IS IT TRUE August 19, 2013
IS IT TRUE the Courier and Press editor quoted County Commissioner Marsha Abell saying that the water and sewer rates shall rise only 36% and will costs the rate payers only $10 a month?…while this quote may be close to the truth for the next year the fact remains that sewer rates are set go up 76% over the next 3 years costing the average ratepayer more like an extra $35 per month?…this is just a small taste of what is coming when the bonds are issued to finally fix the sewers under order of the EPA?…when the minimum of $545 Million and possibly up to a Billion dollars is financed the monthly rates will increase by between $35 and $65 per month just to pay the interest on the debt?
IS IT TRUE that County Commissioner Marsha Abell has been all over the news lately expressing her support for the City of Evansville’s plan to give $37.5 Million plus an expensive parcel of land to HCW of Branson, Missouri as an incentive to build a hotel in downtown Evansville?…Commissioner Abell even seems to be on board with the idea that refinancing the Centre is the best way to get her paws onto a couple of million dollars to help our her former Commissioner and friend, Mayor Winnecke?…just a few years ago when Mayor Weinzapfel was in office and had presided over the demolition of the Executive Inn Commissioner Abell was not all smiles and hugs about the prospect of the County being asked to hand money to the City to help ameliorate the mess the City had made of the Centre’s convention business?…at that time Commissioner Abell and Commissioner Steve Melcher both were pretty outspoken that the City’s cavalier and unplanned action was the cause of the Centre’s demise and that it should be the responsibility of the City of Evansville to fix their own mess an make the County whole for the financial damages caused by the haphazard way the City conducted ITS project?…we wonder why a single letter change from D to R in the Mayor’s office caused Marsha Abell to flip flop the way she has on who hosed the pooch at the corner of MLK and Walnut?…we wonder if the Centre had been a private business just how large the damages from a lawsuit may have been due to the willful infliction of damages by the City of Evansville?
IS IT TRUE the government of Vanderburgh County is considering refinancing the Centre to hand money to an out of town developer because the City of Evansville messed up at a time they busted their budget by $2 Million and are considering layoffs and reductions in services?…this happens at a time that the City of Evansville is planning to add 16 full time positions in its Sewer and Water Department?…we are beginning to wonder what else will have to be sacrificed by the people of Evansville to squander taxpayer dollars on a facility that most Evansvillians will never see the inside of?…when it comes to Arenas, and places like the Centre there are never ever any private businesses that will invest in such things because they do not make money?…that is not the case for a hotel?…there are already close to 4,000 hotel rooms in greater Evansville that were all built without a government handout?…the same goes for restaurants, retail space, and apartments?…the City of Evansville by handing money to a for profit entity with local competitors is setting a very dangerous precedent?…we can bet the next entrepreneur that comes along will have their hand out to do anything at all in this jurisdiction?
IS IT TRUE the weekend brought several questions regarding the discrepancies between Mayor Winnecke’s words and the findings of the Hunden Study that he commissioned and paid $105,000 for?…the biggest but not only discrepancy is in the number of jobs that will be created by the new hotel?…the Mayor says 250 but the Hunden study says 41?…the Hunden Study backs their number up with a series of pro-formas that include itemized operating expenses that look quite accurate for typical hotel operations?…unless this gap can be explained and explained clearly the City Council should either postpone a vote or vote NO due to misrepresentation of the benefits to the people of Evansville as a result of this project?…we wonder if the Mayor can be off by over 500% on just the jobs at the hotel just how far off is everything else he has been saying about this project?
The jobs number isn’t the only gap that needs explaining…
The Citizens of Evansville Against a Taxpayer Funded Hotel are working on a new slim jim style information pamphlet to hand out at the remaining townhall meetings and the Sept 9th big showdown.
In this pamphlet, we will be listing a few of the issues we have with the Mayor’s plan vs. what’s actually in the Hunden Report.
Here is a preview of that pamphlet:
1. Giving public money to private businesses is unethical, particularly when some of that money is coming from direct competitors in the form of an innkeeper’s tax.
2. The ERC commissioned the Hunden Report, a feasibility study costing taxpayers $217,000 according to Councilman John Friend. It declared “…the market as a whole is not generating enough demand at high price points to support a large, full-service hotel,” and this project will need “future reinvestments”. (Hunden p.11-13)
3: A survey of professional event planners in our area found only 40% would “likely” consider holding events in the new hotel. (Hunden p.9)
4: “The surrounding markets to Evansville are nearly all larger and offer more in terms of hotels, function space, entertainment and accessibility than Evansville.” (Hunden p.11)
5: Neither the Mayor nor Hunden account for a possible hotel development at the old River House downtown in their competition assessments.
6: Only 30% of business is expected to come from groups, meaning 70% will come from existing hotel business. (Hunden p. 20)
7: The Fort Wayne Courtyard hotel, opened in 2010, held up by Hunden as “a good model for this project.,” only cost $47 million in total for a 250 room hotel with parking garage, of which only $12 million came from public incentives. (Hunden Ch.2 p.13)
8. Within two years of opening the Fort Wayne Courtyard, the Marriott, which was closeby was foreclosed upon. (Indiana Economic Digest, 7/16/07)
9: According to Hunden, the “only truly feasible hotel from a private market perspective is a 120 – 150-room limited service hotel.” (Hunden p.13)
10: The total projected cost of a 240 room, limited service hotel, with garage, pedestrian connectors, and infrastructure is $37.5 million, of which only $13.5 million would be from subsidies. Under the current plan, the cost to taxpayers will be…you guessed it…$37.5 million. Coincidence? (Hunden p.25)
11: Only 41 onsite Full-Time Equivalent jobs and 71 total FTE jobs are projected to be created. Not 250 jobs. (Hunden p.31)
12: According to Councilman John Friend, when asked to provide a full business plan Rick Huffman, the “H” in HCW, replied, “WE are the business plan.”
13: The final projected public expense for the project after all debt servicing over a 25 year period will be about $78 million. (City-County Observer, IS IT TRUE August 14, 2013)
I call on each member of the ERBC to pony up $ 1,000,000 personally in support of the Hotel project, such money being invested in the form of Subordinated Debt (” Sub-Debt”), taking a 2nd position to the Developer’s bank.
Each of the ERBC members have made their fortunes in Evansville, and it is time to “give back” to the community by taking the average taxpayer (and the City Administration) out of the equation for funding this hotel. If you think the Hotel is a great idea, put your (substantial) money where your mouth is.
Finally, you will not be “giving” back , you will be investing, as each Sub-Debt investment will carry an interest rate and an eventual repayment of your principal after the Developer’s bank loans have been retired.
They could easily just form a management company and invest and cut out the HCW middleman, who will only hire out every phase of the project anyway from construction to management. In fact, they seem intent on never setting foot in Evansville again once we give them this bag o’ cash.
Sounds a lot like Johnson Controls! sign the contract, give em the the money and they never show their face in Evansville.
tris_speaker—How much will you be contributing? Have you ever run a business?
Winnecke seems totally inept. How could this happen? Vote out every incumbent in Evanshell politics.
Is it true that constructing a convention hotel and parking garage at the corner of Walnut St. and MLK, Jr. Blvd., using TIF and Visitor Bureau funds, not only will create jobs, but will result in an immediate increase in annual Downtown TIF fund and innkeeper tax revenues? That the increase in TIF and innkeeper tax revenues not only will help repay the investment in the convention hotel, but also will be available for additional infrastructure improvements and job creation?
Is it true creating a TIF district for the hotel alone will not help the surrounding Ward much as all taxes will go toward improvements in the tiny TIF rather than being spread throughout the neighborhood? …will created far fewer jobs than we are told? …will cost taxpayers far too much per job? …will take 25 years to pay back and ultimately cost $78 million?
I’m referring to the already existing Downtown TIF District, within which the hotel site is located. There is no need to create a hotel-specific TIF district.
Now, is it true that employing Downtown TIF District funds + Visitor Bureau funds, not only will create jobs, but will result in an immediate increase in annual Downtown TIF fund and innkeeper tax revenues? That the increase in TIF and innkeeper tax revenues not only will help repay the investment in the convention hotel, but also will be available for additional infrastructure improvements (within the Downtown TIF District), and job creation?
These are simple and specific questions, not requiring veering totally off into the negative polisphere for an answer.
Property taxes on hotel will be about $720,000 per year (3% of $24 Million valuation at completion)
COIT based on estimated labor budget from Hunden Study will be $15,000 per year. (1% of $1.5 M)
Innkeepers tax will be about $92,000 per year (based on 30% of projected room revenue, the other 70% is offset by losses elsewhere according to Hunden)
Too many assumptions to make a guess on the restaurant and retail but there you have it. $827,000 per year plus whatever the restaurants and retail increases are. A safe estimate is to count on $1 Million per year in new taxes.
Is it worth it? Only analysis will tell.
How about TIF and innkeeper tax revenue from satellite development spurred by convention and tourist traffic within the Downtown TIF District?
That will add something and it should ratio by about 70% of the non property tax part of my last post if it is represented well by Hunden’s job creation stats. That would add about another $100k per year or so using that ratio.
So, your conservative estimate is nearly a $1,000,000 a year in increased TIF and innkeeper tax revenue, plus _?_ new jobs, and an increase in downtown restaurant, tavern, and night club business?
Yes, and most of that comes from the $720k in property taxes from the hotel that in previous proposals were always phased in. New jobs, I accept the Hunden estimate of 70 overall and 41 at the hotel. That makes sense from all I have read. And yes there will be some increase in downtown nightlife spending from the 30% of the new business brought to town by the hotel. The note payments were stated at one of the meetings to be $2.6 Million per year. Given that the net cash flow to the City of Evansville is expected to be negative $1.6 Million per year. Is the potential for gain worth a guaranteed loss of $1.6 Million per year? We shall see but this is what the leadership should be trying to answer in a forthcoming way.
Of course this does not address the philosophy of giving public aid to one hotel and not the others but that is really a different argument.
Keep something in mind. COIT is 1% of income. To collect the $1.6M from COIT will take $160 Million a year in incremental sales volume. That is not gonna happen.
Bill: It was stated at the last meeting that the hotel would have its own TIF, or at least that is the way it took it. Do you have information that the hotel will not have its own TIF?
__
Press, you and Brad are correct. My mistake.
About 10:45 this morning, a friend called who had read my earlier comment, and informed me that the hotel property had its own “cut-out” TIF zone removed from the Downtown TIF District. Apparently, I missed the reporting of that in the Courier & Press, and I’m no longer in the building or on any planning boards.
I guess the idea is for the hotel to pay the bonds from its own TIF district.
That being the case I will amend my estimate to a maximum of $1 Million collected in the TIF to pay off an annual debt service of $2.6 Million. I will be interested to see where the other $1.6 Million per year can come from. Drawing the boundary just around one building limits the upside potential.
No sweat, Bill. We’re ALL trying to keep up with this fiasco. It’s not easy to do.
Bill–That is true.
Has anyone seen the C&P story about the IU medical center and the possibility of a convention hotel being built on the east side? Why did the mayor not mention this?
This: http://www.courierpress.com/news/2013/jul/05/no-headline—hotel/ or something newer?
Comments are closed.