MIDDLESBORO — The Bell County Tourism Commission met on Tuesday in a special called meeting to discuss the Wasioto Hotel Project. After an hour long meeting, five representatives from the commission voted not to allow the city to use the restaurant tax to help fund the project.
The use of the restaurant tax was the main enabler to the project. Without the ability to use the restaurant tax, the project cannot move forward.
“We feel like we should be allowed to use it (restaurant tax) to promote our area,” said Pineville Mayor Sherwin Rader.
Bell County Judge Executive Albey Brock and Middlesboro Mayor Bill Kelley were also present at the meeting to show their support for the project.
“I have been more engaged in this project over the course of the last month than I have been in my tenure as judge in the last six year,” said Brock. “You ask why, because they have the money.”
“We need this desperately,” added Brock.
Kelley stated that he was in 100 percent support of the project. “We are not going to survive worrying about one area. We are going to survive by coming together, ” said Kelley.
One issue that was brought up by Tourism chairman Tom Shattuck about using the restaurant tax to help fund the project was the legality of the issue. That query was answered by Pineville City Attorney John Gambrel and Bond Attorney Gill Johnson.
Gambrel told the group that the tax can legally be pledged directly to the project.
Johnson, who is with the law firm Steptoe and Johnson and a member of the National Association of Bond Lawyers (NABL), said that some of the statutes stated in a previous opinion (one that stated using the tax was illegal) from a law firm was based on statutes that were “non-applicable” to this situation. He said that the tax dollar would not be paid to the developer, therefore it would not be a subsidy (an assistance paid to a business or economic sector). Johnson added that it actually mentioned in one of the statutes that a hotel is a proper project for the pledging of revenues and taxes for bonds.
Another worry for Shattuck was reliability. Johnson stated that the individual that would be reliable for the project would be himself. “I’m here today to defend that opinion that I gave,” said Johnson.
If the bonds were issued, Johnson would have been required to issue an opinion to the people that put up $14.3 million to invest in the community. He would be required to tell them that the project is valid under Kentucky state laws and statutes.
“I’m putting on the line my malpractice and my reputation,” said Johnson. “I am willing to put my name on the bottom line.”
“I got a brother down in Clinton, Tennessee getting sued right now,” replied Shattuck.
Johnson assured Shattuck that he nor the commission would be sued, but that assurance was not enough to get the commission to allow Pineville to use the restaurant tax to help fund the project.
The Wasioto Hotel and Resort project would have been a $14.3 million four star resort hotel. The hotel would have consisted of 102 rooms, a 350 seat conference center, 100 seat restaurant and many other amenities.
It would have created approximately 167 construction jobs for local workers, and more than 80 permanent full and part-time positions. There was hopes that the project would attract more tourist to the area to help the economy, and the city of Pineville would have been able to collect taxes from the hotel such as the room tax.