An initiative to create a taxing district aimed at boosting tourism and hotel stays in Peoria took a step forward this week.
The Peoria City Council on Tuesday approved a resolution of intent to form the Peoria Tourism Improvement District, setting a public hearing for Sept. 8.
The proposal would impose a 1.5% tax on short-term hotel room rentals, with the proceeds used to support marketing and other programs aimed at attracting out-of-town visitors.
JD Dalfonso, president and CEO of the regional convention and visitors bureau Discover Peoria, said hotel owners support the idea because it wouldn’t be a tax on the hotels themselves, but rather a pool of revenue used for their benefit.
“If you were talking about a tax, they’d be here in person, no matter where they were, because they’d be against it,” said Dalfonso. “This assessment allows them to collect 1.5% on the room nights, to determine how they get to spend the money for themselves, for the betterment of bringing more room nights to their businesses, which in turn generates more hotel tax for the City of Peoria.”
The item was pulled from the meeting’s consent agenda by council member Alex Carmona, who expressed a concern over the imposition of a new tax.
“This means that us as a city will continue to have higher taxes and higher costs, which in the world of free market economics does not compete well with our surrounding communities,” said Carmona.
“I don’t want our city to continue to go down the path of increasing taxes or creating more business districts or more TIF districts, which all mean more costs to whether it’s visitors or residents of our city.”
Council member Mike Vespa countered by noting the tax would not be paid by Peoria residents.
“This is all outside money. This is an assessment on people from outside of Peoria bringing more of their money to Peoria in order to bring more people, eventually, to Peoria, to bring more money to Peoria, and it has a cascading effect,” said Vespa.
The formation of the district requires more than 50% of the hotels that would be subject to the tax to submit petitions of support. That requirement was met by the end of June, with 12 hotels filing petitions with the city clerk.
“One of my requirements was to fully understand that this is what the hotel owners wanted,” said Mayor Rita Ali. “This is something that the owners want, and they believe that it will help to drive tourism in the City of Peoria, and actually not hurt their hotels, but actually help their hotels.”
Dalfonso said the pool of money could be used to attract more youth athletic tournaments to Peoria sports facilities such as the Louisville Slugger complex, as well as assist programming at venues like the Peoria Civic Center.
“By Discover Peoria being able to work alongside our hotel owners as to what they want to do with the money they’re investing in together, we can go execute that plan to drive more overnight stays,” said Dalfonso, noting Discover Peoria would merely act as an administrator of the revenue.
“We can’t even call it our money because we’d be working on behalf of a board that is created by hotel ownership,” he explained. “The only process that the city would have involved is to help collect the assessment. We wouldn’t be able to spend by the way we see fit, only by the way in which the hotel owners would approve that money to be spent.”
Dalfonso said while this approach is “a proven mechanism for tourism across the entire country,” Peoria would be the first Illinois municipality outside of Chicago to form a tourism improvement district. He said communities such as Rockford, Champaign County, the Quad Cities and Bloomington-Normal are contemplating the idea.
“They’re all on the heels, and so it’s an opportunity for us to stay ahead and to not fall behind. We’re trailblazers in this,” he said. “But I’ve had this vision for three years, which is why we’ve been in lockstep with the hotels because they’ve seen it work.”
