(This story was updated at 3 p.m. April 26 to reflect details included in meeting minutes from an April 18 meeting of the Legacy Investment from Tourism Fund Committee. These minutes were sent to Xpress at 2:43 p.m. April 26.)
The big question heading into the April 24 meeting of the Buncombe County Tourism Development Authority was whether affordable housing projects would qualify for financing from the agency’s new $10 million grant fund. The answer was “not really.”
Buncombe County’s $210 million Ferry Road project is slated to include 645 housing units with 55% of them deemed affordable. It received $4 million of its $6 million request from the Legacy Investment from Tourism Fund, but only for amenities like greenways and trails, not the housing itself. Mountain Housing Opportunities had asked for $1.5 million to build Star Point Apartments, but the request was denied.
“The committee recommended only investing in the public recreation and conservation components of the project, which includes 1.9 miles of greenway, 1.7 miles of trails, public parking access with 20 parking spaces, greenway and trail signage, wetland access and signage,” said Tiffany Thacker, director of grants for Explore Asheville.
“By investing $4 million directly into recreational and conservational components such as greenways and trails, we’re able to support this really important project for our community through amenities that should be available by 2026,” said TDA President and CEO Vic Isley after the vote.
Ben Williamson, an organizer with housing advocacy group Buncombe Decides, which helped organize a petition last year asking the TDA to allocate LIFT funds for affordable housing projects, said he was just as disappointed about the lack of funding for the MHO project as he was excited about Ferry Road.
The MHO project was one of two under consideration April 24 that didn’t receive funding. The other was a $30,000 City of Asheville project for fully enclosed, extra-large trash cans for public spaces. BCTDA spokesperson Ashley Greenstein didn’t respond to questions about why those two projects didn’t qualify in the eyes of the committee, instead sending a written response.
“The LIFT Fund Committee recommended investment in the projects that aligned with the goals of the fund and with state statutory limitations. All projects that were recommended for investment benefit the community at large of Buncombe County and can be enjoyed by both visitors and residents,” she said.
To better understand why certain projects were chosen, Xpress requested minutes of all the LIFT Committee meetings, the first of which was in December. The only meeting that contained action or discussion, according to the provided minutes, was a meeting April 18 at which the committee voted 8-0 to approve the final recommendation to the TDA board. No discussion was documented, and no video recordings were made of the committee meetings.
The remaining 12 projects under consideration by the committee were approved in part or in full by the TDA board. They range from $3 million for the City of Asheville’s Coxe Avenue complete street project to $40,000 for a rebuild of the Aston Park Tennis Center. The Asheville Museum of Science, Blue Ridge Parkway Foundation, Hood Huggers Foundation, UNC Asheville’s Botanical Gardens and RiverLink were some of the fund’s other benefactors.
New funding source
The $9.99 million in funding allocations were the first for the LIFT Fund, which was created in 2022 by state law. The law changed the amount the BCTDA could spend on tourism-related community capital projects from one-quarter to one-third of occupancy tax revenues. The rest must be used for marketing and promotion of Asheville and Buncombe County to visitors.
The one-third set-aside for community projects is now split between the LIFT Fund and the Tourism Product Development Fund, which was created in 2001 and has funded projects ranging from upgrades to the Asheville Community Theatre to renovations at McCormick Field.
The difference between the two funds can be hard to pin down. To explain the difference, Greenstein quoted state law.
The TPDF provides investment for “major tourism capital projects” to increase visitor stays in lodging facilities and “further economic development in Buncombe County.” The LIFT Fund is for “tourism-related capital projects” to increase stays at lodging facilities and “benefit the community at large in Buncombe County, including project maintenance, design, project administration, restoration, rehabilitation, enhancement of natural resources or expansion of necessary infrastructure,” she said.
This year’s initial interpretation of state law by the LIFT Committee and TDA board was important, even if it was limited to the projects that applied, acknowledged state Sen. Julie Mayfield, who lobbied for the legislation that established the LIFT Fund in 2022.
Mayfield suggested before the vote that other types of projects that didn’t apply this year could receive funding in the future, and if people were unhappy with the TDA’s decision of what to fund, they should blame the state, not the local board. Each local TDA across the state is governed by independent legislation.
“I think it’s very problematic because there are communities all across the state that are using occupancy tax dollars [differently]. Because there is no definition of tourism-related expenses, different cities use their money for different things,” she said.
The guidelines written by the state are outdated, vague and at times contradictory, Mayfield argued, and need to be redrawn.
Based on the way the guidelines are currently written, Mayfield said before the meeting she’s not sure affordable housing projects would qualify, but ideally, Buncombe County should be able to decide how to use its occupancy tax dollars based on the needs of the community and Asheville’s uniquely busy tourist market.
Not for affordable housing
Meanwhile, the N.C. Restaurant and Lodging Association opposed the TDA’s potential use of occupancy tax funds for affordable housing projects, writing to county commissioners April 11: “Hotel occupancy taxes should not be used to pay for general fund expenses that are primarily used by the community at large and other businesses that are not paying the tax. If the original need for tourism promotion and product development is no longer needed, and the tax has met its goals, perhaps consideration should be given to lowering the tax rate,” wrote NCRLA President and CEO Lynn Minges.
In a letter to Minges on April 9, the association’s general counsel, R. Frank Gray, argued that affordable housing projects don’t meet legislative mandates for LIFT funds to “increase patronage of lodging facilities, meeting facilities and convention facilities by attracting tourists, business travelers or both” and “benefit the community at large in Buncombe County.”
“While affordable housing is a worthwhile goal for any community and may meet the second requirement of benefiting the community at large, it does not meet the first requirement of the authorizing legislation — increasing patronage at lodging facilities. Both elements must be present.”
Minges went further.
“Although there have been public statements that this language is up to interpretation, if local elected officials decide to use it to fund affordable housing and other nontourism-related expenditures, that interpretation will be done by the courts,” Minges wrote.
Board reaction
After the vote, TDA board members and staff celebrated the first allocation of LIFT funds.
“The [LIFT Fund] has expanded the authority’s ability to invest in these transformative projects and allows the wider uses of these funds to collaborate with our nonprofit and municipal partners. The projects approved today reflect the diversity of our community and disbursal throughout our county,” Isley said.
“It’s great to be able to support such a great variety of projects,” said board Vice Chair Matthew Lehman, who is general manager at the Grand Bohemian Hotel Asheville. “Ten million dollars over a dozen projects, it’s just really tremendous. And I’m really excited about the Ferry Road project as well. I think we’ve learned a lot through this process about the impact that housing affordability has within our community.”
Board member Kathleen Mosher, vice president of communications at The Biltmore Co., who also served on the LIFT committee, acknowledged the need to address affordable housing collectively.
“I think we have, first and foremost, a real need to partner with city and county and other community members to make sure that we have active projects being built to solve this affordable housing issue. Our zoning needs to be updated, and our unified development [ordinance] needs to be updated. And we need as a community to come together and figure out how to solve this so that we have more housing in our urban centers,” she said.
Honestly, let’s take the N.C. Restaurant and Lodging Association at their word and lower the occupancy tax rate to a level where restaurants and hotel owners have to start spending on their own marketing budgets instead of outsourcing them to Explore Asheville. They threaten to sue over where TDA funds are allocated? This tells us they have sucked on the TDA teat for too long.
From time to time there is talk from Buncombe County Commission on doing just that, but they are never able to bring themselves to actually doing it.
Headline says TDA doesn’t fund affordable housing then article goes on to explain they do. Nice reporting, MtnX Eye roll
In a normal world, this money would belong to the community anyway. The TDA is just a collection of wasteful middle-people who like to receive praise for doling out 33 cents on the dollar…
well, they were able to pry ten million from the MAGA GOP created TDA slush fund ( ..many thanks for Ms. Mayfield’s efforts here) …but it’s still a slush fund siphoned from public monies that has inadequate oversight. just saying.