Develop a public financing plan for a new NBA arena in the city of Sacramento. The arena
Question:
Develop a public financing plan for a new NBA arena in the city of Sacramento. The arena will have a total cost of $350 million, and the public will finance 60% of the construction cost. Both the City of Sacramento and Sacramento County will participate in the financing of the arena. Devise a public financing plan that uses funds from at least three different sources.
case questions:
1. Determine the total amount that must be financed.
2. Determine which sources will be used and what changes to those sources must be made (e.g., raising hotel taxes 0.5%).
3. Determine the amount of financing that will be generated from each source. These amounts should sum to the total amount that must be financed.
4. Determine the timing: when money will be collected from each source and when it will be paid back. For instance, if a general obligation bond is used and it is paid for with an increase in hotel taxes, what is the annual payment necessary to pay it off?
5. Create a table showing the sources of financing, the total amount financed from each source, the annual payment amounts, and the time period of those payments.
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