Topeka governing body adopts charter ordinance to capture transient-guest tax increment at Hotel Topeka

The Topeka governing body on Sept. 16 approved a charter ordinance that establishes an 8% transient-guest tax at Hotel Topeka and directs the portion of tax revenue that exceeds a 2025 baseline year to the city to recoup costs related to the hotel acquisition, operations and capital work.

Deputy City Manager Braxton Copley, who led the presentation, said the ordinance keeps the hotel’s baseline transient-guest-tax (TGT) proceeds flowing to Visit Topeka and the city at current splits for 2025, and channels the increment above that baseline to the city. “This item basically establishes an 8% transient-guest tax at Hotel Topeka... The increment above the base year is what will go specifically to the city of Topeka,” Copley said.

The measure matters because the city is attempting to recoup about $17.7 million it has recorded for bond principal, bond interest, capital and operating costs tied to the hotel and the Mainer Conference Center. Staff and councilors said the repayment plan combines two main revenue streams: estimated CID (community improvement district) receipts of about $4 million over 22 years and the TGT increment; the residual delta was estimated at roughly $13.3 million recoverable over about 30 years under current projections.

Josh MacInarney, the city’s division director of budget and finance, prepared the project revenue spreadsheet shown to the governing body. Copley and other presenters said projections rest on multiple assumptions about future revenues and expenses and that faster growth could shorten the payback period.

Council members asked procedural and fiscal questions about what the ordinance changes and how the payback is expected to occur. Councilman Spencer Duncan, chair of the policy-and-finance discussion on the item, described the change as largely procedural to align the city charter language with the deal the governing body previously approved when the hotel sale was authorized. He noted the city’s existing TGT rate is 7% and that the ordinance applies an 8% rate only at this hotel location.

Council members also discussed complementary revenue sources: the CID, projected increases in sales tax revenue tied to the hotel and conference center and the fact the property will return to the tax rolls in 10 years under current project plans.

A motion to approve the charter ordinance passed on a 9–1 vote, with Councilwoman Valdivia Acala voting no. The motion was made by Councilman Scott Miller and seconded by Councilwoman Hoefer.

What’s next: staff said the option before the council had been reviewed by the transient-guest-tax committee and the policy-and-finance committee; implementation will follow the ordinance’s adoption and ongoing monitoring of actual hotel revenue to track the increment above the 2025 baseline.