WENATCHEE — A loan backed by the city of Wenatchee will allow Town Toyota Center to keep its kitchen and concessions equipment.

The City Council on Thursday agreed to back a loan for $586,000 to buy the equipment, which is needed to provide food and beverage service during events at the 4,300-seat arena.

The loan will be in the form of a lease-to-own agreement between Wyatt Leasing of Cashmere and the Public Facilities District, a league of nine regional cities, counties and towns that own the arena.

Wenatchee is the leading member of the district and the only member on the hook to cover arena deficits.

According to the lease contract approved Thursday, lease payments wouldn't exceed $8,000 per month for 72 to 84 months at a maximum interest rate of 5.5 percent.

"This is a very competitive deal," Allison Williams, the city's executive services director, told the council. "The kitchen equipment is critical for the facility."

She said other potential leasing firms had interest rates that approached 10 percent.

Revenue from arena concessions, expected to be $160,000 this year, will cover the monthly lease payments, she said.

Williams said that lenders wouldn't extend credit without city backing, because the Public Facilities District hasn't been in business long enough to qualify for the loan.

The arena began operation in October 2008. The district has only recently completed its first state audit. Results should be released to the public next month.

Recessionary credit restrictions have made other forms of financing impossible, Williams has said.

All the kitchen equipment, down to the forks and knives, is currently owned by the venue's former management company, Global Entertainment of Tempe, Ariz.

The district fired Global in June, after a review of arena books by Wenatchee city staff showed the venue appeared set to lose some $130,000 this year, despite expectations to break even or show a modest profit. The city also questioned Global's accounting practices.

Global's last day of arena management was Sept. 3.

Responding to council inquires, Williams and Joe Jarvis, president of the Public Facilities District board, said they couldn't think of any other arena business that would urgently require the city's financial backing.

Williams said city staff are currently doing a financial analysis of the arena.

"I think we're all anxious to see the budget and wish to minimize surprises," Mayor Dennis Johnson said.

"That's our wish, too," Jarvis said.

Christine Pratt: 665-1173

pratt@wenatcheeworld.com