Skip to comments.Talk of hotel tax hike has Mary Kay seeing red
Posted on 01/29/2004 12:36:36 PM PST by PAR35
DALLAS - Cosmetics giant Mary Kay Inc. is threatening to have its conventioneers hop in their pink Cadillacs and head west if voters approve an increased hotel tax to pay for a new Cowboys stadium.
Mary Kay annually hosts one of the largest conventions in the city, bringing nearly 53,000 people to five three-day conferences that pump more than $115 million into the Dallas economy.
The Cowboys would like to use recent legislation that allows Dallas County to levy additional taxes on car rentals and hotel rooms to help pay for a proposed $1 billion stadium complex. If approved by voters, Dallas' hotel tax rate would rise from 15 percent to what officials said would be the highest in the nation at 18 percent.
But David B. Holl, president of the Dallas-based cosmetics company, sent to Dallas Convention & Visitors Bureau officials last month a letter stating that Mary Kay will "steadfastly oppose" raising the taxes. An increase would force the company to move the conventions from its home of 40 years and look elsewhere, possibly the new Gaylord Texan Resort & Convention Center in Grapevine, the letter stated.
"Each of our independent sales force members owns her own business and, consequently, pays her own way to attend our Dallas meetings," Holl wrote. "Being subject to an 18 percent hotel/motel tax when there are so many competing lower cost alternatives presents an unnecessary hardship for the small business owners who sell our products."
In his letter, Holl said responsible meeting planners would have to consider the high tax rate in their site selection. He said the Gaylord facility, which would be the area's largest hotel when it opens April 2, will have a 12 percent tax rate.
"We hope you can see that a successful referendum to increase the hotel/motel tax will have a far-reaching and negative financial impact on our city's convention and meeting business," he wrote.
The letter has many officials concerned.
"This would be devastating to the city," said Phillip Jones, Dallas Convention & Visitors Bureau president and chief executive officer.
The bureau does not have an official position on the new stadium plan because final details have not been determined, but Jones said Holl's letter is bringing to light what reality might be like if it moves forward.
"We are not opposed to the project -- a $1 billion stadium in Dallas would be good for the area," he said. "Our concern is the funding mechanism that will be used."
Dallas County commissioners, who would be the Cowboys' public partner in the deal, are worried about losing such convention business. They will have to weigh it against the benefits of building a stadium as they make their decisions, County Judge Margaret Keliher said.
"It's going to be an economic decision for us," she said. "If Mary Kay pulled out of Dallas, that would certainly affect the economics. That's a consideration that we'll have to take into account as we decide what to bring to the voters."
The leading sites for the stadium complex are the Las Colinas area in Irving and along the Trinity River, south of downtown Dallas.
Keliher said she is not surprised by Mary Kay's reaction and expects more from the company. But she emphasized that the final details of the stadium deal have not been determined.
On Monday, Keliher said, commissioners will have a closed meeting to discuss various aspects of the stadium proposal, including how much public money should be used, as well as other funding sources.
A spokesman for the Cowboys could not be reached to comment Wednesday.
Dallas Mayor Laura Miller, who has been a vocal opponent of the current plan, said she is encouraged to know that the commissioners will discuss other funding options, which she said should include taxing the stadium's parking or tickets so that users of the facility help pay for the building.
Miller said it is heartbreaking that one of the city's largest corporate residents, which she said does many good deeds for the city, would leave its home to stage conventions because it is too expensive.
"The message is clear that one of our biggest conventioneers, Mary Kay Cosmetics -- they bring 52,000 women in our city every July -- is not happy, and we want to keep those pink ladies happy," Miller said.
I will never understand why the average citizen has to fund a multi-million dollar stadium so that multimillionaire football players can chase an oblonged ball down a field and charge the average citizen through the nose to watch the event.
Oh they'll vote alright...with their dollars.
as a matter of fact they use the convention center and they use thousands of hotel rooms which are not used during a cowboy game. I think the pink ladies do more for the city than the cowboys.
The fairest approach of all would be to have the stadium's tenants pay sufficient rent on the damned thing to pay it off.
One of the major (though relatively unheralded) factors in Jesse Ventura's victory in the governor's race in Minnesota a few years ago was his steadfast opposition to the use of public funds to build venues for the state's professional sports teams. His most effective campaign slogan in that regard: "If the Minnesota Timberwolves can sign players to $100 million contracts, then they can pay for their own arena."
Much more to the story than what is told. Houston raised hotel taxes and car rental tax saying "Local citizens will not have to pay for the tax". Only to find out later that any rental is taxed including equipment rental.
1. Homeowner rents a carpet cleaning machine: pay for the statium tax.
2. Hire a contractor to build your house and he rent heavy equipment: pay the stadium tax.
3. Have a auto accident or car stolen. The insurance company pays the stadium tax and included the cost into insurance rates.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.