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.

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.

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. :-)

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

The City People event is SEPTEMBER 17.

Ah. So it is. My bad.

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.

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,

Just sayin'

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.

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. :)

"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?"

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.

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

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.

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

(link...)

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?

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.

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.

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

The Haslam Rolodex comes in handy, at times.

An excellent point by Mr. Edens.

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

$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).

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.

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.

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.

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.

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.

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.

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.

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.

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.

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...)

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?

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.

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?

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.

>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.

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.

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..."

>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.

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.

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.

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.

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

"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.

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.

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.

Let me put it in the vernacular, then:

Pot, Kettle.

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!

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

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

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.

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?

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?

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

especially when it rolls around to the letter H.

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.

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.

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

Martin

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

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.

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?

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

Is the News Sentinel article incorrect?

What is the city's expected return on investment?

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

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.

"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.

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?

"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.

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

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.

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

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,
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, 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.

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

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...)

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."

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.

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?

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.

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)?

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?

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.

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

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

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

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.