City, county may not get return on Gravely commissioning investment

WILMINGTON, NC (WWAY) — A closer look tonight at the commissioning of the USS Gravely. In November, the Navy will commission the 500-foot guided-missile destroyer here in the Port City.

The City of Wilmington is giving $25,000 of your taxpayer dollars to help pay for the event. Volunteer Louise McColl is helping head up the commissioning ceremony and plans to use the money to help feed sailors and VIPS in town and provide buses and trolleys for them throughout the 12 days of the event. McColl plans to ask New Hanover County for another $25,000.

The recession has been hard on both the city and county, and both have talked about raising taxes to help make ends meet. But dishing out $50,000 for food and transportation is something city council members and county commissioners say is well worth it.

So we crunched the numbers to find out the return on investment.

McColl says about 6,000 people will visit Wilmington to witness the commissioning. We broke that down to 2,000 families of three. The Cape Fear Coast Convention and Visitor’s Bureau estimates the average family spends about $375 per day on hotel, food, gas and souvenirs. Over two days that generates $1.5 million.

Take out county sales tax, which increases to 2.25 percent Friday, and you get close to $34,000. That’ll be divided up among the city, county and beach communities.

Room occupancy tax also generates income. Two-thousand people at an average of $100 per night for two nights of hotel rooms is $24,000. But that money won’t go back into the city’s or county’s general fund. It goes toward beach renourishment, the Visitor’s Bureau, and the Convention Center.

So after investing $50,000, it looks like the city and county will only directly get back $34,000. The other $24,000 helps alleviate the tax burden, but won’t go back into budget.

County finance director Avril Pinder says the money spent on the USS Gravely commissioning is a return on investment and it will make a huge impact on the local economy. Pinder says every time you spend one dollar, it is spent 2.5 times in our community. It’s called the multiplier effect. Based on $1.5 million in sales tax, that would mean the community would generate $3.75 million.

The numbers we used are based on people spending two days in the Port City to witness the commissioning. The destroyer will be in town for a total of 12 days. There is also a gas tax, of which a percentage goes to the city and area beaches.