The construction of the stadium is ultimately going to be a fixed cost. When the stadium is ready for occupancy, there will be a finite amount spent on the construction of the stadium.

 

If the tax rebate was essentially $ 1 million dollars per year, over thirty years, the present value of that future money is much less than $ 30 million. I am no eoncomist, but the present value of a total of $ 30 million over thirty years is probably going to be maybe $ 15 million in today's money (using the rule of 7 - money doubles every 7 years).

 

Question: were the Marlins to get $ 15 million now, would that be the same as being $ 30 million total over thirty years? Has anyone looked at what it will take in terms of "today's" dollars to get this done now? Or, was the tax rebate sought for some other financial purpose-- because the Fish were never really going to use future money for a hard present cost like the construction of the stadium.

 

I'm curious if any of you business/accounting-types have any info on this?

They were think $30 million because it may be $60 million worth of capital in future dollars. Better to have more than too little.

The construction of the stadium is ultimately going to be a fixed cost. When the stadium is ready for occupancy, there will be a finite amount spent on the construction of the stadium.

 

If the tax rebate was essentially $ 1 million dollars per year, over thirty years, the present value of that future money is much less than $ 30 million. I am no eoncomist, but the present value of a total of $ 30 million over thirty years is probably going to be maybe $ 15 million in today's money (using the rule of 7 - money doubles every 7 years).

 

Question: were the Marlins to get $ 15 million now, would that be the same as being $ 30 million total over thirty years? Has anyone looked at what it will take in terms of "today's" dollars to get this done now? Or, was the tax rebate sought for some other financial purpose-- because the Fish were never really going to use future money for a hard present cost like the construction of the stadium.

 

I'm curious if any of you business/accounting-types have any info on this?

766185[/snapback]

 

good point. And I have no clue. First the Marlins wanted to re-direct the JRS rebate to the new location (not sure how much is left, probably 30+ or 40).

 

The Marlins have also mentioned the 30 million figure.

$30 million is the present value of $60 over 30 years. That's why they need $2 million per year for 30 years.

Question. If the county and city were going to own the stadium, why didn't they ask the state for a rebate instead of the Marlins? This would have precluded any "double dipping" argument agains the tax rebate.

There is no way that $30 million is the present value of $60 million in thirty years. The present value is much less probably 4.5 times less-- probably around $12 million.

 

$30 million dollars today is much, much more than $60 million dollars in thirty years.

 

In fact, $30 million today is probably worth $120+ million in thirty years.

 

My number of $15 million in the first post took into account the fact that

that $ 1 million was essentially being amortized over thirty years-- that's because a million dollar rebate today will be worth much more to the team than a million dollar rebate in thirty years.

I need to run some numbers by my financial calculator.

 

What should I use for cost of capital?

 

5%?

There is no way that $30 million is the present value of $60 million in thirty years.? The present value is much less probably 4.5 times less-- probably around $12 million.

 

$30 million dollars today is much, much more than $60 million dollars in thirty years.?

 

In fact, $30 million today is probably worth $120+ million in thirty years.

 

My number of $15 million in the first post took into account the fact that

that $ 1 million was essentially being amortized over thirty years-- that's because a million dollar rebate today will be worth much more to the team than a million dollar rebate in thirty years.

766275[/snapback]

 

You're misinterpreting what I am saying or I didn't say it clearly enough. $30 million now is worth $2 million dollar payments per year for 30 years. I am not saying that $30 million now is worth $60 million in the future. See the difference? Also, the people involved with this thought about this issue. Trust me, we're not going to catch a mistake. lol

5 percent is good.

$30 million is the present value of $60 over 30 years. That's why they need $2 million per year for 30 years.

766273[/snapback]

 

 

100% correct :thumbup

I'm a bit rusty on finance, but here we go:

 

PV 30,000,0000

Cost of Cap = 5%

Number of Years = 30

Number of Payments/Year = 1

 

Future Value = 129,658,271

I'm a bit rusty on finance, but here we go:

 

PV 30,000,0000

Cost of Cap = 5%

Number of Years = 30

Number of Payments/Year = 1

 

Future Value = 129,658,271

766286[/snapback]

 

this is wrong.

 

you are correct 2003,

 

30,744,902 is the PV of 2,000,000 dollar payments for 30 years, at a cost of cap of 5%

I'm a bit rusty on finance, but here we go:

 

PV 30,000,0000

Cost of Cap = 5%

Number of Years = 30

Number of Payments/Year = 1

 

Future Value = 129,658,271

766286[/snapback]

 

You didn't do it correctly. To get the future value, you have to have the present value, amount paid per year, interest rate, and number of years. I don't see the $2 million per year in that calculation.

I'm a bit rusty on finance, but here we go:

 

PV 30,000,0000

Cost of Cap = 5%

Number of Years = 30

Number of Payments/Year = 1

 

Future Value = 129,658,271

766286[/snapback]

 

this is wrong.

 

you are correct 2003,

 

30,744,902 is the PV of 2,000,000 dollar payments for 30 years, at a cost of cap of 5%

766289[/snapback]

 

 

That's exactly what I said.

I'm a bit rusty on finance, but here we go:

 

PV 30,000,0000

Cost of Cap = 5%

Number of Years = 30

Number of Payments/Year = 1

 

Future Value = 129,658,271

766286[/snapback]

 

this is wrong.

 

you are correct 2003,

 

30,744,902 is the PV of 2,000,000 dollar payments for 30 years, at a cost of cap of 5%

766289[/snapback]

 

 

That's exactly what I said.

766292[/snapback]

 

Yup

I didn't mean to make this into an argument about economics.

The fact is, no matter how you look at it, the tax rebate essentially deals with future money.

 

The real issue is: Considering the money to be given by the team, the county and the city, what is the amount that is needed now to complete the stadium deal?

 

While I understand that the request was for a tax rebate, how is that future money being used to complete construction now.

I didn't mean to make this into an argument about economics.

The fact is, no matter how you look at it, the tax rebate essentially deals with future money.

 

The real issue is:? Considering the money to be given by the team, the county and the city, what is the amount that is needed now to complete the stadium deal?

 

While I understand that the request was for a tax rebate, how is that future money being used to complete construction now.

766296[/snapback]

 

It would be used to finance a $30 million loan taken out by the Marlins to pay off the building of the stadium. The loan would complete all the current money needed to build the stadium. The $2 million rebate the Marlins would get each year would be the yearly payments the team must make to pay off that $30 million loan. It's really not that complicated.

Thanks; that's what I needed to know.

 

Now the most expedient thing would be $10 m more from each of the three partners.

Thanks; that's what I needed to know.

 

Now the most expedient thing would be $10 m more from each of the three partners.

766313[/snapback]

 

Yeah, definitely. If the county and city chip in $20 million, Loria can't leave over $10 million, right?

its really 20 million since mlb agree to give them 10 million

its really 20 million since mlb agree to give them 10 million

767349[/snapback]

 

Give them $10 million or chip in $10 million in some form (such as a low interest loan, etc.). If they really will give them $10, there is no reason why this deal shouldn't get done soon. If they move because they couldn't provide $6.67 million, then Loria sucks. But we all know he's a great owner. He'll do his best to keep the Marlins in South Florida.

you know what, I was thinking about this and is not really 30 million.

 

Basically the 30 Millions won't be needed until 08 or 09. So we can't assume 30 mill in today's dollars.

 

So that means that the PV of 30 millions (needed in 3 years), is 25,188,579

 

FV = 30,000,000

Interest Rate = 6%

Number of Years = 3

Before you start spending the guy's money, you have to stop looking at this in a vacuum.

 

Not only is Loria's $192 million already the biggest piece of the pie, he is also on the hook for any cost overruns, which potentially could run another $10-20 million depending on when they actually start construction and a million other unforeseen problems that might/will arise in a project of this magnitude.

 

Personally, I think the way to deal with this is a surtax at both Marlins Stadium and the OB in the range of 1.5%. Based on ticket sales of approximately 30,000 a game and an average $25 per seat, it would raise in the neighborhood $1 million a year at Marlins stadium and about half that at the OB. If such a tax were to be applied to food and other concessions, the $$$ money needed could be generated exclusively at the stadium complex and from my perspective be the fairest way of handling the shortfall. It would also undermine all the "don't tax me to make some millionaire richer" naysayers because the enduser (the fans) is paying the tax and no one else.

 

For example, a $25.00 ticket, now taxed at 7% actually costs $26.75, that number would increase to $27.13, or a 38 cent increase, which is insignificant.

 

If the Marlins are smart and they are, they should also bounce TicketMaster and bring those services in-house, which would also be an additional source of revenue because of TM's service charges. Basically what is going to happen over the next couple of months is the parties are going to look for other ways to skin the cat and I suspect a ticket surcharge will be one of them.

 

 

 

.

Ticket surcharge is a good possibility. I also think you may see the county and city pick up the entire $30 million and the marlins commit to pay $2 million ayear for thirty years in additional rent. Then you will see the team go back for the money when Wayne's whipping boy is no longer in charge of the senate. If they get the money it would nullify hte increased rent to be paid by the team.

 

You may also see them condemn additional land in order to get the private sector more involved in the form of retail or additional parking. For example they could condemn another square block and lease it to a private entity (possibly one controlled by the marlins) which would increase the revenue in the form of parking fees.

 

Just some thoughts.

 

BTW, I would have loved to get some funding for this by taxing cigarettes.

Wayne's whipping boy is no longer in charge of the senate.767464[/snapback]

 

:lol Great way to put it!