The City of Williamsburg is kicking off a new development program which will increase visitation to the Greater Williamsburg region. This program is called the Tourism Development Fund or TDF. The TDF was adopted in 2017 with one intent:
The purpose of the Tourism Development Fund (TDF) is to increase patronage to restaurants, attractions, hotels, and events in the City of Williamsburg through financial assistance and reinvestment in tourism products, place-making projects, special events, public-private partnerships, and destination marketing.
The City is looking for partners to help increase tourism. The reason is simple. People agree that the City has to bolster tourism in order to continue offering the world class services and quality of life to which residents and visitors have grown accustomed. To do this, the City has to provide a business-friendly environment, be progressive in thinking about new concepts, and reduce the costs of investment.
The TDF is all three of these rolled into one program. Just by establishing and promoting the availability of a TDF and the partnership it represents, the City is advertising a business-friendly environment. The TDF is not a new concept and is used in many tourism destinations, but it is new to Williamsburg and that sends the message that the City is aggressive in addressing the need for tourism. Lastly, the TDF is a grant program intended to help reduce the costs of investment.
The TDF is funded through a portion of a 1% sales tax increase set by Virginia Senate Bill 942 (2018). These funds are made available for grants based on an application/review process and recommendation by a review committee and final approval by City Council. Projects can be new development, expansion of existing projects, public facilities, improved experiences, and/or increased marketing. Any project that can be shown to increase patronage to restaurants, attractions, hotels and events can qualify and be considered.
The first round of grant consideration will begin in March of 2019. To learn more use the menu bar on the left, email the City Manager's Office or call (757)-220-6100.
Why do we need a Tourism Development Fund (TDF)?
The largest driver of Williamsburg’s economy is tourism. This industry gets the credit for keeping the real property tax rate in the City at one of the lowest in the Commonwealth of Virginia. The industry employs thousands and supports all of the quality of life we enjoy as residents. However, since the mid-1990’s we have seen a significant decline in visitation which results in fewer jobs, less tax revenue, and a reduction in programming.
It is difficult to credit one national trend or action for this reduction so we will not speculate. The community has spent years talking about the decline and trying to address it. However, ultimately every corrective action depends on additional revenue to add reasons for visiting Williamsburg, for advertising new and interesting events or activities, and for creating a place that people want to visit and remember.
What types of projects could be funded by the TDF?
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:
◦Streetscape renovations and enhancements
◦Transit improvements (bike share, pedestrian access, enhanced bus shelters)
◦Convention and group meeting facilities
◦Outdoor and Indoor recreation facilities and amenities
◦Public parks (community or regional)
◦Business improvement grants (through EDA)
◦Public art and place-making
◦Special event grants and marketing
◦Culinary arts incubators
◦Regional trails and connectors
◦Historic and cultural sites
◦Other projects that meet award considerations, demonstrate feasibility, and receive recommendation
How much would taxes increase if the TDF is approved?
Virginia Senate Bill 942 (2018) increased the Virginia sales tax 1% in the Historic Triangle (James City County, York County and the City of Williamsburg). A portion of that 1% goes to fund the TDF.
Why can’t the City fund the TDF using existing revenues?
The city budget cannot accommodate new expenses of nearly $2.1 million annually without new revenue sources or eliminating services and programs
How did City Council decide on a Tourism Development Fund?
Discussion began in the fall of 2016 as the City started developing the 2017-2018 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 2017-2018 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 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.
How does the TDF differ from the City’s Capital Improvement Plan (CIP)?
- The CIP is a 5-year plan of municipal projects that exceed $10,000 dollars in value and have a useful life of at least 5 years.
- The TDF will function like the CIP in that it will include a 5-year plan of action which will enable projects to receive funding over multiple years.
- The biggest difference between the CIP and the TDF proposal is that the TDF is a grant program and the CIP funds only city projects.
- The CIP is funded through general revenues of the City while the TDF fund revenues would be restricted for its use.
- The need for a separate process is based on the desire to reserve these new revenues explicitly for the use of the TDF projects.
Where has a TDF been successful in a similar market to ours?
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 2000’s 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 the 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. (Note: the video is an edited version of several videos developed by the Asheville Convention and Visitors Bureau).
Virginia Beach tells a similar story. Virginia Beach utilizes two (2) programs aimed at boosting tourism. The Tourism Investment Program (TIP) is a discretionary funding tool utilized to jumpstart major projects in their 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.
Here are some examples of projects in other localities using similar funding:
Citizens are encouraged to share their questions, comments and concerns with City Council. You do not have to be present to comment on City Council meeting agenda items. Simply go to the City's emeetings page, find the meeting you are interested in, and beside the link for the meeting agenda, click on "eComment" and leave your comment there.
Previous TDF discussion meetings:
July 8, 2017 (Saturday) 8:00 am – City Council Work Session (specifically to discuss the TDF) - Stryker Center
July 10, 2017 4:00 pm – City Council Work Session - Stryker Center
July 13, 2017 2:00 pm – City Council Meeting - Stryker Center
July 27, 2017 (Thursday) 6:00 pm to 8:00 pm Community Forum in the Community Building at 401 N. Boundary Street
August 7, 2017 4:00 pm - City Council Work Session (not an agenda item, but discussed during "Open Forum") - Stryker Center
August 10, 2017 2:00 pm - City Council Meeting - Stryker Center
April 24, 2018 9:00 am City Council Budget Work Session - Stryker Center
April 30, 2018 8:00 am Public Meeting - Stryker Center (attended by representatives of all three historic triangle jurisdictions)
May 10, 2018 2:00 pm City Council Meeting - Stryker Center
Helpful links and documents:
Memo - Establish Tourism Development Fund
Resolution #17-12 - Establish TDF and TDF policy
Ordinance #17-09 - Meals and Lodging Taxes (repealed - see Ordinance #18-01)
Ordinance #17-10 - Admissions Tax (repealed - see Ordinance #18-01)
Memo - Comparison Questions and Answers
Ordinance #18-01 - Repeals City tax increases for tourism
Memo - Regarding Ordinance #18-01
At City Council Work Session - April 10, 2017
At City Council Work Session - June 5, 2017
At City Council Meeting - June 10, 2017
At City Council Work Session - July 8, 2017
At City Council Work Session - July 10, 2017
At City Council Community Forum - July 27, 2017
At City Council Budget Work Session - April 24, 2018
At City Council Work Session - August 6, 2018
At City Council Work Session - September 10, 2018
What other localities are doing:
Ashville, NC http://www.ashevillecvb.com/product-development/
Ashville, NC http://bctda.ashevillecvb.com/product-development/