Buncombe County Tourism Development Authority
Tourism Product Development Fund (TPDF)
Frequently Asked Questions
1. What is the TPDF?
The creation of the Tourism Product Development Fund (TPDF) is the outgrowth of a business decision by the tourism industry to find a way to drive more room nights to the area. It is a fund that is under the auspices of the Buncombe County Tourism Development Authority which designates review and vetting of applications to the Tourism Product Development Committee as called for in the legislation.
2. Why was the TPDF developed?
When the industry realized the Asheville area was at risk over time of losing visitors to competitive destinations, leaders devised a mechanism that could serve as an incentive for significant tourism product that would drive overnight visitation.
Just as they had in the early 1980s, the lodging industry in Buncombe County turned inward to find a solution. The TPDF is the result of lodging properties choosing to add an additional 1% to the 3% existing self-imposed tax on their lodging facility in order to serve as a catalyst for tourism product that will generate significant additional room nights, thereby impacting the local economy. The fund is not intended to be a project’s primary source of funding.
3. Who pays the tax?
The room tax is paid by visitors to the area who are staying overnight in lodging properties with 5 rooms or more. In addition to the 4 percent room tax, visitors also pay a sales tax of 7 percent resulting in visitors paying a total of 11 percent on their accommodations.
4. Is it true that both non-profit and for-profit businesses can apply for funds?
When first created, the tourism industry purposefully crafted the legislation without consideration of tax status of the applicant. The aim was to create an incentive pool to help projects that would serve as a destination driver or provide a reason for an extended stay or repeat visit. Projects are judged based on their ability to create substantial new and incremental overnight stays in Buncombe County thus creating a significant overall economic impact on the community.
5. Who decides what project(s) receives TPDF dollars?
The enabling legislation mandates that a TPDF committee review all funding applications. Each project must pass a two-stage approval process prior to receiving funding. The TPDF committee first thoroughly reviews all applications and conducts interviews as needed. The committee then makes funding recommendations to the Buncombe County Tourism Development Authority (BCTDA). Before a project is recommended to the BCTDA board, eight of the nine member TPDF committee must affirm the decision to fund, or all voting committee members minus one in case of absentees or abstentions. A majority of BCTDA voting board members (four) must affirm the funding recommendations made by the committee.
6. How are projects chosen for funding?
Each project is reviewed on its own merit and much scrutiny is given to the methodology and assessments of room nights. Projects are judged on their ability to generate new room nights as well as to impact the overall economy, similar to the way that businesses are assessed for potential economic development incentives. The TPDF committee also requests information on financials from each project to ensure the financial viability of a project as best it can.
In most cases, a hotel in and of itself is not the primary reason people come to visit. Therefore, a builder of a new hotel would have a more difficult time demonstrating that the project would generate incremental rooms versus displacing visitors from other lodging.
7. How many projects have received funding thus far?
In just eleven years, the tourism industry has provided $15 million to sixteen projects that are not only generating room nights, but are also great assets to the community. More than half of the funds disbursed have gone to City of Asheville owned or affiliated projects, including the John B. Lewis Soccer Fields, Pack Square Park, a portion of the Wayfinding program and the U.S. Cellular Center (Asheville Civic Center).
8. How are funds disbursed once a project is awarded funding?
Disbursement of the monies takes place after various steps in the construction process have occurred. Contractual language in the specific grant agreements outlines a series of provisions and covenants tied to disbursement of the funds as well as remedies in the event of a breach. When it becomes clear a project won’t move forward, under certain contracts, the award can be rescinded.
9. Where do the funds sit before construction begins?
Funds stay in escrow in a BCTDA account until construction begins on the new projects.
10. How can I learn more about applying for a TPDF award?
To learn more about the application process, criteria for funding, funding schedule, and to download an application packet visit www.ashevillecvb.com/tpdf-2014-grant-applications.