Originally Posted by
OkieDave
Councilman Ed Shadid's Facebook page comment on Lackmeyer article:
Robert Rowling, the owner of Omni Hotels, is the 67th richest human on the planet with a net worth approaching $7 Billion. He could do this deal without public subsidies. Instead, he engages in predatory, parasitic behavior in which he extracts enormous sums of money from cities like OKC which are struggling to finance core services.
Assuming that the city is able to sell the revenue bonds at 4% interest, the estimated cost to the city is $135 million when you include interest costs. In addition, the city must spend all of its money before Omni spends a dime thereby allowing Omni to shift interest costs to the city. In addition, the city will essentially provide an interest free loan to Omni who will buy the land over a 25 year period. In addition, the city must builtd a $37 million parking garage plus acquire the land for the parking garage from OG&E. But we are not through: the City is prohibited from subsidizing any hotel in an area defined by Omni which includes essentially all of downtown threatening adaptive re-use projects such as those contemplated at Spaghetti Warehouse etc...Finally, and most importantly, if the hotel does not perform as well as projected and there is a shortfall in paying back our loan from the proceeds, then the shortfall must be paid from the city's general fund which will further erode delivery of core services to our citizens. Imagine a scenario in which the owners of the Thunder demand a new arena from taxpayers (coming in the next 2-6 years IMO) or else they would have to consider relocating to a different area within the Greater Metro or even to another city. Our debt on this hotel provides enormous leverage against us.
OKC is running out of time to diversify its economy. We already face the headwinds of nation leading cuts to public education, and by extension, academic research. If we do not want to end up like West Virginia with its over reliance on a commodity which is going to plummet in value over time, we must diversify our economy as quickly and efficiently as possible. Imagine what an investment such as this might accomplish in an Innovation District centered around the OU Health Sciences Center where industries congregate, exchange ideas and technologies, and spin-off/create new companies. One biotechnology company alone (Selexys), which spawned from such a collobaration, recently attracted a $665 milion investment from Novartis. It is heartbreaking to see OKC put all of its incentive eggs in one basket. With this massive investment in a dying industry full of minimum and low-paying jobs, we will have no powder left to help create the 21st century city and economy our people deserve.
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