Two Lake Norman organizations intended to bring money into the area will face increased scrutiny this summer as local officials tighten their budgets.
Officials from Huntersville and Cornelius have suggested that their towns should cut funding to Visit Lake Norman or the Lake Norman Regional Economic Development Corp.
Visit Lake Norman is a nonprofit organization that aims to attract overnight tourists to area hotels. It is funded entirely by the hotel-motel and prepared-food tax, which is gathered from the three towns and distributed by Mecklenburg County.
Lake Norman Regional EDC is a public-private entity with a 501(c)(3) designation. Its purpose is to attract businesses to the area.
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Despite their different missions and funding methods, both organizations have drawn criticism from some local officials who say they do an inadequate job at taxpayers' expense.
At the March 21 meeting of the Cornelius town board, Commissioner David Gilroy, 44, suggested the town reduce funding to Lake Norman EDC by 25 percent over the next four years.
Public funding during the current fiscal year for 2011 comprised about 55.9 percent of the EDC's budget, with Cornelius, Davidson and Huntersville contributing 16.6 percent, 8.1 percent and 31.2 percent respectively, according to the EDC.
"Where general fund tax revenues are involved ...we must have a clinical, objective view of the organization's true net impact in creating local, high quality economic development," said Gilroy, who owns a regional finance and accounting business.
Public vs. private funding
But some officials said the EDC has fallen short on its promise to lure business.
"Until recently, their impact on Cornelius has been negligible, but they seemed to have listened to our concerns and are responding," said Commissioner Jim Bensman, adding that the EDC's greatest contribution was bringing the ABB plant to Commerce Station, which created more than 100 jobs.
Bensman also said public funding of the EDC was only meant to be temporary; the private sector was ultimately expected to take over that role.
But EDC executive director Jerry Broadway contested that notion, saying the intent always was to have the public and private sector contribute equal levels of funds. Broadway, 63, joined the organization about five years ago.
"I don't think it's advisable for the towns to get completely out of EDC because they lose a voice of what happens and that opportunity to guide what we do," said Broadway. "They need to stay involved. "
Gilroy ultimately recommended the board continue to provide the same level of funding to the EDC for at least one more year.
Huntersville Commissioner Ron Julian disagreed that the EDC has not made an adequate contribution to the area. Since its inception in 2003, Julian said the organization has created more than 1,000 jobs and brought more than $163 million in capital to the area. The EDC has often cited those numbers as well.
"For the amount of public money that goes into it, it is functioning at a very high level," said Julian, 50, who works as a real estate developer and property manager in the area.
A big visitors center?
In contrast, Julian said Visit Lake Norman has used nothing but public funds without yielding a sufficient return to the community.
"Huntersville is not a tourist destination. People in Minnesota don't wake up and say, 'I think I'll travel to Huntersville,'" he said. "A big visitors' center is not an asset to Huntersville."
Visit Lake Norman received $448,145 during the current fiscal year.
Cornelius contributed $132,929, Davidson contributed $47,920 and Huntersville contributed $267,296 to make up the total, according to Visit Lake Norman.
Julian added - in terms of regional tourist attractions such as the Carolina Renaissance Festival and Discovery Place Kids - Visit Lake Norman has historically not sponsored the events with money.
"Right now we're supporting tourism at those places with our general fund," said Julian.
According to N.C. statute, all hotel-motel and prepared-food tax revenue must go toward promoting tourism. Julian suggested if Huntersville didn't have to give that revenue to Visit Lake Norman, the town could do a better job of supporting local organizations that attract regional tourism.
But Sally Ashworth, Visit Lake Norman's executive director, said her group contributed funds to the Carolina Renaissance Festival last year and plans to do so this year. She also said the organization has an agreement with the festival that requires it to solicit area hotels to host travelers.
"If we see that we can grow an event and help to impact hotels in the Lake Norman area, we will set forth to create an agreement with that attraction," said Ashworth, adding that Visit Lake Norman also provides funding to attractions such as the Loch Norman Highland Games.
Other local officials championed Visit Lake Norman for its ability to bring high-profile events to the area, including BASS fishing tournaments.
Cornelius Commissioner Lynette Rinker, 53, said the organization has been instrumental in raising the area's profile to regional and national prominence.
Rinker works as a business manager for a local architectural firm in Cornelius.
Huntersville Commissioner Danae Caulfield cautioned area towns of the temptation to manage tourism themselves.
"Government should have a limited role and often times tries to wear too many hats thinking just because it is in a position of power it should and can do all things - It clearly cannot and should not," she said.
Ashworth emphasized the great return on investment the towns receive. I fiscal year 2010, the towns contributed $493,719 to Visit Lake Norman. The economic impact the organization had that year was almost $12 million, according to Visit Lake Norman.
"The best part about the financial impacts that we create for our communities is our funding comes from taxes that are mainly paid by visitors, who come, spend money, and then leave," said Courtney Wolfrom, a Visit Lake Norman spokeswoman.