The Macon City Council approved a contract for a convention center hotel last night, but I doubt the issue has been put to rest.
The most frustrating thing about the hotel issue has been how hard it is to report the facts. I am not a bond attorney. I feel that I, and other reporters, haven't been able to lay bare the facts of the two competing proposals side by side so people could say "That's the best deal."
We've quoted "experts" on both sides. And they disagree. I can tell you, though, that the National Ventures proposal (the one that lost) could easily be filed under "sounds too good to be true" because it promises bond funding that the city would not be liable for.
Some very well thought of attorneys say that can be done. Others question the rationale. In the end council members went with the Noble deal, which they felt more comfortable with, despite admitting that they preferred National Venture's site location.
I take facts seriously, and have to tell you they've been slippery on this issue. I think a lot of that is because high finance and government bonding is complicated, and perhaps overly so.
Government, it seems to me, should be simple enough for the average informed person to understand. Let me tell you, it's not.
Also complicating things has been the great passion the hotel issue has spawned, which is hard to understand. Councilman Alveno Ross gave a thoughtful (if long-winded) speech at last night's meeting, essentially upbraiding people for paying so little attention to most government issues, then coming out en masse over this hotel issue.
It seemed a fair point to me. Why are public hearings on a $100-million-plus city budget empty year after year?
Ross openly wondered why there wasn't a similar public outcry years ago when people's homes were taken to make way for the coliseum and convention center that the hotel will connect to. And why other bonding deals, such as the one that brought Bass Pro to town, haven't gotten this much scrutiny.
Let me go ahead and translate those comments: All of a sudden white people from north Macon are interested in east Macon because there's money to be made.
How much money? That's hard to say. But when National Ventures' head man Bob Schwartz filed a federal lawsuit over the hotel deal, he listed his requested damages (and hence predicted profit) at $20 million.
On the other side, let me assure you that Noble isn't getting into this thing to lose money. Kind of makes you wonder why any government funding is needed, doesn't it?
My point is this: Any time there's a lobbying campaign it's important to ask: Whose interests are at heart here, the public's or the individuals?
I'm not offering an answer - I won't pretend to know people's hearts and minds. I'm saying ask the question when someone asks for your support on this issue, and on every issue.
By the way, Lawyers, Guns and Money is a Warren Zevon song.
11 comments:
I'm not sure it's quite fair to point a finger at North Macon, I think it's really easy for people to point to North Macon and say they aren't interested unless it's a big issue or if involves big money. Not everyone at the council meeting was from North Macon.
That being said I think you make a valid point, we should ask why people care about this issue and any other one that comes along. People should always be made to justify an opinion.
It seems to me that one of the causes of the hotel conundrum is that the proposals came from developers seeking support and financial backing from the tax payers; sort of like a car salesman trying to sell you a new car you don't need and can't afford. Perhaps the City should put together their own financial package; decide up front how much bond debt we can handle; decide what the project needs to include and then shop the proposal to developers. Sort of like going to the auto dealership and informing the salesman that you want the red sedan with option package 1 and that you won't pay more than $18,500. That may be a simplistic comparison but I think the City is being jerked around by developers who are basically looking for investors (tax payers) to sweeten a risky deal.
Rumor has it, last night a bunch of North Maconites and Downtown Mafianites were captured on the "East Macon" Banks of the Ocmulgee River while panning for gold and fighting off the Ocmulgee Pontoon Pirates...
You'll only see the news as it happens at Georgia Improper
http://www.flickr.com/photos/ georgiaimproper
and if you're appreciative of the value of a good set of shoes:
http://www.myspace.com/ georgiaimproper
enjoy and unwind by the Ocmulgee,
Vic
Travis, you are right on with your blog. But, not everyone in town is against this deal because of an alterior motive. I am against this deal (I'm not against a hotel, mind you) because it is a bad deal. Not one person, not even the Telegraph, has looked beyond the bonds or the location of this hotel. Not one person has questioned Noble's experience. Yes, they have built hotels all over the place. Yes, they have run hotels all over the place. But, have they ever managed a full convention center? Have they ever managed entertainment venues? I don't have a stake in this at all. I just care about the Centreplex and the city it calls home. There are so many things that should be covered in regards to this story, not the inner-workings of the bonds, mind you, but the inner-workings of this deal as a whole and what this deal is projected to do to the city's finances in the years to come. Or, are there any projections? (Haven't seen that question asked) Successful for the city coffers is not going to be the same thing as successful for the hotel. Noble can be filling their pockets and the city will likely still be emptying theirs. The deals have been signed, so why don't you guys interview Noble folks? How about the consultants that council has based their decision on? Did this consultant just help with the selection based on the bonds or did they help structure the actual agreements that have been signed? Whose vantage point did they look at it from, the city or the hotel?
And, one last thing, if anyone does any research and finds that Noble has little, if any experience managing a full convention center and they also find that they have absolutely no experience with a Coliseum, ask the question why? That's pretty simple, why have all the other people they've approached said "no way"? It hasn't made Noble back away from building a hotel anywhere else. But, as always, Macon gets itself into a desperation mode and nothing is a true negotiation. Maybe Macon needs to hire a chief negotiator...or put their consultant money into someone that will actually negotiate their contracts.
P.S. If you need some hints on how to best research this (though I know you are a good reporter)...just say so here...be glad to help point you in the right direction.
I agree with you Travis about the complexity and depth of the whole deal. The thing that bothers me is that SO many of the people did not take time to read the 2 plans before they formed an opinion. Hell most of the people I spoke with didn't even read the one they supported!! Making a decision before doing your homework usually leads to bad choices...
What "Anonymous" said about Noble is valid and deserves further exploration. The fact that the deal would eliminate the red ink that the city has been supplementing every year ($ 800,000+ the year alone!) is one major fact that has been omitted. Another major fact that has been overlooked is that all the employees will be transferred from the city's payroll to Nobles. This is a positive for the good employees that really want to work and improve their situation for it avails them of higher wages and better benefits than currently in place. It also removes nearly 100 employees from over 1400!!! that currently bloats the city roles. This is one way to reduce a major problem with the city finances. One which sucks over 70% of the budgetary dollars every year!
Lastly, the concern over the selection of Noble. With over $1 Billion in development and over 7000 rooms under management (BTW, they also run convention centers very well i.e. Winston Salem, NC, etc...), this company displayed an incredibly impressive resume of success and potential. Take a look at their management team and you will see the level of expertise that this group brings to the table. They are not in this as a "one-time and out" deal. They do this stuff every day, and have so for over 15 years, in order to maximize profits and deliver value to their investors AND partners!! We should hope and pray that they are in this to make money for the city, and the community at large, will benefit from their success. We should try having a little faith and, heaven forbid, a positive outlook for a change. Macon so desperately needs something to believe in and something to be proud of for a change. I think this is a good step in that direction and I hope, in time, that the rest of Macon will share my optimism.
Cole Thomason
I hate to go against one of our council members, but, Cole, you are wrong about the management agreement that Noble presents wiping out the Centreplex drain on the budget. Did you ask for a pro-forma? The red ink that goes for all three buildings will now go for just two and it will still be red, probably even a much deeper shade of red. But, I don't have to argue the point, because you will see in a few years. I'll print this and send it to you when the city sits down to do their budget. And, Noble, does know how to run hotels, but I bet you won't find many places that they manage convention centers that were city-owned. How is it going in Winston? And, I know you won't find where they have been allowed to go into the entertainment industry. Homework is more than just reading a plan presented to you by the developer and taking their resume at face value. You have people in the community that know the ins and outs, but I wonder if you talked to any of them? Don't even get me started on the impact of the hotel/motel tax. Smart negotiations there could have helped the city reduce the red-ink a long time ago. Have you looked at other city's in Georgia and what their losses look like. You would not be so quick to complain about Macon, when you see they get a whole lot more hotel/motel tax and, in many cases lose more money with just an arena. Start your homework at home, not from a developer's notes.
Mr. Thomason, either folks who made and agreed to this deal either don't understand or are playing a shell game with the public. You seem to celebrate that 100 Centreplex employees will be moved off of City payrolls to better opportunities with Noble (for one year) and the city will "wipe" out $800,000 (this year) deficit at the Centreplex? You aren't wiping those out, you are shuffling shells, because the city is still responsible for all operational costs (and losses) at the Coliseum and Auditorium, and that includes salaries! And the worst part of it all is now the city will have lost control over its facilities. Whose going to stop the management company that is being paid $96,000 (another expense) when they decide to book a conference that means hotel rooms to them and nominal rent to the city over a public show that means over $100,000 in revenues to the city, money need to offset the operational cost of the coliseum. Or maybe they don't know how to run an entertainment venue and just screw up, and then you wind up with losses of $1 million or more like Augusta, Albany. What is their track record with arenas and auditoriums? Just asking the question. I just wish people could drop their pride for a minute and look at this from other angles. Talk to other cities. I'm not making this stuff up. I've been in this industry for a while and have seen it all. I don't live in Macon now, but I still care about it. Go for the hotel. Go for the management, if you must. Just don't expect to wipe out the deficit, and don't try to tell the public that. It's not going to happen. That's not being negative; that is being realistic.
I am not sure what documents the last 2 "anonymous" writers are looking at, but the ones that I am holding in my hands conflict with what they are saying. That is exactly what I was getting at in my first post; misinformation and opinions being formed from it... I am not arguing someone's professional credibility, but the facts of this deal are not being vetted in many of these and other conversations.
BTW, I did my homework by calling other cities and speaking with operators. Noble scored very well and Macon Ventures tanked! Actually, I could not speak to any of Venture's "references" because they were fabricated. The only projects that I could validate were constructed in the early 80's and no one on the current management teams even knew of Bob Schwartz and/or Macon Ventures. It is incredibly difficult to do your "homework" when your subject lies about their background. Credibility is important to me.
Cole Thomason
Nobody is talking about Macon Ventures, or National Ventures. Nobody is even talking about Noble's initial proposal here. Nobody is denying Noble has much development and management experience in the hotel industry. Somebody is questioning whether or not the final agreements made are a "good deal". Cole, do you really think this will wipe out the Centreplex drain on the general fund? If so, on what basis do you make that opinion? And, what references did you call? Do you mind listing them? How many actually dealt with the management of convention centers? How many dealt with management of coliseums and theatres? I'm not saying you are wrong, but you aren't saying enough to prove you are right.
To "anonymous" and Cole Thomason: What difference does any of this make? The agreements have been signed. What's done is done. You make some good points, "Anonymous", but this is now on Mr. Thomason and the rest who signed on the dotted line. No need to defend yourself, Mr. Thomason, this is your legacy and time will tell.
Cole, I have to say it looks to me like not all the homework was done. It's great that you called references, but I wonder if you or anyone else has ever put anything less than a "glowing" reference on their resume. Sorry, dude, I hope you are man enough to explore the stuff anonymous pointed out a little closer and that you are man enough to admit the truth of what you find.
Jake J.
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