>> In a message dated 2/19/02 5:50:38 PM Central Standard Time, [EMAIL PROTECTED] >> writes: >> >> << Stadium funding comes from a bond issue that is paid off totally by the >> stadium revenues, The team and owners pay for the stadium totally, --on a >> lease basis. >> James E Jacobsen >> "Whittier" > > Keith, NearNorth: > > But with a bond issue, tax payers still shoulder all risk of a default or > deficiency, don't they?
Actually, it depends on the type of bonding it is, and you can play a part in it, if you care: 1. Taxpayers are on the hook for defaulted bonds if the ones issued are General Obligation bonds, backed by the full faith and credit of the governing jurisdiction. or 2. Investors are at risk, not the taxpayers, for defaulted bonds if the ones issued are Revenue bonds, backed by a required reserve of somewhere around 5% of the issue, i.e., each investor places in reserve 5% over and above the amount they invest, which reserve is used to make up the default if the project goes bust. The revenues for paying off the bonds can come from TIF (tax increment financing) monies (the difference between the property taxes paid before and those that would be paid after a new project is up and running). The increment (difference) is considered to be the payment on the bonds and runs 25-50 years. Or they can come from revenue generated by the the business operating there - like, in this case, professional sports, or a bank or any number of enterprises. There are obvious convolutions of all this but you get the idea, I hope. Andy Driscoll Saint Paul _______________________________________ Minneapolis Issues Forum - A Civil City Civic Discussion - Mn E-Democracy Post messages to: [EMAIL PROTECTED] Subscribe, Unsubscribe, Digest option, and more: http://e-democracy.org/mpls
