Council to arena advisers: ‘You make this go away for us’
Friday, August 10, 2012
WENATCHEE — The dollar amount may not seem like enough, but some City Council members say a financial settlement they approved Thursday over the Town Toyota Center should pay off in other ways.
In the settlement, bond underwriter Piper Jaffray, legal firms K&L Gates and Foster Pepper, and bond attorney Nancy Naraas will cover the majority of the costs of refinancing the arena’s nearly $42 million debt, which could amount to nearly $700,000.
But more importantly, councilmembers said, Piper Jaffray must put together a plan to pay off the debt using only revenues from a 0.2-percent sales tax in the city of Wenatchee and a 0.1-percent regional sales tax. If all goes well, the city will pay nothing toward the refinancing and, within a couple of years, will not be paying any more money to the arena.
“The issue is not about dollar amounts,” said Councilman Tony Veeder. “Yes, they put us in a bad way. But we are saying we will relieve them of any litigation if they make it right. Piper Jaffray needs to make this refinancing happen, even if it means they will have to buy some of the bonds themselves.”
“We told them, ‘You make this go away for us,’” Veeder said.
The unanimous vote makes Wenatchee the last of the parties to approve the settlement. The Greater Wenatchee Regional Events Center board of directors voted for it last Friday. The attorneys’ firms and Piper Jaffray have also agreed to it.
In addition to laying out what the bond underwriter and attorneys will either pay or services provide for free or a reduced cost, the settlement also lays out a schedule for getting new bonds to market. The bond attorneys will talk with rating agencies next week to try and get a good investment rating for the bonds. The bonds will likely be offered for sale in about a month.
The city also agreed to provide up to a $500,000 loan to the arena to help keep it operating while the refinancing is being worked out.
The agreement also amends an agreement with eight other cities and counties that make up the facilities district. In the amendment, the city no longer pledges its full faith and credit to financially back to the arena.
Roy Koegen, the city’s bond attorney, said that “after a very painful 18 months to two years, we’re at a place now where we think we can get this put behind the city, that the community can move forward. We know what the city’s obligation will be.”
Councilman Mark Kulaas, who voted against building the arena, said he has mixed feelings about the settlement agreement. He believes the bond underwriters and attorneys who advised the city should bear a greater financial burden in fixing the problem.
“I remain very frustrated,” he said. “My heart says no, it’s not enough. But my practical part — my head — says we’ve got to move on. ... Our city has been neutered by all this. We are not the dynamic city we were once were.”
But, he added, “This agreement tonight seems to set us on a path for healing. ... At some point we just have to say enough is enough.”
“It’s about getting out of the tailspin we’ve been in,” Veeder said.
Councilwoman Karen Rutherford said that the settlement agreement was worked out by the public facilities district board, which has representatives from all nine partners.
“I feel good about that,” she said.
Kulaas said Wenatchee promised the other PFD members, when they agreed to allow a public vote on a regional sales tax earlier this year, that the city would help keep the arena financially viable through the refinancing and that they would go after the those entities that advised them through the originally financing of the facility.
“What we did tonight was a fulfillment of those commitments,” he said. “We lived up to our promises. That’s a very important part, that we treated our partners with respect.”
Rutherford summed up her thoughts, saying, “Maybe it’s not the dollar amounts we would have liked. But it’s something you really can’t quantify: moving on.”
Michelle McNiel: 664-7152
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