As we noted in this space Tuesday, even under the best of circumstances, the operating expenses of a Rocky Mount event center are projected to run at an annual deficit of between $300,000 and $600,000. Those estimates come from advisers and supporters of a proposal now before the City Council.
With all of the challenges before the city right now, is this an affordable undertaking?
We don’t think it is.
The city is considering a number of options to help make up the gap – some traditional, some relatively new to the revenue stream. As much as all of us would love to see the Edgecombe County side of town thrive in a commercial sense, using public money to build a multimillion-dollar facility there would be a tall order.
In other communities, raising money through a hotel room tax would be a logical way of offsetting the price of an arena that likely would draw visitors from out of town. Most of the hotels and motels that already exist in the Twin Counties, however, are in Nash County. A hotel room tax in Edgecombe County would likely have little chance of raising enough money to build an event center that has been estimated to cost $40 million or more.
A property tax increase would pose other issues. Edgecombe County’s property tax already is one of the highest in the state – 86 cents per $100 valuation of property. Raising that levy even higher is asking a lot from a tax base that has not seen the kind of commercial development that retailers, restaurants and other businesses tend to generate.
Against that backdrop, there would seem to be few alternatives to a Rocky Mount property tax increase. That would affect residents and businesses in both counties, but it also would add another hurdle in the ongoing effort to attract new industries, businesses and the jobs that come with them. In an area with an unemployment rate that has topped double digits for far too long, we don’t need any additional barriers to economic development.
Even if the City Council decided to build the event center and raise the city property tax to offset the expense, Council members likely will soon face other challenges to generating revenue. Property revaluations are around the corner, and some analysts have projected that property values in the Twin Counties could fall as much as 20 percent since the last revaluation.
That kind of drop would force Rocky Mount City Council, Nash County commissioners and Edgecombe County commissioners all to consider tax increases – independent of an event center – just to stay revenue neutral.
Under ideal conditions, a property tax increase wouldn’t affect the tax bills of homeowners since the values of their homes likely will have dropped. But higher property tax rates and lower property values pose another obstacle to recruiting the kinds of businesses and industries that can help a community thrive.
For all of those reasons – the initial $40 million cost of buying property and building such a center, the expected annual operating deficit of $300,000 to $600,000, and the likely impact that such an undertaking would pose to property tax rates, we don’t believe an event center is in the best interests of this community at this time.
Based on the turnout at Monday night’s public hearing, a sizable part of the community agrees with us. Here’s hoping the Rocky Mount City Council takes these concerns to heart as it deliberates this important decision.