KALAMA— McMenamins’ Kalama Harbor Lodge has been open for just over five months, but its significantly increased the city’s hotel tax revenue and downtown foot-traffic.
The City Council on Thursday night will decide how to spend it.
The 40-room lodge has increased the city’s hotel/motel tax revenue from $3,000 to $4,000 a year to $3,000 a month, said Coni McMaster, city clerk and treasurer. Kalama already has received $14,000 in hotel tax revenue this year, more than three times the $4,000 it budgeted.
“It’s a considerable increase,” McMaster said. “Even if that dropped by half, it will still be a lot more than in the past.”
A 2 percent tax is charged at hotels or motels with fewer than 40 rooms, and 3 percent at those with 40 or more.
McMaster said McMennamins is drawing more people to other businesses in town. Multiple businesses, including restaurants, have reported a sales boost since McMenamins opened near the Port of Kalama Marine Park in April. Overall, the town has seen more visitors, she said.
John Norton, owner of 1st Street Antiques, said his businesses has seen a 10 to 20 percent increase in sales.
“I think they’ve been an asset,” Norton said of McMennamins. “It’s hard to say exactly how much it’s helped, but often people say they’re staying at McMenamins and came over to see what’s going on in downtown Kalama.”
Columbia Inn Assistant Manager Lisa Hassett said the restaurant’s also been busier. She said they had some concerns about competition before McMenamins opened since it also has a restaurant, but that’s changed.
“When you stay at a hotel, you’re not going to to eat all three meals there,” Hassett said. “We don’t have any complaints about them being here.”
Home goods store Ella Gray has seen an increase in foot-traffic, owner April Hoffman said, but McMenamins presence hasn’t “shot the business through the roof.” Hoffman said the drawback she’s seen is that there isn’t an easy way for McMenamins guests to get to downtown. The Port of Kalama and city are working on getting a better pedestrian bridge that will help, she said.
McMaster said Kalama has also seen some increase in sales tax revenue, but it’s difficult to know how much is due solely to McMenamins. There has been a lot of construction in the past year and that is another source of sales tax, she said.
The city is limited in how to spent hotel tax revenue by state law. That money only can be used for tourism activities or promotions designed to attract overnight tourists. This includes funding for events such as the Untouchables Car Show and Heritage Festival.
The city could also use the money to redo its wayfinding signs, develop a walking map or purchase souvenirs to sell to tourists.
McMaster said she is bringing the issue to the City Council tonight.
“Before, we did what little we could. Now we have funding. I’m bringing it before the council because we really have to look at limitations,” she said.
McMaster sent applications for funding requests to local groups that could qualify for the money. The Untouchables Car Club, Pacific Ohana Foundation (Kalama Heritage Festival organizer) and the Kalama Chamber of Commerce submitted requests.
Untouchables is asking for $2,000 to pay for flyers, advertising, insurance, logo artwork and printing. To help fund the Kalama Heritage Festival, the Pacific Ohana Foundation is asking for $10,000. The Kalama Chamber of Commerce is asking for $2,063 to pay for signs to direct people to its tourism map and for boulevard banners thanking downtown shoppers.
City staff is recommending the city grant $2,000 to each of the organizations. It is also suggesting the council allocate funds for developing a policy and plan for future tourism promotions and activities.
City staff is also requesting that the council put $6,300 in hotel/motel revenues into updating the city’s website.
The City Council should give the staff direction on what to do with the funding. Any final adoption will be included in the budget process. The council meeting is at 7 p.m. on Thursday at the Kalama City Council Chambers.