Arena Update: Overrated statistics and weird location ideas

I hope anyone interested in the Lincoln Arena discussion heard our interview today on the show with Lynn Darling.  She’s the closest thing there is right now to the face of organized opposition to the City’s arena proposal, and she’s trying to start a grassroots group to promote an alternative arena vision.  Now, to be clear, she thinks the city could use an arena, but she’s of the belief that the city is ramrodding their proposal and location through without giving it enough thought and public input.  Apparently she didn’t think the months of studies done by the arena task force were adequate to pinpoint the most advantageous spot, and as she told me on the air, she’s not really a fan of ‘experts’ and their opinions, particularly the ones that were offered indicating the West Haymarket was the best place to put in a new arena.  Anyway, if you want to hear the interview, it’s here.  We had a few callers say they thought we were too hard on her, and another emailer who complimented us on our class during the interview, so listen to decide for yourself.

Also, Deena Winter is continuing her streak of finding irrelevant, obscure or misleading ways to stir up opposition to the arena with her column.  Clearly, she’s decided that the only arena news she’s interested in is the stuff that’s negative and implies that the city is misleading the citizens.  Her column this morning went after Dan Marvin, who has been saying that the citizens of Lincoln will only foot the bill for 20% of the arena project.  She points out correctly (as has Dan, every time I’ve heard him speak on this) that in that calculation he includes private income from both the Breslow Ice Center and other private development in the area.  If you take that out of the equation, Lincolnites are paying (in occupation taxes) just under 30%, rather than 20%, according to Deena’s calculations.

Here’s the thing, though.  The number we care about isn’t the percentage of a project (whose parameters are arguable) for which we’re on the hook. Instead, I would argue most Lincolnites care about the total dollar amount they’ll pay, whether it’s 20% of the entire West Haymarket redevelopment project, 29% of the arena, or some other percentage of a different conception of the scope of this proposal.  That number hasn’t changed.  It’s the amount that will be bonded, which reports indicate will be about $24 Million. 

To make it easier to understand–let’s say John Bishop, Dane Ross, Coby Mach and I decided to take a road trip to Dallas for the Big XII Championship game and we decided to divide the items for which each person would pay, not necessarily in an equitable way, given our different financial positions, but just to be sure expenses were covered.    Let’s say John agreed to pay for tickets, Dane for our lodging, Coby for food & drink and I’d pay the expense to rent a van to make the trip, which cost $200.  

Assume John then ran some numbers and let me know that it turned out I was paying for 20% of the trips’ total cost.  Then Coby, always the fact-checker, dug into John’s numbers and realized that John had counted in the total cost of the trip the value of the leftover beer from Coby’s fridge that he was bringing along, which increased the that cost figure, even though it technically wasn’t an out-of-pocket expense.  The two agreed to disagree about whether the beer should properly be counted in the total trip cost.  In any case, let’s say I find out that although I’m still paying $200 for the trip, if we don’t classify the beer as a ‘cost of the trip’, my share is now 29% of the total cost of the trip rather than 20%.  Either way, I’m still paying $200 and that hasn’t changed at all.

I’m pretty sure that $200 figure would be a significantly more important number to anyone in my position than would be whether that accounts for 20% or 29% of the trip’s cost, depending on what you count as ‘part of the trip’.  Further, I’m not mad becasue it was never a secret that John was counting the beer in the trip, as he mentioned it every time we got together.  Now, I recognize it would be different if we had all agreed in advance to share an equal portion of the trip, but that’s not part of the story, nor is that the case with the arena’s financing. 

The takeaway is this:  I wish I was going to the Big XII Championship game.

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7 Responses to Arena Update: Overrated statistics and weird location ideas

  1. lucabrasi says:

    You need to post/link your response on the LJS comments section of her article.

  2. Gimme an Arena, already! says:

    Good job!

    $24 million dollars for everything that the Haymarket Arena project includes is a bargain and we as a community need to get behind it.

    I wish Deena Winter would stop trying to gin up negativity. We understand newspapers are going out of business and need to sensationalize to justify themselves but focus on the drunks on O Street instead of something that will actually improve Lincoln.

  3. Really? says:

    So let me get this straight: Your take is that the only number that matters is the amount of money we’ll get from the state (which is sales taxes paid at the arena and nearby hotels), and the bar/restaurant/hotel/car rental taxes and fact that we’re pledging out city’s full taxing authority to back up this whole plan DOESN’T MATTER TO YOU AT ALL? Get your head out of the sand, boys and stick to what you do best: banter about the weather.

  4. jackm1400 says:

    What????? Did you even read the post?? You were in such a hurry to get to the sweet zinger about the weather that you didn’t bother to understand either the article Deena wrote or my criticism of it. I never said the only money that matters is that money we’ll receive from the turnback tax. I don’t even know where you would have gotten that from. To clarify/repeat, I said the number that matters is the total money the city will have to repay (not the funds received from the state, which you incorrectly implied). That number would be the bonded amount that would be approved by the vote of the people (probably about 24M) That’s the “number that matters” because it has to be made up by occupation taxes and that’s where the risk lies. I want to make sure that we can recoup this number via those taxes and not have to look at a property tax increase down the road in 15 years. Thus, that number matters, as I stated. What doesn’t matter is whether we should characterize that $24M as 20% of the arena project or 29% of the total West Haymarket development.

    So, Mr. or Mrs. anonymous poster, it rings pretty empty when you come on here and imply that I’m out of my league and then you show your inability comprehend the subject matter. You clearly are concerned about the potential tax burden if the arena passes, as am I, which is why I’m trying to focus Deena on the number that matters–the bonded amount–rather than an irrelevant discrepancy about whether the ice center’s private funds should be counted as part of the “total project cost”.

    You were right about one thing, though. We’re awesome weather banterers.

  5. Gene says:

    So, tell me more about this leftover beer that John has in his refrigerator. I think a team of “experts” (led by myself) need to do a serious analysis of his contribution.

  6. Jen Rae says:

    Wow, Jack. You’ve just displayed an astounding lack of understanding about how this thing is getting paid for.
    1. The money the city will get from the state will come from sales taxes paid at the arena and nearby hotels. It’s not like a grant.
    2. That $24m “number that matters” to you is NOT “made up by occupation taxes.” WTF? It is the aforementioned turnback tax described in No. 1.
    3. The occupation taxes account for a whole nother piece of the pie, my friend. And if those don’t come in as planned, well then, expect your property taxes to go up, as they are doing in Omaha on account of overly rose projections. And it didn’t take them 15 years.
    4. I think more important than whether the public pays 20 or 30% is the city’s false promise that “the private” will pick up 80% of the tab when actually it’s 30% new local taxes; 30% private contributions; 37% arena revenue and the remainder turnback taxes. But that doesn’t sound nearly as good as claiming some magical fairy has offered to pay 80% of the cost, does it?

  7. jackm1400 says:

    Whoa, is this the Jen Rae I know? I assume she’d never dive headlong into this conversation with the mean-spirited weather-banter jabs, given our previous work together. That’s a conversation to be had outside the blog, though.

    I don’t have time for a full rebuttal this afternoon, although your comments beg one, so we’ll keep it short. i will clarify one thing. I understand the turnback tax goes toward retiring the city’s $24M bond. I didn’t intend to imply something different when I referenced that the occupation tax would go toward that debt, I can see how that was unclear. I’ve outlined that part of the plan fairly extensively last June in this space: https://jackandjohn.wordpress.com/2009/06/24/a-preview-of-the-arena-financing-plan/.

    At the time, when I spoke with Don Herz, he told me that not only would those turnback taxes be used to retire the general obligation bond, but the occupation taxes could also be used to bolster turnback revenue to pay back the bond. That’s still the case, as the current projections for occupation tax receipts on hotels conservatively don’t include the new hotels that would be built as part of this project, thus there’s a potential that those numbers could come in over projections and if so, they’d be put to use to retire the bond.

    In any case, I understand the general obligation bond will generally be repaid with turnback taxes (which, by the way, is something like a grant from the state to the city of sales tax revenue).

    All that said, parsing that sentence of my response is a gross diversion from the crux of the issue. Thankfully, your #4 above brings up a worthwhile discussion, and, in the end, reinforces the point of my original post criticizing Deena’s article. Nobody cares if the public’s share is 20% of the overall project or 30% of the arena alone, and Deena’s whipping up fury that the city is misleading people isn’t a particularly well-placed criticism when there are certainly other more important things for the voters to analyze.

    I referenced the 24M in the above article in making my overall point, as it’s the only actual part of the equation the voters get to weigh in on. You fairly point out that the occupation taxes retiring additional revenue bonds is an additional piece of the pie in addition to the 24M that we’ll vote on. THAT’s what we care about: what we’re on the hook for, whether it be occupation taxes retiring the revenue bonds or the turnback tax (and other sources) retiring the general obligation bond.

    One other note. You were critical of me for only caring about ‘the money we’ll get from the state’. Now I realize you must have meant ‘the obligation the city will have which they hope can be repaid by the money we’ll get from the state’. There’s a big difference there, thus my first response, but I believe I know where you’re coming from now, and we can dig into this further.

    I guess I had more time than I thought. I’ll continue my response to #4 when I get a chance.

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