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Lodging tax proposal hits resistence from Ottertail club-hotel manager

OTTERTAIL -- A room tax that garnered wide acceptance in Perham may be a harder sell for Ottertail.

The 3 percent tax, which is applied specifically to hotels and lodging facilities, was outlined at the Ottertail City Council meeting Jan. 21.

The manager of one of Ottertail city's two lodging businesses was skeptical that the tax would be appropriate for the community.

"Aren't we being taxed enough?" said Linda Buchanen, manager of the Otter Supper Club-which also has a dozen hotel rooms within the complex. "We're struggling to keep customers as it is."

Perham representatives believe that a lodging tax that would combine the revenues from Ottertail and Perham, would provide the marketing dollars necessary to promote the entire Perham-Otter Tail lake country area more effectively. Lodging tax revenues, by state law, must be earmarked for marketing and promotion expenses.

Representing Perham at the Ottertail City Council meeting was Perham Area Chamber of Commerce President Nick Theroux, Chamber officer Nick Anderson and Arnie Thompson, The Crossings Inn, who has been a proponant of the lodging tax.

Based on annual volume at Perham's two hotels, Crossings and Super 8, the tax should generate about $30,000 a year. If Ottertail voted for a lodging tax, revenue could be comparable-as the total number of rooms in each of the towns is at nearly 100

Ottertail's Thumper Pond, with 78 rooms, is the largest lodging operation in East Otter Tail-and would generate the most revenue. Thumper was not represented at the Ottertail meeting.

If successful, the Ottertail and Perham lodging tax would be administered under a joint agreement. In Perham, the money will be governed by a five-member tourism bureau-which makes recommendations to the Perham City Council, which serves as administrator of the program. The city of Perham is only charging $500 a year to serve as administrator of the lodging tax, noted Theroux.

Perham-Ottertail is about the only market area between St. Cloud and Crookston without a lodging tax, said Theroux. Most travelers are so accustomed to paying a lodging tax, it is hardly noticed, said Thompson, who said there hasn't been any comments about the tax since Crossings began charging the room tax Jan. 1.

"But we're not Alexandria, Detroit Lakes or St. Cloud," said Buchanen. "We have a small-town atmosphere. That's why people come here, and that's how we promote it...but taxing is not a way to do it."

Because of the difficult economy, Buchanen is concerned that the lodging tax will simply reduce the disposable income people would otherwise spend on another dinner out, or on retail shopping.

"Is it going to bring money into the community, or is it going to take it away?" asked Buchanen.

But Theroux said the lodging tax is a source of revenue that will have a lasting, long-term impact by promoting the area on a regional, statewide and inter-state level.

Ottertail council members did not voice opinions or positions on either side of the question.

But Councilman Myron Lueders acknowledged that there would need to be more research and local input before making a decision.

Councilman Terry Wagenman agreed to set up meetings with the various parties to start the lodging tax dialogue.