Oct. 2—MITCHELL — Major disputes that have developed between some local hotel owners and city leaders over a proposed $2 Business Improvement District tax on Mitchell hotels have been resolved, resulting in the Mitchell City Council to approve a few tweaks to the proposed resolution.
On Monday night, the council approved a key amendment to the hotel BID tax resolution that gives local hotel owners the ability to repeal the $2 tax at any time. Another key change was allowing the BID board to expand and include additional hotel owners without having to restart the process needed to impose the hotel tax.
The changes gained the support from the owner of Mitchell's largest hotels, Jerry Thomsen, who had concerns about the language in the resolution outlining how the city can spend the BID tax revenue and representation of hotel owners on the five-person BID board that recommends allocation of the funds.
"This whole process has gone a little crazy on us. First and foremost, the majority of the motel owners have always supported the $2 BID. But what I've learned over the years is that the devil is in the details," Thomsen said. "We're very pleased with the progress we've seen and the additional language you added. It does calm a lot of our concerns."
The language in the ordinance pertaining to how the city can spend the tax revenue is still a concern for Thomsen, but he viewed the change to allow hotel owners to kill the BID tax at any time serves as a safeguard if the funds aren't being spent appropriately.
"In the previous BID tax resolutions, it was always defined what the use of funds was. This one is different, and we're not defining the terms. It's up to the BID board and the council to determine how the funds are used," Thomsen said, noting the council ultimately has the authority on honoring the BID board's spending recommendations.
Establishing a new $2 hotel BID tax before the existing $1.50 tax expires this year has been a goal among city leaders who say it would help attract more large-scale events and people to Mitchell that could boost hotel occupancy and sales tax revenue.
"Our goal is to promote Mitchell. We want to bring people to stay here and help our hotels, restaurants and shops see steady business," Mayor Bob Everson said.
Since the proposed tax was brought in front of the council in August, there were growing concerns among hotel owners.
It was revealed during Friday's BID board meeting that a petition began circulating to kill the tax resolution. It was indicated that the petition won't be necessary after the council approved adding the changes on Monday.