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  • Writer's pictureMark L. Johnson

Tourism Funds Preservation-Update

In 2020, the Tortolita Alliance (TA) performed considerable research regarding the history of the Tortolita Preserve (TP) and published the 3-part Lease-Onomics Series (Series).


The Series included information on; (1) TP origins, (2) TP Lease with Arizona State Land Department (ASLD), (3) TP Lease Rent Funding, (3) TP Asset Value to Marana and (4) Dove Mountain developer concessions. Suggest reading the Series as a refresher or primer.


This blog provides an update regarding TP Lease Rent Funding via the Bed Tax Fund.


The Bed Tax Fund data utilized in this blog was provided by the Town of Marana via a Public Records Request (6/30/23).

 

Tortolita Preserve & Lease

TP is a 2,400 acre preserve established in 2000 as a result of required mitigation land for the construction of a Resort Hotel (ultimately Ritz-Carlton) within the Dove Mountain Specific Plan.


The land is owned by the Arizona State Land Department (ASLD) and leased to the Town of Marana for 99-years.


Lease Rent Payments

Marana has provided TA with the Projected Annual Lease Rent Payments with the 5-year 10% adjustment factor provided in the lease. In 2023, Marana will pay a TP Lease Rent of $632,491 and the annual rent goes up to $2,642,072 in the last year (2099) of the TP Lease.


The state of Arizona utilizes the lease payments to fund the state education budget.


The Hotel Sales Tax and Bed Tax Fund

Visitors that stay at any of Marana's hotels pay an 8% Hotel Tax on the room charge. Half of those tax proceeds go to the General Fund and half go to the Bed Tax Fund.


The Bed Tax Fund was established pursuant to Arizona Revised Statute (ARS) Section 9-500.06, which provides that the Town can impose fees (taxes) on the hospitality industry but the receipts must be used to promote tourism. The expenditures that qualify include; (1) sporting events or cultural exhibits, (2) contracts with non-profits that promote tourism and (3) to develop and improve tourism related attractions or facilities and related planning and promotion.


TP is one of Marana's most valuable natural resource assets and a destination for visitors desiring to hike, bike and horseback ride in this beautiful, pristine Sonoran Desert location! Accordingly, the Bed Tax Fund is used to pay the TP Lease Rent.


The Bed Tax Fund also supports the salary of Economic Development & Tourism staff and other tourism-related expenditures. As of 6/30/22, the Bed Tax Fund had a balance of $3,475,267.


This means that visitors, not Marana residents, are funding the TP Lease Rent payments.


The only exception are those Marana residents that are in the dog-house and forced to stay at the Ritz-Carlton or Hampton Inn for hopefully just a few nights!



Bed Tax Fund Receipts


Let's take a look at how the Bed Tax Fund is doing.


Annual Bed Tax Fund Tax Receipts (2020-2023 YTD) are shown in the table below and are approaching about $2 million per year.



Monthly Bed Tax Fund Tax Receipts (2020-2023 YTD) are shown in the table below. Some interesting notes and observations:

  • Bed Fund Tax Receipts may lag a month from the time the actual Hotel Tax is incurred

  • Highest Bed Fund Tax Receipts are in March, April and May (except 2020-COVID-19 Year)

  • Low Bed Fund Tax Receipts in June 2021 is not clear but probably due to ongoing COVID-19 epidemic

  • Total Bed Fund Tax Receipts for March & April 2022 is $470,479 versus $508,572 for the same period in 2023. This is a +$38,093 (+8%) change. For 2023, this time frame coincides with the LIV Golf Tournament and one has to wonder if a $50 special permit fee that resulted in only $38,093 of additional Bed Fund Tax was worth all the aggravation.



Future Use Of Bed Tax Fund

There is certainly enough Bed Tax Fund tax receipts coming in to pay the TP Lease Rent, other current Bed Tax Fund expenses and still have a surplus. This surplus will increase in the years ahead and TA would like to see some of the Bed Tax Fund surplus used for:

  • Improvements to the TP Trail System and connecting trails identified in the Parks and Recreation Master Plan-2022

  • Invasive Plant Management programs to ensure eradication of invasive plants in the Tortolita Mountains

  • TP and Tortolita Mountain Saguaro research

  • Public environmental education programs for visitors and residents, especially children

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