Oct. 29, 2010--CLAYTON -- The Ritz-Carlton Hotel and Clayton Mayor Linda Goldstein have sent competing letters to residents about the city's proposed hotel tax on Tuesday's ballot.

The hotel's letter warns that the tax could drive away business, and that the city could lose its Ritz-Carlton. Goldstein's letter says the tax would enhance tourism and free general fund money for other city projects.

The city wants voters to approve a room tax of not more than 5 percent. Hotels in Clayton now charge guests 15.42 percent in combined state, county and local sales taxes and a regional hotel tax. Richmond Heights and St. Peters have similar taxes on the ballot.

The Ritz-Carlton letter was signed by Lew Wolff, with the Maritz, Wolff and Co. ownership group.

"Increasing Clayton hotel taxes to over 20 percent will drive business away," Wolff wrote. "Out-of-town groups pay close attention to group costs and a tax hike in these tough economic times will only serve to drive customers to hotels in downtown St. Louis or hotels in other communities and regions."

He further says that "approval could mean that we no longer will have a Ritz-Carlton here in Clayton." Jeff Barone, with the ownership group, said that the Ritz-Carlton hotels are difficult to maintain in the Midwest because of the higher costs and prices, and that Kansas City and Dearborn, Mich., have lost their Ritz hotels. He also said occupancy rates at Clayton hotels were hovering just over 50 percent in the last 18 months.

The Ritz and other hotels tried unsuccessfully in the courts to get the issue off the ballot.

Craig Owens, Clayton city manager, said it's unlikely the city will levy the full 5 percent.

"If it is approved, the city of Clayton looks forward to working with our hotels and restaurants, businesses and residents to develop and implement programs that bring more business to our city and our region," Owens said.

Goldstein said the city would use the tax to "cultivate business for hotels and restaurants" and for the St. Louis Art Fair. The city could fund currently unfunded tourism-related projects such as streetscape improvements and signage downtown, better connections for mass transit and a marketing plan. The regional Convention and Visitors Commission has adopted a resolution opposing the proposals in Clayton and Richmond Heights.

Meanwhile, the owners of the Ritz and the Ritz-Carlton chain are in an unrelated dispute over the interpretation of their management contract. Several million dollars are at stake.

The Ritz owners say that under the contract, the chain owes the owners a reimbursement because profits did not meet a $4 million minimum in the 2009-10 period. The chain says its reading of the contract does not require the payment.

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