GOTL Lodge Debt Relief FAQs
Geneva on the Lake Lodge Debt Relief Plan Frequently Asked Questions August 9, 2021
- Doesn’t the Lodge make a profit? Does the County get any of that money?
- The Lodge does make a profit and is a successful operation until considering debt payments and large future repairs and maintenance. Net Proceeds in the last five years were at a high received in 2019 at roughly $600,000 and a low in 2014 of $250,000. These are funds received after expenses, management fees, etc and are applied to debt payments but do not cover even half of the current payments.
- Money associated with the Lodge must stay at the Lodge. The county cannot for example take profits or revenue and use that money for other purposes, so these funds stay there.
- What happens now that the Governor signed the budget bill?
- The Budget Bill language inserted by State Senator Sandra O’Brien provides the requirement that an agreement for transfer of ownership of the Lodge from the County to ODNR be in place by January 1, 2022. Should that happen, the Bill appropriated the money necessary to pay the remaining $13 Million + of the Lodge Debt owed by the County. This Bill speeds up the timeline of transfer to the State and allows for money to be exchanged, something the current lease agreement to the State does not. The Board of County Commissioners will enter into Transfer discussions with the Ohio Department of Natural Resources to begin the transfer.
- How much debt is still owed on the facility?
- There is roughly $13 Million still owed on Construction Debt, with an additional roughly $2 Million owed in non-construction debt. The final payments are scheduled to end in 2031 assuming no further refinancing or additional debt.
- Why is the county selling the GOTL Lodge?
- First, the county is not selling the GOTL Lodge. The County is expediting the transfer of the Lodge to the State of Ohio which was originally planned for 2040 based on the lease agreement. With the State assuming ownership of the facility now, they also will cover the remaining debt payments for the Lodge. The debt payments on the facility have been a financial burden on the County budget since construction, while the county should not have had to foot the bill for the facility, this agreement at least takes some of the burden of the facility to the state.
- Would the State of Ohio really get the property for free anyway in 2040?
- The current lease agreement with the State of Ohio provides that the State owns the land the Lodge sits on and has a say with any current improvements with the facility. The County owns the Lodge and uses a management company to handle the day to day operations. When the Lodge was built, the State did not wish to construct or financially support the facility and entered into a long-term lease with the County to have the Lodge transferred, for free, to the State in 2040. Is it possible to renegotiate that lease agreement when the period is up? Possibly. To wait until 2040 means making assumptions that we do not know the answer to now, but we do know that to wait means paying the remaining debt off with a mix of resident and tourist taxes and being responsible for future upkeep and maintenance.
- Wasn’t the county’s bed tax supposed to pay the debt of the Lodge? Does it?
- When the Lodge was built, a promise by the then Board of County Commissioners was that local taxpayers would not be footing the bill for the Lodge for long as bed tax and Lodge profit would cover the debt. Unfortunately, that has not been the case. Bed Tax contribution to Lodge debt has ranged from a high in 2017 of $374,000 to a low in the last five years of $250,000 in 2014. With an average payment of over $1.25 Million in debt moving forward
- What will happen to the savings to the taxpayers?
- County Tax Payers contribute to the Lodge’s Debt through the County’s portion of the Inside Millage. Inside Millage is a property tax amount which is 10 mills, or $10 per $1,000 of value which is charged to every property in the County. The County’s Inside Millage has been earmarked for debt payments or economic development. The portion devoted to the Lodge Debt can not be used in a better return on investment for our dollars. Having the state pay the remaining debt, frees up funds to lower interest payments, other debt, and new developments.
- What has been paid so far on the facility? Have residents paid towards that?
- So far, the County has paid $19.3 Million towards the construction debt of the Lodge. Of that number, $13.5 Million came from property tax payers and the remaining came from economic involved payments such as bed tax, lodge profit, contributions from the Ashtabula County Convention and Visitor’s Bureau, Convention and Facilities Authority, GOTL, and property transfer tax. In total, the facility for construction debt is estimated to be roughly $33 Million.
- If the state takes ownership of the Lodge, will we lose local control?
- State ownership of the Lodge does not automatically mean large changes at the facility. Presently, the County owns the Lodge and contracts with a management company Delaware North based in Buffalo. The State will similarly contract with a management firm, likely the same one, to run the facility. The management company runs the day to day operations and will set policy in addition to the State. With State ownership the County will not be the owners at the table, however due to our strong state delegation, local concerns will still be addressed by the Ohio Department of Natural Resources.
- Is the Lodge closing?
- No, nothing could be further from the truth. With the Budget provision to transfer ownership of the Geneva on the Lake Lodge and debt from the County to the State, the future of the Lodge is saved in addition to the taxpayers. With State ownership means more capacity for investment and funding available for long term maintenance and upkeep. The Lodge isn’t going anywhere.
- Was this done to move money over to the new Jail project?
- No, the Lodge Debt reduction and the proposed ballot initiative for the Community Corrections and Rehabilitation Center are not connected whatsoever. The Proposed Sales Tax Modification for Public Safety if passed this November would cover the estimated expenses of the potential new Community Corrections and Rehabilitation Center and additional public safety measures. This budget bill language and the transfer of ownership is occurring now because of the strong leadership and ability of our State delegation to get appropriation dollars to Ashtabula County. This is likely one of the largest appropriations the state has ever given our County.
- Other State Lodges aren’t as nice as GOTL Lodge, will our Lodge become run down?
- The GOTL Lodge’s business model is unique to other lodges in Ohio. Most state lodges are located in isolated areas where the business model is more for outdoor recreation and the overhead is slim. The GOTL Lodge and several others though cater to a different population with our lake, wineries, and more upscale offerings. There is no incentive for the State to alter this business model significantly. It is also important to remember that through our State delegation representation, we will have a voice to lobby and leadership who will pay attention to the quality of the facility.
- Why would County ownership of the lodge be a bad thing after the debt is paid?
- The current lease agreement negotiated with the State when the Lodge was constructed provided that the Lodge would be given to the State for free in 2040. So, even if the County did not make an agreement with ODNR to transfer ownership of the Lodge now, the State will still be receiving the asset. This means it would not make sense to have the County pay off the remaining $13 Million + in debt only to turn around and transfer it for free to the State. In addition to this reason, another important aspect of why County ownership would not make sense is that the County would be responsible for all future maintenance and upkeep on the facility. After 2040, the Lodge will be nearly 40 years old requiring expenses to maintain its quality that the State could more easily pay for than the County.
Past and Future Debt Payment Information:
- More information on past revenue streams from 2015-2020 for Debt Payments for the Lodge which displays the Lodge's profitability, but also the inability for debt to be paid without property taxpayer dollars. (https://docs.google.com/spreadsheets/d/1_4B9L3EClmNIY5wNE-fIyubfEFKI_OW3j3PHkv3JU_U/edit#gid=0)
- More details on Revenue and Expenses for the $19 Million spent from 2007-2021 on the Lodge and future $13 Million debt payments (https://docs.google.com/document/d/1VzNDx9SfODasMeGGT1nJ-xhIMVaF6ndTx3SVcyICMPc/edit?usp=sharing)
- Payment Schedule on the Two Bonds for GOTL Lodge Construction Debt (https://drive.google.com/file/d/1nGG06om2GVEiUWgcSvwW389wv5qRAR9Q/view?usp=sharing)
- Webinar with Commissioner Kozlowski and me discussing and answering over 50 questions from residents on this topic (https://auditor.ashtabulacounty.us/dnn/Announcements/ArtMID/518/ArticleID/325/Recorded-Webinar-on-GOTL-Lodge-Debt-Relief)
Articles on the Issue: