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The Tourism Development Fund (TDF) is funded through a portion of a 1% sales tax increase established by Virginia Senate Bill 942 (2018) and agreed to by Williamsburg City Council and leaders in James City County and York County in late April/early May 2018. The sales tax increase does not include groceries and went into effect in July of 2018. Read more about the funding sources here.
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The goal is to "kick start" private investment that will bring new and exciting projects to our destination. It is impossible to know just yet what specific projects might be submitted for consideration, but this is a list of some types of things we would expect:
Yes, the funding is available for use by any project and applicant if approved by the City Council after review by the Tourism Development Grant Review Committee (TDGRC).
The program will work like a grant program meaning that interested parties would apply for funding. This includes the establishment of the Tourism Development Grant Review Committee that would accept applications once annually. They would then review the applications and recommend a funding plan to the City Council for approval.
The committee will be appointed by the City Council. The application process will include two phases. The first phase is a preliminary review by staff to determine eligibility. The second phase, if eligible, would be more detailed requiring studies and analysis of the concept at the applicant’s expense.
The committee members serve two years and must be replaced or reappointed. A member may serve as many as three terms. This means that no one member’s terms on the committee shall exceed six years of service. The committee consists of three representatives of the tourism industry, two at-large community appointees, and two ex officio members (one from the Planning Commission and one from the Economic Development Authority. The committee will solicit project applications, review every Phase 2 Tourism Development Fund (TDF) application, and will make funding recommendations to City Council. City Council will make final funding decisions.
The private sector will invest in opportunities where return is certain and profit is likely.
The Williamsburg market is not as strong as it once was which hinders private investment in new products. This is particularly true in cases of newer concepts like boutique hotels, attractions, and mixed-use developments with integrated living and retail options. In communities where these types of developments are desired, the government’s role is to provide risk reduction to encourage this investment. This does not mean the government or the taxpayer has to fund the majority of the cost. It means we, the taxpayers, have to reduce the risk of investment to a point where the private sector is willing to invest. This threshold is different for each project.
Discussion began in the fall of 2016 as the City started developing the 2017 to 2018 Goals, Initiatives and Outcomes (GIOs) as City Council recognized the need for a renewed investment in tourism infrastructure, place, and attractions. This is reflected in the adopted 2017 to 2018 Biennial GIOs.
The conversation matured in January 2017 during the City Council budget retreat. City staff was asked to look for ways to finance the kind of projects the community lacks. This question was partially driven by the pending completion of the Williamsburg Downtown Vibrancy, Design and Marketing Plan, and the resulting question of how to implement the changes and improvements suggested.
During the April 2017 City Council Work Session, the concept of a Tourism Development Fund (TDF) was discussed. It was again reviewed in detail during the June 2017 City Council Work Session and Business Meeting. Council reviewed comparable programs from other tourism-based localities and considered operating models for a local TDF at a July 8 work session.
At the July 10 work session, the Council considered the existing budget and potential new revenue sources for funding the TDF. At the July 13 business meeting, the Council delayed action on the TDF and asked staff to organize a community forum to answer questions regarding the proposed TDF. That Forum was held on July 27 and was well attended generating lots of good comments and discussion. The Council then adopted components of the TDF in August and finalized the process in September.
Yes. Any unspent funds would be available in subsequent years for project awards. Additionally, if the committee realizes an inability to expend all of the revenue, they can recommend that the tax rate be reduced as needed or warranted.
We identified Asheville and Virginia Beach as similar markets. These are both competitive markets for Williamsburg and we compete for the same audience or visitor.
In Asheville’s case, we find that in the early 2000s the community, led by the hospitality industry, worked to create the Tourism Product Development Fund (TPDF). Funded using similar revenue streams this program has funded 31 projects with $27 million since 2001. It is credited as helping create Asheville which today welcomes record visitors and boasts a wealth of attractions. For more on Asheville’s program here is a video that describes tourism’s impact on their community.
Virginia Beach tells a similar story. Virginia Beach utilizes two programs aimed at boosting tourism. The Tourism Investment Program (TIP) is a discretionary funding tool utilized to jumpstart major projects in its market. Projects and events like the Rock’n’Roll Marathon and Beach Street USA benefit from the program.
While this is not conclusive data-driven proof of success, it is indicative of the efforts that create a successful tourism community.
Annual reporting and evaluation of the program staff and committee are an important part of this process. The City Council and the community have to consistently evaluate all City programs for effectiveness. Obviously, as with any program, there is a building period. The Tourism Development Fund (TDF) will take at least five years to reach a point of measurable outcome.
It should be noted that the TDF was paused in March of 2020 due to the COVID-19 pandemic. This did not affect the funding of those projects approved in November of 2019. The program reopens February 1, 2023.