There’s been a flood of untrue comments saying the Committee for Transparency (CFT) is trying to block Barter.
Not true. We simply seek to have our plan’s safety clauses added to the current plans. Those will protect taxpayers in case “new” tax revenue falls short.
But the untrue comments have crossed the lines of common courtesy and decency; let alone honesty. Most of the rhetoric is inaccurate. Some includes immature personal attacks. Many say we’re “demanding” our plan version, which is absurd. Some even say our version is illegal. On that point we’ve consulted an attorney well versed in city government matters.
The attorney opinion verifies our method of determining lease payments that was challenged is legal. We also request that Barter’s subsidy payments from city be determined by ticket sales, but that has not been claimed illegal.
Here are main differences in the plans from the City/ad hoc group (AHG), and from our Committee for Transparency (CFT):
LEASE: The AHG plan for lease the facility simply says the city pays developers $560K dollars per year for use of the theater by Barter. The assumption is the city will gain at least that much in “new” tax revenue from Spencer projects. Our CFT plan wants to say the city pays a yearly lease amount as long as the city receives that much in “new” tax revenue from the project. If “new” tax revenue is less, the lease payment will be less. Taxpayers will not be stuck with any shortfall.
There’s also misleading information from city’s AHG plan: The public is being told all the costs of building the theater will be from developers and not from city money. True; but there is also a lease required, so the city still pays. The public is told the $560,00 per year lease from city to developers is just for five years. True; but it is also renewable and city will have huge pressure to renew each five years even if projections for projects are not met. Otherwise the city would be accused of pulling the plug on everything.
The lease was originally to be 20 years and renewals could easily reach that. Twenty years of leasing would mean $11.2 million from city to developer. Our version protects taxpayers even with lease renewals.
SUBSIDY: The AHG plan also says Barter will get a cash subsidy from city of up to $600,000 the first year, plus more in years two through five, with total capped at $2 million for first five year. After year 5, Barter gets $100,000 per year.
AHG says their plan determines the yearly subsidy amount by Barter’s performance. That’s misleading because they mean using only the number of performances and not ticket sales. CFT wants the subsidies to be determined by ticket sales because that’s what brings tourists here. Having performances with low ticket sales does little good for city.
The AHG plan places taxpayers at risk if the project does not produce enough new tax revenue. That means the city would be betting on Barter’s projections. Developers stand to make millions in profit. They should take that risk and not taxpayers. Of course the developers would much rather have the AHG plan with themselves protected but not us. We feel the city/AHG should work on getting agreements with the safety clauses instead of ones without, which is what we see now.
Even with CFT’s safety clauses protecting taxpayers, the city has already put $1 million in Spencers, and will put another $6 million in infrastructure, plus $2 million in subsidies. Then add $2.8 million for five years of lease payments. So the lowest cost for city is $11.8 million for the first five years if there no lease renewal. But then who would pay the developer? Not Barter; they don’t have money. So the whole thing could fold without city renewal. Odds are 50 to 1 the city will renew and renew up to 20 years and end up paying $11.8 million in leases. Adding infrastructure and subsidy’s costs and 20 years would cost the city $22.3 million in total.
The public has been told city investment is only $6 million. Very misleading. Our figures above show it could be three or four times that. Of course if Spencer projects do what they claim it could repay city even up to the $22.3 million by creating enough economic growth with new property and sales taxes. Hopefully it will but taxpayers shouldn’t have to bet so much on it. All we want is to include the safety clauses in the deal to protect taxpayers if projections fall short.