True cost of an underground arena with underground parking

The following analysis is based on numbers from my opponent’s web site but with adjustments to match reality.

Total cost of an underground hockey arena with underground parking for 40 cars $22,000,000 (It will probably end up costing more but we will accept my opponent’s number).

My opponent says we will get a government grant of 2/3 since that is what Westmount got for their underground arena. However, Westmount got $20 million but the final cost ended up being $40 million so the grant ended up being 50%. Further, even getting a grant is not likely for many reasons, but let’s assume we get a 50% grant.

So we will deduct $11 million leaving a net cost of $11 million.

That will be financed over 20 years. The Libcorp report, which my opponent referenced, used an interest rate in their scenarios of 5%. Given that the law requires refinancing every five years and that interest rates are not likely to remain as low as they are today, this is a reasonable average interest rate for the life of the loan. My opponent uses an unrealistic rate of 2%. We will use 5%.

This works out to $500 per year for each taxpayer for 20 years.

My opponent says there will be no net operating costs. However, all the towns that we consulted said that they have net operating losses of $300,000 – $500,000 annually on their arenas. We will take $400,000 as the annual loss. That represents another $200/year per taxpayer forever.

Taken together we get $700 per year for each taxpayer for the next 20 years and continuing operating losses of $200 per year for each taxpayer after 20 years.

Since only 10% or 200 of our hockey families will use the arena, this represents a subsidy of $6,500 per year for 20 years given to the hockey families by all the taxpayers of the Town of Hampstead.

This is grossly unfair. If I am re-elected, we will look into the possibility of a hockey arena, above ground, and many other options, but I am committed to no local tax increase above inflation for the next four years.

Therefore, we will not even consider an underground arena as it is obviously, too expensive.

On November 3 vote to re-elect Mayor Bill Steinberg