No2Arena says interest should be taken into account

"This number should be a show-stopper in itself," No2Arena spokesman Scott Wendt said.

He wants voters to be aware that the $25 million listed on the ballot is "just the tip of the iceberg." It is one of three bonds totaling up to $344 million that would be issued to pay for the project - plus interest.

"Lincoln voters need to know just how massive the taxpayers' debt will be," said Wendt, who owns Bluestem Books near the Haymarket.

The city's arena coordinator, Dan Marvin, accused Wendt of trying to scare voters with "big numbers."

"The only reason they're doing it is to get people to vote no," Marvin said.

Although City Finance Director Don Herz was not available for comment on Thursday, he has previously told the Journal Star the cost of the project with interest would be about $750 million.

Accountant Don Raskey, a member of No2Arena, said assuming the city pays 5 percent interest, interest would add up to $377 million, eclipsing the $344 million in bonds that would be issued as well as other public works project's price tags, including the Antelope Valley Project.

"In reality, the $25 million debt stated in the ballot language represents only 3 percent of the total projected expenditures for the arena project," he said. "Taxpayers should be aware of the entire amount of debt burden they will be assuming if the arena project goes forward."

Marvin said he could not say whether he thought the group's figures were accurate, but said people don't generally look at the cost of a house or car in terms of the cost with interest over the life of the loan. They look at the interest rate and whether they can afford the monthly payment.

"Yes there is going to be interest and principal added together," he said, "(but) it's a careful campaign of wordsmithing and scaring people."

Wendt said the cost, with interest, equates to $8,000 per Lincoln household, or $273,000 for each of the 1,200 jobs promoters say would be created by the project. Marvin said that's an "atypical" way to look at it.

Wendt said by the time the city begins paying on the principal debt, in 2021, the annual payments will be more than $24 million. He said there are better ways to finance the project - such as the course taken in Wichita, Kan.

Voters there agreed to institute a 30-month, 1 percent sales tax in 2004 to build an arena, which opened this year.

"We'd certainly look at that" type of financing, Wendt said.

The mayor's chief of staff, Rick Hoppe, says Lincoln can't raise its sales tax since it is already at the 1.5 percent maximum set by state law.

No2Arena also questioned some of the city's projections. For example, the city estimates it would take in $2 million per year for naming rights - which is about double what the Qwest Center Omaha receives and more than a recently announced deal in Louisville, Ky.

The new home of the University of Louisville men's and women's basketball teams - a 22,000-seat, $238 million arena under construction - recently announced a deal with the company that owns KFC, Taco Bell and Pizza Hut to call the arena the KFC Yum! Center for $1.4 million a year.

No2Arena has put out a flier claiming that every dollar spent on the arena project is a dollar that can't be spent for city services such as street repairs, snow removal and libraries.

But the mayor's chief of staff, Rick Hoppe, said that's untrue - the arena would largely be paid for with new taxes on restaurants, bars, hotels and car rentals. So it's not as if money is being taken from the city budget to pay off the arena debt.

Hoppe, issued a statement in response to No2Arena's press conference, saying, "The latest misleading information from the opponents of progress is only news to those who have never bought a car, house, business or other major item."

Reach Deena Winter at 473-2642 or dwinter@journalstar.com.