Arena issue heads to Lincoln City Council on Monday
Lincoln Journal Star
February 5, 2010
By Deena Winter
During the past five years of planning and talking about a new arena, the Lincoln City Council largely has been in the background.
But on Monday, the issue lands on the council's plate, when members will decide whether to put the arena issue on the May 11 primary election ballot.
The council also will be asked to approve agreements to form a joint public agency with the University of Nebraska-Lincoln to finance the project and for the men's and women's basketball teams to play in the arena. The agreements are contingent upon voter approval of building a new arena to replace Pershing Center.
The joint public agency would be governed by the mayor, a member of the NU Board of Regents from District 1, which covers the largest portion of Lincoln, and a member of the Lincoln City Council.
The city would own the arena, and the $344 million financing plan would be backed by the city's taxing authority.
In advance of the council meeting, Mayor Chris Beutler gave the arena project one more plug during a news conference Thursday, saying a new arena would create jobs, generate tax revenue and keep young people in Lincoln.
"If you're concerned about your property taxes increasing, then you should support a new arena," he said.
If the council agrees, voters will be asked to approve about 6 percent of the financing plan: a share of state sales tax revenue collected at the arena and nearby hotels that the state would turn back to the city.
Councilman John Spatz thinks the council will put the question on the ballot, since most people agree voters should decide whether to proceed or not.
He said has sensed a more positive attitude about the arena in recent months. "I feel better today than I have over the last year," he said.
More questions are likely about the agreement with the Board of Regents. The city would own the arena, which the Huskers would lease for 30 years, beginning in 2013.
The athletic department would pay $750,000 in annual rent, but get credit for sales tax revenue from the sale of basketball tickets, the first dollar of city ticket surcharges on basketball tickets and a $300,000 credit for lost concession revenue. Depending on attendance, that could amount to free rent.
That may seem like a good deal for UNL, but the city needs UNL as a tenant both to keep the arena busy and to make advertising there more attractive.
Spatz said his primary concern has been that the city make conservative projections, and he believes it has.
"I don't want to over-promise anything," he said. "Politicians have a tendency of doing that."
The arena alone is expected to cost $168 million.
But the plan involves more than an arena: Streets, bridges, parking garages, surface parking lots and private development also are planned.
About half of the project's total $344 million price tag would be paid off with new citywide entertainment taxes that are expected to generate about $10 million a year:
- A 2 percent tax on restaurant and bar tabs;
- A 4 percent tax on hotel stays;
- A 4 percent tax on car rentals.
The entertainment taxes wouldn't be on the ballot.
Another 24 percent of the financing would come from arena revenue.
Members of the Citizens for Jobs and the Lincoln Haymarket Arena have sent out an e-mail alert encouraging supporters to attend Monday's council meeting.
Lynn Darling, leader of an arena opposition group that's still in the organizational stages, said she expects opponents also will turn out.
Her group -- which doesn't have a formal name, advertising budget or Web site -- has scheduled a Feb. 20 meeting at Walt Library, 6701 S. 14th St., from 10 a.m. to noon, that's open to anyone interested in joining.
The Nebraska Restaurant Association recently wrote to Lincoln City Council members expressing support for the arena project but requesting a look at a financing mechanism more broad than the proposed entertainment taxes. Bars and restaurants already pay 7 percent in state and city sales taxes.
Jim Partington, executive director of the restaurant association, said he plans to attend Monday's meeting.
Councilman Jon Camp, who owns eight buildings in the Haymarket District adjacent to the proposed half-billion-dollar project that includes redevelopment of a railyard and building the arena, said he hasn't decided yet whether he'll vote on arena issues.
He has abstained from voting on some Haymarket redevelopment projects in the past due to a possible conflict of interest.
"I suppose it'll have an impact on me one way or another," Camp said of the arena project.
