O'Fallon Progress

O’Fallon proposes 4 percent increase in hotel/motel tax

Downtown O’Fallon “Destination O’Fallon” conceptual design proposed currently, which is subject to change later.
Downtown O’Fallon “Destination O’Fallon” conceptual design proposed currently, which is subject to change later.

The city of O’Fallon is launching a new economic development initiative known as Destination O’Fallon.

Destination O’Fallon includes a number of projects and community-wide investments that city officials hope will attract visitors and businesses to O’Fallon. Two of the largest projects will include a state-of-the-art multi-sports complex in the O’Fallon Family Sports Park and a new multipurpose community plaza in the heart of the historic O’Fallon Downtown.

During Monday night’s Community Development committee meeting at City Hall in O’Fallon, Walter Denton, city administrator, said there was a full house with all supportive speakers and attendees offering comments.

“There was no one who spoke in opposition,” Denton said.

To help fund Destination O’Fallon, a 4 percent increase in the O’Fallon Hotel/Motel Tax is being considered. Currently, O’Fallon has the lowest hotel/motel tax in the region at just 5 percent, which brings in $815,000 annually.

Combined with the current percent rate and the proposed additional 4 percent, the hotel/motel tax revenue generated could total about $1.5 million.

The projected cost of the entire venture is in the ballpark of $9.5 million, which will most likely change based on design later, Denton said.

Breaking that down, the staff believe the downtown plaza portion could cost in the range of around $1 million, and the Family Sports Park portion could possibly be between $7 million and $8.4 million.

“So our thought was since this is going to be attracting visitors we felt using our hotel/motel tax rather than making our residents foot the bill. So unless our residents stay in O’Fallon hotels, they will not be impacted by the hotel/motel tax increase proposal,” Denton said.

To pay for construction without taking big risks, Denton said the city has tentatively estimated that it could feasibly afford to take out a bond in the amount of about $9.5 million and make payments on that with just what the hotel/motel tax is bringing in now without the increase.

The O’Fallon Community Development Committee will hold a special meeting at 6 p.m. Tuesday, Nov. 1 at the O’Fallon Public Safety Facility, located at 285 N. Seven Hills Road to answer questions regarding Destination O’Fallon.

“Destination O’Fallon builds on the investment that is being made in our city by private businesses such as the St. Elizabeth’s, Visionary Wealth Advisors, Reliance Bank, Gander Mountain, McKendree Metro Rec Plex and many others over the last three years,” Mayor Gary Graham said in a news release. “In 2017, O’Fallon is poised to have an influx of over 250,000 visitors as the new hospital opens and more businesses begin construction.”

Destination O’Fallon seeks to increase the number of visitors and attract more businesses to O’Fallon.

Denton said the city is looking to host events that will draw visitors staying in hotels off Interstate 64.

“This way we could have those who may not even be aware of our downtown space to come, eat and shop and participate in community events, which would generate an increase in sales tax too,” Denton said.

Destination O’Fallon plans to transform an underutilized parking lot at the corner of First Street and Vine Street into a multipurpose gathering space and overflow parking area. It will create a plaza in the heart of the historic O’Fallon Downtown that can host farmers’ markets, parades, and seasonal festivals.

“Based on recommendations in the downtown plan and the priorities given from local merchants, we thought an all weather, year-round pavilion with the ability to pull doors down similar to a garage door would be ideal,” Denton said.

Currently, street closures and minimal assigned space for signature events are among concerns listed by local merchants, as well as booths or activities taking place directly in front of stores, and limited parking.

For more information about Destination O’Fallon, visit www.destinationofallon.org.

Pending the results of the Community Development Committee Meeting, the O’Fallon City Council will consider the first phase of Destination O’Fallon, on Nov. 7.

Robyn L. Kirsch: 618-239-2690, @BND_RobynKirsch