After signing off on the Lutsen Tofte Tourism Association’s (LTTA’s) request to pay off golf course bonds so it would no longer have to keep significant amounts of lodging tax income on hold in county coffers, the Tofte town board voted Thursday, July 9, 2009 to collect the tax itself and then disperse it to the LTTA.
The county will continue to keep $50,000 of the 3% lodging tax each year to help the Cook Authority pay Superior National Golf Course revenue bonds. The town of Tofte will now have 1.78% of the tax available to use as it sees fit for promoting tourism. The board will turn the money over to the LTTA, but Tofte supervisor DC Olsen expected that LTTA would not be happy with its decision to have the money go through Tofte first.
Olsen said he was approached recently by a University of Minnesota representative taking a survey on whether the LTTA office should be relocated to Lutsen instead of remaining in the Tofte Fishing Museum. If people don’t stop for tourist information until they get to Lutsen, Olsen said, they’re not going to turn around and go back to Tofte.
If the LTTA leaves the fishing museum, Tofte resident Jim King said, the museum may not survive. TheLTTA has been helping staff the museum and pays for the building’s heat and electricity. According to town supervisor Paul James, the LTTA agreed to be housed in the fishing museum when it was built in order to allow the museum to operate.
If an argument ever breaks out over how lodging tax funds are used, James said, having the money sent to Tofte Township will make it clear that Tofte has the say in how the money is used. He noted that Tofte has not been getting reports on amounts being collected, how the tax is used, or if any lodging businesses are in arrears in submitting their taxes.
Several days later, at the monthly meeting of the Schroeder town board, LTTA employee Sally Nankivell and LTTA treasurer Scott Harrison fielded questions from Schroeder residents who did not believe their town was being promoted well with lodging tax dollars meant to promote tourism in the West End.
A month ago, Nankivell and Harrison asked the Schroeder town board to approve payoff of the golf course bonds, but supervisors Cathy Johnson, Bill McKeever, and Ross Willson said they needed to investigate the issues before agreeing to the request. On Tuesday, July 14, Nankivell and Harrison returned and were presented with questions from Cathy Johnson and comments from the community.
Johnson asked how the LTTA was using lodging tax money to benefit Schroeder. Nankivell referred to a marketing brochure featuring a map of the West End. The map of Schroeder listed Temperance River State Park, Temperance Landing on Lake Superior, Father Baraga’s Cross, the Cross River Heritage Center, Lamb’s Resort & Campground, and Superior Ridge Resort. Below the map was a list of non-lodging West End amenities: 14 in Tofte, 22 in Lutsen, and one in Schroeder: the United States Post Office.
Nankivell said she had run out of time to list more Schroeder amenities and did not include businesses that did not pay membership dues. Johnson pointed out numerous businesses that have said they do not feel that paying dues benefits them enough to justify the cost.
The LTTA brings in money through three sources: lodging taxes, membership dues, and five extra levels of membership (ranging from $400 to $4,500) that qualify businesses for inclusion in marketing efforts.
The discussion brought up old issues that started years ago, according to Town Treasurer Mary VanDoren.
Nankivell said she encourages business owners to attend LTTA meetings and give their input. Johnson said the LTTA’s daytime meetings are difficult for working people to attend.
Marion McKeever asked about the LTTA’s thoughts on moving from Tofte to Lutsen. Nankivell said they are researching the best use of their resources. Tourist information should be available at the county line, McKeever said.
Johnson said she was not comfortable approving or supporting the LTTA’s bond payoff request. She said she thinks people “are disgusted” with how the LTTA has operated and does not believe lodging tax dollars are benefitting Schroeder. “We miss the boat big time,” she said.
County Commissioner Bruce Martinson, owner of Superior Ridge Resort in Schroeder, said he thinks Schroeder only contributes about 4 ½% of the amount the LTTA receives each year from lodging taxes.
Ross Willson supported the LTTA’s request to pay off the bonds but said he would like to see more Schroeder businesses be part of LTTA marketing efforts. “We don’t have anything else to move Schroeder forward at this time,” he said.
Harrison said he had not heard of the frustrations of Schroeder residents or business owners until he got to that meeting.
The perception in Schroeder, Tom Spence said, is that they have been treated like second-class citizens.
Whether a business is paying or not, Catherine Johnson said, putting all businesses on the map would benefit tourism.
Minnesota Statute 469.190 on local lodging taxes requires that 95% of a lodging tax be used “to fund a local convention or tourism bureau for the purpose of marketing and promoting the city or town as a tourist or convention center.”
In order to approve the request, Johnson said, she would want a report regularly on where the money is going. She also said she wants to see businesses paying the tax get recognized as the larger businesses do. “I’m not a fan of certain small businesses being shut out because they can’t afford to pay,” she said.
Nankivell agreed to send the township monthly board meeting minutes, an annual report, and the LTTA budget. Harrison promised that if the township signed its approval of the bond payoff, he would experiment with meeting times to see if it brought more participation.
Theboard (with Bill McKeever absent) approved the request.
In a separate phone conversation, Nankivell said, “Our goal is to do more and more promoting of the area as a whole.”
Rates for LTTA membership start at $100 for non-lodging businesses. Lodging establishment membership rates are based on a formula that includes the size of the property, number of full-timeequivalent staff, and number of pillows. According to LTTA vice-president Jim Vick, the basic membership simply makes a business a “civic player” but does not bring the business individual recognition.
Vick believes some businesses are not aware of what the LTTA is doing to promote the entire community, such as with direct mail, billboards, and radio spots targeting visitors from Chicago to Winnipeg. “Our mission is to bring people to the area, and clearly we do a good job at that,” he said.
The home page LTTA website, www. americasnorthcoast.org/about/business. php, includes a compelling slide show. After considering the business advantages of calling the entire area from the county line to Cutface Creek “Lutsen” in its advertising, the LTTA settled on calling it “America’s North Coast,” Vick said.
Will small “Mom and Pop” businesses and lodging establishments be ignored in the face of newer, trendier accommodations afforded by the bigger West End businesses? Vick noted one bed and breakfast business that bought one of the levels of extra advertising and got more reservation requests than it could accommodate. He believes all types of business have a niche. “There are people who are cherishing the Ma and Pa places,” he said. “That is not outside our mission.”
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