Editorials

Lowcountry better off with returning Heritage

Congratulations to all who put in nonstop efforts over nearly two years to find new sponsors for the Heritage golf tournament, a nationally televised event that puts Hilton Head Island, the Lowcountry and South Carolina on the map, helps sell our way of life and puts money in our pockets.

A sigh of relief whipped across the Lowcountry and the state with the June 16 announcement that Royal Bank of Canada will step into the title sponsorship role in 2012, while the Boeing Co. contributes as a presenting sponsor.

We're confident the community would have found ways to make up for the loss of the tournament's economic and charitable impacts, but we're also glad it's not necessary. These aren't the best of times to test our mettle.

The five-year deal breathes fresh life into the 43-year-old PGA Tour event that had seemed on the ropes just days before the announcement. Tournament officials had sought $7 million to $8 million a year for the tournament. They didn't quite pull that off.

In the end, it took taxpayer support to seal the deal. The Town of Hilton Head Island will pay about $3.2 million over the five years to buy 40 ad spots. Tournament officials asked the town for help shortly before the announcement. With very little discussion and very few details, including exactly how it would be paid for, the council approved the request.

It also came just days before the council gave final approval to a tax increase for the coming fiscal year. A perfunctory vote and a rush to a press conference is not the way to conduct the public's business -- whether the rush was town officials' idea or not.

Still, the town's support wasn't all that surprising. The town chipped in $1 million for the 2011 tournament after no replacement was found for title sponsor Verizon, which left after the 2010 event.

When a plan for public support of the tournament was pushed by Beaufort County Councilman Stu Rodman, officials had indicated that if town participation would make a difference in whether the tournament stayed on Hilton Head, they would step up. They were lukewarm on Rodman's idea because it called for substantial support from the state even though Gov. Nikki Haley had said she wouldn't support state tax dollars going to the tournament.

Hilton Head should see a good return on its approximately $600,000 a year investment. The tournament's estimated annual economic impact is $82 million, according to a 2010 Clemson University study. The tournament generates about $4 million for local governments.

Now the town must negotiate contracts and determine how to pay for the ads. In recent budget discussions, town manager Steve Riley noted that the town planned to spend about $325,000 for additional advertising and promotion in the coming year. That money could be used for the ads.

Hilton Head also is fortunate in that it has some accounts it can tap for ad buys that don't require it to look to general operating funds. The town has an emergency advertising account funded by local accommodations and hospitality taxes that could be used, although it might require some revisions to the ordinance to allow longer-term use for the Heritage.

To give you an idea of the rate at which that money is coming in, the town reports that it collected about $4.7 million in hospitality taxes in fiscal year 2010 and has collected about $3.4 million through the first three quarters of this fiscal year. The 1 percent local accommodations tax brought in about $2 million in fiscal year 2010 and about $1.4 million through the first three quarters of this fiscal year.

Hilton Head uses the revenue from these taxes for a variety of purposes, including police and fire protection and capital projects. It's one of the ways that it has been able to hold down its property tax rate over the years. Money that goes to the Heritage is money that won't be available for other purposes. We'll probably see some adjustments to capital projects down the road.

Although the governor didn't want to see state money go to sponsoring the tournament, advertising dollars from the state's tourism agency ought to help pay for the town's Heritage ads. It would be a good way to thank Hilton Head for closing the deal.

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