I was under the impression that the $150,000,000.00 renovation of the convention center was going to generate millions in revenue for the city thanks to all the huge conventions that are going to flock to town. If that is the case, why do we need to subsidize a luxury hotel to the tune of another $139,000,000.00 (48% of the project cost) to make it financially feasible practically next door? And we wonder why we can't pave our streets and are broke.
There ensued a substantive discussion.
JeffG: It's a great time to be a corporate player in Louisville under a mayor as fully committed to trickle-down economic theory as Reagan ever was-- the same guy who thinks $10 an hour is too much for labor thinks this is fantastic.
MarkC: Guess it's just me, but if I financed 48% of a for-profit business, I would want something approaching 48% of the profit or my money back plus interest. I never claimed to be good at this business thingy.
JeffG: Aww, Mark. You take all the fun out of public-private partnerships-- public expense, private reward. You'd make a lousy lobbyist.
Given that New Albany's mayor (a) prefers backroom deals out of public view, (b) maintains an economic development director eager to incentivize the sort of entities that usually don't need it, and (c) photobombs Greg Fischer whenever possible ... well, there may be something to learn from the Omni giveaway.
Unprecedented Omni deal would restrict Metro in future projects, by Stephen George (Insider Louisville)
The deal Mayor Greg Fischer announced this week to bring a 30-story, 600-room Omni hotel tower downtown would add a new skyscraper to the city skyline for the first time since 1993, help attract tourism and other economic activity to downtown Louisville, and provide welcome relief for a Central Business District increasingly desperate for hotel rooms.
It also would impose unprecedented limits on Metro’s ability to make certain large-scale economic development deals in the coming years while requiring the city to work on Omni’s behalf in ways it has not done before for a private entity. And if the city’s financing scheme for the project’s public costs were to fail, taxpayers would be left footing the bill ...
You see, there's this pesky non-compete clause ...
... However, for the first time, this deal also limits the city in future development projects that are similar to Omni. Under its agreement with Omni, Metro government would be barred from participating in any other projects in excess of 400 rooms and within a 1-mile radius of the Omni’s footprint unless the incentives it provides are worth less than $10 million — a pittance to the high-profile deals that have come to define parts of downtown.
In effect, with Omni’s projected open date in 2018, the provision would prevent Metro from subsidizing any new hotel development in the heart of the city — or in support of an expanded convention center — for the next 10 years ...
... the provision has irked some local developers, whom IL granted anonymity to speak freely because of the sensitive nature of their business. They told IL the non-compete clause would needlessly prevent future opportunities without offering city government any real benefit.
The crux of it:
They also worry Metro is focusing its economic development efforts on big projects like Omni to the exclusion of locally driven, smaller-scaled investments that could better prioritize livability and quality of life downtown. And without the ability to help finance new downtown hotels near an expanded convention center, they said Metro might find itself bereft at key points down the line.
To repeat, in bigger letters:
(fill in name of city) focusing its economic development efforts on big projects ... to the exclusion of locally driven, smaller-scaled investments that could better prioritize livability and quality of life downtown.
That's my point. Not only that, but from the perspective of Jeff "922 Culbertson" Gahan's demolition fetish, the Omni deal also provides Fischer with the opportunity to level historic structures.
Envy. It's contagious.
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