On February 10th many voters may have received a large mail piece from Moving Wichita Forward, a group formed to urge Wichitans to “Vote Yes” in the February 28 special election in Wichita.
The subject of the election is a Wichita city charter ordinance that rebates 75 percent of the Ambassador Hotel’s guest tax collections back to the hotel’s owner. A yes vote means you agree with this allocation of the taxes the hotel collects. A no vote means you disagree, and would rather see the hotel’s guest tax collections handled in the usual manner — funding Wichita’s convention and tourism promotions, and debt service, maintenance, and updates of Century II.
Like the first mailer sent by Moving Wichita Forward, it pays to examine the claims carefully.
For example, the front of the mailer shows a sign reading “Going Out of Business” with a caption nearby reading “If you vote NO.” The implication is that a no vote is bad for business, and will cause businesses to close and jobs to be lost.
The reality, however, is quite different.
First, the Ambassador Hotel developer has said that even if the “Vote No” side prevails in the February 28th election, the hotel will open, and jobs will be created. So voting no, according to the hotel developer, will not prevent jobs from being created.
Beyond that, the WSU study that the “Vote Yes” campaign relies on contains some inconvenient facts that Moving Wichita Forward leaves out. An important fact in the WSU study is the estimation that 50 percent of the Ambassador Hotel’s business will be diverted away from other Wichita hotels. As these hotels experience a drop in business due to the Ambassador Hotel opening, they may become at risk of going out of business.
Even if they stay in business, lower levels of demand for hotel rooms means it is likely that jobs will be lost at other Wichita hotels.
Here’s another claim made in the mailer: “The Ambassador Hotel project will create a total of 1,102 direct and indirect jobs, including 978 for construction and 124 for ongoing operations.”
First, remember that the developer has said the hotel will open and jobs will be created, no matter the outcome of the election.
As to the claimed creation of 978 construction jobs, here’s what the author of the WSU study said about these jobs: “It is likely that these expenditures merely support existing construction jobs.”
Supporting existing jobs is important. But that’s a lot different from creating new jobs, as Moving Wichita Forward claims.
Also, there is a question as to how many local workers are being hired for the construction jobs. The Kansas Democratic party, in support of its “Hire Kansas First Act,” has specifically criticized the Ambassador Hotel for using large numbers of out-of-state workers.
For the jobs due to ongoing operations, remember the WSU study and the 50 percent substitution factor. As the hotel draws business away from other Wichita hotels, it is very likely that jobs will be lost at these hotels.
Another claim by Moving Wichita Forward is this: “Visitors will pay through the transient occupancy tax or bed tax. The bed tax cannot be used to fund city services — it can only be used to promote the city of Wichita.”
Tax Fairness for All Wichitans has never claimed that the bed or guest tax is used to fund city services.
Instead, the purpose of that tax is to provide revenue to the city’s Convention and Tourism fund. The purpose of that fund is to support the Go Wichita Convention and Visitors Bureau, and also to support debt service, maintenance, and upgrades to Century II.
A Yes vote will drain this fund of revenue. It’s losing $2 million this year, and its balance will soon be near zero. Remember that half the Ambassador Hotel’s business — according to the WSU study — is diverted away from other Wichita hotels that presently pay guest tax to the Convention and Tourism fund.
Voting Yes on February 28th diverts future revenue away from the Convention and Tourism fund and into the pockets of one hotel developer. It is likely that Wichitans across the city will have to make up the missing revenue. That’s an unfair burden to city taxpayers, and an important reason to vote No.
Voting No protects the city’s Convention and Tourism fund and an important source of revenue for Century II.
A previous fact check of a Moving Wichita Forward mailer is at Fact checking the Wichita Ambassador Hotel campaign.