StanN
09-27-2004, 01:39 PM
The Cary Town Council is a model of thriftiness in comparison to the Wake County Commissioners. The WCC is subsidizing a new, larger convention center including a luxury hotel with a rooftop swimming pool. I am not talking about the infrastructure for the hotel - a direct subsidy for the hotel is included in the $200 million package. The entire package will be financed through certificates of participation (COP's) - none of us were given a chance to vote on convetntional bond financing which would have carried a lower interest rate. The interest on the COP's plus the repayment of the principal plus the operating subsidy of the convention center, estimated at $2 million per year totals $730 million over 30 years. 20% 0f that is supported by taxes generated here in Cary. Everytime you eat out in a restaurant or buy a prepared meal in a supermarket you are paying for that hotel and convention center. If Mayor McAlister or the CTC proposed a direct subsidy for a luxury hotel in Cary - what would be the reation on this site? People here go ballistic over $200K for artwork in fron of the new town hall. But $20 million for a luxury hotel is OK? And do we really need a new Convention Center? Who wants to go to Raleigh for a convention? Yet WCC chairman Kenn Gardner and the other Wake Commissioners have supported this giant boondoggle which we are paying for.
Here is an excerpt from the minutes a joint meeting of the WCC with the Raleigh City Councl - both of which had to agree to the project. ( Commissioner Jeffries was the only dissenter on the WCC on the basis that citizens should have the right to vote on the project.)
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Mr. Regan presented the following handout.
Local Taxpayers Paying for Almost Half of Project
Estimate: 80% of Prepared Food & Beverage Tax is paid by Raleigh and Wake citizens.
Estimate: 20% of Occupancy Tax is paid by Raleigh and Wake businesses hosting visitors.
Estimate: Burden of Convention Center and Hotel project carried by local citizens is $358 million.
Justifying Taxpayer Investments
Taxpayers don’t choose to invest, they are forced to invest. Even if the majority agree, the minority are forced. Therefore, the standards for investment of taxpayer money must be higher than those for investment of private money.
Poor Investment for Taxpayers
We are asking local taxpayers to invest $358 million in tax revenue for a return of $50.2 million in tax revenue.
This is a 20-year return of -86%.
Question
Why is it okay to have a low or negative return on taxpayer investments?
Commissioner Ward pointed out she feels it is necessary to look at the big picture and consider all the spin off benefits such as additional jobs, businesses, etc. Mr. Regan indicated at this point he does not know how North Raleigh (no less Cary) would benefit from things going on downtown and would like everyone to consider these final questions. Councilor Crowder indicated he does not necessarily agree with this position. His parents and his grandparents all had to pay taxes. The per capital income back then was very low, but today Raleigh is one of the best places in the Country to live. His quality of life is much better than when he grew up and he is very glad people had the courage to invest in his future.
City Manager Allen pointed out there are also economic benefits of this project. He spoke to the net increase for Wake County for the first five years as well as the new jobs that will be created. He noted the value must be given to the asset and the public will own the convention center .
Commissioner Jeffreys asked if he had any figures on the new jobs that would be created. City Manager Allen indicated it would be a range of jobs, typically tourism and related jobs such as accountants, property managers, and service-related jobs it is a very large range. Commissioner Jeffreys indicated that hotel would only require one manager and one accountant but there would be a considerable amount of service workers.
(note by sn..service workers = maids and janitors earning a minimum wage that provides perpetal poverty.)
Commissioner Bryan spoke to the projection of $260 million in the next five years and asked if they had projections for the next 20 years with City Manager Allen indicating he did not have those numbers. Commissioner Bryan indicated he feels there will be an economic benefit for the community. City Manager Allen pointed out there will also be a benefit for the State.
Mr. West noted there are other opportunities that may spin off from this project that will give an improved quality of life to Southeast Raleigh and strengthen the City overall.
Commissioner Council indicated he feels there are two risks; the first is if nothing is done, the second risk would involve making a decision and moving forward with that decision. They can always question their actions but at this time they don’t know all the answers. He is inclined to move forward with this project and additional information will continue to come in that will add clarity to the process. There is a vision of where we want this community to go and does not want to make the same mistakes as the RBC Center. He indicated they can sit around and beat it to death or move forward and feels we have to have a sense of faith in the people who we have hired to do this.
A motion was made by Commissioner Ward to enter into an agreement with Stormont-Noble as recommended by staff.
Councilor Regan indicated he knows he is in the minority and has a tremendous amount of respect for City Manager Allen but as elected officials they weren’t elected to have someone else make decisions. He asked that everyone consider the value of the asset. They are asking taxpayers to invest upfront and collect rent. Statistics have shown that these structures typically are not money makers and a structure that loses money is not an asset. He asked everyone to consider the economic benefits and the multiplier effect. If they take the money they would have taken from the taxpayers and return it to them to buy the things they want then entrepreneurs would build the businesses that the taxpayers want; however, if you taken money from one and you cannot show how they get it back you are simply transferring wealth from one person and giving it to someone else. (note from sn ..giving it to the restaurant owners and land oners in Raleigh who lobbied for the convention center)
County Manager Cooke speaking to the motion as made by Commissioner Ward indicated the next step to take would be for the City Council to authorize City staff to enter into a development agreement negotiations with Stormont-Noble. This should take place at the January 20 City Council meeting.
No second was received to the motion and the motion failed.
Here is an excerpt from the minutes a joint meeting of the WCC with the Raleigh City Councl - both of which had to agree to the project. ( Commissioner Jeffries was the only dissenter on the WCC on the basis that citizens should have the right to vote on the project.)
--------------------------------------------------------------
Mr. Regan presented the following handout.
Local Taxpayers Paying for Almost Half of Project
Estimate: 80% of Prepared Food & Beverage Tax is paid by Raleigh and Wake citizens.
Estimate: 20% of Occupancy Tax is paid by Raleigh and Wake businesses hosting visitors.
Estimate: Burden of Convention Center and Hotel project carried by local citizens is $358 million.
Justifying Taxpayer Investments
Taxpayers don’t choose to invest, they are forced to invest. Even if the majority agree, the minority are forced. Therefore, the standards for investment of taxpayer money must be higher than those for investment of private money.
Poor Investment for Taxpayers
We are asking local taxpayers to invest $358 million in tax revenue for a return of $50.2 million in tax revenue.
This is a 20-year return of -86%.
Question
Why is it okay to have a low or negative return on taxpayer investments?
Commissioner Ward pointed out she feels it is necessary to look at the big picture and consider all the spin off benefits such as additional jobs, businesses, etc. Mr. Regan indicated at this point he does not know how North Raleigh (no less Cary) would benefit from things going on downtown and would like everyone to consider these final questions. Councilor Crowder indicated he does not necessarily agree with this position. His parents and his grandparents all had to pay taxes. The per capital income back then was very low, but today Raleigh is one of the best places in the Country to live. His quality of life is much better than when he grew up and he is very glad people had the courage to invest in his future.
City Manager Allen pointed out there are also economic benefits of this project. He spoke to the net increase for Wake County for the first five years as well as the new jobs that will be created. He noted the value must be given to the asset and the public will own the convention center .
Commissioner Jeffreys asked if he had any figures on the new jobs that would be created. City Manager Allen indicated it would be a range of jobs, typically tourism and related jobs such as accountants, property managers, and service-related jobs it is a very large range. Commissioner Jeffreys indicated that hotel would only require one manager and one accountant but there would be a considerable amount of service workers.
(note by sn..service workers = maids and janitors earning a minimum wage that provides perpetal poverty.)
Commissioner Bryan spoke to the projection of $260 million in the next five years and asked if they had projections for the next 20 years with City Manager Allen indicating he did not have those numbers. Commissioner Bryan indicated he feels there will be an economic benefit for the community. City Manager Allen pointed out there will also be a benefit for the State.
Mr. West noted there are other opportunities that may spin off from this project that will give an improved quality of life to Southeast Raleigh and strengthen the City overall.
Commissioner Council indicated he feels there are two risks; the first is if nothing is done, the second risk would involve making a decision and moving forward with that decision. They can always question their actions but at this time they don’t know all the answers. He is inclined to move forward with this project and additional information will continue to come in that will add clarity to the process. There is a vision of where we want this community to go and does not want to make the same mistakes as the RBC Center. He indicated they can sit around and beat it to death or move forward and feels we have to have a sense of faith in the people who we have hired to do this.
A motion was made by Commissioner Ward to enter into an agreement with Stormont-Noble as recommended by staff.
Councilor Regan indicated he knows he is in the minority and has a tremendous amount of respect for City Manager Allen but as elected officials they weren’t elected to have someone else make decisions. He asked that everyone consider the value of the asset. They are asking taxpayers to invest upfront and collect rent. Statistics have shown that these structures typically are not money makers and a structure that loses money is not an asset. He asked everyone to consider the economic benefits and the multiplier effect. If they take the money they would have taken from the taxpayers and return it to them to buy the things they want then entrepreneurs would build the businesses that the taxpayers want; however, if you taken money from one and you cannot show how they get it back you are simply transferring wealth from one person and giving it to someone else. (note from sn ..giving it to the restaurant owners and land oners in Raleigh who lobbied for the convention center)
County Manager Cooke speaking to the motion as made by Commissioner Ward indicated the next step to take would be for the City Council to authorize City staff to enter into a development agreement negotiations with Stormont-Noble. This should take place at the January 20 City Council meeting.
No second was received to the motion and the motion failed.