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Monday, July 26, 2010

More Taxpayer "Skin" Expected In Hockey Arena Boondoggle

The Janesville City Manager, Eric Levitt, is requesting the approval of a concessions contract at the current ice arena with Janesville Youth Hockey that is expected to bring in $1,400 less annually for the city, based on a percentage of last year's sales figures.
City of Janesville Web Site:
The City Manager is requesting consideration of approval of the City’s agreement with Janesville Youth Hockey Association (JYHA) for operations of the concessions at the Janesville Ice Rink located on Beloit Avenue. The fee for the operation would be for the City to receive 12.5% of net proceeds.
12.5% of net proceeds instead of a $5,000 flat fee produces the loss of $1,400.

In this article from the Janesville Gazette, the Director of Administrative Services Jay Winzenz said the decision to take a portion of profits (percentaged based instead of a flat fee) was made to capitalize on increased sales they expect from Janesville Jets games. However, the figures posted at the Janesville City Website (page 13), which are what the $1,400 loss is based on, already takes in a great portion of revenues collected from last season's Janesville Jets games. The figures are fiscal year ending 3/31/2010.

Yet, according to the Janesville City Web Site (page 2), the city administration expects to make up for the lost revenue by shifting other revenues due to the taxpayers from concessions contracted out in the facility's warming room.

Either way, Janesville taxpayers are expected to see an even smaller return on their investment which must eventually be made up with increased subsidies. All the while special interests profit more.

At the last Janesville city council meeting, a pro-hockey-arena "neutral" consultant hired by the pro-hockey-arena city administration had this to say about re-evaluating existing contracts at the arena.
Council Meeting Excerpt:
"If you were to construct a new facility, like all of your existing contracts it would be prudent to go back and re-evaluate those, particularly on the attendance side of things, selling tickets, to be sure that they're going to to fill that new arena that would be built for them ...that there would be a little more skin in the game for them - to keep them around." -- Rink Consultant speaking to the Janesville City Council
Whether we're talking about $5,000 or $5,000,000, the more money city taxpayers pour into our once-upon-a-time "community" ice arena, the more "skin" Janesville taxpayers will have to give up to the privileged special interests that are pushing the boondoggle in the first place. Contrary to all the basic principles of free market risk, competition and supply and demand, we (taxpayers) will pay even more to the very folks that make sure our investment never pays off.

What a racket.

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