Last spring Gov. Earl Ray Tomblin, to much fanfare, signed a bill to renew tax credits, potentially worth millions, to developers that build tourism destinations in West Virginia.
There was a signing ceremony with a trumpeter, an NFL head coach, the state's richest man and a coterie of state tourism officials.
Slightly more than a year after the law went into effect, four projects have applied for its tax credits. Three of the four projects seeking tax credits are owned by Jim Justice - the coal and agriculture magnate, owner of The Greenbrier resort, gubernatorial candidate and, according to Forbes, the richest man in West Virginia.
Only one of those projects has, so far, been approved by the state Development Office to receive tax credits - the football fields and facilities at The Greenbrier.
Those facilities brought two of the NFL's marquee teams, along with the accompanying fans and media scrum, to rural West Virginia last week. They've brought hundreds of fans, mostly from out of state, to The Greenbrier and to Lewisburg-area businesses and hotels nearly everyday for the last three weeks, drawn by the New Orleans Saints training camp.
Those facilities, built by a billionaire at a luxury resort, could also end up costing the state up to $9.5 million in foregone tax revenue over the next 10 years.
"The state ought to be exploiting our tourism values in spades, over and over and over, Justice, who is now running for governor as a Democrat, said. "Jiminy Christmas, to have the world champion New England Patriots here was really special.
The West Virginia Tourism Development Act was first passed in 2004 and was renewed and expanded in both 2007 and 2014. It aims to boost the creation of new tourism attractions by offering tax breaks to help offset private construction costs if the facilities meet certain criteria.
The current version offers as much as a 25 percent rebate on construction costs, although that number jumps to 35 percent if the project is on an abandoned surface mine or is next to a state or national forest or park.
The three football fields and the training building that The Greenbrier built to draw the Saints to White Sulphur Springs cost a little more than $27 million. Because the property is next to Greenbrier State Forest, it's eligible for reimbursement of up to 35 percent of that cost in tax credits - a little less than $9.5 million.
The tax credit works in much the same way as tax increment financing plans which have been used in recent years to fund business development areas in Putnam and Cabell counties and the new baseball stadium in Morgantown.
Justice and The Greenbrier are not guaranteed $9.5 million in tax credits. They can only collect tax credits if tax revenues grow. And if revenues do grow, they cannot collect the total $9.5 million all at once.
The state tax commissioner will determine the base amount that The Greenbrier collected in sales tax before the football facility was built. The Greenbrier can only collect tax credits if it brings in more sales tax in future years than that base amount - with the base amount continuing to go to the state. And it can collect no more than 10 percent of that $9.5 million per year, with the total collection period spread out over 10 to 13 years.
The Saints training camp lasts only three weeks, but to qualify for the tax credits a facility must be open to the public at least 100 days per year and at least 25 percent of visitors must be from out of state. Justice wasn't sure on the specifics of how the project would meet the 100-day threshold, but was confident that it would, with local colleges also holding practices there and with the training facility also used for other resort purposes. The Greenbrier will have to document those 100 days by mid-February 2016 in order to remain eligible for the credit.
Prior to the law's extension in 2014, only five tourism projects had received tax credits since 2004 when it was first passed, collecting just over $11 million.
Since the extension, in addition to the football facility, three other projects have applied for tax credits, but either have not been built yet, or not yet been approved, according to the state Development Office.
Two of those are also Justice projects, at or near The Greenbrier: the combination tennis facility and wedding chapel at the resort and a proposed ski resort near the resort.
The final application is for an expansion of cabins at Stonewall Resort, where Benchmark Resorts contracts with the state to run the resort within a state park.
One project that has not yet applied for tax credits, but seems likely to, is the Greenbrier Medical Institute - for sports medicine and plastic surgery - which Justice announced in 2011, but which has yet to break ground.
Justice said the medical institute is still "absolutely a full go, but had been temporarily pushed back by the football and tennis projects.
The 2014 Tourism Development Act was amended very late in the legislative session specifically to accommodate the proposed medical center, albeit with strict criteria about job creation that would have to be met. A provision was added to the bill to apply the tax credit to a "professional services destination facility that costs more than $80 million to build and that is next to a "historic resort hotel with more than 500 rooms.
The provision was added after Greenbrier lobbyist (and then-state chairman of the Democratic Party) Larry Puccio lobbied then-House Speaker Tim Miley and then-Senate President Jeff Kessler about the bill.
Puccio remains a lobbyist for The Greenbrier (and for seven other businesses) and is now a consultant on Justice's gubernatorial campaign as well.
Kessler is running against Justice in the Democratic primary for governor.
The likely Republican candidate for governor, Senate President Bill Cole did not vote on the tourism bill in 2014. He asked to be excused from the vote because he owns a home at The Greenbrier.
Justice stressed that he only receives tax credits if revenues increase beyond what they were prior to the projects' construction.
"This is the greatest thing in the world, because it's costing the state nothing, he said.
Asked if he would have built these projects - football fields, a tennis facility, potentially a ski resort - if the state had not dangled millions in tax incentives, Justice hesitated.
"Here's how I'd answer that, I feel like everybody feels better when everybody's pulling the rope together, Justice said. "Sure, this has been helpful, but the magnitude of it is not an ultimate game change."
Gazette-Mail file photo
A little more than a year after Gov. Earl Ray Tomblin celebrated the passage of a new tourism tax credit bill with Greenbrier-owner Jim Justice and representatives from the New Orleans Saints, the football facilities at The Greenbrier are the only project to be approved for the tax credits. Three of the four projects that have applied for the credits since the new bill was passed are owned by Justice.
Reach David Gutman at email@example.com, 304-348-5119 or follow @davidlgutman on Twitter.
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