Entries Tagged 'Taxes' ↓

How much does The Denty contribute to it’s mortgage payment? Very Little.

Did you know that the mortgage payment on The Denty is around $10 million a year? Did you also know we pay that debt service out of one of our 3 pennies our city takes in for revenue? We pay debt service on all of our bonds out of the 2nd penny, money originally set aside a long time ago by city commissioner Loila Hunking for ROADS and other infrastructure.

Of course, if The Denty is contributing to that 2nd penny, it does with help with the mortgage payment – we will get to that contribution shortly.

We heard it just about a month ago, Garth Brooks sucked $7 million in ticket sales out of our town straight into his pocket. The news today, the Foo Fighters (which I contributed to) had record ticket sales, guess where? At The Denty where they sucked a record $1,018,273 out of town, FROM ONE CONCERT! That is an average $93 per person. Guess how much we garnered for the 2nd penny on the Foo Fighters show from ticket sales? $10,182. Woot! Woot!

While I have been asking for numbers from the city for awhile about how much money we are making from The Denty (that could contribute to the mortgage payment) I haven’t gotten very far, but I did get a small breakthrough today.

According to the City’s Finance Director The Denty collected $1,824,710.19 in tax revenue for 2016. If you break out the 3 pennies we get (The state gets 4.5 pennies) we took in $729,884 and if you break it down to single pennies, since the 2nd penny is the only one we use to pay debt, it comes to $243,295, hardly a ‘dent’ (excuse the pun) in the mortgage payment.

Yes it is true besides the taxes that The Denty collects, their is an economic impact. My guess is at the highest it would probably be about 3x what The Denty brings in. You have to figure that half already live in Sioux Falls and the other half probably spends a majority of their money at The Denty since we built the facility along the interstate and not in the center of an entertainment district, visitors drive straight there, spend there money there, then drive straight home.

But the almighty Finance Director also fills us in on some other interesting information. Doesn’t the city get a share of the profits SMG makes off of the The Denty?

Ah, not really. Here is how he explained it in a recent email to council;

Revenues generated for SMG as a private sector company are limited to the fees paid to SMG as set out in their contract with the City: a base fee and, if earned, an incentive fee.  These fees are how SMG makes its money as a business.

Revenues generated from the operation of the City’s facilities (DSPC, Convention Center, Arena, Orpheum Theater) are revenues to the Operating Account managed on the City’s behalf by SMG.  Revenues to the Operating Account include rental fees, charges for additional services provided to guests that rent the facilities, ancillary revenues (food & beverage commissions, novelty sales, parking charges, suite cleaning, facility fees, etc.) and marketing & sponsorships (advertising, naming rights, suite leases, loge box leases, club seat fees).  All revenues generated from these sources are deposited into the Operating Account and are used to pay the costs of running the facilities (payroll, utilities, cleaning & maintaining the facilities, SMG’s management fees, internet/telephone, office supplies, insurance, etc.)

In small man’s word’s, any money The Denty makes that isn’t collected tax revenue goes straight back into a fund to support the building. In other words, while SMG and it’s management make money and are able to pay the light and garbage bill, they are contributing NOTHING to the mortgage payment. Zilch. SMG is essentially making a profit and paying rent.

I’ve said all along, The Denty wasn’t built for you and me, it was built to make a bunch of bond investors and construction company owners a lot of money. You have to realize out of the $180 million dollar payoff $65 million is interest payments. That’s $65 million that won’t be spent on our roads and handed directly over to private bond investors.

I still think we could have built The Denty with a combination of private investors and money from the state’s investment funds (that we would pay back in no interest or very low interest payments). Instead we decided to go it alone, built it in the wrong location, an don’t require the profits from the facility to pay off the debt.

The f’cked up siding is one thing, but the finances of this place are a total disaster. And the mayor calls himself a ‘banker’. LMFAO!

Councilor Neitzert misses the mark on the Lloyd TIF

Sioux Falls city councilor Greg Neitzert was doing the 2nd half of his SE Podcast stint this Sunday.

He was asked about TIFs and specifically the Lloyd TIF. He did a fantastic job of explaining how TIF’s work (it is essentially a property tax rebate). He also made great arguments as to why the TIF for UPTOWN II was for good reasons. On the face he is correct. We are using the TIF money to clean up soil, old buildings, asbestos and constructing some minimal public parking. Like I said, on it’s face it sounds like a great use.

But let’s look at reality. First off, we have NOT collected a penny in property taxes on the land for over 11 years. Nothing. Zilch. ZERO.

The TIF (Tax rebate) will last for 13-14 years. We will essentially be getting little to no tax revenue from the property for almost 25 years.

But what makes this TIF controversial is the fact that Lloyd promised to buy this property in 2006 and for some strange reason we let it sit for 11 years, and the only real reason I can come up with is that we were HOLDING it for the developer (with no major retainer of down payment). One developer in a city that has dozens of high profile, successful developers that would have loved to get their hands on that land, some of said that.

I guess I will never know the reason why we held the land for Lloyd Companies (I was looking for it in the Siding Settlement, but couldn’t find it).

I do know this though. Within those 11 years the city did NOTHING to either sell the land, clean up the land (with EPA grants) or even send out any RFPs. Why? Doesn’t it seem strange that while we were getting $27 million in Federal Dollars for a plot of dirty RR land we didn’t set aside a few bucks to clean up this property, put in curb and gutter and parking and sell it?

While Neitzert makes some good points about the usage of TIFs, the deal with Lloyd stinks.

*Also an important note. All of the councilors who voted for the TIF (besides Neitzert) received campaign donations from Craig Lloyd and councilor Selberg earns his living as a broker for the Lloyd Companies (he did not excuse himself). Councilors Starr and Stehly (who have never gotten campaign donations from Lloyd) voted against the TIF.

Thune still fantasizes about Reagan’s ‘Trickle Down’ economics

You know, because if the rich get tax cuts they will pay more . . . LOL. It amazes me how the GOP continues to sell that BS lie.

UPTOWN II Tax Increment Financing (TIF) DOES NOT benefit the public

You can watch the whole Sioux Falls Planning Meeting,

notice how there is almost ZERO discussion before approving the Lloyd TIF. How ironic, our planning commission will horse trade for 45 minutes over the timing of a church’s electronic billboard but spend only a few seconds on giving away a $4.1 million dollar tax rebate to a wealthy developer.

Heck, even after George Hahn came and pointed out their tax valuations were incorrect and the TIF should be deferred until those numbers can be corrected, they still marched forward.

Hey, what’s a few million here and few million there when we are short changing public education? They will just raise taxes on the worker bees to make up for it.

Lloyd Companies asks for TIF next week

They will request the TIF during the Planning Meeting, next week (Wed, Sept 6 – 6 PM).

If you read the attached documents you will see that the Lloyd Companies was probably seeking $5.1 million to begin with, the ‘proposed’ cost of the soil cleanup (still am struggling with the fact that cleanup is this much).

I could say many things about my opposition to this TIF, but you have probably already heard it. I will say this though, we need as many people from the public at this meeting in opposition to get it on public record. I’m not naive, the planning department recommends approval and the commission will probably approve it, I would be shocked if they did not.

My main opposition is that it takes money from the public schools and county. And with all the opt-outs lately, this is NO time to give tax discounts to wealthy developers on prime downtown property.

City Plans to tap Entertainment Tax slush fund for SF Stadium and SMG

Looks like SMG isn’t happy enough with padding their pockets with the Orpheum, the Arena and The Denny, they now want a piece of the pie at Sioux Falls (Canaries) Stadium, and with the slush fund called the entertainment tax they see dollar signs. As we know, with the EC, they get paid, the entertainers get paid, the promoters get paid and concessions manager Ovations gets paid while the taxpayers are stuck with the maintenance and mortgage that is well over $10 million a year.

Another scam that just sends more money straight out the door of our community while not helping to pay the REAL bills.

Just look at the budget boost from 2017-2018.

More concerns about a possible multi-million dollar TIF to developer

As I have mentioned before, with Sioux Falls School District recently passing a $50 million dollar opt-out and the plans for a possible $30 million dollar bond for a new HS this is the WRONG time to be handing out property tax discounts in the form of TIF’s to wealthy, successful developers. Not to mention all the issues with open enrollment causing widespread segregation and almost half of Sioux Falls students on FREE or reduced lunches.

Here are a few more reasons;

• The county is struggling to make ends meet with rising crime while building a new jail.

• Developers, especially one of the largest in the city, having been doing very well for a long time, especially with record breaking building permits, do they really need tax discounts or breaks to be successful? Shouldn’t we be focusing tax incentives on affordable and workforce housing and not retail and luxury lofts?

• The state is in the midst of considering some rule changes when it comes to giving so much power to municipalities concerning TIF’s. Expect some legislation in the upcoming 2018 session. Not only does the county and school district want a bigger say in these matters, so does the state.

• There are numerous conflicts of interest on the council. Besides Councilor Marshall Selberg being an independent contractor for Lloyd Companies, the mayor and some of the others have received campaign donations from Lloyd. Starr, Neitzert and Stehly seem to be the only candidates who have not. You can’t hardly vote on a $43 million dollar project with a TIF incentive with only 3 votes.

There are way to many conflicts of interest here for the council to even consider a TIF incentive. I think approving the project is fine, but when it concerns a tax discount, that should be taken off the table.

Garth Brooks sellout is a perfect opportunity to give us the real numbers

It didn’t take long for the usual mouthpieces to come out talking about the economic impact of the Garth Shows, which is no surprise;

Teri Schmidt, executive director of the Sioux Falls Convention and Visitors Bureau, said anytime a concert sells out it means an infusion of money to bars, restaurants, hotels and gas stations in the city. But a household name that draws people from all over the country like Brooks raises the bar even further.

“Even if we said the average person would spend an average of about $100, that’s another $4.5 million in economic impact — just in a blink of an eye,” she said. “Throw in the possibility of an overnight stay, going out to eat, maybe they do a little shopping, fill up their car with gas — it’s going to be a great week in Sioux Falls.”

That’s good news also for local governments that find themselves dealing with sluggish sales tax revenues.

Which comes to about $135,000 in sales taxes to the city coffers (if you count all 3 pennies the city takes in). But let’s say everyone spends double that, that’s a whopping $270,000.

I won’t dwell on that.

As I have said all along, I would like to know the amount of money that is spent at the Denny (not at other businesses citywide) that leaves town. In other words how much goes to Garth, SMG and Ovations, and how much of that gets recirculated in Sioux Falls?

People have argued with me that the Denny is bringing in MORE money to the community, yet;

1) The city and SMG won’t show us the actual sales numbers AND

2) sales tax revenue has been slowly declining in SF since the Denny opened YET most shows are sellouts.

With all the additional sales at the Denny and people coming to Sioux Falls for this extra entertainment, why haven’t we been seeing a boom in sales tax growth?

You know I know the answer why, but will the city have the nads to admit it?

Tax OPT-OUT fails to get enough signatures

I knew it was going to be a rough road getting that many signatures in a short period of time. I think they lacked the manpower to get it done. Not sure how many they were short, but after talking to a couple different people from the drive and associates it looks like they came up about 1,000 short (which ironically means they got about as many signatures as the number of people who voted in the last school board election) So I guess we are stuck with paying the $50 million dollar ‘SINISTER’ tax.

I also got thinking about the statement from the school board that they wouldn’t spend the entire tax, and that’s all fine and dandy, but they still have to ‘collect’ the tax. So does that mean at the end of the year, what they don’t spend will be refunded back to us?

LOL!

In other words, even if they don’t spend it, it still gets collected and goes into investments. At least the school district will not only be able to retain teachers they will keep some stock brokers in Sioux Falls employed. Now shut up, go pay your higher taxes on food so we can retain teachers who teach kids on FREE and reduced lunches. Makes sense? Right?

Soccer Tournament Economic Impact? The Proof is in the Pudding.

We will have to wait until the City of Sioux Falls June finance report comes out before we know the actual impact of the Soccer tournament to the sales tax rolls. The ‘CLAIM’ by the organizers and CVB is a $17 million dollar impact which boils down to about $480,000 for the city tax rolls (this is counting the 1st, 2nd and 3rd Penny entertainment tax BUT not the state’s 2 penny cut) which would be a $160K bump to each penny that we would not have normally seen the year before. Since the numbers have been running a little flat to under what it was last year, this bump should be noticeable.

As I have also argued the city probably kicked in about $20-40K in resources to help support the tournament in traffic control and park maintenance.

We’ll see if the $17 million dollar guestimate holds any water really soon.