Ok these numbers are crude.
The facts as I understand them. Along with approximations I have made.
- The debt cost the city $11M a year.
- The garages make $4M a year above that $11M cost
- The debt has a maximum life of 20 years (assumption)
- cost of space rental increases in a linear fashion (assumption, least revenue generated case) make allowed is a 2 fold increase
therefore I made the calculation that after the first 20 years the garages retire their debt and will make an additional $11M a year on top of the $4M+
From year 21 to year 75 the garages net $605M dollars total.
Current net profits (after paying loans) increases linearly from $4M today, to $8M in year 75. This nets $451M over the 75years.
total potential profits from the garages are $1.06B that is billion dollars.
With these numbers it doesn't make sense. Or roughly 10 years of the citys current budget not accounting for inflation)
Now if it is actually that the garages produce $4M of revenue at the cost of $11M in loans then dump the property. My same analysis using those conditions nets $231M after 75 years Likely the construction loans are not for 20 years, but still it has very poor financials, and like the mayor says it is basically subsidizing the surrounding communties...
crs921 could you send this out to your council contact list?