Palmer Events Center
'Chronicle' Betrays Constituency
RECEIVED Mon., Oct. 20, 2008
Dear Editor,
The Chronicle argument against Prop. 2 shares the same basic misunderstanding of real estate and finance that led the Austin City Council into its senseless $64 million subsidy of the Domain luxury mall in 2003 ["'Chronicle' Endorsements," News, Oct. 17]. The Chronicle’s own bad math severely understates the Domain obligation as “up to $25 million in subsidies, in 2003 dollars,” an error of $35 million over the 24-year life of the deal since the compounding rate is contractually 7.5%. That’s precisely where Endeavor hid their ill-gotten gains and exactly why columnists and council members are ill-advised to play retail subsidy games with sophisticated players in complex real estate deal-making.
Michael King argues against Prop. 2 because he thinks the redevelopment of the city’s own Downtown 6- acre Green Water Treatment Plant and its retail component will “likely require city subsidies to make economically viable” [“Point Austin,” News, Oct. 17]. But with the land valued at $55 million, why is he already walking in the developer’s door with his wallet wide open? Our municipal tax system is too regressive to champion retail subsidies. Austin has a host of other measures to gain additional leverage like granting density bonuses or fee waivers. The city could also set its vision with restrictive covenants and sell the land at fair market value or skirt Prop. 2 entirely with a tax increment financing district.
Mueller will carry on unharmed as Catellus would not walk away from a guaranteed 15% return. At the Domain, Endeavor failed to deliver the promised $35,000 average wages or 4 acres of public open space. They hid $26 million in additional compensation using sales-tax revenue projections of less than a Home Depot. A court-approved lawsuit settlement says we don’t owe the developer one red cent. Get the facts at www.stopdomainsubsidies.com.
The Chronicle built its business on Austin’s locally owned businesses who detest these subsidies, yet the Chronicle favors the position that will cause continuing harm to those same people. Retail subsidies are a mostly recent invention that came into vogue as a business model of Cabellas and Simon Malls. Let’s usher them back out the door and vote for Prop. 2.
The Chronicle argument against Prop. 2 shares the same basic misunderstanding of real estate and finance that led the Austin City Council into its senseless $64 million subsidy of the Domain luxury mall in 2003 ["'Chronicle' Endorsements," News, Oct. 17]. The Chronicle’s own bad math severely understates the Domain obligation as “up to $25 million in subsidies, in 2003 dollars,” an error of $35 million over the 24-year life of the deal since the compounding rate is contractually 7.5%. That’s precisely where Endeavor hid their ill-gotten gains and exactly why columnists and council members are ill-advised to play retail subsidy games with sophisticated players in complex real estate deal-making.
Michael King argues against Prop. 2 because he thinks the redevelopment of the city’s own Downtown 6- acre Green Water Treatment Plant and its retail component will “likely require city subsidies to make economically viable” [“Point Austin,” News, Oct. 17]. But with the land valued at $55 million, why is he already walking in the developer’s door with his wallet wide open? Our municipal tax system is too regressive to champion retail subsidies. Austin has a host of other measures to gain additional leverage like granting density bonuses or fee waivers. The city could also set its vision with restrictive covenants and sell the land at fair market value or skirt Prop. 2 entirely with a tax increment financing district.
Mueller will carry on unharmed as Catellus would not walk away from a guaranteed 15% return. At the Domain, Endeavor failed to deliver the promised $35,000 average wages or 4 acres of public open space. They hid $26 million in additional compensation using sales-tax revenue projections of less than a Home Depot. A court-approved lawsuit settlement says we don’t owe the developer one red cent. Get the facts at www.stopdomainsubsidies.com.
The Chronicle built its business on Austin’s locally owned businesses who detest these subsidies, yet the Chronicle favors the position that will cause continuing harm to those same people. Retail subsidies are a mostly recent invention that came into vogue as a business model of Cabellas and Simon Malls. Let’s usher them back out the door and vote for Prop. 2.
Brian Rodgers
Stop Domain Subsidies
Vote for Prop. 2
Stop Domain Subsidies
Vote for Prop. 2