Taxes Funding Entertainment Venues

Episode Transcript

Speaker 1 (00:00):
Imagine Omaha without the Chi Center or Lincoln without Pinnacle
Bank Arena. Kind of sobering, isn't it? Both happened because
the taxpayers in both communities voted, yes, use our money
to build them, or they won't happen now. In Omaha,
seventy five of the two hundred million to build the
Downtown Arena was donated. In Lincoln, one hundred percent of

(00:22):
the three hundred and forty million dollar Pinnacle Bank Arena
was public money. But who could argue that both have
returned the investment multifold. They aren't Mount Rushmore, but they've
been a great buy. Look at all of the stuff
that has grown up around the places, stores, property, restaurants, bars, hotels.
So let's do it everywhere, spend big tax money on buildings.

(00:43):
Problem most communities don't have that kind of cash, so
they invent ways to borrow it and then pay it
back with taxes that don't exist today but should exist tomorrow,
tax increment financing, TIFF turn back taxes. Both in the
Great American Salesman's creed fake it till you make it,

(01:05):
City of Omaha's faking it till they make it. On
the street car project, downtown to the tune of seven
hundred million in potential property taxes to pay for it.
Doing it again, the city and union Omaha the soccer
team announced last week a plan to use turnback tiff
and a few other future taxes to turn a dingy
patch of railroad land near schwab Field into a one

(01:27):
hundred and forty million dollar soccer palace, promising when it's built,
new taxes will flow into city Hall like the river,
thousands of new downtown residents and businesses who will want
to be so close to the action a soccer ball
might fly through their front doors, and then will all
buy what they're selling? Maybe? Maybe not? Is this really

(01:51):
a good deal? It could be if everybody shares in
both the risks and rewards, but that isn't the current
business model. Sorts owners in big cities learned a long
ago legal extortion can be both practiced and perfected. Threatened
to leave unless the taxpayers foot one hundred percent of
the bill for new stadiums and arenas, from which the

(02:13):
team keeps all the money, no risk, only reward. They
laughingly say that the taxpayers, you'll get yours through all
the new taxes we're going to generate for you fine
print after the sales taxes pay off the construction debt,
which takes decades. City of Phoenix did it forty years ago,
and luring the football Cardinals out of Saint Louis. Then

(02:35):
Saint Louis did the same thing, and getting the Rams
out of La Los Angelinos got even in building a
new stadium for the Rams, who promptly moved back. It
is a billion dollar game of chicken. Now. The final
details of the Union Omaha deal have not been negotiated,
but I believe if there is a private entity seeking
profit on the project, there are several fundamental questions taxpayers

(02:59):
insist before figurably answered. For example, how much cash investment
is Union Omaha making. If it's not half, it's not
really a partnership. Who pays off the debt? If tax
revenues aren't enough, who pays for maintenance and upkeep on
the facility? Is there a revenue share on all of
the activities in there? So it should be in proportion

(03:21):
to what each partner invests. That seems fair to me.
How about you? Cheerleaders for this say the competition for
people and business is so fierce these days, city and
state officials must do anything to lure workers and businesses,
then lock them down. They also say these can't miss projects.
If so, why need the taxpayers build it yourself, get

(03:44):
the tax incentives and keep all of the money. Maybe
they aren't really can't miss projects, but these public private
partnerships can be big winners. The projects involving nonprofit organizations
where the property is already bought and paid for and
attract youth sports events, are in the middle of established
enterprise zones like the Chi Sports Complex in La Vista,

(04:07):
will deliver Families spend big on kids' activities, and they'll
travel and those turn back taxes. Sales taxes on food, gas, hotels,
entertainment will grow and pay off. So let's not junk
the whole idea, but make sure that the checklist is
longer for anything that needs tax money.