Seaside businesses object to proposed sales tax

DON FRANK PHOTO A $25 million expansion of the Seaside Civic and Convention Center could be paid for by a local sales tax and an increase in lodging taxes.

Local business operators said during a meeting Feb. 12 they may not be able to keep their doors open if a sales tax is adopted to help fund a $31 million expansion of the Seaside Civic and Convention Center and construction of a parking structure.

“I’ve gone door-to-door in the Gilbert District, and 90 percent of the businesses are against it,” local graphic artist Kathleen Peterson said. “They don’t want to be taxed.”

In addition, Peterson said, the construction project, which would double the size of the convention center and add a multistory 500-space parking structure, would further impact the community’s economy, which is just now recovering from a long recession.

“They’re hanging on, hoping to recover, and they feel it will be another blow to them,” Peterson said.

Peterson’s comments came during the Seaside Downtown Development Association’s regular Thursday morning breakfast meeting Feb. 12. The room was packed with business owners — many who do not usually attend the weekly breakfasts — who wanted to hear a presentation by Russ Vandenberg, the convention center’s general manager.

Although the construction project and financing proposal are still in the development stage, the issue is expected to come before the City Council this year. It will not be subject to a public vote.

This was Vandenberg’s second presentation; he spoke to the Seaside Chamber of Commerce Jan. 30. Since then, opposition to a proposed sales tax and a bump in lodging taxes has gained momentum.

Vandenberg said the convention center faced the loss of groups that had rented the center for conferences for years but had grown too large for the center. The groups consisted of school administrators, student councils, ham radio operators, bridge and chess players. Events also were finding larger venues and moving out of the center, Vandenberg said.

In addition to more breakout and meeting room space, the 40,000-square-foot expansion would expand the center’s current 4,000-square-foot ballroom to 10,000 or 12,000 square feet. This would enable the center to bring in groups of 500 to 600 people and to provide dining space for everyone. As it stands now, dining is limited to 300 people, Vandenberg said. The expansion’s cost is estimated at $25 million.

Expansion would occur on the center’s west side and would remove at least 40 parking spaces. To make up for that loss, and to provide more needed parking in the city, a $6 million parking structure, possibly four stories high and containing 500 spaces, is being considered.

To pay for the $31 million project, which would require payments of $220,000 a month, the latest of several studies commissioned by Vandenberg suggests three options: a joint agreement between Seaside, Cannon Beach and Astoria to raise lodging taxes by 2 percent, with the proceeds to go to the convention center; a 6 percent increase in lodging taxes, which would bring Seaside’s total lodging taxes to 15 percent; or a combination of a 2.75 percent “business improvement district” tax on restaurants, retail sales, gas and groceries — “everything that’s sold in Seaside,” Vandenberg siad — along with a 2 or 3 percent bump in lodging taxes.

“These were options presented to us,” Vandenberg told the business operators. “Nothing has been decided.”

The business owners, however, asked Vandenberg just who wants the center to be expanded and how it would benefit Seaside. Vandenberg replied that most business operators believe the current center has had a positive impact on the city’s economy. If the expansion were to occur, it would, in 10 years, bring 20,000 more people a year to town and add $20 million more to the economy, he said. However, Vandenberg did not say how the estimates were derived.

But those attending worried about how the additional cars would affect traffic flow, whether there were enough hotel rooms and whether the popularity of conventions overall was decreasing. If Seaside had a population of 300,000, the impact could be spread out, they said, but Seaside is too small to absorb it. Larry Donnelly, of the Shilo Inn Oceanfront, noted that, in the next 10 years, several area hotels would have to undergo extensive remodeling just to keep up with the expanded convention center.

They also noted that additional parking spaces would be removed during construction and that visitors might be discouraged from staying in Seaside.

“There are challenges; you can’t build without some disruption,” Vandenberg replied. “There will be a loss of parking and limited access. That’s the price of growth.”

Greg Boat, owner of Del Sol in downtown Seaside, said he would have to eliminate at least one job, just to cover the proposed sales tax.

Val Perry, of Trendwest Resorts, worried that the project and the proposed financial scheme would “drastically change” the character of the community where businesses and residents, who would also be subject to the sales tax, would have to “pay for the right to live and work in this town.”

“Why would people come to Seaside when they have to pay 6 percent more for lodging and more for sales tax?” Perry asked. “You’re switching funds from visitors to residents, and that changes the paradigm.”

Wayne Poole, owner of the Pig ‘N Pancake restaurant, agreed. The convention center’s food service operation originally came from 10 local business operators who invested $1,000 each, he recalled. They were willing to pitch in because they were persuaded that the convention center would be good for the community, he said.

But this time, Poole told Vandenberg, “You’re missing the buy-in of the business community. It hasn’t really been sold to us.”

Others wondered if the expanded convention center would be too big for downtown Seaside.

“I think we’re trying to get too big for our britches,” said Marge Diebolt, owner of The Man Store.

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