The net inflows to the City are, effectively, what it may save in capital costs each year, which the HTG proposal essentially estimates at $200,000 (increased 3% for inflation some years). But, while the Alliance-Ordway proposal This is a key question. As many may remember from the Brookfield/Gaviidae deal/default, you can get a corporate payback promise but it isn't necessarily gold.
The Brookfield deal is instructive. The part that was defaulted upon was backed by a very poor guarantee - a secondary mortgage interest that a Brookfield subsidiary could walk away from. However, another part of Gaviidae is backed by a central Brookfield asset - and no default. The trick for city negotiators is to get a strong guarantee. Nothing is ironclad, and the public should vet the details. But all the Council did on Friday was agree to negotiate exclusively with HST/Clear Channel for 120 days. We - and a Council that is far more fiscally responsible than its predecessors - will be able to judge the fine print. > 2. Does anyone have accurate debt service figures for the City once > the bonds are converted? Here are the sources: HST/Clear Channel financing proposal: http://www.ci.minneapolis.mn.us/cped/docs/response_htg.pdf (see pages 28-33) The current debt-service schedule: http://www.ci.minneapolis.mn.us/cped/docs/theatres_exhibit5.pdf It looks like HST/Clear Channel would pay a lease of $1.6 million, equal to the interest and principal on the new bonds. (A new 30-year term would start with the conversion from tax-free to taxable.) Currently, the city is treading water on its theater debt. It pays $600,000 a year interest but no principal. As in many public and private deals, the principal repayment is severely backloaded. The first $125,000 principal payment is in 2010 - year 9 of the 30-year schedule We would pay $2.5 million in principal in 2031, the last year of the deal. > 3. Are the $1.6 million estimated lease payments to the City for 30 > years considered the ultimate 'purchase' price of the three theaters. Yes. > Remarkably, I understand that the City has no > appraisals for the buildings but is going forward with this as an > ultimate sale. It's probably tough to appraise these properties since there are no comparable sales. It comes down to what someone will pay. No one has made an offer until now. Could someone pay more? Perhaps, but unlikely. Remember, too, HST/Clear Channel will pay building maintenance costs the city (owner) is currently on the hook for. > 4. HTG/HTT/Clear Channel don't provide a presumed average ticket price, > while the Ordway/Alliance assumes an average of $30.75 for its four venues. > Any clue what HTG must charge for tickets to make this deal work? No - though I think price and attendance projects are easily puffed and mostly speculative. Despite the monopoly factors in this debate, there is lots of competition for the entertainment dollar, and those market forces will constrain whomever manages the theaters. I'd love to see others chime in to answer Greg's questions - especially any public servants who have studied the deal. The one way a devil's advocate can sleep with himself is if he helps create a climate where more facts emerge for informed public discussion. David Brauer Kingfield REMINDERS: 1. Think a member has violated the rules? Email the list manager at [EMAIL PROTECTED] before continuing it on the list. 2. Don't feed the troll! Ignore obvious flame-bait. For state and national discussions see: http://e-democracy.org/discuss.html For external forums, see: http://e-democracy.org/mninteract ________________________________ Minneapolis Issues Forum - A City-focused Civic Discussion - Mn E-Democracy Post messages to: mailto:[EMAIL PROTECTED] Subscribe, Un-subscribe, etc. at: http://e-democracy.org/mpls REMINDERS: 1. Think a member has violated the rules? Email the list manager at [EMAIL PROTECTED] before continuing it on the list. 2. Don't feed the troll! Ignore obvious flame-bait. For state and national discussions see: http://e-democracy.org/discuss.html For external forums, see: http://e-democracy.org/mninteract ________________________________ Minneapolis Issues Forum - A City-focused Civic Discussion - Mn E-Democracy Post messages to: mailto:[EMAIL PROTECTED] Subscribe, Un-subscribe, etc. at: http://e-democracy.org/mpls
