Sat
Aug 25 2007
03:17 pm

This is a reminder of the plans for this week's grand opening celebration of the Regal Riviera theater. More detailed information including the sweepstakes prizes. Monday night I will be juggling on Gay Street from 5pm-6:30pm for the Opening Ceremony street party. Michael Messing will be performing magic and there should be other entertainers. Come down and participate in the festivities!

I read the garnishness comments and I have to disagree. This is how theaters are supposed to appear. I think it complements Gay Street, the Bijou and the Tennessee. I think the only thing wrong with the Turkey Creek theatre is that they don't regularly have giant batmanesque spotlights out in the parking lot sending crossing beams of light into the sky. Turkey Creek (and all future supershopping areas) should be designed like The Irvine Spectrum Center. Visiting the Spectrum is like going to Disney for the day! If you are ever in Los Angeles (Orange County), try to get by the Spectrum!

CathyMcCaughan's picture

People with money and their

People with money and their friends will be inside the a/c enjoying their "private" party. The riff-raff can watch the street performers in the hundred degree heat. Riff-raff who say "hi" to the juggling riff-raffer, will make him very happy.

Ian's picture

That's a "City People"

That's a "City People" event, not a "People With Money" event. City People consists of riff-raff who can manage to scrape together $25/year to support stuff in downtown Knoxville.

Doug's a badass juggler, though, so I'll probably blow off the air conditioning to watch Knoxville's premo club-slinger out on the street.

Rachel's picture

Umm, I'm pretty sure there

Umm, I'm pretty sure there is a VIP party, invitation only.

And no, I didn't get one. And we belong to City People, so we would have if it was a CP event.

Stan G's picture

Rachel

Have you checked your e-mail invites this weekend?

Personally, I'm in the mode for a good comedy so I plan to attend the county commission meeting -- going to watch them juggle the blame. :-)

bizgrrl's picture

That's a "City People"

That's a "City People" event, not a "People With Money" event. City People consists of riff-raff who can manage to scrape together $25/year to support stuff in downtown Knoxville.

For those interested, here's a link to City People

Michael's picture

The City People event is

The City People event is SEPTEMBER 17.
~m.

Ian's picture

The City People event is

The City People event is SEPTEMBER 17.

Ah. So it is. My bad.

Tess's picture

$1 movies

I could be wrong, but the list that I saw of the $1 movies for the next few days tells me they really ARE dollar movies. Elf?

Wasn't that shown from free on Market Square not too long ago?

It would have been nice if corporate could have thrown in some real new release movies for the $1 promotion.

I ain't going downtown to see Elf.

Michael's picture

BFD

I ain't going downtown to see Elf.

So what? You ain't going downtown for anything.
~m.

Tess's picture

Wrong again ~m

n/t

Michael's picture

n/t?

Whatever you say, Tess.
~m.

Bill Lyons's picture

City role in Regal Cinema

Just for background, while people are musing over whether the cinema was what government ought to be involved in I might provide the following context. It is not like this project popped up last week, month, or year and has not been vetted and discussed and reworked and rethought at great length. It first appeared in the first response to an RFP issued by KCDC over seven years ago. That RFP followed a lengthy public process. Kinsey Probasco proposed a cinema, parking garage, and public space improvements.

The cinema has been through many iterations, much discussion, including the decision to build around the S&W and associated buildings. It stopped and was totally reworked in response to public input. Many citizens gave a lot of their time and council and the administration was very patient while the community sought the best outcome. Knox Heritage played a major role.

Its general approach and financial structure has evolved, but the direct bill to the city has not because of our pledge to limit the exposure of the taxpayers. The project has been through a number of council votes, all unanimous. The public has been totally informed, and through their elected leaders, totally supportive. I don't know how many ways one can measure success in a project like this, but they include direct taxes generated, indirect impact on other businesses, indirect impact on quality of life in a community such that creative people and companies are more likely to locate in the area and create jobs and opportunity, etc. I don't know how one puts a price tag or a value on the sense of community, pride in place for people who live here. I don''t know how you put a price tag on the opportunity for folks who live in the empowerment zone to work close to where they live, accessible by public transportation. I think it is worth a lot.

I was downtown last night and the excitement was incredible. I wish we could go back not that long ago, HG Wells style, and see the difference. The cinema and its associated elements has been designed with good urban planning principles in mind. People have to come to Gay St. to the main entrance. The route from the State St. garage is well lighted, safe, inviting, and attractive, as is the garage presence at State St. The city has made Promenade available for free in the evenings along with the other garages.

Finally, city governments are municipal corporations formed by citizens to provide a whole range of urban services beyond that provided by county governments. All states, including Tennessee provide tools to use for redevelopment of areas which otherwise might sit decaying for decades. Knoxville has used those tools judiciously and in totally transparent manner. All cities that folks love to go to have utilized these tools in varying degrees. In my opinion we would be remiss not to use them.

I am very pleased with the cinema, the role of the city in making it happen, and am very optimistic about not only its future buts its impact on downtown and on the rest of the city.

There are those who think the city should not have gotten involved in this project or projects like this. Reasonable people are always going to disagree on the policy matters such as this. Reasonable people will disagree on architecture and design. But I hope that reasonable people, and even some unreasonable folks, regardless of whether they personally favor this effort, will come to the conclusion that this project has had wide support form an informed community, support from those elected to make public decisions and that those making these decisions have been kept full informed regarding the project from its outset.

frenchharp's picture

Transparency

First let me say that I am working on Isa's campaign. (link...).

I am concerned that so much public funds were used for this project. I don't believe there has been transparency because the paper reported that there are unknown investors. Did city council know who these investors were before they voted? No matter the intention of the Mayor it is a conflict of interest to invest his own money in a publicly funded venture that he has political control over. What if this was Cynthia Finch? Also, this information should have been vetted through the public first. I suspect that it wasn't forthcoming because folks felt uncomfortable about it that is when you need to listen to that voice in the back of your head. The investors are protected. Also, the funding mechanism seems complex. It would be nice if it were explained better. Who got the TIF? Did Regal get a check back from KCDC?

I had imagined a small start up theatre with maybe two screens that showed hard to get movies that would grow over time. I hope all the businesses succeed. It just seems we have slipped into "the end justifies the means".

Martin Pleasant

jbr's picture

We just attended a movie at

We just attended a movie at the new theatre. Seems like nice theatre. We got a chuckle of the incredibly powerful hand dryers in the restrooms. Easy to park tonight and walking thru Krutch Park before and after added to experience. Something like Krutch Park would add to a lot of business areas. Hopefully whatever happens to South Knox Waterfront it will reflect the value of interspersing parks and open spaces throughout, and the notable impact that has on the atmosphere.

StaceyDiamond's picture

riff raff days

People without money do get 3 days of dollar films and food. I plan to go one day and even again when the prices go up. I may go to see Elf, I laughed outloud at Elf when it was on a couple of years ago,

Tess's picture

I like Elf

Just sayin'

CBT's picture

Some people will complain

Some people will complain about anything. I believe there were one or two private parties, mostly for contractors involved in the building of the project, Regal folks, etc. So what!

This week, different charities are benefiting from $1 movies, $1 popcorn on Tues., Wed. and Thurs. There are sponsors each night (WBIR did superheros Tues.). These were/are theme nights, one superheros (Spiderman, Superman), one Christmas and another something else. They had about 8 set movies and 3 or so specific to the nightly theme (thus, 'Elf' on one night for a couple of showings). There were some newer movies in the other group of 8 running all the time (Knocked Up, Wild Hogs, others). So, no, you're not limited to Elf. That was one night and for a reason. The listings of all the movies were in the paper.

I left my office last night about 7:30 (it's directly accross the street from the theater). Lots of people in and around the theater. People standing in line at the box office for tickets. It was great to see.

This is a great thing for downtown. Some movies for a $1 to benefit charities to kick things off. And all some people can do is complain that some VIP's got a party and pick on a couple of the movie selections. Geez.

Tess's picture

Bad!

Yes, some people are just bad to the bone. And, probably Democrats, too.

And, just think, if they had offered new release movies to benefit charities, they could have charged TWO dollars and raised twice as much. :)

michael kaplan's picture

"It would have been nice if

"It would have been nice if corporate could have thrown in some real new release movies for the $1 promotion."

how about just a good movie? i'm wondering whether the DT will be a venue for the indie films regal is showing at downtown west. that would save many people a lot of money in gas and improve (to some small degree) air quality in this oversprawled town.

in fact, one of those eight screens could be showing "An Inconvenient Truth" or "Who Killed the Electric Car?"

Mello's picture

11th Hour is showing!

CBT's picture

And, just think, if they had

And, just think, if they had offered new release movies to benefit charities, they could have charged TWO dollars and raised twice as much. :)

And you know, that probably violates some agreement they have with the movie distribution company. Guess they could have opened up at $8 and said to heck with the community. No good deed goes unpunished.

Tess's picture

Tax incentives

Didn't the tax payers pick up part of the bill to fund that theater? I forget.

R. Neal's picture

I heard that 2000 people

I heard that 2000 people have attended the theater so far. Off to a good start. Hope it keeps up once the real prices go into effect.

Tess's picture

Speaking of Sicko and Who

Speaking of Sicko and Who Killed the Electric Car, I wonder if Knoxville will get No End in Sight? (Downtown or elsewhere)

(link...)

CBT's picture

Didn't the tax payers pick

Didn't the tax payers pick up part of the bill to fund that theater?

I think the answer is yes and they will reap the benefit. It was a complex funding deal, with substantial private and some public money.

If you think taxpayers should get something free at the cinema opening, where's my free beer and food from the establishments on Market Square?

Bbeanster's picture

where's my free beer?

Goodness, Chad, you sound like a socialist.

I'm surprised that a free enterprise capitalist like yourself would support the government subsidizing private bidnesses.

Wonder how other taxpaying cinema operators feel about this use ofpublic funds to subsidize their competitor?

From each according to their ability, to each according to their need ~ Karl Marx

CBT's picture

A socialist...why would you

A socialist...why would you cuss me that way???

I have no problem with investments which will provide a return. In this instance, government is supporting more than one business. In about 6 months, ask the merchants near the cinema. In the end, it's not government running the show. I don't think that was Marx's idea.

Inevitably, government is involved in many businesses, from TIF's to roads. Substantial money was spent in Turkey Creek and in Cedar Bluff. Theaters in that area no doubt benefited.

Do you have a breakdown on the source and amount of funds for the cinema? Maybe Bill Lyons could give us some insight.

zoomfactor's picture

breakdown of costs

According to the local paper:

Total project cost: $14.85 million

Funding sources:

$4 million in city funds
$2.5 million in furniture, fixtures and equipment from Regal
$4.25 million in bonds
$2 million tax credit
$1.1 million state grant for outdoor escalator, elevator, walkway and lighting
$1 million tax-increment-financing subsidy

bizgrrl's picture

So, does this mean all but

So, does this mean all but $2.5 million is taxpayer money (one way or the other)? The only thing listed that is not clear is the $4.25 million in bonds. Are those government bonds?

StaceyDiamond's picture

Movie Magic

I saw Elf today and it was as good as the first time. The theatre and staff were very nice. Even after the discount days the parking garages will give you free 3 hours of parking with a movie ticket stub. The complaining about downtown annoys me. If they were showing dollar Indie films someone would want something else. I think all the restaurants and bars benefit from the theatre. When I worked downtown 2 1/2 years ago there were only a couple of places serving food after the lunch rush and Sundays were a ghost town. Now its completely different, I think people living there has helped. People who can't afford to live downtown still benefit from more things to do there, of all price ranges. You can't get any better than the WDVX shows and a real live Elvis impersonator on the Square during lunch.

Michael's picture

Other Changes

I gather from one of their employees that as a result of the opening of the cinema, Arby's on Gay will be staying open later. Now I won't have to see the disappointed looks from people who pry on their door after 6 pm. And the General Store (previously the severely misnamed "All Day Cafe") is expanding it's hours as well.

As for return on investment, I spoke with one downtown business owner that figures that in the year since the opening of Mast General, they're sales have risen by hundreds of thousands of dollars. All of those dollars amount to additional tax collections in addition to Mast's exceeded expectations for their sales.
~m.

Ennui's picture

That's really good news

That's really good news about the garage. Making things easy like that will help draw the patrons.

edens's picture

I believe the $4.25 million

I believe the $4.25 million in bonds were equity bonds sold to private investors.

The Haslam Rolodex comes in handy, at times.

CBT's picture

An excellent point by Mr.

An excellent point by Mr. Edens.

Plus no salary. The City has a great Mayor for free.

bizgrrl's picture

$8.1 million (nearly 55%) in

$8.1 million (nearly 55%) in taxpayer money. Not that I'm counting.

I truly hope it is successful and, even more maybe, I hope it helps downtown (especially existing retail business).

R. Neal's picture

If I still lived in South

If I still lived in South Knoxville, I'd be very happy to have a real movie theater so convenient once again so as not to have to drive out to West Knox to see a first run movie.

I hope they run some of the indie flicks that the Downtown West cinema has been the only place in town to see, as someone suggested earlier. Given the hipster loft set makeup of downtown residents, it might make good business sense, except it might grate on the politics of our local leaders who have so graciously made such downtown amenities possible.

Bill Lyons's picture

Gratuitously and Unnecessarily Unfair

I hope they run some of the indie flicks that the Downtown West cinema has been the only place in town to see, as someone suggested earlier. Given the hipster loft set makeup of downtown residents, it might make good business sense, except it might grate on the politics of our local leaders who have so graciously made such downtown amenities possible.

Obviously indie movies might make sense at some point and I am sure Regal is aware of the market for these as they choose what films to show at what theater. Obviously that is their call.

I know I am coming at this from a different angle, but I just don't get the value added to rational discourse by the last phrase above. It is completely disconnected from any element of reality regarding the fundamental essence of the people obliquely referenced and just plain gratuitously unfair in a very fundamental sense.

R. Neal's picture

Geez, Bill. Lighten up. It's

Geez, Bill. Lighten up. It's only my second post on this thread. In defense of the theater, no less.

P.S. Did you go out to the Downtown West to see An Inconvenient Truth, or Sicko, or Fahrenheit 911? Did Bill Haslam?

I'd be very curious to know if you or Haslam did, or if either of you have seen any of these movies.

(My guess is that you have seen at least one of them, but who knows? I'm guessing Haslam, not so much.)

P.P.S. You missed an opportunity to correct and further chastise me by pointing out how it was voters and taxpayers who helped make these downtown amenities possible.

Bill Lyons's picture

I saw both "An Inconvenient Truth" and "Sicko."

I saw both "An Inconvenient Truth" and "Sicko." I have seen every Michael Moore and Al Gore film ever made. I read "Earth in the Balance" as well. I have no idea if Bill Haslam has seen them. We never discuss movies and very, very rarely discuss national politics. Regardless of whether he has seen them he would never, not in a million years, ever think of suggesting anything to Regal Cinemas about the films they might show at any of their theaters. Well, maybe if XXX films appeared downtown, but that won't happen. Seriously, he has brought tremendous energy and commitment to this cinema, as well as the Bijou, for that matter. However he brings no personal or political agenda to such efforts, period. It's called public service. There are still at least a few people of both parties (OK, the Green Party, Libertarians, and non-partisans as well) who know the meaning of the term practice it in real time. I respect and admire those who do regardless of their political perspective.

I am sorry if I overreacted but at my old age I have become increasingly unable to appreciate the tendency toward cynicism we all fall into on occasion. I know it is increasingly the narrative of choice and much safer than erring toward being a polyanna, but.. oh well... time to quote Rodney King.

R. Neal's picture

I have become increasingly

I have become increasingly unable to appreciate the tendency toward cynicism we all fall into on occasion. I know it is increasingly the narrative of choice

Perhaps you are confusing cynicism with people suddenly having a voice to express different points of view other than what they they are told to think by public relations outlets a/k/a local media.

And, geez, it's hard to imagine why anyone in America, or Knox County for that matter, would be cynical these days, what with Republicans being in charge and doing such a swell job.

(I'm glad to hear you are a fan of Michael Moore and Al Gore, though.)

Bill Lyons's picture

Healthy Skepticism is Fine


"Perhaps you are confusing cynicism with people suddenly having a voice to express different points of view other than what they they are told to think by public relations outlets a/k/a local media."

I went to high school and college in the mid to late sixties. I never had trouble finding outlets for any viewpoint. I read Bernard Fall's "Vietnam Reader" in high school and formed my own opinions on the Vietnam War. I read countless treatises on civil rights and read everything from Marcus Garvey to Ralph Ellison to Stokely Carmichael to H. Rap Brown and MLK. I took part in Martin Luther King's marches in Memphis prior to his assassination and was present for his last speech. There were plenty of outlets for those who wanted an alternative viewpoint and in those days in the deep South the dominant viewpoint was pretty darn oppressive.

The atmosphere back then was a lot more restrictive than anything in recent memory and from that point on I have never had any trouble in avoiding being "told what to think or what to believe" or finding plenty of sources of opinion and information. People have long had voices to express their points of view before anonymous blog replies became an option. Certainly quantity if not quality, of typing has increased. Unfortunately there has been a movement at times away from what I would call discourse. On the other hand maybe we are practicing a bit of it now so the new medium obviously has some potential. After all I posted here a few weeks ago regarding the reasons KnoxViews was successful and filled a valuable niche in local political discussion.

I appreciate a very healthy skepticism in response to much of what you reference. I still think cynicism and accompanying smugness is very unhealthy, both for the body politic and for the individual. Enough said there. Finally, I can appreciate a good bit of what Gore and Moore have to offer without calling myself a "fan" and can do so without attributing ill motives to either of them.

CBT's picture

However he brings no

However he brings no personal or political agenda to such efforts, period. It's called public service.

Heck, if tomorrow's Metro Pulse is correct, Knoxvillians owe Bill Haslam big time as he has personally invested 7 figures in bringing the new cinema to downtown. I hope it's successful. Knoxville's Mayor apparently puts his money where his mouth is.

or Knox County for that matter, would be cynical these days, what with Republicans being in charge and doing such a swell job.

I will reiterate again, the problems in Knox County government have not a single thing to do with "Republicans". Cynthia Finch is a Democrat. So are other members of Mike Ragsdale's senior staff. There were Democrat Commissioners on January 31 who participated in what lots of people have been complaining about. Partisan politics has nothing to do with it.

Factchecker's picture

The atmosphere back then was

The atmosphere back then was a lot more restrictive than anything in recent memory and from that point on I have never had any trouble in avoiding being "told what to think or what to believe" or finding plenty of sources of opinion and information.

Except for privacy (warrantless wiretaps and corporate-assisted eavesdropping), civil liberties (Patriot Act), freedom of speech ("Free Speech" zones at Bush rallies and harassment/arrests of Bush/Cheney protesters), etc. These freedoms have certainly been diminished over the last couple of decades. It's technology in general and the internet specifically that makes it too hard for the gov't to be any more restrictive. (Gee, that makes me sound like a Lib or a conspiracy nut, and I'm neither.)

My wife and friends too have been hoping Regal will see the demographics downtown and play the Downtown West type movies at the Riviera. There are obviously enough screens here to do so. Those are just about the only first run movies we see, and it's got to be the same for many of our peers in the downtown area. I hope somebody at Regal follows this thread. They'd be missing a good community relations opportunity if they're not.

CBT's picture

Regal has the most

Regal has the most experience in the business. I'm sure they have a plan to put butts in the seats. My guess is they will run the major releases as those will attract people from a wide area. There are lots of downtown residents, but likely not enough to support 8 screens. Regal may put up 1 or 2 'art' features, similar to those at Downtown West. But, maybe not at first. They may even mix up the times and run those films once or twice a day.

I recall Mayor Corker talking about what made the movie theaters in downtown Chattanooga successful. Simply put, it became the place for young people to go. The Riviera will be attractive to young people, as it's not 'their parents theater' and offers a unique atmosphere before and after the show. The same can be said for people of all ages. I hope UT students patronize it. That's another key draw.

As Randy said, there are areas of town which don't have a theater without heading to West Knoxville. The majority of those people want to see the major releases. But, if it sells tickets, Regal will show it.

Have the Democrats in Congress passed legislation to drop the wire-tapping and eavesdropping? Last I checked, the now Democrat controlled Congress has a lower approval rating than President Bush and lower than the Republican Congress which preceded it. So much for change.

It will be interesting to see if a Democrat wins the White House next year if 'free speech zones' remain the rule for Presidential appearances. My guess is they will. Unlike Factchecker, I don't fear the wire-tapping or eavesdropping. I've never been in a 'free speech zone', but have been at a number of Presidential rallies, just not as a protestor. My freedoms are just fine and, in my view, protected by our current President.

None of these last comments has a dang thing to do with the Regal Riviera. Some people insert Bush and Republican bashing in every thread.

Rachel's picture

Have the Democrats in

Have the Democrats in Congress passed legislation to drop the wire-tapping and eavesdropping? Last I checked, the now Democrat controlled Congress has a lower approval rating than President Bush and lower than the Republican Congress which preceded it. So much for change.

Ok, you're right - this stuff has nothing to do with the Regal Riviera. So first things first:

Love that there's a downtown theater. Don't love the architecture, but as B. Lyons notes, there are good urban design elements about it. (For more on the architecture, see Jack Neely's piece in the current MP.)

I don't expect the Riviera to totally be an "art" cinema, but I do think Regal will be missing an important market if they don't show art/indie films on one or two screens. Lots of demand for those from downtowners and downtown hangerouters like myself.

Ok, back to CBT's comment: The reason this Congress has a lower approval rating is precisely because they aren't perceived as pushing back against Bush et al. hard enough. Rs wave the approval rating around like it proves folks liked the last Congress better. They didn't; they just think this one isn't different enough.

Michael's picture

Eh...

Regal has the most experience in the business. I'm sure they have a plan to put butts in the seats.

Yeah. You're right. But they own a lot of seats.

From the get go, a lot of us have hoped for the "art-house screens" at the new Rivera. But think about it. Downtown West may be the oldest cinema in town. I got no idea what Regal's investment is in it, but the thing was paid for a long time ago. It's got to be essentially a cash cow. Particularly when it's got the monopoly on the indie stuff.

It's pretty much the same everywhere. If a Sicko or An Inconvenient Truth is playing in any town, the audience that's going to pay to see it is going to go where it's showing. It's not so much a convenience thing.

From a business perspective, why cut your throat putting butts in seats downtown, when those same butts are willing to drive to Downtown West and probably make for a better bottom line on the run?

I wish Regal would move (or at least duplicate) some of the art and indie material downtown. But between SoKno and UT, there's plenty of demand for mainstream films. There's really not a lot of incentive for them to shuffle venues unless they're assured that they can keep both viable.
~m.

Cletus's picture

One of the theaters has just

One of the theaters has just over 100 seats. That might be a good bet for your independent movies.

CBT's picture

For some comparisons...U.S.

For some comparisons...U.S. ticket sales:

Spider Man 3 $337 million (released May)
Bourne Ultimatum $187 million (out 3 weeks)
Knocked Up $148 million (released June)
Simpsons Movie $169 million (out 4 weeks)
Superbad $73 million (out two weeks)

Sicko $23 million (released in June)

Regal tracks these numbers and will show movies accordingly.

SammySkull's picture

Ticket sales figures only

Ticket sales figures only show us what the majority of people want, but all things considered, if the theater doesn't try to cater to all of Knoxville, then I feel the whole point of it is missed and we might just as well have put it elsewhere. And really, what do sales numbers tell us? It doesn't denote quality as can be proved by looking at the sales of many popular artists such as the much maligned Ms. Spears, bless her heart.

bizgrrl's picture

BL: However he brings no

BL: However he brings no personal or political agenda to such efforts, period. It's called public service.

CBT Heck, if tomorrow's Metro Pulse is correct, Knoxvillians owe Bill Haslam big time as he has personally invested 7 figures in bringing the new cinema to downtown. I hope it's successful. Knoxville's Mayor apparently puts his money where his mouth is.

You guys should really stop while you are ahead. You don't think a Mayor of a town/city personally investing 7 figures in a movie theater has any personal/political agenda?

By the time he is done, he'll look real good to the voters when running for governor. There is a point when a Mayor should probably lead and let others invest. Personally investing and expecting a return on that investment is an agenda besides just public service. Otherwise it is a charitable donation, which can involve an agenda of a different type.

Bill Lyons's picture

It is what it is


By the time he is done, he'll look real good to the voters when running for governor. There is a point when a Mayor should probably lead and let others invest. Personally investing and expecting a return on that investment is an agenda besides just public service. Otherwise it is a charitable donation.

I guess I am a bit troubled by this because there really can really be no such thing as public service, or falling short of that, even something done to be helpful in a situation, if any action is viewed through this catch-22 prism. An action that would appear to be selfless is actually selfish because the appearance of selflessness puts one at a political advantage for the future. FYI, for what it is worth, in this case BH never announced or planned to announce his purchase of these bonds. This financing package was put together months ago. Last week someone took the trouble to dig into it and found out. And to save us the trouble of leaping across the next chasm, it was not "leaked" nor was it being hidden.

I would think purchasing bonds for a local project would fall way down the list of strategies for anyone thinking of seeking statewide office down the line sometime. I cannot even imagine where that would get before voters on a statewide level. There are at least a thousand more productive uses for one's time and money toward building a base of political support.

Obviously folks who don't like or support somebody in public life are going to attribute negative or selfish motivations to that person's actions or statements. I still tend to believe in the wisdom of Occam and his razor. The simplest explanation is usually the best one. Or put in best tautological form in today's terms.. It is what it is. If people want to make it something less or more, then have at it. Not much more I can say.

Rachel's picture

Haslam's investment

Hey, bizgrrl, I think you're being too hard on Haslam here. He personally pledged to raise the bond $$ for this thing, and investing in them himself I think of as leading by example.

If Nine were here, he'd surely call me a cheerleading mouthpiece, but I just calls 'em like I see 'em. Without Haslam, this theater wouldn't be here. The theater is an example of the Mayor doing an extraordinary job. Knoxville owes him.

As for his motives - geez, if doing what is good for downtown coincides with doing what may be good for the Mayor politically, where's the beef? Most of us do most things out of mixed motives.

Now, if he'd just been a bit more picky about the architecture.... :)

P.S. As for the governor thing - maybe Haslam wants to be governor. I'm still not convinced. He just doesn't seem to have that drive (the "fire in the belly" to use a phrase I dislike) that most successful politicians have. And I doubt if I'd vote for him. I think on the whole he's been a good mayor, but his views on state and national political issues aren't mine. OTOH, I would walk on glass to keep Marsha Blackburn out of the Governor's Mansion.

Bbeanster's picture

Rachel, I think you're

Rachel, I think you're making bizgrrl's point when you say

"As for his motives - geez, if doing what is good for downtown coincides with doing what may be good for the Mayor politically, where's the beef? Most of us do most things out of mixed motives."

I don't see anyone blasting him for doing this -- just saying that there's more than one reason for him doing it. I suspect some Pilot bucks went into saving the Bijou, as well.

Rachel's picture

Motives

I don't see anyone blasting him for doing this -- just saying that there's more than one reason for him doing it.

There are ways to say it w/o sounding totally cynical and snarky.

Look, if I do good work at my job, it benefits me as well by beefing up my resume and making me more marketable. That doesn't mean I shouldn't get credit for doing a good job, especially if by doing it I have a significant positive impact on my community. I don't see why the Mayor should be any different.

Bbeanster's picture

Rachel, with all due

Rachel, with all due respect, that just sounds silly.
Politics is not a parlor tea party.

CBT's picture

Like Bill, I'm somewhat

Like Bill, I'm somewhat befuddled. Lots of people have been wanting to make a downtown movie theater a reality for years. Investors were hard to come by. So, Bill Haslam and others step up to invest their personal money and make it happen, all the while preaching, believing and hoping it's a success. Such philanthropy is then characterized as having some political motive, despite the fact that the investments were never mentioned until someone in the media dug deep enough to figure it out. I've been around a lot of politicians. They're usually not shy about getting credit when they want to get credit (by 'leak' or official announcement). Bill Haslam did no such thing.

If the theater project didn't materialize, it would be a setback to downtown. As it is, like Mast, it can be a catalyst. There were well-to-do families in Chattanooga who stepped up and personally invested millions in Chattanooga's downtown re-development. So much of what Chattanooga was able to accomplish years ago was due to these people being willing to put up the money. Instead of attributing some ulterior motive, seems to me we ought to be thankful for Bill Haslam and others being willing to invest in the success of downtown Knoxville. Thanks Bill H.

R. Neal's picture

Well, notwithstanding the

Well, notwithstanding the Haslam Pep Rally five days ahead of the start of early voting, we are still allowed to have opinions. Some think a) the new downtown cinema is a bit on the ugly side and is not compatible with the character of downtown, and b) Bill Haslam does not walk on water.

That said, I think most folks want to see the theater succeed. Nobody wants to waste millions of taxpayer dollars on another failure.

Bill Lyons's picture

It's your narrative

Well, notwithstanding the Haslam Pep Rally five days ahead of the start of early voting, we are still allowed to have opinions. Some think a) the new downtown cinema is a bit on the ugly side and is not compatible with the character of downtown, and b) Bill Haslam does not walk on water.

The KnoxViews truth squad has nailed it yet again with this keen insight into the timing of the opening of the theater. Yes, people are "still allowed to have opinions" (a bit hyperbolic, don't you think!) in our obviously Orwellian local culture. But thanks for keeping the reply option open so other people can express counter opinions in a responsible manner. Somewhere someone is reading and might be better informed relative to the sum total of all opinions expressed.

And for the record nobody jumped in gratuitously saying that Bill Haslam walked on water. A grand total of two of us reacted to charges that he poisoned the water... you know, like he would manipulate movie programming, support the project with bonds as a political maneuver, or time the opening of this project for political purposes.

Look, you and Bizgirl and others don't like the guy. Fair enough. As you say, people are free to think what they want. Your syllogism has the conclusion penciled in.. that he sucks.. and it's not incumbent upon you to bother with assembling convincing evidence to get to that conclusion. After all, it's your narrative.

SnM's picture

theater design

I'm sure it'll spark more howls of contempt, but one old-movie-theater-architecture buff I corresponded with while working on the KNS "history of the Riviera" piece thought the design was intended to evoke the work of George and Cornelius Rapp, who designed many theaters in the '20s.

Here's some info on them:

(link...)

And here's a couple of their theaters that the new Riviera kinda (in a much scaled-down way) resembles:

(link...)

(link...)

Stan G's picture

Bill Lyons

Two quick questions:

1. Does the lease require Regal to pay the county and city real estate taxes?

2. Will the additional sales tax revenue generated by the theater - assuming total current sales tax revenue is in excess of the base amount - be applied to the convention center debt?

Bill Lyons's picture

Regal Tax Questions

1. Does the lease require Regal to pay the county and city real estate taxes?

2. Will the additional sales tax revenue generated by the theater - assuming total current sales tax revenue is in excess of the base amount - be applied to the convention center debt?

Stan, my understanding is that Regal will pay personal property tax on the eligible equipment in there. The IDB owns the theater and hence they are exempt from property tax. Also it is my understanding that the state portion of the sales tax will go into the collections made in the CBID and thus will go toward paying off the convention center debt according to the formula in place.

Factchecker's picture

Assuming Regal knows what it's doing

Regal may put up 1 or 2 'art' features, similar to those at Downtown West. But, maybe not at first. They may even mix up the times and run those films once or twice a day.

I'd understand and will be patient. But if they have a hard time getting the butts and don't try "indie" films, don't blame us for not supporting a downtown movie house.

...when those same butts are willing to drive to Downtown West...

We TRY and get out west to see these films, but we libruls have limits to our patience just like any other movie goer. We showed up to see Sicko only to learn Regal had changed the show times, so we left and never got back out. Still haven't seen it.

Some people insert Bush and Republican bashing in every thread.

I thought I was bashing gov't. and only did so because I disagreed with Bill's previous comment to the contrary. (Hence my Lib/conspiracy comment.) I do agree that it will be interesting to see how national security will change under Obama, but he will likely be informed by Bush's Dept. of Homeyland that they need to keep status quo for everyone's own protection. It's hard to put toothpaste back in the tube. At least Dems aren't even putting terror in their talking points, as Rudy has stupidly pointed out.

An action that would appear to be selfless is actually selfish because the appearance of selflessness puts one at a political advantage for the future.

How many of us felt about treatment Kerry got. Some claimed to hate him because they said he wanted to be President too badly!

As for CBT's ticket sales comparisons, how many screens have shown Sicko vs. the other movies listed and what were the demographics surrounding those screens (family populations, malls, etc.)? Major apples vs. oranges there.

bizgrrl's picture

BL: Look, you and Bizgirl

BL: Look, you and Bizgirl and others don't like the guy.

The discussion has nothing to do with liking or disliking the Mayor of Knoxville. It has to do with accounting and, I guess, agenda/motive.

Snm: And here's a couple of their theaters that the new Riviera kinda (in a much scaled-down way) resembles

IMO, they don't really appear to resemble the new Regal theater in downtown Knoxville.

CBT:
Investors were hard to come by.
Hmmm.
The Mayor of Knoxville invests/donates 7 figures to the venture.
I really have no idea, did the Mayor of Chattanooga invest/donate?
...the fact that the investments were never mentioned until someone in the media dug deep enough to figure it out.
Is there something wrong with the media trying to find out who is investing in downtown developement?

SnM's picture

no dog in fight

bizgrrl wrote:
IMO, they don't really appear to resemble the new Regal theater in downtown Knoxville.
bizgrrl wrote:

I can forward your email address to the old-movie-theater-architecture buff who proffered that opinion and inquire if he'd care to discuss his perceptions with you, if you'd like.

You can also post your thoughts about it at the following message board (he has posted there many times), and see if any interesting discussion ensues:

(link...)

bizgrrl's picture

no fight

just stating an opinion

Bbeanster's picture

I guess there is a vague

I guess there is a vague resemblance between the Knoxville theater and the older structures pictured -- sort of like the way tudor style McMansions in West Knoxington resemble English manor houses.

edens's picture

>Well, notwithstanding the

>Well, notwithstanding the Haslam Pep Rally five days ahead of the start of >early voting.

Ah, yes, Randy has dug up the real reason for the delays in the cinema's opening: fear of Isa Infante.

R. Neal's picture

Just to clarify, that remark

Just to clarify, that remark was in reference to all the predictable Haslam Cheerleading here by CBT and Bill Lyons regardless of the topic, not anything to do with the cinema. I only said nice things about the cinema. It does seem like the truth squad is out in force, though, to squash even the appearance of any criticism. Are you saying Infante has them worried? That would certainly be news.

Bill Lyons's picture

Block that Kick

Just to clarify, that remark was in reference to all the predictable Haslam Cheerleading here by CBT and Bill Lyons regardless of the topic

Ok, I won't speak for CBT but perhaps you might like to point out what proportion of my posts, with some examples, over the life of KnoxViews fits this characterization. I guess I am a bit disappointed in a system that dismisses responses to caustic asides (I would hard elevate them to criticisms) as "cheerleading." So by all means, carry on with your cheerleader-free narrative. Sorry for the interruption.

edens's picture

Criticizing the critique

Criticizing the critique equals "squashing"?

The Infante comment was obviously irony. And, Randy, you and the Mrs. were the ones to initially drag electioneering into it. Sure political goodwill probably does play into the equation, but I'm always intrigued by how quickly any positive move by the mayor is immediately written off as pure Machiavellian political calculus.

R. Neal's picture

you and the Mrs. were the

you and the Mrs. were the ones to initially drag electioneering into it

Damned if I can see where I did that until I was accused of it.

edens's picture

>Damned if I can see where I

>Damned if I can see where I did that until I was accused of it.

According to a word search, the first instance of "polit" as in politics or political:

Randy:

"it might grate on the politics of our local leaders who have so graciously made such downtown amenities possible."

Bill took offense to the gratuitous implication of pettiness on Haslam's part and speaking to Randy's suggestion that there might be payback of some sort should the Riviera show something the powers that be deem subversive, responded that he "he brings no personal or political agenda to such efforts"

The discussion then spun of briefly into national politics before BizGirl replied specifically to Bill's point about a "political agenda"(she quoted it) with:

"he'll look real good to the voters when running for governor," a notion you quickly seconded with your next comment on the thread, citing the "Haslam Pep Rally".

So I stand by my statement that you and the Mrs. were the ones who brought vote-courting into the discussion.

R. Neal's picture

So I stand by my statement

So I stand by my statement that you and the Mrs. were the ones who brought vote-courting into the discussion.

Stand by it all you want, but you're wrong. Snark about the Haslam's taste in movies (my original comment was specifically about that and not about electioneering in any way shape or form as you claim). And Lyons made up some wild fantasy about Haslam influencing movies shown downtown, not me.

Whatever.

bizgrrl's picture

Edens: And, Randy, you and

Edens: And, Randy, you and the Mrs. were the ones to initially drag electioneering into it.

I think not.

bizgrrl: 8/29/2007, 6:11pm.
---------------------
So, does this mean all but $2.5 million is taxpayer money (one way or the other)? The only thing listed that is not clear is the $4.25 million in bonds. Are those government bonds?

bizgrrl: 8/29/2007, 6:43pm
---------------------
$8.1 million (nearly 55%) in taxpayer money. Not that I'm counting.

I truly hope it is successful and, even more maybe, I hope it helps downtown (especially existing retail business).

BL and CBT Haslam/Knoxville/Theater Defensive Comments Here
-------------------------------------------------------------

bizgrrl: 8/30/2007, 6:15AM
-------------------
BL: However he brings no personal or political agenda to such efforts, period. It's called public service.

CBT Heck, if tomorrow's Metro Pulse is correct, Knoxvillians owe Bill Haslam big time as he has personally invested 7 figures in bringing the new cinema to downtown. I hope it's successful. Knoxville's Mayor apparently puts his money where his mouth is.

You guys should really stop while you are ahead. You don't think a Mayor of a town/city personally investing 7 figures in a movie theater has any personal/political agenda?

By the time he is done, he'll look real good to the voters when running for governor. There is a point when a Mayor should probably lead and let others invest. Personally investing and expecting a return on that investment is an agenda besides just public service. Otherwise it is a charitable donation, which can involve an agenda of a different type.

Bbeanster's picture

Pretty good reductio ad

Pretty good reductio ad absurdum argument, Matt. But as I'm sure you know, the political opponent the Haslam folks have in mind is probably somebody like Marsha Blackburn in a GOP statewide primary, not Isa Infante in 2007.

And Randy, how DARE you suggest that a politician with aspirations to higher office (who incidentally happens to be the son of a politically connected billionaire) might have motives beyond pure altruism for self-funding one of his top priority campaign promises (which has been verrrrrrrry slow off the drawing boards)?

This certainly doesn't make Bill a bad person, and it also validates one of the reasons a lot of folks voted for him -- the expectation that he (and his family) would have the wherewithall to get stuff done. It's good to have Big Jim's son as mayor.

Whether he can put butts in seats over the long haul is another question. I truly hope this theater works out, but I'm still skeptical. There is a lot being taken on faith here, and the lack of solid data backing up the mantra of UT students and South Knoxvillians hungering for a movie house continues to bother me. Generally, public projects require more extensive planning and market studying than simply repeating "If you build it, they will come. If you build it, they will come..."

edens's picture

>the political opponent the

>the political opponent the Haslam folks have in mind is probably somebody >like Marsha Blackburn in a GOP statewide primary

As if keeping Marsh Blackburn out of the Governor's mansion is a bad thing?

An interesting political gamble, though. I suspect an empty, failing (or shuttered) theater circa 2010 would play well for an opponent. And the extra effort to accommodate the S&W? Its status as a landmark barely plays in Knoxville, much less statewide. Nor are preservationists a particularly powerful constituency.

Bbeanster's picture

Nor are preservationists a particularly powerful constituency

Preservationists aren't a particularly powerful consituency, but keeping campaign promises is a powerful selling tool at the Next Level. And perhaps more importantly, not keeping them is handing Opponent X a powerful tool, too. And this one is going to slide in right under the wire.

Marsha Blackburn is despicable, so what else is new? How much money did the Haslams give GWB? Bottomline is whoever the GOP nominee for guv is in 2010, s/he'll be down with the party platform.

edens's picture

>Preservationists aren't a

>Preservationists aren't a particularly powerful consituency, but keeping >campaign promises is a powerful selling tool

Exactly. But Haslam only promised to make the theater a priority - not saving the S&W. And he came fairly close to sinking the deal in the attempt to save it, when the politically expedient thing would have been not to.

R. Neal's picture

Wow, looks like this is just

Wow, looks like this is just going to go on and on.

This post started out by someone complimentary of the theater and inviting everyone downtown for the festivities. So far so good.

My first post on this thread was congratulating the theater for having 2000 attendees in the first few days.

My next post was about how it's beneficial not only to downtown but to residents of nearby communities and also supporting the earlier idea of art/indie films, with a little bit of snark about the politics of the players involved in reference to Chad's comments and Bill Lyon's lengthy comment on the history of the project, the benefits, the process, the financing, the leadership, etc. etc. which at that point seemed out of proportion to any of the mild criticism or questions raised by others.

Then Bill Lyons piles on me, telling me I'm irrational, disconnected from reality, gratuitously unfair, etc. Seems like he is projecting his anger about things said by others at me.

Then someone brings up the topic of finances (not the Mrs., by the way). Edens and CBT pile on some more.

And it goes downhill from there. And I'm the one being unfair and irrational? Sheesh.

Bbeanster's picture

Good, Lord, you Haslamites

Good, Lord, you Haslamites have delicate sensibilities!

If you think it's insulting to suggest that a politician might have political motivations, I suggest you take some hide-toughening lessons before 2010 rolls around.

edens's picture

>Good, Lord, you Haslamites

>Good, Lord, you Haslamites have delicate sensibilities!

Yep, irritate Haslam and risk being banished from the city.

Rachel's picture

Me: Look, if I do good work

Me: Look, if I do good work at my job, it benefits me as well by beefing up my resume and making me more marketable. That doesn't mean I shouldn't get credit for doing a good job, especially if by doing it I have a significant positive impact on my community. I don't see why the Mayor should be any different.

Bean: Rachel, with all due respect, that just sounds silly.
Politics is not a parlor tea party.

Actually, it's sad that you would say it's silly.

I am in no way trying to downplay the existence of political or self-serving motives in the actions of public officials (or individual citizens, for that matter). That would be silly.

And I'm no babe in the woods when it comes to politics either.

I just allow for the possibility that people can actually be motivated by improving their community as well as by enriching themselves. If that makes me naive, so be it.

Bbeanster's picture

This demand that Haslam get

This demand that Haslam get kid glove treatment just irks me, that's all. He's a big boy, playing in a hardball arena, and if common wisdom is correct and he (or his family) intends to move on up the ladder after awhile (and unlike you, I believe that's in the cards), he and his better learn how to take it as well as dish it out. I would reference his longtimefamily friend Corker's senate race as the model for a future Haslam statewide run.

I just don't see what the whining is about -- nobody said he's a bad guy -- just that he's a politician.

Rachel's picture

I don't think I'm

I don't think I'm whining.

As for demanding that Haslam get "kid glove treatment" - huh? I doubt he'd put me in the category of giving it, much less demanding it. For example, I think I probably irked him recently by making a fair amount of noise about MPC appts.

But when I think he's doing a good job, I'll say that too. For the most part, the cinema's an example.

And I don't really care whether or not he's prepping for statewide race. I care how he's doing his job as Mayor. If good results make him more electable statewide, I can sure live with that (although as I've said before, I'm pretty sure I couldn't vote for him).

edens's picture

>learn how to take it as

>learn how to take it as well as dish it out

Why, yes, that's pretty good advice all around.

But, never mind me, I'm just a Haslamite trying to squash debate.

frenchharp's picture

Transparency

First I would like to say that I am working on Isa's campaign (link...). I believe she will be a great Mayor for Knoxville.

I am concerned that the downtown theatre is being financed by the public. I would like a downtown theatre and probably will watch a couple of shows a year. I had imagined the downtown theatre starting out small with just two screens and growing over time. I had hoped it would be an independent operation meaning not an established large entity that would show films that normally do not get a lot of play. I believe the process has not been transparent because the "investors" were not revealed to the public early on in the process. It would be important for the public to vette the mayor being one of the investors before hand. I assume that is why this was not openly stated to the public because he and his supporters felt uncomfortable about it. That internal voice should have told him this is a conflict of interest. Did city council know that Bill Haslam was an investor before they voted to approve the project? If Cynthia Finch was mayor would it be ok for her to invest in such an endeavor? It doesn't matter the Mayor's intention the "end doesn't justify the means".

Did regal cinemas recieve a check from KCDC and for how much? Who recieved the TIF? This financial structure needs to be made a little more clear.

How much business will be needed before the taxpayers see a return on our investment?

Martin Pleasant

R. Neal's picture

These are very good

These are very good questions, Martin.

The financing of this deal is very confusing.

Such as who issued the bonds?

Who/what is securing them?

It is my understanding that it's not the city, so how does that work? The city owns the land, but not the building, or the development? Who pays if the bonds go bad? Who profits if it works out?

I think it's pretty clear that Regal owns the equipment and fixtures, which could be pulled on a moment's notice if the deal goes sour. Who's on the hook for the rest of it?

And despite Bill Lyon's extensive explanation above that all of this was brought before City Council and very public, there still appears to be some confusion about who issued these bonds, who are the beneficiaries, etc., which Bill did not explain. Were these bonds and the structuring of this deal fully disclosed and explained to Council?

I'm not accusing, I'm just asking. I probably missed something along the way, so Edens and Lyons can feel free to pile on and ridicule me some more, as is their want.

Anyway, according to Metro Pulse these are 5% 40 year maturity bonds, so it's not like Haslam is going to get rich (richer?) from his $2 million investment (as reported by Metro Pulse).

But as someone mentioned earlier here or in another thread (ed. note to Edens and Lyons, it wasn't me!), it's starting to sound like the Haslam/Corker business plan of wealthy candidates writing their own checks to fulfill policy promises.

It would seem that these are all very good questions that someone at the KNS might already be asking and looking to answer in an upcoming report. Unless Hartmann gets a call, of course. Which might also explain the hyper-defensive and over the top reaction to any Qs about finance here. (Edens and Lyons alert re. conspiracy and cynical destructive public discourse!)

edens's picture

"Snark about the Haslam's

"Snark about the Haslam's taste in movies (my original comment was specifically about that and not about electioneering in any way shape or form as you claim). And Lyons made up some wild fantasy about Haslam influencing movies shown downtown, not me."

Randy, you're backpedaling. Read what you said.

"hope they run some of the indie flicks that the Downtown West cinema has been the only place in town to see, as someone suggested earlier. Given the hipster loft set makeup of downtown residents, it might make good business sense, except it might grate on the politics of our local leaders who have so graciously made such downtown amenities possible."

"Might make good business sense?" And why wouldn't it? "except it might grate on the politics of our local leaders who have so graciously made such downtown amenities possible." Downtown amenities such as, say, a taxpayer funded, city-owned cinema, which said business leases from the city.

Maybe that's a matter of Haslam's "taste." But it also pretty directly implies some payback if Regal runs afoul of that "taste". Lyons didn't concoct the fantasy, he merely called you on dropping some pretty big damn hints that such things could shape Regal's business decisions: "might make good business sense, except."

Maybe it was snark, but snark has a way of becoming urban legend.

True you're initial point wasn't about "electioneering." I was mistaken. It was Bizgirl's reply to Bill Lyon's response about things not being "politically motivated" spun things off in that direction.

R. Neal's picture

But it also pretty directly

But it also pretty directly implies some payback if Regal runs afoul of that "taste".

Wow. Are you kidding? Or are you secretly #9? You're pretty good at making up conspiracy theories where none exist.

I would be insulted if I believed you actually thought I was that stupid.

edens's picture

"You're pretty good at

"You're pretty good at making up conspiracy theories where none exist."

Well, if that isn't ironic...

R. Neal's picture

Well, it should have been

Well, if that isn't ironic...

Well, it should have been "exists".

But I guess you're not talking about my grammar.

Which, again, leaves me wondering exactly what you are talking about.

Your cryptic comment leaves me buffooned.

Joe328's picture

Funding Tennessee Theater

Could someone report the amount of city and county funding spent on the Tennessee Theater. I heard its mostly closed on Saturday, because it would attract the wrong kind of people.

edens's picture

cryptic comment?

Let me put it in the vernacular, then:

Pot, Kettle.

R. Neal's picture

Let me put it in the

Let me put it in the vernacular, then:

Pot, Kettle.

Such uncivil discourse. You really need to back that up, though. So far, I think it's pretty clear to anyone reading that you haven't, and can't.

But thanks for playing!

edens's picture

Let's see, which one of was

Let's see, which one of us was prone to panicking about the publisher under his bed?

Pickens's picture

All of you need to settle

All of you need to settle down and buy a beer or two (for me, that is).

Though I could be wrong, I didn't read R.Neal's first post as an attack on anything, but this whole thing sure went to pot awfully quick.

R. Neal's picture

Let's see, which one of us

Let's see, which one of us was prone to panicking about the publisher under his bed?

Edens, perhaps you should disclose to casual readers here who might not know that a) you are paid to write about downtown and urban development by a publication whose publisher is a key player in several major downtown developments and who has deep ties to the city administration on several downtown deals (some of them controversial), that b) you also write for a sister publication of the same outfit on the same topics, and that c) both publications were recently purchased by the daily local paper creating a virtual print monopoly under the control of the local GOP business as usual PR department.

And you know there was a lot more to it that me "panicking". We're going to start that crap again? I thought you were above that. I guess I should have known better.

Creep.

CathyMcCaughan's picture

it's been run into the ground now

Can't the subject change to some other new business being built? Surely you can all agree to hate something at Turkey Creek.

edens's picture

>Surely you can all agree to

>Surely you can all agree to hate something at Turkey Creek.

Well, sure, that goes without saying...

Scruffy Citysin's picture

Ear Worms

It appears after reading “Ear to the Ground” in Metro Pulse that Mayor Haslam holds an advanced degree from the Mike Ragsdale school of public administration: “The mayor confirms that he bought ‘a substantial” sum of the bonds …. He says he doesn’t recall the exact dollar amount.” Written with tongue in cheek; I understand why the mayor would not make an issue of the amount of his personal investment.

On the other hand, the Ear also heard that the mayor purchased about half of the $4 million in outstanding bonds. The bonds may not be “a great investment vehicle,” but they will generate approximately $100,000 in tax-free income for the mayor over each of the next four years and for quite a few years after that.

I find it interesting that the Ear concludes with the statement, “The city already owned the State Street Garage, without which the project would not have been feasible.” Let’s see if I have this straight. The State Street Garage made the Riviera feasible, which made the Market Square renovations feasible, which made the Walnut Street Garage feasible, which made the Market Square Condominiums feasible. As I recall, that’s not the way I first heard the plan.

Rachel's picture

The State Street Garage made

The State Street Garage made the Riviera feasible, which made the Market Square renovations feasible, which made the Walnut Street Garage feasible, which made the Market Square Condominiums feasible.

Huh?

Stan G's picture

Martin Pleasant Touched on the Matter

I think we all understand the you, Bill Lyons, cannot always provide an immediate response to issues raised on Knox Views; however, there appear to be unanswered questions regarding the Regal Riviera Funding -- to use the NS caption. Specifically, if the IDB does not pay real estate taxes and neither the city nor the IDB pay federal income taxes, how is the $1M TIF subsidy to be repaid and who benefits from the $2M federal tax credit?

Bill Lyons's picture

Cinema Funding

Stan, The TIF is paid back by a small TIF district set up for this purpose in the downtown area.. It will capture the increment in property taxes generated by re-appraisals of downtown properties that benefit from the redevelopment. The federal tax credits are new market tax credits like those that helped fund the Tennessee Theater. These are complex financial instruments set up for developments that enhance urban areas. They are allocated by region and applied for on a project-by-project basis. Knox Heritage was very helpful in this process. The beneficiary of the tax credits, and the TIF, is the cinema project itself, which is governed by a subsidiary of the IDB.

R. Neal's picture

The beneficiary of the tax

The beneficiary of the tax credits, and the TIF, is the cinema project itself, which is governed by a subsidiary of the IDB.

Is that who issued the bonds? Do they have a charter or some other kind of offical organizational entity? Or a name?

Bill Lyons's picture

Cinema Funding

The City Industrial Development Board issued these bonds, which are revenue bonds and not general obligation bonds. Thus they are not guaranteed by the city. The IDB has a charter.

frenchharp's picture

Building as collateral

I thought that the building itself is collateral for the bond holders? Is this true?

These explanations are still fuzzy to me.

R. Neal's picture

If they are revenue bonds,

If they are revenue bonds, that means they are secured by future revenues from the project they are issued for. What those revenues are would be spelled out in the bond itself. Presumably, it would be tax revenues since they are, according to what Metro Pulse seems to say, tax free municipal bonds and I'm not sure what other revenues they would have since it's not a water treatment plant or something like that that generates fees, but I haven't been able to find anything about the details. Maybe someone knows more about it or can point us in the right direction or knows who to ask what exact very detailed and specific questions? It is indeed very fuzzy.

Bill Lyons's picture

Revenues to pay to bondholders

If they are revenue bonds, that means they are secured by future revenues from the project they are issued for. What those revenues are would be spelled out in the bond itself.

Randy, the funds to repay the bondholders come from revenues generated by Regal's lease. That is a direct function of the number of patrons who come to the cinema.

R. Neal's picture

Thanks for the

Thanks for the clarification. So, Regal's lease payments are based on a percentage of their revenues? Is there a base or something?

(P.S. Like your "cheerleader" avatar. Nice touch.)

Bill Lyons's picture

Lease Payments

Randy, the lease with Regal pays 17% of gross sales, which includes the total of: box office receipts, concessions, game machine and other receipts. After the loan for the bonds is repayed Regal pays 12% of gross sales. So about 1/6 of each popcorn purchase helps pay for this thing.

Glad you like the avatar... I thought about taking it away but it can stand, at least for a while, as an historical artifact.

Rachel's picture

Glad you like the avatar...

Glad you like the avatar... I thought about taking it away but it can stand, at least for a while, as an historical artifact.

When you're finished with it, I may have to steal it.

I'm glad you two guys stopped fighting. Both of you contribute tons to our community (both real world and cyber). I appreciate you both.

michael kaplan's picture

"The Haslam Rolodex comes in

"The Haslam Rolodex comes in handy, at times."

especially when it rolls around to the letter H.

michael kaplan's picture

The IDB is a spin-off (or

The IDB is a spin-off (or whatever legal term you want to use) of the City of Knoxville.

On their website: "Seven members are appointed by the Mayor and confirmed by City Council, each serving for six years. "

NOT on their website: the IDB charter.

Legaleez or not, the City owns the movie theater.

NOT on their website: the IDB Great Buildings Collection.

knxnicole's picture

After reading all of this I

After reading all of this I have one thing to say. Randy you embarrassed yourself here with how rude you have been. Cant you take anyone calling you out on those cheap shot cracks you make? And then you say Lyons is trying to squash debate. Look in the mirror. I cant believe how you have the nerve to ask him questions after all of that.

R. Neal's picture

knxnicole, I'm still trying

knxnicole, I'm still trying to figure out the "cheap shot crack" that warrants someone calling me "irrational," "disconnected from reality," and "gratuitously unfair." That seems sort of rude to me, and a bit of overraction to an innocuous (but ironically factual and true) wisecrack.

Thanks for reading, and have a great day!

Bill Lyons's picture

Time for an apology

The bad vibe situation has gone on long enough. KnoxViews has been a good thing for the area and is by far the best place for discussion on local politics. I do appreciate all the work that Randy and the Mrs. put into it and can't imagine how tough it must be to run something like this as well as a business. I have more than once hit the "post" key before I had a chance to think about the wisdom of doing so. So, for the record, I should have just let the comment about the independent movies and where they are shown go without comment. It was thin-skinned of me to get upset. In a real sense, then, I am the one who kicked the train off the tracks and into the gully.

I am glad we got back to substantive exchanges on the financing of the cinema. It is not appropriate for me to say much here during election season but I will try to answer relevant questions in a timely manner and without slipping in text which is self-serving or promotional (overtly, or even covertly) to me, the mayor, or the administration.

Randy, Bizgirl, et al. I am sorry for overreacting and for compounding it with further overreacting.

R. Neal's picture

Bill, thanks for your note.

Bill, thanks for your note. It seems there was a serious disconnect somewhere, and my apologies to you for any part I played in that. And thanks again for your participation.

zoomfactor's picture

(No subject)

bizgrrl's picture

knxnicole, you seem to be

knxnicole, you seem to be confusing discussion with Edens with perception of discussion with Bill Lyons.

Also, this may be hard to explain. But, what I have seen thus far (2-3 years or so) in the discussions between Bill and Randy, they have been able to keep it mostly at a civil level, heated but respectful. I've never worked in politics and very little in government, but in the private sector, upper level management have strong differences and are still able to get the job done. I believe this is the case with Bill and Randy in this discussion and previous discussions.

frenchharp's picture

Knoxnews Article

Does anyone have a link to the News Sentinel article about Regal Riveria? The one that breaks down some of the funding.

Martin

R. Neal's picture

It said in the paper it

It said in the paper it would be on their website, but I couldn't find it. I e-mailed the reporter...

Bill Lyons's picture

Link to Article on Cinema Funding

I think this is a link to the article you are thinking of.

(link...)

frenchharp's picture

Article property as collateral

"The property itself, rather than city funds, serves as collateral for the bond investors, including Haslam, who stand to make a 5 percent tax-free annual return on the 40-year notes."

Who purchased the building? Who owns the building?

Stan G's picture

Re: Cinema Funding

Submitted by Bill Lyons on Fri, 2007/08/31 - 11:07am.

Bill, hope you’re having a good holiday weekend.

Stan, The TIF is paid back by a small TIF district set up for this purpose in the downtown area.. It will capture the increment in property taxes generated by re-appraisals of downtown properties that benefit from the redevelopment.

Perhaps my question wasn’t clear, I do have a vague idea how a TIF works, however what puzzles me in this instance is that according to you there are no real property taxes involved because the city through the IDB owns the building therefore there will be no incremental property taxes generated. It would appear that in effect the city is obligated for the payment through the IDB.

The federal tax credits are new market tax credits like those that helped fund the Tennessee Theater. These are complex financial instruments set up for developments that enhance urban areas. They are allocated by region and applied for on a project-by-project basis. Knox Heritage was very helpful in this process. The beneficiary of the tax credits, and the TIF, is the cinema project itself, which is governed by a subsidiary of the IDB.

Concerning the new market tax credit, the requirements do appear to be somewhat complex. The bottom line, however, appears to be that private investors receive total tax credits over a period of seven years totaling 39% of their investment. In effect then, the private investors recover their investment and earn a small bonus credit over the seven-year period as the credit offsets the tax due on future income.

Obviously, the theater would not have been feasible without those private investors who were in a position to advance a substantial portion of the construction funds.

frenchharp's picture

Bond length and tax credits

I am still confused. Do the bond holders potentially recover there investment in seven years? Is there a portion of the bonds by private investors that is for forty years?

frenchharp's picture

KCDC

What is the specific involvement of KCDC? Do they distribute the TIF?

Bill Lyons's picture

Response to Cinema Finance Questions

The TIF is not paid back from property taxes collected on the cinema (none are) collected), but from a TIF district created in a part of downtown. The increments are from increases in property taxes in the district. This is a short duration district – max of 2 years. This TIF district is handled through the IDB. KCDC has no involvement. The IBD cinema subsidiary owns the buildings.

I have no expertise in bond arrangements. So this a disclaimer on anything I say about them. The following is my understanding and my attempt to be helpful and provide transparency. The bonds are due December 1, 2046. The money to pay back the bearer comes from the rent, as I described earlier. These bonds are not guaranteed. If the project fails the bond investors are totally at risk. The private placement memorandum supporting the issuance of the bonds, complete with all the financing details, description of the process, and elaboration of the risk is a public document.

Like folks have said, this is a very complicated financing plan, but no more complicated than it had to be, but (and just my opinion) it took this to get the project to come to fruition.

frenchharp's picture

Collateral

Is the News Sentinel article incorrect?

frenchharp's picture

Return on Investment

What is the city's expected return on investment?

frenchharp's picture

Investor Transparency

Who are all the investors? How would someone find out?

Bill Lyons's picture

I do not know who the

I do not know who the investors are other than that Mayor Haslam is one of them and that folks were not exactly crashing down the doors to get a chance to invest when the bond availability was announced. I can't help you any more than that.

Stan G's picture

Re: Bonds Length and Tax Credits

Martin,

I didn't mean to create any confusion and I certainly have no inside information. My comments are based on the funding data published in the NS.

Based on the information Bill Lyons posted earlier, the city owns the building which apparently serves as collateral for the bonds.

The Industrial Development Board issued $4.2M 40 year revenue bonds (revenue from the theater not tax revenue). I have no idea what the redemption schedule is; however, over a period of 40 years, the bond holders will be repaid assuming the theater continues to operate.

The financing also involved $2 in federal tax credits to private investors in a qualified project. To be more correct, it appears that I should have reported that the investors are permitted to earned an amount equal to the amount of their investment tax-free over a period of seven years -- they invest $2M and they can earned $2M tax-free over a period of seven years. I am not in a position to know when, if ever, they receive a return of their investment.

My understanding only, hope it helps rather than add to the confusion.

michael kaplan's picture

the 40-year theater

"I have no idea what the redemption schedule is; however, over a period of 40 years .. "

it's hard to imagine this building, or the theater within it, lasting 40 years. where's the capri? the old west town theater? the cineplex odeon (now dick's)?

sounds (and looks) like a land bank scheme to me.

Bill Lyons's picture

Cinema as Land-Banking Scheme for Bond Investors

sounds (and looks) like a land bank scheme to me.

Interesting insight! Do a bit of research into the present value of the land in question - small frontage on Gay St. backing up to a wide presence on State St., figure in demolition cost and you will see what a cracker-jack investment strategy that one is.

The bondholders got into this lucrative land banking scheme for a bit north of $4 million.

michael kaplan's picture

The bondholders got into this

The bondholders got into this lucrative land banking scheme for a bit north of $4 million.

fast forward three years: the bondholders are still getting 5% tax-free on their investment. lucrative is the word, considering the rate of return the average citizen has received on his/her investments over the last three years (2007-2010).

if anything, this investment is a bet that the cinema will fail in the next thirty-seven years - which it likely will. and when that happens, the investors (not the public) will get the land and building (or what's left of the building). in the meantime, they will already have made their money back a few times over.

Stan G's picture

Re: The Riviera TIF

The TIF is not paid back from property taxes collected on the cinema (none are) collected), but from a TIF district created in a part of downtown. The increments are from increases in property taxes in the district. This is a short duration district – max of 2 years. This TIF district is handled through the IDB. KCDC has no involvement. The IBD cinema subsidiary owns the buildings.

I glad I claimed to have only a vague knowledge of TIF’s. As I understood them, rather than paying the increased county and city property taxes resulting from redevelopment, the developer is permitted to use that increase to repay the TIF subsidy.

As I understand what you are saying, the city created a TIF district in which the property owners are assumed to benefit from the Rivera, their property tax assessment will be increased accordingly, and the incremental increase in their property taxes will be applied toward a portion of the Rivera debt. In would appear that $1M TIF subsidy divided by a two-year TIF district results in a $500,000 annual increase in property taxes within the district. Do I understand it correctly? Will the city and county continue to receive the incremental tax payments after the subsidy is repaid?

Bill Lyons's picture

Explanation of TIF district

In would appear that $1M TIF subsidy divided by a two-year TIF district results in a $500,000 annual increase in property taxes within the district. Do I understand it correctly? Will the city and county continue to receive the incremental tax payments after the subsidy is repaid?

There are no increased tax payments for anyone as function of being included under a TIF. Property owners are assessed at appraised value regardless of whether a TIF is in place or not. Any increment in taxes during the period is directed to pay off the TIF loan. As soon as the TIF loan is paid off the increment just goes to the general city fund. The person or entity paying the taxes is unaffected. What is affected is the allocation of the taxes. The TIF directs them to a specific purpose for a set period of time. The same is true, for a longer period, for South Waterfront TIF district. Property owners in the district will be unaffected. Increased taxes generated will be directed to a fund to pay for infrastructure to support the project.

Everybody have a great holiday. And thanks for asking all these questions.

michael kaplan's picture

"There are no increased tax

"There are no increased tax payments for anyone as function of being included under a TIF. Property owners are assessed at appraised value regardless of whether a TIF is in place or not."

however, if the effect of the TIF is to increase the value of property within the district, then all property within the district will be subject to higher appraisals and resulting higher taxes.

that's why homeowners who fall within a TIF district are fighting the so-called 'gentrification effect.' dave hill argued that, along with higher taxes, their property values are also going up. that's only meaningful, though, if and when they decide to sell their homes. if they choose to remain in their homes, they're going to suffer from higher taxes.

Bill Lyons's picture

Preference for stagnant property values?

I have heard repeated references from two or three people relative to the supposed number of folks in the neighborhoods who would prefer their property values to stagnate or decline rather than to increase. Precious few of such folks have come forward so I am interested in the basis of any assertion of such a widespread preference. This assertion has interesting possibilities for policy, maybe East St. Louis as a model. No problems with increased property values there, but lots of other problems. Of course the appraisals stay low in such environments but all other factors (crime, fire, lack of tax base, demands for services, etc.) push the actual rate higher. The result is a higher tax bill with no accompanying higher home value.

For some reason we hear a whole lot more from folks who are thrilled with the idea of living in neighborhoods in which their properties gain in value. This is true throughout the city. People often come to council to speak in for neighborhood issues and they invariably reference their interest in their property values -and not to keep them low! From all indications - turnout at meetings, city council, etc. the vast majority of folks in the neighborhoods in the South Waterfront are thrilled with the plan.

Up Goose Creek's picture

Taxes

Michael is correct that there are some SWF homeowners who are concerned about being forced out by rising taxes. There is a new state law that allows freezing of taxes for elderly homeowners (hopefully restricted to low income), Dave Hill has mentioned that this could be used and I hope it will. I hope the city can work out some sort of program where any increases for other low income residents can be delayed and payed if/when the property passes outside the family.

Besides, I don't think there's any need to balance the TIF budget on individual homeowners if there's any amount of new building being done.

BTW, Dr Lyons, I hope you are not comparing Scottish Pike to East St Louis, That's pretty insulting if you are. I hear about a LOT more crime from my friend in Westmoreland than we ever see around here.

____________________________________
Less is the new More - Karrie Jacobs

Bill Lyons's picture

I am not in the least

I am not in the least comparing Scottish Pike to East St. Louis. I am just making a general point about logic of making public policy to keep property values from going up. And there may well be a few folks who feel this way, as you say. They never seemed to materialize anyplace in any number and I am unaware of any more than a couple of folks expressing such an opinion. They did not come to council workshops, council meetings, MPC meetings and workshops, public meetings at the drop in center, etc. I am always concerned when unelected people take it upon themselves to purport to articulate and represent the interests of others in the absence of any evidence to support such a claim.

frenchharp's picture

Tax Increases

It is true that if you increase the land value of the neighborhood the taxes will go up. If the area is populated by lower income people this will effect them greatly. Their taxes go up and their home owners insurance goes up. Gradual increases over time is normal. It is the sudden increase that is a problem. Understanding this effect should be acknowledged and addressed.

Up Goose Creek's picture

Participation

I recall that a lot of participants expressed concern at the public meetings that residents be able to stay in thier homes - both from inside and outside the nighborhood.

Is it true that the Haslam Administration will only listen to residents that have the time and inclination to attend multiple meetings? This is the second time I've heard this from a city offical in as many days.

I'll send you a copy of a petition that was circulated last spring by going door-to-door. We canvassed about half my neighborhood. About half of the signers noted why they didn't attend meetings. 15 said work, 5 old age, 3 sickness, and 4 child or elder care responsibilities.

For the record, I'm not concerned about my own taxes going up (within limits). But I know of many neighbors who are. If you'll be kind enough to send me your number I'll see if any of them would like to call you.

____________________________________
Less is the new More - Karrie Jacobs

Stan G's picture

Re: Explanation of TIF District

Bill, my dictionary defines increment as “the action or process of increasing esp. in quantity or value.” That is why I’m having a problem understanding how you can talk about an ”increment in taxes to pay off the TIF loan” after stating, “There are no increased tax payments for anyone as function of being included under a TIF” and end with statement, “Increased taxes generated will be directed to a fund to pay for infrastructure to support the project.”

TIF dollars are tax dollars. They may be future tax dollars that for a period of time are allocated for a specific purpose as opposed to in the bank tax dollars; they are still tax dollars that in this case amount to 20% of the city’s investment in the building housing the Riviera.

Personally, I had the same problem when I read that the World’s Fair Park improvements did not involve taxpayer dollars. The city sold a taxpayer asset, the proceeds I assume were deposited in a city bank account, city council approved the expenditure of those dollars, and therefore those dollars would appear to be taxpayer dollars.

My problem is not with the dollars but with the spin. If we were talking a private venture, there is a good chance my problem would be with the dollars, but that’s another issue. If the property owners located within the Riviera TIF district don’t object to making a $1M contribution to the project, I certainly have no objection. The News-Sentinel article and your original comments simply did not make it clear to me who would be repaying the TIF debt.

Thanks for your previous response.

Bill Lyons's picture

Veracity of discussions

The discussion of the movie theater and the World's Fair Park have never been cast in the same terms and are not comparable other than as general indicators of veracity. That is apparently the point here so I will address each. The theater costs have been made very clear, and nobody has ever said that the TIF dollars are not taxpayer dollars. They are dollars expected to be accounted for by increased dollars taken in at a later time as a function of increases in property values (in this case in a small area - a TIF district) as a result of value realized by the project. They are not the same as present dollars allocated our of the general fund for capital projects. This was made clear when the TIF district was presented to council. I have explained ad nauseum that the people in the TIF district pay the same taxes regardless of whether they are in the district on not. There is nothing for them to "mind."

As for the "spin" on the Worlds Fair Park projects, discussion has been clearly couched in the media. That is, that all the went on in the World's Fair Park area [(+$) sale of the Candy Factory and Victorians (-$) amphitheater, Sunsphere, improvements to Emporium for dance and public meeting space] were done at no NET COST to the taxpayers. In both cases the presentation has been very clear. See the budget items for the cinema and my quotes in the article below that appeared in the August 8, 2007 News Sentinel discussing the final piece - renovations to the amphitheater.

The city’s 2005 sale of the Candy Factory and seven Victorian houses on 11th Street for $1.82 million to Chattanooga-based developers Kinsey, Probasco, Hays & Associates will roughly pay for the $1 million in renovations planned for the Sunsphere and the $850,000 restoration of the amphitheater.

In addition, the $200,000 needed to finish the first floor of the Emporium Building, a downtown facility that houses the Arts & Culture Alliance of Knoxville and nine other arts and cultural organizations, was also paid for by an agreement with KPH. A ribbon-cutting ceremony will be held Thursday for the Emporium’s first floor, which boasts 5,000 square feet of public meeting space and dance studios.

“All indications are that we are within the budget,” Lyons said of the amphitheater’s renovations. “All costs, along with that of the Sunsphere and renovation of the Emporium for public meetings and rehearsals, will be paid for out of sales proceeds from the Candy Factory and the Victorian houses.”

If folks just don't like either of these from a policy perspective or a public presentation perspective that is fine. You will excuse me if I note that the Q and A here has become reminiscent of an earlier, endless discussion of TIFs, the Candy Factory, a couple of years ago. People are free to carry on with whatever spin they want to put on this or other matters, unencumbered by what would have to be interpreted as administration propaganda from this end. My participation obviously does not fit the overall ongoing narrative here. it detracts from it and that is not fair to anyone.

frenchharp's picture

The building itself

Bill Lyons,
Thank you for continuing the dialogue. You have made a statement contrary to the News Sentinel article. The article stated that the Movie Theatre is collateral for the bond holders. You have stated otherwise. Which one is correct?

Martin Pleasant

Bill Lyons's picture

One more time and that is it

Mr. Pleasant. The timing of all this activity on KnoxViews obviously places you in campaign mode. I find it impossible to engage in this without violating my own promise not to engage in anything that could be construed as self-serving toward the mayor or campaigning on this site. So the thread, along with the others, belongs to you, Mr. Kaplan, and other supporters of your candidate. If you have questions about this or other city projects I suggest you pursue them through more traditional means. Good luck on your campaign.

So one more time and this is it. The premise of your "question" is incorrect. The NS article to which I provided the link is correct. The building serves as collateral for the bondholders if the cinema project fails. Thus the he city itself is not at risk for the bonds. I am unaware of saying anything remotely to the contrary. I only addressed Mr. Kaplan’s assertion that this collateral was a “land-banking scheme.”

Stan G's picture

A Matter of Definition?

Bill, I’ve come to the conclusion that you and I are not defining the term ‘property taxes’ in the same manner. I suspect you are referring to the amount of tax the property owner currently pays and I would agree that portion of future payments by your definition does not change.

I’m using the term to refer to the total amount property owners pay to the city and county based on the property’s assessed value. If, as I suspect, future tax statements include both the current property tax and the future TIF payment as a single total, then I am referring to the total as an increased property tax.

frenchharp's picture

Building as collateral

Thanks Bill,
I feel that you and the News Sentinel agree. I had asked this question on this thread before and thought you were responding to it but maybe you were not. If you were it was an indirect response.

Martin Pleasant

Dixie Belle's picture

I guess it's "off-topic" re: the movie theater but

Please go see "The 11th Hour"!!! I went today, to the new theatre downtown, of course, and loved this movie.

I haven't heard much mention of it, including on this progressive blog, but it contains interviews with scientists and experts from a wide range of backgrounds concerning climate change and I was impressed.

(link...)

R. Neal's picture

THREAD RESET

It might be more appropriate to start a new blog post, considering most of the discussion has been about the financing (which was probably not the discussion the original poster had in mind).

But there are quite a few keystrokes and pixels (and emotions) invested in the discussion on this thread, so I guess it can stay here in one place for continuity and posterity.

Wading back through all of it and sorting out the facts from the sideshows, here is a summary of the relevant information so far if anyone is interested in continuing this discussion:

Overall Financing (posted by zoomfactor from a newspaper article):

Total project cost: $14.85 million

Funding sources:

$4 million in city funds
$2.5 million in furniture, fixtures and equipment from Regal
$4.25 million in bonds
$2 million tax credit
$1.1 million state grant for outdoor escalator, elevator, walkway and lighting
$1 million tax-increment-financing subsidy

TIF (various Bill Lyons comments):

The TIF is paid back by a small TIF district set up for this purpose in the downtown area.. It will capture the increment in property taxes generated by re-appraisals of downtown properties that benefit from the redevelopment.

TIF district created in a part of downtown. The increments are from increases in property taxes in the district. This is a short duration district -- max of 2 years. This TIF district is handled through the IDB.

There are no increased tax payments for anyone as function of being included under a TIF. Property owners are assessed at appraised value regardless of whether a TIF is in place or not. Any increment in taxes during the period is directed to pay off the TIF loan. As soon as the TIF loan is paid off the increment just goes to the general city fund. The person or entity paying the taxes is unaffected. What is affected is the allocation of the taxes. The TIF directs them to a specific purpose for a set period of time.

BONDS (various Bill Lyons comments):

The bonds are due December 1, 2046. The money to pay back the bearer comes from the rent, as I described earlier. These bonds are not guaranteed. If the project fails the bond investors are totally at risk.

The City Industrial Development Board issued these bonds, which are revenue bonds and not general obligation bonds. Thus they are not guaranteed by the city.

[T]he funds to repay the bondholders come from revenues generated by Regal's lease. [..] [T]he lease with Regal pays 17% of gross sales, which includes the total of: box office receipts, concessions, game machine and other receipts. After the loan for the bonds is repaid Regal pays 12% of gross sales.

The building serves as collateral for the bondholders if the cinema project fails. Thus the he city itself is not at risk for the bonds.

FEDERAL TAX CREDITS (Bill Lyons):

The federal tax credits are new market tax credits like those that helped fund the Tennessee Theater. These are complex financial instruments set up for developments that enhance urban areas. They are allocated by region and applied for on a project-by-project basis. Knox Heritage was very helpful in this process. The beneficiary of the tax credits, and the TIF, is the cinema project itself, which is governed by a subsidiary of the IDB.

Quotes from articles referenced in the discussion:

KNS:

"The property itself, rather than city funds, serves as collateral for the bond investors, including Haslam, who stand to make a 5 percent tax-free annual return on the 40-year notes."

METRO PULSE:

"We understand that three of the major investors have the last name of Haslam. To demonstrate to the other investors his faith in the project, we hear Mayor Bill Haslam coughed up about half the total. The mayor confirms that he bought "a substantial" sum of the bonds, having said that he would purchase all those that went unsold, and that his family participated. He says he doesn't recall the exact dollar amount. The bonds aren't backed by the city or its taxpayers."

djuggler's picture

Since my post generated so

Since my post generated so many comments, do I earn the title of "most controversial blogger on Knoxviews"?

Doug McCaughan
(link...)

R. Neal's picture

Yes, I think you may have

Yes, I think you may have taken away #9's claim to the title.

R. Neal's picture

My comments

Getting back to the discussion of the cinema financing and the summary thereof just above, a couple of things.

It appears that Bill Lyons has given a fairly complete summary of the various moving parts. Whether you agree that taxpayers should invest $8.1 million in the project, it is what it is and everything as described appears to be on the up and up and standard operating procedure for these kinds of projects.

The only remaining question is reconciling the KNS remark that the property is collateral, v. the fact that the bonds are paid back from the lease which is based on revenue.

The newspaper quote is so vague as to be practically meaningless. In one sense, I guess expected revenue from the property could = "collateral", although that would not be the usual definition. But it could also mean that revenue pays the bond principal and interest, but if that dries up the property itself (the ground underneath? the building on it? both?) is collateral that would be forclosed and the bondholders would get whatever they could get?

So the newspaper gave the bullet talking point, Bill Lyons gave a little more detail, but if someone could clarify that last point I think everyone could better understand, if anyone is still interested.

Bill Lyons mentioned that the bond memorandum is a public document. (It would seem that Mayor Haslam's contract would be public record, too, if the mayor is investing in a city project.) So maybe if someone could find those and post them it would clear up all the questions about the bonds.

Bill Lyons's picture

A couple of points to help wrap up

I would add only a couple of things to the above. As part of this the city gets the retail piece that is to the north of the cinema. That has substantial value. PBA is handling the leasing for that space. Also, another not so subtle benefit of this is that it provided the opportunity for the S&W space to become commercially viable and hence possible to "save." Given the condition of the structures I don't think there was a lot of time left. I would only quarrel, and I am not going to make that big a deal of it, about how we carve up and discuss the amount of taxpayer money - especially the apprx 3 million in state grants and federal tax credits. Of course it is, in the final analysis, taxpayer money.

There is about 5 million in local taxpayer money, counting the TIF. The state transportation grant benefits more than just the cinema and was competitive in nature. It provides lighting and other improvements to complement the escalator connector to Gay St. That benefits the Tennessee theater are Bijou with better connectivity to parking for their evening shows. It makes the State St. garage much more valuable. The tax credits have been approved by Congress and are also competitive. The cinema project provided a great vehicle for their application in downtown Knoxville. It is true, of course, that these are taxpayer funds, but these two pieces of the funding were allocated for purposes such as the cinema at both the state and federal levels.

As someone associated with this from the beginning I obviously think that overall, this and associated efforts add up to good public policy. But I am hardly an objective third party. Time will tell how well it works. It has substantial risk and substantial reward potential. The risk is easier to quantify than is the reward, with all the intangibles, some, but not all of which translate into the balance sheet through tax revenues. I am reminded of earlier discussions way back in this process when some folks (now departed from the dialog) accused the city of prostituting everything relative to Market Square on the "alter" of increased sales taxes. Interesting how target moves on these sorts of ongoing discussions, but that is a topic for another time.

The community is better off with discussion of this from a public policy perspective as was provided for in this thread (even with the diversions). People will always disagree on (1) how aggressive local governments should be in pursuing such projects, and with downtown (extending also to the South Waterfront and now Fifth and Broadway/Downtown North) in general and (2) how effective / clear / wise local governments have been in if they are active in pursuit of (1). I know one person who insists that the City should never have done anything at all -- TIFs for residences, etc, Mast, Cinema, Market Square, etc. We have had interesting "what if" discussions. My scenario building shows a mostly boarded up downtown, a deteriorated Market Square, etc. without the application of the tools, including those inherent in the MS redevelopment plan. But who can know for sure.

R. Neal's picture

Oh, and I had one other

Oh, and I had one other question. Is the downtown TIF district just for the cinema project, or can it be used to subsidize other projects?

Bill Lyons's picture

TIF District for cinema

The TIF district is specific to the cinema project. The proceeds can't be used for anything else. After the $1,000,000 for this purpose is generated it ceases to function.

R. Neal's picture

We have obtained a copy of

We have obtained a copy of the Private Placement Bond Memorandum (PDF format).

Haven't had time to wade through it all yet, but there are a couple of interesting things.

One, on the earlier question re. collateral, the bonds are secured by a first mortgage lien on the property and building, and it can be foreclosed:

The Borrower will enter into a Deed of Trust and Assignment of Lease dated as of April 1, 2007 (the "Deed of Trust") in favor of a trustee for the benefit of the Issuer to secure its payment obligations under the Loan Agreement. The Issuer will assign its rights under the Deed of Trust pursuant to the Indenture to the Trustee to secure the payment of the Bonds. The Deed of Trust will constitute a first mortgage lien upon the Project. In the event the Borrower defaults on its payment obligations under the Loan Agreement, the Trustee will be permitted to foreclose upon the Project upon the terms set forth in the Deed of Trust.

Pursuant to the Deed of Trust, the Borrower will also assign to the Issuer its right to receive rental payments under the Regal Lease and any subsequent lease of the Project. The Issuer will assign these rights to the Trustee pursuant to the Indenture.

Here's another interesting tidbit from the memorandum regarding a bailout clause in Regal's lease:

Termination of the Regal Lease

If after the first three years of the Regal Lease, Gross Sales (as defined in the Summary of Regal Lease in Appendix B hereto) are less than $1,500,000 for any period of twelve consecutive months (without a cessation of partial or total use of the Project due to either the occurrence of a casualty, remodeling of the Project by Regal, or other alterations pursuant to the Regal Lease), then Borrower or Regal may terminate the term of the Regal Lease upon written notice to the other party. Such termination would be effective at the end of the twelfth calendar month after receipt of such written notice by the non-terminating party. Such termination could have a materially adverse affect on Borrower's ability to make payments pursuant to the Loan Agreement and would therefore be a materially adverse affect Issuer's ability to make payments on the Bonds. Additionally, should Regal terminate the Regal Lease, there can be no assurances that an alternative operator for the Project can be engaged.

Pickens's picture

who can buy

interesting to see on page 13 on the PDF file (page 10 of the text) some of the qualifications you must have to buy these bonds. Two of the criteria are that you have to have a net worth over $5 million, or you've earned over $500K in the past two years.

So, anyone in these here parts who bought one bond (or more)?

frenchharp's picture

Resolution adopted

On page 5 under The Issuer
"The Issuer is a public, not-for-profit corporation organized pursuant to the Act and is governed by a board of directors, consisting of seven members. The Issuer is authorized by the Act to finance the construction and equipping of the Project. The Issuer adopted a resolution on November 14, 2007, authorizing the issuance of the Bonds."

Is this date correct?

bruce's picture

November 14, 2007

There are two Deeds of Trust on the property. One for $6850250 recorded in instrument 200612130049371. The second Deed of Trust was recorded in instrument 20070424086852. The second Deed of Trust is for the Bonds. Copies can be obtained from the Register' Office as well as the leases, etc. I can get copies, but don't know how to post them

Stan G's picture

Submitted by R. Neal on Tue,

Submitted by R. Neal on Tue, 2007/09/04 - 9:04am.

Oh, and I had one other question. Is the downtown TIF district just for the cinema project, or can it be used to subsidize other projects?

Per the Private Placement Memoradum

Another source of funds to be used to pay costs of the Project is the proceeds of a tax increment financing note issued by the Issuer in the amount of $1,000,000.00. The proceeds of the tax increment financing will be used to reimburse the Issuer for costs incurred in connection with preparing the Project site for development and for payments of capitalized interest on the tax increment financing note for a period ending up to two (2) years following completion of the Project.

Not to start another lengthy discussion about the TIF nor to suggest there might be something inappropriate; however, when compared to other TIF projects, the $1M note with a two-year payback suggests that this is a TIF in name only.

JaHu's picture

Had to dig this out of the

Had to dig this out of the boughs of Knoxviews, but I finally took the opportunity to drive past the Riviera tonight. I was pleasantly surprised. The theater and its sign seemed to add a nice persona to downtown. I still haven't viewed it in the daylight hours though! I may have been a little harsh with my first comments about it.

Adrift in the Sea of Humility

Pam Strickland's picture

amazing

I tried reading this post while at school the other day, and got lost. Tried it again today, and here's what I came up with:

1. While many people wanted a movie theatre downtown, they are now bitching because it doesn't look like what they had in mind. Give me a break. One of the wonderful things about this country is freedom of expression. I think the theatre expresses Regal just fine.

2. Instead of being thankful that the financing was creative enough to get something done that had been talked about for years, again, people are bitching. Yes, the funding is in places questionable, and I could say a lot of things about how it could have been done differently, but perhaps the time to weigh in on that was when it was being put together. My mama used to tell me that if you didn't participate in the process that you couldn't complain about the outcome.

3. I can't think of a sole who is truly against indie films and documentaries at the Riviera. Regal, I hope, understands this. If you think they don't, perhaps contacting them directly is the answer instead of whining about it here.

4. There probably are more than 4, but I need to get on with my life.

Pam Strickland

"We are what we pretend to be, so we must be careful about what we pretend to be." ~Kurt Vonnegut

Factchecker's picture

Indie films/documentaries

3. I can't think of a sole who is truly against indie films and documentaries at the Riviera. Regal, I hope, understands this. If you think they don't, perhaps contacting them directly is the answer instead of whining about it here.

Perhaps I will, but they're the market experts. They are (Regal is) going to figure out what works best for downtown and will screen accordingly. Presumably this will be done with sophisticated market research to some degree, and to trial and error the rest of the way.

That said, in the earlier discussion I was unaware that such a film was already being shown there! This is great, I thought!! We made plans to see this movie, Leonardo DiCaprio's "The 11th Hour," on Saturday night, last night (during the "game"). We were downtown Friday night for First Friday, so we stopped by the theater to check show times for the next day.

The movie had been pulled! They stopped playing this flick after a measly one week!! We couldn't learn about it and plan to see it soon enough to catch it!!!

I thought the days of showing a movie for only one week were long gone. Was the response Regal got for it downtown that weak???

This was our big opportunity to go to the Riviera and support the place with a vote for the type of movies we go out to see. So much for that. We won't go see some schlock pop culture thing just to "support." I wonder how long it will be before there's another movie there we really want to pay for.

BTW, when we stopped by on Friday, maybe all of the showings were in progress and thus the place was between visible traffic. But it was a very busy night downtown and the theater looked almost deserted from the street.

Just sayin'.

spratt's picture

I grew up in Knoxville. I

I grew up in Knoxville. I moved away. I moved back. I went to movies at the real Riviera, however you want to pronounce it. I still look up at the "BankAmericard" ad painted on the side of whatever building it's on and think about the good old days. They be gone.

I really hope that the new Riviera makes a big positive impact on downtown, but my cynicism won't let me bank too much on that hope. Knoxville has had some great opportunities to be like "the big boys" over the years, and pissed them away. Thank God, at least in a way. The thing that has kept bringing me back to Knoxville is that it is just a big old small town. But, the city fathers have always seemed to want it to be something bigger. Since Knoxville is a stubborn place though, it has always managed not to ever become that bigger place. Thank God.

Knoxville has never had a big downtown. Knox County is much more a collection of small communities, each having its own identity and people who identify with it than it is a city. The Convention Center has proven to be about as viable as most people expected it to be. I suspect the theater will too, but I hope I'm wrong.

I'm glad to see improvements in downtown, but I seriously doubt it will even achieve the status it had in its prime. And that wasn't much bigger than most of the small towns around, certainly not a "city."

sp

Stan G's picture

Re: Amazing

Submitted by Pam Strickland on Sun, 2007/09/09 - 9:40am.

While many people wanted a movie theatre downtown, they are now bitching because it doesn't look like what they had in mind. Give me a break. One of the wonderful things about this country is freedom of expression. I think the theatre expresses Regal just fine.

While I have yet to patronize the downtown movie theater, there is no doubt in my mind that when the lights go dim there will be no way to know whether I am at Knoxville Center, Westown, or Turkey Creek; it will be a Regal theater, nor can I argue with your comment that the exterior expresses Regal just fine.

My comments and most likely those of others had to do with whether the theater expresses Gay Street. The mood along Gay Street has always been subdued including the Tennessee Theater and the Bijou. After all these years, people still complain about the old KUB building at the corner of Cumberland and the city spent big bucks restoring the Miller’s Building. Now, Regal has dropped a piece of Time Square in the middle of Gay Street. In my opinion, it’s like a woman in a cocktail dress and heavy makeup or an Elvis impersonator in costume walking into church on a Sunday morning; they are free to express themselves, but they no doubt will be the talk of the congregation.

One of the wonderful things about the country is the freedom to express your opinion on a blog, but then there are those who bitch because they don’t agree with your opinion.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.

TN Progressive

TN Politics

Knox TN Today

Local TV News

News Sentinel

State News

Local .GOV

Wire Reports

Lost Medicaid Funding

To date, the failure to expand Medicaid/TennCare has cost the State of Tennessee ? in lost federal funding. (Source)

Search and Archives