Williamsburg City Council approves tourism development fund

WILLIAMSBURG, Va. (WAVY) — Williamsburg City Council has approved a proposal to create a tourism development fund.

Benming Zhang, a member of the Williamsburg City Council, confirmed to 10 On Your Side that the tourism development fund passed 3-1 during the Williamsburg City Council meeting Thursday.

Councilwoman Barbara Ramsey says the plan was first presented to them at a retreat in January and is based off development funds from other different cities.

“The main thing is, this is done to help our tourism professionals achieve our goals and to respond to travel trends. The way people travel now are different than how people traveled 40 years ago,” Ramsey said.

Ramsey says they’re hoping to promote tourism by providing grants to public and private business ventures and for partnerships. She says some of the ideas have been on the city’s list to complete for years.

Some examples include an aquatics center and an indoor sports facility at the College of William & Mary.

Applicants can apply for grants through the city.

Increased lodging and prepared food and beverage tax will fund the program. It’s something that upsets local restaurant owners.

“The more I understood about it, it didn’t seem like it was a very good idea,” said Mickey Chohany, co-owner of Second Street American Bistro and spokesperson for the Williamsburg Area Restaurant Association.

Chohany says the association first found out about the plan in February.

The proposed plan will increase the tax from five percent to 6.5 percent.

Chohany says that will put a burden on restaurants who are already struggling this year. He says area restaurants made a combined $120,000 less in the first five months of the year.

“It’s very disparaging, the different levels of tax. We’re at the highest level already and they’re proposing going to the highest level out there and we just think the tourism tax shouldn’t be funding on the restaurants backs,” he said.

Ramsey says other local counties have similar local taxes.

“It’s a dollar on a $50 bill. I think that needs to be taken into context on that regard,” she said.

Ramsey says the city has worked with businesses throughout the year to come up with ideas on how to make this work. According to Ramsey, after discussing with citizens and stakeholders, council decided to compromise on the three taxes to provide revenue for the fund:

  1.  An admission tax of 3.5 percent; seven percent originally proposed
  2. Lodging tax increased from five percent plus $2.00 to seven percent. An additional one percent was approved and will be added next month. Ramsey says this is a procedural process.
  3.  Meals tax will increase from five percent to 6.5 percent, a compromise to the seven percent originally proposed.

Ramsey says the fund will be set up and organized this fiscal year. Tax collection will start on July 1, 2018.

In a statement, Zhang said, “Over the past few months, residents and business owners have asked us to slow down and consider alternative funding mechanisms, in addition to exploring a regional approach for a shared outcome. With the passage of the TDF today, I will continue to ensure that taxpayer dollars are used effectively. I welcome any revisions to the TDF to address my concerns and those of residents and business owners should a majority of council be open to it.”

To learn more about the tourism development fund, click here.