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return to the Town would be in occupancy taxes with a limited <br />sales tax revenue increase. <br />In addition, the Orange County Tax office staff has advised us that <br />two hotels in Chapel Hill each received reductions of about $2 <br />million in their taxable valuation due to reduced income. At the <br />current property tax rate, these valuation reductions reduce Town <br />property tax revenues by about $25,000 annually. Tax records <br />indicate these valuation reductions occurred in 1990. <br />A future increase in valuation and related property tax revenue <br />from these hotels is therefore a potential benefit from increased <br />visitor /tourism promotion and marketing. The Tax Office staff <br />advised that it assigns valuations to most hotels and motels on the <br />basis of construction costs and land value rather than income. <br />Programs of the 2roposed visitor <br />development authority <br />The proposal by the Visitor Task Force includes suggested annual <br />budgets and a list of marketing and promotion programs (pages 5 <br />through 8 of the report). Generally, the approach is that the <br />authority would serve as an umbrella agency that would supplement <br />the work of the four existing visitor service agencies in Chapel <br />Hill, including the University, and Hillsborough. <br />Examples of programs suggested in the Task Force proposal include <br />a county -wide visitor guide, meeting planners guide, calendar of <br />events, media /marketing kits, video, VIP host program, tour <br />packages, speakers' bureau, signage program and telephone hotlines. <br />We believe these service are logical additions and enhancements to <br />the existing local programs. <br />CONCLUSION <br />We suggest the following as a general approach to visitor services <br />issues: <br />1. We recommend allocating 10% of the Town's hotel /motel tax for <br />a visitor /tourism promotion agency on a performance agreement <br />basis, subject to annual review by the Council. <br />2. We believe the agency would benefit from being a County entity <br />with related administrative and support services. <br />3. We suggest an advisory board for the agency have representation <br />with emphasis on businesspeople with interests and skills related <br />to visitor services, and that the composition of the board take <br />into account the distribution of hotels and motels within the <br />county. <br />4. We would recommend endorsing a County -wide hotel /motel tax as <br />the primary source of funding for visitor services. <br />