Friday, May 01, 2009
"If the hotel is such a good deal, why isn't a private developer paying for it?"
"It's a matter of cheaper municipal tax-free financing," retired Bank One Texas chairman Ron Steinhart tells The Dallas Morning News.
"The numbers work. It reduces the risk substantially by having the ability to issue tax-free bonds at lower interest rates. Debt that might require a 7 or 8 percent taxable interest rate might well be 4 or 5 percent interest if it's tax-free. So you can service debt with less occupancy. You don't have as big of a nut to crack.
"Hotelier John Scovell reinforces, tax-exempt revenue bonds "will be repaid with revenues from guests staying at the hotel – not Dallas taxpayers.
"In a nutshell: Dallas' business leaders say this financing approach makes good business sense for Dallas.