90% Growth in Available Units for Short Term Rentals Is What Fueled Dramatic Rise in Perdido Key Bed Tax Collections 2021-2022

 Recently there has been a series of meetings aimed at improving and enhancing the advertising of Perdido Key in District 1.  For the last several years, all county marketing has been centralized under the "Visit Pensacola" brand.  I'm told by folks familiar with this matter that "Perdido Key gets plenty of coverage and advertising--just look at their year over year tourist tax development (TDT) collections growth--that's the proof."   Nobody is knocking what Visit Pensacola does, it is just that Perdido Key is not Pensacola Beach--they are two separate and distinct areas of the county.

Currently, the Perdido Key Chamber of Commerce leases the Perdido Key visitor's center from Escambia County.  Within the visitor's center, "Visit Pensacola" maintains a presence, complete with rack cards, displays, and murals. There are also multiple employees of Visit Pensacola who staff this visitor's center through the week.  One issue that has been brought to my attention by the Perdido Businesses and citizens with whom I have spoken is that the Visit Pensacola employees who work in Perdido Key often recommend out of the area restaurants and other attractions to visitors who are coming to Perdido Key.  In one instance, a guest asked where a good restaurant was for a bite to eat.  Instead of pointing this particular guest to the Florabama, Crab Trap, Oyster Bar, or the Sunset Grill---the employee said "I'd recommend you go to Pensacola Beach, to the Grand Marlin"   There have been other similar occurrances of which I have been made aware.

In addition to this, there has been a lot of disdain about Perdido's Chamber of commerce--because as a state line chamber of commerce--they naturally have some members in Alabama.  About 60 of the 400 members of the Perdido Chamber of Commerce are Alabama businesses.  Of that 60 Alabama entities, however,  only 5 (Five) collect 5 cent bed taxes.  And of that five---4 of the 5 are owned by well-respected Escambia County businessman, Julian McQueen's.  company Inisfree Hotels.

Nobody is trying to knock Julian McQueen's hotels in Alabama.  It is a separate market from Pensacola Beach---very different and unique.  And Perdido Key actually lines up more with them and is closer in proximity to that market than it is to Pensacola Beach.  Perdido Key is 25 miles away from Pensacola Beach.

Meanwhile, back at the visitor's center in Perdido Key--rack cards are meticulously controlled by Visit Pensacola, with one such prominent rack card advertising an Out of State (Alabama) Gambiling Casino and another announcing "Welcome to Pensacola Beach!"  Of more than 100 posts to Visit Pensacola's Instagram over the last year--not one post had a #Hastag Perdido Key.  Every single one of the posts had hastags for Pensacola Beach or downtown.  Additionally, a recent perusal of the "Beach Events" page on Visit Pensacola was all but EXCLUSIVELY spotlighting Pensacola Beach, with the reader having to go eight clicks deep through the pages to find even one Perdido Key beach establishment listed.  The Perdido Key Chamber's website is not linked to Visit Pensacola's site for reasons unknown, yet Pensacola Beach's Chamber website is linked.  Why is that?

Perdido Key feels neglected and the businesses out there are not happy about it.  Remember, they are the #2 highest collector of Bed tax dollars behind only Pensacola Beach, in all of Escambia County.

Yet, I'm told if we bolster the Perdido area with better, more directed marketing--we will essentially be "Sending money to Alabama businesses." or "Competing against ourselves [Escambia]." I simply disagree.  It is a cop out and I can tell you as a person who frequently spends time at a Pensacola Beach Condo I own---visitors to either location will vote with their feet as it pertains to food and beverages; e.g. just because they are staying in Pensacola Beach or Perdido Key does not mean every dollar such visitor spends will be in Escambia County's jurisdiction.  People travel, people eat and drink out of jurisdiction.  Do I want all people in both locations to only spend money in Escambia County's jurisdiction so we collect the sales tax?  Of course.  Is that a realistic expectation?  no.  In Pensacola Beach, a vast majority of long duration visitors buy groceries over the bridge at Publix or Wal Mart.  All name-brand pizza delivery companies that deliver on Pensacola Beach to visitors staying there (Dominos, Pizza Hut, Papa Johns)  similarly are located out of our taxing jurisdiction, over the bridge in Santa Rosa County where the grocery stores are.  And when these visitors gas up their vehicles, by and large they skip the one high-price gas station in Pensacola Beach for one of the significantly less-expensive stations in.........drumroll.......you guessed it--Gulf Breeze   Santa Rosa County, out of our jurisdiction.

Similarly--in Perdido Key visitors staying in condos there may go over to Cobalt of the Hangout in addition to spending money in Escambia County at Perdido area restaurants.  

So--food an beverage choices happen, we can't hold visitors hostage at either beach once they arrive there for a visit.

But the money we are discussing, TDT, are not collected anywhere other than lodging accomodations, not at retail establishements or restaurants--so those discussions are red herrings anyhow, when we are talking about year over year TDT collections increases.   

The 2021-2022 year over year Bed Tax collections gains at Perdido Key were NOT driven by slick marketing for Perdido Key that Visit Pensacola placed.  These increases were organic, primarily due to the growth in new units coming on the market in Perdido Key via VRBO, AirBnB, Expedia, and other online owner-operated lodging solutions--in addition to work the Perdido Key Chamber did, in addition to the work Visit Pensacola did, in addition to the work Alabama state-line chambers did.

And I have the information to prove this,  information from the clerk.

I reached out to staff from the clerk's office for data on the number of unique, individual collectors in the 32507 (Perdido Key) Zip code to see what was driving this huge jump in gross-dollar TDT collections.  

The metric has only been tracked since late 2021--but the pattern is obvious;  there are a huge number of new rental units (TDT collectors) coming online in Perdido Key, and that is driving the increase year over year--it is obvious to the most casual observer.  Now, If the number of available units had held static and the gain was 52% that would point to something dramatic happening in terms of marketing and this conversation would not be happening.  But that is not what the story tells.  

Look at just 5 months side by side  to see the reason why the gains are occurring (month on top, total number of unique collectors on the bottom):

  

In just those 5 months compared, above, the available units jumped by 90% year over year--yet collections did not match growth and were "only" up 52%.  What does that mean?

There are ongoing conversations to improve this situation, I have discussed the issue with no real resolution at yesterday's TDC board meeting, where I informed that board I'd be bringing this issue to the BCC for discussion at an upcoming BCC meeting to work toward a better situation between Visit and Perdido Key to fix some of these untenable issues.  Naturally, any sort of a change to the current status quo has, is, and will be running into a buzz saw of opposition from hoteliers, advertisers, and others who are quite comfortable with the current state of things.  I happen to believe some minor tweaks and some autonomy for Perdido Key can fix things.  Unfortunately, a meeting on this topic I facilitated and attended last week produced no meaningful solutions going forward.

So I'll keep working on it from my end and through the BCC at the next meeting.

Visit Pensacola Celebrates Escambia County's Tourism/Hospitality Industry

I had the opportunity yesterday to speak and present a proclamation at Visit Pensacola's Hospitality Heroes Awards Luncheon at Bayview Community Center.

The luncheon was presented and sponsored by Visit Pensacola, and the host was CEO of Visit Pensacola Darien Schaefer.

The Board of County Commissioners approved a proclamation at our last meeting in April naming this week hospitality and tourism week in Escambia County-- which I presented at the luncheon as Mr. Schaefer graciously introduced me and invited me to the stage.

One of the best, most enjoyable parts of the program was the video montage of a recent "Hospitality Olympics" held by Visit at Blue Wahoo's stadium---where some interesting competitions were had.

--sack races

--toilet paper backward over hand toss into trash cans

--50 yard dash with a tray loaded with cocktails

--tug-of-war over a kiddy pool.

Yes, the video drew some chuckles from the crowd.

I was honored to speak yesterday at the Hospitality Appreciation Luncheon

But the overall topic of tourism is very serious.  

According to the information given by Schaefer during the introduction to the program---the serious financial impact of tourism last year is evident in real numbers:

-In 2021 2.1 Million Visitors came to Pensacola

-the 2.1 Million Visitors generated $1.2 Billion in Economic Activity/Spending

-the hospitality/tourist sector locally employes more than 20,000 Escambia Citizens

-the taxes collected from visitors totaled more than $70 Million--representing 26% of all taxes collected

-the taxes collected from visitors, if not realized, would necessitate an additional $600 yearly in taxes on county residents.

So yes--Tourism/Hospitality is a big deal.  Huge.

The final portion of yesterday's event centered on recognizing individuals for accomplishments in this space.  5 total citizens were awarded based upon exceptional acts over the last year.  The most prominent recipient was a hotel employee who witnessed a child drowning and jumped in fully clothed with his wallet, cellphone, keys and all----and saved the child's life.  It was a powerful picture--this individual Rosendo Morillo Peralta of the Surf & Sand Hotel, holding the little girl he rescued!

Read all about the awards here

Read about what Visit Pensacola does to promote our area, here

Visit Pensacola's Staffing over 5 Years

The chart above is a graphic illustration of the staffing of Visit Pensacola over the last 5 years since that entity came out from under the umbrella of the Greater Pensacola Chamber of Commerce.

During last week's initial budget hearing, there were questions from the dais about "employment creep" at Visit Pensacola.  The above chart shows the growth that has occurred, and also the corresponding increases to the budget at Visit Pensacola over the same 5-year time frame.

Information Provided Validates the Questions that were Raised.....

A week ago today I had a conversation about the new downtown field house concept with a person intimately familiar with this initiative.

I asked this person if they supported the plan for a field house downtown--and the answer was a resounding and forceful "No."

I wondered aloud..."Why not?"

During the course of the ensuing conversation, the reasons for this individual's hesitation would be framed and detailed;  the lack of support hinged on multiple issues and financial concerns--which eventually this person would detail.

#1.  Some financial irregularities should be looked into, according to this source.  Chief among these was the $150,000.00 purchase of a website domain name for www.pensacola.com. "It's not that they spent money to buy this domain,  it's not even about the price of the domain, although I think it is a lot of money--it's the fact that their board didn't authorize the purchase in advance which they should have done.  At least one board member was not happy about this the next month when the full board were notified about the purchase."  

After looking at the minutes for Visit Pensacola from June 27th--the claim about the purchase being made absent board approval appears to be true.  Furthermore, it looks like the board did not even take a vote after the fact to approve the purchase which is odd.  Nobody has been able to tell me definitively, yes or no, the answer to this question:  "Did Visit Pensacola's Board ever authorize this purchase?"  Apparently, from the comments she made in the PNJ,  the clerk of the court believes this purchase was not inappropriate.   From the PNJ: "Pam Childers, Escambia County Clerk of the Circuit Court whose office reviews all county expenditures, said in a text message to the News Journal Thursday evening that there was no malfeasance surrounding the purchase of the domain name."  For what it is worth, I never used the term malfeasance--that was my counterpart in district 2 that used that word.  I said "inappropriate and irregular"--which I believe are the better words to describe this event; because I still have trouble with the fact that the purchase was not approved in advance.  Regardless of what one chooses to call this--it appears that this purchase was, in fact, "irregular" if nothing else....

#2.  Several consultants are being paid by PSA to lobby the BCC for more money for a field house--according to this source.  "They have several guys making thousands per month on contracts to lobby you to spend more on studies for the field house." said this individual.



After receiving the information from Visit Pensacola and the Pensacola Sports Association on Monday---it appears that this additional concern is also a true statement.  It appears that Visit Pensacola has a total of four consultants being paid at the moment tied to the effort to bring a field house to Pensacola. It also appears as if these positions were not solicited via an RFP or RFQ but rather the persons chosen were name-selected. One consultant gets $4,000.00 monthly, one gets $3,000.00 monthly, one received a fixed price to do a study, and the fourth consultant receives $125.00 hourly on a contract not to exceed 210 hours.

In looking at PSA's last two budget requests--I do not see these costs as a part of the request to the BCC.  So the question I have is where is this money coming from, the money to lobby the BCC to

Reason for the Pause, Part II

An analysis of requested information should clear up any questions raised by allegations that were brought to my attention Wednesday evening which led to my move to pull a funding item from last night's agenda....

In part I of this series I described the rationale for taking a pause on an agenda item from yesterday's meeting.

I asked my aide, Debbie Kenney, to make some inquiries of Visit Pensacola and Pensacola Sports Association so that I can run some other allegations to ground before we move ahead with the vote for an additional $2.3 Million to Visit Pensacola next month.

As I said to channel three and in the PNJ--I am just following up on information that was given to me.  Just allegations.  Hopefully, there is no substance to these allegations.....

I reiterated this position in a Friday interview on Pensacola's top-rated morning radio show, "Good Morning Pensacola" on 1370 WCOA.

Here's the Deal:   if I do not follow up on serious allegations from credible sources, then I am not doing my job, so I follow up on credible reports when I get them, and I get to the bottom of issues that are real.  Look no further than Newpoint schools and what happened there........ 

The below request was made today by my aide.  When I receive the information back, I'll hopefully have a better idea, before the next vote in April, about whether or not some things I have been told about these allocations of TDC monies are true or untrue.

Reason for the Pause, Part I

Sometimes a close examination of an allegation is good for all sides. Sometimes it proves there was no "there" there, other times it confirms allegations.  Occasionally  it serves to improve processes.  In any case, a thorough look is in order when seemingly alarming claims are made

At yesterday morning's agenda review session, I led the effort to pull a funding item from the agenda for this month so that I could investigate some issues that had been alleged having to do with the "process" of some purchases.

The board agreed and the item was dropped.

I described to the media and my peers on the BCC some of my concerns--the largest one being that according to a citizen with intimate knowledge of Visit Pensacola--a large-dollar purchase of a website domain name was made without proper authorization (from the full Visit Pensacola Board of Directors--in advance of the purchase)

I did confirm that to be true yesterday late in the evening--the board of Visit Pensacola neither authorized nor approved this purchase in advance as should have happened according to their bylaws and financial procedures documents.

The minutes from June 27th describe the purchase being disclosed to the full board after the fact. 

So far as I understand it--the purchase was questioned by the clerk's office, who in turn deferred to the County Administrator's office.

The County Administrator's office approved the purchase for reimbursement in September of 2018 (although the original purchase was made in early June of 2018).  I asked the following question yesterday:  "Was the authorization for the approval of this purchase reimbursement made with the understanding that the Visit Pensacola Board of Directors had voted to authorize this purchase in advance?"  and the answer was an unequivocal "Yes."

I'm told at least one Visit Pensacola board member was not happy about the way this purchase was done.

Nobody has told me yet, for sure,  if this purchase was ever officially ratified by a follow-on vote of the board--as should have occurred.  This action, if it did occur, is not reflected in the minutes.

So setting aside the size of the expenditure ($150,000.00 seems high to me-- but I'm not an expert in buying website domains) There is little doubt that the process here was badly flawed.

So if this was truly a time-sensitive issue--my question is why not call a special meeting?  Why not wait at least 3,5, or 7 days to do it right?  Why not write the contract stipulating the purchase is not valid until the Board of Directors approve the purchase?  Why the rush to spend this much money with no deliberations among the board of directors prior to the purchase?

And if the website was so important to acquire in such a rapid fashion, why has nothing been done with it--why is it not, at a minimum, at least directing traffic to the existing Visit Pensacola site right now?

Some other allegations were made about "multiple consultants and lobbyists" being engaged by these entities as well--with very generous monthly stipends.  This is all well and good, but I am requesting some information to see if what I am told squares with the reality of the situation with respect to several of these consultants, what they are doing, and for what purpose, and what sources of money is funding this.

I'm also going to ask about how these positions were advertised and whether or not RFP's or solicitations for these services were put out before the hires were made--or were these persons direct hires?

As I said in the PNJ--it is all probably nothing--I hope there is no larger issue other than this one obvious misfire with the website address purchase prior to board authorization.

But in our oversight capacity as commissioners--we have to take credible information seriously and we have to ask questions when irregularities (like the $150K Website Purchase without prior authorizations from the Board of Directors) are brought to our attention. 

I hope everyone gets this.

I mean, just imagine the alternative.  Imagine if we "didn't" follow up on allegations brought to our attention about potential issues with the expenditure of public monies?