At the Wednesday night City Council meeting, Council unanimously agreed to proceed with placing a question on the April 4, 2017 ballot that, if approved by voters, will increases sales tax by ¼ cent and generate revenues to fund the construction and operation of a downtown event center and improvements to Two Rivers Convention Center.
The proposed project has been discussed within the community for several years, with at least two feasibility studies being conducted, the most recent in 2015. Specifics of the project include construction of a new 5,000+ seat event center together with improvements to Two Rivers Convention Center. The creation of a facility that is attractive to a regional market and is able to host activities not currently possible in Grand Junction including minor league sports teams, large concerts and family events, large conferences, expos and conventions, is the impetus behind the project. An event center would serve the growing recreation, entertainment, convention, and tourism industry, and present significant economic benefit to local dining, lodging and shopping establishments.
It has been shown in recent studies that a significant portion of the City’s general government revenue is derived from sales tax paid by visitors, out-of-area shoppers/non-City residents. The City is principally funded by sales tax, but with the large amount of sales tax paid by those visiting the community, the tax burden on City residents is estimated to be just 22% of the total.
Mayor Phyllis Norris states, “This is an exciting prospect for the City to be able to regain some of our regional presence, as well as to bring a new economic engine to our community. It is estimated that an additional 200-240 new jobs will be created directly related to the Center and even more indirectly, and that is something that cannot be overlooked. We have to be creative in looking at ways of igniting our economy, and this is just one possibility. I am hopeful that voters will support this as something our community needs right now and into the future.”
If approved the tax increase would go into effect on July 1, 2017 and is estimated to generate approximately $4 million annually. The revenue will change correspondingly with any actual growth in retail sales activity. The debt issued will not exceed $65 million plus or minus a premium or discount at an effective interest rate not to exceed 5%. The total repayment cost would not exceed $134,000,000 over a 30-year term. It is projected that the revenue generated by the ¼ cent will be sufficient to cover the debt service cost as well as any potential net operating cost.
Currently the City of Grand Junction’s 2.75% sales tax rate is below the average (3.3%) of 25 comparable cities around the state including neighboring towns and cities. For comparison Fruita, Delta, and Palisade all have a city sales tax rate of 3% and Montrose has a city sales tax rate of 3.3%.
For additional information on the proposed project, visit the City’s website at www.gjcity.org.
Contact: Sam Rainguet, Communications Manager 970-244-1507