Let’s face it, I don’t think too many tax payers in Sioux Falls are that naïve or ignorant to think the Events Center will pay for itself (You know, cuz like, it is quality of life). Even with sponsorships, you have operating expenses, maintenance and mortgage payments, a steep bill that has to be paid for the next 30-50 years.
I think this is pretty obvious to anyone who owns a home or business, or for that matter a lawnmower or snowblower.
But it still hasn’t stopped the manager of the Events Center and our city finance director from talking about ‘Net Operating Income’ which leaves out our mortgage payment on the facility.
Paying 9 million in debt service to make 2 million in income doesn’t make you a financial genius, and surely not worth bragging about. Even if you factor in the supposed tax income of $1.5 million you are still at a $5.5 million dollar loss for the year. It would be like making a household income of $3,000 a month with a $6,000 a month home mortgage payment. Not sustainable, or even reasonable.
It’s dishonest to say ‘its in the black’ or ‘net income’. Â Now if you want to say the operations are in the black, that is perfectly honest, and believable. Â But don’t say it’s making a profit or ‘net income’. Â This word play effects people not knowing the distinction and creates the perception that it’s a wild success.
Also note, anyone who has read the prospective and then retrospective studies on all of these venues knows that the first two years don’t really mean anything. Â It takes until about the third year before you see what NORMALIZED operations will be. Â This is the honeymoon period and cannot be counted on as the norm going forward.
We should be honest. Â Don’t claim it’s making tons of money, it’s not. Why not say it’s costing us money, but it provides a quality of life, and it’s worth the cost (and you can agree with that or not).