A.G. Gancarski
The vote, much like the Jaguars’ game against New England this year, was never in doubt.
With heavy backing from the Lenny Curry administration throughout the process, Jacksonville City Council’s Recreation, Community Development, Public Health, and Safety Committee unanimously OK’d the city’s $45 million allocation for the improvements to EverBank Field, which include a covered practice field, an amphitheater, and other in-stadium renovations.
The Finance Committee approved this deal 6-1 Monday, with Danny Becton playing the role of dissident, a fact that rankled certain proponents of the bill even almost twenty four hours after the vote. At least one believed that it would have been 19-0 if Harden hadn’t spoke yesterday.
Expectations were that the administration would pre-empt such undue populism in this committee meeting, and the other two on Tuesday.
Luckily, there wasn’t much to worry about, as at least this committee doesn’t trouble itself by looking at proposed deals in the larger context of macroeconomic turmoil, such as threats to the dollar’s reserve currency status.
Their main worry: event conflicts.
Despite that minor setback, good humor permeated Council Chambers before the meeting, with Council President (and EverBank Executive) Greg Anderson joking with the Jags’ General Counsel, Megha Parekh, that “we’re going to have to put a little plaque here for you” on one of the front row seats, where Curry administration members and Jaguars’ officials sat side by side.
Anderson and Harden emerged from the Green Room, just as Chairman Doyle Carter reprised Bill Gulliford‘s “dog and pony show” joke from Finance on Monday.
Mousa’s remarks were familiar to those who read the Finance write-up from Monday, delivered with a little bit more edge, as if pre-empting the loss of control of the discourse that permeated Finance’s deliberations.
Of note: Mousa selling the club seat renovations, saying that the current 11,000 club seats is “too many club seats for an NFL stadium,” an interesting point.
Mousa emphasized the “multiuse” function of the “covered practice facility,” which can be used for “other various functions that occur in the stadium area.”
Mousa also emphasized that the Jaguars “get all the revenues, all the expenses” from Jags’ events in the covered practice facility, while the city has “opportunities to hold functions in the covered flex field,” for which the “city gets all the parking.”
“There’s some discussion going on that the city doesn’t get use of any of these facilities,” Mousa said, not specifying where that comes from.
Instead, this is a “revenue-generating opportunity” for the Jags and the city.
Then, Mousa sold the amphitheater, saying that it would face north, which should delight the Eastside residents during the next heavy metal or schlock country music festival there.
“The same conditions apply that apply to the covered flex field,” Mousa said, with the “same scenario” on ticket surcharges and parking.
The city has five guaranteed uses of each facility of the year, and more with 60 days notice, and Mousa contended, very patiently, that there are “revenues to be stashed” which will go to facility improvement.
Mousa again emphasized that separate legislation will be introduced next year to raise ticket surcharges in all city facilities.
And the call to action: “it’s a very tight timeline” with “a lot of work to be done” and “plenty of work” for the contractor set.
Then, Chief Financial Officer Mike Weinstein spoke, noting that “in Finance Committee, we got off on a bit of a tangent” and had a budget discussion (seemingly appropriate for a $45 million outlay), then excoriating the T-U for “worst case scenario” projections.
Seemingly every advocate of the deal made a de rigueur jab at the article, predicated on projections supplied by the administration.
Weinstein then contended that the bed tax would cover the debt service for $88 million of debt service, if needed, though he stressed that they don’t plan to go out for $88 million.
He then explained the mechanics of debt service and the bed tax to members of the committee, which seemed almost deliberately over the head of at least one member.
As in Finance, no consideration was made of macroeconomic uncertainty, including Fed rate hikes expected as early as this month.
“As I was quoted in the paper as saying, when you spend $45 million, it’s going to have an impact.”
Weinstein noted, again, that bed tax dollars can’t be used for drainage, sidewalks, or other things; rather, it must go to “tourism-related things,” and so the investment is a “partnership” to “try to keep the team here.”
“Even when they do events, we get revenue,” Weinstein said.
With expectations that the Jags’ management will use the facility 25-30 times a year, Weinstein emphasized ample usage opportunity for the city.
That is, if Council wants to “be bold.”
Then, questions from Council.
Matt Schellenberg noted, in Gulliford fashion, that the “Jaguars take risk” with this deal, which Mousa agreed with, as he did with Gulliford yesterday.
Weinstein then noted, regarding the financing, that “money is so inexpensive right now” that we’ll “do the cash flow in a conservative way,” with up to 70 percent expected to be subject to long-term financing.
Councilman Reggie Brown then promised a series of questions.
“As it pertains to the projection of bed taxes,” Brown wondered if the numbers jibed with those of the Council Auditor, who noted that while recently bed tax has increased up to 10 percent per year, there was a year during the recession when there was an 18 percent decline.
The solution, clearly: a Council ordinance banning recessions.
Brown wondered about the “event company” language in the bill; Weinstein noted that “the NFL has lots of rules,” and one of which is that the team couldn’t take on debt past a certain point, which seems to require the creation of shell companies, such as American Thunder.
Brown also wondered about the possibility of additional burdens, such as Sports Complex maintenance, falling on the General Fund should bed tax suffer.
Mousa contended that there would be a “buildup of surcharges” in the “early years,” but maintenance would not be required. And surcharges would be increased, of course.
Meanwhile, the extant amphitheater, at Metropolitan Park, is at the “end of its life,” with dressing rooms and such “antiquated,” citing a 2009 report that recommended replacement.
Mousa added, later, that it was just “coincidental” that the current amphitheater was declared unusable just as this deal was proposed.
“My real concern,” said Brown, was that in previous administrations, he “watched the Kids’ Zone in Metropolitan Park being removed,” hampering quality of life for families with children
Lack of funding for that, said Brown, reduced public access to a “beautiful waterfront.”
Though Brown supports this deal “100 percent,” he’s unhappy with the erosion of these services.
Councilman Garrett Dennis then asked about revenue projections; Mousa cited the Jags’ projections of surcharge money for the city, assuming 25 events with 125,000 attendees, as being $800,000 for the city.
Then, Al Ferraro.
“Everything is great right now with the city and the Jags,” he asked, before wondering what would happen if the Jaguars left.
Then, Ferraro cited the T-U piece: “even a broken clock’s right twice a day.”
Weinstein: “If adjustments have to be made … government budgets are basically a priority system. If we don’t have the money for these facilities in the Enterprise Fund,” he said, they will “compete” with libraries and other buildings.
Meanwhile, Weinstein added that moneys are “basically pooled” into “500 different accounts” to “make sure that we are following all the rules and regulations” Council set up.
Mousa then chimed in, regarding “the Jaguars possible leaving.”
“I don’t anticipate the Jaguars leaving, but when negotiating the deal you always have to expect the worst.”
The Jags, he noted, are only committed to EverBank through 2029, and in case the worst happened, the city has the “option” to buy out the leases on “straight line depreciation of what’s left on the lease.”
“Our concern was if they leave, they turn out the lights and lock up the gates,” Mousa said, to protect the city.
All that said, Mousa does not expect the Jaguars to leave.
Katrina Brown was next, urging compliance with the JSEB program; Mousa committed the Jaguars to such compliance.
“When the citizens of Jacksonville see $45 million, they don’t understand that we can’t use the money for anything” but the stadium, she said, leaving out the fact that the money will be borrowed and paid off from future bed tax.
Paul Harden promised her “jobs going almost full-time” from events, as well as jobs in construction (“the short term jobs”), though he lacked any evidence as to how many would be created beyond the anecdotal.
“Generally speaking, Mr. Khan is very aggressive on local work,” Harden said, cautioning that the strict time line limits constraints that can be imposed on contractors.
As well, “dollars will be spent throughout the community” from visitors staying at hotels and eating at restaurants, Harden added.
Greg Anderson noted that “between Finance and this committee, you’ve now debated this bill for five hours,” and there are, of course, a “couple of committees to go.”
He then referenced the T-U article.
“What I’m hearing is that you don’t dispute the numbers, but that they’re worst case scenario.”
Weinstein noted that even though the numbers are worst-case scenario, the numbers are accurate, predicated on long-term borrowing and a 2 percent bed tax increase per year.
Before going through the amendments agreed to in Finance, Council Auditor Kirk Sherman noted that a fixed-rate would be locked in soon, with a “reasonable amount” of the debt being variable-rate or commercial paper.
Still, “you’ll have a tighter availability for some time,” with regard to funds being available for sports complex maintenance.
Sherman took questions about amendments, noting that bed tax revenue is “very volatile,” a statement that may be worth circling back to.
Meanwhile, the installation of temporary seats for college games will be a delightful addition to the annual budget process.
One new amendment: the proposed removal of the “targeted tax” language from the bill, which led committee chair Carter to ask “what is that.”
Harden gave a folksy explanation, quoting the Bible, and the committee members seemed as relaxed as toddlers at nap time.
Finance didn’t want it waived in Committee, but was inclined to do it on Council floor next Tuesday, said Mousa.
Harden disagreed, and the two men had a brief comic exchange that seemed lost on those in attendance.
“I’m going to make a small wager with Mr. Mousa,” Harden said, “when we go upstairs and watch whatever was said on the tape.”
What’s really at stake: if the removal of a targeted tax is established, it will bind the city for 30 years to not imposing such a tax.
30 years, in Jaguars world, adds up to about ten head coaches.
The Jags, meanwhile, worry that a tax could be levied on the team, to fund other functions, such as “extraordinary repair,” said Parekh, a “backdoor mechanism for the city to fund its other obligations.”
The “targeted tax” language seems like the only real point of contention for next Tuesday night.
