There was often a lot of talk to the run-up to the vote for the Events Center about ‘economic impact’. But was that ‘impact’ ever really broken down? And who is benefitting (economically) the most?
In all fairness the mortgage on this facility, to reach probably well over $180 million (not including operations and maintenance over the next 30 years) will be paid for out of the CIP, one of two pennies the city gets from sales taxes. Â So in some ways visitors to our city and EC will help pay that mortgage. But even if the sales generated from the EC (lodging, fuel, food, tickets, etc.) was around $200 or $300 million a year that is only $2-3 million into the CIP, a far cry from our $10 million dollar mortgage each year. The comparison kind of reminds of how much taxpayers have put into platting fees versus the developers.
Also factor in whether the place will stay in the black with operations, maintenance, upgrades, etc. Even with sponsorships, it may squeak by, and on a generous note, if the EC actually makes the city a profit each year, will that money go into the CIP to help pay the mortgage? A question that has only been vaguely answered by several city officials saying the same thing, “That’s a possibility.†Which means . . . NO.
Let’s face it, if the facility does make a profit, we may never know, because profits will quickly be eaten up by the managing companies that run the facility and promoters. I have a feeling we will magically always end just a little in the black each year, with someone else besides the lowly citizens of SF enjoying the spoils.
So besides the public supposedly benefitting from this economic impact (we will get to that in a moment) who else has REALLY benefitted (economically) from the EC’s construction?
– The bonding company that sold the bonds gets a percentage of the sale, instead just a flat fee.
– Mortenson and several contractors have benefitted, and depending on how the siding gets fixed, they may also come out smelling like roses on that also.
– Hotels, restaurants and other businesses that see an uptick in business when an event comes to town.
– Ticket brokers and scalpers are making a mint from the convoluted way the EC sells tickets. Pre-sales to fan clubs, naming sponsor employees and several other ‘gimmicky’ ways tickets are pre-sold. Something the city claims they ‘can do nothing about’ even though they could implement a city ordinance that bans out-of-state ticket sales until after tickets are sold to the general public.
So what benefit is there to the General Public?
Besides the trickling in of a few million to the CIP, the public really isn’t getting any economic benefit from the Events Center, except another bond to pay off, money that could be spent on better parks, roads, water and sewer, and host of all kinds of other things that actually improve quality of life in Sioux Falls besides a top-40 country concert or a bull riding circus. And most of these things we don’t have to pay for out of pocket after standing in line for 18 hours.
Okay, so we determined the economic impact to our personal wallets isn’t really there, so what about quality of life? Is overpaying and finding it difficult to purchase affordable tickets to the EC for a couple of concerts a year really worth our mortgage? Personally I don’t think it is, and that is why I voted against the facility. The math wasn’t just fuzzy, it just doesn’t add up.
But even those who voted for the place and are willing to go see the latest ass in cowboy hat play the place, do you find any value in the facility or how it may have improved your life? That will be the hard question we will be asking over the next couple of years, as tickets get more expensive, maintenance and operational costs go up and a possible lawsuit that we will probably lose over the siding come to surface.
So enjoy your new events center Sioux Falls commoner, because we sure are paying a Helluva a lot for it and not getting much in return except a mortgage bill.
I realize most people aren’t like me but I planned on attending any type of event, I would eat at home before attending the event, or if I was from out of town I would take a few sandwiches and eat in the car. I don’t have to worry about that, though, because they will never have anything there that I would want to attend. But then on the other hand I did hear a rumor today that in May there is supposed to be Bull Riding in it. I do like rodeo, but due to my health I don’t have the energy or the money to go to anything.
You forgot to mention the inferior construction that will eventually cost any equity on the bonds. I’m looking forward to your discertation on the indoor pool citizens are building for free access to veterans and hospital staff. Citizens will pay admission at exorbitant prices if/when it’s not overcrowded.
You mention the lodging, eatery, bar and related businesses. These were the type of businesses that fought the hardest against the recent minimum wage increase vote. These businesses want the taxpayer to help them out when it comes to all these proposals to help their businesses, yet when it comes time to pay wages, they want to pay as little as possible.
I’m getting tired of helping the food, drink and lodging industry make money on my tax dollars and then paying wages that leave workers needing government assistance such as food stamps and WIC. Then the big corporations that own the food, drink and lodging industries make big money and want another handout to start another business.
So, what do you propose to do?
Tear it down?
Seriously – IF YOU GOT RAPED – replaying the scene over and over and over again in your head – you’re raping yourself – again and again and again. You are making yourself your own worst enemy.
Ruf – What would I suggest? Well if you read my post you would see that I would like to see any profits and sponsorships go towards paying down the bond instead of into ‘private’ pockets. I would also like to see ticket sales to be for local individual consumers first.
Scott, I hear you on that one.
I’m hoping people soon realize there’s no control when it comes to special projects. Usual maintenance budget gets assigned but extra money is tapped by the mayor and inside contractors for projects such as the EC, the indoor pool, & a tennis coliseum because there’s unrestricted funds to be tapped. Paying for this extravagance is one thing but can the city afford future repairs and maintenance given we’re a taxable population of 160k.
the anti-minimum wagers say that no one pays that anyway, and at the same time cry that it’s too high. if no one pays minimum wage, why do they care if it’s raised?
DL: I would like to see any profits and sponsorships go towards paying down the bond …
We don’t need to do that. Are you paying off your 2.9% mortgage early. If so you are a bad financial planner.
You will find this all adds up in the end no matter how hard you try to make it a bad deal. The profits and sponsorships pay for the place being open – remember.