elpasospeak

The city has evidently entered into it’s final, last, not one cent more contract with the construction company to build the ball park and have it substantially complete by April 28, 2014.  That’s only 17 days after the first game is scheduled to be played there.

Isn’t it time that we get to see the final plans?  What will it look like?

Between now and then we have Santa Claus coming and multiple visits from the Tooth Fairy.

The Easter Bunny is scheduled for April 20, so he or she will want to know what to look for.

While we are at it could we please see the minutes of the June 18, 2013 and August 1, 2013 meetings of the Downtown Development Corporation?  (That is city council acting in ball park mode).

We deserve better

Brutus

In  August of 2013 the city sold $60.7 million dollars of bonds at par.   These bonds were offered in two groups, $45.1 million in tax-exempt bonds, and $15.6 million worth of taxable bonds.  The city evidently received a premium of another almost $4.3 million on the bonds, presumably because of the high interest rate we were willing to pay.

The tax-exempt bonds were sold but the taxable bonds were not.  The underwriters had to buy them.

We paid $1.7 million dollars for the privilege of selling these bonds.

Hotel Occupancy Tax

According to a June 26, 2012 presentation from the city’s chief financial officer we can expect to get about $2.4 million each year from the increase in the Hotel Occupancy Tax.  You will remember that we were told that this tax along with lease payments from the sports group as well as revenue generated from the 77 games each year would pay for the ball park.

A document available on the city web site tells us that the cost to finance the bonds in 2014 will be $3,052,205.14 for the tax-exempt bonds and $1,091.175.50 for the taxable ones, totaling $4,143,380.64.  Those numbers go up slightly in 2015.

I guess the city has been right in telling us that we will have to use general fund revenue to make up the difference.

Those numbers do not include any payment of the principal.

The city’s presentation shows that they plan to make modest principal payments on the taxable bonds starting in 2019.  They will start making serious principal payments in 2024 with an ever increasing payment until those bonds are paid for.

No principles

As for the tax-exempt bonds, this chart tells what the city has done to us:

They are planning a “large bullet payment” of $17,455,000 in 2023.  The amortization chart is below:

They optimistically talk about the potential of using “excess” Hotel Occupancy Taxes and of the potential of lower market rates.  We have already seen HOT taxes coming in under their projections.  As for lower interest rates in the future I think that we all know the answer.

Better future

We are not even planning to begin paying for the tax-exempt principal until 2023.  Where will that money come from?

We deserve better

Brutus

I found the first amendment to the ball park lease.  As it applies to parking the only thing that I saw in the amendment was that in years 25-30 of the lease the city will be entitled to $1.60 per parking spot per year.

The lease is now for thirty years with the sports group having the option to extend the lease three times for five years each.  That brings the period in which they can control the ball park to 45 years.

The lease will cost $400,000 per year for the first five years and escalates all the way up to $644,204 per year in years 25 to 30.

City use

The sports group gets first priority in using the facility each of the 365 days of the year.

The city may request to use the facility for:

“civic-oriented, community not-for profit or educational events such as City ceremonies, conferences, conventions, meetings and training sessions”

and the sports group will allow them to use it if the sports group does not have something else scheduled for that day.  In other words the city only gets to use the stadium if the sports group does not want it that day, and the city cannot use the arena to make a profit.

Concession

When the city is using the stadium the sports group has the right to run the concessions.  If the sports group declines to run the concessions for a city event, the city must “negotiate an agreement” with the sports group’s existing concessionaires.

The city will reimburse the sports group for any extra expenses that running the city event cause.

City ticket revenue

The city may place a surcharge of fifty cents for each ticket sold for a ball park event.  That number increases each five years up to eighty cents per ticket in years 25-30.

Escalator

I can understand setting fixed amounts for leasing of large facilities.  What does not make sense is a ticket surcharge that goes from fifty cents to eighty cents after 25 years.  Where were the city people in this negotiation?

We deserve better

Brutus