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Isthmus on Edgewater

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Re: Isthmus on Edgewater

Postby Henry Vilas » Tue Jul 31, 2012 4:12 pm

It used to be that the most heated arguments were over politics, or music, or even food (foodies can be downright mean)... but room rates?
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Re: Isthmus on Edgewater

Postby Stebben84 » Tue Jul 31, 2012 4:18 pm

Henry Vilas wrote:It used to be that the most heated arguments were over politics, or music, or even food (foodies can be downright mean)... but room rates?


Hellz ya. Gotta hone my skillz for debating Meade and Cornbread. Those guys are tough ones.
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Re: Isthmus on Edgewater

Postby Ducatista » Tue Jul 31, 2012 4:19 pm

Huckleby wrote:you're cramping my style.

Sorry to tell you this, but the word "cramping" is off limits, too.
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Re: Isthmus on Edgewater

Postby green union terrace chair » Tue Jul 31, 2012 4:42 pm

Ducatista wrote:
Huckleby wrote:you're cramping my style.

Sorry to tell you this, but the word "cramping" is off limits, too.

Nice one.

Well, unlike a lot of our arguments on TDPF, at least we'll get a real answer to this one. We'll just have to wait awhile for it.

Someone bump this thread in 2014 and then we'll see who the hotel rate master prognosticator is.
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Re: Isthmus on Edgewater

Postby Madsci » Tue Jul 31, 2012 5:05 pm

Why don't y'all just get a room? :lol: :roll: :shock:
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Re: Isthmus on Edgewater

Postby lukpac » Tue Jul 31, 2012 8:24 pm

Madsci wrote:Why don't y'all just get a room? :lol: :roll: :shock:


They are too expensive.
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Re: Isthmus on Edgewater

Postby Steve Vokers » Tue Jul 31, 2012 8:39 pm

lukpac wrote:
Madsci wrote:Why don't y'all just get a room? :lol: :roll: :shock:


They are too expensive.


$400 I hear.
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Re: Isthmus on Edgewater

Postby green union terrace chair » Tue Jul 31, 2012 9:32 pm

Steve Vokers wrote:
lukpac wrote:
Madsci wrote:Why don't y'all just get a room? :lol: :roll: :shock:

They are too expensive.

$400 I hear.

On average.
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Re: Isthmus on Edgewater

Postby narcoleptish » Sat Nov 10, 2012 9:47 am

Interesting column in the latest CT.

Developers of the Edgewater Hotel are no longer using direct public money to build the $98 million luxury hotel after $16 million in tax increment financing from the city of Madison fell through.

Instead, they are looking to get low-cost financing through a federal program designed to provide relief from the Midwest flooding in 2008.

Edgewater Hotel LLC and developer Bob Dunn have submitted an application with the Public Finance Authority for $66.15 million in Midwest Disaster Area bonds.

The program was established by the federal government to encourage redevelopment of areas impacted by the heavy rains during the summer of 2008. Thirty of Wisconsin’s 72 counties are eligible, including Dane.


Read more: http://host.madison.com/business/biz_be ... z2Bpc3rWBF


Here's a good explanation of MDA bonds that I found:

Typical bonds sold by companies involve IRS income tax. Companies that borrow money through bond sales agree to pay interest to the bond buyers–the lenders. The interest lenders receive is taxable as income. If a bank or individual lends money through regular bonds, the interest payments received is taxable income. What Congress did through the MDA bonds was say that lenders who buy this specific type of bond will not have to pay income taxes on the interest.

If lenders receive, for example, $1 million in interest from MDA bonds, it is tax exempt. By contrast, in the case of regular corporate bonds that are taxable, lenders receiving interest are prepared to hand approximately 30% to the IRS. So, their truer profit from lending the money is no longer $1 million; it’s $700,000.


So the indirect "cost" to taxpayers is lost taxes on interest income from those who buy the bonds.

It still sounds like a bullshit use of a financial tool meant to stimulate recovery from a natural disaster. Of course, the whole Edgewater saga started in 2008, but I don't think a "flood" of public opposition is really what the MDA program is about.
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Re: Isthmus on Edgewater

Postby Stu Levitan » Sat Nov 10, 2012 1:42 pm

Note that they're getting the bonds from (and paying fees to) the state-created Public Finance Authority, instead of the Madison Community Development Authority. Would have been nice to keep the fees with the local agency, Bob Dunn!
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Re: Isthmus on Edgewater

Postby Huckleby » Sat Nov 10, 2012 2:28 pm

This is all way too fucking complicated.

How about those Badgers? I sure hope the kid with 3 knee surgeries doesn't get hurt again.
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Re: Isthmus on Edgewater

Postby SombreroFallout » Mon Nov 12, 2012 1:43 pm

From the madison.com article:
Also, private business users of the program must have suffered a loss due to storms to qualify.

File this under attempted waste, fraud and abuse of a federal financial relief program. Correct me if I'm wrong, but Bob Dunn and the Edgewater is not eligible under the program, as they have not suffered loss due to storms. Perhaps they lost a few shingles in high winds, but I'm grabbin' at straws here to see it their way.

Otherwise, this is the kind of ENRON accounting that had compromised the integrity of city TIF funding, which was an egregious-enough abuse that it led Soglin to run for mayor again. But wait~! Apparently they hired the law firm of Whyte Hirschboeck Dudek to twist the letter of the law to finance the kind of projects explicitly excluded by the program/statute language. From the article: "Proceeds from the bonds must be used for qualified projects, which can include . .. retail businesses and shopping centers, restaurants, office buildings ... commercial development. "Neither hotels nor luxury condominiums" are explicitly identified "as qualifying projects." Given that level of detail, if the legislators had meant hotels, they would've said hotels.

One could really work over the language until it submitted to the 'interpretation' that Edgewater is a commercial development that includes restaurants -- but that sort of weaseling is badly undercut by facilities that are specifically prohibited, including "skyboxes or other private luxury boxes, health club facilities, golf courses, country clubs, racetracks and liquor stores." The 10 luxury condominiums atop the hotel and the hotel itself are nothing if not a skybox from which to take in the panorama of outdoor sporting activities conducted on Lake Mendota day-in and day-out.

The madison.com article gets the story wrong on two counts: that hotels and luxury condominiums not being listed as qualifying projects isn't important, and that hotels and luxury condominiums not being listed as excluded from the program is important.

IMHO, you could reasonable argue that a hotel is a form of commercial development that retails shelter. You cannot reasonably assert that this hotel and the luxury condominiums atop it somehow are not covered by the list of prohibited projects, all of which are luxury goods and/or cater to an exclusive clientele.

The idea that the shoreline location qualifies the project because it somehow makes it vulnerable to future flooding is ludicrous and a no-go on two counts. First, it's not gonna flood. It's just not. So, it's not vulnerable to flooding going forward. Second, only businesses that've already suffered damage in the past qualify.

The kicker? " . . . the governor could declare that the borrower has suffered a loss."

Only a few routes to approval exist to tap this funding source:
1. One of the new financial backers own a business that suffered storm-related losses elsewhere, which still doesn't qualify the business that is the Edgewater, short of a full merger and more lawyerly statute-twisting.
2. An unjustifiably baseless court ruling that pulls the Edgewater off the luxury list and onto the qualified project list.
3. Governor's declaration of a nonexistent storm-related loss to the Edgewater.

None of which qualify the Edgewater under the program, unless someone or someone's law firm can enlighten us taxpayers as to how exactly this business and this project has suffered storm-related losses. The hotel is certainly a form of development. But that's as far as it goes.

Bets?
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Re: Isthmus on Edgewater

Postby green union terrace chair » Mon Nov 12, 2012 2:08 pm

Does the fact that the Edgewater was not owned by the developers at the time of those storms factor in at all?
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