OK, I was a tad harsh on the Mayor with yesterday's post on the agreement with the Colts on a new stadium. Since the plan is clearly not going to be tax-funded, I will today give him credit for that. Good show!
On the other hand, I still think that the quest for funding could be done better than by using gambling revenue. The possibility of using gambling revenues as the source of funding is as troubling to some as using taxes is to others. Fortunately, three good options are available that are enormous civic pride opportunities.
1. Join a consortium of investors
2. Purchase shares of stock in the project
3. Purchase bonds in support of the project, a la WW2-era War Bonds
By using these three methods, the funding is achieve solely by the choice of the participants, and directly so, as opposed to the gambling funded method. People will choose to get involved because they believe in the project. They will have a stakeholder interest far beyond the guy who drops ten bucks on pull tabs and loses.
Civic projects can and should be a source of pride to as many people as possible. Using funding that people will be eager to provide is an excellent way for everybody to come out a winner.
Good so far. Make it better.
Is the sale of stock in a stadium a good way to raise money? In 1998, the Cleveland Indians sold shares of stock in an IPO at the initial offering price of $15/share. This raised $60 million, selling out the stock in rapid fashion. That's not a huge percentage of the $800 million or so needed to be raised. No problem. Set the amount to be raised by this device to $150, with a higher initial offering price tag, and this can be achieved easily.
Will the stock be worth anything to the investor? Possibly not. There is always the risk of a crash when investing in the stock market. Many subscribers will be glad to simply buy the stock certificate as a piece of history and something to frame and hang in the den. The 1998 Indians stock certificate goes for $150 on collector sites. Others will treat it as a business and look for a dividend, or to sell if the price rises with the success of the complex. The story of the Indians stock had a happy ending.
War Bonds sold phenomenally well because the public believed in the cause. I think that enough people in Central Indiana would buy Stadium Bonds because they believe in it. Pie in the sky guess? I think $150 million could be raised from investors on this.