An article (not available online) in the Intelligencer Journal of September 30, 2006, underlines some of the contradictions being promoted as facts by project supporters:
QUOTE
Beckett also said the authority's annual debt service on two bonds -- the $40 million bond and a $14 million bond -- would be just short of $3 million.
The PSP's "
What's The Risk?" document clearly states the risk associated with HALF of the $40 million "hostage loan" to be $1.2 million a year, or $2.4 million for $40 million in remarketed bonds. Add another $12 million to their own calculations, and the total cost per year comes out to about $3,240,000, or more than the hotel tax brought in last year:
QUOTE
In 2005, the hotel tax generated $3.2 million for the authority, enough to cover debt service to protect the county guarantee, but not enough to pay for the predicted operating losses as well.
QUOTE
Tom Beckett, the authority's financial adviser, testified Thursday the predicted annual operating loss is only a maximum $700,000, about half of PKF's projection.
Based on what? No study has ever been released to the public by the LCCCA that examined the actual operating figures of the proposed convention center. If there WAS a study that has never been released to the public, why didn't the LCCCA promote it as an alternative to the PKF report? More likely, these numbers were calculated in-house by someone associated in some way with the LCCCA or its contractors, which is why they won't tell the public where they came from.
QUOTE
Beckett, though, predicted hotel tax proceeds would be about $4 million yearly, based on an average annual growth of about 2.8 percent in hotel tax revenue since 1999. The $4 million would be enough to cover the authority's expenses, he said.
Based on an average annual growth of about 2.8 percent in hotel tax revenue since 1999, 2005's $3.2 million in revenue would take nearly
NINE YEARS to exceed $4 million dollars! What exactly would the LCCCA use to pay its bills until then?
The LCCCA has publicly stated on more than one occasion that they expect the operations of the Convention Center Authority itself to be about $300,000 a year. Of course, this would increase with inflation. Add to that the $700,000 in ANTICIPATED operational losses, and there is a $1 million a year shortfall in funding. Add this to the $3,240,000 in borrowing payments, and the most optimistic initial cost needed to operate the proposed convention center is $4,240,000. This could increase a LOT if operational losses would exceed the anticipated $700,000, which is VERY likely. It is highly unlikely that the "hotel tax" would be adequate to pay for debt plus operational costs for at least a dozen years - or more.
