Lenexa uses hotel tax revenues to cover costs of Public Market operations

At just over a year old, Lenexa’s Public Market has become an eating and drinking destination at City Center.

With the Lenexa Public Market wrapping up its first full year of operation, city staff and leaders are making plans to keep the space financially stable for the next few years.

The Lenexa council agreed in a 7-0 vote during its Dec. 18 meeting to make up the difference in Public Market revenues and expenditures for the rest of 2018 and all of 2019. Councilmember Thomas Nolte was absent.

The council’s action authorizes the transfer of funds from the Tourism and Convention Fund to the General Fund for Public Market operations for this year and next year.

Denise Rendina, communications director for Lenexa, said the council’s action “retroactively” makes up the difference in costs from 2018 and proactively covers the difference in 2019, Rendina said.

Costs have exceeded revenues, but city staff anticipate that as the Public Market grows in popularity, the difference will decrease.

“We knew that for the first three years or so, until we have more density in here, that it would take some time for it to grow,” Rendina said.

Deputy city administrator Todd Pelham said the Transient Guest Tax revenues make up a shortfall of about 40 percent of the difference in the Public Market’s costs and revenues. The Public Market operates on a roughly $300,000 budget; expenses can be cut in the future as city staff works out the kinks in the new concept, he added.

An exact amount of funds making up the difference for 2018 is unknown until the city’s finance staff have finished processing all transactions at the end of this year, Rendina said.

Because the Public Market is considered a destination spot for City Center and Lenexa as a whole, it makes sense that the city would fund it through the convention and visitors bureau, Rendina said.

The fund balance in the Tourism and Convention Fund was $1.59 million as of Nov. 30. Lenexa’s reserve balance has grown in recent years because of increased Transient Guest Tax revenues from new hotels — from $834,000 in 2016 to $1.4 million in 2018. City staff anticipates projected revenues for next year to be $1.76 million.

“We’ve had multiple new hotels being built, so we had the luxury of saying, ‘What’s the best use of that money for economic development and for tourism right now?’ And we feel like the Public Market is a really good match for that,” Rendina said, citing recent media attention on the city’s unique Public Market concept.