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March 5, 2015 - At the March 3, 2015 Mariposa County Board of Supervisors meeting, District 4 Supervisor Kevin Cann brought an item before the supervisors to discuss granting the Mariposa County Economic Development Corporation (EDC) $50,000. After almost two hours of discussion between the supervisors, EDC, business owners and residents the supervisors decided not to fund the EDC the money. The EDC will return in the future before the supervisors to discuss options. 

Full audio of the meeting:
{play} http://www.goldrushcam.com/sierrasuntimes/images/audio/2015/hotel342015.MP3{/play}

The following are excerpts from the discussion:

Supervisor Cann said he has been attending EDC meetings since 2007 and the EDC has produced an amazing body of work but the county has given them nothing as far as supporting their functions. He said to be honest they receive one day a week of staff assistance. He mentioned the Economic Vitality Strategy report on the EDC website. By joining with four other counties through a JPA with the Central Sierra Economic Development District the EDC is eligible for a 50% match of state and federal dollars for projects, like turn lanes on the 140 or extending water and sewer lines to a potential development and up to or including enterprise sites.

Supervisor Cann questions how much economic growth the community is really interested in and while we talk about it we have not done anything.

Supervisor Cann said "Government does not create jobs."

Supervisor Cann said local economic development does not happen without local investment. And without local investment you get Oakhurst.

He said too many people equate the EDC with a performing arts center and the conference center.

He said we are one of the few counties that do not support the EDC. Tuolumne County EDC budget is $390,000. The County itself pays $258,000 with the rest paid by the cities in the county.

He said the TOT is off the charts as it is up $997,000 in the first six months of this fiscal year over 2014.

He said $50,000 is too small and he did not put projects in this proposal because he would like the EDC to come back and tell the Board what they should do. He said with economic development you may have ten areas of emphasis and two or three won't work.

He said he personally sent out an email to the Mariposa County Business Association that this item was going to be on agenda.

He said rightfully we have some folks who don't support this and this is probably what generated a lot of people coming to the meeting. He said that is the way we should be, we should have good debate about this.

District Three Supervisor Marshall Long mentions the General Plan supporting a public/private partnership/investment. He said the county is responsible for the infrastructure such as road, fire stations, etc. He said the county has to have a role in economic development or their will not be any. He supports a diversified economic development, not just one industry. He said tourism cannot be our only economic development. He said we need something else to fall back on if tourism should falter. He said tourism and economic development should stand on the same footing, if we support tourism with $400,000 we should support economic development with $400,000.

District One Supervisor Rosemarie Smallcombe mentions early in her career with a long range planning service she saw way too many proposals that had fancy brochures that went on to shelves and never to be retrieved. She would like to see the General Plan and the Economic Vitality Strategy to be modified/updated (with public participation) and turned into a strategic plan that is regularly updated. She is for economic development.

Supervisor Smallcombe referenced the document that the EDC circulated showing the priorities for expenditures of the $50,000. The preliminary list was made in early March 2015.
The document calls for :
$35,000 to $40,000 for a resort hotel and conference center.
$6,000 to $8,000 for Made in Mariposa.
$4,000 for local business synergy's/clusters.
$4,000 to $8,000 on new business attraction/startup.
$1000 to $2,000 for UC Merced opportunities.
And other associated items for which no value was assigned.

She said among the community there is support for some of the items. She is concerned with the $35,000 to $40,000 for a resort hotel and conference center.

She said credibility is very important to her as it was essential in her career.

A week ago a letter was sent out by the County to the CA. Offices of Emergency Services and the Lake Don Pedro Community Services District. The letter stated that Mariposa County had no available discretionary funds to assist the Lake Don Pedro Community Services District.

She said grant funding needs to be considered in the budget and these projects by the EDC or the community needs to be discussed on how the county is going to spend its money.

She noted the RFI the EDC sent out to prospective hotel owners last year. She said in the RFI some of the respondents mentioned that public funding would be needed if they were to move forward with a hotel/conference center. She said one respondent asked why the EDC wanted to do this as no conference center built in the last twenty years has made a profit.

She said there is a book by the University of Pennsylvania Press where the author states there is one other thing as certain as death and taxes and that is public subsidies for convention centers and hotels.

She said the next step for a possible conference center will be a feasibility study. A 1999 study that looked at over 30 feasibility studies across the country for convention centers note that the companies conducting the feasibility study want to please and are overly optimistic, such as longer stays than are reasonable.

Instead of spending money on a feasibility study we should learn what we can from past studies.

Stats from a big six audit company show they look at population, number of hotel rooms and number of cities connected by direct flights using jets only. What they have determined is that more than 50% of convention business is local in nature, like local meetings, weddings, banquets and shows (like boat, gun) etc.

In Mariposa a good example would be the Black and White Ball that is held at the fairgrounds and they host many of the type of events that could go to the conference center. This could be a zero sum game as we could increase the risk of losing the fairgrounds.

Given that the other 50% of the convention business is from outside the area we need a reputation as a destination instead of a drive-thru community, transportation, a nearby airport for jets flying to multiple cities. She said if we are not a destination the county would have to put up more than 50% of the building costs.

She would like to see Fiester Auditorium at the Mariposa County High School put to better use.

She said the community needs to know what our priorities are and to have an informed conversation noting what costs and benefits to the community a conference center would have. If a conference center is determined by the community that is what they want and it is economically feasible then we go out to a independent consultant to confirm what we already know or disprove us.

The price in the Economic Vitality Study for the conference center is $30,000,000. We need to be careful before we spend taxpayer money and we need to be informed.

Supervisor Cann said we do need the research because if we do not grant what the EDC is proposing the questions will never get answered and Mariposa is unique.

Supervisor Cann said he did not want to have a debate over a conference center, that is not why he brought this item foreword. He mentions the list that Supervisor Smallcombe spoke of, that the list did not exist when he brought the item to the agenda.

He said his intention was for the EDC to come back before the Board after they evaluated their ten years of research and tell the Board what they think where the business community wants to go.

Roger Biery from the EDC said he has done more extensive research than Supervisor Smallcombe and that she is right that the model of a publicly owned convention center fails almost universally and that is why the EDC is NOT proposing this type of center. What they are proposing is to recruit a developer to develop and operate both a resort hotel and a conference center like Tenaya Lodge. He said Tenaya Lodge is very successful. He said the financial feasibility study being subsidized is very common. He said with the RFI that was sent out the respondents mentioned before they would conduct their own study they want to look at a professional feasibility study. He said their appeal will be the Central Valley for using the conference center.

Tara Schiff, Mariposa County Community Development/Grant Coordinator said the $50,000 would only be a start. We need to create jobs in the county that can support a family and we need to create a work force to attract new business to the county and to support the businesses that is already here. And we need to create an economy that is not dependent on one economic driver.

Resident Ron Iudice said he is sorry the EDC got knocked off track by what he feels is a filibuster (by Supervisor Smallcombe) and has watched MERG do that tactic to try to inhibit growth in Mariposa County. We should not tell the EDC how to work. Give them the money, if they succeed great, if they don't well we learned a lesson.

Mariposa County Chamber of Commerce Chairman of the Board Karen Cutter said the chamber supports the EDC request.

Resident Ruth Sellers commented on Supervisor Cann's email to the community where he mentions: "As expected the BOS has received two negative comments from Ruth Sellers and Ruth Catalan. I expect that since they are generally sure that everything I propose is bad." She said she thinks this is insulting.  She said as a citizen of this county who has been involved with the board for twenty years she deserves more respect than to be referred to, to a group of people in that manner. She said Supervisor Cann has chosen to ignore me, that I should be his enemy. I don't feel that way. I sit back an allow him his decisions.  She said she likes to know what money is being spent for.

Les Marsden, EDC First Vice President, said the $50,000 is an investment. He said $1 dollar invested in the arts returns around $8-92 dollars and the Fiester Auditorium is too small for the community.

Supervisor Long is for the Made in Mariposa brand. He said he cannot support the county supporting a feasibility study for private enterprise. Roger Biery said if they do not perform a feasibility study they will not get a resort hotel/conference center. It is the EDC's number one priority. He said this proposal could raise the TOT $2,000,000 a year.

Supervisor Smallcombe said before she could vote to fund a feasibility study she needs to be convinced that the money would be well spent and invested in behalf of the taxpayers of Mariposa County.

Supervisor Cann said he brought the item before the board because that is what the business community wants.

Interim CAO Mary Hodson said usually with grant funding the agreement shows where the money will be spent so the taxpayers know where their money is being spent. 

For more information: 

Mariposa County EDC to Request $50,000 From Mariposa County Supervisors

Economic Vitality Strategy and Implementation Plan

Presented at the February 26, 2015 EDC Meeting: 

Draft Scope of a feasibility study for a resort hotel and conference center that would be performed by Halo Hospitality. (pdf)

Grant Funding List Referred to by Supervisor Smallcombe:

mariposa-county-edc-money-grant