Kent County commissioners say they did not ask for proposed hotel tax

Sarah Gamard Karl Baker
The News Journal

Opened in 2017 with the help of more than $4 million in taxpayer grants, supporters say the DE Turf sports complex in Kent County needs more money to grow.

In the last days of the legislature this year, lawmakers overwhelmingly passed a bill sponsored by Dover Sen. Trey Paradee that gives the county the power to tax its hotels and motels up to 3% of room rates. That revenue, expected to be nearly $1 million, would then flow directly to DE Turf to help it attract more tournaments.

Kent County Levy Court also must approve the legislation. No date for a vote has been set.

BACKGROUND

New Kent County hotel tax proceeds would go to private entity, raise questions about potential conflict

Trey Paradee, D-Dover after being sworn in for the start of the 150th General Assembly at Legislative Hall in Dover in Jan. 2019.

Several Levy Court commissioners who spoke to The News Journal said they had little knowledge of the proposal as it was being voted on in Dover. They are now playing catchup before voting on the measure that Gov. John Carney quietly signed in mid-July.

"Right now, people focus on 3%, hand the money over to a failing DE Turf,"  said Kent County Commissioner Eric Buckson, whose district includes the facility. "In fairness to the community, that's how it looks."

But according to state lawmakers and DE Turf operators behind the bill, the facility isn't failing.

It just wants to grow.

The new revenue stream is necessary for the sports complex to attract more and bigger tournaments. That would bring in tens of millions of dollars in economic impact, according to Kent County Regional Sports Complex Corporation board chairman Bill Strickland, whose nonprofit operates DE Turf.

As more facilities around the country bid for these tournaments, which can host more than 100 teams over a weekend, costs for landing such lucrative events have surged, Strickland said.

Demetrius Stevenson in 2017 with a shot on goal during practice at DE Turf Sports in Frederica.

“The business planning that was done for the DE Turf did not anticipate the need for these incentive dollars,” said Strickland, who worked with Paradee to push the hotel tax bill through the General Assembly.

Strickland expects DE Turf would receive up to $950,000 a year from the hotel tax. Most of it would be used to outbid competing sports complexes.

He stressed that bigger tournaments bring in more people to spend money in central Delaware and that benefits all of Kent County.

It was with that thought in mind, he said, that he asked lawmakers to allow Kent County Levy Court to impose a hotel tax.

"Kent County is looking for its piece of the pie in the tourism world," Strickland said. "This venue is working, and it's the venue that we have."

Several members of Levy Court confirmed with The News Journal that the county did not ask for the new tax to fund the facility.

When pushing for the legislation, Strickland and sports complex board member Shelly Cecchett told Sen. Paradee that Levy Court members supported the tax bill, the senator recounted.

But Kent County Administrator Michael Petit de Mange said Levy Court leadership had no objection to using a hotel tax for DE Turf when the sports complex board members approached them in the spring.

Kent County Administrator Michael Petit de Mange in 2005.

“I wouldn’t say it rises to the level of representing support of Levy Court as a body,” Petit de Mange said. “Absolutely not, no way.”

Levy Court President Brooks Banta said he has not read Paradee's bill.

“I don’t think anyone’s in a position to clearly direct any funds to do anything until we have a public discussion,” he said.

Banta, who was added into DE Turf’s Wall of Fame in January, said the induction would not influence his vote.

In conversations with The News Journal, some commissioners said they first heard about the bill when reading about it in the paper shortly before it passed.

“I’m going to be one of the decision-makers and I’m finding out just like my next-door neighbor,” said Kent County Commissioner Glen Howell, who plans to vote for the hotel tax. “Either they were trying to be secretive or they just didn’t even bother to inform us.”

The General Assembly scrambled through three versions of the bill within a week before passing it on the final day of the legislative year.

Rep. Ruth Briggs-King, R-Georgetown, was one of only two lawmakers who voted against the bill. She said she has concerns about tax revenue going to one nonprofit.

"It was not going to the county, and not going to tourism in general,” Briggs-King said about the tax. “I'm just not sure that's fair."

Reps. Charles Postles, R-Milford, and Lyndon Yearick, R-Camden-Wyoming, sit on DE Turf's board and declined to be interviewed for this story. Both Kent County lawmakers abstained from voting.

Yearick and Postles were unaware when the legislation passed that John Paradee —  who is Sen. Paradee's brother and sits on the DE Turf board — is involved in a development near DE Turf, according to a House Republican spokesperson.

Two days after the bill passed, John Paradee sent the state an application to build a hotel, restaurant and retail development on a 21-acre field adjacent to the complex.

The governor's office would not say whether Gov. Carney, who signed the bill into law, actually supports taxing Kent County's hotels to help DE Turf grow.

"This is simply enabling legislation that allows for a debate on these issues at the local level," the governor's spokesperson wrote in a text message to The News Journal.

Chairman Bill Strickland speaks at an event for DE Turf in Frederica.

Several county commissioners who spoke to The News Journal said they hadn't fully made up their minds about if or how they will implement the tax.

At least three said they were warmer to the hotel tax after a public forum hosted by the DE Turf on Thursday night, where many attendees voiced concerns about the proposal.

Attendee and Kent County resident Robin Hayes left the Thursday meeting unsatisfied.

"Coming here tonight, I think it was about clarifying what we've all heard," she said. "I think we all are still leaving with questions."

Hayes said she wonders why DE Turf is earning money from a hotel tax instead of raising its own fees for facility users.

"It just seems like they should do what other nonprofits do," she said.

Strickland and the politicians who support the hotel tax stress that it's just a user fee even though the bill language calls it a tax.

At least one commissioner, Jeffrey Hall, said he doesn't plan to vote yes. He remembers past years when backers of the complex said it would provide new customers for hotels, not take money from them.

“It’s sort of a betrayal to those same industries to say, ‘Well, we need you to support the thing that was supposed to be supporting you,’” Hall said.

Hall worries there isn’t enough oversight of how DE Turf will spend the money it would receive from hotel taxes, though Strickland said he welcomes adding "safeguards."

Other Levy Court members fear the new funding mechanism will lead to other companies also demanding a chunk of a hotel tax.

“This could be the beginning of something that we don’t really want to get involved in,” Howell said. “If people see that we’re doing this for the DE Turf, they’ll say, ‘Why can’t you do it for us?’”

Contact Sarah Gamard at sgamard@delawareonline.com or (302) 324-2281.