Presented by: Proposed Sports and Event Complex in Coeur d ...

Estimated Funding Supported Per 1% Increase
in Local Hotel Tax Rate:
Scenario 1: 8.2% Annual Scenario 2: 3.0% Annual
Revenue Growth Revenue Growth
Estimated Revenue Estimated Revenue
Taxable From 1% Taxable From 1%
Sales (1) Tax Increase Sales (1) Tax Increase
2008 $53,456,000 $50,888,000
2009 57,839,000 52,414,000
2010 62,581,000 $626,000 53,987,000 $540,000
2011 67,712,000 677,000 55,606,000 556,000
2012 73,264,000 733,000 57,275,000 573,000
2013 79,270,000 793,000 58,993,000 590,000
2014 85,770,000 858,000 60,763,000 608,000
2015 92,802,000 928,000 62,586,000 626,000
2016 100,410,000 1,004,000 64,463,000 645,000
2017 108,643,000 1,086,000 66,397,000 664,000
2018 117,550,000 1,176,000 68,389,000 684,000
2019 127,188,000 1,272,000 70,441,000 704,000
2020 137,616,000 1,376,000 72,554,000 726,000
2021 148,898,000 1,489,000 74,730,000 747,000
2022 161,106,000 1,611,000 76,972,000 770,000
2023 174,315,000 1,743,000 79,281,000 793,000
2024 188,607,000 1,886,000 81,660,000 817,000
2025 204,070,000 2,041,000 84,110,000 841,000
2026 220,802,000 2,208,000 86,633,000 866,000
2027 238,905,000 2,389,000 89,232,000 892,000
2028 258,492,000 2,585,000 91,909,000 919,000
2029 279,685,000 2,797,000 94,666,000 947,000
NPV: 2010 - 2029 (2)
$14,452,000 $7,862,000
(1) Based on actual 2007 sales, inflated by 8.2 or 3.0 percent
(2) Assumes 6.0 percent discount rate
As shown, if hotel sales continue to grow at the 8.2 percent annual growth rate demonstrated
over the past six years, it is estimated that the revenue generated by a 1.0 percent increase in the
local hotel tax rate could have an NPV of approximately $14.5 million over the 20-year period
from 2010 through 2029. If hotel sales growth moderates to 3.0 percent in future years, a 1.0
percent hotel tax increase could generate revenues with an NPV of approximately $7.9 million
over a 20-year period. The actual amount of project costs funded by these revenue streams
would depend on factors such as the required debt coverage ratio and other borrowing costs.
The State statutes regarding Auditorium Districts allow the districts to enact a tax of up to 5.0
percent in their respective communities. Based on the above analysis, a 5.0 percent hotel tax
could generate a 20-year NPV of $39 to $72 million. Therefore, it is possible that hotel taxes
could potentially fund 100 percent of project costs, based on preliminary cost estimates,
depending on required coverage ratios and other borrowing costs. However, it should be noted
that gaining political support for the formation of an Auditorium District may be more feasible if
the hotel tax rate is held below the maximum of 5.0 percent.
Feasibility Analysis of a New Sports and Event Complex in Coeur d’Alene
Funding Analysis
Page 119