MARSHALL - Marshall businesspeople had plenty of questions regarding a proposed regional sports facility and local sales taxes during a meeting Thursday morning. Proponents of the sports complex weren't able to give many details on the facility itself, but did discuss the possible effects of a .5 percent sales tax and a 1.5 percent "hospitality tax" on local businesses.
Roger Madison, co-chairman of the Southwest Minnesota Amateur Sports Commission, was a guest speaker at a meeting of Marshall downtown business owners on Thursday morning. The audience included businesspeople from other parts of the city, as well.
The talk came a day after Madison and Marshall Area Chamber of Commerce Director Cal Brink testified on behalf of the sports complex before the Government Finance Committee in St. Paul. SMASC is seeking $4 million in state bonding money to help pay for construction of the sports center. The funds could shorten the amount of time a proposed .5 percent local sales tax would be in effect, Madison said.
The state Legislature has already approved the local sales tax, as well as a 1.5 percent "hospitality tax" on sales of prepared food, beverages and lodging to help offset the operating costs of the sports center. However, both of those taxes need to go to a public vote in November before they can be put in place.
Madison said the concept for the sports center includes two sheets of ice that could be used for hockey, or converted to a dry floor for other events. Softball or baseball and soccer fields are also included in the proposal. Beyond that, details of the facility and locations for the proposed fields remained flexible.
"We're still working on the design that will serve best," Madison said.
The Schwan Food Co. has donated land for the sports center near the intersection of Minnesota Highway 23 and Minnesota Highway 19, just south of Marshall High School. Adjacent land along Highway 19 is still owned by Schwan, and land north of the high school along Highway 23 is privately owned, Madison said.
The city of Marshall would own the sports complex, but how it would be run has not been determined, he said.
A major concern for downtown businesses was how the proposed taxes would affect the local economy.
"What does it really mean?" asked Lyle Patzer. "Would customers take their business to other cities to avoid paying sales tax?"
Norm Gregerson questioned whether events like sports tournaments would really help many local businesses. While visitors would definitely buy meals, he said, "Are the athletes really going to shop here?"
In looking at the taxes' potential impact on Marshall, Madison and Brink said it might be helpful to look at other regional centers like Willmar and Sioux Falls, S.D. South Dakota has sales tax, but it doesn't discourage area residents from shopping in Sioux Falls. Madison said a local sales tax doesn't seem to have hindered growth in Willmar, either.
In response to an audience question, Madison confirmed that the hospitality and local sales taxes would be levied in addition to current state sales taxes for restaurant meals and lodgings.
Concerns were also expressed about the possibility of a hotel being built near the sports complex, before there is a need for more lodging in Marshall. The hotels currently in town are only booked up a few weekends a year, said a representative of the Ramada in Marshall.
"There has been discussion among some private developers" in regards to the area around the proposed sports center, Madison said. However, he said supporters of the complex are not recruiting hotels or other businesses. While Madison and Brink said they couldn't prevent a private business from coming to Marshall, the ideal would be for existing local businesses to benefit from an increase in visitors.
If the public votes against the sales taxes in November, things could get "really interesting," Brink said. Proponents of the sports center could have to start over from scratch, asking the state for permission to enact a sales tax. There's also the possibility that the Minnesota Amateur Sports Commission could decide to pursue a regional sports facility somewhere else in southwest Minnesota.
"We have a great opportunity here," Brink said.
More opportunities for the public to learn about the proposed sports center and local taxes, as well as an official "vote yes" campaign, will be coming later this year, Brink said.