OTTER TAIL RESORTS: PART III

by Kelly Asche

This is part 3 of a series by Kelly Asche discussing resorts in Otter Tail County. Part 1 explained the estimated economic impact of resorts in Otter Tail County and compared it to the impacts of 2nd home owners (seasonal residents). Part 2 highlighted the results of a survey and interviews with resort owners about their future plans and their opinions and perceptions of barriers to future business growth. This final installment contains an outline of suggestions for Otter Tail County on improving conditions for resort business. Read part one here and part two here.

COUNTY SUGGESTIONS

Nick Leonard’s experience as the Director of Tourism and Economic Development in Otter Tail County and a resort owner gave him a unique perspective which enabled him to develop a list of suggested actions for the county that were both realistic in terms of county influence, and also useful for resort businesses.

The following is a list of suggestions Otter Tail County could consider based on owner input and research findings. It should be noted that the county may not have authority over some of the suggestions, in which case, partnering with the resort industry to influence policy makers and other decision makers may be warranted. These suggestions were presented to County Commissioners who then directed Nick Leonard to develop an action plan incorporating these suggestions:

1. Implement property tax policies that encourage investment in new resorts and campgrounds as well as the redevelopment of existing properties. Given the significant local revenue and taxes generated by transient visitors, county tax policies should encourage traditional, transient-based lodging. Examples may include:
   • Consider property tax assessments based on the utilization and auxiliary economic impact of the property. Current values far exceed the value of most resort or campground businesses. Rather, property taxes reflect highest and best use which is typically redevelopment as individual parcels or common interest communities. As a result, assessment practices are actually encouraging the exact sales behavior which you hope to slow and/or reverse.
   • Consider tax abatement opportunities for significant development or redevelopment of transient-based resorts and campgrounds. Many owners expressed reluctance in making significant improvements to their business as a result of the tax implications.
   • Allow flexibility in tax deadlines to align more with seasonal revenue.
2. Assist developers and existing resort and campground owners in finding capital for development or redevelopment.
   • Compile resources and develop partnerships with banks, credit unions, DEED, SBDC, USDA, the local RDC, MMCDC and others in order to assist resorts and campgrounds in locating necessary capital for expansion and/or improvements.
   • Consider partnering with USDA to create a Rural Economic Development Loan and Grant Program for the tourism industry.
   • Work with the industry to identify and market resort/campground properties that are available for recreational redevelopment.
3. Much of the participant feedback related to zoning and less restrictive shoreland ordinances. Coincidently, the County Board has recently adopted the statewide shoreland ordinance which affords greater development opportunities for resorts and campgrounds. Suggestions for complementing the new policy include:
   • Consistently apply rules and regulations. Many resort and campground owners expressed concern that the interpretation of the ordinance varied considerably.
   • Develop a rules and regulations guide book of commercial planned unit developments so they are easy to interpret and find.
   • Invite the industry to a public input meeting when proposing and/or changing shoreland rules and regulations, expand the window for public comment, and avoid the summer months.
4. Continue to invest in infrastructure that makes Otter Tail County an attractive destination for visitors.
   • Invest in public infrastructure such as roads, bridges, and broadband, as well as recreational destinations and activities such as trails, parks, nature preserves, public beaches, events and festivals.
   • Develop a county-wide comprehensive plan that incorporates recreation and tourism to assist developers in identifying redevelopment opportunities.
5. Continue to invest in marketing Otter Tail County as a tourism destination. According to Explore Minnesota, every $1 invested in tourism marketing returns an estimated $7 in state and local taxes and $75 in traveler spending.
   • Continue to partner with the industry on strategies for developing a more robust marketing budget. The resort and campground industry has been fundamental to regional marketing efforts over the past 50 years. However, the decline of resorts and campgrounds has also impacted the availability of resources available for regional marketing. Otter Tail County spends considerably less than similarly sized and positioned tourism destinations.
6. Enforce policies related to the licensing and inspection of vacation rentals (e.g. private properties for rent via VRBO and Air BNB).
   • Private vacation rentals have the potential to replace some of the lost visitors due to resort and campground closures. The resort and campground industry stressed the importance of consistent and fair licensing and enforcement.
   • As the local health inspector, it is important that Otter Tail County enforces such ordinances as a matter of 1) public safety, 2) to ensure appropriate zoning, 3) environmental protection, and 4) to create a fair and level playing field with the resort and campground industry.
7. In partnership with Otter Tail County’s resort and campground industry, encourage the legislature to adopt policies that protect and preserve the industry. Examples of important topics and legislation include:
   • Sensible Statewide Shoreland Ordinances
   • Increased Explore Minnesota Tourism Funding
   • Brick and Mortar Sales Tax Exclusion
   • Funding and Initiatives to Prevent the Spread of Aquatic Invasive Species
   • Maintain Traditional Post-Labor Day School Start
   • Sensible Minnesota Pollution Control Agency Rules on Septic System Permitting, Design and Operation
   • “One State – One Rule” – Consistent Labor Standards in Minnesota Vendor Allowance for Collecting and Remitting Sales and Use Tax