Dean E. Carlson wrote:
Mr. Piehl technically is correct. The Twins "could" decide they don't want
to pay their 10 million and renege on the deal. Presumably there would be
an agreement between the State and the Twins regarding default provisions
and penalties for default. Otherwise the State could always sue forcing
the
Twins to pay up. However, using this logic is a recipe for never doing
anything!! Banks could never exist under Mr. Piehl's scenario -- they
would
never lend money for fear that the loan reciever might default.
David Piehl writes:
Banks don't often loan money to organizations with a history of default.
When they do, it is at a premium to off-set the risk of default.
Dean E. Carlson wrote:
snip
Under the
Guv's plan, the State is the bank. Wells Fargo and USBank can't do this
because they can't get their hands on the low-interest bonds that the state
can.
David Piehl writes:
Oh please - I hope folks have a better understanding of financial markets
than that! Local corporations have recently borrowed billions of dollars
at rates as low as 5.125%. I'm currently refinancing my home mortgage at
6%, a mortgage note that will be owned by.....Wells Fargo!! How is it that
the banking industry isn't interested in a 6.5% note for a Twins stadium,
yet they are able to profitably lend money at rates well below 6.5%?
Possibly the Twins aren't interested in private financing because then
if/when they don't pay, their political strong-arm tactics cannot avert
foreclosure. Minnesota does not have a state owned bank, so why is the
state suddenly entering the banking sector? And don't forget, attempting
to achieve am 8.5% return on the money the Twins are asked to front is not
without risk of it's own.
> David Piehl writes:
> They forgot the last step: When it's time to negotiate new multimillion
> dollar contracts with the Twins players and management, the owners decide
> they don't want to pay the bond payments of $10 million a year anymore
and
> the taxpayer is left holding the bag. Look up the history of "forgiven"
> payments and rents from the sports teams and you'll know what to expect.
I consider this a bait and switch, it would be more respectable to simply
> state the cost and let people decide. It's not just sports teams -
Gavidae Commons is playing the same game. Ask yourself, if this is a good
business decision, then where are Wells Fargo and US Bank? Both have large
mortgage departments!!
>
> I hope it isn't the Minneapolis taxpayers that get stuck with the bill,
> we've got too many creative financing situations to deal with already.
>
> David Piehl
> Central
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