Saturday, August 25, 2007

Harrison Square - Last Chance to Defeat it.

If you want to stop Harrison Square now is your chance.

Harrison Square is opposed by most of our community. Recently the Department of local Government Finance voted 4-2 to recommend the bond issue for this boondoggle. The board's recommendation will be considered by Cheryl Musgrave, commissioner of the Department of Local Government Finance, for final approval.

Contact Cheryl Musgrave and tell her you don't want this project. Send this email to everyone you know who doesnt want this project. Let her hear the voice of the public.

Her contact info is
Phone:317-232-3777
Fax:317-232-8779
email: propertytaxinfo@dlgf.in.gov

Below is what I sent.

Dear Cheryl Musgrave,

Today I read in the News Sentinel where the City of Fort Wayne is proposing to borrow $45 million to partially fund a private enterprise development using taxpayer money. This $45 million will be used to pay for the construction of a $30 million baseball stadium that at best seats 5,000 and would have 75 games. The City of Fort Wayne will contribute $225,000 a year towards maintenance of the ball field. Based on the current stadium's maintenance cost, the $225,000 is too little to cover costs based on accrual accounting. This means this new proposed stadium will slowly fall into disrepair and require either additional tax money to maintain or tear it down.

Total potential ticket sales are 375,000. The City of Fort Wayne has informed the taxpayers that we will get $1 for each ticket sale when total sales surpass 325,000 full paid tickets. A full price ticket does not include the promotionals or complimentary tickets. The maximum potential paid to the city of Fort Wayne is $50,000 a year. These total sales do not come close to paying even the yearly cost of maintenance.

The cost to the taxpayer to finance $30 million is over $1 million a year. A first grader can easily see that the baseball stadium is money looser. The same city council has authorized the borrowing of millions for the Grand Wayne center, which is continual money looser.

The majority of taxpayers in the City of Fort Wayne do not support the Harrison Square project. It was thrust upon the taxpayers with very little information presented. When questions have been asked, the city has stone walled answering and in most cases people gave up ever getting an answer.

The city council speaks in terms of creating 300 new jobs. The reality is the jobs that will be lost by closing the current stadium needs to be subtracted from this 300. Just as the jobs that were lost in the Allen County Department of Transportation when Fort Wayne annexed Aboite and Perry townships. In our case, jobs cannot be created or destroyed, just moved about the city.

The Harrison Square project in and of itself cannot and will not create new jobs, but simply shift where people now work. The only way for new jobs to be created is to actually create a new need and not displace a current business. To actually create 300 new jobs would require the City of Fort Wayne to actually see increased sales in the area totaling hundreds of millions of dollars. 300 jobs paying $30,000 a year requires $9 million in wages. For the taxpayers to recoup their $30 million investment, maintenance cost, lost property taxes and other revenues based on taxes paid by the average person that are directed to the city will require over $195 million in new sales a year. This would be equivalent to having nearly 7,000 people yearly visit Fort Wayne and spend $30,000 each. Another way is to look at 6.5 million people each spending $30 in Fort Wayne (No city residents).

The trickle down theory works only as long as you do not displace existing workers or business and an actual new need produces increased productivity, which allows for the new need to be filled by the existing infrastructure without detrimental effect to fulfilling existing needs.

Will this proposed new stadium attract 6.5 million people who do not live or already spend money in the Fort Wayne to the city of Fort Wayne yearly? The baseball stadium has a yearly capacity of 375,000. It is clear that the baseball stadium does not come close to 6.5 million. This means that in order to be self sufficient and be a positive affect on the Fort Wayne economy, we need something else that will bring the 6.5 million visitors to Fort Wayne that does not cost a penny.

I sincerely hope that you will listen to the taxpayers of Fort Wayne. Please do not approve the request by Fort Wayne to borrow money for Harrison Square.

Sincerely,

William Larsen

4 Comments:

At 8:24 AM, Anonymous Anonymous said...

You are completely forgetting (or ignoring) that naming rights revenue to the City is also placed into the maintenance fund.

 
At 1:17 AM, Blogger William Larsen said...

Anonymous, please provide a link to the location that identifies "naming rights." This is the first I have heard about "naming rights."

How much revenue is projected who projected this and what are the assumptions?

For a project of this size and scope, the city of Fort Wayne has done a terrible job at presenting the project. The information is too little and way too late. If you want to convince the public that this project is good, then you need to be open about it, present the material without asking and the numbers must add up.

The PDF files that are available are dated after July 2007. This information should have been available to the public prior to the very first vote by the city council. The city of Fort Wayne gets an F in this regard.

Cash flow analysis - no details such as bond rate or term, wages, number of workers, tax rates (sales, income, etc), personal exemptions (taxable income).

On page 7 of the Crowe report, it states it may produce 471 jobs and an increase family income by $68 million. This is $144,373 each. Who are we kidding? Are they mixing total income with yearly income? This report is a terrible report in terms of information. Table F does not even add up correctly.

Appendix C says it will produce nearly $1.2 million in sales tax. Is this Fort Wayne's share or total? If it is Fort Wayne's share, then how do the people of Fort Wayne earn nearly $200 million more just because we build a stadium? I know my income won't increase. Is the income generated by Harrison Square nothing more than shifting existing income from some where else?

I see no offset listed for loss of sales or employment to existing establishments.

 
At 8:55 AM, Anonymous Anonymous said...

You would do well to read the Stadium License Agreement. From the document, Article VIII:

For the initial term of the Naming Rights Agreement, which is anticipated to be 10-15 years, the City and Hardball shall each receive fifty percent (50%) of all revenues related to Naming Rights for the Stadium up to Three Hundred Thousand Dollars ($300,000) per year net of costs for signage and inventory. The City shall receive One Hundred Percent (100%) of all such revenues in excess of Three Hundred Thousand Dollars ($300,000) per year

...

All revenues derived by the City from the sale of Naming Rights will be deposited directly into the City Maintenance
Fund described in Section IV(D).


Hopefully you would be more well read if sitting on City Council.

 
At 7:58 PM, Blogger William Larsen said...

Anonymous wrote "
For the initial term of the Naming Rights Agreement, which is anticipated to be 10-15 years, the City and Hardball shall each receive fifty percent (50%) of all revenues related to Naming Rights for the Stadium up to Three Hundred Thousand Dollars ($300,000) per year net of costs for signage and inventory. The City shall receive One Hundred Percent (100%) of all such revenues in excess of Three Hundred Thousand Dollars ($300,000) per year

...

All revenues derived by the City from the sale of Naming Rights will be deposited directly into the City Maintenance
Fund described in Section IV(D).


Do you understand what this says? 50% of revenues up to $300,000 a year. Revenue is after costs. This means if the margin is 10% on each sale, then we are looking at $3 million dollars of, which it is split 50/50. This means sales need to exceed $6 million. If we have a sell out at each game we would have 375,000 people. Each would have to spend $16 each. Since I have not been to a ball game and actually don't care to go to one, I would find it difficult to believe that a family of five going to a ball game would not only spend money on tickets, possible eats and drink and too top it off spend an additional $80 each game. Now if we do not have a sell out each game, the amount each attendee needs to spends increases. Quite frankly, after the first several years, would the merchantability decrease as the market becomes saturated? Do attendess buy new stuff every year like shirts, ball caps, etc?

On page 7 it says the City gets 10% of gross revenues after taxes from concessions.

A $30 million stadium open to the weather will cost 1.5 to 2% of construction costs per year and most likely more.

 

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