Convention Center

[Just the facts]

Let's put this in very simple terms...

If you owned a house that was worth $100,000 and wanted to trade it for one that costs $300,000, how much more would you owe the seller? $200,000 of course.

So you can either pay him $300,000 in cash or your house + $200,000. Either way, the cost is the same to you, although perhaps an easier transaction.

And either way, you still have $300,000 invested in your new house.

Right - but only $200,000 came out of my budget for a new home. Let me add, I totally get what you are saying and see your point of view but as long as we are trading apples for apples (land for land) I don't have an issue with it. Now if the CC guys came back and said hey - lets trade the existing Cox center then that is not an apples for apples trade.

[Urbanized]

Utilizing existing assets in no way "keeps costs down".

You are basically spending assets, whether it's cash, land or otherwise. It's the exact same cost no matter.

I agree with you. But crux of this argument is that by your own admission you would have no problem building on City -owned land and NOT charging the value of that land to the project (this still "spends" an asset), BUT you feel if the same land were used in a swap it SHOULD be charged charged against. I'm sorry; that makes no sense. None.

If you at least want to be consistent, say that when the arena was built we should have washed $5 million or whatever the land was worth at the time out of the MAPS budget and into the general fund via OCPPA or whichever trust owned the old bus terminal.

[Pete]

Right - but only $200,000 came out of my budget for a new home.

Cost = budget = expense.

[mkjeeves]

Who cares about budgets, especially those presented to and approved by the voters? Besides Pete, I mean. When we put construction out for bid, they could put it in the bid documents the low bidder gets a city owned building in exchange for the one they build. That would get us even more bang for our buck.

[Just the facts]

I think we agree that the CC committee can't sell off city assets to raise money for the CC, but I just don't see that being the case here because we are getting equal value for the same commodity. We aren't selling City Hall to get an extra $50 million for the CC budget because that would result in us not having a City Hall (insert joke here that City Hall has already been sold and thus isn't the City's to sell now). We are taking land already owned by the city and trading it for land the that will then be owned by the city. It just so happens that the CC will then be built on that same land.

[Urbanized]

It's fine to be sanctimonious, but what is the point of the City owning land if it is not to be used for public projects?

[Pete]

It's fine to be sanctimonious, but what is the point of the City owning land if it is not to be used for public projects?

The huge majority of the land acquired by the City is not for public projects.

[Urbanized]

You're probably right; public USE probably would have been a more appropriate term. The only point of the City owning land should be that it some way it ultimately benefits the community. Public projects fit that definition. As far as I'm concerned - though there is surely legalese that will confirm/deny, and appears to be according to the City attorney's opinion - MAPS is a construction budget. If utilizing City-owned land makes it easier to deliver the intended project within that budget, such use is a good thing.

If one day we have to replace Chesapeake arena and repurposing the scoreboard helps them save millions that would have been otherwise spent on a new one, thus allowing other parts of the project to stay off of the chopping block, I'm all for it. Sorry, but it really IS as simple as that.

[Urbanized]

For the record, when I said "sanctimonious" I didn't mean Pete.

[hoya]

I guess for me it comes down to a basic question - should MAPS projects pay for the land they are built on if that land is owned by the city?

That's a solid question.

[Stickman]

Agree. 20 million plus the Cox Center( worth about 25 million ) equals 45 million for the vacant land.

[Stickman]

How about we pay 25 million for the land the city convention center and hotel will be build on and let the Hall/Howard group keep the land (between Hudson and Walker) that we won't use. It will be worth 3 times what it's worth after everything is built.

[Urbanized]

That land has been identified for future expansion of the CC. Doing that would guarantee having to start from scratch the next time we need more convention space.

[Pete]

If you were managing a project with a budget and went to your boss and said, "I'd like to use company assets in trade on my project and don't want that to count against my budget", what answer do you think you'd get?

I can tell you because I was a CFO who not only managed large projects but also was responsible for all the books for a large corporation. No flipping way.

Those assets have value and come from somewhere, just like cash. There is absolutely zero difference when it comes to budgeting and accounting.

Trust me.

[Urbanized]

So, again, why the double-standard from you regarding building on a site that the City already owns, vs. trading land? Again, Pete, it's a double standard that doesn't pass the sniff test.

[Pete]

So, again, why the double-standard from you regarding building on a site that the City already owns, vs. trading land? Again, Pete, it's a double standard that doesn't pass the sniff test.

Because that's the way the budgets were set up and the deal that was agreed to ahead of time, before the public voted, there were subcommittees, etc.

And, there is was/is no property changing hands in those situations. The City still owns it.

[Urbanized]

If you are referring to previous MAPS projects that's not the way it happened, at all. The ballpark and library very specifically did not end up anywhere near where they were originally envisioned.

[Pete]

The better question is why don't we use City assets to fund all sorts of projects that go over budget (or that would like to)?

Why not sell land to fund the shortfalls in Project 180, or to allow the Whitewater facility to be built to original specs along with the river grandstand?

Virtually ever MAPS project was over budget and had to be scaled back in some way.

Now the convention center comes along, has already been given a big increase/expansion before we've even acquired the property or have a final design (let alone construction bids) and we are already supplementing millions more through the transfer of property??


So, why is the convention center being treated this way when no other MAPS project has been?

It was one of the lowest priorities as determined by voters.

Plus, there was no allowance for parking (they now want to fund that through TIF tax dollars) or the hotel (which will require some undetermined number of tens of millions).


The City owns hundreds of millions in land. Why not trade (which is just another word for sell) that to fund all these other projects or education or tons of other things?

[Urbanized]

By the way, liquidating an underutilized asset to pay or free up budget for a new asset happens in business every single day.

[Pete]

If you are referring to previous MAPS projects that's not the way it happened, at all. The ballpark and library very specifically did not end up anywhere near where they were originally envisioned.

But they were still paid for by MAPS (i.e. $.01 sales tax) funds.

[Pete]

By the way, liquidating an underutilized asset to pay or free up budget for a new asset happens in business every single day.

We're talking about a voter approved project with very specific parameters, not the general operating fund of the City which is where these assets already reside.

[Rover]

If we put it on land the city already owns, would anybody care?

[Just the facts]

The better question is why don't we use City assets to fund all sorts of projects that go over budget (or that would like to)?

Why not sell land to fund the shortfalls in Project 180, or to allow the Whitewater facility to be built to original specs along with the river grandstand?

But that is not what is happening here. The city is taking an asset and trading it for the exact same asset in a different location. We aren't selling land and then taking the proceeds to build 50,000 more sq. feet (although that might be okay with me as well). The City will essentially own the same value of land before and after the transaction. If you want to look at it from a corporate point of view look at it like currency exchanges. Company X exchanges euros (which they don't/can't use) for dollars (they can/want to use). The value is the same.

What if the City wanted to kick in some funds for an additional mile of streetcar lines and it is going to sell some park-front land to do it? Are we saying that the streetcar can only be funded with MAPS III money now? The 'budget' is for the project's share of the MAPS III money, not additional funds from the City. Let's say the land swap is $20 million and that gets charged against the CC budget - that would generate a $20 million surplus in MAPS III funding when the tax collections didn't change at all.

[Pete]

Let's say the land swap is $20 million and that gets charged against the CC budget - that would generate a $20 million surplus in MAPS III funding when the tax collections didn't change at all.

Only if the convention center is not planning to spend all of it's budget, and I am very sure that isn't the case.

They are going to spend their budget, plus the $30 million extra that was just allocated, plus contingency, PLUS more City assets in the form of land. And this is before we even have a design, let alone construction bids.

That was not the deal struck with voters and the reason there is a budget -- and subcommittees and all types of oversight -- in the first place.

[Urbanized]

But they were still paid for by MAPS (i.e. $.01 sales tax) funds.

But not the property on which they were built..?