Sure is a great time for stuff like this to happen, isn’t it?
Harris County taxpayers may have to inject up to $7 million a year into the Harris County-Houston Sports Authority for the next two years due to a financial crisis sparked by the souring of bonds used to build Minute Maid Park, Reliant Stadium and the Toyota Center.
Facing balloon payments on $117 million in variable-rate bonds, the authority now is obliged to pay off the debt in five years instead of 23 years. That would require $24 million a year — a figure that, together with more than $30 million in additional obligations, would push the authority to the brink of insolvency.
The alternative: Convince major banks to provide lines of credit that would give the authority a two-year window to refinance. That would cost $7 million a year.
But those deals would create a new set of problems: The authority would have to take $7 million a year now used for stadium maintenance and the expenses of the Harris County Sports and Convention Corporation and spend it on repaying the loans. To make up the difference, Harris County may have to pick up some of those expenses with property tax revenue, a step that some say indirectly violates stadium boosters’ promise that taxpayer dollars would not be used to pay for the new venues.
Bloomberg had a story about this a few days back as well. I’ll admit it, I voted for the stadium deals when they were on the ballot. I believed at the time that they provided an economic boost for the cities that built them – the research is clear now that that is not the case – and I believed the assertions about how they would not be paid for with tax revenues. Live and learn. I still don’t regret my votes, as I believe the city has gotten value out of all that construction, and I suspect that in the end the refinancing will go through, which will make this not be a crisis any more. But it isn’t what we were promised, and there ought to be some consequences for that – if it means the dissolution of the Sports Authority, or at least a huge curtailment in its mission, that’s a good start. I’m curious as to why the name Gene Locke did not come up in this story, since he has longstanding ties to the Sports Authority and has touted his involvement in the stadium deals as part of his qualifications to be Mayor. Seems like it would be a good idea to get his reaction to this on the record, don’t you think?