KVIA Report on City Losses for Ballpark

rats_roostLast Friday, August 29, KVIA published an unattributed report on city losses for the ballpark. The report titled “First downtown ballpark season showing losses for city” points out that the taxpayers are going to have to pay “about half a million dollars”, according to early numbers. The fact that the taxpayers have to pony up some money this year is not at all surprising to me. As a matter of fact, I wrote a blog post on August 19, 2013 detailing how the city, itself, was telling the investors it would have to use taxpayer monies to make the debt payments the first six years.

In my post “City Tells Investors It Needs to Offset HOT Tax and Team Payment Shortfalls”, I shared with you how the city had told the investors that it would have to put up almost a million dollars to make the first six years of payments. However, the debt documents that I referred to showed that the city expected to have to make up one million the first six years – not half a million the first year alone!

According to KVIA’s report, the city has brought in $3.8 million in hotel occupancy taxes (HOT) and about half a million in sales taxes and team-shared payments. KVIA goes on to point out that the city has spent $4.8 million in debt payments including about $700,000 in police costs. This leaves the city about half a million short to make the necessary payments and thus it needs to take money from the taxpayers in order to meet the debt obligation.

In my original post, I pointed out the document “Certain Projected Sources of Revenue” that the city had disclosed to investors shortly before floating the ballpark bonds in the market. In that document, the city had indicated that it would be short on revenues from the team sales and the HOT taxes. According to the city’s estimates, it would be short by $188,885, the first year, $303,052 in 2015, $224,274 in 2016 and so on through 2019 for a total of $975,372.

On my numerous posts about the ballpark fiasco, I have written how the city’s projections for the HOT taxes and sales tax figures were misguided. In my opinion, they neglected to include economic realities about the HOT taxes and other revenue sources that were based on previous trends that did not factor an economic downturn for the city and the artificially inflated hotel occupancy rates caused by major construction projects and the drug violence in Juárez.

Well it turns out that I was right after all.

Looking at the document, submitted by the city to the investors, it had predicted that the city would generate $4,246,319 from the HOT taxes in 2013 and 2014. KVIA, on the other hand reports that the city has only raised $3.8 million from the HOT taxes. About $400,000, less than the city had projected. Although KVIA is not clear on whether the $3.8 million are 2013 and 2014 figures, I assume that they are because the HOT taxes that started in 2013 were to be allocated to the first payments in 2014.

Also because of the lack of specificity by KVIA it is unclear about whether the half a million dollar figure for “sales taxes and revenue sharing” includes the payments committed by the ballpark owners for the use of the ballpark. Regardless, the ballpark owners were projected to pay $774,396 in payments to the city.

Obviously, there is a discrepancy in those figures, as well.

More important, though, is that as much as the city and its enablers continue to yell about ballpark awards and record-breaking attendance the fact remains that the taxpayers are being forced to subsidize the ballpark fiasco at an even greater amount then the city itself projected.

Ballpark Hurting Downtown Restaurants

As if the shortfalls weren’t bad enough for the taxpayer take a look at this week’s El Paso Inc. report by Robert Gray. In the piece titled “East El Paso: Where the action is” you will notice that as the newness of the ballpark begins to subside the luster of downtown redevelopment is starting to show signs of rust. Many of us have continuously pointed out that the ballpark is not sustainable nor is it an economic engine for downtown, much less for El Paso.

The problem that the proponents of the ballpark continuously ignore is that El Paso has very limited disposable income. Building the ballpark and all of the other “make everyone feel good” economic drivers such as the trolley fiasco does not stimulate economic development but rather it takes disposable income from one area and puts it somewhere else.

You can clearly see this in the Robert Gray piece where he writes about John Geske. Geske is quoted as stating that instead of his restaurant, The Garden, improving it has instead declined because of the ballpark. This is because Geske now has to compete with the ballpark for the same disposable income that the taxpayers have.

Geske is quoted as stating, “the ballpark wasn’t good for the Union Plaza” the entertainment district where the restaurants are that were hoping to profit from the ballpark. As Geske states it, people are eating and drinking at the ballpark and then heading home.

This clearly demonstrates that there is only so much disposable income to go around and when something new comes around it takes away from the existing businesses and moves the money to the new ones.

The private restaurants that are now losing revenues are taxpayer entities. The ballpark does not pay property taxes. This is one of those inconvenient facts that proponents like to gloss over. What’s going to happen when restaurant owners can’t pay their bills and shut down their restaurants? What is that going to do to the tax base? If that’s the case then how can anyone argue that the ballpark is an economic catalyst?

The community is barely through the first ballpark season and the fake façade of “it’s all good” is starting to show some serious cracks. Many of us have been pointing this out only to be called “crazy” for daring to point out fallacies in the ill-conceived economic development fiascos.

A Note on KVIA’s Lack of Bylines

I also found it curious that KVIA is now publishing reports without a byline on their website. I am not really sure what’s going on with that but it makes it more difficult to understand the full context of a report. One of the first things I look for on any news report is who produced the piece. I do this because news pieces have their inherent biases and knowing who produced it gives me a better understanding of the context of the item as well as how well I believe the item was vetted before it was published. Some reporters have a better track record on accuracy over others and knowing the author of the piece helps me make a determination as to the veracity of the piece.

Now that KVIA is apparently not publishing the author’s byline gives me pause to question the accuracy of their product.

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