New Sports Stadiums - Public/Private Partnership

Episode Transcript

Speaker 1 (00:00):
A sixty three million dollar volleyball complex in western Douglas County,
a twenty nine million dollar elite cheerleader facility in Gretna,
an eight point one million dollar rec center in West Point,
and now a one hundred forty million dollar soccer stadium
in downtown Omaha. Every one of them, they say, is
a financial lead pipe cinch, promising to deliver hundreds of

(00:23):
millions in tourism dollars, sales tax revenue, jobs and property taxes.
Recession schemeshion, no economic downturn in Nebraska. Let the good
times roll. Oh wait a minute, says right here in
the fine print. Tax dollars yet collected tax dollars, We'll
pay for it? What yep? The latest is soccer Club

(00:47):
Union Omaha's deal to have the city spend one hundred
forty million dollars to buy land across from schwab Field,
move dirt, put in sewer and electrical lines, poor concrete,
build a soccer stadium for seventy matches a year. That's
the deal we pay they collect. Stop me when we
get to the part about how this is good for

(01:08):
the taxpayers. Now, all of these projects and a few
more hinge on a state law called These Sports Arena
Facilities Financing Act SEPHA. It allows for future sales tax
revenue within six hundred yards of a sports or recreation
facility to finance the construction tax money that might happen. KeyPoint,

(01:28):
somebody has to open up a shop, a restaurant, a
retail business, a hotel, and that's six hundred yards and
somebody else has to go in there and buy stuff
for this to work. Very similar to tax increment financing,
another government tool that uses future property taxes to pay
off the loans to do the project. You can tiff
in the flesh right now. Drive downtown on Farnamer Harney Streets.

(01:52):
They're building a streetcar with seven hundred million in uncollected
property taxes. Some of the property targeted into that tip
if is already tiffed for some else. From the news
reports last Friday, it sounds like this soccer stadium is
a done deal. On Union Omaha's website homepage, there it
is a drawing of the stadium with a caption that

(02:12):
reads new stadium coming in twenty twenty eight. Well, the
proposal hasn't even been seen by the mayor or the
city council, and if I were one of them, these
would be my so far unanswered questions. What if the
tax projections come up short, who covers the gap? Who
will maintain the facility, fix the broken seats, mow the grass,

(02:34):
replace the toilets. If the city owns it, sounds like us,
Will the Omaha taxpayers share in the revenues? If so,
what percentage? Fifty to fifty sixty forty. In many cases,
the public entity gets nothing except a lease payment and
a percentage of new sales taxes or in other words,
taxes we might get to me. The biggest question is

(02:56):
how much of this is Union Omaha chipping in? Anybody Hello?
It looks like they want Omaha to invest one hundred
forty million and finance it through future sales occupation taxes,
which is a tax employers in their pay for each employee.
And our good friend Tiff, even though the governor is

(03:17):
killing himself trying to get our property tax formula blown up.
Despite what you read or the cheerleading, this isn't done
and it's not even close. The only way taxpayers win
is if a bunch of private developers come in. See
the soccer stadium as some twenty first century Mount Rushmore
build commercial space, apartments and condos that will eventually pay

(03:38):
some property tax, all of which will take twenty five
to forty years to break even, while seventy percent of
the initial sales taxes that might be generated will go
to pay off the city's debt. Meanwhile, each year that
goes by will need police, fire, road repair, street lights, parks,
and pensions for retired city employees, and only thirty cents

(04:01):
of every tax dollar to pay for it. That said,
if everybody participates, these things can be huge winners. Talk
about that tomorrow