Sunday, May 03 2009
Evansville Mayor Jonathan Weinzapfel is applauding state legislators' passage of a food and beverage tax in Vanderburgh County. He calls the measure a major step toward building a downtown arena without raising property taxes. The food and beverage tax, along with downtown TIF and gaming receipts, will be the main sources to fund the up to $127 million project.
Mayor Jonathan Weinzapfel today is commending state legislators for the passage of House Bill 1514, which includes changes to the Food and Beverage Tax in Vanderburgh County.
"This is a major step forward in our plan to build a new downtown arena. We will be able to use the existing local Food and Beverage Tax to help fund a new downtown arena without raising property taxes," said Mayor Jonathan Weinzapfel.
The Food and Beverage tax, along with the downtown TIF and gaming receipts, will be the main sources to fund a new downtown arena. Initially the City would be able to utilize food and beverage revenues, over what is necessary for principal and interest payments on the Centre, to pay for the arena. Currently, the Food and Beverage Tax generates $3.7 million per year in revenue. Approximately $3.3 million is committed annually through 2017 to pay off The Centre bonds. The City would begin to capture the entire amount in 2017.
"With these three sources of revenue we can finance a new downtown arena without raising property taxes. In the alternative, if we were to build at Roberts, we would have increase property taxes by about $60 million," said Mayor Jonathan Weinzapfel.
The arena financing plan calls for 75% of project costs (about $91 million) to be funded by proceeds from long-term debt in the form of a series of bonds to be issued in late 2009. Payments on the bonds would begin in 2012
The remaining 25% ($31 million) will be covered by cash on hand or collected during the three years prior to initiation of debt service payments. The financing plan also includes coverage on the debt service of approximately 150%, which will vary slightly from year to year. This means that for every dollar of debt, we will have roughly $1.50 in revenue to cover that debt.
No growth in the downtown TIF was taken into account when estimating future revenues, even though it will certainly increase in assessed value. Also not taken into account were any possible secondary methods of financing including naming rights, suite sales, the sale of Roberts Stadium or the property on which it sits, the innkeepers’ tax or an auto rental tax.
Source: City of Evansville & Inside INdiana Business