Orange County’s Tourism Development Tax and the Venues Buyout Plan
By County Commissioner Bryan Nelson
Orange County’s Tourism Development Tax (TDT) is a County tax that is collected on all lodging rooms within the county. If you have ever booked a hotel room you may have noticed this tax when it was added to your total for the room. The TDT is a 6th percent tax charged to all hotel guests including those that rent for six months or less. Additionally, Airbnb rentals are also charged the tax. A deal was reached between the company and the County in March of this year that allows for the collection of TDT on any rooms booked through the website.
Orange County CommissionerBryan Nelson
The tax has been used to fund and develop many of the community venues that the Central Florida Community is proud of. These include the completion of the Amway Center, the first stage of the Dr. Phillips Center of the Performing Arts, and the renovation of the Camping World Stadium (formerly knowns as the Citrus Bowl). Half of the $1 billion that was used for these projects came from the TDT and the other half came from the Community Redevelopment Agency (CRA) funded by the City of Orlando and Orange County, from City contributions, and from private sources and philanthropy. For County residents who do not live in short-term lodgings like hotels, or who reside outside downtown Orlando, this means those residents will not be taxed for the cost burden for the community venues.
An intergovernmental agreement between Orange County and the City of Orlando was reached in 2007 called the Venues Agreement that allowed for all of these projects to move forward towards completion. The Venues Agreement allowed for Orange County to share the TDT revenue with the City of Orlando. Half of the 6th percent TDT collections now and for many years will be used to pay the construction costs to build the Amway Center which was completed in 2010. Additionally, the agreement called for the county to retain the 1st -5th percent TDT for county obligations including management of the Convention Center and tourism promotion. All excess TDT revenue was then granted to the City of Orlando for building of the remaining venues (Dr. Phillips Center and the Stadium). This revenue, however, was not sufficient for all development costs and consequently the City of Orlando issued debt backed by repayment from the TDT sent to the City via the intergovernmental agreement.
While TDT continues to grow annually, the county portion of this revenue is only growing at a rate of two percent each year under the terms of the intergovernmental agreement. This is due to the obligation the County has to the city regarding all excess revenue. As a result of this there are many new projects today that are not able to continue development.. Construction for the Dr. Phillips Center was divided into two phases due to the Great Recession. In order to be complete its second stage, the Center is still in need of $45 million. In addition, there are many other community programs and organizations in need of additional funding including the Orlando Philharmonic Orchestra, the Orlando Ballet, the Orlando Science Center, Visit Orlando, and the Convention Center among others.
In an effort to buy out the debt for the existing venues and use the excess revenue TDT revenue currently assessed to the City of Orlando the County will issue County TDT bonds to pay the TDT funded debts. This will allow the current venues debt to be paid off by the year 2024, almost 20 years before the projected date. However, because the County will also retain the excess TDT revenue it currently gives to the City of Orlando, it will make the $45 million immediately available for the completion of the second stage of the Dr. Philips Center and potentially fund many of the other community programs previously mentioned. This accelerates the availability of sizeable amounts of TDT funds from no-sooner-than 2024 to the beginning of 2017.
On September 30 the Tourist Development Council unanimously recommended three things to the Board of County Commissioners: 1) the additional $45 million from TDT to finish the DPC Stage 2 funding, 2) $5 million of TDT for a sports incentive fund to continue attracting major events like the NFL Pro Bowl and NCAA Kick-off classic games, and 3) consideration of the Venues Buyout Plan to make TDT funds available sooner for other community priorities. The Board of County Commissioners had a workshop on these topics on October 18. On November 1, 2016 the Board of County Commissioners unanimously approved all three TDT funding initiatives proposed by the Tourist Development Council.
If you have any further question about the TDT and the new venues buyout plan you can visit www.ocfl.net or contact my office at distrit2@ocfl.net
Bryan Nelson sits on the Orange County Board of Commissioners and Represents District 7 which includes Apopka and Northwest Orange County.
