Nearly a decade later, stakeholders say Pinnacle Bank Arena is smashing success, but debt still looms

10/11 Investigates finances behind Pinnacle Bank Arena, outstanding debt
Published: Aug. 24, 2022 at 6:47 PM CDT
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LINCOLN, Neb. (KOLN) - For nine years, the Pinnacle Bank Arena has been a destination in Lincoln.

“The Pinnacle Bank Arena has been an amazing project,” Tom Lorenz, PBA Manager said.

The arena has hosted some of music’s biggest names, set the stage for graduates and transformed into a mass vaccination site to combat COVID-19.

“I personally think it’s lived up to every expectation and more,” Jeff Maul, executive director for the Lincoln Convention and Visitors Bureau said.

Lorenz said except for the COVID years, PBA has had about 750,000 visitors a year, sold 1.5 million tickets and brought in more than $100 million in revenue from ticket sales alone.

“We certainly had large expectations and I think it’s met all of those expectations and exceeded them,” Lorenz said. Not just us but the economic impact its had in the area with the growth in the Railyard and the Haymarket.”

But the city, and tax payers, are still footing the bill and will be for at least two decades.

In 2010, 56% of voters approved the creation of the West Haymarket Joint Public Agency which allowed the city to take out $300 million in bonds and use a new occupation tax on businesses like restaurants, bars and hotels to pay off the debt.

On top of building the arena, the JPA paid for moving BNSF Railroad tracks paving the way for privately funded hotels, the Railyard and more.

“I’m really pleased with how the project has turned out,” Dan Marvin, Urban Development Director for the City of Lincoln said. “We’ve probably accomplished more than what we even told voters we could.”

The occupation tax is also bringing in far more than projected. A chart provided by the city shows in 2021, the tax brought in about $15 million and is projected to bring in just under $20 million in 2022. The city finance director said they didn’t think they’d bring in $20 million in a year until 2036. So far the tax has gone toward paying off $191.4 million of the debt, but an additional $504 million has to be paid by 2024. That includes nearly $200 million in interest.

This chart, provided by the city finance office, shows revenue from the occupation tax is...
This chart, provided by the city finance office, shows revenue from the occupation tax is bringing in significantly more than projected.(City of Lincoln)

“Any time you ask the tax payers to dole out additional dollars from their bottom line revenues that’s a hard adjustment. It’s a hard change,” Maul said. “But I think the economic impact this has had on all of us; It’s increased sales tax revenues for the city, it’s increased lodging tax revenues, it’s bringing in new visitors to our community.”

10/11 NOW was unable to obtain an official economic impact study done on Pinnacle Bank Arena, but did request data showing the amount of sales tax and lodging tax brought in over the last decade. On average, since 2013 the amount the city is collecting from sales taxes has risen 5 percent annually. The amount of lodging taxes collected by the city, has on average risen 10 percent each year since the arena opened. Though neither the city nor county would tie those increases to the Pinnacle Bank Arena entirely.

But stakeholders say it’s paying off and that Pinnacle Bank Arena will continue to bring in crowds, re-invent itself and re-invent Lincoln.

“It’s created a sea change that has ripple effects in the skyscraper you see in that area, the other development in the Haymarket, the housing that’s come in,” Marvin said. “Much of that is a result of the Pinnacle Bank Arena transforming the entire downtown.”