City board supports CARES request
The city’s leisure travel business has rebounded from its spring and summer doldrums, but the other half of the city’s tourism portfolio continues to flounder.
Visit Hot Springs CEO Steve Arrison told the Hot Springs Board of Directors earlier this week that it’s uncertain when the convention and meeting business will return, explaining that 120 events the Hot Springs Convention Center was scheduled to host this year have been canceled.
“The industry forecast right now says the meetings business is not going to return until 2022,” Arrison said
Wednesday.
He said convention and event centers were the first to feel the effects of the economic downturn wrought by the coronavirus pandemic and will be the last to recover. But state and federal aid that has sustained other industries through the downturn has not been made available to the quasi-governmental facilities Arrison said generate nonresident sales tax revenue for local governments.
Unable to qualify for the $150 million set aside for cities and counties from the state’s $1.25 billion in Coronavirus Aid, Relief and Economic Security Act funding, convention and event centers are feeling left out.
“We’re just asking for a little help,” Arrison said, noting the industry was also excluded from the $50 million the state recently made available from its CARES Act funding for business interruption grants for the personal care, tourism, travel, recreation and hospital industries. “Give us some consideration. Help us keep the doors open as we move forward and get through this.”
The city board lent its weight to the cause, adopting a resolution in support of Arrison’s request for
$1.5 million in CARES Act funding for the Hot Springs Convention Center and Bank OZK Arena.
“We hope that the governing body of our city, by them making a formal request, then maybe we can get some attention,” Arrison said. “We had 480,000 people come through the building last year. Even if you have one person come through you still have the elevator maintenance contracts, the chillers for the 360,000-square-foot building, the security and fire systems. You have all of these ongoing expenses if you have no business or a lot of business. We haven’t qualified for anything.”
The steering committee the governor appointed to consider funding requests from the state’s CARES Act money said Wednesday it had assigned or allocated
$1.17 billion. More than $450 million of that is on hold. Funding proposals advanced Wednesday left $70.7 million to be distributed from the $1.25 billion allocation, the committee said.
State Sen. Will Bond, D-District 32, of Little Rock, a member of the committee, asked the steering committee last month to make funds available for convention and event centers.
“I want to make sure they have a place where they fit in this proposal,” Bond, referring to the Arkansas Municipal League and Association of Arkansas Counties’ $150 million request for local governments, told the committee last month. “They’ve really taken it on the chin. I think we need to keep them in mind.”
AML Executive Director Mark Hayes reminded Bond that lost revenue resulting from the pandemic is not reimbursable under rules the U. S. Department of Treasury issued for CARES Act funding. Funding is limited to pandemic-related expenses incurred between March 1 and Dec.
30 that were not accounted for in
2020 budgets.
“There’s probably a way to talk about employments issues, any maintenance issues that have been deferred,” he told the committee. “It is not an easy question. We are going to dig hard to find some link back to the act. I’ve had phone calls from all over the state, and they’ve all essentially had to close their doors. We’re going to have some additional work to see if we can do some substantial amount.”
More than $850,000 for salaries and benefits from March through December was included in Visit Hot Springs’ funding request.
“It won’t save the 27 people I laid off already, but hopefully I won’t have to lay anybody else off if things get worse,” Arrison said.
Garland County and Hot Springs are eligible for $2.35 million and $1.5 million, respectively, from the $150 million set aside for cities and counties.
“The cities and counties have a lot of holes they have to fill as well,” Arrison said. “We’re not their number one priority. Their number one priority is to take care of their organization. If I was them, I’d feel the same way.”
He said if the convention and meeting business doesn’t rebound by next year, and if no CARES Act funding is made available, he may have to ask the Hot Springs Advertising and Promotion Commission to appropriate money from its restricted fund.
Interest income from the fund’s principal pays for capital improvements at the convention center. Arrison said it may be needed to keep the building afloat if no funding is made available.
“That’s to take care of this building way into the future,” he said of the restricted fund. “If we don’t get any help, we’ll probably have to start dipping into it. The citizens of all these communities paid a lot of money to build all these facilities. What happens when it’s two years from now and it’s $2 million to replace the roofs on these facilities. Where’s that money going to come from?”