Star Cen­ter fi­nances not re­ally so rosy

Albuquerque Journal - - RIO WEST -

YOUR RIO WEST story about the fi­nances of the Santa Ana Star Cen­ter “look­ing up” couldn’t have been fur­ther off the mark. It may be true that the an­nual op­er­at­ing sub­sidy for the cen­ter has dropped from $874,000 to $769,000 but, with Rio Ran­cho taxpayers on the hook for an ad­di­tional $2.2 mil­lion an­nu­ally through 2032, the cen­ter’s fi­nances will con­tinue to be a ma­jor bur­den on city taxpayers.

It is true that a vast ma­jor­ity of are­nas and events cen­ters are money losers. That’s hardly a jus­ti­fi­ca­tion. Rather, it is an in­di­ca­tor that cities like Rio Ran­cho are over­in­vest­ing in such fa­cil­i­ties rel­a­tive to the mar­ket’s will­ing­ness to pay for them. In ba­sic eco­nomic terms, sup­ply is out­pac­ing de­mand.

For Rio Ran­cho, it is too late. City taxpayers are pay­ing what cur­rently amounts to 80 per­cent of their an­nual gross re­ceipts tax col­lec­tions for an arena. Yes, bond money is sep­a­rate from the gen­eral fund bud­get but, when you put the city’s fi­nan­cial obli­ga­tions in that light, you see why the cen­ter was a ma­jor mis­take.

The good news is that Rio Ran­cho’s ex­pe­ri­ence can be a les­son to Al­bu­querque and other cities that might be con­sid­er­ing such ma­jor and po­ten­tially bur­den­some spend­ing projects.

PAUL GESS­ING

Al­bu­querque

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