Surrounding communities tell Wenatchee to pay for the arena itself
Friday, December 2, 2011
WENATCHEE — Officials from several local cities and counties say they should not be made to pay for the Town Toyota Center and presented Wenatchee leaders with a plan to shoulder the arena’s entire $42 million debt alone.
“It is the feeling of the seven of us ... that we do not feel any financial obligation to the indebtedness that is incurred,” Douglas County Commissioner Ken Stanton told the Wenatchee City Council on Thursday, speaking for his board as well as Chelan County commissioners and the Cashmere, Entiat, Chelan, Rock Island and Waterville councils.
“We fully support the city of Wenatchee in any endeaveor that will allow them to handle this debt,” he added.
The leaders are actively lobbying for changes in a bill before the state Legislature that would loan $42 million to pay off the arena’s debt.
But Rep. Mike Armstrong, R-Wenatchee, said today that the bill will not be changed.
“The bill is where it’s going to be,” he said. “We have to keep the punitive pieces in there. We don’t want this to look good to other municipalities. We want this to be an absolute last resort, one that nobody else would want to take on.”
The arena went into default Thursday when the Greater Wenatchee Regional Events Center Public Facilities District failed to pay off the short-term bond obligation.
Stanton said his board and other members of the PFD would like the state bill to only allow Wenatchee to increase its sales tax to pay for the arena. As it it currently written, the bill would allow all nine jurisdictions that make up the PFD — the seven that met Thursday as well as Wenatchee and East Wenatchee — to raise their sales tax independently and would allow the state to withhold sales tax revenues from them all if the loan is not repaid on time.
While the arena is owned by the PFD, Wenatchee is the only government that financially backed it. The others agreed to give up a portion of sales tax receipts collected in their jurisdictions to help pay for the arena.
Stanton presented a plan to the Wenatchee City Council for how the other jurisdictions would like the city to handle the entire debt.
The plan calls on the city to impose a 0.2-percent sales tax (if the bill passes) and bond against that and to sell an additional $18 million in bonds to be paid from the city’s general fund. If the PFD sells bonds backed by a state sales tax kickback, those proceeds combined with the city’s bonds could cover the entire debt, according to the plan presented by Stanton.
“I just want to readdress the fact that the other jurisdictions involved in the PFD were promised when this facility was sold to (us) that in no way would they be encumbered by any indebtedness, that the city of Wenatchee was fully responsible,” Stanton said.
East Wenatchee Mayor Steve Lacy, who did not attend the gathering of PFD member agencies earlier in the day, told the Wenatchee council members that he was keeping an open mind.
He said he would wait until his council was presented with a plan for helping out with the arena debt.
“I think I share the sentiment, generally, that Commissioner Stanton has expressed,” Lacy said. “However, I think my personal opinion is that I’ve always tended not to make decisions until I have specifics in front of me.”
He added, “I’m going to reserve absolutes at this point.”
Chelan City Councilman Stan Morse, who also did not attend the meeting earlier in the day, told Wenatchee officials that they should look elsewhere for help.
He urged them to bargain with bondholders to renegotiate the loan instead.
“I think if you push the legislation in Olympia, you will find the political repercussions will be severe and long-lasting,” he said. “You will tear the county apart. You will have communities that actually hate you. I don’t know if that’s the political price you want to pay.”
Wenatchee council members did not respond to the comments.
“None of us have a resolve this evening,” Mayor Dennis Johnson said.
After the meeting, Johnson gave The Wenatchee World a copy of the original interlocal agreement signed between the nine governments in 2006 with sections highlighted.
One section read that the governments agreed that there was a public benefit to their citizens in building the arena.
He also highlighted a section explaining that the PFD can seek a sales tax increase with approval of the nine member agencies.
In response to Stanton’s comments that the other governments would never to be asked to help out, Johnson said that nothing in the written agreement says that. Johnson also said that while he did personally promise the other officials that the city of Wenatchee would never ask them to pay for the arena, he said the PFD never made such a pledge.
“We haven’t asked any of them to pay money from their general funds,” he said. “But we never gave up the right of the PFD to ask for the tax.”
Stanton, contacted after the meeting for response to Johnson’s comments, said, “Mayor Johnson can pick and choose whatever he likes from the agreement. But if you look through it, you will see where the city of Wenatchee is responsible for every degree of decision making on that project. No other jurisdiction was involved in that.”
Stanton said the seven governments met earlier in the day to talk about whether they should protest the legislative bill.
No Wenatchee officials attended the meeting, however Mayor-elect Frank Kuntz did. Stanton said the group concluded that the best option was to let the bill continue, but lobby for changes to eliminate their cities and counties.
He said they are not worried that they would be held liable if bondholders sue to be paid back.
“We are all pretty confident that we could prevail and get out of any lawsuit,” he said. “But that’s going to take time and it’s going to take money. We would have a substantial financial commitment just to prevail.”
Michelle McNiel: 664-7152
mcniel@wenatcheeworld.com
“It is the feeling of the seven of us ... that we do not feel any financial obligation to the indebtedness that is incurred,” Douglas County Commissioner Ken Stanton told the Wenatchee City Council on Thursday, speaking for his board as well as Chelan County commissioners and the Cashmere, Entiat, Chelan, Rock Island and Waterville councils.
Douglas County Commissioner Ken Stanton
The leaders are actively lobbying for changes in a bill before the state Legislature that would loan $42 million to pay off the arena’s debt.
But Rep. Mike Armstrong, R-Wenatchee, said today that the bill will not be changed.
“The bill is where it’s going to be,” he said. “We have to keep the punitive pieces in there. We don’t want this to look good to other municipalities. We want this to be an absolute last resort, one that nobody else would want to take on.”
The arena went into default Thursday when the Greater Wenatchee Regional Events Center Public Facilities District failed to pay off the short-term bond obligation.
Stanton said his board and other members of the PFD would like the state bill to only allow Wenatchee to increase its sales tax to pay for the arena. As it it currently written, the bill would allow all nine jurisdictions that make up the PFD — the seven that met Thursday as well as Wenatchee and East Wenatchee — to raise their sales tax independently and would allow the state to withhold sales tax revenues from them all if the loan is not repaid on time.
While the arena is owned by the PFD, Wenatchee is the only government that financially backed it. The others agreed to give up a portion of sales tax receipts collected in their jurisdictions to help pay for the arena.
Stanton presented a plan to the Wenatchee City Council for how the other jurisdictions would like the city to handle the entire debt.
The plan calls on the city to impose a 0.2-percent sales tax (if the bill passes) and bond against that and to sell an additional $18 million in bonds to be paid from the city’s general fund. If the PFD sells bonds backed by a state sales tax kickback, those proceeds combined with the city’s bonds could cover the entire debt, according to the plan presented by Stanton.
“I just want to readdress the fact that the other jurisdictions involved in the PFD were promised when this facility was sold to (us) that in no way would they be encumbered by any indebtedness, that the city of Wenatchee was fully responsible,” Stanton said.
East Wenatchee Mayor Steve Lacy, who did not attend the gathering of PFD member agencies earlier in the day, told the Wenatchee council members that he was keeping an open mind.
East Wenatchee Mayor Steve Lacy.
“I think I share the sentiment, generally, that Commissioner Stanton has expressed,” Lacy said. “However, I think my personal opinion is that I’ve always tended not to make decisions until I have specifics in front of me.”
He added, “I’m going to reserve absolutes at this point.”
Chelan City Councilman Stan Morse, who also did not attend the meeting earlier in the day, told Wenatchee officials that they should look elsewhere for help.
He urged them to bargain with bondholders to renegotiate the loan instead.
“I think if you push the legislation in Olympia, you will find the political repercussions will be severe and long-lasting,” he said. “You will tear the county apart. You will have communities that actually hate you. I don’t know if that’s the political price you want to pay.”
Wenatchee council members did not respond to the comments.
“None of us have a resolve this evening,” Mayor Dennis Johnson said.
After the meeting, Johnson gave The Wenatchee World a copy of the original interlocal agreement signed between the nine governments in 2006 with sections highlighted.
One section read that the governments agreed that there was a public benefit to their citizens in building the arena.
He also highlighted a section explaining that the PFD can seek a sales tax increase with approval of the nine member agencies.
In response to Stanton’s comments that the other governments would never to be asked to help out, Johnson said that nothing in the written agreement says that. Johnson also said that while he did personally promise the other officials that the city of Wenatchee would never ask them to pay for the arena, he said the PFD never made such a pledge.
“We haven’t asked any of them to pay money from their general funds,” he said. “But we never gave up the right of the PFD to ask for the tax.”
Stanton, contacted after the meeting for response to Johnson’s comments, said, “Mayor Johnson can pick and choose whatever he likes from the agreement. But if you look through it, you will see where the city of Wenatchee is responsible for every degree of decision making on that project. No other jurisdiction was involved in that.”
Stanton said the seven governments met earlier in the day to talk about whether they should protest the legislative bill.
No Wenatchee officials attended the meeting, however Mayor-elect Frank Kuntz did. Stanton said the group concluded that the best option was to let the bill continue, but lobby for changes to eliminate their cities and counties.
He said they are not worried that they would be held liable if bondholders sue to be paid back.
“We are all pretty confident that we could prevail and get out of any lawsuit,” he said. “But that’s going to take time and it’s going to take money. We would have a substantial financial commitment just to prevail.”
Michelle McNiel: 664-7152
mcniel@wenatcheeworld.com
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