RICHMOND, Va. – A few hours after my column was posted on WTVR.com Wednesday, I got a tip about the Mayor’s posse chuckling to themselves after reading it.
Apparently they had already decided to change the financing plan to make an end run around my article. Only they had not told anyone, it would be revealed later that night.
Today, the Mayor’s letter to Councilman Baliles proves the tip was right. His letter got released last night. The Councilman hasn’t had time to respond. But give him great credit for getting the Mayor to answer and reveal the truth, “good show mate” as they say in Australia.
But the Mayor’s letter changes the financing, at least the way everyone had been led to believe.
It is a clever bait and switch.
Just read what Graham Moomaw wrote in today’s RTD about what the Mayor’s posse had been saying as recently as yesterday afternoon:
“City officials have said the Shockoe stadium would essentially pay for itself through added tax revenue from the surrounding development….”
This has been a consistent mantra. But it has been totally misleading.
Because the issue of whether tax revenue covers the cost of the stadium is only relevant IF YOU ARE ISSUING BONDS the city has to repay.
But the Mayor revealed last night the bonds he wants to issue to pay for the Stadium will be issued by the Economic Development Authority, not the city.
Unless the city is on the hook to repay the bonds – and under the law EDA bonds are not legal obligations of the city – then the “tax revenue” angle is totally misleading because tax revenue CAN NOT PAY BACK EDA BONDS!
EDA bonds are “revenue” bonds and are to be paid back by revenues going to the EDA from the project and dedicated to such bond repayment.
The “tax revenue” angle has nothing to do with it the repayment, at least legally under state law although the city and EDA could enter into whatever agreement relative to repayment they so choose consistent with the law. The Mayor is saying the city will have a “moral obligation” to repay the bonds.
What does this mean?
This is a very slippery legal and financial slope.
But it is what he said and so what the heck does he really mean here?
By now switching to EDA financing, the public’s right to a public referendum can be bypassed (although I am researching a line of federal cases to see whether this is actually the case due one yet unexplored angle in federal law).
For weeks now, the Mayor’s people have been intentionally leaving the impression that the city would be issuing the bonds and responsible for not only paying back the principal and interest, but also management.
NOW WE LEARN THIS IS NOT THE CASE.
Moreover, they have decided to use the EDA to finance the stadium, which makes what Mr. Moomaw reported today irrelevant as a financing matter relative to the Mayor’s Shockoe ballpark.
However, he did say the infrastructure improvements required for the stadium would be done with city bonds.
These bonds would be subject to a public referendum if enough signatures are collected.
Paul Goldman is in no way affiliated with WTVR. His comments are his own, and do not reflect the views of WTVR or any related entity. Neither WTVR nor any of its employees or agents participated in any way with the preparation of Mr. Goldman’s comments.