IS IT TRUE August 21, 2013
IS IT TRUE the City County Observer would like to start today’s IIT by openly asking for our readers to submit articles written about any financial success stories that may be out there regarding public investment in any downtown convention hotel project in the United States during the last 10 years?…we furthermore would like to solicit published articles that compare the claims of elected officials before a hotel or convention center project to the actual results 5 years after the projects were completed?…we privately put out the call yesterday for articles about publicly incented hotels and every article returned to us had two things in common?…one of those things is that the real results missed the sales pitch by large amounts and the other is that every hotel was either struggling or had entered bankruptcy protection?…we challenge the supporters of making this grant of $37.5 Million to come out of the shadows and start talking real numbers that make sense and can be verified?…we challenge the supporters of making this $37.5 Million grant to honestly explain the differences between Mayor Winnecke’s claims and the projections in his own Hunden Study?…the next 18 days should be days spent in honest dialog about real expectations with respect to jobs created and economic impact as opposed to spewing platitudes and clinging to nonsensical claims without basis?…the Hunden Study was bought and paid for by the people of Evansville and is the baseline that should be used?
IS IT TRUE we would like to start with the claim by the Mayor that 250 jobs would be at the hotel which is over 500% out of kilter with what the $105,000 Hunden Study says?…we are begging the Mayor to come forward with the details of where his claims of 250 jobs at the hotel and 800 jobs for construction is based on?…in the absence of a competent and detailed explanation we will assume that the Mayor’s numbers are sourced in what Alan Greenspan once called “irrational exuberanceâ€?…as some will recall Chairman Greenspan was referring to the bubble of internet stocks that eventually popped when he made his “irrational exuberance†speech to congress?…it has been 13 years since the internet bubble burst and the NASDAQ is still over 30% below it’s March 2000 peak?…the City of Evansville with all of the upcoming mandated infrastructure based spending cannot afford to base a $37.5 Million decision on “irrational exuberance†or the skill and charm of the cheerleaders?…without a well thought out business plan that is based on reality and probability an informed decision is not in the realm of possibility for our City Council to make?…it is clear that two members of the City Council specifically Councilman Weaver and Councilwoman Mosby are caught up in the “irrational exuberance†to the point they are wearing their team colors and buttons to the council meetings?…we have faith that most of the remaining seven members of the council will not come under the spell of a charismatic sales pitch filled with “irrational exuberanceâ€?
IS IT TRUE the people of Evansville got both good and bad news yesterday with respect to the EPA mandated repairs to the dysfunctional combined sewer system?…that the bad news of course is that there will be a series of rate increases over the next three years that will amount to 68% from today’s reasonable rates?…the examples released by the Mayor’s office stated that a residential customer that uses the average of 4,000 gallons per month can expect to see their bill increase to nearly $50 after these increases?…that is a reasonable monthly water bill but we do not think 4,000 gallons is a realistic expectation for what a family will use?…that 4,000 gallons is more like the use for a retired couple that only takes showers every couple of days, cooks, and washes clothes a few times a month?…the other piece of bad news is that the spending of $120 Million that triggered a 68% increase is only between 15% and 20% of the spending that will have to take place to achieve compliance?…that would mean there are either 4 or 5 more 68% increases coming in the next 20 years?…those increases will raise that $50 water bill to $84 by 2019, $141 by 2022, $237 by 2025, and $351 by 2028?…if the EPA’s estimate of $815 Million turns out to be correct you can make that $589 by 2031?…that is the end of the bad news?
IS IT TRUE the good news of course is that after over 50 years of neglect and denial something tangible is finally being done about the combined sewer overflow problem?…this has been a long time coming and it will be expensive but perhaps yesterday was the first day of Evansville’s climb back to being a functional city that is able to do the jobs it should?…you may not like the price but you will like the clean smelling air, the diseases avoided, and the enhanced lifestyle that having an exemplary sewer system will bring?…if we can just get the focus off of asinine projects that only benefit the elite and promote fun and games there may be a glimmer of hope on the horizon?
Outstanding IS IT TRUE CCO. I hope the pro hotel people respond to Mr. Wallace invitation to published their side of the story why the taxpayers need to fund this hotel in the CCO.
AS far as I’m concerned yesterday Fort Wayne Sentinal Editorial convince me we shouldn’t put a dime of taxpayers money in this project. Great research CCO and to bad the Courier and Press doesn’t do similar. I guess this is why many readers of the Courier and Press are now reading the CCO every week because they are providing honest and factual reporting.
What bothers me MOST about this proposed hotel project is that we again find the public in a position where multimillions of its tax dollars will be pledged by 9 individuals who owe their seats on the common council to organized labor’s ability to get out the vote come election time. What would any person with a modicum of intelligence think would be the result of that vote?
This is no way to run a government. If they could do this project without pledging the use of the COIT or ad valorem property taxes to meet future debt service payments it would be a much smaller pill for the public to swallow, however, the real fix is to require a referendum on publicly funded projects over a certain dollar amount.
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A wise man once said “Sewers before Stadiums”.
A wise man will say “Restore Mesker Amphitheater before building Dog Parks”.
Agreed. Mesker Amphitheatre deserves to be saved. I am about as far removed as one can get from advocating increased debt and spending, but we need to find a way to make Mesker into a thriving venue again, or at least ensuring it’s not falling in on itself. If that means shelving this hotel and any new discretionary spending, then that’s what needs to happen.
Right now there is literally GRASS growing out of the roof of the building.
Saw Airhead and Heifer. State Board auditing at its finest. I also just spoke with the AICPA. The State Board has been reported for not sending a CPA on a audit of this size.
Please double check the math and assumptions in this scenario:
$38 Million subsidy
Assume: 0% Return over 10 years
$38M divided by 10 = $3.8/yr
Assume $200/day/person of spending by convention attendees.
Assume 250 working/attendance days per year
Assume 10% capture of spending from InnKeepers Tax and COIT
Assume $800k/year in property tax paid
$3.8M – $0.8M = $3M/yr
$200/day/person X 10% capture rate = $20/day/person
$20/day/person X 250 working days = $5K/person/year
$3M/year target break even return divided by $5ktaxes/person/year
EQUALS 600 attendees/working day for TEN YEARS in a 250 room Hotel just to break even
600 X $20/day in tax revenue X 250 working days/year = $3M/year
Oh, my good friend Brains,
Just take your $ 3,000,000 per year break-even;
Divide by your $ 20 per day in taxes paid per person (you meant Food & Bev., not COIT)
Equals a new figure, ” Person Days per Year” of 150,000 required
Divide by the working days per year of 250
There are your 600 persons per day, for 250 days per year, for 10 years to recover the sum of $ 38 Million subsidy less $ 8 MIllion of property tax paid.
Gosh, Brains, with those 600 convention people per day for 250 days per year milling around, no one will go Downtown anymore: it will be too crowded !! (apologies to Mr. Y. Berra)
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