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On Virginia Football Stadium Authority For New Washington Football Team Stadium

On Virginia Football Stadium Authority For New Washington Football Team Stadium

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Oakland News Now Presents:

On Virginia Football Stadium Authority For New Washington Football Team Stadium

. A vlog by the YouTube channel named in the video’s upper left corner and serves as the original blog post for this content.

There are two bills before the the Virginia Legislature for the 2022 season. Both them will form the Virginia Football Stadium Authority for the proposed New Washington Football Team Stadium:  SB727 by Virginia Senator Richard L. Saslaw (D) and HB1353 by Virginia Senator Barry Knight (R).  Recent reports on the proposed NFL stadium are that it will be a dome and not outdoors, as a previous model, the image presented here, indicated.

8 months ago, WFT Owner Dan Snyder gave the public an idea of the kind of football stadium he wants to build when he talked to a TMZ camera person while touring the enormous So-Fi Stadium in Inglewood, CA.:

Both Bills Focus On Forming Virginia Football Stadium Authority

Here’s the broad-brush text of the bills that will form the Virginia Football Stadium Authority. But before we go in, one thing to understand in all of this is that the Virginia Football Stadium Authority (in either case) was formed to issue bonds that will pay for construction of the stadium. The proposed authority will work much as the Las Vegas Stadium Authority (http://www.lvstadiumauthority.com/) does, or the Oakland-Alameda County Coliseum Joint Powers Authority, which issued the bonds for the Coliseum to be refurbished for the return of the Raiders to Oakland in 1995.  Now, here are the bills:

SB727 by Virginia Senator Richard L. Saslaw (D):

Senator Saslaw’s version of the Virginia Football Stadium Authority called SB727 follows the basic model used to establish organizations of this type, going back to the Oakland-Alameda County Coliseum Joint Powers Authority.  In that, it’s an organization with its own managerial body and that is charged with the collection of taxes deemed appropriate for the objective of financing a bond issue the organization would float.  There’s nothing new here.  The main text of the proposed legislation reads this way:

Virginia Football Stadium Authority. Establishes the Virginia Football Stadium Authority as a political subdivision charged with financing the construction of a football stadium and related facilities. The Authority is authorized to hire independent contractors, enter contracts, acquire property, borrow money, and exercise other similar powers. The Authority is exempt from the Personnel Act and the Public Procurement Act. The Authority may issue bonds with a maximum maturity date of 40 years. The bill entitles the Authority to sales tax revenues from transactions at the stadium but would exclude certain revenues that current law dedicates to transportation and education. The bill also entitles the Authority to corporate income tax revenues from football teams that use the stadium and personal income tax revenues from income generated by employment or the conduct of business at the stadium. The Authority receives all corporate income tax revenues, but only 4.25 percent of personal income tax revenues. Remaining personal income tax revenues accrue to the general fund. The Authority is made up of nine members appointed by the Governor and subject to confirmation by the General Assembly. Four of the nine members are appointed from a list chosen by the football team that primarily will use the stadium. The bill enables localities to exercise their eminent domain power to acquire property and convey it to the Authority. It also authorizes localities to appropriate tax revenues to the Authority.

HB1353 by Virginia Senator Barry Knight (R):

Senator Knight’s version of the Virginia Football Stadium Authority, called HB1353, also follows the basic model used to establish organizations of this type, going back to the Oakland-Alameda County Coliseum Joint Powers Authority. Like the version filed and called SB727, HB1353 also forms an organization with its own managerial body and that is charged with the collection of taxes deemed appropriate for the objective of financing a bond issue the organization would float.  Again, there’s nothing new here.  The differences lay primarily in terms of the seats of persons who are selected to be on the board.

From this, the model prevalent appears to be the one used to form the Las Vegas Stadium Authority.  In that organizational format the Las Vegas Stadium Authority owns the stadium and the Las Vegas Raiders are the managers of the stadium.  In that roll, the Las Vegas Raiders enjoy the ability to collect fees from events produced at the stadium, from concerts to conventions.  The Raiders hired AEG to be the day-to-day managers and event bookers at Allegiant Stadium, but they contractually work for the Raiders.  In the Oakland Coliseum case, the Raiders had no role as stadium manager: SMG and then AEG were hired in the role by the Oakland Alameda County Coliseum Board, and then reported to the Oakland Alameda County Coliseum Board, and not the Raiders.  The difference is revenue: in the Las Vegas case, the event control aspect of the contract allows the team to realize a new, and large, stream of money it did not have before.   That will be the case for the Washington Football Team.

Virginia Stadium Authority Bills Fall Short With Respect To Revenue Collection For Construction

While the bills SB727 and HB1353 point to the same basic structure, they have slightly different revenue collection objectives, but cause concern with this vlogger.

First, SB727 calls for the “Virginia Football Stadium Authority Financing Fund” which is described:

There is hereby created in the state treasury a special nonreverting fund for Authority to be known as the Virginia Football Stadium Authority Financing Fund. The Fund shall be established on the books of the Comptroller. All revenues to which the Authority is entitled pursuant to з 15.2-5837, any other moneys that may be appropriated by the General Assembly, and any moneys that may be received for the credit of the Fund from any other source shall be paid into the state treasury and credited to the Fund by the Comptroller as soon as practicable following their receipt. Interest earned on moneys in the Fund shall remain in the Fund and be credited to it. Any moneys remaining in the Fund, including interest thereon, at the end of each fiscal year shall not revert to the general fund but shall remain in the Fund.

Second, HB1353 also calls for the same Virginia Football Stadium Authority Financing Fund.  But the issue here is neither bill points to a source of tax revenue that’s large enough to then realize formation into a bond issue to provide the kind of stadium subsidy necessary to help pay construction costs on what is sure to be a new facility that costs around $2 billion to build.  Where the Las Vegas Stadium Authority immediately focused on the formation of a new stadium hotel tax, the bills HB1353 and SB727 do not identify any large-scale source of revenue.  Let’s take sales taxes.

SB727 has this language:

A. The Authority shall be entitled, subject to appropriation and to the limitations of this chapter, to all sales tax revenues. Such revenues shall be applied for any purposes that the Authority deems appropriate for the facility, including the payment of debt service on the Authority’s bonds. The State Comptroller shall remit such sales tax revenues to the Fund on a quarterly basis, subject to such reasonable processing delays as may be required by the Department of Taxation. The State Comptroller shall make such remittances to the Fund, as provided herein, notwithstanding any provisions to the contrary in the Virginia Retail Sales and Use Tax Act (з 58.1-600 et seq.). Such entitlement shall continue as necessary to cover eligible expenses of the Authority. B. The local governing body of the locality in which the facility is located may direct, by ordinance or resolution, that all local sales and use tax revenues generated by transactions taking place upon the premises of the facility or on the campus from taxes levied pursuant to зз 58.1-605 and 58.1-606 shall be remitted by such locality to the Authority for any purposes of the Authority. Such remittances shall be for the same period and under the same conditions as remittances to the Authority paid in accordance with subsection A, mutatis mutandis.

Now, the way this reads, only the sales taxes generated in the stadium and on what is called “the campus” can be used toward a bond issue for stadium construction.  But, from calculation experience, generating stadium sales tax revenue from the proposed facility itself and nothing else, will not cover the debt service on a billion-dollar or half-billion-dollar bond issue.  Now, if County or State Sales Taxes were the target, then we’re looking at better numbers, but not in the way this is currently proposed.

Unlike what was reported in the Washington Post, these bills are not “vastly” different, and the most important place they are alike is in revenue collection for a stadium bond issue.  Right now, and a spreadsheet will show this, there’s not enough money.

Virginia House Majority Leader Terry G. Kilgore (R-Gate City) said to WRIC “Virginia is a football state. We deserve a football team … both as a source of shared pride and of state revenues. We have a business-minded, forward-thinking governor and House majority, and as we continue to pursue this opportunity.  think it’s important for us to understand how this project and its revenues will benefit the whole state, from Arlington to the mountains of Southwest Virginia.”  That’s a good start, because as this goes, Virginia’s going to realize it can’t get the NFL on the cheap.  Asking for a substantial stadium NFL bond issue to be paid for solely by sales taxes from the facility itself is just pure folly.  The legislation needs to be adjusted to identify a larger revenue source, like property taxes from a special district, or if the WFT were building something on the order of a giant, 100-acre, mixed use development. Sales tax revenue streams tend to fluxuate with the economy and should not be used as the main revenue source for a bond issue unless they come from a huge source, like, again, an entire county.

Legislation Also Fails To Use Tax Increment Financing

Tax increment financing or “TIF”, where the property tax and sales tax and other tax revenue streams are used in a kind of doubling formula, is specifically permitted for use in Virginia, let not used in the legislation to form the Virginia Football Stadium Authority, and needs some language adjusting to make it work.  Here’s what Virginia law says on TIF right now:

The governing body of any county, city or town may adopt tax increment financing by passing an ordinance designating a development project area and providing that real estate taxes in the development project area shall be assessed, collected and allocated in the following manner for so long as any obligations or development project cost commitments secured by the Tax Increment Financing Fund, hereinafter authorized, are outstanding and unpaid.

1. The local assessing officer shall record in the land book both the base assessed value and the current assessed value of the real estate in the development project area.

2. Real estate taxes attributable to the lower of the current assessed value or base assessed value of real estate located in a development project area shall be allocated by the treasurer or director of finance pursuant to the provisions of this chapter.

3. Real estate taxes attributable to the increased value between the current assessed value of any parcel of real estate and the base assessed value of such real estate shall be allocated by the treasurer or director of finance and paid into a special fund entitled the “Tax Increment Financing Fund” to pay the principal and interest on obligations issued or development project cost commitments entered into to finance the development project costs.

B. The governing body shall hold a public hearing on the need for tax increment financing in the county, city or town prior to adopting a tax increment financing ordinance. Notice of the public hearing shall be published once each week for three consecutive weeks immediately preceding the public hearing in each newspaper of general circulation in such county, city or town. The notice shall include the time, place and purpose of the public hearing, define tax increment financing, indicate the proposed boundaries of the development project area, and propose obligations to be issued to finance the development project area costs.

The current TIF law needs to be reworded to read “The governing body of any county, city or town, or authority or special district”, so that the Virginia Football Stadium Authority can use TIF.  The Virginia Legislature could rework the final Virginia Football Stadium Authority bill to simply include TIF language, as well.

Stay tuned.

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Note from Zennie62Media and OaklandNewsNow.com : this video-blog post demonstrates the full and live operation of the latest updated version of an experimental Zennie62Media , Inc. mobile media video-blogging system network that was launched June 2018. This is a major part of Zennie62Media , Inc.’s new and innovative approach to the production of news media. What we call “The Third Wave of Media”. The uploaded video is from a YouTube channel. When the video is “liked” by Zennie62 YouTube, then it is automatically uploaded to and formatted automatically at the Oakland News Now site and Zennie62-created and owned social media pages. The overall objective here, on top of our is smartphone-enabled, real-time, on the scene reporting of news, interviews, observations, and happenings anywhere in the World and within seconds and not hours – is the use of the existing YouTube social graph on any subject in the World. Now, news is reported with a smartphone and also by promoting current content on YouTube: no heavy and expensive cameras or even a laptop are necessary, or having a camera crew to shoot what is already on YouTube. The secondary objective is faster, and very inexpensive media content news production and distribution. We have found there is a disconnect between post length and time to product and revenue generated. With this, the problem is far less, though by no means solved. Zennie62Media is constantly working to improve the system network coding and seeks interested content and media technology partners.

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