Meals tax opponents: Sell city land

Business representatives who have organized to fight Ashland's 5 percent meals tax said the city could sell its 829-acre Imperatrice property and also use hotel tax money to help pay off the sewer treatment plant debt, rather than asking for the tax's renewal or raising sewer bills.

Ashland Springs Hotel General Manager Don Anway and Liquid Assets Wine Bar Owner Denise Daehler made that argument at the hotel during a Wednesday press conference before members of the media and about two dozen people who own or work in restaurants, hotels and other businesses.

The Jackson County Assessor's Office has put the market value of the Imperatrice property at $7.6 million.

The City Council raised the city hotel tax from 7 percent to 9 percent in 2008.

Voters are being asked whether they want to renew Ashland's 5 percent meals tax until 2030. Ballots are due on Tuesday.

If it's not renewed, the meals tax sunsets in December 2010. If it is renewed, businesses that collect the sales tax on prepared food and drinks would keep 5 percent for their efforts and the city would receive 2 percent for administrative costs. Of the remaining amount, 80 percent would go to fund debt incurred for a past sewage treatment plant upgrade and for future sewage projects. The remaining 20 percent would be used to buy park land, develop parks and fund major parks projects.

Possible projects include improvements for the ice rink, the Calle Guanajuato pedestrian walkway along Ashland Creek and the Oak Knoll Public Golf Course irrigation system, Ashland Parks Director Don Robertson said.

If the city could get $7.6 million from the sale of the Imperatrice land, it could pay the $17.6 million remaining balance on the city's sewage debt down to $10 million, meals tax renewal opponents said.

The interest rate on the sewage loan is 3.43 percent. The city will pay more than $4.9 million in interest on the $17.6 million remaining principle by the time the debt is paid off in 2023, according to the city of Ashland Finance Department.

Meals tax opponent and Grilla Bites restaurant owner Tom DuBois said he calculated that if the city sold the Imperatrice land and paid the sewage debt down by $7.6 million, the city could pay off the remaining debt in six years at current payment rates and pay only $1.1 million in interest on the remaining principle instead of $4.9 million.

"I was stunned to see the city could save $3.8 million," DuBois said.

The City Council has not indicated its support for selling the Imperatrice land.

The city charges an Eagle Point rancher $1,000 per month to graze cattle on the land, which is located across Interstate 5 from Ashland at the base of Grizzly Peak.

The city bought the Imperatrice property in 1996 for just over $950,000, according to city officials.

The plan was to sprinkle sewage effluent on the land because the Oregon Department of Environmental Quality said Ashland's effluent contained too much phosphorus to be dumped into a local creek. But the City Council of that time abandoned the plan and chose to upgrade the sewage treatment plant with equipment that could remove phosphorus. That allowed the city to continue emptying its effluent into the creek to supplement flows for fish.

The Ashland Public Works Department has said the Imperatrice land could still be used to sprinkle effluent because DEQ says the city's effluent is too warm and could harm fish. Other options include building cooling towers or planting trees along waterways.

Ashland Finance Director Lee Tuneberg said on Wednesday that he doubts the Imperatrice land could be sold for anything close to the $7.6 million that the county assessor's office has estimated it is worth.

He said the land is zoned for exclusive farm use, which limits its value.

Farming, ranching, wineries, farm stands, food processing, public parks, mining, sewage effluent treatment, garbage disposal, schools, churches, forestry and golf courses are among the uses that may be allowed on EFU land under state law. State minimum lot sizes for new homes are 80 acres for farm land and 160 acres for range land, although counties can seek permission for smaller minimum lot sizes, according to the Oregon Department of Land Conservation and Development.

The Imperatrice property is outside Ashland's city limits on land that is under Jackson County jurisdiction.

As for whether proceeds from any Imperatrice property sale would have to go toward sewage debt, City Attorney Richard Appicello said he is not aware of any legal restrictions on how the proceeds could be used.

In addition to sewage plant debt, Ashland currently has a $14.25 million balance on a $15.5 million bond used to finance Ashland Fiber Network debt. The interest on that amount is about 6 percent, according to Tuneberg.

The AFN interest rate is higher than the 3.43 percent interest rate on the sewage plant upgrade debt.

At the Wednesday press conference, meals tax opponents also pointed to the city's 9 percent hotel tax as a source that could be tapped to pay sewage plant debt, rather than higher sewer bills. They advocated using a portion of that tax.

Hotel tax revenue currently goes toward economic development planning, as well as economic and cultural development grants to organizations like the Oregon Shakespeare Festival, Ashland Chamber of Commerce and Ashland Film Festival. Hotel tax revenue also helps support the city's general fund.

Resident Lynn Thompson, who sits on the Ashland Citizens' Budget Committee that scrutinizes and sets the city of Ashland's budget, said the city's general fund is already so stressed that diverting money is not practical.

"I do not have a feeling that there is fat to be cut in the city budget," she said.

Thompson said if voters don't renew the meals tax, the logical next step would be for the city to raise money through another fee, such as increased sewer bills.

She said she doesn't discount the concerns of restaurant owners that the meals tax causes some potential customers to avoid eating out in Ashland.

"The problem is, is there a next best solution that wouldn't enact a greater toll on the community?" Thompson asked.

In addition to holding the Wednesday press conference, meals tax opponents printed anti-tax brochures and posters. They also said they have created a letter that they are mass mailing to residents.

Former Ashland School Board member Chuck Keil, who has been speaking in support of the meals tax's renewal at public forums, said the meals tax opponents are spending a lot of money to try and defeat the tax's renewal.

"They're trying to buy the election," he said.

Staff writer Vickie Aldous can be reached at 479-8199 or

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