Disappointing bed-tax revenue in April, when Tough Mudder Inc.’s two-day event near Milton was expected to give the Santa Rosa County numbers a bump, is prompting tourism industry leaders to reconsider the financial incentives promised to the New York company.
County commissioners voted last November to pay Tough Mudder $110,000, including $80,000 from bed taxes, which come mainly through a 5 percent tax on lodging stays.
But the April 9-10 Tough Mudder obstacle course didn’t return the county’s investment, at least when measured by bed-tax revenue, which rose by only 8 percent, or $14,820.
“It was a rip-off,” said Jack Sanborn, a member of the volunteer Tourist Development Council who owns Adventures Unlimited, an outdoor recreation company in Milton. “We paid way too much.”
Liz Horton, a TDC member and marketing executive at Wyndham Vacation Rentals in Navarre, said, “We shouldn’t be giving them $80,000. We shouldn’t give them anything to get them back here next year.”
Tough Mudder is a for-profit company that charges a range of prices to entrants – up to more than $100 apiece. The company doesn’t share any of its revenue with Santa Rosa County or the dozens of other locales where it annually challenges participants with such activities as mud crawls and rope climbs.
The April bed tax collections broke a string of double-digit monthly gains dating back to August 2015.
Measuring economic impact
When learning about the April bed-tax numbers from a reporter, District 2 Commissioner Bob Cole said, “I’m inclined to be lenient, at least until we find out how much was generated in sales taxes from selling Cokes and peanut butter crackers” among other purchases by Tough Mudder participants and spectators.
He also pointed out that the relatively weak gain in April might be partly attributable to the 2016 Easter holiday weekend coming in March. Last year Easter was in April.
Still, Cole said, “Maybe if the results aren’t there we can negotiate a lower amount” to attract Tough Mudder in the future. “Maybe we can leverage this for next year. I don’t know what the right amount is, but we can handle this like a business.”
Cole added, “I’d like to see (Tough Mudder) back here. I think it’s good for the East Milton area. I just don’t know if we should be paying them $80,000.”
Several members of the TDC, who had voted to give Tough Mudder only $20,000 before being overruled by the County Commission, had expressed doubt about the event’s economic impact on Santa Rosa from the company’s first event here in March 2015.
The move to raise the amount paid by the county was advocated by District 4 Commissioner Rob Williamson, who represents his elected colleagues as a voting member of the TDC. He didn’t return a reporter’s phone messages seeking comment for this article.
The commissioners decided on the larger amount because Tough Mudder requested it, and in light of a study the company supervised that reported the economic impact of last year’s one-day event at about $6 million.
Sanborn and other TDC members pressed to have an impact study done this year by the University of West Florida’s Haas Center for Business Research. Although that study has been completed, it has only been released to Tough Mudder, which paid $4,000 for the assessment as a condition in the company’s contract.
The county’s recourse
Santa Rosa doesn’t have to pay Tough Mudder the $80,000 until the Haas Center’s report is made public, according to Julie Morgan, county tourism director.
Morgan had requested an additional $30,000 in the form of a grant from the Florida Sports Foundation, a nonprofit group based in Tallahassee that promotes tourism. However, the foundation trimmed the grant to $10,000 and won’t pay that until it sees evidence that a significant share of the Tough Mudder revenues came from out-of-state visitors.
But TDC members Sanborn and Horton suspect the reason that April’s bed-tax revenue wasn’t higher is in part because few of the Tough Mudder enthusiasts came from outside of Northwest Florida. The Haas Center study should help determine that from questionnaires filled out by some participants.
“I’m looking forward to seeing that report,” said Vernon Compton, a TDC member who works as project director for Longleaf Alliance Inc., a nonprofit group that promotes environmentally responsible outdoor recreation.
Compton said that while he had hoped Tough Mudder would draw more overnight visitors than the bed-tax figure indicates, “I know that some bed-tax collectors did really well – the Holiday Inn Express in Milton and some campgrounds in the northern part of the county.”
Still, Tough Mudder’s financial incentive was agreed on by county commissioners in the hope that the event’s participants traveling here from outside the Santa Rosa County area would also visit the beach and south-end restaurants and retail outlets.
Horton said that Wyndham Vacation Resorts didn’t benefit from a single room rental to any Tough Mudder visitors.
But Cole cited what he hopes is an intangible benefit of supporting the event. “There was probably a lot of talk about Santa Rosa County on Facebook and other social media. That’s essentially free publicity that you hope translates into tourism dollars somewhere down the road.”
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