TIF passes, further taxing relationships between Mayor and business owners


By Carolyn Roy, carolyn@natchitochestimes.com

The Mayor got his way at the City Council meeting Monday when a 1 cent sales tax passed that applies to people making purchases at Interstate 49. The tax will be collected in a taxing or TIF district. Taxes collected in that district are spent there to support economic development and infrastructure projects. TIF District C includes the businesses at I-49.

The Mayor hopes to find a way to audit the I-49 businesses for use taxes, or 1 cent on “big ticket items” bought in other places that are associated with their costs of doing business. The I-49 businesses would be entitled to a one-time rebate of the use tax although a limit has not been established on the amount the amount of pur chase that would entitle them to the rebate.

Councilmen Lawrence Batiste, Dale Nielsen and Don Mims voted for the tax with Eddie Harrington and Sylvia Morrow voting against it.

The tax will be levied on people staying in all hotels and motels in Natchitoches and eating at restaurants in the I-49 corridor, or TIF district C. It is expected to generate about $260,000 annually with 60 percent going to the City and 40 percent going to Northwestern State. The City will use the tax proceeds for operation and maintenance of Parc Natchitoches, the recreation park under construction on University Parkway.

The new tax will raise the total tax paid in that district to 10.95 after the first of the year. Northwestern State will use its share to promote recreation and sporting events hosted in the City and to attract even more events. Posey originally proposed that NSU and the City split the proceeds of the tax equally. But NSU agreed to a 40 percent share since that amount will be sufficient for its needs to market athletic events. The tax is expected to start being collected in the first quarter of 2020.

The proposed tax has been a source of controversy since it was proposed at a City Council meeting June 10. Hotel and motel owners at I-49 have stated at past meetings the tax was unfair and should also be imposed on other businesses in the City. Posey agreed to include all hotels in the City including two in the Historic District, three on the bypass and one on Washington Street.

At the meeting Monday, as at several past meetings, Jay Sharplin spoke for hotel and motel owners at I-49. Their main concern is that the City has not collected a tax on a value-added package that Hotel St. Denis charged for about 18 months. The issue has been referred to back taxes. That issue has arisen at every meeting the City has held about the proposed 1cent tax.

Lauren Sharplin, president of the Natchitoches Parish Tourist Commission board, asked Posey about the back taxes. A La. Attorney General’s opinion stated that the package was taxable and back taxes should be collected provided the cost of collecting the taxes did not exceed the amount of the back taxes. To date, no one has been able to determine the amount of the back taxes. Sharplin said the tourist commission board has asked the District Attorney’s office to for help in recovering the back taxes.

City Attorney Ronald Corkern told Sharplin that the back taxes issue had nothing to do with the proposed 1 cent tax and was a matter for the Natchitoches Tax Commission, not the City. Posey and Corkern said it was up to the tax commission to collect the back taxes, not the City. Tax Commissioner Jerry McWherter said Tuesday that he is waiting for another opinion from the Attorney General’s office that is based on additional information.

Posey said the I-49 business owners were objecting to the 1 cent tax because they were mad about something else, the back taxes not collected on Hotel St. Denis. He also said the owners initially agreed that the park was a good project that would generate more business at I-49. The tax is proposed for that area because it is where the City Council believes the most new business and revenue will be generated with events at the park. Posey said the City had done several projects to assist business owners at I-49 by using proceeds from a 2 cent tax TIF tax already collected in that district. He mentioned several concrete projects and service roads that were built near hotel and motels.

Director of Utilities Charles Brossette said that a sewer project to support two proposed automobile dealerships near I-49 will cost about $500,000. Posey said some of the TIF money was used for a service road to Sharplin’s hotels.

When Posey took office in 2016, he said that tax fund had a deficit of $150,000. Now it has about $300,000 that will be used for infrastructure projects in that area. Therefore, that money could not be used for Parc Natchitoches operation and maintenance and could not be rededicated for the park.

Harrington explained his reasons for voting against the tax. He said he didn’t think the tax was necessary because if the park generated “thousands of people” visiting Natchitoches as the City projected, an additional tax would not be needed. He also said the park was being built whether the tax passed or not. Harrington said the council was first told the tax would be to pay for new equipment at the park, namely lawn mowers. Now there are sponsorships to help with those costs. Harrington said he still had not been told why the tax was necessary.

Another complaint the I-49 business owners have voiced is that there was no accounting for how the tax would be spent and how much the park will cost. Posey distributed a Parc Natchitoches Pro Forma that lists revenue and expenses for the park. It projects operating expenses will be at a loss of $7,386 for the first year. Since Posey first proposed the 1 cent tax, he has advocated that it was a creative way to support economic development in the City and the park is about the quality of life for Natchitoches residents. He said the percentage going to NSU is a way to support “the lifeblood and heartbeat of the community.” Posey said if the council found that the tax was hurting the businesses in any way, it could be rescinded.

An ordinance introduced that will allow for a cooperative endeavor agreement with NSU stated the following:

•During 2018-19, NSU hosted three Southland Conference championships for volleyball, softball and men’s and women’s track over 13 days that had an economic impact of over $1 million

•NSU Athletic Department hosts an estimated 150 recruits and their families annually.

•Estimated impact of LHSAA Cross Country Championship meet is $7 million annually.

•NSU hosts over 150 regular season games, camps, clinics, high school and other events annually. The tax is expected to start being collected in the first quarter of 2020.