East End Tourism District Plan 'Not Ready For Albany': Thiele

SOUTHOLD, NY — A proposal for a new East End tourism district that would add a $1 tax to occupied motel and hotel rooms has sparked contention and political divide in Southold, seen both a show of support and some questions in the other four East End towns — and "is not ready for Albany," according to New York State Assemblyman Fred Thiele.

Bryan DeLuca, of the East End Tourism Alliance and executive director of the Long Island Aquarium in Riverhead, pitched the idea for a Peconic Region Tourism Marketing District at a recent Southold town board work session, where the idea gained no traction.

DeLuca said there's a "movement in the industry" for the creation of such districts, where funds generated would go to the municipalities where they are collected. Currently, he said, Suffolk County's 3 percent hotel/motel tax brings in approximately $10 million, with about $2 million targeted to Discover Long Island's promotion efforts.

The new movement, he said, comprises 157 tourism marketing districts nationwide, collecting the $1 fee on an overnight stay in a room; those monies raises "stay 100 percent in the district," he said. "It stays in the district — that's very appealing for us on the East End," DeLuca said.

Both New York State Assemblyman Fred Thiele and New York State Senator Ken LaValle were "very enthusiastic" and helped to draft the legislation, DeLuca said.

On Monday, however, Thiele told Patch that initially, DeLuca, along with some East End business representatives including Janine Nebons, general manager at Tanger Outlets, Steve Bate and Paul Monte of the Montauk Chamber of Commerce, came to him and LaValle with the plan. Thiele said they agreed to draft legislation with the caveat that all five East End towns needed to sign on by home rule.

"We haven't been presented with the kind of consensus needed to move forward with this legislation," Thiele said. "I would say it's unlikely that there would be any action on this proposal during this session."

While Southold Town Supervisor Scott Russell, Thiele said, had been "vocal" with his concerns, Southold wasn't alone: "I can't say that we've heard definitively from the other four towns that they're ready to move forward," Thiele said.

Looking ahead, Thiele said towns and villages need to have future discussions locally and decide how they want to proceed, perhaps in the coming year.

And if one town opts out, then the plan, as presented, can't proceed, as it's a regional concept. However, one alternative — which there's not enough time to explore this year — might be to create BID districts in individual East End villages and towns under state general law, Thiele said.

As for the current proposal, Thiele said, aside from the opposition in Southold, "There is interest in the other four towns — but they still have questions."

Greenport's interest

DeLuca spoke at a recent Greenport Village board meeting, where he outlined the plan, and said the EETA was formed to brand and market the East End as a region.

The new tourism district, while "somewhat of a heavy lift" as none exist currently in New York State, would be a boon to the East End because 100 percent of the funds garnered stay in the district. "It's a fantastic opportunity for using it for what our towns need — events, transportation, the shoulder season," he said. Of the funds raised, 72 percent would go to the EETA board to decide collectively how to spend the funds, with 25 percent going to each town.

Russell expressed concerns at the Southold Town work session, stating that he'd gotten anonymous emails from individuals in the industry opposing the plan. The decision lies with his constituents, those affected by the proposal, he said.

Russell asked where "the specific notice" was, that had been sent all the stakeholders in the lodging industry affected by the proposal. Russell said he had received calls saying business owners had heard about the proposal on Channel 22 and maintained that not enough outreach had been done.

"I have a constituency to represent," Russell said.

At the Greenport Village board meeting, DeLuca said he'd gotten support from other East End towns, with the East Hampton town board "patting us on the back after the meeting," and Southampton, Shelter Island and Riverhead Towns similarly supporting the plan.

"Unfortunately, Scott Russell does not. I'm not certain why. I can't figure it out," DeLuca said. "We're at a crossroads."

DeLuca said without the support of all five East End towns, LaValle and Thiele had maintained the plan could not move forward based on the current state Business Improvement District law.

Thiele, DeLuca said, has written three drifts of the legislation and LaValle was "one hundred percent on board until Scott said 'no.'"

Greenport Village Trustee Julia Robins said the Greenport BID was totally in support of the plan.

Trustee Doug Roberts asked, if Southold Town did not sign on, "Can we have the money? Let's be honest. We're the tourism destination." If the village could use a portion of the town's proceeds toward parking, it would help improve the quality of life for all, Roberts said.

"You have a ton of support here," Roberts said.

Russell speaks out

When asked for comment after the village board meeting, Russell said he believed the "EETA is a good organization and great for the East End. However, it is a private organization, not-for-profit or otherwise, it is still a private organization. So, why are we trying to create legislative income streams for it?"

The draft legislation does not mention EETA, but does layout criteria for a not-for-profit organization that has experience in regional tourism to be suited to execute the tourism marketing district, DeLuca responded. "Most every other tourism promotion agencies and groups around the country are private not for profit organizations. This is a collaborative regional effort with proposed town representation on the tourism marketing district board — we work together to achieve common goals."

DeLuca, Russell said, "never seemed to make any real effort to reach out to all of the hotel, motel, and B&B owners. It's starting to look like his presentations before the town and village boards are nothing more than an effort to do an end-run around the very businesses he's supposed to represent."

DeLuca responded: "This is not the case. We had a meetings at Martha Clara, Dave Perrins' Cedar House, and Jim Waters' tasting room over the last several months," providing a history of the EETA, including past grants and funding provided, reviewing the tourism marketing district concept at length and covering the current craft beverage grant and the video grant for each town— along with opportunities for each business to buy a five-second tags on the professional video shoot the EETA funded, he said.

DeLuca said the EETA met with each East End town supervisor to educate them on the tourism marketing district, based off of New York State BID law and how it could benefit the five East End towns; four of the five supervisors supported the "concept of forming" a tourism marketing district, he said.

Industry support, DeLuca said, would come later in the process.

If the plan had support from all five towns, both Assemblyman Thiele and Senator LaValle who both sponsored the new legislation would then present it to state legislators, through a state committee and if supported it would go to the governor to be signed into law, DeLuca said.

While each town would have to pass a home rule resolution in support, towns would have an option to opt out of the tourism marketing district, DeLuca explained.

"The proposed legislation only enables the five East End towns to create the tourism marketing district; it's still up to the towns to opt in," he said.

If the state passed the legislation, then the EETA board would go out and further education on where and how the funds would be spent, with the "main focus being on peak season transportation — free hop on hop off shuttle loops — and off season, or shoulder season, tourism promotion," DeLuca said. "Because the towns have the option to opt out of the tourism marketing district we first focused on getting the legislation outlined and approved at the state level. Otherwise going to the accommodation business prior to the state approving would/could be a feudal attempt. Again any one town could opt out once home rule comes down," DeLuca added.

Russell addressed Roberts, who, he said,"is urging everyone to come to Town Hall to lobby for it. Certainly not the most compelling of social issues especially considering it's a tax his business wouldn't even have to pay. Perhaps he should sit down with our state representatives and draft a new law that ensures he pay his fair share."

Roberts, who is co-owner of an eatery in Greenport, said he agrees that restaurants and other businesses that benefit from tourism should pay their fair share; he said he has reached out to Thiele and LaValle and the discussion is ongoing.

"My only point is that the village deserves to be part of the discussion. If all it takes to make that happen is another round of personal attacks against me and my business by Southold Republicans . . .that’s fine. Let’s stop being petty and get some work done on behalf of our residents," Roberts said.

"Greenport provides a regional transit and tourism hub with no support from our neighboring municipalities. This revenue could go a long way to improving parking and other infrastructure issues that burden our residents during the tourist season. Instead of shutting down discussion let’s engage and get a deal done," he added.

Russell referenced a Freedom of Information Law requested filed by the Southold Town Democratic Party Chairwoman Kathryn Quigley, "of the business owners who oppose it raises questions in my mind as to why. She didn't ask for the names of those who supported it."

Many businesses, Russell said, were concerned about the reaction of other businesses and organizations who support it.

"They didn't want their names disclosed. I hope this isn't an effort to strong-arm business owners into supporting it. I also hope that it doesn't discourage people from privately expressing their opinions to me in the future out of fear of their names being publicly used for a political stunt," Russell said.

Quigley responded: "The Southold Democrats don't have a position on the East End Tourism District at this time. We believe in good communication, responsiveness and transparency in this process. We are in support of listening to the range of important perspectives of local business owners and residents to this initiative."

Quigley added that her impression is that the supervisor and town board "are preemptively shutting down a constructive dialogue between businesses, residents and local government about how to best help the the local economy and address transportation and traffic problems."

The proposal, she said, is a bipartisan effort by our state legislators and local agencies with preliminary support "from four of the five East End towns. It seems worth further exploration, especially at this stage, and that is all that is currently being asked of the town board. If the supervisor is concerned that not enough business owners have been contacted, why is his solution to stop that process?'"

Quigley said, of the FOIL request, "I was curious to know more about Supervisor Russell's claims that he received 'overwhelming opposition' to the proposal. In the interest of accountability and open government, I requested documentation of all the responses he had received to provide context to his definition of 'overwhelming opposition.'"

In her request, Quigley said she asked that the names of all business owners be redacted, in order to protect the privacy of their opinions. "The anonymous responses I saw indicated to me a somewhat small number of businesses who had reached out and more of a mixed bag rather than 'overwhelming opposition': with some in favor, some opposed, and some uncertain but interested in exploring the issues."

Quigley said she commended local business owners for engaging with their elected officials on important issues and hoped their range of perspectives would be fully represented.

"With regard to Supervisor Russell's calling the request for documentation a 'political stunt', we simply have no stake in this process aside from ensuring good governance: transparency and accountability for citizens. Though he seems to be making this issue political, especially given that his characterization of my request is patently untrue," she said, adding that she asked for documentation for all feedback, for and against, the plan.

Russell maintained that there are issues that need to be addressed. "The law was not created to promote tourism. It was created to provide a perpetual funding stream to the East End Tourism Alliance, a group Mr. DeLuca co-founded. It requires towns to hire a 'management organization' to oversee the district. Only the EETA can qualify based on the criteria in the law. EETA is a private trade organization. Why is state law being proposed to fund it?" he asked.

The EETA, the supervisor said, estimates $1 million in revenue each year of which it would receive 75 percent, or $750,000 every year. Each town would receive 25 percent of what is generated in the town, he added.

"After subtracting for 'administrative fees,' Southold would receive about $35,000 each year — a pittance," the supervisor said.

Further, Russell said there is no clear directive on how the funding would be spent each year regionally; if a trolley or transportation option didn't work, "Do they have a Plan B?" Russell asked.

"We have a board of directors that represents all the major tourism promotion groups, the North Fork Promotion Council, Hamptons Visitors Council, Montauk Chamber, East Hampton Chamber, Riverhead Chamber, and we are seeking a new Shelter Island member to fill a recent vacancy. Additionally there will be a town liaison on the EETA board if the TMD gets approved," DeLuca said. "Our initial budget has a minimum of $500,000 for transportation for 10 to 16 peak weekends. We will make great effort to have a successful transportation loop, as we have done with our past beta tests. Plan B would be for the board to decide, but having initial and dedicated transportation money can help us get federal or state grants to further assist in our traffic challenges," DeLuca said.

Russell added: "You can call it what you want but it's a tax all of which will be paid by only a small segment of all of the businesses that benefit from tourism — the hotel, motel and B&B owners. These aren't owned by corporate giants like in other towns. These are small business owners who live here."

DeLuca maintained the fee is passed on to the traveling consumer, not the local taxpayer. "This would essentially be benefiting the traveling consumer by providing transportation or great shoulder season events for the tourist to attend — i.e., Winterfest ."

Russell said he believes if there is strong support from the business community, as suggested by DeLuca, that community can establish monthly membership dues. "All Mr. DeLuca needs it a box of pre-addressed return envelopes and he can start generating revenue tomorrow."

DeLuca said there is broad base support from many of the accommodations along with the presidents of North Fork Promotion Council, the Greenport BID, the Greenport Village, Hamptons Visitors Council, Montauk Chamber, East Hampton Chamber, Riverhead Chamber, and Riverhead BID.

"If you are providing transportation for the region/town and have select members, how do you identify the consumer that is staying at a non-members' property? How do you tell them that they can’t ride the trolley because the property they stayed at does not contribute? That’s not hospitality. This initiative is to benefit the region — if only assorted accommodations partake it would not work," DeLuca said.

At the Greenport Village board work session, Trustee Mary Bess Phillips said the village also has a responsibility to its residents."I'm sure Scott Russell is thinking of the residents in the Town of Southold," she said. "Tourism is part of our economic engine but we also have a responsibility to have a quality of life." She added that DeLuca should reach out to other villages on the East End for their thoughts, as well.

DeLuca, meanwhile, said the funds could be used toward a shuttle that would bring people from Riverhead east, "a pumpkin express to farms" from Splish Splash or another location, to alleviate traffic woes for residents.

He was joined by Yvonne Leiblein, who helped form the EETA, who also voiced her strong support for the plan.

Robins said energy should be expended to "convince the supervisor," the town board, as well as LaValle and Thiele of the support regionally for the plan.

Time is of the essence, DeLuca said.

Southampton Supe expresses concerns; Shelter Island opting in for now, waiting to see what evolves

Southampton Town Supervisor Jay Schneiderman also expressed some reservations about the plan.

"I have some concerns about making hotels less competitive with home rentals — and how the money would be distributed," Schneiderman, who also owns a hotel in Montauk, said. "Probably at the end of the day, I will support it — if I believe the hotel industry, on the whole, supports it."

Shelter Island Town Supervisor Gary Gerth said it's a "two step" process; he and the board have seen two presentations so far. "We're opting in," for the initial stages, but, he said, there's a sense of, "'Where's the beef?' We want to see what it means. There's not a lot dollars promised but we want to know, where does it go? We're opting in now to go along with the other supervisors but want to see what happens with the second half of the process. We're pro tourism. We love having people out here to enjoy our island," Gerth said.

Riverhead Town Supervisor Laura Jens-Smith says that she is not against the proposed East End Tourism marketing district, but believes that “some of the of the implementation plan will need to be worked on if it is going forward.”

Plan details

At the last Southold town work session, DeLuca explained facets of the planning, including the fact that a town-designative representative would be chosen to sit on the independent board.

The five towns would sign on through an intermunicipal agreement; state law is needed to form a tourism improvement district, DeLuca said. A tourism district, he said, provides funds for destination marketing that would address shoulder seasons, transportation elements, and other issues

Each of the five East End towns would be capable of directing a portion of their funds to support tourism, he said.

DeLuca said with 2,919 rooms, East Hampton could generate $458,000; Southold, with 977 rooms, could garner $160,472.

The intermunicipal agreement, DeLuca said, would put parameters in place to ensure fair distribution of funds.

DeLuca said the issue being discussed was focused on the creation of the district and towns would be able to opt out later.

"It would be terribly unfortunate if a town opts out at this juncture," DeLuca said at the time.

Despite requests for comment, East Hampton Town Supervisor Peter van Scoyoc and LaValle did not immediately respond.

Patch courtesy photo.