Extension of hotel tax at issue

County legislators want questions regarding Albany Convention Center answered before acting

TIM O'BRIEN Staff Writer
Section: Capital Region,  Page: E1

Date: Sunday, March 9, 2008

ALBANY - Albany County legislators may seek to table extending a hotel tax to help pay for the proposed Albany Convention Center.

Hotel guests now pay an extra 3 percent tax on their rooms, which will expire at year's end unless the county and state act. Some of that money now goes to plan the proposed $397.5 million center, and the new legislation would shift more of the funds toward the center and an attached hotel. The County Legislature is scheduled to take up the hotel tax at its meeting at 6:30 p.m. Monday in the legislative chambers of the County Courthouse. Before the state Legislature can approve the extension, the County Legislature must pass a resolution calling for it to do so. County Legislator Christopher Higgins of Albany said he and others want the resolution tabled. He said there are several concerns, including the removal of a sunset clause that would make it impossible for the Legislature to reconsider the tax in the future.

"We will be stuck giving 3 percent of the hotel money to the convention center," he said. "The county should have control over this."

Duncan Stewart, executive director of the convention authority, said the hotel tax cannot be subject to annual renewal or it would be rendered useless: The money is for repaying bonds for building the project, and no one would buy the bonds without a guarantee funds would recur.

"It's the first money that's spent to pay off interest debt," he said. "You could not pledge that money if it was only an annual sum."

Higgins also fears the legislation would give some of the funds to the private operator of the Sheraton Hotel connected to the center.

Stewart said the money will repay construction costs and will not go to Starwood Hotels and Resorts Worldwide Inc. of White Plains, which will operate the 400-room Sheraton. The convention authority would own the structure, he said.

"I think there might be a misunderstanding there," he said.

Frank Commisso, the County Legislature's Democratic majority leader, said Friday it is unclear whether the legislation will be tabled Monday.

"We'll know for sure on Monday," he said. "There are a few questions we're looking to get answered. There is some ongoing dialogue, and we'll know more about that on Monday."

In 2005, the state Legislature raised the tax on hotel rooms in the county from 3 to 5 percent. A year later, an additional 1 percentage point was added, bringing the total tax on stays to 6 percent.

One percent, or about $1 million a year, is now used to plan the convention center. The 2 percent added in 2005 helps Albany County pay off debt for building the county-owned Times Union Center.

The legislation calls for renewing the 3 percent tax and shifting the county's share to the convention center project once it is built. By that time, county officials have said, the money would no longer be needed for the Times Union Center.

Higgins said he and others are reluctant to approve the legislation when it is unclear if there will be sufficient funds to build the center. The authority recently estimated the cost for the project at $397.5 million, double what was originally expected.

The state has already allocated $205 million for the project, but the higher cost estimate means at least another $192 million is still needed.

"I don't understand where the money is going to come from," Higgins said. "The governor needs to come out and be clear: Is he going to provide money for this?"

Stewart said he still has no word on additional funding.

"We continue to review the proposal," said Jennifer Givner, a spokeswoman for Gov. Eliot Spitzer. "We're facing very difficult financial times."

Tim O'Brien can be reached at 454-5092 or by e-mail at tobrien@timesunion.com.