Pinnacle Bank Arena

With revenue from the city's occupation tax growing each year, the West Haymarket JPA should have no problem paying off the bonds to build Pinnacle Bank Arena.

Eight years after city voters gave a green light to building a new city arena on an old rail yard, most of the money has been spent — $365.4 million for the arena, the new street system, parking garages and environmental cleanup.

And the plan for bringing in revenue to pay back the bonds and maintain the arena seems to be successful so far.

At the end of the last fiscal year, on Aug. 31, the West Haymarket Joint Public Agency, the entity that built the arena and is paying off the bonds, had almost $39.5 million in its reserve. 

An occupation tax — on restaurant and bar food and beverages, hotel rooms and rental vehicles — has brought in about $115.6 million over the past six years, far more money than expected.

In the early years, the occupation tax revenue grew by 4 to 8 percent each year. Though it has leveled off in the past two years, with average 2 percent increases, total occupation tax revenue is still far ahead of projections.

In fact, city leaders didn’t expect the occupation tax revenue to hit the current $17 million in annual revenue until 2030, said Brandon Kauffman, the city’s finance director.

The occupational tax has been so successful that the West Haymarket JPA (consisting of the mayor, a University of Nebraska regent and a City Council representative) has given several million dollars annually to the city to help with operating the arena itself. The arena operation is a city responsibility.

Over time, the city's tax revenue will benefit from associated expansion in the West Haymarket.

As the West Haymarket has developed, including corporate headquarters buildings for Hudl and Olsson Associates, the assessed value of the area has increased dramatically, growing 97 percent between 2013 and 2017, Kauffman said.

In 2013, the assessed value for the property in the West Haymarket was $119 million. By 2017, it had risen to $234 million.

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For the arena itself, the bond payments will peak in 2021-22, at $24.6 million, then gradually decrease over time, according to Kauffman. 

Projections show the JPA should bring in enough money to pay off the bonds and maintain the arena over the next three decades. 

The JPA expects to have income of more than $1.03 billion over the 30-year life of the West Haymarket bonds and expenses of $963.4 million. 

Arena milestones

Reach the writer at 402-473-7250 or nhicks@journalstar.com

On Twitter @LJSNancyHicks.

Reporter

Nancy Hicks reports on Lincoln city government, but she’s been following the leaders of local and state government for more than 40 years.