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Commissioners want game plan from Wenatchee before approving vote on TTC tax increase

Originally published January 31, 2012 at 8:22 a.m., updated January 31, 2012 at 9:07 a.m.

WENATCHEE — Chelan and Douglas County commissioners want to see a clear plan of what a 0.2-percent sales tax will pay for before they approve a public vote that could save the Town Toyota Center.

Commissioners from both counties met in executive session Monday to hammer out points they need from the city of Wenatchee before putting a sales tax increase before voters next April. The session Monday followed a lengthy discussion between the six commissioners, attorneys and Wenatchee Mayor Frank Kuntz.

Investors seek extension of lawsuit window

By Michelle McNiel

World staff writer

WENATCHEE — Investors holding about one-third of the Town Toyota Center’s outstanding debt have asked the arena’s owner and nine local governments to waive the statute of limitations for being sued.

The Denver-based law firm of Davis & Ceriani sent letters and e-mails Monday to the Greater Wenatchee Regional Events Center Public Facilities District seeking the extension by Feb. 29.

The law firm sent similar letters to the mayors and county commissioners of the nine local governments that are members of the PFD. They are Chelan and Douglas counties, the cities of Wenatchee, East Wenatchee, Cashmere, Entiat, Chelan and Rock Island, and the town of Waterville.

If they do not sign the agreement, the letter states that the bondholders will pursue legal action.

The letter also stated the bondholder group wanted a face-to-face meeting with PFD representatives as quickly as possible. All communication between the district and that group of bondholders has either been in writing or by phone.

The law firm represents investors who hold nearly $13 million of the arena’s $41.8 million debt, which went into default on Dec. 1.

The firm first wrote the PFD last October demanding full repayment of the investment on Dec. 1. However, the firm wrote another letter in November saying the investors were “encouraged” by local efforts to find a way to pay off the debt. In that letter, dated Nov. 10, the firm stated that it would be seeking a an extension with the PFD.

This week’s letter only sought such an agreement with the PFD, and not with the nine governments that make up the PFD.

The PFD and the city of Wenatchee have already secured similar agreements — which keep the legal door open for lawsuits — with Piper Jaffray, the underwriter of the Town Toyota Center bonds; and K&L Gates and Foster Pepper, which have served as bond counsel for the arena board.

Michelle McNiel: 664-7152

mcniel@wenatcheeworld.com

The two counties are part of the nine-member Greater Wenatchee Regional Event Center Public Facilities District that owns the financially troubled center. Governments of Cashmere, Entiat and Rock Island have taken steps toward a vote on the tax. All nine have to agree before the issue could be put to a public vote without state legislative action. All nine allowed state taxes from their areas to be used for an arena in 2008, but only Wenatchee promised financial backing if the arena could not support itself. It can’t, but Kuntz said the city can’t support it on its own. The center’s $42 million debt went into default Dec. 1.

“Every meeting we’ve been to, there has been some new revelation that we hadn’t heard before. It’s been a moving target,” said Chelan County Commissioner Doug England. England said he wants to see a firm plan before agreeing to ask voters to decide.

Commissioners on both sides of the Columbia River echoed the sentiment, hoping to put pressure on Wenatchee officials to give them something solid to take to voters, including a provision to keep the center open.

“How do you sell a pig in a poke if the building is closed,” said Ken Stanton, Douglas County commissioner. If it closed before a tax rescue could be put before voters, “that would be the death knell,” he said.

Stanton said Douglas County commissioners agree it’s in the best interest of the county to support the center, but they want to see Wenatchee take major responsibility for developing a workable plan. Support in helping pay for the center will in the long run be cheaper than paying for lawsuits that will come if the debt isn’t paid, he said.

“Until Wenatchee steps up to the plate and is open and up front, I’m not in a hurry to make a decision,” said Douglas County Commission Dale Snyder. A clear plan to raise how much money and how it will be spent is also needed to convince state legislators who may need to pass or amend regulations to allow the election and financial support, he said. Some commissioners from the two counties are planning to travel to Olympia Thursday. At least two pieces of legislation concerning the center are now working their way through the system.

Kuntz said the city wants to be as up front as possible but said there are stumbling blocks to every plan the city has looked at to pay off the center’s $42 million debt and none guarantee that the center will stay open.

“We are in a difficult spot. We can’t do this alone,” Kuntz said. All plans are to keep the building open through the Wenatchee Wild hockey season through March, and maybe longer if the Wild make it to the playoff season, he said. The Wild are the ice arena’s main tenant.

“If we can’t come up with a funding solution by April 30, then we may not be able to keep it open,” he said. “I don’t see how the city can keep it open without all nine of the entities signing on to some kind of tax.” Kuntz said he believes there’s a 95 percent chance that a 0.2-percent tax from all of the enties would provide enough money to keep the center going while paying back most of the debt, “but we can’t guarantee that because no one can predict what will happen with bond and interest rates next year.” The city could not raise enough money if it was the only entity to pass the tax, he said.

Both counties will have representatives at a meeting of the Public Facility District Wednesday, said Ron Walter, Chelan County Commission chairman, after the executive session.

“Both Chelan and Douglas counties hope to come out of that meeting with a decisive path to move forward,” he said.

Rick Steigmeyer: 664-7151

steigmeyer@wenatcheeworld.com

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lonedog3     1 year, 3 months ago

the main question is how do we, the tax payer, trust anything the city says when up to this date they have been very sneaky and untrustworthy? What assurances do we have that the City of Wenatchee will not come back in a year or two begging for more since anyone with any sense realizes that .02 will not cover the full intrest let alone the principle OR the upkeep on the property. I hope our Douglas County Commissioners toe the line and insure there is a defualt clause in any agreement for the City of Wenatchee to receive any more tax money from us. Court proceedings to prove that the County is not responsible for the City of Wenatchee's debt will be ALOT cheaper than the financial drain this WEA will have on our economy in the future.The .02 % tax increase would much better benefit the budget for Douglas County and I would much rather see it go there than to be drained into a sinking money pit.

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hemphill     1 year, 3 months ago

We've updated the story. Thanks for the heads-up. — Russ Hemphill, city editor

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douglas     1 year, 3 months ago

And Rock Island used the Cashmere model for their "approval".

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yankie     1 year, 3 months ago

The Town Toyota Center was something that most of us knew couldn't support itself from day one but, the Mayor just had to have it... Mill Bay Casino has all the good shows so why go to the arena ( I don't go to either one ) Then Tacoma Dome has huge shows, Spokane too. Wenatchee is not a huge place like they are but for some reason the elected officials are trying to make it look like it is...All the smoke and mirrors are not going to make it into one. The mayor of East Wenatchee also wanted an arena remember but instead had a fit till he put East Wenatchee in the red for those little boats... We got rid of the county commissioners ( still one to go )who thought they could do anything they wanted...The Round about for one, It's time to clean up our towns and make them realize they work for the people.

1

NOLIBHERE     1 year, 3 months ago

I wonder where Id be with no TTC..Enjoy Walt and the wild from time to time.Other than that it dosen't trip my trigger.Most of the other events could have been at the convention center.Went to see Weird Al there, very comfortable venue and seems the right size for the Wenatchee Market.

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Seven     1 year, 3 months ago

Mill Bay competes against the TTC by way of bidding for the shows, and they have more tribal $$ than us...cuz we have $0....so there isnt high % that we can win that bidding war. Mark Miller spoke about that at a meeting and described the bidding process.

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davebugg     1 year, 3 months ago

It isn't just a bidding process between Mill Bay vs the White Elephant Arena. Many shows at Mill Bay are part of a contract agreement package with other casinos in Washington Stae. In other words, an act who is signed to perform at, say, the Emerald Queen Casino, may be obligated by that contract to also perform at Mill Bay Casino.

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lonedog3     1 year, 3 months ago

That would be interesting to reed the entire transcript of that conversation. That would add an etirely different theme to the City of Wenatchee's WEA fiasco and how they intend to keep sucking in more and more of our tax money.

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JMark     1 year, 3 months ago

If we vote on this are all the votes added up and the majority wins or do all of the entities have to agree before it passes?

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lonedog3     1 year, 3 months ago

Who is there to trust and insure that wenatchee pays back anything? So far they have been sneaky and not forthcoming to the people.

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jamesshank     1 year, 3 months ago

I am from Moses Lake, many of us come to Wenatchee to play hockey in the off season (ours is an outdoor rink) and various tournaments in the winter; as well as go to Wild games. When we come we eat, shop and buy gas. My family alone has spent at least $500 at the Olive Garden alone this past year. Add the other families that go and I am sure our bill combined would be over $2000 at the Olive Garden alone just this past year. We hear that East Wenatchee is opposed to help with financing this awesome facility. If that is true, then East Wenatchee would lose out on revenue because we'd take our business elsewhere. Please reconsider and keep the rink open and available to all who are drawn to the great communities of the Wenatchee Valley. Thanks for listening.

http://www.wenatcheeworld.com/users/photos/2012/feb/01/119646/

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davebugg     1 year, 3 months ago

Why not extend the sales tax increase to Moses Lake residents as well, or to those of Bothell, or Walla Walla? They have as much to do as did East Wenatchee in conceptualizing the White Elephant Arena, approving the plan for the White Elephant Arena, implementing the plan for the White Elephant Arena, or agreeing to take on the debt for the White Elephant Arena.

Overall, it will not be the tax issue that will close down the White Elephant Arena, it will be the lack of people attending events. Obviously, there are not enough people attending these events from Moses Lake or elsewhere to cover the costs of the overhead, much less the mortgage.

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