Town Toyota Center Owners Have RUn Out of Options for paying Down Debt

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.


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