Amphitheater and Priorities

As was stated today in the Roanoke Times, I have expressed serious concerns over the construction of a new, $14.2 million amohitheater in downtown Roanoke. While I would love to have another great concert and arts venue, I simply do not believe that Roanoke can afford such a luxury item at this time.

The article in today's newspaper was, at its very best, incomplete. A number of items stated as suggestions are are not suggestions at all, but factual. For instance, it is not a suggestion as to what the debt service and subsidy would be for a new amphitheater, it is fact. Because of the incomplete nature of the Roanoke Times article, I have decided to post the letter I wrote to my colleagues here.

- START LETTER -

All,

I wanted to write this email to you all regarding the inclusion of the amphitheater design in the CIP that we discussed Monday. As you recall, the design itself is projected to cost $1.2 million with construction not able to commence until 2013.

My purpose in writing this is because, after really looking closely at the numbers year over year debt and subsidy, I do not believe it is in the best interest of the taxpayers of the city to proceed with this project at this time. Below are my reasons for this conclusion.

First, we are all aware of the enormous infrastructural challenges we face in the city. We have more than $7 million in bridge maintenance and repair, more than $60 million in stormwater needs (this is in today's dollars and does not include additional needs and costs that will arise in five, ten and years beyond that), as well as two pools, the market building and other existing needs that must be addressed.

Second, between the time the design would take place ($1.2 million) and the time the amphitheater would be built ($13 million) is several years and two possible council changes. As we all know, when councils change then priorities change. I do not believe it is fiscally responsible to commit to $1.2 million now when the chances of priorities changing over the next four years is rather strong.

Third, I do not believe we have near the necessary financial information to make such a serious and costly decision. Please see the follow:

-At $14.2 million total cost for the amphitheater, our annual debt payments, given current market conditions and interest rates (which may be higher in four years) would be $1,178,600 (that's $83,000 per $1 million borrowed).

-On top of this, and something we have really hardly discussed, is that the projected numbers indicate that, beyond the nearly $1.2 million in annual debt service payments, there is a $500,000 per year subsidy that is called for - this subsidy assumes the projected numbers are correct - if they are not, the subsidy could be even more than $500k per year.

-So, if market conditions stay the same, and we have unusually low interest rates right now, and the cost of construction remains fairly constant, we as a city will have to pay nearly $1.7 million per year just to meet our debt and subsidy obligations. This does not include maintenance costs.

Fourth, we have had no discussion, and I don't believe that the City Manager or Finance Director have been asked, but have we done any projections as to what we believe the indirect revenue impact would be with an amphitheater?? By this I mean do we have any idea how much tax revenue would be generated or any projections of this from downtown food, shopping and the indirect benefits from an amphitheater? I cannot find anything that even begins to address this, which to me is vital and necessary information to have to know whether the costs of the amphitheater are outweighed by the benefits.

And lastly, the Civic Center in '08 required, debt payment and subsidy, $2.7 million from the city. If we are having to subsidize it to such an extent, it is difficult for me to understand how we would not be required a continued and large subsidy for an amphitheater. And will we be pulling attendance from the Civic Center and thus creating the need for an even larger subsidy. We are hopeful that Global Spectrum will be able to reduce the Civic Center subsidy, but we are no where near close yet.

In closing, I believe that an amphitheater should not be a priority for our city at this time. We have some real needs in our neighborhoods and in the community that I believe have a direct impact on the future prosperity of the city. I would love an amphitheater as one resident, but having spent so much time in the neighborhoods across the community, I believe that concerns over curb, gutter and sidewalk, stormwater, economic development and the need for new and better jobs, and other needs are a much higher prioirty for our residents. We must take care of the facilities we already have, such as our pools that do need significant renovations, before we begin to build new capital facilities.

I would only ask that before we finalize the CIP we address this again and do more homework. I do not believe we have a full understanding of the implications of committing our taxpayers to more than $14 million and believe it would not be a responsible course of action to proceed with so many unanswered questions. Given all this, I will not support moving forward with the $1.2 million design at this time.

Thanks for your consideration and I hope you will agree that we should discuss this more, ask Ann Shawver if she can figure out some projections for indirect tax implications, overall subsidy and debt service and the real numbers that we need, aside from consultant projections, to determine whether this is a wise project or not.

Sincerely

Court