Now we know why Paul Allen needs $100 Million

who makes the money?

the government.

the government is "out of money" right? but they're still loaning money
out, right?

gosh, I should get a brain.
 >> Stay informed about: Now we know why Paul Allen needs $100 Million 

On Wed, 5 Apr 2006 13:33:41 -0700, "Terraholm"
<terraholm_SpamNada_.RemoveThis@gmail.com> wrote:

>mmasw wrote:
>> On 4 Apr 2006 22:10:04 -0700, "Blazer Fan Dan"
>> <BlazerFanDan.RemoveThis@gmail.com> wrote:
>
>
>> But the city doesn't have to act as his financial stooge...and they
>> won't.
>
>Remember besides the revenue brought into the city that helps everyone inderectly, they also make 4
>million directly off the blazers a year in taxes on the tickets and from the arena parking. And
>Cities selling the idea of bringing business to an area a sports team is an attraction. There is a
>reason other cities fund arenas...

yes...there is some direst financial incentive for the city to
help...there seems to be a lot more political incentive not to help
though

as to the indirect benefit, no doubt it exists. However, asking all
the businesses in portland to pony up a little extra in taxes each
year, while MAYBE making some marginal financial sense, is simply not
going to sold politically....and this decision will be much more of a
political one then a financial one

so that leaves issuing bonds with a secondary agreement. That wouldn't
be as simple to structure as everyone seems to think considering there
are 2 different and apparently intractable parties that would have to
come together for the secondary agreement. It may be very difficult to
secure an undewriter because of that. so a 5-6% rate may be pie in the
sky. And the city's charter may prohibit issuance of bonds without
specific underwriting criteria and a higher bond-rating that may not
be forthcoming.
>
>>
>> And you have as yet explained how the taxpayers....whether local or
>> federal...don't foot the bill if they give allen a below market loan
>
>Because the loan still makes money even though the interest rate is lower. Even if from bonds issued
>from the state or fed instead of the City it is investing not spending taxpayer dollars, at each
>level someone is getting interest on that money. The interest Allen would be paying might partly end
>up in China paying national debt, but the fed would be loaning it at a higher rate than they
>borrowed it...

ok...what is the 10 year treasury rate right now?...4.6-4.8 % And what
rate do you suppose would be the secondary rate in this transaction? I
think you'd discover that the difference would be a marginal one at
best

The suggestion that the city could secure a loan for 5 to 6 % and
allen could not doesn't jibe with reality

If you're talking about the rate that paul allen can secure, I
guarantee you that he could go to several european markets or some
asian markets and secure a rate that would be competitive...probably
better. It's the europeans and asians after all that are buying US
bonds for considerably less then 5-6%

but as we both know. the object in this charade is not to secure a
loan but rather secure an exit visa

If the city was going to get involved and float bonds, they ought to
really get involved and buy the blazers like green bay bought the
packers.

>....And the Blazers generate tax revenue. Motel taxes, ticket taxes, income taxes etc. The interest
>in this case likely would not be tax exempt either.


the city doesn't levy income taxes, the state does, so that's a
non-factor. The state won't get involved and won't notice the
"reduction"

any interest deduction is federal or state as well....non-issue

no doubt there are a few core businesses that will be affected. And if
the blazers leave, there will be an impact on tax revenue for the city
and county. But I'd be surprised if it was significant...the RG will
still be there and property taxes will still be assesed, and I would
estimate that is the big cash cow


>
>
> http://www.oregonlive.com/news/oregonian/index.ssf?/base/news/11432715...23990.x have shot at dealPublic money - If Portland helps with financing, Mayor Potter could keeppromises, and the teammight stayWhat could the city do? Topping the plausibility list, Portlandleaders could use the generousinterest rates available to governments to borrow money on theBlazers' behalf. They could, forexample, issue revenue bonds to give Allen the cash he needs to buyback the Rose Garden, assuminghe can agree on a price with the banks that own it.Allen originallyborrowed $155 million at an interest rate of 8.99 percent to build the Rose Garden.When his OregonArena Corp. filed for bankruptcy in 2004, he owed $193 million, including principaland interest.Depending on how the bonds were rated and how long the debt were to last, the citycould borrow withan interest rate between 5.5 percent and 6.5 percent.The city has previously borrowed money onbehalf of the private
>sector, for example, for nonprofitgroups looking to build affordablehousing.But for such a deal to work -- both financially and politically, given that the mayor haspromisednot to do anything that would put public money at risk -- Allen or any future Blazers ownerwouldhave to personally guarantee repayment. He'd presumably repay the bonds with revenue fromconcessionsales, luxury suites and courtside seats.=The last idea on the list is the mostmysterious -- and intriguing, at least for city leadersstruggling to turn the Rose Quarter andsurrounding area into a bustling urban center.Two weeks ago, while he ruled out options such asgiving Allen cash from the city's general fund,Potter suggested that the Portland DevelopmentCommission could help. He offered no specifics, butAllen owns 3.5 acres near the arena, the site ofthe old Red Lion hotel.--Laurel T"If you can't say anything nice, sit next to me." Alice RooseveltLongworth (1884-1980)


once again....I haven't said that something couldn't be structured
that would make some financial sense, at least on the part of the
city. And it may be that something could be structured that the owners
of the arena would accept, but I don't believe they will do the city
any financial favors. But the "logic" will evaporate as they negotiate
with allen....since it's unlikely he would be negotiating in good
faith.

Politics is the biggest roadblock in this.The blazers have alienated
far too many fans...some of them influential portlanders, and allen is
wildly unpopular. About the only way I see local government MAYBE
getting involved is if it's a new owner/s that is benefitting...not
allen

If the city was going to float enough bonds to allow allen to buy out
the areana owners....it makes me wonder why they wouldn't just cut out
the middle man and buy the RG themselves.
 >> Stay informed about: Now we know why Paul Allen needs $100 Million 

On Wed, 5 Apr 2006 13:34:05 -0700, "Terraholm"
<terraholm_SpamNada_ RemoveThis @gmail.com> wrote:

>mmasw wrote:
>> On 4 Apr 2006 12:40:50 -0700, "Blazer Fan Dan"
>
>>
>> fourth...the city isn't gonna help paul allen. Their pretense of
>> "listening" is as sincere as david stern's negotiating effort.
>
>I doubt it is that cut and dried...

ok...they are a tad more sincere....not bt much though.


>Interesting editorial by a guy that cares less anymore about the team:
>
> http://www.oregonlive.com/news/oregonian/david_reinhard/index.ssf?/bas...ditoria I first gazed upon the "Blazers seek hand" headline, my first reaction was to give them,maybe,one finger before waving, "Buh bye."After all, it's easy enough to tote up all the core governmentfunctions that Portlanders andOregonians believe are not adequately funded: police, roads, schools,parks and prisons. Why shouldthe public do anything to help billionaire Paul Allen's littleplaything?And yet . . . I've had second thoughts. Even with all of Portland's unmet needs -- maybeespeciallybecause of them -- the Blazers' departure for lack of public help might be especiallydamaging toPortland in particular and Oregon in general.What if state and local officials told theBlazers that they'll receive no public help and the teamwent to a more welcoming city? Even thosewho don't give a fig for the Blazers and taxpayer-enabledfranchises might regret this initiallysatisfying
adios.
>Is Portland so fat and happy these days itcan afford to lose the Blazer payroll aswell as the related jobs and revenue from our hospitalityindustry? Is Oregon so fat and happy it canafford to lose the tax revenue thrown off by thiseconomic activity? Or the publicity-generatingstatus that comes to cities with pro sports teams?One of the reasons businesses relocate to citiesis the civic attractions those cities offer. Likeit or not, a pro sports team is one of the biggercivic attractions.What does Portland offer these days -- besides an "iconic" tram? A come-hitherbusiness climate? Thecity already has a reputation for being an awful place to do business and thejob-loss andcommercial real estate numbers to match its business-unfriendly reputation. The city nolongerboasts a Fortune 500 company and did its best to see that up-and-coming ColumbiaSportswearrelocated to Washington County. A crackerjack local government? Suffice it to say PortlandandMultnomah County governments have nothing
>on Paul Allen when it comes to dysfunctionandmismanagement. Schools? Whether Portland Public Schools has a funding problem or a spendingproblem,the district has problems we're going to hear more about in the coming year.Not doinganything to lure a new major league team here is one thing. But do we really want to losean existingfranchise -- our only franchise -- by failing to come up with some kind of publicsupport to keep theteam's current or future ownership here, the type of public support that can-domidsize citiesdesperate for major league franchises are eager to offer?Liberals and public-school backers who arepart of today's "Not a penny more for the Blazers" crowdshould especially entertain some secondthoughts. Both want government or government schools to domore and more things. Well, it's simplyimpossible to pay for all this if the tax revenues aren'tthere for lack of job growth and economicactivity.Our self-induced loss of the Blazers would give Portland a new kind of
>national status: amajorleague city bent on going backward.Three years ago we had a bit of negative national publicityabout our last school "crisis." Sportsnews being what it is, it's a cinch that a major city tellingits only major sports franchise to getlost would generate far more bad press, from Portland toPodunk -- if that's not, by then, aredundancy.


one thing that I believe is an important factor....or at least it
should be:

there is no doubt that paul allen is simply an atrocious
businessman....bad decision after bad decision. Now why would you give
that man a loan? There seems to be an assumption that if allen simply
had control of the RG again then all would be hunky-dory in
blazerland. There is no evidence that's true. I assume that the
city...if they were to float bands and issue allen a loan would have a
raftload of provisions in the secondary caontract. If they didn't
they'd be idiots considering allen's business acumen.

I doubt he'd agree to them
 >> Stay informed about: Now we know why Paul Allen needs $100 Million 

On 5 Apr 2006 15:40:38 -0700, "Blazer Fan Dan"
<BlazerFanDan DeleteThis @gmail.com> wrote:

>who makes the money?
>
>the government.
>
>the government is "out of money" right? but they're still loaning money
>out, right?

try the math....there is a federal budget...what it spends

there are taxes collected....that falls short of the budget

there are bonds issued. taxes + bonds = budget/expenditures

the fed is about 8 trillion dollars in debt. Now here is a startling
coincidence!...there are about 8 trillion dollars in outstanding
federal debt instruments!

who'd a thunk it


>
>gosh, I should get a brain.

don't bother...you'd break it
 >> Stay informed about: Now we know why Paul Allen needs $100 Million 

mmasw wrote:
> On Wed, 5 Apr 2006 13:33:41 -0700, "Terraholm"
> <terraholm_SpamNada_.RemoveThis@gmail.com> wrote:
>
>> mmasw wrote:
>>> On 4 Apr 2006 22:10:04 -0700, "Blazer Fan Dan"
>>> <BlazerFanDan.RemoveThis@gmail.com> wrote:
>>
>>
>>> But the city doesn't have to act as his financial stooge...and they
>>> won't.
>>
>> Remember besides the revenue brought into the city that helps
>> everyone inderectly, they also make 4
>> million directly off the blazers a year in taxes on the tickets and
>> from the arena parking. And
>> Cities selling the idea of bringing business to an area a sports
>> team is an attraction. There is a
>> reason other cities fund arenas...
>
> yes...there is some direst financial incentive for the city to
> help...there seems to be a lot more political incentive not to help
> though
>
> as to the indirect benefit, no doubt it exists. However, asking all
> the businesses in portland to pony up a little extra in taxes each
> year, while MAYBE making some marginal financial sense, is simply not
> going to sold politically....and this decision will be much more of a
> political one then a financial one.

The political big 'no' is using tax dollars to bail out Allen. The selling of securing a guaranteed
loan is not such a hard sell.

>
> so that leaves issuing bonds with a secondary agreement.
That wouldn't
> be as simple to structure as everyone seems to think considering there
> are 2 different and apparently intractable parties that would have to
> come together for the secondary agreement.

The creditors would set a price and be paid off. They have pretty much set the price at 180 mil.
Allen would own the RG and being making payments on the new loan. The city would be in the middle
but the loan would be guaranteed by Allen "co-signing" the loan for personal responsility.

> It may be very difficult to
> secure an undewriter because of that. so a 5-6% rate may be pie in the
> sky.

Perhaps. But I think the city would have no trouble securing such a loan.

> And the city's charter may prohibit issuance of bonds without
> specific underwriting criteria and a higher bond-rating that may not
> be forthcoming.

On Muni's perhaps, but a revenue bond from outside city revenue should not be a big problem.


>>
>>>
>>> And you have as yet explained how the taxpayers....whether local or
>>> federal...don't foot the bill if they give allen a below market loan
>>
>> Because the loan still makes money even though the interest rate is
>> lower. Even if from bonds issued
>> from the state or fed instead of the City it is investing not
>> spending taxpayer dollars, at each
>> level someone is getting interest on that money. The interest Allen
>> would be paying might partly end
>> up in China paying national debt, but the fed would be loaning it at
>> a higher rate than they
>> borrowed it...
>
> ok...what is the 10 year treasury rate right now?...4.6-4.8 % And what
> rate do you suppose would be the secondary rate in this transaction? I
> think you'd discover that the difference would be a marginal one at
> best


I was addressing your take that somewhere tax payers would be paying for the RG.

>
> The suggestion that the city could secure a loan for 5 to 6 % and
> allen could not doesn't jibe with reality

It may because of the RGs situation. It is on city land.


>
> If you're talking about the rate that paul allen can secure, I
> guarantee you that he could go to several european markets or some
> asian markets and secure a rate that would be competitive...probably
> better. It's the europeans and asians after all that are buying US
> bonds for considerably less then 5-6%

Perhaps. He could go to himself too. =)

>
> but as we both know. the object in this charade is not to secure a
> loan but rather secure an exit visa

That's my take. I am just showing it could be done without giving Allen our tax dollars.

>
> If the city was going to get involved and float bonds, they ought to
> really get involved and buy the blazers like green bay bought the
> packers.
>
>> ....And the Blazers generate tax revenue. Motel taxes, ticket taxes,
>> income taxes etc. The interest
>> in this case likely would not be tax exempt either.
>
>
> the city doesn't levy income taxes, the state does, so that's a
> non-factor. The state won't get involved and won't notice the
> "reduction"

The players and nate alone pay 10% or 11% on 40 million dollars. ( half the payroll because they
only pay for home games)

>
> any interest deduction is federal or state as well....non-issue

You were saying somewhere we would be putting in tax dollars....

>
> no doubt there are a few core businesses that will be affected. And if
> the blazers leave, there will be an impact on tax revenue for the city
> and county. But I'd be surprised if it was significant...the RG will
> still be there and property taxes will still be assesed, and I would
> estimate that is the big cash cow


Look at the motels alone. The city has pretty good soft taxes on that revenue. You are looking at 45
to 50 nights at high end hotels for 30 or so people. That is 200K or more for one item.

>
>
> once again....I haven't said that something couldn't be structured
> that would make some financial sense, at least on the part of the
> city. And it may be that something could be structured that the owners
> of the arena would accept,

They are willing to sell

>but I don't believe they will do the city
> any financial favors. But the "logic" will evaporate as they negotiate
> with allen....since it's unlikely he would be negotiating in good
> faith.

I do not think that is a problem, but as we have said I do not think he will ask the city to do it,
he would be afraid it would work....

>
> Politics is the biggest roadblock in this.The blazers have alienated
> far too many fans...some of them influential portlanders, and allen is
> wildly unpopular. About the only way I see local government MAYBE
> getting involved is if it's a new owner/s that is benefitting...not
> allen

If it comes down to no tax funds and cooler heads pointing out that losing the Blazers really hurts
the city they might decide shooting themselves in the foot to spite Allen is not the best plan.

>
> If the city was going to float enough bonds to allow allen to buy out
> the areana owners....it makes me wonder why they wouldn't just cut out
> the middle man and buy the RG themselves.

That would be a huge difference and would take tax dollars with Portland assuming the risk and
trusting Allen not to also bankrupt the team. It is lot different than floating a loan for Allen.


--
Laurel T
"They run like deer, jump like deer
and think like deer."
Charles Barkley on the blazers
 >> Stay informed about: Now we know why Paul Allen needs $100 Million 

mmasw wrote:
> On Wed, 5 Apr 2006 13:34:05 -0700, "Terraholm"

>> the Blazers would give Portland a new kind of national status:
>> amajorleague city bent on going backward.Three years ago we had a
>> bit of negative national publicityabout our last school "crisis."
>> Sportsnews being what it is, it's a cinch that a major city
>> tellingits only major sports franchise to getlost would generate far
>> more bad press, from Portland toPodunk -- if that's not, by then,
>> aredundancy.
>
>
> one thing that I believe is an important factor....or at least it
> should be:
>
> there is no doubt that paul allen is simply an atrocious
> businessman....bad decision after bad decision. Now why would you give
> that man a loan?

Because he would be co-signing it from personal funds...

>There seems to be an assumption that if allen simply
> had control of the RG again then all would be hunky-dory in
> blazerland. There is no evidence that's true. I assume that the
> city...if they were to float bands

Float bonds sounds like tax bonds...this would be getting a revinue bond from outside.

>and issue allen a loan would have a
> raftload of provisions in the secondary caontract. If they didn't
> they'd be idiots considering allen's business acumen.

What secondary contract? The contract that he keeps the Blazers in town already exists. If he
bankrupts the whole works the loan is guaranteed. But I do not think it would be as bad, the arena
is making money outside of the Blazers again and the Blazers situation is improving by cutting
expenses if not increasing revenue.

>
> I doubt he'd agree to them

I doubt he wants a loan...

--
Laurel T
A coach after being informed, that like
players, their drug tests would include
banned performance enhancing drugs:
"Does that include Viagra?"
 >> Stay informed about: Now we know why Paul Allen needs $100 Million 

On Wed, 5 Apr 2006 17:45:42 -0700, "Terraholm"
<terraholm_SpamNada_.RemoveThis@hotmail.com> wrote:

>mmasw wrote:
>> On Wed, 5 Apr 2006 13:33:41 -0700, "Terraholm"
>> <terraholm_SpamNada_.RemoveThis@gmail.com> wrote:
>>
>>> mmasw wrote:
>>>> On 4 Apr 2006 22:10:04 -0700, "Blazer Fan Dan"
>>>> <BlazerFanDan.RemoveThis@gmail.com> wrote:
>>>
>>>
>>>> But the city doesn't have to act as his financial stooge...and they
>>>> won't.
>>>
>>> Remember besides the revenue brought into the city that helps
>>> everyone inderectly, they also make 4
>>> million directly off the blazers a year in taxes on the tickets and
>>> from the arena parking. And
>>> Cities selling the idea of bringing business to an area a sports
>>> team is an attraction. There is a
>>> reason other cities fund arenas...
>>
>> yes...there is some direst financial incentive for the city to
>> help...there seems to be a lot more political incentive not to help
>> though
>>
>> as to the indirect benefit, no doubt it exists. However, asking all
>> the businesses in portland to pony up a little extra in taxes each
>> year, while MAYBE making some marginal financial sense, is simply not
>> going to sold politically....and this decision will be much more of a
>> political one then a financial one.
>
>The political big 'no' is using tax dollars to bail out Allen. The selling of securing a guaranteed
>loan is not such a hard sell.
>
>>
>> so that leaves issuing bonds with a secondary agreement.
> That wouldn't
>> be as simple to structure as everyone seems to think considering there
>> are 2 different and apparently intractable parties that would have to
>> come together for the secondary agreement.
>
>The creditors would set a price and be paid off. They have pretty much set the price at 180 mil.
>Allen would own the RG and being making payments on the new loan. The city would be in the middle
>but the loan would be guaranteed by Allen "co-signing" the loan for personal responsility.
>
>> It may be very difficult to
>> secure an undewriter because of that. so a 5-6% rate may be pie in the
>> sky.
>
>Perhaps. But I think the city would have no trouble securing such a loan.
>
>> And the city's charter may prohibit issuance of bonds without
>> specific underwriting criteria and a higher bond-rating that may not
>> be forthcoming.
>
>On Muni's perhaps, but a revenue bond from outside city revenue should not be a big problem.

as I said....it may not be as simple and easy as you contend. I'm not
sure that representatives of the city have the legal authority to just
go out and borrow 180 million dollars. I'd think the debt would have
to be secured or covered prior to the "loan" which could mean that the
entire structure of the 'pass-through' would have to be in place
first...I'm almost sure of it in fact. So, both the "seller" and
"buyer" would have to agree to all covenants first. And that would
seem to be an impossible dream considering the circumstances

But then if the city is going to issue revenue bonds, I'm not sure
they would necessarily have to secure a loan. Maybe the city's charter
prevents it from acting as the "lending institution"
>
>>>
>>>>
>>>> And you have as yet explained how the taxpayers....whether local or
>>>> federal...don't foot the bill if they give allen a below market loan
>>>
>>> Because the loan still makes money even though the interest rate is
>>> lower. Even if from bonds issued
>>> from the state or fed instead of the City it is investing not
>>> spending taxpayer dollars, at each
>>> level someone is getting interest on that money. The interest Allen
>>> would be paying might partly end
>>> up in China paying national debt, but the fed would be loaning it at
>>> a higher rate than they
>>> borrowed it...
>>
>> ok...what is the 10 year treasury rate right now?...4.6-4.8 % And what
>> rate do you suppose would be the secondary rate in this transaction? I
>> think you'd discover that the difference would be a marginal one at
>> best
>
>
>I was addressing your take that somewhere tax payers would be paying for the RG.

there were suggestions of "below market" loans which certainly implies
subsidy. Furthermore, I would guess that if something like the senario
you describe comes to pass, there will be a few thousand hours of city
employee time invested in this situaion, and it's highly unlikely all
of that will be charged against the loan or bonds. Certainly the
underwriting costs would be credited, but not all administrative costs
would be
>
>>
>> The suggestion that the city could secure a loan for 5 to 6 % and
>> allen could not doesn't jibe with reality
>
>It may because of the RGs situation. It is on city land.

LOL...oh well that simplifies things!
>
>
>>
>> If you're talking about the rate that paul allen can secure, I
>> guarantee you that he could go to several european markets or some
>> asian markets and secure a rate that would be competitive...probably
>> better. It's the europeans and asians after all that are buying US
>> bonds for considerably less then 5-6%
>
>Perhaps. He could go to himself too. =)

pull it out of the safe on his yacht
>
>>
>> but as we both know. the object in this charade is not to secure a
>> loan but rather secure an exit visa
>
>That's my take. I am just showing it could be done without giving Allen our tax dollars.

yeah...and darius miles will be an all-star next year
>
>>
>> If the city was going to get involved and float bonds, they ought to
>> really get involved and buy the blazers like green bay bought the
>> packers.
>>
>>> ....And the Blazers generate tax revenue. Motel taxes, ticket taxes,
>>> income taxes etc. The interest
>>> in this case likely would not be tax exempt either.
>>
>>
>> the city doesn't levy income taxes, the state does, so that's a
>> non-factor. The state won't get involved and won't notice the
>> "reduction"
>
>The players and nate alone pay 10% or 11% on 40 million dollars. ( half the payroll because they
>only pay for home games)
>
>>
>> any interest deduction is federal or state as well....non-issue
>
>You were saying somewhere we would be putting in tax dollars....

and we would...this bond process gobbles up man-hours..and I don't
believe that it would all work out "rosey"
>
>>
>> no doubt there are a few core businesses that will be affected. And if
>> the blazers leave, there will be an impact on tax revenue for the city
>> and county. But I'd be surprised if it was significant...the RG will
>> still be there and property taxes will still be assesed, and I would
>> estimate that is the big cash cow
>
>
>Look at the motels alone. The city has pretty good soft taxes on that revenue. You are looking at 45
>to 50 nights at high end hotels for 30 or so people. That is 200K or more for one item.

then let the hotels loan allen money
>>
>>
>> once again....I haven't said that something couldn't be structured
>> that would make some financial sense, at least on the part of the
>> city. And it may be that something could be structured that the owners
>> of the arena would accept,
>
>They are willing to sell

I don't think they are the problem...they just want their pound of
flesh
>
>>but I don't believe they will do the city
>> any financial favors. But the "logic" will evaporate as they negotiate
>> with allen....since it's unlikely he would be negotiating in good
>> faith.
>
>I do not think that is a problem, but as we have said I do not think he will ask the city to do it,
>he would be afraid it would work....
>
>>
>> Politics is the biggest roadblock in this.The blazers have alienated
>> far too many fans...some of them influential portlanders, and allen is
>> wildly unpopular. About the only way I see local government MAYBE
>> getting involved is if it's a new owner/s that is benefitting...not
>> allen
>
>If it comes down to no tax funds and cooler heads pointing out that losing the Blazers really hurts
>the city they might decide shooting themselves in the foot to spite Allen is not the best plan.
>
right...commons sense always rules the day

>> If the city was going to float enough bonds to allow allen to buy out
>> the areana owners....it makes me wonder why they wouldn't just cut out
>> the middle man and buy the RG themselves.
>
>That would be a huge difference and would take tax dollars with Portland assuming the risk and
>trusting Allen not to also bankrupt the team. It is lot different than floating a loan for Allen.

that's why I brought up green bay
 >> Stay informed about: Now we know why Paul Allen needs $100 Million 

mmasw wrote:

>>> And the city's charter may prohibit issuance of bonds without
>>> specific underwriting criteria and a higher bond-rating that may not
>>> be forthcoming.
>>
>> On Muni's perhaps, but a revenue bond from outside city revenue
>> should not be a big problem.
>
> as I said....it may not be as simple and easy as you contend.

Ot perhaps somewhere between "no big promble" and "not simple and easy" =)

>I'm not
> sure that representatives of the city have the legal authority to just
> go out and borrow 180 million dollars.

Well the article quoted stuff from the city's chief administrator among others and said it was
'plausible' so I assume the people he asked must have not said it was illegal. They said the city
had borrowed before for the private sector.


I'd think the debt would have
> to be secured or covered prior to the "loan" which could mean that the
> entire structure of the 'pass-through' would have to be in place
> first...I'm almost sure of it in fact. So, both the "seller" and
> "buyer" would have to agree to all covenants first. And that would
> seem to be an impossible dream considering the circumstances.


>
> But then if the city is going to issue revenue bonds, I'm not sure
> they would necessarily have to secure a loan. Maybe the city's charter
> prevents it from acting as the "lending institution"

They would have to lend it from the general fund, that will not happen.

>>>>> And you have as yet explained how the taxpayers....whether local
>>>>> or federal...don't foot the bill if they give allen a below
>>>>> market loan
>>>>
>>>> Because the loan still makes money even though the interest rate is
>>>> lower. Even if from bonds issued
>>>> from the state or fed instead of the City it is investing not
>>>> spending taxpayer dollars, at each
>>>> level someone is getting interest on that money. The interest Allen
>>>> would be paying might partly end
>>>> up in China paying national debt, but the fed would be loaning it
>>>> at a higher rate than they
>>>> borrowed it...
>>>
>>> ok...what is the 10 year treasury rate right now?...4.6-4.8 % And
>>> what rate do you suppose would be the secondary rate in this
>>> transaction? I think you'd discover that the difference would be a
>>> marginal one at best
>>
>>
>> I was addressing your take that somewhere tax payers would be paying
>> for the RG.
>
> there were suggestions of "below market" loans which certainly implies
> subsidy. Furthermore, I would guess that if something like the senario
> you describe comes to pass, there will be a few thousand hours of city
> employee time invested in this situaion, and it's highly unlikely all
> of that will be charged against the loan or bonds. Certainly the
> underwriting costs would be credited, but not all administrative costs
> would be.

And the city will not lose it's 4 million per year...

>>
>>>
>>> The suggestion that the city could secure a loan for 5 to 6 % and
>>> allen could not doesn't jibe with reality
>>
>> It may because of the RGs situation. It is on city land.
>
> LOL...oh well that simplifies things!

And has city owned parking garages attacted to it...

>>
>>
>>>
>>> If you're talking about the rate that paul allen can secure, I
>>> guarantee you that he could go to several european markets or some
>>> asian markets and secure a rate that would be competitive...probably
>>> better. It's the europeans and asians after all that are buying US
>>> bonds for considerably less then 5-6%
>>
>> Perhaps. He could go to himself too. =)
>
> pull it out of the safe on his yacht
>>
>>>
>>> but as we both know. the object in this charade is not to secure a
>>> loan but rather secure an exit visa
>>
>> That's my take. I am just showing it could be done without giving
>> Allen our tax dollars.
>
> yeah...and darius miles will be an all-star next year

good! ;-)

Miles has finally used up my credit too, the last 2 games he has been throwing up several airballs
missing by feet not inches...I can only figure it is on purpose to get off the floor. If he wants a
trade he might use a different plan...

>>>> ....And the Blazers generate tax revenue. Motel taxes, ticket
>>>> taxes, income taxes etc. The interest
>>>> in this case likely would not be tax exempt either.
>>>
>>>
>>> the city doesn't levy income taxes, the state does, so that's a
>>> non-factor. The state won't get involved and won't notice the
>>> "reduction"
>>
>> The players and nate alone pay 10% or 11% on 40 million dollars. (
>> half the payroll because they only pay for home games)
>>
>>>
>>> any interest deduction is federal or state as well....non-issue
>>
>> You were saying somewhere we would be putting in tax dollars....
>
> and we would...this bond process gobbles up man-hours..and I don't
> believe that it would all work out "rosey"

And the blazer games generate revinue and brings in taxes. I think yoou are reaching now. =)


>>> no doubt there are a few core businesses that will be affected. And
>>> if the blazers leave, there will be an impact on tax revenue for
>>> the city and county. But I'd be surprised if it was
>>> significant...the RG will still be there and property taxes will
>>> still be assesed, and I would estimate that is the big cash cow
>>
>>
>> Look at the motels alone. The city has pretty good soft taxes on
>> that revenue. You are looking at 45 to 50 nights at high end hotels
>> for 30 or so people. That is 200K or more for one item.
>
> then let the hotels loan allen money

Glad you do not care about the little guys that will lose their jobs....
The city and state makes money off room taxes...

>>>
>>>
>>> once again....I haven't said that something couldn't be structured
>>> that would make some financial sense, at least on the part of the
>>> city. And it may be that something could be structured that the
>>> owners of the arena would accept,
>>
>> They are willing to sell
>
> I don't think they are the problem...they just want their pound of
> flesh

They have already got back their original money in interest and will double that selling it even at
150 million.

>>
>>> but I don't believe they will do the city
>>> any financial favors. But the "logic" will evaporate as they
>>> negotiate with allen....since it's unlikely he would be negotiating
>>> in good faith.
>>
>> I do not think that is a problem, but as we have said I do not think
>> he will ask the city to do it, he would be afraid it would work....
>>
>>>
>>> Politics is the biggest roadblock in this.The blazers have alienated
>>> far too many fans...some of them influential portlanders, and allen
>>> is wildly unpopular. About the only way I see local government MAYBE
>>> getting involved is if it's a new owner/s that is benefitting...not
>>> allen
>>
>> If it comes down to no tax funds and cooler heads pointing out that
>> losing the Blazers really hurts the city they might decide shooting
>> themselves in the foot to spite Allen is not the best plan.
>>
> right...commons sense always rules the day

Money...

>
>>> If the city was going to float enough bonds to allow allen to buy
>>> out the areana owners....it makes me wonder why they wouldn't just
>>> cut out the middle man and buy the RG themselves.
>>
>> That would be a huge difference and would take tax dollars with
>> Portland assuming the risk and trusting Allen not to also bankrupt
>> the team. It is lot different than floating a loan for Allen.
>
> that's why I brought up green bay

Works in Green Bay where every ticket is sold a decade in advance and they own not just the stadium
but the team. I do not see the people of Portland wanting to cough up the 300 mil for the package...


--
Laurel T
"If Jordan loves the game so much,
why does he keep quitting?"
Cal Ripken.
 >> Stay informed about: Now we know why Paul Allen needs $100 Million 

On Wed, 05 Apr 2006 18:45:01 -0700, mmasw <jump.DeleteThis@nolegs.com> wrote:


>
>as I said....it may not be as simple and easy as you contend. I'm not
>sure that representatives of the city have the legal authority to just
>go out and borrow 180 million dollars. I'd think the debt would have
>to be secured or covered prior to the "loan" which could mean that the
>entire structure of the 'pass-through' would have to be in place
>first...I'm almost sure of it in fact. So, both the "seller" and
>"buyer" would have to agree to all covenants first. And that would
>seem to be an impossible dream considering the circumstances
>
>But then if the city is going to issue revenue bonds, I'm not sure
>they would necessarily have to secure a loan. Maybe the city's charter
>prevents it from acting as the "lending institution"

I meant "loan" 180 million, not borrow

by secure I mean have the full agreement in principle in place
 >> Stay informed about: Now we know why Paul Allen needs $100 Million 

On Wed, 5 Apr 2006 17:57:07 -0700, "Terraholm"
>>
>> there is no doubt that paul allen is simply an atrocious
>> businessman....bad decision after bad decision. Now why would you give
>> that man a loan?
>
>Because he would be co-signing it from personal funds...

look up the financials on charter communications...It may be an
erroneous assumption that he will have personal funds
>
>>There seems to be an assumption that if allen simply
>> had control of the RG again then all would be hunky-dory in
>> blazerland. There is no evidence that's true. I assume that the
>> city...if they were to float bands
>
>Float bonds sounds like tax bonds...this would be getting a revinue bond from outside.

by outside I assume you mean a dedicated issuance of revenue bonds by
the city
>
>>and issue allen a loan would have a
>> raftload of provisions in the secondary caontract. If they didn't
>> they'd be idiots considering allen's business acumen.
>
>What secondary contract? The contract that he keeps the Blazers in town already exists. If he
>bankrupts the whole works the loan is guaranteed. But I do not think it would be as bad, the arena
>is making money outside of the Blazers again and the Blazers situation is improving by cutting
>expenses if not increasing revenue.
>
by that I mean an extra layer of cover their ass contract
>>
>> I doubt he'd agree to them
>
>I doubt he wants a loan...


but lets play it out a bit:

I'll count on you to google-up any necessary info. I always wanted a
blonde secretary...I take just a tad of milk in my coffee by the way..

anyhow:

The city manages to get an agreement in principle from all parties. So
they line up the underwriter. If they are going to loan the entire 180
million then they'll probably issue 190-200 million in debt to cover
the underwriter's fees and various administrative costs.

I would assume a 30 year bond.

The 30 year federal bond is around 4.9 %. However it seems a forgone
conclusion that the fed will keep jacking up interest rates so the
bonds the city issues will conceivably have to compete with a 5-5.25
(at minimum) anticipated fed bond benchmark.

And the fed's are AAAA and exempt from state taxes

I would guess that the bonds the city issues to loan to allen will be
fully taxable

I'm getting some new municipal bond offerings from oregon that are
approaching 5%...not quite but close. And they are AAA rated

I doubt that the bonds issued allen would be any higher then A
bonds...maybe AA but I doubt it.

So if you can go out and get AAA oregon munis for 5% (will be by
august) that are fully tax exempt from both state and federal taxes,
the bar for "blazer-bonds" is pretty high.

the tax-equivalent is 7.5-8.5%. So let's say that the city issues
bonds with a coupon value of 6.35-6.85%. I'd bet it would have to be
closer to 7 then 6 in order to sell out.

And because of it's rating and taxability, the underwriter would most
likely insist that there would be at least a quarter point margin
between coupon value and loan terms.

In other words allen's loan from the city could be approaching 7%

somehow this doesn't seem like an attractive deal
 >> Stay informed about: Now we know why Paul Allen needs $100 Million 

mmasw wrote:
> On Wed, 5 Apr 2006 17:57:07 -0700, "Terraholm"
>>>
>>> there is no doubt that paul allen is simply an atrocious
>>> businessman....bad decision after bad decision. Now why would you
>>> give that man a loan?
>>
>> Because he would be co-signing it from personal funds...
>
> look up the financials on charter communications...It may be an
> erroneous assumption that he will have personal funds

If Charter goes belly up it will go bankrupt as a corporation.
And there is still the RG as collateral.

>>
>>> There seems to be an assumption that if allen simply
>>> had control of the RG again then all would be hunky-dory in
>>> blazerland. There is no evidence that's true. I assume that the
>>> city...if they were to float bands
>>
>> Float bonds sounds like tax bonds...this would be getting a revinue
>> bond from outside.
>
> by outside I assume you mean a dedicated issuance of revenue bonds by
> the city

I mean the city borrows the money from a source outside of their general fund or any city revenue.

>>
>>> and issue allen a loan would have a
>>> raftload of provisions in the secondary caontract. If they didn't
>>> they'd be idiots considering allen's business acumen.
>>
>> What secondary contract? The contract that he keeps the Blazers in
>> town already exists. If he bankrupts the whole works the loan is
>> guaranteed. But I do not think it would be as bad, the arena is
>> making money outside of the Blazers again and the Blazers situation
>> is improving by cutting expenses if not increasing revenue.
>>
> by that I mean an extra layer of cover their ass contract

The guarantees would have to be outside of the blazers and RGs sucess or failure.

>>>
>>> I doubt he'd agree to them
>>
>> I doubt he wants a loan...
>
>
> but lets play it out a bit:
>
> I'll count on you to google-up any necessary info. I always wanted a
> blonde secretary...I take just a tad of milk in my coffee by the way..

I am gray now...

>
> anyhow:
>
> The city manages to get an agreement in principle from all parties. So
> they line up the underwriter. If they are going to loan the entire 180
> million then they'll probably issue 190-200 million in debt to cover
> the underwriter's fees and various administrative costs.
>
> I would assume a 30 year bond.
>
> The 30 year federal bond is around 4.9 %. However it seems a forgone
> conclusion that the fed will keep jacking up interest rates so the
> bonds the city issues will conceivably have to compete with a 5-5.25
> (at minimum) anticipated fed bond benchmark.
>
> And the fed's are AAAA and exempt from state taxes
>
> I would guess that the bonds the city issues to loan to allen will be
> fully taxable
>
> I'm getting some new municipal bond offerings from oregon that are
> approaching 5%...not quite but close. And they are AAA rated
>
> I doubt that the bonds issued allen would be any higher then A
> bonds...maybe AA but I doubt it.

It is the cities rating not Allen's.

>
> So if you can go out and get AAA oregon munis for 5% (will be by
> august) that are fully tax exempt from both state and federal taxes,
> the bar for "blazer-bonds" is pretty high.
>
> the tax-equivalent is 7.5-8.5%. So let's say that the city issues
> bonds with a coupon value of 6.35-6.85%. I'd bet it would have to be
> closer to 7 then 6 in order to sell out.
>
> And because of it's rating and taxability, the underwriter would most
> likely insist that there would be at least a quarter point margin
> between coupon value and loan terms.
>
> In other words allen's loan from the city could be approaching 7%

7% is a lot better than 9% with the sameytax add-ons.....and the revinue from the RG would
increase.

>
> somehow this doesn't seem like an attractive deal

Not as attractive as finacing himself...


--
Laurel T
I don't hate anyone, at least not for
more than 48 minutes, barring overtime."
Charles Barkley
 >> Stay informed about: Now we know why Paul Allen needs $100 Million 

mmasw wrote:
> On 5 Apr 2006 15:40:38 -0700, "Blazer Fan Dan"
> <BlazerFanDan RemoveThis @gmail.com> wrote:
>
> >who makes the money?
> >
> >the government.
> >
> >the government is "out of money" right? but they're still loaning money
> >out, right?
>
> try the math....there is a federal budget...what it spends
>
> there are taxes collected....that falls short of the budget
>
> there are bonds issued. taxes + bonds = budget/expenditures
>
> the fed is about 8 trillion dollars in debt. Now here is a startling
> coincidence!...there are about 8 trillion dollars in outstanding
> federal debt instruments!

so you're teling me that the government doesnt s