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Old 11-19-2011, 12:19 PM
 
Location: Georgia, on the Florida line, right above Tallahassee
10,473 posts, read 13,413,505 times
Reputation: 6344

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Local News | Rush on to prevent default of Wenatchee arena | Seattle Times Newspaper

The state Treasurer's Office is rushing to prevent a publicly owned arena in Wenatchee from defaulting on $42 million in debt, fearing a swift bond-market reaction that could jack up financing costs for other local governments.
The treasurer's proposal would force the public-facilities district that owns the 4,300-seat, multipurpose arena to borrow money from the state and pay it back with local tax dollars.
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Here's the rub;
A state proposal to avoid default on the Town Toyota Center debt would give the arena’s owner the ability to impose a sales tax increase across nine jurisdictions without voter approval.
State treasury officials have said they want to avoid a municipal default in the state at all costs because of the potential impact to the state’s bonding capabilities. The last municipal default — the Washington Public Power Supply System — had a negative impact for decades, state officials have said.

Here's the other rub;

In 2008, the district issued three bond-anticipation notes worth about $42 million to pay for the facility. The notes are basically short-term financing issued with the expectation it will be paid off later with long-term bonds.
The bonds were never issued, at least in part because the arena didn't make as much money as anticipated, Opitz said. But there were other factors as well, and the district only made interest payments on the debt. Now the entire $42 million is due Dec. 1.

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So..let's borrow 42 million dollars (and tax the public to pay it back) to prop up a public arena that doesn't make enough money to justify the selling of bonds to pay for it, so that other people will still loan the state money like the state actually has no problems paying its municipal debts. When in fact, it has to create a new sales tax to fix the problem with debt it can't pay on something that didn't make as much money as some politician thought it would.

That's government in action. Or slapstick. Your choice.
Can't default, or the whole house of cards comes down.

Heh. Oh well, just hit the locals with another tax and it's all good.
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Old 11-19-2011, 12:44 PM
 
29,988 posts, read 35,855,551 times
Reputation: 12719
It is a municipal and state issue. If the people of Washington state or of those municipalities pass such a measure they are fools. Time for Washingtonians to read their state Constitution.
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Old 11-19-2011, 12:45 PM
 
Location: Great State of Texas
86,093 posts, read 69,893,919 times
Reputation: 27519
And right now Austin is going down the same path with funding a Formula 1 Racing circuit which includes major infrastructure changes. And the developers don't want to belly up their money of course.
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Old 11-19-2011, 12:53 PM
 
Location: Georgia, on the Florida line, right above Tallahassee
10,473 posts, read 13,413,505 times
Reputation: 6344
It's slimy government if you ask me. Bond holders are usually paid in full during a bankruptcy because the city wants to continue to borrow money. In this case, they knew the bonds wouldn't be purchased, so they just decided, "To hell with it, we'll figure this out later." and somehow stick it to Joe taxpayer.

America's junkiest cities - Jun. 1, 2010

Oh well, at least we ain't the only ones heading for the credit junk bucket.
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Old 11-19-2011, 06:29 PM
 
Location: Old Bellevue, WA
18,794 posts, read 13,583,139 times
Reputation: 7921
Ralph Nader came to Seattle to explain why tax-funded sports stadiums were a bad idea. He said that they would 'socialize costs, privatize profits.' But of course no local democrats paid him any nevermind and the stadium was built. Never let principles get in the way of Paul Allen, the NFL, and local media that makes megabucks from covering and promoting sports.
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Old 11-19-2011, 08:54 PM
 
29,419 posts, read 17,957,404 times
Reputation: 5434
The arena has been there since '08. Did they public get to vote on it to begin with to build the thing? It seems to me the loons from Cali have been relocating to Seattle and up the west coast and they still have the attituded that the state has a neverending pile of money to throw away. They will destroy Seattle next and the infestation will start moving east into Idaho and Montana.
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