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A N A H E I M C O N V E N T I O N C E N T E R E X P A N S I O N Expansion Financing ---PAGE BREAK--- A N A H E I M C O N V E N T I O N C E N T E R E X P A N S I O N Background o Anaheim Tourism Improvement District (ATID) formed in September 2010 o District hoteliers agreed to self‐assess 2% of room rate • Pays for marketing and promotions • Contributes to transportation o City committed to rapid expansion of ACC o City no longer pays the Anaheim/OC VCB • $6 million in 2010 • Estimated total of $450 million by 2046 2 ---PAGE BREAK--- A N A H E I M C O N V E N T I O N C E N T E R E X P A N S I O N Checklist to Proceed o Do we see a return on our Resort investments? o Does the expansion create a net benefit? o Can we afford it? o Does this benefit the entire community? Yes No 3 ---PAGE BREAK--- A N A H E I M C O N V E N T I O N C E N T E R E X P A N S I O N Do We See a Return on our Resort Investments? o Resort generates 50% of General Fund taxes o Pays for lease payment obligations mainly related to the Resort o Remainder available to provide General Fund services (Amounts in millions) 2015 Resort Taxes Revenues $129.8 1997 Resort Improvements Lease Payments (45.4) Other General Fund Lease Payments (16.9) Marketing & Promotions - Net Resort Taxes $ 67.5 4 ---PAGE BREAK--- A N A H E I M C O N V E N T I O N C E N T E R E X P A N S I O N Does this Expansion Create a Net Benefit? (Amounts in millions) Total Over 30 Years Incremental Revenue and Recovery of Lost Revenue $ 545.0 Lease Payments for Expansion (417.7) Economic Benefit 127.3 Avoided Marketing & Promotion Costs* 450.0 Total City Benefit $ 577.3 o Independent market analysis performed o Keeps the revenue that we depend on today to provide core services o Net results provide additional resources for services 5 *Formerly paid to the Anaheim V&CB, now generated by hoteliers in the Anaheim Tourism Investment District (ATID). ---PAGE BREAK--- A N A H E I M C O N V E N T I O N C E N T E R E X P A N S I O N Can We Afford It? (Amounts in millions) Before Expansion After Expansion 1997 Resort Improvements Lease Payments Formula related to revenues Formula related to revenues Other General Fund Lease Payments $16.9 $14.9 o Refinance $53 million in existing lease obligations o Obtain construction proceeds o Maintain General Fund lease payments at or below today’s level 6 ---PAGE BREAK--- A N A H E I M C O N V E N T I O N C E N T E R E X P A N S I O N What Happens if We Don’t Expand? Estimated Year 15 (Amounts in millions) Expand Do Nothing Resort Taxes $ 203.9 $ 186.5 1997 Resort Improvements Lease Payments (73.2) (69.0) Other General Fund Lease Payments (14.9) (2.9) Marketing & Promotions* - (6.0) Net Resort Taxes $ 115.8 $ 108.6 *Conservatively assumed at 2010 level. 7 ---PAGE BREAK--- A N A H E I M C O N V E N T I O N C E N T E R E X P A N S I O N What Happens if We Don’t Expand? 8 ‐15.0 ‐12.5 ‐10.0 ‐7.5 ‐5.0 ‐2.5 0.0 2.5 5.0 7.5 10.0 12.5 15.0 17.5 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035 2037 2039 2041 2043 2045 Millions Do Nothing Expand ACC $320.3 $ ---PAGE BREAK--- A N A H E I M C O N V E N T I O N C E N T E R E X P A N S I O N Expanding is Better than Doing Nothing Net impacts to the General Fund: o $115 million better off over the 15‐year period o $320 million better off over the 30‐year period 9 ---PAGE BREAK--- A N A H E I M C O N V E N T I O N C E N T E R E X P A N S I O N Risks to the General Fund o Increased revenues may not be as anticipated o Delay in expansion will likely result in: • Increased construction costs • Increased interest rates o Not expanding will likely result in decreased Convention Center and General Fund revenues in the near future o There is risk with action and inaction 10 ---PAGE BREAK--- A N A H E I M C O N V E N T I O N C E N T E R E X P A N S I O N Checklist to Proceed o Do we see a return on our Resort investments? o Does the expansion create a net benefit? o Can we afford it? o Does this benefit the entire community? Yes No ---PAGE BREAK--- A N A H E I M C O N V E N T I O N C E N T E R E X P A N S I O N Expansion Financing