Letter: Rifle doesn’t need a patch of ‘blue sky’
Blue sky. Definition: 1.) having little or no value; 2.) not grounded in the realities of the present. This became a term and eventually a law in the securities world. It is said to have originated in the early 1900s when a Supreme Court justice declared his desire to protect investors from speculative ventures that had “as much value as a patch of blue sky.”
The proposed Rifle Recreation Center seems to fit into this category as more Rifle businesses close doors for good. Storefronts remain empty and it appears for long periods. Where are the businesses that are going to support the sales tax increase to pay for the $21 million plus interest? If the community supports this tax increase, and the center is built, what happens if we default on the payments?
My questions led me to the City Council Packet, 02/13/13. This workshop between the RREDC and First Southwest was to discuss the finance plan and Southwest’s recommendations for the proposed rec center. Included in this packet is Appendix A, a description of what happened to a town in Minnesota that bought high grade bonds to support the payments of a sports center. Ultimately, they couldn’t afford to make payments and the high grade bonds were downgraded to “junk bonds.”
They report that this deal “… like other struggling or failed economic development supported by municipalities — underscores the importance of a credit review that looks at direct and indirect debt and assesses the ability of a government to support a project should it fail to meet expectations.”
What would Rifle have if we vote for this sales tax increase to spend millions of dollars on a Recreation Center and we don’t have the businesses to support the required payments? A patch of Blue Sky. We deserve better. Vote NO in September.
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