Facing big beach and baseball projects, Pinellas eyes shift in tourist spending

CLEARWATER — Pinellas County officials could change how tax money collected from hotel and short-term rental stays is allocated, with an eye toward making more of those dollars available to capital projects such as beach renourishment and sports venues.

That was the central conversation Thursday inside the Sheraton Sand Key Resort in Clearwater Beach, where county commissioners had their semi-annual joint meeting with the county’s Tourist Development Council, the appointed group of elected officials and businesspeople that makes tourism-related recommendations to the County Commission.

Changing the current funding formula, which puts 60% of tourist development taxes toward operational expenses including advertising, and the rest toward building or improving tourist attractions, would take a vote by county commissioners; so far, nothing is scheduled. But commissioners over the past year have repeatedly floated the idea of moving to a 50-50 split, and the assumption that they’ll make such a move was built into financial projections for the next decade that officials saw at Thursday’s meeting.

The discussion comes at a pivotal time for Pinellas’ approach to tourism, with two major projects that could benefit from more tourist tax dollars being earmarked for capital uses.

The county is in negotiations to help pay for a new Tampa Bay Rays stadium in downtown St. Petersburg; a preliminary agreement announced last year would have the county putting $312.5 million in tourist tax dollars into the ballpark. And given that the county would finance that payment over the course of decades, the final cost would likely be far higher.

It’s also staring down the idea of paying to renourish the county’s eroded beaches by itself. That prospect grows likelier every day that the U.S. Army Corps of Engineers, which typically performs such work and pays for about two-thirds of it, maintains its stance that it needs perpetual public access to private property in the project areas. Because many property owners in the area won’t grant the access, the renourishment process has been delayed.

County Administrator Barry Burton said Thursday that the county is in the process of designing and getting permits for a full-scale renourishment, which takes about a year, so that, if commissioners want, it can go ahead with the project should the Corps still be unmoved by then. Projections shown Thursday have the county spending about $102 million on renourishment in both 2026 and 2032, though Burton said those numbers don’t account for state grants that the county could get for the work.

Both the operational and capital funds have more than $100 million in reserves now, and the projections suggest that the county could afford the beaches, a new stadium and more — $40 million on the Phillies’ spring training complex in Clearwater, $25 million on a Dali Museum expansion — and still be growing reserves by 2033.

“I’m seeing no indication that the Army Corps is going to work with us on” the beaches, said Belleair Beach Mayor Dave Gattis, a Tourist Development Council member. “What I see with a 50-50 split is this is the only way to ensure our beaches are taken care of, and that we have the money to repair them in the event of a disaster.”

But the 50-50 idea also faced some resistance on Thursday as the business owners on the Tourist Development Council expressed worries about the state of the tourist economy. Russ Kimball, the Sheraton Sand Key Resort’s CEO, said the hotel’s occupancy in March and April was the lowest he had seen in his nearly 50 years there. Others noted competition from European travel markets and the cruise industry as post-pandemic travel has normalized. Though the county’s tourist tax haul in the 2023 fiscal year was its biggest ever at $98 million, numbers have slumped slightly in recent months.

County officials said moving to a 50-50 split would leave its tourism bureau, Visit St. Pete/Clearwater, plenty to work with. CEO Brian Lowack, whom Burton appointed to lead the agency last year, plans on asking commissioners for an extra $6 million to boost marketing in the coming budget cycle. But some members said they fear that altering the formula would signal an unwillingness to spend more on advertising Pinellas to tourists.

“We have to be spending more money,” said Michael Williams, managing director of the Innisbrook Golf Resort. “We have to be spending more money smartly in order to compete.”