Mayer for Mayor says, Nine takeaways from last weeks filing of HB 544 by Dem. Jesse Crenshaw, which if enacted would increase hotel taxes by 2.5% to help pay the $328 million (current) cost of the Rupp Re-Do. (1) Its supporters estimate the tax increases to generate $3.5 million each year to help pay for the Rupp Re-Do, or a bit less than what affordable housing activists have spent the past five years begging city leaders to generate through a trust fund. (2) Our current citys support for HB 544 comes despite the fact that the Bluegrass Hospitality Association opposes the hotel tax increase--they claim not to have been contacted regarding the tax increase. (3) In 2004, the city issued a $22.5 million bond to pay for a series of Convention Center upgrades. This bond is not paid off--we still owe $18 million on the debt for that renovation, an amount that will be rolled back into the cost of the Rupp Re-Do. This means the $310 million project has now become a $328 million project. (4) Bond payments are like mortgage payments--you pay huge amounts of interest up front before making a dent into the principal. For example, the 2004 loan to upgrade the Convention Center came via a 17 year bond that the city planned to pay off by 2021. After 10 years of payments, we have paid only $4.5 million off the principal. (5) Generally, bankers and financial advisers benefit the most from re-working bond agreements. Whichever bankers and bond-issuers get the Rupp Re-Do job will benefit from creating new interest on rolling over the $18.5 million in old and unpaid Convention Center debt. (6) HB 544 creates a tax-funding structure that will give the 47-acre Rupp project nearly 50% of all hotel taxes generated in the entirety of Fayette Urban County. Of the 9.5% your visiting friends pay in hotel taxes, 4.5% would now go to pay debt and interest on the Rupp Opportunity Zone. HB 544 does this by creating a new 2.5% hotel tax and then re-appropriating the 2% tax specially generated in 2004 to pay for the convention center upgrades. (7) Lexington big-wig Brent Rice is not forecasting the truth when he claims that a re-done Rupp will generate $35 million per year in new business. (8) UK Chief spokesperson Jay Blanton is also not telling the whole truth when he claims that a UK Athletic Association lease on Rupp Arena represents no university funds being used to support the project. Let us rid ourselves of the notion that the universitys athletic department is not directly equatable to the university that permits and enables its existence. (9) Looking at the picture below...how much carbon do we plan to burn so that our UK coach and city business leaders can feel comfortably world class?
Posted on: Tue, 11 Mar 2014 11:32:39 +0000
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