County Paying For Convention Hotel

Government subsidies have reached 75%.

Dec 21, 2005

According to the Onondaga County Industrial Development Agency (OCIDA) meeting minutes of January 13, 2005, David Murphy of Onondaga Hotel Ventures LLC said that $34M will be spent on the Convention Center Hotel project. The company will invest $10M directly, and wants OCIDA to approve the issue of $24M in municipal bonds to finance the rest.

In addition, he said that PILOT payments, funded by sales and room tax revenue generated by the new hotel and convention activity, will be used to pay off the bonds.

Stated in other published reports, the project is to receive a 25 year property tax exemption; the county has agreed to donate the land, and will spend $10.5M out-of-pocket on infrastructure upgrades (steam and electrical plants, paving, etc.) to support the new building.

How the published $53.9M cost of the project was arrived at, even with the county's out-of-pocket expenditure included, remains a mystery.

Since the bonds are to be paid off with tax revenue, and not by the company, taxpayers will pay for $34.5M of the $44.5M project, a subsidy of more than 75%.

One must wonder why the county doesn't simply put in a little more money and own the hotel? If it wished, it could later sell it as a profitable venture, recoup its investment, and preserve its tax base. After all, if the county can justify building and owning the Convention Center, why not the Convention Center hotel as well?

No Request For Bids On Convention Hotel

Oh, how people trip over there own strained logic.

Feb 7, 2006

Regarding the County's RFP for the Convention Center hotel, the Post-Standard reported on Feb 6th that County Attorney Anthony Rivizzigno said the county had requested proposals, not bids.

That's very interesting. To construe RFPs as not being bids seems rather unusual.

So apparently the County has awarded free land, a 25 year property tax exemption, the repayment of $24M in municipal bonds using projected new sales tax revenue, and $10.5M in out-of-pocket infrastructure expenditures to a private company without issuing a request for bids.

County Should Build Convention Hotel

Post-Standard letter to the editor.

May 28, 2008

An open letter to county executive Joanne Mahoney. Dear Mrs. Mahoney, I applaud you for your initiative to help get the convention hotel financing on track with the offer to invest $10 million in county funds and make the county a privileged investor in the venture.

But, perhaps, a better deal could be offered to local tax payers. Right now, the private developer will invest only $10 million of it's own money on the project. It will receive from the county (at last count): $10.5 million in infrastructure upgrades; $24 million in municipal bonds plus interest, to be repaid not by the developer but by hotel room and sales tax revenue; a 25 year property tax exemption; and free prime downtown land to build on.

So, really, taxpayers will contribute well over $44.5 million to the project; and the city, county, and schools will forgo roughly $50 million in property taxes over the next 25 years.

Now, if the county could see it's way to finance an additional $10 million (the developer's bit), it could build the hotel itself. And why not? After all, that's what it did with the convention center. It can always sell the the hotel in a few years, as an ongoing concern, at a nice profit for taxpayers, with the property back on the tax rolls.