The Jackson City Council agreed to provide the Capitol City Convention Center with $500,000 so it could pay its utility bills.
The request for funding came just weeks after the Capitol City Convention Center Commission announced it would like to increase the hotel tax and occupancy fee that hotels in the city of Jackson charge so it would have the funds it needs for operation, debt service and capital.
Jackson City Council President Virgi Lindsay said the $500,000 the council approved for the convention center came from the American Rescue Plan and not from the city’s budget.
“A lot of institutions are still suffering due to the effects of the pandemic and the convention center is one of them,” she said.
The commission hopes the Legislature will agree to boosting the hotel tax from 4 percent to 5 percent and the hotel occupancy fee from 75 cents per night to $2 per night.
The increases would generate funds that would help cover the convention center’s operations, pay debt service and provide capital, so the city of Jackson wouldn’t have to provide funds to keep it going.
“Historically, since 2014, the tax amount we’ve collected is about $4.4 million dollars and that is supposed to pay debt service, the capital fund and the operating amount for the facility,” said Marc Arancibia, general manager at the convention center, who spoke to the Jackson City Council about the commission’s plans to lobby the Legislature for the changes.
“Debt service is about $4.569 million and in March will go up to about $4.6 million.”
An increase of the hotel tax to 5 percent would be in line with seven communities within the state, some of which are neighboring cities to Jackson, that already charge a 5 percent hotel tax, he said.
Open since 2009, the convention complex features 330,000 square feet of flexible exhibit, ballroom and meeting space and is located in downtown Jackson.
The city took out a $65 million bond to fund construction of the center in 2006 that is still paying it off. To help pay the debt, the city passed and pledged a specialty tax on hotels and restaurants, but the tax revenue falls short, especially since the global COVID-19 pandemic caused many conventions and meetings to be canceled.
Losses from March 2020 to February 2021 were close to $2.5 million, or about 62 percent of the operating income to run the complex, said Arancibia, who works for Oak View Facilities, the company that manages and runs the convention center.
The Jackson City Council on Tuesday designated more than half a million dollars for the convention center after Jackson Mayor Antar Chokwe Lumumba said the center would have to close without it.
Federal coronavirus funds provided the $570,000 allocation, which was to pay utilities and other expenses for the remaining fiscal year.
Prior to covid, revenues were already falling short.
Ashby Foote, who represents Ward 1 on the city council, said he hopes the convention and meeting business will pick up.
“We’ve got to get the economy going so we can get more meetings and conventions at the convention center,” he said.
