To get York County hospitality funding approval, restaurants must benefit

York County leaders are making changes they say will help restaurants in unincorporated parts of the county.

York County Council approved a new application form Dec. 5 for marketing and advertising grants funded by county hospitality tax dollars. Hospitality tax money, a 2-percent charge on food and drink in unincorporated areas of the county like Lake Wylie, must be spent on projects promoting tourism. An advisory committee takes funding requests and recommends project funding to Council.

For almost a decade hospitality tax money has been used on marketing festivals, events and gatherings throughout the county. In recent years the tax advisory committee began tweaking how it evaluates requests, focusing on how festivals and promotions contribute back to the tax.

“We’re changing the scoring section to help give a kind of discretionary bonus, in terms of point evaluation, if they show proof of partnership with food vendors within the unincorporated portions of the county,” said Mark Van Sickle, tax advisory group member. “Because that’s the people who are actually going to generate this, so they should help get the benefit of collecting the tax.”

Many festivals and events in York County are held in municipalities. Fort Mill, Rock Hill and others have their own hospitality taxes. The county advisory group looks at where the nearest restaurants are to events to figure out where revenue will be generated. Restaurants in the Baxter area of Fort Mill or in Lake Wylie generate the unincorporated tax. Restaurants in downtown Fort Mill or Tega Cay don’t.

One solution to continue funding events like South Carolina Strawberry Festival in Fort Mill is if organizers show it uses food vendors from outside town limits like restaurants in Baxter or near Carowinds.

County hospitality tax revenue makes up a small portion of overall festival funding, but it can be a significant part of the advertising budget.

Just as festival and event promoters must show how unincorporated areas will be impacted, so, too, do groups submitting for capital requests. Van Sickle said the same focus on impact to unincorporated area restaurants will be used for capital requests, such as a sports park in Lake Wylie or multipurpose fields in Fort Mill. Still even the best request may have to wait.

“Our recommendation is regardless of the status of the revisions to the application, that no decisions be made based on projects that we know are forthcoming,” he said.

The new advisory group began a couple of years ago, in part, to look at distributing tax money piling up and largely used only for smaller advertising and marketing grants. With the aquatic center in Lake Wylie and fields allotments since, the group is now seeing more money requests than it has to spend. Van Sickle asked Council to “not allocate the limited pool of money to one project” and not approve any capital requests until summer, when tax revenue collection begins refilling the fund.

“Obviously, there’s a finite fund at this point, and it’s going to take a long time to replenish that,” he said.

For several years restaurant owners in Lake Wylie and elsewhere asked why they weren’t seeing the tax money they collected put into projects that help their business. Now, county leaders say they are making an impact.

“I thought they did a good job with everything I saw in all the (marketing grant) recommendations,” said Councilman Robert Winkler.

Councilwoman Christi Cox said it makes sense to consider areas paying the hospitality tax money when deciding how to spend it.

“I like the fact that you guys are beefing up the component of ensuring the unincorporated area is given some deferential treatment given the origination of the funds,” she said.

But, she said, the tax is a county tax to improve the county as a whole.

“I’m not sure if the onus is to make sure they’re spread throughout the county,” Cox said of approved funding requests, “but I think it would be something I think is important, is that we assure that projects that are recommended are something the entire county is (benefiting from).”

This story was originally published December 9, 2016 at 5:03 PM with the headline "To get York County hospitality funding approval, restaurants must benefit."