The Encinitas City Council is poised to defund a controversial proposed staircase at Beacon’s Beach and is considering borrowing $22 million to finance the construction of its major capital project, the Leucadia Streetscape.The Beacon's stairway was never popular with locals. Leucadia Streetscape remains highly controversial.
As part of the proposed capital improvement project budget the council is considering at its May 22 meeting, staff is proposing — with the council’s direction — redirecting the $3.4 million for the project to the El Portal pedestrian and bicycle underpass project.
“The El Portal project in Tier 1 (B) for $4.7 million (General Fund portion) will be funded partially by using the funding previously appropriated to the Beacon’s project in the amount of $3.4 million. The Beacon’s project will be de-funded until reconsidered by Council,” the staff report states.
Tuesday, May 28, 2019
City cancelling Beacon's stairway; likely to borrow $22 million for Leucadia Streetscape
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As Charlie Sheen says:
ReplyDeleteBR-R-R-R-R-R-R-R-ING IT!
“Opponents of the project, however, did not fare well at the ballot box as incumbent Mark Muir and council and mayoral challengers Tony Brandenburg and John Paul Elliott — who all campaigned against the project — lost their respective races.”
ReplyDeleteNailed it.
[touches index finger to nose]
Per your post on the other thread, 10:53 - Burgin did not nail it.
DeleteThe reasons the other three did not prevail have nothing to do with their opposition to Streetscape.
Burgin's been sounding like the city's mouthpiece for awhile now. The publishers are aware that this is becoming an issue.
Yeah, because everybody knows candidate positions on issues have no impact on election results.
DeleteGood one.
Are you really trying to argue that JP Elliott lost to Blakespear because he opposed Streetscape?? You can't be serious.
DeleteAnd either you're pretending or you need to be spoonfed on the other two: Hubbard was trotted out at every meet and greet and photo op possible with her cheerleader Blakespear. Muir stayed home and severely overestimated his incumbent status. Brandenburg lost by fewer than 200 votes and never left home to campaign.
Mosca, like Hubbard, was greatly helped by Blakespear's bully pulpit.
Boiling down the three losses to Streetscape is beyond absurd. No one is buying what you and Burgin are selling.
Pffffft.
Deleteanti-streetscape candidates were 0-3, including an incumbent. I don't think it makes a strong case that its a winning position.
Are you seriously arguing that JP would have gotten LESS votes without his opposition to streetscape? The guy got 15%, which is approaching the amount of voters who randomly pick a name based on how it sounds to them. It's not credible to suggest that he or any other candidate received a net benefit at the polls from opposing streetscape.
They gained some votes and lost some votes based on the position. And the results suggest they lost more than they gained.
Based on the results, you are going to have one hell of a time recruiting a viable candidate who wants to adopt that position.
Exactly right, 1:16.
DeleteSince the great majority of residents in Districts 1 & 2 are against Streetscape, the positions candidates in those districts take in 2020 will affect the results.
What happened to the "great majority" in the at large mayor's race?
Delete2:11 is spouting the city party line. Developers and a few loud business owners will not carry more than a handful of votes. Much of the militant cycling lobby don't even live here and won't count at the ballot box, either.
DeleteIt's called listening to your constituents, something none of the current five are capable of doing.
2:45 - seriously? You are embarrassing yourself.
DeleteI hope 2:11 is Blakespear's campaign manager.
DeleteThe timing of the article is weird. It's written in the future tense, published on May 26, for an event that supposedly took place on May 22. Twilight Zone?
ReplyDeleteThe mayor and council have lost all common sense to even discuss borrowing $22 million dollars. They should put the borrowing question on the ballot. The streets are falling apart. The million dollar density bonus houses will soon lose value and the sales tax is dependent on booze tax. Bring on the bond, mayor/council dummies. Over 20,000 voters live east of the freeway. Guess which way they will vote.
ReplyDeleteAgreed! Such indebtedness should be a collective decision of the electorate, not this group of sell-outs.
DeleteIs the funding source still planned to be lease revenue bonds? With no revenue coming in, as required by law? I thought the mayor likes to follow the law - she talks about it nonstop.
ReplyDeleteShouldn't residents be voting on this - what does the law say? And the mayor's bff attorney need not respond, we need a real answer.
Have you folks noticed the Costanza management of construction projects going on around schools? It is truly baffling - or actually not. If you apply the Costanza principle the Mayor and City Costanzas (Council)do exactly what makes it more difficult and miserable for its residents. If the City Costanza and Mayor Costanza just directed the construction crews to begin their work at approximately 8:15am instead of 7:30 in the middle of school rush hour it would appear to be a very intelligent directive. Not surprising sea level rise is infinitely more important to these Costanzas? Encinitas - the educated derelicts capital of the world.
ReplyDeleteThe city should do General Obligation Bonds which require a public vote and put the tax on the property tax bill. Of course, they won't because it would lose. They will do Lease Revenue Bonds which require the project to have a revenue source to repay the debt. The council can approve the bonds with a simple majority vote. It's a sleight of hands. The bonds will be repaid out of the General Fund.
ReplyDeleteShame on Catherine and the others on the council who support her. Jody Hubbard is a CPA. Will she cry foul? No. She will go along because Catherine got her elected.
How much “revenue” do you think we’re getting from the arts group to cover the $10 million “lease revenue bonds” on Pacific View?
DeleteZero.
DeleteWhy is that group and its project dead in the water?
Entire city on the hook for $10M plus interest and all we have to show for it is 15 minutes of Phony Tony's photo-op fame.
DeleteThe Pacific View group is dead because they need $2M+ to get the site up and running and then they say they need another $500K per year to operate the site..
DeleteReally??? why didn't they just ask for the money when Teresa n'Tony were busy inking the overpayment?? Could've signed us up for $12M plus another $500K a year.
DeleteAnd the $500K, isn't that money going the wrong direction? Shouldn't that be the rev stream ostensibly to pay back the lease rev obligation???
One good thing came out of it: Vina hit the trail as a result of "forgetting" to tell the council the site could not be rented out or used for pretty much anything.
A lease revenue bond on Streetscape is appropriate.
ReplyDeleteStreetscape will result in increased economic activity and increased property values, which means more sales tax, and more property tax flowing to the city. The increased revenue to the city as a direct result of the project is used to pay interest on the debt.
This is exactly how Streetscape through old Encinitas was financed and paid for, and it worked.
Pacific View isn’t generating enough revenue to cover the debt financing, and the plan should change as a result.
The city should sell the current city hall site on Vulcan and use the proceeds of sale to build a shared space city hall/arts center at Pacific View.
Dead wrong, 9:10, although it is true that lease revenue bonds are regularly used by cities in a sleight of hand designed to avoid the normally-required 2/3 majority voter approval. Perhaps it's this practice that is leading you to think they are an appropriate funding mechanism for Streetscape. Just because the downtown Encinitas changes were financed using lease rev bonds did not make it right or legal, not that that has ever stopped a council on a mission.
ReplyDeleteFrom the California Treasurer's website (https://www.treasurer.ca.gov/publications/bonds101_revenue.pdf):
"Lease revenue bonds usually finance the construction of facilities, including state office buildings, correction facilities, courthouses, and state fire facilities. However, unlike revenue bonds that use money generated by the project (a bridge toll) to repay investors, lease revenue bonds have a lessee (government agency) that pays rent to use the facility. The rent payments are used to pay back investors who purchased the bonds used to finance the construction of the facility."
So 9:10 - what lessee(s) will be paying rent to use the facility (Streetscape) in order to make lease revenue bonds appropriate in this situation? Unpredictable sales tax increases from a handful of businesses do not a lessee make.
Upon further review, you are right.
DeleteThe appropriate bond for Streetscape is a revenue bond, not a lease revenue bond.
Also from the treasurer website:
Q. WHAT TYPES OF MUNICIPAL BONDS ARE THERE?
A. There are two types most pertinent to public finance – general obligation bonds and revenue bonds. This guide will focus on revenue bonds. Go to treasurer.ca.gov/publications to download our previous guide on general obligation bonds.
Q. WHAT IS A REVENUE BOND?
A. Revenue bonds finance projects such as hospitals, airports, toll roads, education facilities and bridges. Generally, revenues from those proj- ects repay the interest and principal of the issued bonds over time. For example, a bridge financed by revenue bonds has a toll paid by motor- ists each time they cross the bridge. Revenues from the toll are used to pay back investors who purchased the bonds used to finance construc- tion of the bridge.
Q. WHAT IS THE SECURITY FOR A REVENUE BOND?
A. Generally, revenue bonds are backed by the money generated by the proj-
ect that was funded by the bond issue.
Q. DO REVENUE BONDS REQUIRE VOTER APPROVAL?
A. No.
In 7:04's example using a bridge, the revenue bond is paid back with toll revenues. The revenue increase can easily and predictably be forecasted using traffic data, then backing into the per-vehicle toll needed to cover the expense.
DeleteSo the question remains: what guaranteed revenue stream will make the payments? Answer: none. The Streetscape revenue stream depends on unforecastable additional sales tax collected from a handful of hopeful business owners.
If Fred doesn't sell enough vintage postcards and Papagayo doesn't sell enough additional dinners and Shatto's few extra tee shirt sales don't cover the bond obligation, then what? The city does its usual shell game and robs other projects and maintenance schedules citywide to cover the shortfall? We all know the answer is Yes.
Has anyone at the city calculated the additional Streetscape-associated sales taxes required to make the payments? Highly doubtful. Have they required pro formas from the businesses who expect to strike it rich? Definitely not.
Only in Encinitas does the logic "More people will be on their bicycles so will buy more coffee/spa services/beer" take the place of standard financial analyis.
That's because city will go to any lengths to avoid a public vote. The council knows how that would turn out. The entire city is on the hook for the $22M bond and the last thing Blakespear wants to do is let them decide if they want to be left hanging.
The full relevant quote is this: "Revenue bonds finance projects such as hospitals, airports, toll roads, education facilities and bridges. Generally, revenues from those proj- ects repay the interest and principal of the issued bonds over time."
DeleteSo, in the examples given by the state, what are the guaranteed revenue streams to a city from a hospital or an education facility? The answer is none, because a guarantee isn't a requirement, only a good faith estimate.
8:36 poses a good question though. What happens if a business doesn't sell more to generate more sales tax to cover the bond repayment? The simple answer is capitalism happens. The underperforming business is put under pressure to make changes or yield the more highly valued real estate to a business that can make more productive use of the space.
If you want to know what happens when real estate values increase due to streetscape, and a business underperforms relative to the value of their real estate footprint, just ask Ace Hardware.
Eventually, the market will correct the problem, and the expected revenues from Streetscape will flow.
That makes no sense, 9:01. Why would someone in business currently not underperforming close doors later if they don't see an expected increase in revenue from Streetscape?
DeleteThere is no "market force" to apply here. Try again.
The entire city is still on the hook to provide the revenue stream needed to cover the $22M and the council is still unwilling to let them decide if this is how their money should be spent.
Anyone who wants to go on a tear about how they represent us can save their breath. They don't, and word is getting out.
9:55,
DeleteThey are not underperforming today relative to the real estate value around them. But once the real estate value goes up, the building owner will increase the rent. If they don't improve revenue and profit enough, then they are underperforming, and will be replaced. If the business owns their own building and are underperforming, then at some point they will realize that they can make more money closing the business and renting to someone else, or selling the building. In any case, market forces create pressures that result in higher tax receipts. Don't take my word for it. Look at Streetscape in Old Encinitas. Some businesses kept up. Some didn't. When they didn't, they were replaced. But tax receipts from property values and sales taxes went up and covered the cost of the bond.
You can in good faith oppose Streetscape because you simply don't don't like change or think profits are evil. That's fine.
There you go, rent increase opportunities. I heard that one landlord in particular is counting his chickens big time.
DeleteThere is still the problem of revenue from the project itself. Your increased sales tax fantasy and business turnover does not guarantee bond payments. What does? The entire city. Put it to a vote.
Dude, higher rents are supported by increased sales, which means increased sales taxes. Increased economic activity also drives higher property values, and thus an increase in property taxes.
DeleteBoth taxes represent revenue increases to the city, and support revenue bonds.
Do try to focus.
Speaking of focusing: where is this increased sales tax plan that will guarantee bond repayments so the rest of us across town aren't stuck with the bill?
DeleteDo focus and tell us: where is the pro forma that ties increased sales taxes to enough revenue to cover the bill?
Do focus on specifics to back up your claims and tell us what rents will be increased and where are the pro formas to tie the increases to increased sales tax?
What does focus look like? It looks like showing your math.
10:35 - simply "don't like change." The ollllld Shaffer and Hubbard line for anyone who doesn't agree with them.
DeleteInsulting and stupid. Mostly stupid.
It's kinda sorta basic economics. 9:55, 11:27 and 12:35 aren't discussing the economics of the bond - they're focusing on the risk. Yes, at the end of the day if revenues stay the same or decrease, then the city has to use other funds to pay off the bonds. This risk will certainly be disclosed to investors in the bond's prospectus. To alleviate that risk, the economics of the deal tells us that by slowing traffic and making merchant locations more accessible will drive increased revenues to those merchants resulting in increased sales tax revenue. Combine that with the overall gentrification of Leucadia and the incremental increase in disposable income of the gentrifiers and there'll be a shift in the kinds of products and services available in the area, resulting in even more sales tax revenue as well as increased property tax revenue. The trick in all this is to have all this happen without drastically or abruptly changing the community character. That has to be allowed to evolve organically. There's tons of studies published on this happening for the good and for the bad. It's kind of a B-School staple as well as in urban planning.
DeleteSince the taxpayers of Encinitas are the guarantor we should be given the opportunity to give the thing a thumbs up or down. But that's not going to happen, kind of like how voters are not "stakeholders" when determining our housing plans.
DeleteI'm a B-school graduate who never learned what you're spouting. I'd love to be a fly on the wall when the city asks for money backed by allowing things to "evolve organically." Do you seriously propose using your outside voice instead of providing pro formas with numbers? Your description of how things work may be SOP in government when taxpayers are the financial safety net, but laughable in the real world.
Geezus I cannot imagine showing up in a boardroom with your drivel and for an instant being taken seriously. But deliver your little speech to the council and they'll lap it up and think it makes perfect sense, including Hubbard who should know better. Perhaps you already have, who knows.
Leucadia is not asking for gentrification. We like how we look. Our property values are doing just fine. But there IS a certain favored developer at city hall who's friends with the mayor. He stands to make a windfall raising rents along the 101. There's your real sales pitch for the bond dealer, heck maybe a little kickback can be worked into the dealer's fee. At the very least it should fly better than waiting for things to "evolve organically." Thanks for the chuckle.
City taxpayers are not the guarantors.
DeleteUnder a revenue bond, there is a specific revenue stream associated with the project that is legally tied to the repayment of the bonds. If the revenue source is short, the city is not legally required to dip into other funds to pay bond holders.
People buying the bond must do their own due diligence on the stability and security of the specific revenue source linked to bond repayment. Their risk assessment will factor into the interest rate on the bond. (A low risk of non repayment would drive the interest rate lower; higher risk drives higher yield).
Because the risk for the city is legally isolated to the defined revenue source, and not the full faith and credit across all city-controlled funds, this is exactly why there doesn’t need to be a vote.
GO bonds must be approved by voters, because the full faith and credit of the city is committed, which could affect taxes and/or services city-wide if the city struggles to repay the debt.
Come on 3:41 - you know all this stuff will be included in the prospectus for the bonds. All your answers will be in that prospectus and you can then decide if you want to invest your hard earned money. Leucadia may not be asking for gentrification but it's happening anyway so get used to it.
DeleteB-School - Really??? You didn't come across this in B-School? It's textbook underwriting for figuring out the highest and best use of properties in underdeveloped areas. Well, I'm glad you got a chuckle.
You still have not quantified the revenue stream, using specifics. It shouldn't be that hard, as you sound very sure of yourself.
DeleteYou claim that it will come from increased sales tax as the result of "gentrification." This shows you have no knowledge or at least no acknowledgement of the affordable housing crisis in Encinitas that the city claims it's trying to solve. How does gentrification and increased values play a part there? How does it fit into the 1,000s of affordable housing units our mayor is signing us up for? You want a cliched term to throw into your "toolkit?" Take the "wholistic" view of things. Do you still think gentrification is a worthy goal?
With only "organic growth" to count on to pay back the $22M plus interest, you need to set aside your dazzling (to some) but empty technical terms and admit that the taxpayers will be stuck with the bill, should growth not materialize as hoped.
While not on paper we are the in guarantors, in effect we are, should things go south.
Sheesh.
DeleteJust wait and read the prospectus.
It has to define the revenue stream in the prospectus, by law.
We all know our gullible council will be copacetic with whatever it says. The thing will be written to make the project attractive to investors and will use a whole lot of trendy phrases and, in the end, say nothing. Kind of like how 3:41 expresses himself. He has managed to convince me of nothing except the city plans to sneak this one through as it did with the hall property and pacific view. SOP at city hall.
DeleteIgnorance can be soooooo tiring....but here goes. Bond offerings are regulated. Opinions from law and accounting firms are required. Risk factors on both a micro and macro level must be disclosed. Later if there are any misrepresentations found to be made lawsuits are filed by regulators, bondholders and/or issuers and it gets nasty fast. But all that is moot for 6:02 because 6:02 either does not understand the bond market or is being willfully disingenuous. A bond is not a mortgage - a mortgage is secured - a bond is not - you can't give the property back should you no longer be able to make the payments. It's OK to not like streetscape - it's claims are truly speculative and I predict that after all is said and done there may be very little change. It may take 10 years for anything to happen and might not have anything to do with streetscape. Just like most projects in this city it was a much better idea 10 years ago than today - oh well.....
DeleteLeucadia Streetscape will gridlock the traffic on 101 and kill the businesses.
ReplyDeleteThat's the plan. Then they will redevelop into high density housing.
DeleteGood one.
DeleteThen why are L101 business owners supporting it?
The crazy lady says they support it to make evil commercial profit and evil real estate profit. If true, then revenue bonds are fine.
Can’t have it both ways. Either Streetscape will result in evil profit and evil revenues to pay bonds and will be supported by business owners, or it will hurt business and business owners will oppose it.
They support it.
7:15 Do you know what percentage of business owners L101 lists in the corridor are members of the association? It's 18.4%. And not all of those support Streetscape. So you should probably rethink your assertion.
DeleteShow me the organized majority group of business owners who are opposed. Do they have a website?
DeleteNobody said they were organized, a majority or had a website. 10:18 said 18.4% of the merchants L101 counts are members of the association. Not all of them want Streetscape. There's dissension in the ranks.
DeleteThe city wants to avoid a public vote, that's the beginning and end of it.
ReplyDeleteOf course. It makes sense. A vote would be influenced by lies, hyperbole, invective, rumors, and slander by a handful of cranks.
DeleteIf I were on council, I would also opt for the legal, sane, adult, and fact-based path.
Lol you've got to be kidding - look nor further than that idiotic "At Home in Encinitas" Measure T propaganda campaign by the city to know where the lies and hyberbole came from.
DeleteThat they were exposed as such and the majority of voters recognized the truth was another embarrassment to the city and colossal waste of taxpayer money. It's no wonder no one trusts city hall. But do go on.
So 10:41, why does the council listen to Marco?
DeleteHAHAHA awesome, 6:27!
DeleteSo how much is Streetscape going to cost?? Lets see the bids.
ReplyDeleteIncluding interest. None of this $22M crap!
DeleteInterest is irrelevant without a time value of money (inflation) calculation.
DeleteIf the bond has a 30-year maturity, that means the last year of payments will be made in 2050 dollars, which are bound to be worth far less than 2020 dollars.
Interest and inflation are offsetting forces.
No one's buying your shell game, 4:08. How much are we paying you to spew this nonsense? The inflation rate the past 30 years is 3.22%. What is the interest on this $22M project that only a handful of business owners and our council actually want? If not equal to or less than 3.22%, your "offsetting forces" argument goes out the window.
DeleteNope.
DeleteSorry, but you don’t know what you are talking about if you think inflation has no bearing on time value of money.
I didn't say no bearing. Yet again,I asked you to show your math. And yet again, you refuse.
DeleteYou do realize you're gaining no converts, right?
It’s not my math. The math belongs to the consultants who will craft the prospectus for the bond issue, and council who will approve it.
DeleteWhen they draft the bond language, you’ll be welcome to critique the definition of the revenue securing the bond.
No we won't, 9:29. The bond language will be determined and approved before we ever see it. Same as virtually every issue opposed by residents that come before the high and mighty council. It's all decided ahead of time. But you know that.
DeleteNope.
DeleteYou don’t get your way because you don’t understand, not because of a nefarious conspiracy.
Please. This is Encinitas we're talking about. Are you saying we're going to get to give "input" at one of the city's bogus workshops? No not nefarious, just SOP at city hall. I'm sure you're well aware.
DeleteAre the bonds like a mortgage in that they're front-loaded with interest payments in current or near-term dollars, with the principal payments being tiny in the near term then growing gradually to become big near the end? If so, that heavily dilutes the inflation factor.
ReplyDeleteIn any case, whatever amount the city borrows through bonds, the payback will be much, much more than the original principal amount. And that for a project that's inherently doomed to fail in a big, embarrassing way.
reasonable, educated, and succinct summary, 7:48.
DeleteIf your mortgage payment is the same every month for 30 years, then the net present value of all payments isn’t affected by the amortization of interest charges.
DeleteAll the good folks posting above and assuming Streetscape will produce more sales and property tax revenue are missing the fundamental point:
ReplyDeleteThere isn't and will never be enough parking to increase business activity. On top of that, the one-laning will clog the traffic worse than now and discourage locals and visitors from using the road and patronizing the businesses.
Then you have nothing to worry about, because the bonds won’t sell.
DeleteOnly if the council presents the situation honestly, as 9:16 does. But they won't and you know it.
DeleteInstead they'll lie, spin, obfuscate...in other words, SOP at city hall, because they want this project so very, very badly.
Those are just wind turbines, Mr. Quixote.
DeleteThe bonds will sell. Investors know that the payments will be made. In the very rare circumstance that a city goes bankrupt, like in the cities of Stockton or Vallejo, courts do not allow the bond obligations to be wiped from the books. Cities can cut services, fire employees, and completely dissolve whole departments, but bond payments must be made. It's the taxpayers who suffer.
DeleteIf our city council wants to sell bonds, they will hire the bond consultant who will make the argument that it's a good financial deal for the city. Never mind that it may be a questionable project.
You should really do some reading.
DeleteIt’s not possible for a revenue bond to cause bankruptcy. The only asset securing the loan is the defined revenue stream. If the city defaults on the loan, creditors only have a right to seize the revenue stream defined in the prospectus. The general fund, and all other assets and sources of income are fire-walled off from risk.
Reading is good.
The roads are crumbling and a disaster. Spend money on what’s needed.
ReplyDeleteI agree with 9:30. The roads are in terrible condition. What's that costing in premature repairs and replacements to users' cars?
DeleteSell the finger painting school then have cash in hand, or did the fools borrow money to buy that boondoggle?, hmmmm?
ReplyDeleteYes, they borrowed $$$$.
DeleteYes, they are fools.
Lease rev bonds with no associated income stream. If they could shove that one past the bond investors, Streetscam will be a walk in the park.
DeleteI support revenue bonds for Streetscape, but I agree with you on Pacific View.
DeleteThe city made an implied commitment to tax payers and bond holders by floating a lease revenue bond. The implied promise was that they would pursue uses for the property that would generate sufficient lease revenues to pay down the debt. That’s the whole reason lease revenue bonds don’t have to go to a vote—because the loan isn’t supposed to affect government services by tapping the general fund.
The city has failed to pursue uses that generate sufficient lease revenue. They could legally default and screw the bond holders, but that would hammer the city’s credit rating for a long time. So they are opting to pay the debt from other sources, effectively committing the full faith and credit of the city to repay the debt. The lease revenue bond at PV has become in effect a general obligation bond, with an end run around the trigger for a public vote.
Streetscape is different, in that sales and property taxes are legitimate revenue sources that tend to grow over the long term no matter what.
I would be supportive of public pressure to either change the use at PV to secure proper lease revenue as promised, or doing something completely different with the property, like selling city hall at Vulcan and using the proceeds to build a joint arts center and new city hall at PV. A real, modern arts center would generate real lease revenue that a run down school never will.
Hahaha 12:54 - you CAN'T! You can't change the law that restricts PV's allowed uses and you can't apply "public pressure" to get the city to violate the law. "Sufficient lease revenue" should have been identified at the time the PV bonds were issued. Vina certainly did his homework identifying a bond dealer who would put together such a shaky deal. And his adoring council went along with it.
DeleteRevenue bonds for Streetscape? What is the identified, quantifiable revenue stream, as others have asked for? Not the nebulous "increased sales tax from the effects of gentrification" garbage, but a quantifiable one.
No doubt the city will go back to the same bond issuer they found so compliant as they got with PV.
Nonsense. There are other uses allowable without changing the zoning. It could be leased to Ace Parking for downtown parking, for example.
DeleteYou can keep spouting the same rubbish about revenue streams, but you’ll get the same answer. The revenue source will be described in the prospectus, and is likely to be incremental increases in sales, property, and TOT taxes.
The city doesn’t have to estimate or commit what those revenues are likely to be. Even if they did, buyers of the bond would ignore them and do their own due diligence.
Just because you don’t like the answer, doesn’t mean it’s not the correct answer.
Fantasies about incremental revenue not tied to a forecastable number - now, that's rubbish. If that's what's in the prospectus, I cannot imagine who in their right mind would throw money at such an unknown. If the city doesn't "have to estimate revenues" then what due diligence could an investor do if that information is withheld?
DeleteIt's not that I don't like the answer. It's that I'm not getting one.
You are a far, far way from passing the smell test, 5:55 and no doubt collecting a tidy sum by propagandizing.
Seems like Norby would be mixed up in this somehow. Care to confirm?
[eyeroll]
DeleteI’ve never met Norby. Never been in the same room with him. But I don’t really care who you think I am.
It’s pretty easy for bond buyers to pull historical CAFRs from the city, and see the long term trend in the revenue streams securing the loan. If the ten year moving average is consistently positive, it’s a pretty safe bet.
Eyeroll is right. You quack and walk like an insider, you are one. Spare us your sales pitch.
DeleteIf the revenue stream is the marginal increase in sales, property and transient taxes, there is no revenue stream.
ReplyDeleteAccording to the latest CAFR, retail sales tax receipts have doubled in the last nine years without any project. Even if the project fails to change the trend line at all, there will still be a significant marginal increase.
Delete12:38 sounds like a bar owner, Tony Kranz, or Marco Gonzalez speaking here. Sell out our town...no matter what the cost to quality of life, safety, and the environment.
DeleteWe aren't buying it.
The city's website shows CAFRs from 2012 through 2018, which is seven years. Show the sales tax stats for the last nine years, 12:38.
DeleteThe latest (2018) CAFR has a ten year sales tax table. It’s in the table of contents.
ReplyDeleteThanks for posting the URL.
Deletehttps://encinitasca.gov/Portals/0/City%20Documents/Documents/Finance/CAFR%202018%20Revised.pdf
Deletepages 166-7
2009: $7,340,410
2018: $13,252,053
That's an 80.5% increase citywide. I find no stats for Leucadia 101. But with Public House, Solterra, the beer place and added restaurants with alcohol, I'm sure sales tax revenue has increased significantly between '08 and '18 fiscal years.
7:44 PM - Go to page 214 to get the correct information on taxable sales by business type for the last 10 years.
Delete2009: $9,180,770
2018: $10,948,094
There's not much difference between 2009 and 2018. The auditor also combined the use tax (goods bought out of state) with the sales tax. The sales tax would be local or in state? No, there wasn't an 80.5% increase citywide in sales tax over that ten years. For the brick and mortar businesses in Encinitas the increase was much smaller.
How much will the lose BMW of Encinitas hurt the city tax receipts??
DeleteVery funny, 12:02. The doc ends at page 208.
Delete11:47 AM
DeleteUse the page counter at the top of the adobe reader page. The total number of pages is 234. if you scroll through the document looking at the bottom page numbers, it is page 190.
10:39, don't cry over BMW. The same dude who's developing next door to Portofino threw out a list of properties his company is acquiring that included the BMW site. He was very sure of himself and knew alllll the ins and outs of developing in Encinitas so you need not cry over lost tax income. This dude will no doubt make it up and then some.
DeleteJust so you know, 12:39, Macs open pdfs in Preview, eliminating the need for Adobe Reader.
DeleteHow can the sales tax totals on 190 be different from on 189? Those on 189 are the same as on 166-7.
189 is sales tax revenue. 190 is taxable sales. There lies the rub.
Something wrong with those numbers.
DeleteIn 2018 for there to be revenues of $13M on taxable revenue of $11M, the sales tax rate would need to be north of 100%.
Also, the relationship between the two has to be linear. They can’t grow at different rates.
Also, the taxable revenues number has to be wrong at $11M. Spread across 60K citizens, that equates to $183 per person per year in spending. That won’t cover a week of groceries.
Somehow I'm not surprised that the city screwed it up.
DeleteLeucadia again gets diddly.. unless ones tallies developer give-aways.
ReplyDeleteNot feeling taxpayer representation over by here.
While I agree that Leucadia has been under attack for the past 20 years, the entire city is now hanging by a thread. Developer give-aways are the law of the land for all of the communities. I guess this is good business for Marco since he has turned to the dark side and is on opposite sides of his former clients, friends and environmentalists.
DeleteBarron's - May 23, 2019
ReplyDeletePuerto Rico’s Bankruptcy Case Casts a Shadow on Billions in Municipal Bonds