$470K in lodging tax revenue to help pay Hilton debt
Next payment is due Jan. 1
Thursday, December 20, 2012
Approximately $470,000 from city lodging tax revenues will be tapped to help cover the next debt payment for the Hilton Vancouver Washington.
The $2.5 million payment is due Jan 1.
Vancouver Chief Financial Officer Lloyd Tyler shared the figure Thursday with the board of directors for the Downtown Redevelopment Authority, the legal entity that oversees the city-owned hotel and convention center.
In February, the city said lodging tax revenues, which used to help fund community events such as Independence Day at Fort Vancouver and the Vancouver Wine & Jazz Festival, would now go exclusively to pay off debt at the Hilton. State law prohibits lodging tax revenues, which are collected from a 4 percent charge on hotel rooms, from being spent on anything besides tourism promotion.
Ideally, Hilton revenues would be able to cover biannual debt payments through its operating revenue and a sales tax credit from the state.
Since $65 million in 30-year bonds were issued in December 2003 for the construction of the hotel and convention center, $34.8 million has been paid in principal and interest, Tyler said, and $2.75 million had to come from lodging taxes.
While the maximum amount the city can be asked to contribute from lodging taxes varies year to year, the most the city could have been asked to pay from lodging tax revenues in 2012 was $650,000, Tyler said.
Hotel revenues through November were up 6.7 percent compared to the same time last year, Tyler said, and lodging taxes revenues are up 7 percent from last year, to $608.019.
Eric Walters, general manager of Hilton Vancouver Washington, said he anticipates total revenues for 2012 will be $11.8 million, up $725,000 from 2011, and a gross operating profit of $2.47 million.
Revenues may be up, but the principal payment due goes up, too, Walters said, and the Hilton's cash flow factors into whether the city's dedicated reserve fund needs to be tapped.
This payment from lodging tax reserves doesn't mark the single-largest contribution to Hilton debt. In 2010, the city paid $584,000.
No reserves were tapped in 2011.
The Hilton opened in 2005 at the corner of Columbia and Sixth streets downtown and south of Esther Short Park, the focal point of the city's downtown revitalization program.
More than 95,000 people attended 1,100 events at the convention center this year.
Stephanie Rice: 360-735-4508 or email@example.com.