Monday, May 05, 2008

Still no answers on arena financing plan

At the end of March, it was reported that hotel/motel occupancy rates declined in 2007 in Lucas County, and I blogged about the impact that would have on the financing of the new arena.

Of course, according to this report from WSPD News, the final cost of the arena won't be known until the final design is complete and the last bids are awarded later this year.

Now, let's take a look at this...

The hotel/motel tax is generating about $1 million per year. They plan to issue 30-year bonds and use this revenue to cover the costs of the bonds. However, $1 million/year only adds up to $30 million - not the $43-50 million that the tax was projected to generate to meet the budgeted cost of the arena. And we've not even begun to talk about the interest on the bonds. Even if the hotel/motel tax collects the projected $1.2 million per year, that's only $36 million - still far short of what is needed.

So where is the difference going to be made up????

WSPD has some other sound clips from this story today and I'll link to them as soon as they're available on the website. They include Joe Napoli saying that three companies are 'interested' in naming rights. Originally, naming rights were projected to bring in $14 million. As I wrote here,

According to, getting $14 million for our new arena - even if combined with naming rights for the convention center - would put us third highest in the country. While I'd LOVE to have someone walk in and plop down a check for $14 million to name the arena, prudence tells us that such a company would do their research and know what naming rights are going for and make an appropriate offer.

Napoli explains that there is 'support' for the arena project. That's a good thing. However, until 'support' transforms into 'financial participation,' all we're doing is gauging interest - not intensity. While there is a lot of 'support' in the community for a new arena, the intensity of that support, especially when your own money is on the line, hasn't yet been demonstrated and the economic conditions in the county may mean that original projections must be revised.

The biggest problem is the design of the arena. I'm at a loss for how you can build a structure without having the final design. The numbers being used lately for the cost of the arena have increased with the project now estimated at around $105 million, even though no one (except me) has held the Commissioners accountable for where they're going to get the $25 million increase ...

I can understand that estimates of costs are just that - estimates - and that actual costs would depend upon the returned bids for the various components. But the final design needs to be done PRIOR to the bids being offered, otherwise, the bidders have no idea what they are supposed to be doing. Based upon the final design, there should be an estimate of costs and, prior to bids ever being offered, there should be a new financing plan that identifies the sources for all funds for the arena costs.

And without a sound and sufficient financing plan, the bids should NOT be offered.

If you agree, tell the Commissioners:

Tina Skeldon Wozniak:
Pete Gerken:
Ben Konop:
Phone number: 419-213-4500

My prediction in March was that sometime between now and the opening of the arena, the Board of County Commissioners will announce that they need more money in order to finish what they've started. I also predicted the logic will be that "we can't stop now when we're halfway through the construction, so you need to support a tax or levy or some other source of additional public financing."

I, too, would like a new arena. I'm supportive of the project - but my support is dependent upon the ability of the Commissioners to keep their promises that no tax monies except the hotel/motel tax will go toward the project. And having been in elective office, I'm skeptical - and rightly so.


Monclova Brian said...

Does it really suprise you that this is how the arena plan is working out? Any person with half a brain could have told you that the hotel/motel tax was a bad idea. I don't see a lot of tourism coming to Northwest Ohio anytime soon except for maybe Bass Pro Shops which is located in Wood County. The other side of this is the commissioners who don't care what will happen in 30 years. By then, they will either have died,retired, or moved all together. Besides, this city and area have been so brainwashed that they believe republicans are to blame for their ills and cannot realize that the person in the mirror is the real reason the city is where it is. As I have always said, " You can't teach stupid!".

Monclova Brian said...

Does it really suprise you that this has really happened? The motel/hotel tax was such a bad idea and anyone with half a brain would have said so. I have not seen lately a major rise in tourism and the only spike that may come will be in the form of Bass Pro Shops which is located in Wood County. The other side of this issue is the commissioners themselves and they do not care. None of them will still be in office in 30 years when the bonds come due, so what do they care? This city does not have enough sense to realize that the one looking back at them in the mirror is the problem and all of the political banter that our troubles have something to do with Washington D.C is Toledo metality...Shortsighted. I have said over and over that this city is a long way from rock bottom before it realizes it has a problem. Until then,people like Gladieux, Carty,Gerken et al will continue to abuse this city and milk it for all that it has left. Wasn't there plans several years back, when Rossford announced plans for an arena, to renovate the Sports Arena? How'd that one turn out?

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