Town council: Chamber of commerce contract is legal, but marketing ordinance should go

Standing behind the opinion of its attorney, the Town Council of Hilton Head Island agreed Tuesday night it did not break its own rules when it selected its designated marketing organization last year.

However, council does plan to eliminate the 18-year-old ordinance that town attorney Greg Alford based his opinion on. The law, written in 1998, explicitly states the Hilton Head Island-Bluffton Chamber of Commerce is the town’s designated marketing organization, and selecting any other organization would have violated that law, Alford argued in a May 13 legal opinion, released to the public Tuesday night.

Mayor David Bennett said Alford’s letter to Columbia attorney Taylor Smith on the issue does not settle his personal doubts about the legality of the town’s 5-year marketing contract with the chamber, which spends more than $1.5 million of the island’s accommodations tax revenue each year.

But “that’s the will of council” to accept Alford’s opinion and move on, Bennett said late Tuesday.

The town’s relationship with the chamber has drawn repeated criticism and threats of legal action from local businessman Skip Hoagland, though he was not present at Tuesday’s meeting.

Half a dozen other residents spoke about the issue, including Sonesta Resort general manager Jay Wiendl. As chairman of the chamber’s board of directors, Wiendl defended the organization’s contract, its work for the island and its transparency as DMO.

We actually think you all have done a wonderful job ensuring we are actually spending the accommodations tax dollars they way they’re intended,” he said. “...When you ask whether the chamber’s doing its job, I’ll tell you I believe it, and I have a reason to believe it because I want to stay in this beautiful community.”

Others, including new council member David Ames, criticized the town for muddying the waters with the legality of the chamber contract rather than focusing on the quality of the organization’s work. Ames said he would like to see council push for better marketing of the island’s arts and culture, not solely its hospitality offerings.

Council member Marc Grant agreed that the issue of the contract should be put to rest.

“We’re getting too bogged down in specifics, and I just think, in some ways, we’re creating conflict when there shouldn’t be conflict. It should be, ‘Tell me what the problem is, let’s fix it and move on.’ ”

According to Alford’s legal opinion, the town did not violate its procurement code in November, when it created a contract with the chamber for the first time in their 30-plus year relationship but did not use a procurement process, such as opening the contract up for competitive bidding or explaining why no other organization would qualify for the work.

If Alford had decided differently, the council could have gone a number of routes, from doing nothing to trying to end its current contract, town manager Steve Riley said.

It will be up to a future council to decide what to do once the contract runs out, and it will have a different ordinance to refer to — one that does not name any organization as DMO. Riley will draft the new ordinance, which will go to council for approval.

Though council member Bill Harkins said during Tuesday’s meeting that the town had been sued over the issue, chamber critic Hoagland has not filed any such lawsuit.

Still, Alford writes in his letter that he “would not be uncomfortable at all in defending any suit brought by any party over this issue.”

This story was originally published May 17, 2016 at 9:37 PM with the headline "Town council: Chamber of commerce contract is legal, but marketing ordinance should go."