Build new Haymarket arena
BY DEENA WINTER / Lincoln Journal Star
All three candidates to be Lincoln’s next mayor agree on one thing: It would be great to be able to build a new arena to replace the 50-year-old Pershing Center.
But they don’t agree on whether the city can afford one.
The Democratic and Republican candidates seem committed to finding a way, but the Independent candidate says he wouldn’t support the project if tax dollars were used.
Related Media
Audio slideshow: 2015 Vision's plan for an arena and convention center
(Audio by Deena Winter / produced by Laura Meerkatz / JournalStar.com)...
The city is looking at building a new 15,000-seat arena west of the Haymarket to replace Pershing Center. Similar to Omaha’s Qwest Center, it would host such events as basketball, hockey, concerts, rodeos, monster truck shows and circuses.
Price tag: An estimated $235.7 million, when you include parking and new roads.
Who benefits: Lincoln’s younger sect, because the arena likely would attract concerts and events they enjoy. Hotels, restaurants, stores and bars, because if more people come to events in the arena, more people spend money in Lincoln.
Barriers: Convincing Lincoln voters, or state lawmakers, or the governor, or the City Council, to approve some kind of tax increase to fund the thing. It likely would require a combination of various taxes.
Looks like: The Ford Center in Oklahoma City, Kemper Arena in Kansas City or Kohl Center in Madison, Wis. It would have large concourses and foyers that can be used for banquets, displays and exhibits and meeting rooms.
Probability factor: 50-50, depending upon the mood of Lincoln voters, state lawmakers and the City Council.
And one thing is clear: There won’t be an arena without tax dollars.
Democrat Chris Beutler says the city should “seriously explore” building an arena to compete with other venues in the region. But he also says the city needs at least one more financing tool from the Legislature to make it happen.
Republican Ken Svoboda says even though the city is on a tight budget, he believes Lincoln needs a new arena because the Pershing Center subsidy is only going to grow as the building deteriorates.
“I think we definitely have to make it work,” he said.
He’d like Lincoln residents to weigh in on the issue by voting on a general obligation bond issue.
“This is a major investment in our city’s future and I think it’s important to have the citizens’ involvement,” Svoboda said.
Independent Roger Yant says he’s against using any tax dollars to pay for it.
“The trouble is, taxpayers are paying for a lot of things now that we can’t afford,” he says, citing the city’s Antelope Valley project as an example.
“We’re on a beer budget right now with a champagne taste.”
Most arenas are subsidized by cities, so taxpayers would still be on the hook, he notes.
“They should put it to a vote,” he said of arena supporters.
Who pays for it?
It’s clear that if Lincoln is to build an arena, tax dollars will have to be used, one way or another.
A mayoral task force came up with a long list of potential ways to pay for what they estimate would be a $235.7 million project. That price includes an arena, parking garage, surface parking and new roads.
They’re counting on a private developer to come up with another $95 million to build an accompanying hotel and convention center.
The task force identified 17 possible annual revenue sources — parking fees, club premiums and various types of taxes — that would roll in for years after the arena is built. That revenue would be used to make payments on a bond that would finance arena construction.
The committee also came up with a list of 17 possible one-time revenue sources, such as donations, federal highway funds and state road funds.
Some combination of the 17 annual revenue sources would be used to finance the arena. If, by some miracle, all 17 of the potential sources came to fruition, the city would have nearly $250 million at its disposal.
All of the annual revenue sources would be bonded, meaning the $1 million generated by an increased wheel tax, for example, could be used to make payments on a $12 million bond. It’s sort of like taking out a mortgage or loan — you get the money to buy the house up front and rely on your revenue streams to make the payments.
The biggest money-maker would be a local option sales tax, which would increase the city sales tax for a set number of years.
If the city charged another quarter of a penny in sales tax to every dollar spent in Lincoln, it would bring in enough money to finance most of the arena. That would generate about $10 million annually, which could be bonded to obtain about $135 million.
If such an increase were approved, the total state and local sales tax would increase from $7 to $7.25 on a $100 purchase.
Double that to a half-cent increase, and you’d have enough money to finance the whole project.
But two major hurdles stand in the way of that option:
* State lawmakers and Lincoln voters would have to approve an increase.
* Even if lawmakers could be persuaded, Gov. Dave Heineman would have to sign the legislation, and he isn’t crazy about the idea.
“You can fairly assume that he’s opposed to new tax revenues,” said his spokesman, Aaron Sanderford.
“The governor would keep an open mind, but in reality, he’s opposed in principle to new revenue streams that are an additional tax burden on Nebraskans.”
The mayor’s task force ranked the difficulty of securing each revenue source from easy — such as naming rights — to “most difficult.”
They put sales tax under the “most difficult” category.
But the task force came up with plenty of other ways to come up with money. Among them:
* A general obligation bond issue. A 1-cent increase would generate $1.5 million a year. Lincoln voters would have to approve the bond issue, which would require a property tax increase. Increasing the city’s property tax rate 1 cent would bring in about $1.5 million in revenue. The city could get about $15 million by bonding that revenue for 20 years.
* Capture new sales tax generated in a designated entertainment district. Lawmakers considered legislation allowing such districts last year, and two similar bills have been introduced this year. This revenue stream could yield an estimated $16 million if bonded.
* An occupancy tax on hotels — similar to the 4 percent hotel occupation tax in Omaha to help finance the Qwest Center. A 4 percent lodging tax in Lincoln would generate an estimated $1.8 million annually. The City Council would have to approve the tax.
* A 4 percent city occupancy tax on auto rentals — similar to Omaha’s — would generate an estimated $200,000 annually. City Council approval would be required.
* An occupation tax on restaurant sales. Some cities require restaurants to collect an additional sales tax, similar to a lodging tax. A 1 percent tax would generate about $3 million a year.
* The city’s economic development tool of choice, tax increment financing, could generate about $750,000 per year, which, if bonded, could yield about $10 million.
* Increase the city’s wheel tax and bond the proceeds to pay for street improvements near the arena. A $5 increase in the wheel tax would generate $1 million in annual revenue.
* Secure 1 percent of the county lodging tax to bring in about $450,000 per year. The county would have to sign off.
City Finance Director Don Herz helped come up with the list of potential financing tools.
“These are just options that would certainly need public input if this project goes forward,” he said. “It’s up to the community to decide how they would like to fund it.”
When the mayor’s arena task force wrapped up its work late last year, it recommended Mayor Coleen Seng appoint a new citizen group to take the torch.
Seng supports a new arena, and the emergence of the 2015 Vision group provided a perfect way to continue the conversation about an arena.
That group is now taking its gospel to the people, where they’ll be given a chance — after more than two years of listening to community leaders toss around ideas — to weigh in. And their opinion will be worth much more than two cents.
Reach Deena Winter at 473-2642 or dwinter@journalstar.com.

Facebook
del.icio.us
Fark It
Reddit





Post Your Comment
Standards and RulesYour posted comment will appear after it has been approved.
Frequently asked questions about story commenting.
Katz wrote on January 22, 2007 9:34 pm:
JJ wrote on January 22, 2007 10:20 pm:
Taxman wrote on January 22, 2007 10:25 pm:
Silversmith wrote on January 23, 2007 12:42 am:
FS wrote on January 23, 2007 1:44 am:
sickofseng wrote on January 23, 2007 5:48 am:
mike4mayor wrote on January 23, 2007 7:02 am:
Jeff wrote on January 23, 2007 8:09 am:
Dawg wrote on January 23, 2007 8:50 am:
Showme the$$$ wrote on January 23, 2007 8:59 am:
Terry wrote on January 23, 2007 9:02 am:
at first glance=ABSOLUTELY! wrote on January 23, 2007 9:50 am:
JMK wrote on January 23, 2007 9:51 am:
billybob wrote on January 23, 2007 9:53 am:
Lincoln Must Decide wrote on January 23, 2007 10:02 am:
Jan wrote on January 23, 2007 10:21 am:
Humm wrote on January 23, 2007 10:27 am:
yoshiki wrote on January 23, 2007 10:58 am:
sam wrote on January 23, 2007 11:23 am:
Build it wrote on January 23, 2007 11:44 am:
15,000? wrote on January 23, 2007 2:09 pm:
KRM wrote on January 23, 2007 2:34 pm:
Why Didn't wrote on January 23, 2007 3:17 pm:
Ashamed! wrote on January 23, 2007 4:47 pm:
Jwing wrote on January 23, 2007 5:23 pm:
Lincoln needs a concert & sports venue to attract better entertainment. The Qwest Center in Omaha is making a small amount of money, with bigger events in the near future. If Lincoln builds it, it may take a few years to get in the black, but it will be a benefit to the area. There are over a million people in the Omaha-Lincoln metro areas. It can support two arenas of this size. "
omnione wrote on January 23, 2007 5:30 pm:
Why Qwest expanded wrote on January 23, 2007 8:01 pm:
SAL wrote on January 23, 2007 8:35 pm:
Frank wrote on January 23, 2007 8:57 pm:
PK wrote on January 23, 2007 11:35 pm:
Kenneth H. Zike wrote on January 24, 2007 6:57 am:
Tim wrote on January 24, 2007 7:42 am:
Dave wrote on January 24, 2007 8:32 am:
Corporate sponsorship... wrote on January 24, 2007 8:39 am:
Thats funny wrote on January 24, 2007 8:46 am:
Dm wrote on January 24, 2007 9:18 am:
Corporate sponsorship... wrote on January 24, 2007 9:46 am:
There are much smarter ways to do this but our city government is just not intelligent enough to figure it out and unfortunately, most of the population is so busy riding their high horses that they won't allow any revenue from gambling to stay in-state.
Ameristar arena, The Harrah's Center. I kind of like it!!! "
jaime wrote on January 24, 2007 10:44 am:
Jim wrote on January 24, 2007 10:58 am:
JJ wrote on January 24, 2007 5:15 pm:
Why anything? wrote on January 28, 2007 12:12 pm: