- At the Monday meeting of the Memphis City Council, that body was presented with a series of revenue projections to pay off the bonds on AutoZone Park, should it decide to buy it. Some Council members were skeptical of the projections, which were presented by Mayor A C Wharton's administration. Our City Hall reporter, Daniel Connolly, took photos of the charts while they were on the projector in Council chambers.
- First off, let's understand these charts. They are plotting the debt service on the proposed bond issuance, which would be paid from three streams: 1) rebates of sales tax from items sold at AutoZone Park; 2) payments in lieu of taxes from the adjacent Moore Building and its parking garage; 3) the lease payments from the Cardinals-controlled corporation that will lease the facility for at least 17 years.The first column, 'Sales Tax Rebate,' is perhaps the most important one. The annual projection each year changes based on anticipated growth from AutoZone Park sales. Each of the three documents plots a different path based on a different projection. This is the chart based on 3 percent revenue growth:
- (Forgive the small type.) You'll note that in each year the Redbirds' lease payment is more than the proposed $300,000, tapping into the wiggle room of an extra $100,000 from the Cardinals, for a total of $400,000, built into the agreement. But by 2020, even that isn't enough. Then the city would dip into the $100,000 backstop pledge from AutoZone, for a possible $500,000 annual amount. By 2024, that still means a shortfall -- which is the amount in the 'Non-tax Revenues' column. City officials say this amount would be paid from all sorts of revenue streams except your property tax revenues. This scenario was termed by city Director of Finance Brian Collins as conservative.
Here are the projections run at 3.8 percent growth:
- Under this scenario, a shortfall only appears in the final year of the debt, and even then, it's a mere $1,348. But the Cardinals and AutoZone are both tapped for more than the baseline of the deal. Collins called this 3.8 percent projection "likely."
And finally, the projections at the more ambitious rate, 4.4 percent:
- Clearly a rosier picture of the deal, the Cardinals are asked to chip in just a few thousand more dollars every month to make sure it works.
Collins told Council members that all three scenarios are "worth your support."
What do you think?