Mayor Papenfuse describes how tourism money is funding the National Civil War Museum Tuesday evening at city council chambers.
Resolution 86-2014 A request to suspend the transfer of certain hotel tax revenue funds for the exclusive use of the National Civil War Museum.
Press released by the Office of the Mayor August 27, 2014.
CIVIL WAR MUSEUM MARKETING REPORT SHOWS 66 PERCENT OF HOTEL TAX FUNDS SPENT ON SALARIES
HARRISBURG – Mayor Eric Papenfuse has released a marketing report provided by the National Civil War Museum that shows it spends 66 percent of its funding from hotel tax revenues on salaries, with only 15 percent of the funds going to marketing.
“The museum provided a breakdown of how it spends money from the hotel tax showing most of the money goes for salaries and utilities,” Mayor Papenfuse said. “The museum’s own figures show only about 15 percent going toward marketing.”
Dauphin County commissioners allocate a portion of hotel tax revenues to be used for marketing of the City of Harrisburg. The Hershey Harrisburg Regional Visitors Bureau (HHRVB) distributes and allocates some of the funds, with a large portion going to the National Civil War Museum in an agreement negotiated under the administration of Mayor Stephen Reed.
Tuesday night, the Harrisburg City Council voted unanimously to support Mayor Papenfuse’ s call to suspend hotel tax allocations to the museum, saying the money should be used to market the entire city and not just one facility.
Mayor Papenfuse says the city can no longer afford to subsidize the National Civil War Museum, which pays only $1 per year in rent to the city for a building that could bring in at least $500,000 in annual revenue.
Attached is information that the museum provided on its use of hotel tax funds distributed by the HHRVB.
Harrisburg Mayor Eric Papenfuse appeared before Dauphin county commissioners Wednesday morning with copies of a Tourism Promotion Agreement and First Amendment contracts between the City of Harrisburg and the Hershey Harrisburg Regional Visitors Bureau.
The original contract (Tourism Promotion Agreement) is dated June 26, 2008 and signed by Mary Smith Executive Director of Hershey Harrisburg Regional Visitors Bureau,
Randy King (former COS for mayor Steve Reed) Chairman HHRVB, Stephen R. Reed Mayor, James J. McCarthy Controller, and Steven Dade Solicitor.
The First Amendment To Tourism Promotion Agreement is dated October 22, 2009 and signed by the same parties except for city solicitor Steven Dade who was replaced by Philip Harper the City Solicitor in 2009.
Please consider freezing the payments that go to HHRVB to promote the tourism in the City of Harrisburg. This unwise long term agreement. Every time you pay to park in Harrisburg, you are paying bond debt from the creation of this museum. Mayor Reed signs another long term contract just before he leaves office.
As released by the Office of the Mayor:
HARRISBURG - Mayor Eric Papenfuse today asked the Dauphin County Commissioners to freeze money it allocates to the Hershey Harrisburg Regional Visitors Bureau until the City of Harrisburg can revise the agreement with the agency on how to disperse county hotel tax revenue.
“The vast majority of the funds dedicated for promoting tourism in Harrisburg are diverted to subsidize the Civil War Museum,” Mayor Papenfuse told the County Commissioners at their regular monthly meeting on Wednesday. “This is outrageous and it’s time we end what is essentially a failed experiment.”
County Commissioners took under advisement the Mayor’s request and assigned their attorneys to investigate the funding agreement, which provided the National Civil War Museum with almost $300,000 in 2013.
The agreement dates back to the administration of Mayor Steve Reed who extended it until 2023 as he was leaving office.
“This was a secret deal done to keep subsequent mayors from being able to change the agreement with HHRVB,” Mayor Papenfuse said. “The citizens of Harrisburg can no longer afford to pay for a museum that is not generating revenue and that is not even in the city of Harrisburg.
“We are asking County Commissioners to help us get out of a very bad agreement.”
The funding agreement passed in June 2008 requires HHRVB to provide $500,000 to the Civil War Museum if hotel tax revenues due to the city exceed $960,000. The agreement also calls for yearly increases in allocations to the museum.
Dauphin County provides from its discretionary 1 percent allocation from the hotel tax additional annual funding to the museum, which Papenfuse said “generates no revenue and has become a drain on the city.”
Dauphin County provided at least $50,000 to the Civil War Museum this year.
“The original vision was the museum would become self-sustaining and pay rent to the city of Harrisburg,” Mayor Papenfuse said. “That hasn’t happened.”
The Mayor said the museum does not attract enough visitors nor does it promote tourism into the city.
“Considering the city is in financial recovery, I don’t think this is the best use of our tax dollars,” Mayor Papenfuse told the commissioners. “We could use the money we should get by renting this facility to fix potholes, support public safety and improve the quality of life for the people of Harrisburg.
Papenfuse released the National Civil War Museum’s financial statement showing the facility’s fair market rental value at $633,000 per year. The museum pays $1 per year to the city for rent.
“I don’t think the public supports this museum,” the Mayor said. “Every time we pay to park, we are basically paying to subsidize the building of this museum that is not generating any returns for the city of Harrisburg.”
The Mayor said he has tried to get museum officials to reconsider the agreement in light of the city’s fiscal needs, but “they are not interested in engaging,” he said. “They have a sense of entitlement to the money.
5% Dauphin County Hotel Tax received by the Office of the Treasurer.