SEMO PITCHES PROJECT

This graphic displayed at Monday's City Council meeting shows a possible highway exit sign that motorists might see if the university's River Campus is built.

The Cape Girardeau City Council Monday night heard from proponents and opponents of a proposal to increase and extend the city's hotel and motel tax to help fund Southeast Missouri State University's River Campus project.

The council will vote Aug. 17 on whether to put the tax package on the Nov. 3 ballot.

University officials outlined their request that the council ask voters to approve an increase in the hotel and motel tax from 3 percent to 6 percent and to extend the tax until 2024 to help pay for the creation of a school for visual and performing arts on the St. Vincent's Seminary property.

The university's proposal also calls for extending but not increasing the current 1 percent restaurant tax until 2024 to help pay for the project.

Revenue from the extended taxes would help pay off a $10 million general obligation bond issue for improvements and new construction. The city would issue the revenue bonds.

Dr. Dale Nitzschke, university president, called the proposal "an enormous opportunity" for the university and the city to work together on the project.

The River Campus would offer several benefits, said Art Wallhausen, special assistant to the president. They include economic development, increased tourism, enhanced cultural offerings, redevelopment of the downtown and South Cape Girardeau areas, historic preservation, a stronger university and improved quality of life, he said.

The proposal to increase the hotel and motel tax is "very attractive" because the brunt of the increase would be borne by visitors, not Cape Girardeau residents, Wallhausen said.

The River Campus could attract a minimum of 100 new students a year to the university, and each 100 additional students will spend $400,000 a year in Cape Girardeau, Wallhausen said.

In addition, the university estimates every 100,000 visitors to the River Campus will generate $2.8 million in revenue for Cape Girardeau businesses, including at least $900,000 for the city's restaurants, hotels and motels.

The university's proposal calls for renovating existing buildings and construction of 115,000 square feet of space. The River Campus would include an auditorium of at least 1,000 seats and a 500-seat experimental theater. It would house the university's drama, fine arts, music and dance programs.

Projected total cost of the project is $35.6 million. The university is raising $7.8 million, and the city tax package, if approved by voters, would raise another $10 million. The university plans to ask the Missouri General Assembly to appropriate the other half of the needed funding -- $17.8 million.

Dr. Ken Dobbins, university executive vice president, estimated the increased hotel and motel tax would raise an additional $330,000 a year to help pay off the bond issue.

Revenue from the extended restaurant tax would also help pay for the general obligation bond issue.

The proposal includes enough revenue to continue to fund the Convention and Visitors Bureau at its present level, Dobbins said.

He also suggested the city include a clause that the state first provide a $10 million match before any revenue created through the tax increase and extension is spent.

If the state's share doesn't come through by 2001, Dobbins said, the bond issue can be voided and any funds raised can be used to pay off existing bond debt.

Not everyone is happy about the university's proposal.

Pete Poe, representing Drury Inns, called the university's proposal "impressive." But while the River Campus project might be a good idea, he said, his organization "questions the wisdom" of increasing the existing hotel and motel tax by 3 percent to pay for it.

The increase would make the total taxes on Cape Girardeau's hotels and motels higher than taxes in St. Joseph, Columbia, Rolla and Kansas City, Poe said.

Competition for travel dollars within the Southeast Missouri region is "fierce," he said, with 15 new hotels opening in the area from Perryville to Hayti.

The tax increase could have a "negative effect that could offset the positive that this project could have" for Cape Girardeau, Poe said.

Mayor Al Spradling III invited Poe and other representatives of the hotel and motel industry to come to the Aug. 17 meeting with an alternative proposal to the 3 percent increase.

"We want everybody to be happy. If you can get together and resolve this, we'd appreciate it."