Florida Restaurant and Lodging Association Opposes Driftwood Capital $30 Million Tourist Tax Giveaway

YOUR OPINION • YOUR VIEW

WATCH: You Decide! Should the hotel developer Driftwood receive $30 million of local tourism tax from Brevard County for their Westin Hotel project in Cocoa Beach? The public was invited to attend and participate in a Community Town Hall Forum on July 14 at the Radisson Resort at the Port to discuss Driftwood Capital‘s request for $30 million of tourism tax funds to promote its proposed Westin Hotel to be built in Cocoa Beach.

WATCH: Interviews after the Community Town Hall discussion regarding Driftwood Capital’s request for $30 million of tourism tax funds.

The Florida Restaurant and Lodging Association released the following statement regarding Driftwood Capital’s request for $30 million of tourism tax funds to promote its proposed Westin Hotel to be built in Cocoa Beach.

“FRLA opposes the Project being proposed today because it fundamentally misconstrues and misapplies the statutes on which the proposal is based, obligating Tourist Development Tax (TDT) revenues in a manner not intended under the law.

It applies TDT revenues to the enrichment of one entity, having a potentially negative impact to other projects and establishments who should rightfully expect to benefit from TDT revenues. It incorrectly asserts that an establishment owns the TDT revenues it may collect and has the right to use these funds to subsidize its development and operation.

This sets a dangerous precent for other establishments seeking similar ownership or control over their existing or future TDT collections.

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“This project proposal sets a bad precedent, not only in Brevard County, but potentially in other counties as well. If this Project is granted the ability to retain 50% of the TDT revenues it collects, it is foreseeable that other developments and establishments will want to seek the same privilege.

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First, the Project assumes that Chapter 125.0104, Florida Statutes and Chapter 125.045, Florida Statutes, can be read in concert, permitting the County to obligate TDT dollars collected under Chapter 125.0104 to be used for private economic development purposes as spelled out in Chapter 125.045. We believe this is fundamentally incorrect.

There are over 20 subsections between these two subsections, and we are not aware of any previous attempt to read them in concert with one another for the purpose of redirecting such a huge amount of TDT revenues. Even if we were to assume that this creative interpretation of the statutes is correct, this grant of dollars appears to be far outside the County’s previous direct incentive activity.

Brevard County issued direct economic development incentives in Local Fiscal Year 2019-2020 in the amount of $2.1 million (TDT dollars were not used).1 It is presumed this was granted to several different entities across the county for several different projects. Here, the county is proposing to spend almost a full 50% of that amount on one Project.

And it commits to spending that enormous amount annually for 30 years. Even if it were lawful (and we do not concede that it is), it is so far outside previous activity that it should be alarming to all concerned.

Second, this Project proposal grants a single private entity an exceedingly large amount of TDT revenues – $30 million over 30 years – that were designed for the promotion and marketing of tourism generally, not just for the benefit of one development.

This will obligate a significant stream of TDT revenues for the primary benefit of one entity, potentially limiting the ability to secure bonding based on TDT revenues and having a potentially negative impact on other projects and establishments.

Finally, this Project proposal sets a bad precedent, not only in Brevard County, but potentially in other counties as well. If this Project is granted the ability to retain 50% of the TDT revenues it collects, it is foreseeable that other developments and establishments will want to seek the same privilege.

While it is tempting to say that Brevard is simply subsidizing the Project using TDT revenues the Project may itself generate, this is not accurate. Allowing the Project to retain 50% of the TDT revenues it collects assumes that these revenues would not exist but for this specific Project, and this is not something that can be determined with certainty.

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This proposal incorrectly grants an excessive amount of TDT revenues to benefit a single private Project and makes that grant for an unprecedented length of time. This is contrary to the stated intent of the law, and it is to the detriment of other important and productive businesses in Brevard.

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For example, if the hotel rooms of this Project did not exist, visitors may choose to stay in other Brevard County lodging establishments that would likewise collect the TDT.

This proposal incorrectly grants an excessive amount of TDT revenues to benefit a single private Project and makes that grant for an unprecedented length of time. This is contrary to the stated intent of the law, and it is to the detriment of other important and productive businesses in Brevard.

We certainly see value in the project being proposed, but we do not believe that value should come at the expense of every other tourism-based business or endeavor in Brevard County. An establishment does not own the TDT revenues it collects.”

The issue will be decided when the Brevard County Commission votes on the proposal on July 19 at 9 a.m. at the Brevard County Government Center in Viera.

According to feedback in a Space Coast Daily Facebook post, and the response of Space Coast hotel and business community, this is a highly controversial issue that the public and business community opposes almost unanimously.

The issue will be decided when the Brevard County Commission votes on the proposal on July 19 at 9 a.m. at the Brevard County Government Center in Viera.

WATCH: An Emergency Space Coast Tourist Development Council meeting in underway at the Government Center in Viera to address the $30 million tax request from the Driftwood Project.

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