Delco ups hotel tax to pay for soccer stadium

When Delaware County Council borrowed nearly $30 million last year to put toward a Major League Soccer stadium in Chester, the plan was to pay off the debt using slots revenue designated for economic-development projects in the city.

"I want to stress that the debt will be entirely covered by restricted gaming funds from Harrah's," then-Vice Chairman Jack Whelan said in a statement issued at the January 2009 meeting, when council voted to float the bonds.

Yet, starting Oct. 1, anyone paying to stay in a county hotel or bed and breakfast will also be chipping away at that 30-year debt - whether or not they've ever been to PPL Park to see the Philadelphia Union.

The council voted this week to increase the county's hotel-occupancy tax from 2 percent to 3 percent, and to use most of the new revenue to help pay off the debt.

Hotel owners aren't happy. They say their guests shouldn't have to contribute to a $122 million soccer stadium on the Chester waterfront.

"I don't do any sports business at all here. I'm not really sure how it benefits me," Lori Rossi, owner of Brandywine River Hotel, said of the stadium, which is more than 20 minutes away. Rossi, who hadn't heard of the tax increase yesterday, said she doesn't think it's fair to an industry "that's already been hit pretty hard."

Tore Fiore, executive director of Delaware County's Brandywine Conference & Visitors Bureau, said that the 1-percent increase is conservatively expected to generate about $450,000 a year, most of which will go toward the stadium debt. About $50,000 will fund an advertising campaign for Delaware County hotels.

Whelan, now council president, said he was most likely trying to emphasize at the January 2009 meeting that no county taxpayer dollars would be used to pay off the stadium debt. He said yesterday that increasing the hotel tax, which doesn't affect county residents unless they happen to stay at a local hotel, has been under consideration for a couple of years.

Using the new hotel revenue to pay off some of the stadium debt would free up slots money for other economic-development projects, Whelan said. And even at 3 percent, Delaware County's hotel tax would still be well below Philadelphia's 8.2-percent tax.

"We don't think someone will say they're not going to stay in Delaware County because the tax goes from 2 to 3 percent," Whelan said.

Councilman Andy Lewis was the only member of the all-Republican council to vote against the hotel-tax increase. He also voted against floating the bonds for the stadium last year, saying that the league had refused to provide him with audited financial statements.

"Since this was really another form of financing on the soccer stadium, I voted no," Lewis said. "But I don't think the hoteliers are going to benefit much at all from the stadium in terms of 'heads in beds.' "