Mount Pleasant ending relationship with Real Racine to form tourism commission

Village wants control of its own hotel tax money

Last updated on May 14th, 2019 at 05:05 am

The Village of Mount Pleasant will end its contract with Real Racine, the Racine County visitor’s bureau, on Jan. 1, 2019 to start its own tourism commission.

Currently, the village contributes just under $700,000 annually to Real Racine through a percentage of the hotel room tax. State law allows an 8 percent hotel tax of the gross receipts collected by lodging facilities.

Mount Pleasant, which has two of Real Racine’s 19 board seats would like more control of how its hotel room tax money is spent.

“We don’t want to speak ill of Real Racine, but we have always felt like it is a little City of Racine centric,” said Dave DeGroot, village president.

Of Racine County’s nearly 1,400 hotel rooms, Mount Pleasant has 782 rooms.

The Mount Pleasant contract makes up 54 percent of Real Racine’s budget, said the organization’s CEO Dave Blank.

“It is a large cut,” Blank said. “I’m starting to look at all of the alternatives as far as the budget goes and talking to other potential partners. Racine County is in a great spot right now to do a lot of exciting things, and we would like to be able to continue to help with that.”

State law mandates that municipalities can only keep 30 percent of the revenue generated by their hotel room tax for their general fund. The remaining money has to be spent promoting tourism.

Mount Pleasant village attorney Chris Smith said if Mount Pleasant forms a tourism commission (the village board still has to vote on forming the commission), they could still decide to spend the hotel tax money with Real Racine.

“There are a lot of ways this could go, as long as it promotes tourism development,” Smith said.

Tourism promotion includes marketing projects such as advertising, distribution of printed or electronic promotional materials and media buys, or a tangible municipal development, such as a convention center or conference center.

For more than a year, Racine officials discussed plans for a $55 million, 208,000-square-foot hotel and event center downtown along Lake Michigan The project would have included a three-story, 3,500-seat event center and a seven-story, 150-room adjoining hotel.

But the Racine hotel and convention center proposal died in December following the City Council’s decision not to override Mayor Cory Mason’s veto to fund the project.

On Thursday, Foxconn hosted a groundbreaking ceremony in Mount Pleasant, where the Taiwanese company plans to build a $10 billion LCD screen manufacturing complex that could eventually have 13,000 jobs. Foxconn will make a dramatic impact on the village and it is changing how officials handle numerous issues, including the hotel room tax.

“Foxconn has been a very positive, disruptive change element and is impacting everything we do and how we look at everything,” DeGroot said.

Once a tourism commission is formed, how the village spends the hotel tax money will be discussed, he said.

“We like the idea of a convention center or our own visitor’s bureau right on our campus,” DeGroot said. “We are very, very early in the process. Ending our contract with Real Racine was a legal step we had to do for us to be able to go through our strategic planning process.”

Mount Pleasant is not the first municipality to pull out of a visitor’s bureau contract. In January, the Village of Pleasant Prairie ended its relationship with the Kenosha Area Convention and Visitors Bureau with plans to create its own tourism bureau.

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