The cost of building Minute Maid Park, Reliant Stadium and Toyota Center rose by $37.2 million this week when the Harris County-Houston Sports Authority voted to issue new bonds.
Issuing the bonds was necessary to persuade one of the three major investment rating agencies, Moody’s, not to downgrade the authority’s bonds from investment grade status to junk bonds, said Ric Campo, chairman of the authority’s finance committee.
The new bonds were needed to make up for declining hotel and car rental tax revenues, which the authority receives to pay off bond debt. In 2002 and 2003, the revenues sagged 10 percent.
To meet the annual payments for $900 million in previously issued bonds, the authority had projected annual 3 percent increases in hotel and car rental tax revenues.
“September 11 came and the recession came, and the hotel and car rental taxes have not been growing 3 percent. They’re declining,” said Oliver Luck, sports authority executive director.
The three sporting venues cost $1.036 billion to build. (Reliant Stadium cost $500 million, Minute Maid Park, $286 million, and Toyota Center, $250 million.) With the bond issuance, the price tag has now risen to $1.073 billion.
Many of those who supported building the venues said the county’s residents would not pay the bills — they would be borne by visitors who stayed in local hotels and rented cars.
“The taxpayers of Harris County really aren’t affected,” said Sue Millican, the authority’s chief financial officer.
But Paul Bettencourt, Harris County tax assessor-collector, has estimated that about half of car-rental taxes are paid by county residents and businesses and about one-third of the taxes collected by the sports authority come from within the county.
“It’s just three, four, five years after the elections, and already they’re selling more bonds,” he said. “This is a big concern to me, and it should be to taxpayers.”
The Dallas Cowboys and Arlington are closer to an agreement on the financing of a $650 million football stadium that would make this city the new home of America’s Team.
Both sides said Tuesday that they agreed on all major issues but would not discuss specifics.
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The City Council voted Tuesday night to pass a resolution outlining some details of the financing plan. That resolution, described as a formality, has to go to the state comptroller’s office before a financing plan can be presented to voters.
That document says the city would pay for its share of the stadium with a half-cent sale tax increase, a 5 percentage-point rental car tax increase, and a 2 percentage-point hotel-tax increase. Also, a $3 tax would be added to the parking fee at the stadium, and a tax on each ticket sale of up to 10 percent would be levied.
Be sure to check back in a few years when the city of Arlington issues some new bonds to help cover its debt.
Are these bonds being issued under some exisiting authority? Won’t a new bond issue have to be voted on by referendum?? (countywide?) It seems to me the bloom is off the rose and if they do have to go before voters the fight will be long, bloody and hard with slim to less-than-even chances of passage.
Does any city really benefit from publicly financed sports stadiums? Except New York.
Jerry Jones’ share of the Dallas cost is how much?
Good question, LM.
BTW, what’s wrong with Texas Stadium? If this goes through, will it be used for anything or will it just end up as a giant brownfield in Irving?