The Grand Island City Council has interest in getting an ice rink at the Heartland Events Center. (Courtesy)
GRAND ISLAND – After extensive discussion, the Grand Island City Council voted 8-0 Dec. 30 to keep the city’s Hotel Occupation Tax at 2 percent.
City Council members Ryan O’Neill and Mike Paulick were absent from the meeting.
City administration recommended in a memo that the City Council increase the Hotel Occupancy Tax to 5 percent.
The reason for that recommended increase is approximately $11 million is needed for repairs and replacements at the Heartland Events Center. A 20-year bond would require an annual payment of approximately $800,000. The additional 3 percent Hotel Occupation Tax would provide the funding for the repairs.
The Legislature removed caps on occupation taxes in 2025. The current Hotel Occupation Tax expires Dec. 31.
Several City Council members said they would like to see the matter discussed at a study session. After the meeting, City Administrator Patrick Brown said that the earliest a study session could be scheduled is in three weeks. The next City Council meeting is Jan. 13. City Council members said they felt they needed more time to discuss the issue than what would be available in a regular City Council meeting.
Representatives from Grand Island Tourism, a Grand Island Hotel, Fonner Park, Heartland Events Center, and the Nebraska State Fair were among people who spoke at the Dec. 30 meeting.
The current Hotel Occupancy Tax is being used for Heartland Events Center operations. The total amount of Hotel Occupation Tax revenue in FY2025 is $574,215. Several infrastructure items need to be updated at the Events Center. On Aug. 19, replacement chillers were ordered for $1,225,000. Other items that will be proposed to the City Council are arena lighting replacement ($1,053,254), lighting replacement other than the arena ($698,825), sound replacement system ($1,165,200), ice rink revival ($2,024,195, depends on grant opportunity), roof replacement ($974,203), vestibule ($951,739), and other repairs and replacements.
The first speaker who addressed the City Council was Karla Eyenes, a local hotel director who has worked in the hospitality business for 12 years.
She said hotel staff members are on the front line of fielding comments from hotel customers about how high taxes are. She said she has heard hotel customers “scream” at how high taxes are.
She was concerned that the hotel industry was the only entity being used to provide needed funding.
“Why doesn’t everybody pay for it,” she said.
She said that not all hotels are busy for 12 months of the year. In months where there are fewer people staying at hotels, hotel management may be faced with the issue of reducing work hours for hotel staff members.
Brad Mellema, executive director of Grand Island Tourism, sent an email to Grand Island Mayor Roger Steele on Dec. 29 concerning the Hotel Occupancy Tax. Mellema included as an attachment to his email a position statement approved by the Visitor Promotion Committee, which is the governing board for the Convention and Visitors Bureau.
“Of particular importance is the role livestock and agricultural events play in generating overnight stays. These events are hosted at Fonner Park…and the proposed language does not clearly address support for this critical segment of our tourism economy,” Mellema wrote in his email.
“My intent in sharing this document is to ensure decision-makers have a clear understanding of how the lodging industry views the proposal and how changes to the occupancy tax may affect day-to-day business operations, pricing perceptions, and future event recruitment,” Mellema wrote.
In his position paper, Mellema wrote that the city “has proposed expanding allowable uses of the tax to any city facility that broadly ‘impacts tourism.’ “
Mellema said that since the inception of the 2 percent Hotel Occupancy Tax, hotels have generated approximately $7 million in revenue for the Heartland Events Center. Also, hotels have contributed $2 million through the Visitor Improvement Fund to support bond payments associated with the Heartland Events Center.
Mellema wrote that in recent discussions between the Visitor Promotion Committee and City Administrator Patrick Brown, the committee raised concerns about why hotels are “being singled out as the sole funding source for expanding city-owned tourism-related investments.” Committee members asked whether other sectors, such as food and beverage establishments, have been considered as potential partners in sharing the financial responsibility.
Mellema wrote that many of the livestock shows that generate substantial overnight stays in Grand Island do not take place inside the Heartland Events Center. They are hosted at Fonner Park, which has facilities that “play a critical role in driving hotel demand, particularly during peak livestock and agricultural events.”
“The city’s stated desire to expand allowable uses of the city Hotel Occupancy Tax to any city facility that ‘impacts tourism’ raises significant concerns for the Visitor Promotion Committee,” Mellema wrote.
Recent conversations between the Convention and Visitors Bureau and local hotel operators indicate a willingness to have an increase in the Hotel Occupancy Tax if revenues “are clearly directed toward maintaining and improving facilities that demonstrably generate overnight stays. Support for the Heartland Events Center and the continuation of livestock-related events remains paramount.”
Hotel operators have expressed concerns about increased rates “without defined plans, transparency, or assurances that fund will remain focused on assets that directly impact their day-to-day business operations.”
Mellema noted that regardless of what decision was made Dec. 30, a minimum 15-day period without tax collection will be required as part of parliamentary procedure when adopting or amending city code.
Mellema said that the Visitor Promotion Committee “has significant concerns about equity, broad use language, and the absence of a defined plan and timeline.”
“The Committee believes that a 5 percent rate would be detrimental to our city’s reputation as an affordable place to host major events, such as cattle shows,” Mellema wrote.
In his comments Dec. 30 to the City Council, Mellema said that “fixing a building is not the same as fixing tourism.”
Mellema urged the City Council to slow down its decision-making process. He said that a 5 percent Hotel Occupancy Tax would be equivalent to what is charged in Omaha.
Former Mayor Jay Vavricek said, “I don’t support the ordinance as presented.” He said he was concerned about Grand Island’s ability to compete with other communities for attracting tourism events if a higher rate was approved. He said he was interested in getting feedback from groups such as the Grand Island Area Economic Development Corporation and the Grand Island Chamber of Commerce.
Nebraska State Fair Director Jaime Parr said that the organization has been involved in livestock shows that have been in Grand Island during the last 15 years. She said that the livestock shows bring a lot of tourism to Grand Island. She said that State Fair staff members have provided labor at livestock shows. She said that the State Fair would not continue to providing $25,000 a year to attracting livestock shows.
Chris Kotulak, chief executive officer of Fonner Park, talked about what Fonner Park had done during the time it managed Heartland Events Center. It is now managed by VenuWorks.
“I want nothing more than success for Heartland Events Center,” Kotulak said.
“I don’t think tonight is the night to make a final decision,” Kotulak said.
City Council Member Chuck Haase made a motion to have the phrase “city owned” removed from the proposal. That passed by a 7-1 vote, with City Council member Doug Lanfear voting against it.
City Council Member Mitch Nickerson asked whether the City Council had to make a decision Dec. 30. Mayor Roger Steele responded “no.”
“I think we need to look at all of our options,” Nickerson said. He mentioned he would like to see a study session scheduled to discuss the issue.
City Council Member Mark Stelk said that the issue was too complicated to make a decision Dec. 30. He suggested postponing further discussion about the issue until the next City Council meeting.
A motion was made to postpone discussion of the issue. It failed by a 1-7 vote, with Stelk being the only one supporting the motion.
Kyler Tarwater, executive director of the Heartland Events Center, said that he did not want to see the city lose livestock shows.
Mellema provided a list of the livestock shows that are scheduled in Grand Island in 2026. The are the American Boer Goat National Livestock Show, American Maine Anjou-Chianina Association Junior National, American Gelbrieh Association Junior National, American Junior Simmental Association (pending), Platte Valley Boer-nanza Livestock Show, Wood River FFA Project Livestock Sow, and AGR Prospect Livestock Show.
In other action, the City Council voted 8-0 to spend $1,975,045 to replace three original boilers that are more than 20 years old at the Heartland Events Center. Former Mayor Jay Vavricek asked what the urgency was in replacing the boilers. City Administrator Patrick Brown responded that only one of the boilers is working.
City Council Member Mitch Nickerson asked that an item be pulled from the consent agenda regarding approving a request from Ay Mi Madre at 316 E. Second St. to change the location for its Class “C” liquor license to 112 W. Third St. Nickerson said that the Grand Island Police Department had concerns about the request in background information provided to the City Council, and he also had concerns. Nickerson noted that police had responded to 111 calls in three years at the business. Nickerson said he didn’t have a reason to say “no” to the request, but he wanted things to be as peaceful as possible at the business. City Council voted 8-0 to approve the request.
