Arena debt? Don’t worry about it despite hotel/motel tax decline…
One advantage of a government project is you don’t have to know for sure how it’s all going to be paid for. All you have to do is have a plan and even if some of the dollar amounts for the planned funding changes? It’s said to still be all okay, at least that’s the message I took away from reading today’s Blade article on the debt created by building what is now Huntington Center, (link).
What I found interesting is the information shared as to the additional tax that was levied for our area that made it one of the highest in the region:
To pay the tax-exempt debt, officials are keeping a close eye on who’s getting shut-eye in the county’s hotels and motels.
Those bonds and notes are to be paid off with revenues from the hotel/motel tax, which was increased 2 percent in March, 2008, for that very task.
County officials concede that the hotel/motel tax, now 10 percent, is collecting less per year than the $5.2 million anticipated before the recession.
But the $4.1 million projected for 2010 is still enough to do the job, because $3.7 million is about the bare minimum needed to make the debt payments, the officials said.
The history of Lucas County and lodging taxes from the Ohio Department of Taxation which was increased before 2008 (link):
Lucas County:
The county first enacted a special levy of 3 percent for convention center construction during a July 15, 1985 to Oct. 15, 1985 window permitted by the legislature. In 1997, Lucas County was permitted to enact an additional 2 percent for the county convention and visitors bureau in promoting the region, and it did so. In 2006, Lucas County was permitted to enact an additional 2 percent for purposes including construction of a new arena, and it did so.
A Blade article from March of 2008 reports, (link):
Last year, [2007] the county’s 10 percent tax on rooms brought in $5.1 million, which was a third more than five years earlier. Collections were boosted by a 2 percentage-point increase in March to pay for a new downtown sports complex. Wood County lacks a countywide hotel/motel tax.
From the Lucas County budget ending December 31, 2009 how the arena will be paid for as well as how many events were then projected (link):
Lucas County’s signature project, a multi-purpose arena in downtown Toledo, held its public open house on October 3rd and 4th, 2009 and hosted over 10,000 citizens during the two day event. The arena is located within one block of Fifth Third Field, the highly successful minor league ballpark for which the arena project is modeled after. Since opening its doors, the arena has hosted over 40 events during the last three months of 2009, and is scheduled to host approximately 100 events in its first full year of operation. The $100 million dollar arena project was completed $5 million under the estimated costs. The project is funded with a combination of hotel/motel tax collections and net revenues from the ECHL hockey Team, the Toledo Walleye.
From Blade article of today:
Steve Miller, general manager for the arena’s management company, SMG, said the county can expect extra revenue from Huntington Center this year because of strong ticket sales. The arena was budgeted for 87 events in 2010 and has had 62 already, including concerts by Elton John and Carrie Underwood.
This suggests that the number of events expected has met predictions.
How are they making up the shortfall for the loss of the Arena Football League team which was promised as a way of paying off the arena debt?
June 14th, 2010 at 5:38 pmWhy Ron, don’t you know? The money fairy is going to visit Toledo and sprinkle it with money.
Much of our budget problems are based in unrealistic income expectations.
June 14th, 2010 at 5:44 pmYour first line was killer, Lisa.
“One advantage of a government project is you don’t have to know for sure how it’s all going to be paid for.”
I laughed, then was irritated.
June 14th, 2010 at 6:33 pmI think point of the article was that the Arena project financing was put together very cautiously and that the project cost less than anticipated and that they CAN pay for it and that bookings and attendance are even better than hoped for. We have lots of problems in our community. So why would GCG bloggers feel a need to grouse about something that was done responsibly and is working.
June 14th, 2010 at 7:10 pmI’ve followed the arena financing since the beginning, the twists, the turns, the differences in amounts that were certain to be generated from naming rights, etc.
There are several things important to point out one, that if the hotel/motel tax decreases further, it will be an issue, it has decreased and that’s not really been made a focus before. As the Blade article indicates, it’s stated 3.7 million is the minimum needed, 4.1 was collected.
It’s also important to point out that the article states that the Ohio Cultural Facilities Commission has not approved all of the funding expected.
Ron asks a valid question, that’s not mentioned at all directly but it is clear from the last section of the blog post that they are still on track with close to the same amounts of events scheduled, which is part of the funding source.
June 14th, 2010 at 7:19 pmSAW – did you really just say the project cost less than anticipated? How many times did they raise the price tag? I’m fuzzy on the details, but it was raised several million dollars from the original estimate, no?
Lisa Renee leads a very informed discussion here at GCJ. Check out how many different things she links to per post.
To just come in here and say we at GCJ are just “grousing” is to ignore reality and legit questions – exemplified pristinely by your ignoring of Mr. Korsog.
June 14th, 2010 at 7:44 pmBack in 2008 the Blade reported (link) that the reason the additional funding had not come from the Ohio Cultural Facilities Commission was because they needed more documentation. It’s also pointed out:
I don’t think anyone suggested the State of Ohio was grousing when it felt the County going ahead without full funding documentation was an issue.
The original price tag of the marina was $81.85 million, then it went as high as $105 million and now it’s stated to have cost $100 million. One of the many past posts where the financing was discussed from almost 2 years ago can be found here.
June 14th, 2010 at 7:56 pmI was once told that the only government project to ever come in on time and within the proposed budget was the Panama Canal. (I have no source on this)
I am wondering why I can’t get a job as a project manager, or budget estimator for one of these government projects. Sounds like you don’t have to be right, and you still get paid for the work.
Yes I am grousing today!
June 15th, 2010 at 3:12 pmIf anyone sees the “money fairy” around could you send them to my neighborhood. We live on a fixed income and could use a little extra now and then.
June 16th, 2010 at 11:36 am