March 10, 2011
Owners of the Town Toyota Center appear to have only one viable option for paying down the arena's 41 million dollar construction debt but it could spell financial doom for the City of Wenatchee. Members of the Public Facility District board of directors received a sobering report from their bond counsel and financial underwriter yesterday and their message was, Its time to pay the piper. As background . . . The current short-term, interest-only bond anticipation note is set to expire on Dec. 1. Before that, the PFD and its lead member, the city of Wenatchee, must find a way to refinance and pay for it. The City currently pays the 1.6 million dollar annual interest payments under a contingent loan agreement with the PFD. The arena is currently operating in the black but it can't pay for itself. At their Wednesday meeting PFD members were advised by their financial attorneys that due to the current tight economy extending the interest-only note would be extremely difficult. Their recommendation is for the PFD to issue the long term bonds and sign a new contingent loan agreement with the City. If thats the option, without a viable funding mechanism in place to meet debt payment, the City could be responsible for up to 3 million dollars in annual debt payments. It appears the plan recommended by the PFD board last year to ask voters for a .2 percent sales tax increase will now have to be pursued. Jarvis still supports that proposal as the least painful albeit politically unpopular option Several City Council members attended the meeting. Afterwards Four of them shared their thoughts on the gravity of the situation and their fears of what it could mean for the City's financial future . . Councilman Mark Coulaas... ***CLICK ICON FOR AUDIO** The City and the PFD will likely decide on a course of action starting with a new contingent loan agreement within the next month.