Omaha Mayor Jim Suttle is angry.
Suttle says an offer by the Metropolitan Entertainment and Convention Authority to give the city a $5.6 million cash advance was “inappropriate” and amounted to an “Enron-type” financing scheme that would hurt the city in the long run.
Suttle has sent a letter to Roger Dixon, president of MECA, outlining his concerns.
Neither Dixon nor Gail Werner-Robertson, chairwoman of MECA, could be reached for comment Wednesday.
The dispute revolves around a meeting held earlier this month between Dixon, Robertson and Suttle.
During the meeting, Dixon and Robertson said MECA would give the city a $5.6 million cash advance on the city’s portion of revenue generated by the naming of the Qwest Center Omaha. (Each year Qwest Communications Inc. sends MECA a payment for naming the complex after the telecommunications company.)
In exchange, they asked that Suttle take a proposed entertainment tax off the table.
MECA has argued that Suttle’s proposed 2 percent tax would hurt the city’s entertainment industry, including its own ticket sales. They also argued that a cash advance, which would come from MECA’s reserve fund, would give Suttle and the City Council time to determine a long-range financial strategy.
“The MECA board and management feel strongly this is a tax of diminishing returns, which has the potential to turn promoters and guests away from Omaha,” Dixon said in a written statement given to The World-Herald this week.
Suttle said he quickly turned down the offer, believing it was “inappropriate.”
First of all, Suttle argued, it would only be a stop-gap measure that would worsen the city’s problems in the long run. Secondly, he said, the money is already being used each year by the city to pay off debt for Qwest Center-related riverfront improvements.
The city could have to find money elsewhere in coming years to pay off that debt if it accepted a lump payment this year to help balance the city’s budget, Suttle said.
“It’s already spoken for. It’s already accounted for,” Suttle said of the naming-rights revenue.
“In other words, it would take a problem and make it worse.”
MECA’s proposed cash advance would have covered about half of the city’s projected $11 million budget shortfall.
The proposed entertainment tax is expected to bring in about $10.3 million a year. The tax would apply to a range of activities, including restaurant meals, drinks and concert tickets.
Contact the writer:
444-1309, robynn.tysver@owh.com
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