IS IT TRUE December 19, 2013
IS IT TRUE with yesterday’s publishing of the naming rights agreement for The Centre between Old National Bank and the Vanderburgh County Commissioners comes the scrutiny of that contract by anyone who wishes to clink on the link and read it?…there are indeed things in this contract that can only lead to a conclusion that all of the financial ducks are not in a row for a serious ground breaking ceremony for the downtown convention hotel?…the first oddity about the contract has to do with the amount of money that will or won’t be changing hands for the advertising value of putting the ONB brand on The Centre?…in section 4.1 of the agreement it clearly states that ONB will make “UP TO” $14 Million in “economic investment in downtown Evansville, Indiana, including specifically the downtown hotel project”?…while the County may think it has consummated a $14 Million deal, the reality of the situation is that ONB is not on the hook for more than a dollar contractually?…those words “UP TO†are in that contract for a purpose and that purpose is for the shareholders of ONB to have an out of this deal at a much smaller price than the $14 Million that the headlines proclaimed?…all this contract really does is hand ONB a lock on advertising, 10 free VIP tickets to every single event held at The Centre, 2 FREE RENT private events for ONB annually, for an investment “up to” $14 Million?…this is not a minimum investment at all, it is a maximum fee for the naming rights?…ONB could invest only $1 during the term and technically not be in breach of this contract?
IS IT TRUE that the agreement is not binding on ONB due to a 60 day cancellation provision granted to ONB that can be exercised by ONB for any reason at all?…things are not so good for the County because the cancellation rights of the County are only exercisable for ONB’s failure to satisfy a material obligation?…that basically translates into ONB can get out of this up until they write a check for some amount that they are free to determine themselves as long as it is less than $14 Million and that the County can get out of it if ONB does not give them a thin dime for the 30 year naming rights?…all three of the Vanderburgh County Commissioners (Marsha Abell, Joe Kiefer, and Steve Melcher) signed this agreement on behalf of the County?…only CEO Bob Jones signed on behalf of ONB?…ONB seems to be very safe in its commitments but the County seems to have exposed itself to unnecessary risk?
IS IT TRUE it would be interesting to learn just how the $14 Million maximum figure was arrived at and how ONB will spin whatever the investment in naming rights ends up being for their shareholders?…one thing for sure is that the investment in naming rights value will need to be backed up by some formal valuation of the benefits provided by the advertising?…usually things like this are determined by comparable investments and the closest thing to it sits across from the Civic Center in the form of Ford Center?…the naming rights deal for the Ford Center was a 10 year deal at $400,000 per year?…if this was a 30 year deal the math works out to a total of $12 Million for the Ford Center naming rights?…in most instances when one pays up front there is a discount extended based on an assumed interest rate?…of course the two free rentals and 10 premium seats at The Centre have some value as well?…given all of that the $14 Million could well have come from an analysis based on the Ford Center deal?…that value will have to be tested to pass the smell test?
IS IT TRUE the deal to get a hotel seems to have changed dramatically with this new revelation?…the previous deal which we had deemed to be a good deal involved a $20 Million assistance package from the City and County, an $11.5 Million local investment in equity (led by ONB), and the balance of the equity being paid by HCW in cash and loan?…the truth of the matter is that any naming rights to The Centre are revenue that should be accrued to The Centre and owned by the taxpayers of Vanderburgh County?…the hidden change in this deal is that in a $14 Million naming rights deal THE PUBLIC ASSISTANCE PACKAGE JUST WENT FROM $20 MILLION TO $34 MILLION, the $11.5 Million local investment may just go away, and the equity investment by HCW will be reduced by $2.5 Million?…the public assistance percentage just went from 29.4% (20 of 68) to 50% (34 of 68)?…the reality today my friends is that this deal has put us right back to where we were when the City Council balked at putting up $37.5 Million toward a $75 Million project?…three card monty is a thriving game in downtown Evansville when it comes to handing out taxpayer dollars to subsidize a convention hotel?
…we wonder if the naming rights for The Centre have this much value why it has sat there collecting not one dime for 13 years?…at the rate ONB may pay the County Commissioners have squandered a $6 Million opportunity by sitting on their hands for the last 13 years and leaving The Centre naming rights to rot?…this is once again a SNEGAL activity to cover up laziness and complacency on the part of elected officials?