Of, course, over here at South DaCola, we have known this for awhile;
The task force called the tax the most sensible way to pay for an events center. It’s the only funding source that could generate a large amount of money fast – $50 million a year on a project estimated to cost about $150 million.
But poll respondents opposed the sales tax 51 percent to 42 percent.
The prospect of municipal bonds, which officials have said would cost $80 million more in interest over 20 years compared to a sales tax, is even less appealing. Only 33 percent support a bond issue as a backup plan for the sales tax, with 56 percent against.
I still think Staggers’ idea of private sponsorship and stock options makes the most sense. Have the people who want the EC the most invest their own money.
I find it ironic that the question about supporting a triple B tax was not asked. Gee, I wonder why?
Or a TIF or BID.
WTF is a “stock option” for the event center? Is that your idea or Kermit’s?
I might have gotten the wording wrong, but I think Kermit has suggested selling investment stock in a new events center. I think it is a cool idea, because it would encourage a board of directors to make the place profitable. Which isn’t far-fetched. If something is ‘needed’ it will make money. The municipal golf courses have HUGE budgets and they make money. You want to know why? Because they are needed and used.
Yeah it’s cool but has anyone else done it? I haven’t heard of other cities doing a “stock option”.
Municipal Bonds are the stock option. You make 2% on CD’s but investors are looking for 5%. After the election and a full accounting, I doubt a revised city bond rating could sell bonds.
I agree with the population. Do it if we’re not paying. Do it with bonds, but only if taxpayers are not liable. Do it with B’s or ticket taxes.
It could happen, just not soon. These are problem times. It’s hard to sell bond paper, people give up entertainment first/most, the city has other major problems, and it’s just not getting better but looking worse.
I think we honestly could build it now, but the ONLY way we could build it is if we did intense campaigning, getting the positive message out there about revenue pouring into the city with it, with that money going towards roads and revitalization and such, BUT not having the public pay for it. (With the Exception of Ticket Tax/Parking Fee’s etc).
Parking Fee’s are what Wichita did for the Intrust Center and they seem to be making good money off of it, atleast from when I was down there.
I don’t want to sound like a fuddy-duddy, but I do think it is possible to build an EC in these times if the people who want it find a way collectively to do it. Not sure what that entails but I think this community really needs to start taking that approach on many of these projects. The SF Hockey Association has seemed to figure it out. I have often believed you can choose your own destiny, stop expecting the rest of us to pay for it.
These funding questions are kinda stupid on how they worded them. The Task Farce has slammed issuing bonds because of the interest payments and the Argus followed suit in the wording of their question.
Duh, interest adds up over time, but isn’t that the point? We are talking the exact same way people finance their homes. If you borrow $250K for your house and pay for it over 30 years at 6.5%, do you run around thinking that you live in a $700K house because that’s how much in total you will pay the bank?
The next Mayor needs to have the stones to put and end to this silliness. Go back to square one and do the original plan minus the rec. center. A project of this size and scope only works with a public/private partnership and the private sector will only be roughly 25% of the total, the other 75% we will have to bond for. We can cover the bonds by raising our Lodging Tax 7% and our Entertainment tax .5%.
Anyone who says “Let’s build it, but not with new taxes” isn’t really for it at all, they like progress as long as it’s free. Our town will stagnate under that type of leadership.
Anyone who says “Let’s build it because the public prefers the Task Force plan as written” is simply lying or laughingly out of touch. Go back and read the AL poll, people HATE the sales tax increase and tearing down HWF.
Anyone who says “We need to study it more” isn’t showing any level of leadership or vision. We’ve studied this enough to where we can now claim the mantle of “City with the most Event Center Studies in the USA…no one has studied this as much as us..look how effin smart we are!”
This issue will make or break the next Mayor’s admin and is the one major project we can still actually do with any kind of decent payback for the City. We either do it right or not at all and unfortunately the “not at all” crowd seems to be winning the day.
I did like Huether’s quote recently on the topic, he said something to the affect, “enough about the events center, there is bigger issues facing our city.” and he is right, that is why Kermit has often shoe’d the issue away like flies.
If you borrow $250K for your house and pay for it over 30 years at 6.5%, do you run around thinking that you live in a $700K house because that’s how much in total you will pay the bank?
Not at all, but people like Dave Ramsey would call that person a fool for borrowing money on a 30 year mortgage. If people weren’t so convinced they needed to keep up with the Joneses and if they just bought what they could afford with a maximum of a 15 year loan, they would soon realize how much farther their dollar gets them.
Same is true with financing an Events Center. You can either pay a huge amount of interest in the desire to have things now and pay later, or you can be responsible to find source of funding that don’t require decades of debt or increased tax burden upon the citizens.
The main problem here is nobody in city government cared to look towards the future 10 or 15 years ago, and they don’t tend to think about how to finance things until the decision has alredy been made that we ‘need’ it. Perhaps we just need to change the focus and look towards the future so we can start saving (and I know that seems to be a dirty word) so when the next big project comes along we have sufficient funds to pay for the entire thing or at the very least a significant portion of it with the need to finance every penny.
Not at all, but people like Dave Ramsey would call that person a fool for borrowing money on a 30 year mortgage. If people weren’t so convinced they needed to keep up with the Joneses and if they just bought what they could afford with a maximum of a 15 year loan, they would soon realize how much farther their dollar gets them.
How many people stay in a house for 30 years any more?
Get a lower payment for your starter home, make some improvements while you live there, sell it – hopefully for a gain – and move into a place you’d like to stay for a long time when your income can justify it.
Ramsey has some good advice, but sometimes I wonder about him.
The main problem here is nobody in city government cared to look towards the future 10 or 15 years ago, and they don’t tend to think about how to finance things until the decision has alredy been made that we ‘need’ it. Perhaps we just need to change the focus and look towards the future so we can start saving (and I know that seems to be a dirty word) so when the next big project comes along we have sufficient funds to pay for the entire thing or at the very least a significant portion of it with the need to finance every penny.
Actually, the main problem is continuity. We have a new mayor and council every 4-8 years with differnt ideas on how to spend our tax dollars. So Kermit may get his “save for it” plan through, but eight years down the road if we haven’t built an EC yet, the next mayor may successfully push to use those funds elsewhere.
This is the big reason why I can’t support a “temporary” sales tax hike to build this thing. My college town did this twice while I was there (interestingly, such votes were always held in the summer when there were few students around) and both extra pennies on the sales tax are still there funding other projects. if I thought the tax increase had any shot of being temporary, I’d be more open to the idea.
GoD is correct.
Seriously, even best case scenario under a Staggers regime, how much do you actually think we can save a year for an Events Center? I doubt it would amount to more than $1 million, which doesn’t even cover the inflation expense we incur every year we wait.
Our two biggest economic concerns are the revenues lost for both entertainment & airfare dollars that flow to Sioux City, Omaha & Fargo. A strong & visionary Mayor will realize that these problems are intertwined and solving one will make it much easier to solve the other.
Costner:
“Same is true with financing an Events Center. You can either pay a huge amount of interest in the desire to have things now and pay later, or you can be responsible to find source of funding that don’t require decades of debt or increased tax burden upon the citizens.”
Not really, unless you are buying rental property people don’t look at their homes as a source of income.
BTW, when you look at our two closest and most relevant competitors; Fargo & Sioux City, both of them managed to pay their facilities off completely well before the bond term. Of course, Sioux City got a big chunk from the State, but the point remains they were able to pay it off early. How? They did like most smart homeowners do and if they had a little extra income, throw it at the principal.
Also, think about this: You build an EC downtown and if over the next 30 years you see $500 million of new development go in around it, the State excise tax alone on that is over $10 million. The Legislature in Pierre needs to realize that they should pony up something to this project NOW, in order to help realize their cut of the eventual payback.
Sy:
“Also, think about this: You build an EC downtown and if over the next 30 years you see $500 million of new development go in around it, the State excise tax alone on that is over $10 million. The Legislature in Pierre needs to realize that they should pony up something to this project NOW, in order to help realize their cut of the eventual payback.”
Insert Applause.
Sy: Seriously, even best case scenario under a Staggers regime, how much do you actually think we can save a year for an Events Center? I doubt it would amount to more than $1 million, which doesn’t even cover the inflation expense we incur every year we wait.
If we don’t have an extra million a year to save, then we don’t have an extra million a year to pay off bond debt.
Seems in your mind the only way to fund this is by raising taxes – which puts you on par with the majority of our city council.
Sorry but I disagree. If we can’t afford it, then we can’t have it. We don’t get to buy everything just because we feel we deserve it, and good leaders sometimes have to disappoint people by saying No for a change. So be it.
The “inflation expense” excuse is incredibly idiotic as well and has no merit. You argue about inflation costing us more, but ignore the cost on the debt service. If you want a level playing field, you need to keep in mind any money we save will be in a fund where it can actually be earning a return for us. Even a small 5% return on a stable bond related investment would more than make up for inflation at this point, so the inflation expense argument isn’t valid at all.
Costner:
“If we don’t have an extra million a year to save, then we don’t have an extra million a year to pay off bond debt.”
I’m advocating the exact way nearly all of the Events Centers in this country have been done. A public/private partnership with the tax burden weighted to those who use the facility, rent a room, & dine or drink out.
We are in the top 10 for lowest overall burden while also having an excellent credit rating by the analysts like Moody’s. We are also still in the top 10 in our peer group of cities for Economic and population growth rates. Our unemployment and forclosure rates are a fraction of most of the rest of the Nation.
The City should be in fundraising mode now, but alas we are still sitting with our heads up our asses trying to come up with a painless magic bullet solution. Never mind all those other cities who racked their brains and were unable to. Of course, they didn’t study it for a decade like we did, so WTF do they know?
It would be the height of idiocy along with an amazing lack of vision and leadership if someone like “Mayor Costner” (God help us) came out and repeated your line of bullshit:
“We can’t pay cash and it’s just too damn hard to figure this out so we just are going to say no. We don’t deserve it and of course I know way more than all those consultants, business & community leaders and industry experts we’ve wasted your taxpayer dollars on. End of story, next question please”
You really should run for Mayor on that platform so that Janoct isn’t the only mumbling douchebag in the race next time.
Costner:
“The “inflation expense†excuse is incredibly idiotic as well and has no merit. You argue about inflation costing us more, but ignore the cost on the debt service.”
Really? Back when we started this process we were talking a MAXIMUM amount to budget for the 10-12K seat EC at Cherapa was $85 million, & that included aquiring the site. Even if you remove the HWF component we haven’t seen a current estimate under $110 million and we already own the Arena site.
Annual inflation rates have ranged from 1.6% to 3.8% a year since we began this process, with the exception being last year when we actually had a negative (-.4%) rate. Since 1914 we’ve only seen 14 years of zero or negative inflation and half of those were in the Great Depression.
Are you saying we are in for another Great Depression type era of 5-7 years of deflation? If so, I’d like to see your research along with a copy your advanced degree in Economics.
http://www.usinflationcalculator.com/inflation/historical-inflation-rates/
Sy: Really? Back when we started this process we were talking a MAXIMUM amount to budget for the 10-12K seat EC at Cherapa was $85 million, & that included aquiring the site. Even if you remove the HWF component we haven’t seen a current estimate under $110 million and we already own the Arena site.
You actually believe that increase in costs is due to inflation? Give me a break. The increase in costs is because the first time they pulled a figure out of their asses while the second time they pulled an even bigger figure out of their asses. Nobody has gone so far as to actually seek any level of bidding for such a project, we don’t have so much as an architectural drawing, and our wise city leaders can’t even decide what features or how many seats the thing should have – so what makes you think they have even a clue what it might actually cost? Keep in mind their original estimates openly admitted they didn’t factor in the costs for train track removal or additional parking structures….but those are just pesky details.
So if you honestly believe the numbers being tossed out are growing due to inflation you are either incredibly naive or just plain ignorant – your pick.
Besides that fact, you still ignore the cost on the debt service while whining about the cost of inflation. The fact is, if you are going to factor in the cost of inflation then you also need to factor in the cost of investment income from the fund set aside to pay for a portion of the facility. If we have a $10M fund saved for the eventual construction, then you need to factor in the investment returns of that fund, which can easily offset inflation costs.
Do you honestly run a business like you expect our city to operate? If you needed a bigger showroom, would you wait until you actually needed it and then run out to the bank to finance 100% of the cost? Or instead would you plan ahead and look to the future five or ten years down the road and know you need to start planning – and earmarking funds – for your expansion?
That isn’t to say you need to start saving so you have 100% of the cost by the time you break ground, but at the very least you should have a good portion of the total cost set aside due to your planning.
Now if you think waiting until you need it before thinking about costs and finances – well I guess you have a lot in common with Swatlowski. If on the other hand you plan ahead, then why wouldn’t you want (or expect) the same from our city?
If our city leaders fail to plan, then they plan to fail. Since they tend to wait until they decide we ‘need’ something before setting aside one single dime for that particular project, we will always be backed up against the wall with no way to raise funds for a project other than the option to raise taxes. Great – yet another politician who solves budget problems by raising taxes… that is sure great leadership.
All of this aside, how many sporting events or concerts have passed Sioux Falls by because we don’t have a facility large enough to support them? Can we even justify the ‘need’ for an Events Center at this point? Seems a large portion of our city doesn’t even think we need such a facility…so are all these people stupid or just misinformed? One thing is for certain – if we are being told we need this, then they need to do a much better job of selling it to the public because right now if you put a new EC to a public vote I’d bet at least 60% of the public would vote no.
Sy: You really should run for Mayor on that platform so that Janoct isn’t the only mumbling douchebag in the race next time.
Are you really that much of an asshole that you have to inject one of your little colorful insults in each and every post?
Costner:
“You actually believe that increase in costs is due to inflation?”
Not all of it, but a healthy chunk fo sho. 2%-3% a year since 2000 and things like steel and concrete are very sensitive to the costs of energy. The first plan had conceptual drawings and cost estimates were provided by the Consultant, who has taken info from a construction database of multiple similar facilites that have been built. Same deal with the current plan. If you don’t like their estimates, hire your own consultant and prove them wrong.
And why would they figure in track removal? That money is already allocated and waiting to be spent. They didn’t figure in a ramp because they already have as many spots within walking distance as they have at the current Arena. Not saying they wouldn’t or shouldn’t do a ramp, but it wasn’t 100% necessary to the initial proposal.
Costner:
“Besides that fact, you still ignore the cost on the debt service while whining about the cost of inflation. ”
The phuc I do. I have repeatedly stated that the P&I on 80% a the $100 million EC could be covered by a 7% increase in our Lodging tax and a .5% increase in the Entertainment Tax. Which takes the burden from everyone who buys stuff to those who dine out, rent rooms, drink out, buy tickets etc.
Costner:
“Do you honestly run a business like you expect our city to operate?…well I guess you have a lot in common with Swatlowski.”
Which one of us is still around, again? Run a D&B on us sometime and tell me how shitty this company is run. If truly you don’t like people pulling stuff out of their asses you should lead by example.
Costner:
“All of this aside, how many sporting events or concerts have passed Sioux Falls by because we don’t have a facility large enough to support them? ”
Just about all of them, minus the Globetrotters and Casting Crowns.
Costner:
“Are you really that much of an asshole that you have to inject one of your little colorful insults in each and every post?”
Oh puhlease, call this man an Wahhmbulance.
You’ll note from our other tussles that I hit you back ONLY after you make some wise ass comment on my intelligence and/or mental state, just like you did in this thread. I’ve also agreed with you many times and have called you out positively when I do. Your personal animosity towards me precludes you from any sembleance of objectivity toward anything I post and you think that isn’t patently obvious for some odd reason.
Sy: have repeatedly stated that the P&I on 80% a the $100 million EC could be covered by a 7% increase in our Lodging tax and a .5% increase in the Entertainment Tax.
A tax increase is a tax increase. That 7% might not matter to some people, but I know business travelers who are VERY aware of lodging taxes in particular cities and it does prevent them from booking conventions in the cities that gouge them the highest.
Of all the options I have heard of a bed and booze tax is probably the least idiotic, but it is still a tax increase and may lead to Sioux Falls missing out on some bookings due to the higher rate. I just don’t feel raising taxes (any taxes) is an appropriate way to fund government pet projects. A little pre-planning would have made more sense.
Sy: Which one of us is still around, again?
You need to re-read the statement which prompted this response and notice the little funny curly thing at the end of it… we call that a question mark. That would suggest I was asking a question – not making a statement.
My entire point was that you clearly do NOT run a business like you are expecting the city to run. You plan ahead – you allocate funds – you don’t wait until you need something and then react like our city seems to do.
Sy:You’ll note from our other tussles that I hit you back ONLY after you make some wise ass comment on my intelligence and/or mental state, just like you did in this thread.
Right – because suggesting you are naive or ignorant (which aren’t really insults by the way… just valid explanations for someone who feels the EC estimates are growing merely because of rising inflation even in a down economy when contractors are practically begging for work) is the same thing as calling someone a ‘mumbling douchebag’. Sure thing pal.
Sy: Your personal animosity towards me precludes you from any sembleance of objectivity toward anything I post and you think that isn’t patently obvious for some odd reason.
Sorry to break it to you once again Sy, but other than disagreeing with your viewpoints about 80% of the time, I have no ‘personal animosity’ towards you. In fact I have no personal feelings towards you in any regard because we have never met and likely never will.
If I ever do agree with you I make it clear – and although it is rare to do so, if I had some personal issue with you it would be much more fun to just play the asshole role and disagree with you for pure entertainment.
But that isn’t how I do things, and yet again I feel the need to remind you that this isn’t about you… nor has it ever been about you. This is about me disagreeing with your viewpoints – and I doubt that will change anytime soon.
However – isn’t it about time you called me a raging liberal or something? That seems to be the standard reaction by the third or fourth post so I wouldn’t want to see you deviate from the playbook and get off message.