Wednesday, July 3, 2013

Orange County funding for Stadium

Orlando City Soccer Club's push to secure the final portion of funding for their proposed downtown stadium will come to a head over the next two weeks as Orange County prepares to vote on their $20M contribution to the project.

Sources with the County have stated that a due diligence review of the fiscal impact of the project has been completed and that a special meeting of the Tourism Development Council (TDC) could be scheduled before the end of the next week. The TDC holds the voting power to approve or deny the request to divert future Tourism Development Tax (TDT) money towards the stadium which Orange County Mayor Teresa Jacobs would likely sign-off on shortly their after. But where exactly is the $20M coming from if the County is already on the hook for hundreds of millions of dollars for the convention center and "Orlando Venues" project?

The simplest way to explain TDT is that it is a 6% tax on every hotel, condo, or timeshare rental in Orange County. If you pay $100 for a hotel room you will pay an additional $6 in TDT money, or 6 cents on every dollar you spend. During the 2012 fiscal year, that 6% tax amounted to roughly $175M in revenue for the County. The use options for TDT are limited to "financing and operation of tourist related facilities" and the "promotion and/or advertisement of tourism and to fund the tourist promotion bureaus" associated with the County.

A portion of those TDT funds have already been alocated to the $1.1B "Orlando Venues" project which includes the Amway Center, Performing Arts Center, and renovations to the Citrus Bowl in the form of an "interlocal agreement" between the City of Orlando and Orange County. The agreement has the County providing various portions and proceeds from the TDT funds in the amount of $270M over 30 years. Once that amount has been reached the agreement will end and the TDT funds will go back towards other County projects.

In the case of Orlando City's stadium, the plan is to increase the County's contribution in the agreement to $290M, thus providing the additional $20M the team is requesting. Even with the increase in the total amount, the agreement would only need to be extended 1 year to cover the full amount requested by the club. In addition, if TDT grows at a rate of 5% per year during the span of the agreement, the original $270M will be collected by 2024; 15 years earlier than the planned year of 2039. Compared to 2012, TDT funds are up 6.1% through May of this year, resulting in more funds being paid out more quickly through the "interlocal agreement" to the various projects.

When compared to the massive "Orlando Venues" project or the upgrades and expansion of the Orange County Convention Center, Orlando City's stadium plan is just a small $20M drop in a multi-billion dollar bucket of tourist-funded money.

2 comments :

  1. How does the cost overrun/planned funding increase for the Citrus Bowl mentioned today affect Orlando City's ability to get this funding from the same pot?

    Is the mayor throwing her hands up and paying for both, or could the Citrus Bowl squeeze for the same money knowing Mayor Jacobs is considering giving that same amount to Orlando City and they would rather have it instead since it seems to be available?

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    Replies
    1. Great question. My understanding is that the Citrus Bowl increase, that was mentioned in the Sentinel this morning, is "in-line" behind the Orlando City stadium money. The add-ons referenced for the Citrus Bowl do not directly translate into additional hotel bookings like an entirely new stadium would with Orlando City. In the end both will likely get approved.

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