Dali needs $34 million in tourism taxes to expand

Due to recent significant increases in construction costs and the scope of expansion, officials with St. Petersburg’s Dali Museum have nearly doubled their previous request for bed tax funding.

During the Pinellas County Tourist Development Council (TDC) meeting Wednesday, Dr. Hank Hine, executive director of the Dali Museum, said he must raise $68 million to complete two elements of a significant expansion. The new growth, he said, would allow the museum to continue pioneering technologically enabled, immersive art exhibitions – and conference space.

In 2019, county commissioners gave initial approval for the TDC to negotiate a $17.5 million funding agreement with the Dali, half of the original design cost of $35 million. However, the two entities needed to finalize terms for how the project would promote area tourism, a prerequisite to receiving bed tax revenue. County officials added that 6% tax to the cost of Pinellas hotels and motels.

In 2020, museum officials updated designs and eliminated parking to expand programming, which increased the cost to $37 million. Supply chain disruptions and inflation caused the price of materials and labor to soar, and the total reached $55 million this year. The expected total for 2023 to 2025, when Hine would like to begin and end construction on both phases, is $68 million.

“We’re here today to update you and to show you that the project is ready to go,” Hine told the council as his presentation concluded. “To show you what it’s going to cost and to ask you to consider your willingness to meet 50% of those costs.”

A timeline showing the increase in project costs. Screengrab.

Hine added that he realizes the TDC needs time to deliberate and bring in consultants to analyze the economic impact data. However, he asked them to expedite the process and hopes to come back before the council in December.

Hine began the discussion by stating that the Dali led the area’s cultural arts revolution over the last 40 years. He noted it is the most visited single-artist museum in America and said it was the most significant collection of Salvador Dali’s artwork worldwide.

The Dali, explained Hine, uses the collection to entertain and educate people and recently found its niche by utilizing technology “to shorten the distance from person to person through art.” He said the museum is a pioneer in using artificial intelligence when creating new exhibitions, which provides visitors with a more meaningful connection to the artist.

Hine relayed the Dali’s global reach, attracting around 330,000 people this year despite a hurricane. He added that 75% of people came to the museum from outside Pinellas, Pasco and Hillsborough Counties and, on average, stayed in the area for 3.2 days.

According to his data, 15% of attendees were international visitors. “We are the major cultural attraction in the American South,” said Hine.

He relayed that since opening the new facility, the museum has created a $1.2 billion economic impact on the area, with a $100-$160 million annual return. By 2034, he expects the total financial contribution to reach $3 billion.

A graphic showing the Dali’s global reach. Screengrab.

The expansion’s first element is a dome that will feature projection exhibitions of several artists. Hine said that could open by next summer. The second project is a 60,000-square-foot building – the same size as the current facility – that will provide 15,000 square feet of projection exhibition space and two 10,000-square-foot rooms for digital experiences. It would also offer a unique conference area.

“These spaces are convertible,” explained Hine. “When it’s not a conference space, it’s not going to be a bare conference space. We have like 60 projectors, and we’ll have the software to drive corporate presentations in an entirely encompassing, immersive way.”

To move the expansion forward, St. Petersburg voters must first approve a ballot referendum allowing museum officials to build on a small strip of land known as Lot 6 and zoned as waterfront property. The referendum vote does not concern potential funding sources or expansion designs.

Hine hopes to confirm $34 million in TDC funding early next year while he works to raise the other half. He told the council that museum officials previously raised $17.5 million through its business model, and will now look to obtain another $17 million through commercial loans or bonding.

He said he would also look to the state for funding.

“We need your help,” stressed Hine. “We can’t do this project without you.”

St. Petersburg Mayor Ken Welch said the project is better without parking and noted the city has several potential solutions for the downtown waterfront’s arts center. “I’m even asking our folks to take a fresh look at Albert Whitted,” he added, “so we’ve got a lot of options there.”

Welch called the Dali a proven commodity and expressed his support of using bed tax funding for its expansion. He said, “the numbers are strong,” and believes the new developments will repay the grant through TDC taxes, not including its other economic impacts.

Clearwater Mayor Frank Hibbard asked Welch if the City of St. Petersburg would contribute to expansion funding.

“It’s a partnership,” replied Welch. “And we are open to any discussion to keep the project moving forward, but I think the TDC element is crucial to this moving forward.

“I would have to hear the ask.”

Hibbard noted Clearwater – which includes Clearwater Beach – generates the most bed taxes in the county and believes that will continue to increase. He said that St. Petersburg’s Carter G. Woodson African American Museum will come before the TDC, and a new stadium for the Tampa Bay Rays looms.

He also relayed that Welch mentioned a convention center at the Tropicana Field redevelopment site a few meetings ago, and a new training facility for the Philadelphia Phillies is a personal priority.

While Hibbard stressed that he is supportive of the Dali and called it a world-class museum, he said there “should be some level of equity” on how the TDC spends its bed tax money. Welch agreed with that sentiment.

“My concern,” said Hibbard. “Is that our wants throughout the entire county exceed our revenues.”