New revenues and a nine-figure capital investment in the tourism and hospitality industry highlighted 2019, City Manager Bill Burrough reported in his state of the city address to the Hot Springs Board of Directors Tuesday night.
He reported a 6.4% year-over-year gain in collections of the city's 1.5% sales tax, which he said is expected to raise $21.5 million for the general, police and fire funds after all 2019 collections are remitted to the city. The city has yet to release the December sales tax report, but collections through November put the tax on pace for more than 6% growth compared to 2018.
Collections rose 10.83% compared to the previous year's July-through-November period, growth that coincided with internet retailers and e-commerce facilitators such as Amazon and eBay collecting state and local sales taxes. Changes to the state's tax code that took effect in July require online businesses to collect sales taxes. The city saw a 2.74% year-over-year increase during the six months that preceded the mandate.
July is also when the casino tax took effect, significantly increasing the city's revenue from Oaklawn Racing Casino Resort. The city reported $1.9 million in casino tax revenue during the final six months of 2019, an 83% increase compared to the final half of 2018.
The city gets 19.5% of the 13% tax applied to Oaklawn's first $150 million of annual net gaming receipts and the 20% applied to net totals over $150 million. The resulting revenue is about double the proceeds from the 1.5% share of net receipts the city received from Oaklawn's games of skill.
"With the opening of the additional 28,000 square feet of gaming area, revenues will increase even more," Burrough reported.
Ninety percent of the new Oaklawn revenue goes into a restricted fund for unfunded capital needs, such as a new fire station in the Highway 7 south area and demolition of the St. Joseph's Hospital infirmary on the campus of the Arkansas School for Mathematics, Sciences, and the Arts.
Burrough said the 7,000 local jobs tourism and hospitalities supported last year contributed to a drop in unemployment. According to information compiled by the U.S. Bureau of Labor Statistics, unemployment fell from 4.1% to 3.4% in the Hot Springs Metropolitan Statistical area, which comprises all of Garland County, in 2019.
Employed or unemployed people actively seeking work rose from 40,005 at the end of 2018 to 40,568 in December. Nonfarm jobs rose from 38,800 in December 2018 to 39,200 the following December. The 39,900 jobs in April and June were the highest monthly totals of 2019.
"All indicators point to an encouraging and robust local and regional economy, from steady increases in sales tax revenues and building permits to the infrastructure development that provides building blocks for the future and sustains and enhances our quality of life," Burrough reported.
Oaklawn started a $105 million expansion last year, accounting for most of the city's $139,460,035 in new commercial construction in 2019. The 200-room, seven-story hotel included in the expansion is one of numerous 2019 capital investments in the city's lodging portfolio, Burrough reported.
He noted the more than $20 million revamping of the former Clarion Resort on Lake Hamilton. Rebranded as the DoubleTree by Hilton of Hot Springs, the 142-room hotel opened after closing for renovations in 2019. Wyndham broke ground last year on a $5 million microtel on Higdon Ferry Road.
Boutique hoteliers also contributed, the report noted. The Hotel Hale opened on Bathhouse Row, the Cleveland Arms Building on Central Avenue was converted into lodging, guest rooms were upgraded at the Happy Hollow Motel on Fountain Street and the Best Court Motel on Ouachita Avenue was renovated.
"Numerous historic properties have also undergone full-scale renovations to offer accommodations meeting the needs of Hot Springs' varied and discerning visitors," Burrough reported.
The report acknowledged not all residents have reaped the city's prosperity dividend. The Hope Works Hot Springs anti-poverty initiative announced last year is an outgrowth of that reality. Through a partnership with Jackson House, the city pays the homeless and panhandlers minimum wage to pick up litter. The transactional relationship is expected to develop into more personal connections that steer participants toward support services offered by local churches and nonprofits.
Fostering collaboration, rather than competition, among the area's panoply of service providers was the overarching theme of the anti-poverty summit the city held in June.
"While the progress we are seeing today is gratifying, there remains much hard work and dedication to keep Hot Springs surging ahead," Burrough reported. "We still face daunting challenges and too many of our residents and neighborhoods have yet to be touched by our recent progress.
"Our strength lies in our citizens, and by working together for their betterment we can ensure that all will share in the rising tide of progress."
Local on 02/21/2020