Fayette County

Urban County Council passes resolution supporting a 2 percent hotel tax increase


The Lexington Urban County Council voted unanimously Thursday to send a resolution to the state General Assembly supporting a 2 percent hotel and motel tax increase to pay for a $250 million overhaul and expansion of the downtown convention enter.

Officials with the Lexington Center Corp. had asked the council to pass the resolution backing its proposal to increase Fayette County’s hotel and motel tax from 6 to 8 percent. There is a state-wide 1 percent tax on top of the local tax. If approved by the General Assembly, Fayette County hotel and motel taxes would rise to 9 percent. Officials with the Lexington Center, which manages Rupp Arena, the attached convention center and the Lexington Opera House, have said that 9 percent is still lower than neighboring cities such as Louisville.

The boards of Commerce Lexington, VisitLex, the city’s tourism group, as well as the Bluegrass Hospitality Association have unanimously approved resolutions supporting the increase. Bluegrass Hospitality is the county’s restaurant, hotel and tourism association.

In addition to the tax increase, Lexington Center Corp. will also ask the state for $75 million. The additional 2 percent in taxes will pay debt payments for the overhaul that would include more exhibition space, meeting rooms and other space. The total construction cost will likely be closer to $190 million. The remaining $60 million will be needed to pay off prior renovations including a $15 million technology overhaul of Rupp Arena and a prior renovation of the convention center.

The more than two-year technology overhaul of Rupp Arena will include new ribbon boards, center-hung score boards and improved wi-fi in the arena. That technology upgrade is currently underway.

The legislature — which begins its legislative session Jan. 5 — will have to approve both the tax increase and the $75 million appropriation. Two years ago, the legislature approved a Jefferson County increase to its hotel and motel tax and allocated $56 million in state money for a renovation of its downtown convention center.

Bill Owen, the president and CEO of Lexington Center, has said he hopes Lexington’s unanimous support of its convention center overhaul will help the group secure funding at the state legislature.

In other business, the council unanimously approved the advertisement for bids for the city’s water franchise agreement. Kentucky American Water, which has the current 20-year water franchise agreement, will likely be the sole bidder. The city will have to wait to receive bids before the council takes a final vote on a water franchise agreement. The new agreement would limit the franchise to five years with two five-year extensions. The new agreement also increases fines for noncompliance of the water franchise agreement.

The council voted unanimously to approve a $200,000 two-year contract to Central Kentucky Community Action for a pilot program to house two-parent homeless families. The program aims to serve 16 families in its first year. Families who need emergency shelter will first be placed in a hotel and then can transition to an apartments for up to 90 days. During those 90 days Community Action will work with the family to find stable, permanent housing. Currently, there is limited space in Lexington’s shelter system for two-parent families or for single fathers with children. The program is expected to begin sometime in January.

Beth Musgrave: 859-231-3205, @HLCityhall