Traverse City Record-Eagle

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December 8, 2013

Officials question tax-exempt status of property that houses CVB

TRAVERSE CITY — A smoldering debate over what some locals dubbed “festival fatigue” prompted city officials to question the tax-exempt status of the downtown property that houses the Traverse City Convention and Visitors Bureau.

The Visitors Bureau is a membership organization designed for promotional purposes, and as such doesn’t qualify for a property tax exemption. Instead, Visitors Bureau officials years ago formed the TCC&VB Education Foundation, a qualified nonprofit under section 501(c)(3) of the Internal Revenue Service code.

The Foundation owns the building on Grandview Parkway and Union Street and leases space to the Visitors Bureau, thus providing a property tax-free home.

Some city commissioners began to question the Visitors Bureau’s financial contributions to the city after its leader, Brad Van Dommelen, last month publicly lobbied against fee increases for Open Space festivals. City officials in recent months discussed such fee increases amid numerous complaints from residents about festival noise and frequency.

Higher fees, some city officials contend, could help offset spiraling costs for city services such as trash collection, public safety and other items owed to the burgeoning number of festivals at the city-owned Open Space.

“I don’t think there’s any way the city is ever going to be able to recoup fully what it costs to have 1.3 million people come here, drive on our streets, use our infrastructure, leave their trash,” Commissioner Barbara Budros said. “But if we continue on this current track it will come to the point where we can’t afford to have any of these festivals, and I don’t want that.”

City officials note the Traverse City Area Chamber of Commerce pays property taxes on its building.

“I can’t see a whole big community benefit difference between what the Chamber does and what the Visitors Center does,” said Mayor Michael Estes. “I believe it is time to update the commissioners on the tax-exempt status of the Visitors Center and to explore the options available to the city.”

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