CSB donates money to city, denied lodging tax exemption

by Frank Lee

operations@thenewsleaders.com

A request by the College of St. Benedict to be exempt from a recent lodging tax was denied by the St. Joseph City Council at its June 7 meeting but not before some testy exchanges took place.

The private college provides lodging in the summertime for sport camps, youth camps, alumni and others to those who are willing to pay to live in apartments and residential halls on campus.

“The decision that it turns on is whether or not the College of St. Ben’s is a hotel,” said Thomas Mathews, an attorney representing St. Ben’s. “A hotel is defined under your ordinance, but I would maintain the ordinance is not using the correct definition of a ‘hotel.’”

The authority to issue the lodging tax comes from a state statute and was intended to generate revenue related to tourism development, Smith said.

“The Minnesota Department of Health uses this definition of a hotel, meaning ‘a hotel, resort, boarding house, bed-and-breakfast, furnished house or other building . . .  held out to the public to be a place for sleeping,’” Mathews said. “The critical factor here is ‘held out to the public.’”

The city council considered in March the request of the Economic Development Authority to create an ordinance establishing a lodging tax, which was adopted in May.

It was the opinion of Mathews the city does not have the authority to impose the tax on housing provided by St. Ben’s, but St. Joseph’s attorney, Thomas Jovanovich, disagreed.

“The interesting thing is all lodging establishments must be licensed by the State of Minnesota,” Mathews said. “In this area, the Minnesota Department of Health has delegated that authority to Stearns County. Stearns County then issues those licenses, except for the City of St. Cloud. The City of St. Cloud issues its own licenses.”

Mathews told the city council, however, that Stearns Environmental Services told him St. Ben’s could not get a hotel license and reasoned therefore it should be exempt from the lodging tax. (St. Joseph has one hotel in the area and the short-term lodging provided by CSB.)

“So we can’t get a license to be a hotel,” Mathews said. “And if you are operating a hotel or a hotel without a license, you can be fined . . . I think it’s pretty obvious the services or the accommodations the college provides is not that of a hotel.”

Council member Dale Wick, who sits on the St. Joseph Economic Development Authority committee, took issue with Mathews’ argument and referred to St. Ben’s webpage for on-campus housing reservations that go into greater detail such as housekeeping and rates.

“If you are having a wedding there, and they are going to be using (St. Ben’s) Gorecki Center, you are reserving a block of dormitories, just like a hotel would, that offers that block for the guests of the wedding to come in and reserve . . . for a number of nights,” Wick said.

Susan Palmer, CSB vice president for finance and administration, was also at the city council meeting to lobby for the lodging tax exemption, which largely fell on deaf ears.

“Every person we would have on campus is a contract,” Palmer said. “It’s a contracted event, whether its camps. You can’t just walk on campus and go to a place and say, ‘I need a room for tonight.’ We don’t even have the capabilities to do that.”

According to a St. Ben’s webpage regarding accommodations for wedding guests: “All apartments have restrooms and showers within the apartment as well as a kitchen, washer and dryer, and living room. Kitchens have a refrigerator/freezer, stove and oven.”

It also states “the following items are included in all housing accommodations: sheets, blanket, pillow, bath towel, washcloth, soap, beverage cup and coat hangers” and lists rates by nights.

“My point would be you shouldn’t be renting it out and taking hotel rooms from other people . . . if you can’t get a hotel license,” Wick said.

Jovanovich, who was at the meeting, told Palmer when he looks at St. Ben’s events’ and conferences’ facility guide, his opinion is St. Ben’s is opening its facilities to the public.

“There is no limitation as to who you will make these opportunities available to except for one thing and that is it has to meet the philosophy of St. Ben’s,” Jovanovich said to Palmer.

The college also offers snowbird summer housing opportunities for seniors, and on St. Ben’s webpage advertising the lodgings, it states: “The snowbirds that stay with us typically have connections to Minnesota, but not necessarily connections with the College of Saint Benedict.”

“This is in direct competition to other people within the city that pay property tax,” Wick said. “To me, each place that’s offered up for rent should be paying property tax as well as the lodging tax as well as be licensed as a hotel. … You aren’t paying on the dorms you are renting out.”

Projects that could be completed with funds generated from the lodging tax include, for example, creating a marketing video or marketing brochures for St. Joseph or placing ads for St. Joseph.

“You are advertising to the public to utilize your event and conference center during the summer for any number of events, whether they are related to the college or the Catholic Church or government, so you clearly are trying to bring the public in and renting rooms,” Jovanovich said.

At the conclusion of the council meeting, Mayor Rick Schultz read aloud a document accompanying a $20,000 donation by the College of St. Benedict to the City of St. Joseph, which council member Bob Loso opposed accepting, but he was outvoted by the rest of the council.

“We pay our share of local facility charges, special fees and applicable property taxes,” Schultz read aloud from the document from Mary Dana Hinton, president of St. Ben’s. “As you know, the College of St. Benedict has for many years made a voluntary financial contribution to the City of St. Joseph in recognition of the deep value we place on our relationship. Enclosed, please find the voluntary donation of $20,000.”