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HomeMy WebLinkAboutCOM 0817.001 2008-2010THE ORCHID TESTIMONY OF TOM LEEPER CONTROLLER THE FAIRMONT ORCHID HAWAII May 17, 2010 RE: Real Property Tax Rates Aloha Chairman Yoshimoto and members of the Hawaii County Council. I am Tom Leeper, Controller of The Fairmont Orchid Hawaii. I appreciate the opportunity to testify regarding the proposed real property tax rates. The Fairmont Orchid Hawaii is a resort located on the Kohala Coast. We currently employ 436 full time equivalent employees, down from 2007 when we employed 569 full time equivalent employees. This reduction in staffing levels is a very visible impact of the current economic conditions that the resorts on the Island of Hawaii are currently facing. I fully comprehend the tough economic challenges and decisions facing Hawaii County Government. Over the last two years our resort has experienced the reduction of occupancy levels at significantly reduced room rates. As our revenues have dropped we have experienced the increased cost of utilities, health care coverage for our colleagues, unemployment insurance fund contributions along with many other operating costs for the resort. We would like to thank the Mayor for his effort to keep the tax increases down. However we oppose the proposed tax rate increase in the hotel /resort class. The proposed rates would result in a 9.4% increase in our yearly tax liability adding more than $115,000 to our expenses. We would ask you to review the statistical information provided to you in the Testimony of Murray Towill, President of the Hawaii Hotel & Lodging Association. I urge you Not to increase taxes on the hotels and lodging properties. I also question why hotels are being considered to be taxed at a higher rate than commercial and industrial properties. It seems more appropriate for the County to keep all the businesses at the same rate. Considering the current weakness of the Hawaii Island economy it does not appear to be prudent to be increasing taxes on any of our businesses at this time. Again, mahalo for this opportunity to testify. @Y$ ONE NORTH KANIKU DRIVE, KOHALA COAST. HAWAII U S.A 06743 TELEPHONE 808 885 2000 FACSIMILE 808 885 5778 com a, Rio. o l - 1. 1 Ref. To: f IC.tlWAG4 Ref. Da:e, MAY 17 2010 County of Hawaii Clerk- Council System Separator Sheet 4LW3 County of Hawaii Clerk- Council System Separator Sheet Murashige, Laura From: Sent: To: Cc: Subject: Importance: Attachments: HI County RPT May 17.doc (184 ... Aloha! High HI County RPT May 17.doc Attached is the testimony from Murray Towill for your upcoming hearing on Real Property Tax Rates. If you have any questions or concerns, please feel free to contact the HHLA office at (808) 923 -0407. A Hui Hou Kakou! Tina Yamaki Executive Assistant /Queen The Hawaii Hotel & Lodging Association 2270 Kalakaua Ave. Suite 1506 Honolulu, HI 96815 Phone: (808) 923 -0407 Fax: (808) 924 -3843 Email: tyamaki @hawaiihotels.org Web: www.hawaiihotels.org Tina Yamaki [tyamaki @hawaiihotels.org] Friday, May 14, 2010 2:09 PM counciltestimony @co.hawaii.hi.us mtowill @hawaiihotels.org Real Property Tax Rates - Testimony from Murray Towill 1 P /6oc.NC:r Rd:4(6 eart, Ref. To: Re. :. Oa CoDI L No& , s Z HAWAII HOTEL & LODGING A S S O C I A T I O N 2270 Kalakaua Ave., Suite 1506 Honolulu, HI 96815 Phone: (808) 923 -0407 Fax: (808) 924 -3843 E -Mail: hhla @hawaiihotels.org Website: www.hawaiihotels.org Again, mahalo for this opportunity to testify. TESTIMONY OF MURRAY TOWILL PRESIDENT HAWAI'I HOTEL & LODGING ASSOCIATION May 17, 2010 RE: Real Property Tax Rates Oa iNOO • 33rd Anniversary Are You Walking ? ?? May 21, 2011 (Always the 3 Saturday in May) www.charitywalkhawaii.org Aloha Chairman Yoshimoto and members of the Hawaii County Council. I am Murray Towill, President of the Hawai'i Hotel & Lodging Association. I appreciate this opportunity to testify regarding the proposed real property tax rates. The Hawai'i Hotel & Lodging Association is a statewide association of hotels, condominiums, timeshare companies, management firms, suppliers, and other related firms and individuals. Our membership includes over 150 hotels representing over 48,000 rooms. Our hotel members range from the 2,680 rooms of the Hilton Hawaiian Village to the 4 rooms of the Bougainvillea Bed & Breakfast on the Big Island. We certainly understand the tough economic challenges facing Hawaii County government. Our members have been facing similar and perhaps more difficult challenges as we have seen revenue fall and many external expenses increase. We would like to thank the Mayor for his efforts to keep the tax increases down. However, we oppose the proposed tax rate increase in the hotel /resort class. We understand the assessed value of property in the hotel /resort class is down, but this seems to be a result of two basic shifts. First, over 200 parcels were removed from the hotel /resort class and located in more appropriate classes. Second, assessments were apparently reduced on a number of vacant parcels. The net effect of these two actions is a substantial drop in assessed value and the resulting tax revenue from the hotel /resort class. Unfortunately, the assessed valuations of operating hotel & lodging properties have not seen a drop in assessed value for the new tax year. With only a couple of exceptions, our member properties have informed us that their assessments remain unchanged. As a result, they are looking at a 9.4% increase in real property taxes. Hotel & lodging properties have been hard hit by reduced revenue and increasing costs. On the revenue front in Hawaii County, revenue per available room has dropped over 30% since 2007. Regarding expenses, properties are already facing increases in energy costs, health care costs, and another Transient Accommodations Tax increase. The proposed large increase in real property taxes would be another burden hindering the success of these properties, the visitor industry and Hawaii County's economy. We urge you NOT to increase taxes on the hotels and lodging properties. We also question why hotels are being considered to be taxed at a higher rate than commercial and industrial properties. It seems more appropriate for the County to keep all the businesses at the same rate. Given the weakness in the economy, it also seems counter productive to be raising taxes in any of these business classes.