WENATCHEE — The Town Toyota Center’s governing board has agreed to pay a $20,000 fine to settle a federal investigation into its financial debacle.
The board voted on Monday to sign a settlement agreement with the federal Securities and Exchange Commission, as well as the arena’s builder, Rick Kozuback, Global Entertainment and Allison Williams, executive services director for the city of Wenatchee.
The Wenatchee City Council is expected to sign the agreement on Thursday.As part of the settlement, Kozuback and Global will each pay $10,000. Williams will not be fined.
A document released today by the arena’s attorney, Pete Fraley, includes the official order the SEC is expected to issue in the next week or two.
The federal investigation concluded that Williams, Kozuback, Global and the Greater Wenatchee Regional Events Center Public Facilities District (PFD), which owns the arena, knowingly gave false and misleading information to potential investors before the sale of nearly $42 million in bonds to pay for the arena’s construction.
The arena did not meet the revenue projections and was unable to pay off the short-term debt, which went into default in December 2011. The SEC launched its investigation the same month.
The default plunged the region into financial and political turmoil, threatening the PFD and city of Wenatchee will possible bankruptcy. It caused tension between the leaders of the nine cities and counties that make up the PFD, who eventually all agreed to allow a public vote on a regional tax hike to pay off the debt.
The debt was refinanced into long-term bonds in September 2012.As part of the settlement agreement, Fraley said the PFD neither admits or denies wrongdoing.
The arena board today also agreed to pay the city of Wenatchee $25,000 and Williams up to $5,000 for legal costs they incurred because of the SEC investigation.
“We expect this to be the end of it,” Fraley said after the meeting. “This is the final chapter.”
“We are glad to have this behind us,” said Kuntz, a member of the arena’s board. “I think a lot of people have learned a lot over the last two years.”
Check back tomorrow for a more detailed accounting of the the SEC findings.