In an election featuring four Assembly candidates vying for four seats and a four-candidate, two-seat school board race, it’s a trio of ballot measures that have attracted the most discussion and online comments.
Three ballot measures before voters in this year’s municipal election come down to one question: Should the City and Borough of Juneau spend millions on upgrading two downtown events venues?
The public will be able to weigh in on whether the city should increase hotel-motel tax from 7 to 9 percent until 2035 (Proposition 1), issue up to $7 million in general obligation bonds to renovate a downtown conference venue (Proposition 2) and provide a $4.5 million grant to a proposed arts and culture center (Proposition 3).
[Home Sweet Home: Once-controversial housing program now seems like a success]
Each one of those propositions is connected to a proposed New Juneau Arts & Culture center.
For the better part of the decade, the New JACC has been a project seeking funding to raze and replace the former National Guard armory that serves as the JACC.
The project comes with a projected price tag of $26.4 million, according to the New JACC, about 21 percent of that has been raised so far. The $4.5 million and signal of city support that the passage of Prop 3 would represent would be a major boost for the project.
“I think it’s a no-brainer,” said Juneau artist Arnie Weimer, who built and placed a statue titled “Holey Buckets” outside of his downtown home.
He said the arts are good for the community, and a New JACC seems inevitable, so it has his support.
Not everyone sees it that way.
“I’m looking at a lot of other things we need in Juneau,” said Kathy Swanson, who described herself as a frequent attendee of Juneau arts events. “Look at the dump. Are people going to go skiing on it in the winter? Are we going to get an incinerator? They’re not cheap.”
“If I won the lottery, I’d love to give it to them, but that hasn’t happened,” she added.
While the city owns the current JACC, the Juneau Arts & Humanities Council, which manages both the JACC and Centennial Hall, would own the New JACC, and that’s a point of contention.
“Private ventures should stick to private funding,” said Denny DeWitt, who chairs the Worried Juneau Taxpayers political action committee actively campaigning against Prop 3.
JAHC Executive Director Nancy DeCherney disagrees. The building the city currently owns has bad floors, kitchen plumbing near failing, no HVAC system and other problems.
When Norah Jones performed in Juneau in July, she used a hotel room as a dressing room since neither the JACC or Centennial Hall had an appropriately equipped space, DeCherney said.
“I wouldn’t put this in the Taj Mahal category,” DeCherney said in an interview. “The fact of the matter is Juneau can do better.”
DeCherney said she understands worries about the project’s financial impact amid statewide budget uncertainty, but she said with municipal debt projected to fall off and the building ready to go, now seems like the right time to pull the trigger.
“This is the time and place,” DeCherney said.
The time almost came last year when the Assembly was one vote short of putting a question about supporting the New JACC with public funds on ballots. Voters may have been more inclined for the measure back then as opposed to after a summer of swirling concerns about Gov. Mike Dunleavy’s budget vetoes.
“We could be further ahead. I’m just happy we’re at this point,” DeCherney said.
Critics of the $4.5 million plan point out it’s well short of the $7.5 million the New JACC previously requested and could leave city money tied up during further fundraising.
Size and capacity of the New JACC are also sticking points.
“We have a town of no more than 30,000,” Swanson said. “Do you really think the Rolling Stones are coming to do a show in Juneau?”
DeWitt said he disagrees with financial projections that show the New JACC breaking even by its third year of operations.
“You’ve got a look at some of this stuff and say, ‘Wait just a minute, does this pencil out?’ and the answer is no,” DeWitt said. “If it did, they would take it to the banks.”
He characterized it as an impractical private venue that’s taking funding from a public building — Centennial Hall —that could use an extra $4.5 million. The potential New JACC grant would come from sales tax money initially intended for Centennial Hall work.
Centennial Hall facility manager Kathleen Harper and DeCherney downplayed the competition between the two structures.
Harper said the propositions work out to cost less than the almost $18 million Centennial Hall plan that was the result of a study this summer, and the spaces would be used in complementary ways.
“Essentially, we’re building part of Centennial Hall here,” she said.
The other two propositions
Whatever happens with the Prop 3 vote will have a direct impact on the other two propositions since the bonds would work as an alternative revenue source for Centennial Hall work and the hotel-motel tax hike eases the burden of those bonds on taxpayers.
City Manager Rorie Watt said the neatest election outcome is for all the propositions to either pass or fail, but it’s possible that won’t be what happens.The city has outlined what the different outcomes would mean.
In any scenario in which the New JACC grant fails, $4.5 million is available to go to Centennial Hall as originally intended, and in one scenario $11.5 million could be available for the events and convention venue.
Any outcome in which the bonds proposition passes, but the hotel-motel tax increase does not would likely be the most costly to taxpayers.
Bond debt service would mean an extra $4 of property tax per $100,000 of assessed value if the bonds and hotel-motel tax increase are approved, according to city projections. That’s compared to $12 per $100,000 of value if the tax increase fails.
City Manager Rorie Watt said in a phone interview the average single-family home in Juneau is valued at about $350,000 —that’d mean a tax increase of $14 per year for the average home if Props 1 and 2 pass and a $42 bump if only Prop 2 passes.
Raising Juneau’s hotel-motel tax rate would make it among the highest hotel-motel taxes in the state.
Anchorage has a 12-percent rate, according to the city’s municipal code. Fairbanks sits at 8 percent, according to the city’s code. Recently, there have been multiple unsuccessful attempts to raise the Fairbanks rate. Sitka’s hotel-motel tax is 6 percent, according to the city’s transient lodging tax code.
The hotel-motel tax rate has not been raised in more than 30 years, according to CBJ.
If all propositions fail, there would be no change to hotel-motel tax, no bonds issued and $4.5 million would still be available to Centennial Hall.
If both Centennial Hall propositions pass, the $4.5 million that could’ve gone to the New JACC and $7 million in bonds could be used to improve Centennial Hall.
If voters only approve a hotel-motel tax increase, the city would be able to use the $4.5 million and new hotel-motel money for Centennial Hall.
If the bonds are the only proposition that fails, then hotel-motel tax money can be used to it improve Centennial Hall, and the New JACC is in line for its grant.
If only the New JACC proposition passes, then there’s no tax changes, no bonds and $4.5 million is available for the New JACC.
While a hotel-motel tax change and issuing bonds require voter approval, the election results aren’t binding, Watt said.
The Assembly could opt for a smaller hotel-motel tax increase or taking on less debt.
“The Assembly always has the power of appropriation,” Watt said.
• Contact reporter Ben Hohenstatt at (907)523-2243 or bhohenstatt@juneauempire.com. Follow him on Twitter at @BenHohenstatt.
