I was wondering about these big numbers Mayor Stoney is throwing around about the new Coliseum deal he is proposing, so I decided to read the analysis he paid to have done. I wrote down my findings, here are some highlights.
Full Article: nocoliseum.com/breakdown-of-c…
Full Article: nocoliseum.com/breakdown-of-c…
The numbers I use are from the Hunden Strategic Partners. The firm Stoney paid $500k of City money to provide analysis. They are the ones that said RVA could get an NBA team. I have more Accounting and Economics degrees than the entire company.
Since they are the firm hired by Stoney to provide analysis I am just taking them as the best case scenario, because we all know these public projects always take longer than planned and produce less revenue. See Redskins Training Camp.
On to the findings.
On to the findings.
The project itself will only generate $342m in new RE Tax revenue, while costing the City $620m. If you include the projected increase in RE Tax revenue as a result of this project from the entire TIF District (which is most of downtown) it is still only $576.6m. 
They then add in the Dominion Towers to get the number over the $620m hump. They also subtract the current projected growth from the entire TIF District, except the Dominion Towers to inflate the numbers. The Towers will happen anyway so I don't include them.
They project $326.67m in new tax revenue from sales taxes will be generated by the project. They get to this figure by assuming $10.8b in new spending. That is "new spending," meaning in addition to the dollars currently spent in the City.
They project attendance of 792k a year at the new Coliseum. $10.8b equals $458.48 by every person attending an event at the Coliseum. Put another way, $10.8b is $359 more spending every year by every person (including children) living in RVA, Chesterfield, Henrico, & Hanover.
The firm actually lists new local taxes at $472m, but again they inflate numbers by including the Lodging tax which all goes to GRCC and the Meals Tax portion earmarked for schools. When those are removed it comes to $326.67m.
Stoney says this will generate $1.7b in new tax rev for the City, which will leave $1.2b left over for the City General Fund. $600m of which will go to schools.
His firm's best case scenario projections show only $1.3b in new taxes collected, so I am not sure where he is getting the $1.7b figure. Seems weird and really dishonest to give different numbers than the "independent" analysis.
The 1.3b figure is also inflated. Once you take out the Dominion Towers, Lodging Tax, and School Meals Tax it will only generate $903.47m in new revenue, leaving only $283.47m or $9.4m a year for the City General Fund. About $1 billion less than Mayor Stoney is saying...
And that number includes the entire giant TIF District. If you narrow it down to just the actual development and the new sales tax it shrinks to $668.67m or only $48.67m more than projected cost.
The firm's projections also show it will be at least 5 years before the City starts seeing significant revenue from this project. In the meantime, revenue to the City is locked at current levels. I imagine this will put a huge strain on the budget within a couple of years.
Instead of using the Dominion Tower money on schools when they are completed, it will go to paying for this Coliseum. Schools will have to wait several more years before hopefully money flows in from this project.
Mayor Stoney also claims this will generate 21,800 jobs with 9,000+ being permanent. The firm projects around 7,700 jobs will be created with 6,638 being permanent. A strange, huge disparity.
And finally the analysis says only 17.5% of construction related expenses will be spent in the City of Richmond.
When you strip out all of the fluff the margins are razor thin. When you consider that the Redskins projections were off by millions you really start to worry. The spending projections and number of new events projected seem too good to be true.
Why gamble the Dominion Tower money now when it can be used to fix the schools soon? Stoney's pitch for the meals tax increase was literally that the #KidsCantWait. Now that is exactly what he is going to make them do in a completely best case scenario, if it happens at all.
