EL aids brewery in old mill building

fi Board tables room tax increase proposal for clarification
by Emmitt B. Feldner
of The Review staff

ELKHART LAKE – Add a microbrewery to the shops and attractions the village will offer visitors and residents come next spring.

The Village Board Monday approved a $10,000 special award loan for Switchgear Brewing LLC.

The company plans to convert the space at the west end of the Feed Mill Shops building on Gottfried Street into a brewery and bar operation.

“We are planning to start a small brewery in that location,” Switchgear partner Nick Kullmann told the board. “The brewery will be in the basement with a tap room on the first floor.”

Kullmann said the tap room would be open nights and weekends. He added that it would take the brewery six months to obtain the necessary licenses, so the plan is to be in operation by next spring.

“The CDA (Community Development Authority) reviewed their business plan,” Village President Alan Rudnick told the board. “It’s a good plan, very detailed, and hopefully they’ll be successful.”

Rudnick added that the brewery partners have been working with the Sheboygan County Economic Development Corp. to develop their business plan and details.

Village Administrator/Clerk/Treasurer Jessica Reilly said the CDA loan would be used to help purchase necessary equipment for the brewery.

The board tabled an ordinance to increase the village room tax to 7 percent when several trustees raised questions about the Tourism Commission’s plans and requests concerning the one-percent increase.

The ordinance would increase the percentage of room tax revenue the village keeps from 6 to 7 percent.

The increase was requested by village officials, who cited increased costs connected with tourism and pointed out that the village’s revenue from the room tax does not meet those costs.

“Our expenses have gone up because they’ve been successful in attracting people to the village, but if they continue to be successful then our costs are going to continue to go up,” Trustee John Schott observed.

Reilly explained that the village is looking for an additional $45,000 in room tax revenues to cover its expenses, and that increasing the tax to 7 percent and the village’s share to 7 percent would achieve that.

State law allows the village to keep up to 28 percent of the room tax revenue, Reilly noted.

Trustee Richard Baumann, who represents the board on the Tourism Commission, reported that the commission, “went over this very, very carefully and very, very thoroughly.

“They decided they would go along with the 7 percent room tax with 7 percent to the village, which would give the village the $45,000 they requested,” Baumann related.

However, several trustees questioned the commission’s request that the room tax issue be reviewed in five years and not sooner.

Trustee Richard Sadiq objected to that restriction.

Reilly and Rudnick both pointed out that the village has not set any limits on when the tax could be reviewed or revised in the past.

The village had agreed several years ago, when the tax was last raised, to wait for the completion of the commission’s five-year plan for tourism growth before revisiting the tax rate.

Rudnick noted that those goals have been met ahead of schedule.

Sadiq conceded that the room tax rate could have a point of diminishing returns if it is raised too much. “If it (the room tax) gets to a certain point, it can be detrimental to your viability in the market.”

The board agreed to table the ordinance in order to clarify all of the issues with the Tourism Commission.

Baumann also reported that the commission members expressed their opposition to a proposal raised before the board to begin charging for false alarms after a certain number at any address.

“They do not feel there should be an ordinance regarding false alarm fees,” Baumann said of the village’s resort owners.

The majority of the false alarm calls reported by the fire department come from the village’s resorts. But Baumann said the resorts contend that many of the calls are beyond their control, due to actions by guests, and that the resorts should not be penalized for that.

The board scheduled a public hearing for the proposed 2017 village budget for the Nov. 21 board meeting.

Reilly presented preliminary budget figures to the board. They show a proposed increase in the property tax levy of $3,360 to $1,254,819, an increase of about one-quarter of one percent.

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