Quote:
Originally Posted by Locke
Absolutely, I just dont know what more the CSEC wants. The City will front the money but it has to be repaid from the profits of the asset that the money is being used to create.
I do see some complaint in there from the CSEC that the City is basically profiting without paying. I'm kind of coming around to that notion because they're fronting the cash and then getting it paid back, maybe with interest, maybe not, but theres details in there that are missing.
Heres where I'm at:
The City fronts 2/3s of the cash. Their third and the ticket tax.
The Ticket Tax is repaid in the form of a user fee from people who buy tickets. Fair enough.
But then the City is asking CSEC to repay the third of the cost that the City paid for?
Here is where I think the Devil is in the Details.
Whose building is it?
If the City stumps up 2/3s of the cash but is repaid it then it should be the CSEC's building. Is it? Do they want it? Owning a declining asset isnt normally a great thing.
This is where I'm at. The City wants to be 'Made Whole' over time through a business' ventures. This is a problem. Because at the end of the day what you're doing is making the CSEC pay for the whole thing on their own, just over time. They're acting as a brokering agent.
And I'm not sure where I'm at with that. I'm not sure I have enough information to really solidify this yet.
Theres lots of problems here.
If the CSEC are paying their third and then repaying the City's 2/3s through their profits and its not their building then I can see an issue with that. Even if it is their building I can see an issue with that.
If the City are just acting as a lender and then owning the asset I can see issues with that as well.
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If I'm not mistaken - most franchises that are in a publicly owned facility pay rent. It's usually a normal operating expense for teams. Why not something so normal to enable the City to "recover" its initial investment, even if it's over a long period of time? It has to be a no strings attached gift, or it has no value?