North Little Rock Mayor Pat Hays told the Arkansas Democrat-Gazette yesterday that he didn't envision dipping into the city budget to pay for a dreamed-of parking deck for a new hotel that he hopes to encourage with a swap of city land with that owned by private developers.
It will be unavoidable. The only issue is how much.
I've written before about Wyndham hotel owner Frank Fletcher's questions about this project. He's naturally opposed to a city subsidy of a parking deck for a competitor next door. But he also makes worthwhile points about Hays' dismissal of cost questions. Even if North Little Rock wins the pending TIF lawsuit (which it shouldn't), taking tax money from the schools won't produce enough to build the deck. Parking rental won't pay for the deck. (See Little Rock if you want to see decades of experience with parking decks that don't pay for themselves.)
Hays would be better arguing the overall benefit of a parking deck to downtown development and acknowledging that the city could have to shoulder some of the cost, based on experience elsewhere. On the jump is Fletcher's breakdown of the red ink the parking deck likely will cause for the city, even if TIF money is realized and even if parking revenue meets existing projections. Bottom line: a cost to the city of nearly $300,000 in revenue shortfalls per year for 20 years.
Hays should answer the questions, not be allowed to blow off a reporter by saying he won't tap city money with no firm illustration of where the money will come from.
SUPPLIED BY FRANK FLETCHER
FINANCIAL CONCERNS PROJECT BONDS
TIF Bond Concerns
o TIF calls for 30 year bonds only about 20 years left on TIF.
o Annual TIF Note Payment $317,647 using 20 years.
o Adjusted annual TIF yield $230,730.
o Annual shortage $86,917.
o Shortage over life of Bonds $1,738,340
Revenue Bond Concerns
o Parking Garage Bond Life at 20 years to match TIF project.
o Annual Revenue Bond Note Payment $272,269.
o Parking revenue per Project Plan $154,213.
o Annual shortage $118,056.
o Shortage over life of Bonds $2,361,120.
o Per UALR Study 19.5 Mills.
o Per Pulaski County Tax Collector 16.6 Mills.
o Annual shortage $34,314.
o Shortage over life of Bonds $686,280.
Overall Annual shortage on all Bonds $239,287.
Total shortage over life of all Bonds $4,785,740.
Enclave Property Tax Assessment 33% less than projected. Estimated lost revenue $47,616 per year. Shortfall over life of the Bonds $952,320.
Revised annual shortage $286,903 for debt service of bonds.
Revised Total shortage over life of all Bonds $5,738,060.