Civic Center project pig-in-a-poke By KENT HARRINGTON AND PAM MILLER Local leaders are urging a “yes” to SPLOST on Nov. 5 when voters cast their ballots on whether to continue the one-penny special purpose sales tax. SPLOST helps pay for capital investment in roads, parks, and public infrastructure in Savannah and Chatham County. Because visitors account for almost 40 percent of its revenue, officials say, they pick up much of the tab, reducing the need to hike property taxes. That argument and a great many SPLOST-funded projects have made sense in the past. This year, however, as the old Gershwin song goes, “it ain’t necessarily so.” Savannah’s priority, a new civic center, is the reason why. The new center will consume nearly 25 percent — some $105 million — of the estimated $370 million to be raised by the proposed six-year SPLOST. Officials have provided virtually no details on this major project or even an overall cost, despite encouraging voters to back SPLOST and, in effect, its blank check. Experience here and in half-a-dozen other cities like Savannah should raise a warning flag. As opposed to the purported benefit of a tax that taps visitors to help pay for a major local facility, a new civic center, once built, will require multi-million dollar subsidies, draining away city revenues that could support needed services and infrastructure as well as burdening taxpayers for years to come. In fact, the costs and benefits of this multi-million dollar project remain strikingly ill-defined. City officials admit they have done little analysis of a new center’s overall cost, its revenue potential, or the track record of centers elsewhere. Analysis that shows how a new center will do better than the current one also is lacking. This year the current civic center’s revenues will barely cover 20 percent of its operating costs. It’s an old story. The city provides some $2.5 million annually in tax receipts and transfers from its general fund simply to keep the old center open. Why worry about such details before a SPLOST vote? Because voters need to know to make an informed decision. Take the future drain on the city budget if Savannah builds a new center and operates it along with the current one. What impact will a new facility have on the existing center’s revenues and, therefore, its need for a city subsidy? Demolition or renovation also will cost tens of millions. That’s another major bill for taxpayers. In short, when it comes to the total price tag for the proposed civic center project, at this point a “yes” vote on SPLOST means a $105 million down payment on a pig-in-a-poke. The business case for a new center also needs a hard look. According to its advocates, size matters. A bigger center means Savannah can attract bigger events and, they claim, greater revenue. The track record elsewhere suggests the opposite. In a half-dozen cities similar to Savannah, new, recently rehabilitated as well as older civic centers remain heavily subsidized and under-performing. • In 2013, Duluth. Minnesota’s recently expanded entertainment and convention center covered only 60 percent of operating costs, running $5 million in the red. • Five years after its $55 million expansion, the Peoria Civic Center is barely covering its operating costs; events and attendance continue to decline requiring the city to pay a $1.4 million-a-year subsidy. • Asheville, N.C., is subsidizing its civic center’s losses with $900,000 this year. In Roanoke, Va., in addition to the city’s annual $1 million debt service payment, taxpayers are covering their center’s $500,000 operating loss. A vote for SPLOST on Nov. 5 is not a vote for a new penny tax. It’s a vote for the projects that local leaders put forward for funding. A “no” vote is not the end of the world for other worthy projects; another SPLOST referendum can be held as early as July. Voters need to understand the issues. Pouring money into projects that lack a solid business case produces no economic benefit for their surrounding communities. When it comes to the proposed civic center and its claim on SPLOST funding, the data and analysis to justify its priority — and to explain its long-term impact on the city’s revenues and taxpayers — are simply not there. Kent Harrington and Pam Miller co-chair of Be Smart Savannah. Both were co-founders of a Safe Secure Savannah.
Posted on: Fri, 01 Nov 2013 12:35:54 +0000
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