Friday, May 14, 2004
Portland Sweetens Its Pot
Portland has cobbled together a package of taxes and fees that city officials say would cover $340 million of the $350 million cost of a new major league stadium. The package includes:
Income taxes on players and team officials: High enough to cover $125 million of stadium bonds.
Ticket taxes: A 10% admissions tax, enough to cover $75 million of bonds.
Concessions and merchandise tax: An 8% tax on goods sold at the stadium, estimated to cover another $25 million of bonds.
Stadium district: $75 million -- "a big, still somewhat amorphous chunk, where the city hopes to collect revenue from businesses within a half-mile or so from the stadium."
Miscellaneous: $40 million from charter seat licenses, tax increment financing and local improvement districts.
Sounds great in theory...but everything hinges on acceptance of these optimistic revenue estimates. The club owner (or, conceivably, another private entity) would be responsible for making up any shortfalls between the revenue generated from these taxes and the money needed for debt service, as well as for covering any construction overruns. Those are potentially huge contingenties liability which are likely to worry prospective owners, and MLB, more than if Portland had simply requested the owner pay $X toward the cost of the ballpark.
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Portland has cobbled together a package of taxes and fees that city officials say would cover $340 million of the $350 million cost of a new major league stadium. The package includes:
Income taxes on players and team officials: High enough to cover $125 million of stadium bonds.
Ticket taxes: A 10% admissions tax, enough to cover $75 million of bonds.
Concessions and merchandise tax: An 8% tax on goods sold at the stadium, estimated to cover another $25 million of bonds.
Stadium district: $75 million -- "a big, still somewhat amorphous chunk, where the city hopes to collect revenue from businesses within a half-mile or so from the stadium."
Miscellaneous: $40 million from charter seat licenses, tax increment financing and local improvement districts.
Sounds great in theory...but everything hinges on acceptance of these optimistic revenue estimates. The club owner (or, conceivably, another private entity) would be responsible for making up any shortfalls between the revenue generated from these taxes and the money needed for debt service, as well as for covering any construction overruns. Those are potentially huge contingenties liability which are likely to worry prospective owners, and MLB, more than if Portland had simply requested the owner pay $X toward the cost of the ballpark.
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