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10 Million of Your Tax Dollars In The Wind

A nice bunch of bankers and investors will make a cool $10 million or so from the LENS deal.

An interesting comment went relatively unreported last week. When asked about the borrowing cost for completing the LENS, the administration finally admitted it would be about $10 Million over the life of the bonds.

The problem is the TIF revenues have only produced about $37-$38 million so far. The City and the LENS team has been spending it like water on consultants, construction managers and experts all designed to produce more CYA than results.

So to get the money needed to actually build the iconic LENS, the City will go on the hook for an additional $20 million or so to complete the build. It would look like the actual cost of the LENS, assuming no cost over runs (not a very likely scenario)  will be more like $60-$70 million including debt service.

Look for an open ended bond financing resolution, so the LENS team can go back and get more money if they need it with no serious restrictions.

The TIF (Tax Increment Fund) revenues, which are paid by tax payers in the designated TIF area, will be pledged to pay the bonds.

A nice bunch of bankers and investors will make a cool $10 million or so from the LENS deal. Talk about laughing all the way to the bank.

Sounds good. Let the folks in the TIF pay for the LENS and support the bankers/investors and the rest of us will just ignore the thing.

It is possible that over the life of the bonds the TIF Revenue will run out or be insufficient to cover the principal and interest debt service. Then all of the tax payers get to help pick up the tab.

What is so maddening about all of this is the LENS is being pushed as a way to lower the City's subsidy to the Pier, about $1.4 million annually. If someone would come up with a cost to maintain the structure, scrape the Pelican poop off the walk way and those fancy aluminum panels and add in the debt service there is a good chance the City is once again on the losing side of the equation.

We have not done that yet because the numbers just might not work out for the LENS team, and the last thing they need is another problem.

That extra $500,00 per year being paid as interest  could sure go to some good projects in St. Pete. This was to be a pay as you go project when Mayor Baker conceived it,  not and in debt up to your ____ as the Mayor and Council have morphed the project.

What's the rush? Why borrow the money? Just wait until the TIF funds are sufficient to do the project. The rush is the few people driving this project know it is now or never.

Apply some fiscal sense and some common sense and no person in their right mind would touch this thing with a 10 foot pole.

e-mail Doc at: dr.webb@verizon.net, or send me a Facebook Friend request. 

Have your say.  Be sure to get a petition for the Pier Referendum and complete it properly. Information and schedule of events at Stop The Lens.

This post is contributed by a community member. The views expressed in this blog are those of the author and do not necessarily reflect those of Patch Media Corporation. Everyone is welcome to submit a post to Patch. If you'd like to post a blog, go here to get started.

Nicolas Weathersbee December 12, 2012 at 10:46 PM
John Rose said it very well: "It just keeps getting better and better." Thank you Doc, another great blog.
Rider December 13, 2012 at 03:16 AM
Why don't the Lens pushers realize that a silly pier won't transform St Pete into a major, global art destination? Come on now, it takes much more than that....first things first, St Pete needs a major art school....no city will ever be taken seriously as an art city without one......
Johann December 13, 2012 at 03:31 AM
Bottom line, the lens design was not properly thought out for our environment. Both with the bay water clarity as well as our violent weather. Our Pier has always had a structure at the end, that would provide for gathering, dining, parties, food & beverage and most importantly, shelter from our notorious weather patterns. 3 strike FAIL.
JW December 13, 2012 at 06:21 AM
This is one more rant. So the point of this article is that you should not do anything at all because ANY option would use the same funding method or you wait the 10 years as Doc suggests with no pier while construction prices go up and you end up spending even more than the debt service anyways. Baker has never said that he planned to pay as you go, please give a specific reference rather than placing your interpretation on Bakers intentions. What would you do, replace each section as it falls into the water over the next 10 years. Call Baker get a actual statement then you can write that.
beichler December 13, 2012 at 01:38 PM
I love how these bloggers just conveniently pick pieces to write about as opposed to the whole story. I'm pretty sure they gave a detailed answer and had a slide that compared the cost to maintain the current Pier vs. the cost of maintaining the LENS. It was cut in half, and that doesn't take into account any possible rent from the leasable space within the site. Our current Pier costs to maintain take into account rent from tenants and we are still at a $1.4 Million Dollar Subsidy! Close the shopping mall and build the icon!
Rider December 13, 2012 at 03:33 PM
Icon? Really? Tell me, people are going to flock to see that sculptural broken satellite dish?....especially during the rainy season? Really? And regarding the subsidy, the Pier is still the biggest draw in St Pete so it is worth it, can be reduced, and if we are looking to reduce a subsidy, why not look at the Mahaffey Theater subsidy, which is about the same amount as the one for the Pier. Keep writing, Doc, we appreciate this information especially since the Times is anything but objective in their coverage. We rely on you for objective information and as a voice of reason.
Bill H. December 13, 2012 at 08:07 PM
The Mahaffey Theater cost taxpayers 1.4 million in 2011. Then came Bill Edwards to run it properly and the subsidy went down. What we need is someone to properly market and manage the current pier.
Doc Webb's Bay Post December 15, 2012 at 02:06 PM
A rant it is. You only need to look at the original TIF proposal that was put forward by the Baker Administration and approved by the sitting City Council to understand mayor Bakers' original concept. The objective was simple. Go forward in measured steps and not go head over heels into debt. The economy tanked the TIF revenue, and now is not the time to burden the tax payers with a debt that the TIF revenues may not be able to pay off. Actually, the original plan of repairing the approach and looking at the Pier head as a separate project was a good plan. What messed everything up was the decision to ignore the Task Force Report and let the art community drive the project.

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