The Eagle River City Council voted unanimously to raise the room tax from 4.5% to 8% to finance an estimated $1.2 to $1.5 million project at the Eagle River Sports Arena despite objections by lodging industry representatives during a special meeting held at city hall last Thursday.

If approved by the adjacent towns of Washington and Lincoln, the tax increase would start in 2020 and run for three years with the estimated $600,000 collected over that period dedicated to pay for replacement of the ice-making plant at the Dome, with the rest of the money coming from community donations, private fundraisers and bank loans.

Council member Jerry Burkett, who has served on the Eagle River Recreation Association (ERRA) Board and is spearheading the effort to “Save The Dome,” said the deteriorating ice plant is “one leak from closing down the Dome. When you’re dealing with equipment and plastic tubing that was laid 50 years ago, it’s not if but when it will leak.”

Burkett said an estimated $125,000 in large and small donations and pledges have come in to help fund the project, including $50,000 from the Eagle River Rotary Club and $15,000 from the Eagle River Lions Club, along with $30,000 from Kraft Inc. for Eagle River’s runner-up finish in the Kraft Hockeyville USA contest. 

Fundraising efforts continue, Burkett added, but would account for only roughly 10% of the total needed to pay for repairs.

Greg Hahn, representing the Eagle River Area Chamber of Commerce & Visitors Center, asked whether there were other options besides raising the room tax.

Burkett responded, “We applied for just about every grant and have sought aid from many foundations. River Valley Bank has pledged $5,000. USA Hockey has a foundation. They sent me a hockey puck and a replica jersey from the 1980 Miracle on Ice and said good luck. We’ve explored raising the taxes in the county. It would have to go to a referendum to every town and what do you think the western and northern towns would do? The chances would be slim and none.”

A county sales tax was also explored, but deemed unlikely to pass.

“Raising the room tax was the only nonintrusive tax. It’s collected from our visitors. Anywhere you go you spend a room tax,” said Burkett, who noted that room taxes in Appleton and Sun Prairie, where he recently visited, are 15% and 13%, respectively, contrasted to Eagle River’s 4.5%.

“My whole goal is to make sure the Dome continues. People come here for hockey games and tournaments. They stay at our motels, eat at our restaurants, they buy gas here and shop at our shops,” he said. “Do I think this is a popular tax? No. Do I think any tax is popular? No.” 

Burkett estimated the Dome and hockey directly or indirectly generates $1 million annually to the local economy.

“I can’t imagine Eagle River without a Dome. Eagle River is a hockey town, and the Dome is the last wooden dome structure (of its type) in America,” said Burkett.

Mayor Jeff Hyslop said the arena also hosts the annual Silver Blades Ice Show and other events.

“It’s not just hockey. There are many other things going on there,” said Hyslop.

Other events include gun shows held on Memorial Day and Labor Day weekends, which attract several hundred people from out of town.

Some opposition

While most in the audience supported the project, some questioned whether it was fair to place the financial burden on lodgers and on “the backs of tourists,” as one person put it. 

Alan Decker, owner of the Best Western Derby Inn in Eagle River, said the room tax increase puts motel operators at a competitive disadvantage and that the cost should be more widely spread.

“It’s unfair to impose a tax on one industry,” he said in urging the council to postpone any action in order to hear further from the hospitality industry. 

“No one wants to see the Dome go away. But this tax is going to be a deterrent to our hotel and places us in an unfair position to compete with others,” said Decker. “Don’t get me wrong, I stand with everybody to save the Dome. But this is not the way to do it.”

Another business owner said, “It feels like the burden is being put on the lodging guest. It’s not just 8%. It’s the sales tax and the room tax, which adds up to 10%. We just want you to think about the best option to support the Dome. We are a working-class community. I want our guests to keep coming here.” 

When asked for comment, one resort manager who requested anonymity said, “What this means for our high-season renters is that instead of paying $73 in room tax, they will pay $130. I believe this won’t cancel anyone’s plans to travel, but it could certainly cut down on their disposable income to spend while on vacation. This will trickle down . . . one less meal out, one less round of golf, less shopping, less function activities for the kids to do. So while it may ‘save the Dome’ it may conversely hurt area businesses during tourist season when they make their money.”

Another dissenter said, “No one disputes that this Dome is a good thing. But I really question how this money is being used. The room tax is meant to promote the hospitality industry. The room tax money has to be used for municipal building. (ERRA) is a non-profit organization. It may be a good organization, but it is not municipal.”  

Such concerns raised the issue of whether it would be legal to earmark the room tax money solely for the Dome project. 

City Attorney Steve Garbowicz said he hadn’t been asked for a formal opinion yet, but said he didn’t see a reason why it wouldn’t be allowed.

“We’re not the first entity to come up with this idea,” he said. “Projects are being built with room taxes. Ultimately it is up to the bond counsel to sign off that this is a legitimate purpose under the statute.”

Mayor Hyslop and council members Robin Ginner, Kim Schaffer and Ron Kressin all voiced strong support for saving the Dome through a room tax increase. 

Kressin said, “I think it would be good if we could find a way to spread the cost out, but my feeling is this is something the city of Eagle River needs to preserve. I remember growing up as a kid how much I loved to skate. I just want to see that feeling continue with the kids in Eagle River.”

Said Burkett, noting the urgency of the situation, “We have to commit in the next 10 days to installing that ice in August or we won’t get it in.” 

Other towns

The city of Eagle River and the towns of Washington and Lincoln make up the local Room Tax Committee and all three municipal boards must sign off on the proposal.

It’s expected that the town of Lincoln will take up the matter this week.

The Washington Town Board also discussed the proposal at its meeting last week. There were questions about the legality of government giving a nonprofit tax-collected funds and a request to seek a legal opinion from the Wisconsin Towns Association, not just from a local attorney such as Garbowicz.

Several business owners, including Jake Alward of the Chanticleer Inn, said it was unfair to ask lodging businesses alone to collect funds, suggesting a sales tax which all would pay should be looked at. 

Other business owners said they appreciated the winter business the Dome brings in, but a Gypsy Villa spokesperson indicated they get no business from hockey.

Washington Town Chairman Jim Egan indicated any decision from his town would be made at a special electors meeting, probably in December.

About the Dome

Eagle River’s hockey roots go back almost a century. To promote winter tourism, the first hockey team was formed in 1926. Led by Charles E. Taylor, the idea of building a stadium to provide entertainment and recreation for the town came to fruition with construction of the Eagle River Stadium in 1933. 

The structure’s unique elongated dome-shaped roof consists of a network of wood rafters forming interlocking diamond shapes. Major renovations were done in 1963-’64 when indoor plumbing and a concession stand were added. A new locker room facility was added a decade ago. 

It was the first indoor hockey arena in Wisconsin, and in 1980 Eagle River earned the title of Hockey Capital of Wisconsin. In 1983, the Dome also became the site of the Wisconsin Hockey Hall of Fame.

The 2,000-seat arena is home to the Northland Pines High School Eagles, the ERRA youth hockey program, Eagle River Falcons men’s hockey team and Eagle River Figure Skating Association.