Eureka Springs Money Mystery: Sales Up $7.6M

EUREKA SPRINGS — 2002 was a good year for this quirky tourist town, but nobody really knows why.

Between 2001 and 2002, the city’s general 2 percent sales-tax collections were up 8.6 percent, the largest increase since 1993. That amounts to $152,923 and translates into an extra $7.6 million that was pumped into the Eureka Springs economy last year, when compared with 2001.

But people in Eureka Springs have no idea where that extra money was spent.

The city has another 2 percent sales tax, which applies only to restaurants, lodgings, gift shops and attractions. That tax, which pays for advertising and promotions, brought in an extra 4.3 percent last year, the largest increase since 1998. (If attractions hadn’t been added to the tourism tax collections in August 2001, though, the increase would have been only 2.1 percent for 2002.)

City officials don’t know why collections from the general sales tax, which applies to all sales transactions in Eureka Springs, would have increased by so much more than the tax that applies primarily to visitors.

“I pretty much have no analysis tools at my disposal, so I don’t know why it’s up,” Diane Murphy, the city’s finance director, said of the increase in general sales-tax receipts. “In order to protect businesses’ privacy, we don’t have access to the source of that revenue.”

The sales-tax figures (See chart) indicate people spent about $89.3 million in Eureka Springs last year. Of that amount, $56.9 million was spent at tourism-related businesses.

Barbara King Dozier, executive director of the City Advertising and Promotion Commission, thinks Eureka Springs prospered because it’s a driving destination for visitors from nearby cities. After the terrorism of Sept. 11, 2001, people were reluctant to fly and preferred to vacation nearby.

“2002 was a good year for us,” Dozier said. “We’re doing a lot of things bigger and better in 2003. That’s going to help shore our numbers up.”

Dozier said about 350 businesses in Eureka Springs pay the 2 percent tourism tax, which is collected and administered by the CAPC.

When asked about 2002, Sheila Hulsey, director of operations for the CAPC, said, “I’m almost afraid to answer that because everybody else thinks it was so bad. I personally feel happy with our situation, but it could always be better.”

‘Tis The Season

Eureka Springs is a tourist destination primarily from April through October of each year. During the winter months, many shops close entirely, and others are open only on the weekends.

But several art gallery owners are trying to buck that trend.

Lin Craig said the three galleries that she and Jim Sanders own are basically open 365 days a year.

“Of course the souvenir stores shut down,” Craig said, “but there’s a strong gallery community here, and we’re committed to Eureka Springs being a destination.”

Most of the people who visit Eureka Springs aren’t likely to plunk down $10,000 for a bronze sculpture in Craig’s gallery. The masses are more likely to get home with a $15 T-shirt and a Christ of the Ozarks refrigerator magnet.

The art galleries cater to a more upscale customer. Craig said her clientele includes celebrities such as Clint Eastwood.

“We’re actually a destination,” Craig said. “We’re the largest Mark Hopkins gallery in the United States. This man has been characterized as producing more original bronze than any living artist.”

All three galleries that Craig and Sanders own are in a crook of the city’s dog-legged main drag, Spring Street. Their largest gallery (1,200 SF), which specializes in bronze and porcelain, goes simply by the name of its address — 83 Spring Street. The sculptures inside range in price from $300 to $20,000.

Craig and Sanders also own The Gumpshun Gallery — which specializes in “rustics, naturals and one-of-a-kinds” — and One Trick Pony, which sells paintings and represents Mel Shipley of Eureka Springs. Those two galleries are each about 800 SF in size.

Craig said Eureka Springs had 10 days of snow in December, and that kept customers from driving through the hilly Ozarks to shop in the city of 1,900 inhabitants.

“We were just iced up,” she said. “It really deters people from making the trip. When we get freezing rain in these mountains, people don’t want to make the trip. The weather can close the town down.”

“I think it’s going to be a wonderful year,” said Sena Tidwell, who owns three shops in Eureka Springs. “We’re a safe, wonderful, beautiful little town. Where else would you want to go? Italy?”

Tidwell said her sales were down by 30 percent at one point last year, but she turned it around in the last quarter and ended the year up by 10 percent.

Tidwell was busy painting the floor of Delphia Dreams purple when we talked to her. She has two clothing stores by that name and a gift shop called Delphia Gallery.

Coming Attractions

Eureka Springs may be the most quirky town in America.

Built into the sides of cliffs, Eureka Springs has 230 streets (no two of which cross at a right angle), the only church in North America you enter through the bell tower, and a hotel with five ground floors.

Eureka Springs was incorporated on Valentine’s Day in 1880. The town sprouted quickly around natural hot springs that were known to Native American tribes as far away as Canada.

James DeVito, who owns DeVito’s Restaurant, thinks the springs may have been the fabled fountain of youth that Ponce de Leon sought but never found.

This Victorian hamlet has had many nicknames over the past century, but the one that is heard most often is “America’s Little Switzerland.”

Tourists come for the scenery, spas, architecture, history, shopping, dining and a variety of outdoor activities, including hiking, bicycling and trout fishing on the White River near the dam on Beaver Lake. October is a prime time to vacation in Eureka Springs and watch the leaves change color.

With 1,600 acres, Eureka’s Lake Leatherwood is one of the largest city parks in America. The Great Passion Play still draws thousands of visitors to Eureka, and many of them also take a gander at the 700-foot-tall Christ of the Ozarks statue that blesses all from a nearby hilltop.

The Eureka Springs Blues Festival, held every year the weekend after Memorial Day, is also a major draw. And some 4,000 couples come to Eureka Springs annually to get married.

As shop owners come back to town and gear up for the tourist season, several concerts have been booked at the city’s Municipal Auditorium, which seats about 1,000 and is slated for a major renovation.

The April concerts include Alison Krauss+Union Station on the 16th, Keb Mo on the 24th and Merle Haggard on the 28th and 29th. Tickets for the Alison Krauss show sold out within a week after they went on sale.

Those shows are in addition to some more unusual events, like the 15th-annual Ozark UFO Conference on April 11-12 and the “first annual State Clogging Workshop” on the 26th.