Pasco gives initial okay to sports tourism project, higher bed tax

DADE CITY — Pasco County's $44 million plan for a sports tourism and hotel complex at Wiregrass Ranch earned its first victory Wednesday when a unanimous County Commission blessed the project and a plan to double the hotel bed tax to help finance it.

After a nearly two-hour discussion, the board agreed with the concept of increasing the tourist tax to 4 percent to offset the public's $25 million commitment to the multipurpose gymnasium, public park and amphitheater. The sports facilities, to be operated by Sarasota-based RADD Sports, and a privately financed 120-room Residence Inn by Marriott are planned on land, previously donated by the Porter family, northeast of the Shops at Wiregrass.

Increasing the tourist tax, which has been at 2 percent since voters authorized it in 1990, requires approval from a fourth-fifths majority of the commission. A formal public hearing and final vote will be scheduled at a later date. The commission also must vote on a formal agreement with RADD Sports and a land lease with hotel developer Mainsail Development.

Doubling the tax rate to 4 percent would still leave Pasco's tourist surcharge lower than all of its neighboring counties. Past commissions rejected proposed tourist-tax increases four times over a six-year period, most recently in 2015. However, this is the first time the pitch for a higher tax rate has been linked to a specific tourist-related construction project.

"Let's stop kicking the can down the road,'' commission Chairman Mike Moore said.

Commissioner Jack Mariano backed the plan, even though he initially said it was unfair to the west side of the county, which deserved a share of the tourist tax investment.

But Commissioner Kathryn Starkey, chairwoman of the Tourist Development Council, said the county would be acting unprofessionally and would be unfair to the public and the hotel community if it did not to advance the proposal.

Before the commission debate, a half-dozen speakers weighed in, including Saddlebrook Resort owner Tom Dempsey and his general manager, Patrick Ciaccio, who opposed a tourist tax increase and questioned the RADD Sports project.

"I've looked at the project; I think it's highly questionable,'' Dempsey said. "The financials, I disagree with entirely.''

The 800-room Saddlebrook Resort accounts for nearly 25 percent of the hotel rooms in the county and is the largest collector of the tourist tax.

But other speakers from the Greater Wesley Chapel Chamber of Commerce and Pasco Economic Development Council president and CEO Bill Cronin touted the project.

"This has been in purgatory for five years. The timing is right,'' said Hope Allen, president and CEO of the Greater Wesley Chapel chamber.

The county and its private partner, RADD Sports, are planning a 98,000-square-foot multipurpose gymnasium capable of holding basketball, volleyball, cheerleading, gymnastics and other indoor sports competitions. The complex would include eight outdoor sports fields, an amphitheater and event lawn, and park amenities including trails, pavilions and a playground.

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Commissioners previously earmarked $11 million for the complex in accumulated tourist tax proceeds and some sales tax dollars. The increased tourist tax would bring in an estimated $1.2 million annually and be used to pay down a $15 million loan for the project. Mainsail Development would build the hotel, projected to cost $18.7 million, and would lease the land beneath the hotel site from the county.

RADD Sports projects it could turn over 72 percent of the net operating income to the county — money that could be used to pay off the loan. Financial data provided to commissioners shows RADD Sports expects a $1.3 million net operating income in its first year of operation, and up to $1.6 million in its sixth year. The exact terms of the distribution are being negotiated.

More than the Mainsail hotel are expected to benefit. The county's Office of Economic Growth estimated off-site hotels would absorb more than 80 percent of the room demand generated by the sports facility. A 92-room Fairfield Inn and Suites already is planned on nearby property in Wiregrass; an 80-room Holiday Inn Express and Suites just opened east of Interstate 75, and a 125-room Hilton Garden Inn is under construction at State Road 56 and Silver Maple Parkway.

The county is seeking to capitalize on sports, particularly youth sports, to build its tourism base. Since 2009, the county pursued, but never reached agreement to develop a tennis stadium at Saddlebrook Resort and three separate baseball or softball complexes.

After a proposed 15-field baseball center on the Wiregrass site fell apart in late 2014, a county-hired consultant, Johnson Consulting of Chicago, recommended the county develop the multipurpose building to attract the indoor sports market. Commissioners selected RADD Sports as its private partner to do that in fall 2016.