Editorials

"An Informed Voter Is The Best Defense Against Bad Government"

"ANCHORAGE VOTERS BEWARE…….."? 

By Heather May voteno@gci.net.  March 30, 2005

On April 5^th Anchorage Municipal Voters will be asked to raise the Anchorage Bed Sales Tax and authorize the Municipality of Anchorage to enter into a contract with private developers to fund the construction of a second $93,000,000 convention center.  This will cause major financial problems for the Municipality of Anchorage and cannot succeed!

 

The existing Egan Center has never been able to pay for operational and maintenance costs.  It has lost between $200,000 and $500,000 each and every year since it was built 20 years ago.  The Egan Center was a gift from the State of Alaska and required NO debt.

 

$93,000,000 of privately financed bonds – financed over 30 years at 7% – will require an annual repayment of over $7.424 million dollars.

 

While the “Full Faith and Credit” of the Municipality of Anchorage may not be pledged in order to sell the $93,000,000 bond package, it still means that Anchorage Taxpayers will be liable when the project falls flat on its face.  Can you imagine our “liberal” Assembly allowing those two buildings to sit empty?

 

Currently the 8% Anchorage Bed Tax generates $5,500,000 to fund the Anchorage Convention and Visitors Bureau and $5,500,000 goes to the Municipality of Anchorage to fund Anchorage Municipal Government.

 

The proposed Bed Tax increase will only generate another $5,500,000 to assist in the debt retirement of the proposed $93,000,000 “Begich” Convention Center.  This means that over $2 MILLION of additional funds will be required to pay off the annual Convention Center debt.  This doesn’t even count the operational costs that the two centers will require.  Let’s do a little math.  The new “Begich” Center will be 3 to 4 times larger than the Egan Center.  The Egan Center lost as much as $500,000 per year for 20 years.  It’s quite possible that the dual “centers” will annually run $2,500,000 in the red.  Add this to the annual debt repayment for the “Begich” Center and Anchorage Taxpayers will be in a world of hurt.

 

Can you imagine the Municipality of Anchorage or the Anchorage Convention and Visitors Bureau being willing to give up most of their “Bed Tax” revenue?  If the Municipality gives up its share of the Bed Tax revenues – the Taxpayers will have to make up the difference.  This reduction in the city’s revenue source would be allowed to be made up from the taxpayers because it’s already been a part of the municipal budget.  The tax cap will not stop our “liberal” city fathers from using other city funds.

 

Can you imagine the Anchorage Convention & Visitors Bureau giving up their current share of the $11 million of Bed Tax revenues?

 

On top of all of this, the new “Begich” Civic & Convention Center will have significant overhead expenses.  Additionally, the Egan Convention Center will still have ongoing operational expenses.  This will amount to millions of dollars each and every year!

 

Based on a recent Brookings Institute Report, the National Convention Center industry is in BIG trouble.  There are millions of square feet of convention center space that is empty.  There are also millions of additional square feet of Convention Center space that is under construction or being planned over the next few years.  The Brookings Report says that “the convention business has been declining even as more cities join the competition and that projections for new business generated by new or expanded convention centers haven’t panned out – not to the degree their backers tout”.

 

Most Convention Center economic feasibility reports paint very optimistic projections that never work out as predicted!  Economic studies of proposed convention centers are always predicted to be such a wonderful civic investment – until after they are built,  and then the predicted numbers fall flat on their face.

 

The Anchorage Convention and Visitors Bureau will be lucky to pick off a handful of “large” conventions and meetings each year.  That will not be enough business to fill TWO empty Convention Centers.

 

These “two” white elephants will become a huge drain on the Municipality of Anchorage’s finances and will ultimately require the Anchorage Assembly to pay off the debt from property taxes.

 

If the proposed “Begich” Civic and Convention Center is such a good deal – then why not let the downtown hotels and related visitor business pledge their assets and finance the convention centers?

 

Build the “new” Begich Civic and Convention center and we will find out that FEW will come to Alaska to book the facilities.  Remember – Anchorage will be competing with Seattle, Portland, Boise, Denver, Salt Lake, Las Vegas, Phoenix, Palm Springs and dozens and dozens of other communities all willing to give away empty space to help pay off their money losing civic and convention centers.

 

Please be sure to vote on Tuesday the 5^th of April and be sure to Vote NO on the Civic & Convention Center Bond Issue!

 

ALSO….Don’t Forget…….

 

how Begich got elected Mayor two years ago…….He got his liberal buddies on the Anchorage Assembly to change the rules allowing him to win the race with only 45% of the vote!  They knew that the best vote Begich could garner was 45% - so they CHANGED THE RULES…

 

Now they have done it again.  Backers of the “Begich” Convention Center know that they could NEVER convince 60% of the voters to approve their “dream” so they got the assembly to change the rules.  Now they will only need 50% + 1 vote to subject the taxpayers to their $93 MILLION DOLLAR DREAM if a majority of the voters say yes!

 

You should also know that two weeks ago a poll was taken that showed there were only 38% of the Anchorage Voters supporting the “Begich” Convention Center.  49% were opposed and 13% were undecided. 

 

Don’t let the “BIG MONEY” pro Convention Center campaign fool you into voting for the $93 Million dollar center. 

 

FINALLY, are you aware that the Municipality of Anchorage has well over $1.5 BILLION in current long term debt….Think about it!

 

 

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