What guarantee does the City have that "over $20 million in private funds pledged for the GPAC" will be received?

From "Proposed Greensboro Performing Arts Center (GPAC) Frequently Asked Questions;

There have been over $20 million in private funds pledged for the GPAC. What guarantee does the City have that those funds will be received?

Once private donations are confirmed [meaning they are not], the Community Foundation will provide a “Letter of Credit” to the City, prior to the start of the project, from which funds may be drawn down as the project is constructed. The Community Foundation will, in effect, obtain a line of credit from a bank at an agreed upon interest rate. The donors will pay the bank’s line of credit back and the Community Foundation will be responsible for the interest charged.

The Community Foundation is managing all of the donor pledge amounts and payback schedules.
Where is the Community Foundation getting the money to pay for the interest charged?
What are the financing terms on the GPAC? How long will it take to pay off the debt?

It is estimated that there will be $51M ($30M principal +$21M interest) of financing costs paid over approximately 28 years for the City portion, ending in 2042.

There will be another $30M from private pledges managed by the Community Foundation.
How is $10 million being raised through premium parking fees?

The fees are based on an AMS study projection of 250 spaces and 180 events per year.

Multiplying 180 events by 250 spaces at $15 per space, the gross revenue per year is $675,000.

If use is only on 149 events, or some other variable, the rate-per-space can be adjusted to draw the same gross.

As an example, figuring 149 events multiplied by 250 spaces at $20 per space works to achieve the needed gross revenue.
What if the 250 cars per event don't show up because there is plenty of low cost parking nearby?

Why would who suggest higher prices would still sell 250 spaces?

What if only 100 spaces per event get sold, because most can park across the street for $3?
Answer; Tax increase.


W.E. Heasley said...

When politicos build monuments to themselves and/or engage in showing they are “doing something”, the process, in the main, is that of focused benefit through diffused expense. Hence the politico’s pet activity focuses benefits on a select few at the expense of the diffused many. The diffused many are the unorganized taxpayer/public while the organized few become the focus of the benefit bestowed.

The benefit bestowed, the cost thereof, is politically framed as having a particular limit and hence an “estimate” is produced. The estimate is not one of rigorous number crunching or one with consideration of cascading unintended consequences, rather it is merely a notional proposition held forth as a fact. The notional aspect can clearly be demonstrated by the resulting track record of massive cost-over-runs being the normal in public projects.

The “benefit” is depicted as a first stage economic consequence. Focus is purposely-politically on the first stage economic benefit. That such first stage economic benefit is “the benefit” and will never vary much in degree. Many first stage economic benefits, even of the most notional of intentions, yield a positive effect. However, second through twentieth stage economic consequences, generally of the negative cascading consequence variety ( when notional propositions are deployed) are purposely not considered. Why? Because politicos have a “political time horizon” [next election] which perfectly matches first stage economic consequences.

Once the notional particular limit is defined [the estimate] then the price of such estimate is purposely-politically depicted as an intention that is lower priced than the result [benefit] to the greater public. The result is depicted as a known-known basically through the same notional propositions underlying the estimate mentioned above.

The exercise of politicos building monuments to themselves and/or engaging in “doing something”, which are merely exercises in focused benefit through diffused expense, are then depicted as factual intention/result exercises. Stated alternatively, the intention/result which are notional in nature are held forth as factual in nature. That any expense is really a benefit.

Generally, the end product is expense exceeding benefit in the medium and long run and the highly diffused and unorganized taxpayer being saddled with providing a focused benefit upon an organized few.

The beauty of such notional propositions is that the politico suffers no direct expense nor political expense for failure as taxpayers years from now pay the price of failure of a politico long retired. Yet the politico reaps the rewards of the first stage economic consequence to match their immediate political time horizon.

Political dupery and nitwitery can be very expense.

Anonymous said...

The City's FAQ says it is using projections of 180 events per year from an AMS study, but neither the AMS study to which they link nor the other AMS study project 180 events.

Did City staff just make that up and lie about its source?

Also missing from the calculus, loss of property taxes from removing private property from the tax rolls and loss of current parking income from the city parking spaces already at the location.

g said...

The loss of property taxes is about $115,000 per year, as I recall someone telling me.


Great point though.

Looking into the 180 number.

g said...