The Cannon Beach City Council is considering providing $25,000 to the Cannon Beach History Center and Museum through the Tourism and Arts Fund for the museum’s efforts to purchase the old Cannon Beach Elementary School. But they weren’t very clear if use of those funds is permitted in state law.
City legal council Ashley Driscoll attended the March 12 City Council work session to provide some insight into the issue, but the council was left with more questions than answers. Driscoll informed the council how the transient lodging tax funds could legally be used.
“Seventy percent of new transit lodging taxes are restricted to tourism promotion,” Driscoll said, with funds designated mostly for advertising, publications strategic planning, and marketing for special events and festivals.
But what exactly constitutes a tourism facility is blurry and there isn’t a lot of legal precedent to go on. Promotion is very clear in legislation but guidance for tourism related facilities is only supported by an Attorney General opinion in 2008.
General guidance indicates that the funds need to be used for improved real property on a building with a primary function of tourism, but beyond that, there’s nothing in state law prohibiting the city from giving the tax revenue to either a nonprofit or for-profit business to work on their behalf.
Driscoll cautioned the city to provide strict guidance regarding how the money could be used and include a reverter clause should the museum choose to sell the property in the future, if they do chose to award the museum the funds for the due diligence in their efforts to purchase the old elementary school site.
Mayor Sam Steidel also asked if tourism funding could be used to manage special events directly and Driscoll said that that exact question was in front of the Oregon legislature at present.