I am getting kind of confused by the financing on this but the two recent articles in the Telegram that I have read the past week but here is what I come up with. This is not a a TIF or DIF, but something completely new created during Governor Romney's last days in office, the DCU Special District Finance Zone. It is a fixed geographic area consisting of four parcels: the Hilton Garden Inn, the Residence Inn by Marriott on Plantation Street, the DCU Center arena and convention center and the Major Taylor Boulevard parking garage, including its retail space and operations.
The bill authorizes the City of Worcester to borrow up to $30 million to finance the construction of the “sky bridge” and upgrades to the DCU Center. The initial loan order recommended by the manager initially authorizes $5.125 million in bonds to be issued for the $7 million sky bridge project. The balance ($1.875 million) of the financing for that project is already part of the city’s Five-Year Capital Improvement Plan. How does the City of Worcester pay this back?
The special district designation allows “net new” state tax revenues, such as meals and sales taxes, collected at those establishments to be redirected to the city. The state will continue receiving existing tax revenues from establishments in the special district financing zone, but it will dedicate the "net new" revenues from that zone to the city so it can repay the loans that are taken out for the sky bridge project and improvements to the DCU Center.
Two things can happen.
1. First the DCU Special District Finance Zone will do additional business and the "net new" state tax revenues collected will be redirected to the city, pay the notes and cost the city tax-payers nothing.
2. Second the DCU Special District Finance Zone does no do any additional business and does not create any "net new" state tax revenues. In the later case the note would have to be paid back so I would think it would come out of the City's general fund.
All I am saying is that there is some risk here. In fact Mr. O’Brien emphasized that the loan authorization limits any further capital improvements to proceed beyond the first allotment of $5.125 million. He said further work would be dependent upon the revenue-generating success of the DCU Special District Finance Zone. The loan authorization requires the city manager, with the assistance of the city treasurer, to report to the City Council on revenues generated by the special district, to demonstrate that they can financially support additional capital improvements beyond the first allotment.
In the end the questions is will these investments create the additional "net new" state tax revenues to pay the notes thus not cost the taxpayers of Worcester?? Reminds me of buying stock on margin. If the stock goes up, you can make some great returns. On the other hand if the stock drops, you get a margin call.
WRRB/Telegram District City Council Forum 10/18
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This forum is for all district council candidates; all candidates are here
today. Format: 14 total questions, 4 questions across districts (for all
candida...
6 months ago
8 comments:
What are net new revenues?
$5M of debt will require $250,000 just to pay the interest every year at 5%. Add another $250,000 to pay off the principal over 25 years and total debt service is $1/2 Million per year.
I do not know what the hotel room tax rate is, but meals tax is 5%. Raising $1/2M per year in net new taxes would then require "net new meals" of $10M in the district. I dare say that's the equivalent of serving 10 Million 99 cent McD's cheesburgers. I hope that new restaurant (in the new Hotel) and Beechwood have a 24/7 drive thru to catch all the drunks and stoners with the 2:00 am munchies! I can just see it now, rather than the stoners driving to West Boylston to stare up at the TV antenna they now can stare up at the skybridge: "Like wow man, $5M for that bridge thing. Those city councillors musta been smokin' Left Handed Luckies when they dreamed up this bridge."
Who is doing the projections for this increased tax revenue flow? I want to see it! Is it the same folks who UNDERESTIMATED the cost of the skybridge by 100% or maybe the folks who put together the airport RFP.
Does anyone think that including the Beechwood in the DCU Zone is stretching things a bit? Anyone give any thought to why they did it? I think the answer is simple.
What's next, including Lake Quinsigamond in the special Canal District Financing Zone or including Westwood Hills in the Main South Community Develpoment Zone?
Jahn:
I always love your comments. First off, I believe in the City of Worcester, the Airport, etc more then anyone else.
At the same time that you need to look at things realistically, which to me means crunching numbers.
PILOT payments are back in the news this morning. Mr Rosen, Ms Haller, and Mr palmieri have filed a communication to MOB re PILOT payments.
I wonder how these 3 counciloors voted when it came time to hand over millions in city funds to the new non profit,$26M Bijou Deja Vu Theatre?
I know Mr Palmieri recommended and voted to waive $190,000 in permit fees. How does he reconcile this vote with the filing of an order for PILOT payments from nonprofits? I mean I was born at night, but it wasnt last night. Hand them $190,000 then go begging from them for a possible paltry PILOT payment, if anything at all.
How did Mr rosen and Ms Haller vote. Does the hypocrisy extent to these two also?
I have no problem with PILOT payments, but you dont hand over piles of cash to councillorss who spend like drunken sailors and who have max'ed out the City's Mastercard.
Why dont these folks go affter sick pay? There's million s os dollars being flushed down the toilet every year in this city for sick pay. Average city employee takers 10 or 11 sick days per year. The all tackle the easy issues. None of them have the political cahonnes to take on the sick pay issue.
I was on a task for on the PILOT program. Make a long story short there is no way you can force a non-profit to pay taxes so you need to try and figure out a way to best utilize the assets of the non-profits to benefit the City of Worcester and their residents.
Let me tell you, Rep Jim Leary really did a great job and we had some great recommendations, which turned into the creation of the univercity partnership (http://www.univercitypartnership.org)
The partnership, however, has put into effect little , if any of the recommendations,that we worked on.
Quick question do you know who heads this?? Answer -- Armand Carriere.
Can anyone name one thing that the Univercity Partnership has done that has created a tangible return (dollars and cents) from the non-profits back into the City of Worcester tax base. By this I mean new things since its creation?
Can anyone name one recommendation from the task force that the Univercity Partnership has instituted???
Bill, these all have a common denominators.
Task Forces
Blue Ribbon Committees
Consultant Studies
WMRB Recommendations
Panels
Commissions
The list is endless.
Lotsa money & time spent. Recommendations galore and all these reports gather dust and littel, if any, of the recommendations are implemented.
So WTH bother wasting peoples' time. Small wonder it's hard to find qualified individuals to serve in City volunteer positions and/or on city boards & commissions.
Jahn:
It really was a report full of great recommendations. The City Councilors pushing for the PILOT should grab the report and ask Armand Carriere how is he doing with the recommendations.
Bill
bILL, MY PERCEPtion is that these councillors are really prostituting themselves on the PILOT altar when tthey cry alligator tears about teh need for non prifit PILOT payments......yet........turn around and vote all kinds of concessions to the likes of the new E M Loews
Let's say I own a restaurand on Shrewsbury St and now I ma looiking at poss. having to charge another 2% meals tax to my customers. Then I look across town to the new Loews Theatre and I see all kinds of goodies being dished out the Loews Group and I'll betcha Loews aint getting hit with 2% add'l tax. I wonder if they even have any tax on ticket sales?
None of these 11 overpaid counciloors will tackle the expenses. All they do is look for new taxes to impose.
What would you think if you walked in a restauranteur's shoes
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