The San Antonio City Council will vote Thursday on a proposed fee charged to hotel guests that would generate an estimated $10 million for promoting tourism, but Councilman Rey Saldaña (D4) said this week he will not vote in favor of the fee unless some of the money is set aside to fight homelessness.
Saldaña has some City Council colleagues on board with a request to redirect some funds from the proposed San Antonio Tourism Public Improvement District (TPID) – about 20 percent – to Haven for Hope, a nonprofit that provides shelter and other services for the City’s homeless population. But the plan faces opposition from tourism industry leaders and most members of Council, including Mayor Ron Nirenberg.
“I remain in support of the TPID [as it is],” Nirenberg said. “And I support finding a long-term sustainable revenue stream to ensure that Haven for Hope continues to address homelessness in our community.”
Preliminary approval of the fee received unanimous Council support – without discussion – in June, fulfilling a quest by tourism industry leaders to get more revenue to promote visits to San Antonio. The additional marketing funding would put San Antonio on par with other major Texas cities, officials say.
“The worst-case scenario is we just give them all the money and they just get to use it all for marketing and advertising,” Saldaña said. “We should ask them to get creative.”
But the local TPID wasn’t designed to be a tool to fight homelessness, said Liza Barratachea, president and CEO of the San Antonio Hotel and Lodging Association (SAHLA) which has been leading the effort to establish the district. “We’ve been working on this for almost two years. … We’re not opposed to contributing [to a homelessness solution] but this money and this initiative is not about that. If it was about that in the beginning I think this conversation would be a lot different today.”
In order to initiate the TPID fee, according to state law, at least two out of three thresholds must be met: signatures from at least 60 percent of hotel owners, signatures from owners who represent at least 60 percent of hotel property tax value, or signatures from owners who represent at least 60 percent of hotel acreage.
Since receiving preliminary approval from Council, Barratachea said, those minimums have been surpassed, with about 65 percent of the 163 hotel owners signing on, representing nearly 75 percent of hotel property tax value.
If Council changes how that money will be spent, she said, “it will invalidate all of those signatures” because the terms have changed.
The revenue collected will be directed to and managed by Visit San Antonio, the public-private partnership that promotes San Antonio tourism, and must be used according to the service plan that was presented to hotel owners. A TPID board of hoteliers would oversee the implementation.
“People sometimes forget, in our industry, visitors stay in hotels and they pay hotel tax but they also pay sales tax and that goes into the general fund,” Visit San Antonio President and CEO Casandra Matej said Friday. “And the general fund can be used for whatever city leadership deems as priorities. … But the reality is if we’re really successful on our marketing and sales efforts and we get more visitors here, [the City is] going to see a bump in their overall budget.”
The economic impact of the city’s tourism and hospitality industry in 2017 was $15.3 billion, according to a biennial study by local university professors, an increase of $1.6 billion from two years earlier.
The separate hotel occupancy tax, levied on all stays at hotels and short-term rentals, can only be used on certain city services such as supporting Visit San Antonio, marketing the city, historic preservation, and supporting public art. The TPID would not apply to short-term rental hosts that use platforms such as Airbnb and HomeAway.
Asked if SAHLA would be willing to go back and collect hotelier signatures under new terms to give a portion of the fee to Haven for Hope or other nonprofits, Barratachea said: “It just wouldn’t happen. … There is no impetus for the industry to believe that the City will uphold their next offer.”
There’s also no impetus for the hotel industry to start contributing to the solution, Saldaña said. “We cannot let the hotel industry get away without supporting an issue that they’re very connected to.”
Because tourists don’t like to see homeless people in the cities they visit, Saldaña said, it’s in the industry’s best interest to help address the issue.
The industry is willing to have a conversation about “being the catalyst for some kind of community effort to address homelessness,” Barratachea said, but this “last-minute” request isn’t feasible.
Council members Cruz Shaw (D2), Rebecca Viagran (D3), Shirley Gonzales (D5), Greg Brockhouse (D6), and Clayton Perry (D10) told the Rivard Report that they don’t think a portion of the TPID should be redirected to Haven on Thursday. A spokesman for John Courage (D9) said the councilman would not support it, either. With Nirenberg, a majority of the 11-member Council appears opposed to Saldaña’s plan.
Councilman Manny Pelaez (D8) said he remains open to the discussion, but said: “I suspect that we’ll find a way to do this without disturbing the TPID.”
The City’s 2019 budget already includes $7.6 million for Haven and its campus partners that provide support services for the homeless. It spent $18.6 million on land acquisition and site preparation for the facility, which opened in 2010. Most of the money for the $100 million facility was raised by philanthropist and energy executive Bill Greehey.
City Manager Sheryl Sculley sent a memo to City Council on Nov. 13 that outlined two other revenue alternatives to support Haven for Hope, including redirecting funds from the general fund or increasing the Downtown Public Improvement District tax paid by downtown property owners.
Councilman Roberto Treviño (D1) said he discussed other possible funding options with Saldaña and Nirenberg on Thursday.
“I agree with Rey conceptually,” Treviño said. “I respect this and believe we’re on the same side of this … but I don’t want to kill the entire [TPID] effort.”
If homelessness mitigation isn’t included in TPID, then Saldaña has at least shined light on the problem and started a good conversation, Treviño said. “That’s what we shouldn’t drop.”
An annual one-night count of homeless people shows an increasing trend in homelessness in San Antonio. “There were 144 more newly homeless people in the last 12 months than the previous 12 months,” according to data from the Homeless Management Information System.
Haven for Hope is located in District 5 on the near West Side of downtown.
“Haven is in my district and having a homeless shelter in your backyard makes it very difficult for revitalization,” said Gonzales, who is opposed to redirecting TPID money because she does not believe that more money for Haven will help the problem. “I’m supportive of homeless initiatives, but we have to find a different model and a different way to deal with this increasing population.”
Haven’s service model of being a one-stop destination for people experiencing homelessness and those needing additional social services “over-saturates one community with a lot of homeless people and that has created an incredible burden on the neighborhood,” Gonzales added.
Homelessness, she noted, is a citywide issue.
Haven for Hope has received national recognition for taking a more holistic approach to combatting homelessness by partnering with nonprofits that provide more than shelter – from drug rehabilitation to employment services.
More than 1,400 people utilize Haven’s Transformational Campus at any given time, Haven officials have said, and more than 2,600 have graduated and moved into permanent housing.
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But if Saldaña thought Haven should get more money, Brockhouse said, he should have brought it up during City budget discussions or earlier on in this process.
“I think Rey is way out of line,” said Brockhouse. “I think it’s ridiculous.”
But, Saldaña said, it’s never too late to come up with innovative solutions.
“I hadn’t talked about it on purpose to try to avoid any controversial issues leading up to the November ballot,” Saldaña said. “I tried to talk about it, [most people] weren’t interested.
“It’s either bad policy or not, [but] don’t tell me about the timing because we haven’t voted yet. We’re not a rubber stamp.”
Saldaña said he got the idea from Austin, where roughly 40 percent of its TPID revenue is proposed to go to homelessness.
The main difference is that Austin used another tax increase for a convention center expansion to sweeten the deal for the hotel industry, Saldaña said. San Antonio, with its newly expanded convention center, doesn’t have that leverage.
“I think now is a better time than five years from now,” said Councilwoman Ana Sandoval (D7), who supports the TPID change. “We’ve become aware of other models out there and we think it’s worth discussion. Turning away from a possible part of the solution, I don’t think, would be a responsible thing for us to do.
“When it comes to taxpayers and the city organization, we’re doing our part,” she added, and philanthropists have stepped up. “What is the tourism industry going to do? We’re ready for them to play a role.”
Homelessness needs a long term solution and that conversation is welcome, Viagran said, but it’s not in the TPID.
“This option should have and could have been discussed before Council voted on an agreement many months ago,” she said. “But, bringing this forward now makes it feel [like] some council members did not choose to engage or ask questions beforehand. It feels like one industry in the business community is being targeted.”
Going against the agreement approved in June, Viagran said, “is sending a message that [the Council and City won’t] adhere to items that we vote on.”
City Council decisions are all about counting to six, Saldaña said, referring to a majority vote – provided all 10 Council members and the mayor are present. Asked if he thought some Council members would change their mind next week to support his proposal, he said: “Yes, I do. I confidently believe that they will.”