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How does one get funds to revitalize the downtown area?

One way to revitalize the downtown area is to combine historic preservation and economic development. Doing this can encourage the preservation and enhancement of historic buildings and recruit new businesses and business expansions in the downtown area.There are many organizations that might assist or fund downtown revitalization. The National Trust for Historic Preservation administers three funds that provide matching grants for some of these projects. Also, check with the Historic South Dakota Foundation for funding assistance.

Contact the Department of Transportation, Division of Operations for guidelines on informational and directional signing on transportation systems.

Funding Options for Tourism Development Efforts

Communities and organizations must increasingly look for innovative ways to obtain the resources necessary for tourism development efforts. Both public and private sources must be pursued and often, partnerships formed. The following methods describe a few of the ways that have been successful. However, the success of the community or organization will largely depend upon dedicated and creative approaches to meeting community needs.

Transient Guest Tax is a popular method of financing operations and promotion. It’s also known as a bedroom tax, hospitality tax, or resort tax. It basically is a 1 percent to 10 percent tax on the cost of a hotel room. It can also be levied on meals and liquor. In most cases it requires authorization by a city ordinance which may require approval by a local vote. In many cases, the tax must be authorized by state legislation. Funds collected may be earmarked for a variety of purposes. Uses range from funding city capital improvements directly related to tourism to funding local tourism promotion agencies. This tax is sometimes resisted by local motels and restaurants who view it as unfair taxation. Local residents generally support this tax because it is a fee paid by the traveler or user, not the resident.

Mill Levy on Real Estate Property has been used in the development of tourism. However, it is not a common method of financing a local tourism operation. This method of financing, like the transient guest tax, gives a consistent, permanent source of revenue.

General Revenue Funds from City, County, or Region are widely used as a source of funding. A number of local tourism promotion agencies receive allocations from a general fund. General revenue funding can be advantageous when tourism allocations increase as the amount of funds coming into the city from tourism increase.

Matching Funds are used by a number of organizations. These are programs where local funds are matched by state, regional or federal funds. Such programs are often designated for outside marketing and promotional efforts. These programs provide excellent incentives for tourism development and promote cooperation in the area of marketing tourism.

Membership Dues and Assessments is the most common method of financing the local tourism development effort. Often, membership dues are based on a sliding scale set according to size of business, the number of employees, and the benefits derived from tourism. The amount of funds generated depends on the size of the community and the importance of tourism to that community. The amount of funds received from such dues also depends upon the ability of the director or leader in obtaining members. That person must have the ability to educate businesses as to the value of the tourism organization, its purpose, and the extent to which businesses and enterprises benefit from the visitor’s dollar.

Some communities finance tourism programs with funds raised through the sale of souvenirs and other items, fees charged for arranging commercial and guided tours, and profits from the operation of museums, parks, etc. The funding of tourism programs through special events does provide a focal point for community coopera- tion. Such events require an exceptional amount of planning and work. They require the support of a majority of businesses and organizations in the community. The amount of funds raised by such an event may fluctuate depending upon the weather, the interest of people, etc.

City Capital Improvement Budgets are a way to fund tourism capital improvement projects. Improvements such as the redevelopment of historic homes will be of direct interest and benefit to visitors. Other capital improvements such as golf courses, tennis courts, and restroom facilities, designed for local use, may be of equal value to visitors. The local parks and recreation department will likely have a number of capital project needs that could be related to tourism development. Schools, buildings, and other community facilities may indirectly lend themselves to tourism appeal.

Voluntary Contributions traditionally, are more available and easier to generate for capital projects than for operations and promotion expenditures. In some communities asking for contributions is not considered at all, while in others, millions of dollars have been generated through various kinds of grants, contributions, and solicitations.

Foundations are a significant source of funds for capital projects and tourism development. Historic and museum foundations have been particularly active and successful in working closely with local tourism development organizations to develop attractions. Foundation support is advantageous because they usually have a program of fund solicitation that is independent from the tourism organization or city. The foundation is attractive to those who want to leave part of their estate to a particular cause or to use a contribution as a tax advantage. The independence of the foundation gives the donor additional assurance that their donated funds will be used to the advantage of the community.

Fundraising Some communities have been extremely successful in developing resources for specific community projects through a fundraising strategy. Based on the needs of the community, strategies focus on the private sector to provide funds and/or resources to accomplish the needed project.