Arena weighs on Wenatchee

4 free views left!

Wednesday, August 11, 2010

President, Town Toyota Center’s board

WENATCHEE — If residents of the nine municipalities that own Town Toyota Center don’t agree to share more of this events arena’s $41.8 million debt, Wenatchee’s residents, alone, could have to foot more than two-thirds of the bill.

That’s the way it’s looking now, as the deadline to refinance the debt looms, a state sales tax rebate earmarked for arena debt covers less than a third and the arena, itself, is expected to cover expenses, but not much more.

Both the city and the nine municipalities that form the arena’s Public Facilities District are scrambling.

“There are some potentially big implications of not funding the center,” Joe Jarvis, president of the arena’s all-volunteer board, said Tuesday. “You have potential bond defaults. It would definitely be a black eye for this community. People would wonder how viable this community is.”

The board last week recommended asking voters who live within the arena’s nine-municipality district to approve adding 0.2 percent to the sales tax on items purchased within the district.

The additional tax would cost each district resident about $33 extra per year, according to Wenatchee city estimates.

It would raise an estimated $3.6 million per year — enough to cover the arena’s anticipated $3 million in refinanced annual debt, plus extra the arena could bank for maintenance and capital improvements.

The district comprises the municipalities of Wenatchee, East Wenatchee, Cashmere, Entiat, Chelan, Rock Island, unincorporated Chelan and Douglas counties and the town of Waterville.

Jarvis said the board considered alternatives to the sales tax, but nothing else comes close to covering the debt.

The district needs to secure a revenue source to replace the arena’s existing debt, made up of short-term “bond-anticipation” notes, which expire in 2011.

City sources say the notes were the only financing source available following the Wall Street crash and ensuing recession in 2008, when the district needed to pay for the newly completed arena.

Next year, the district will seek conventional financing in the form of 20-year bonds to replace the notes.

To qualify, Jarvis said the district needs to show it has a revenue stream to cover the debt.

A “yes” vote on the sales tax proposal in February would spread the debt over the approximately 106,870 people who live in the arena district, plus everyone else who makes a purchase there.

A “no” vote means Wenatchee, as the district’s lead municipality, and its 31,120 residents go it virtually alone.

That could mean:

• The city would use its remaining non-voter-backed bonding authority of about $20 million to fund half the arena’s outstanding debt.

• The balance would come from the city’s general fund, which pays for all non-self-sustaining city services, including police and fire.

The City Council would decide how those services would be affected, if arena debt becomes a permanent addition to the city’s yearly budget.

Interest-only debt service this year is nearly $2.2 million. About $600,000 of that is expected to come from a state sales tax credit earmarked for arena debt. The remaining $1.6 million comes from city funds.

A refinanced debt would add principle to the yearly payments starting in 2012, boosting expected debt service to $3 million. The city’s share would be $2.4 million, after the state sales-tax rebate.

Some relief could come if the arena manages to make more money than it spends. This year, city officials say it’s on track to end the year $300,000 in the black.

As the recession receeds and consumer spending increases, the size of the state sales-tax rebate will also increase, taking further pressure off city finances.

For now, these are unknown contributors to a very real debt.

“It has the potential to be scary, yes,” said Mark Calhoun, Wenatchee finance director. “The sales tax option from the PFD (arena district) is the most viable to generate the amount of money needed.”

The sales tax proposal, which would be put to voters in February, must first be independently approved by each of the municipalities’ councils or commissions.

All ballots from all municipalities would be tallied together. It would pass with a simple majority — 50 percent plus one.

State law allows the arena district to propose a maximum 0.2 sales-tax increase to cover arena costs.

If arena-district voters approve a sales tax increase, Wenatchee will become only the second of some 24 public facilities districts statewide that collect the tax. The first is Spokane, which collects a 0.1 percent sales tax for its events center.

Christine Pratt: 665-1173

pratt@wenatcheeworld.com

Want to comment on this story? All Wenatchee World members are invited to comment on stories, by using the form below. Please know that we at wenatcheeworld.com hope our site is useful, entertaining and civil. So we'll delete comments that are obscene, abusive or way off topic. We appreciate it when readers use the "suggest removal" button to flag inappropriate comments. For more about interacting with the site, see our Use Policy.

Gator 2 years, 9 months ago

"Joe Jarvis, president of the arena’s all-volunteer board, said Tuesday. “You have potential bond defaults. It would definitely be a black eye for this community. People would wonder how viable this community is.” . Seriously??? The "community" never voted to approve this in the first place!!!
. But of course, if this tax is voted down, then the Powers That Be will rush to blame the citizens of this community for not pitching in... .

This article reminds me of a lecture from my mom. Especially the times when I got blamed for something my brother did. .

TomyDear 2 years, 9 months ago

So, I'll admit right up front that I don't know why cities and counties let facilities like these be built with public funds. Is the city of Wenatchee one of the owners of the Town Toyota Center?

You'll never get me to "approve" a tax hike to pay for something like this. I believe this is something that should be owned by a person or corporation, and should not be built at public expense or risk.

That, of course, does not mean I won't have to pay the aforementioned tax hikes. But I'm not volunteering.

Doug_B 2 years, 9 months ago

This comment was removed by the site staff for violation of the usage agreement.

pruitt 2 years, 9 months ago

Pistonhead ~

I can't copy and paste, but here's a link to the previous story, sorry I didn't include it in this one originally: http://www.wenatcheeworld.com/news/20...

~ Brianne Pruitt, Web editor The Wenatchee World

Philosoraptor 2 years, 9 months ago

I think Brianne is trolling ಠ_ಠ

WenatcheeResident 2 years, 9 months ago

Maybe I am reading this wrong so maybe someone here can correct me.

** "The sales tax proposal, which would be put to voters in February, must first be independently approved by each of the municipalities’ councils or commissions.

All ballots from all municipalities would be tallied together. It would pass with a simple majority — 50 percent plus one." **

So if Wenatchee does not want to be stuck with the whole tab if they all vote YES and the other areas in the PFD don't get enough NO votes to offset it will pass? So Wenatchee could vote to increase the taxes for all the other municipalities???

2 years, 9 months ago

Explain to me again why I should be taxed for something done in another county and city by a group of idiots I don't even get to vote against? Sorry but my vote will be no if it comes to a vote. I do support the center by going to events that interest me, but that should be where my support ends.

whyarealltheusernamestaken 2 years, 9 months ago

How can you tax Douglas county residents for something they couldn't vote for or against? We don't have representatives to speak on our behalf... taxation without representation anyone? If any other business in the valley was doing badly in sales, they can't request a county wide tax increase for a financial boost. Why should TTC be any different?

WenatcheeCitizen 2 years, 9 months ago

The city can't pay for our fire department to have a decent station where they don't inhale exhaust fumes and asbestos on a regular basis but it sure as heck will be expected to pay for the TTC. This is an atrocity. Someone needs to get their priorities straight.

Anon, I think the "how" they can tax us is by being required to put this to a public vote. A right we must be sure to exercise in February.
. A "guilt-trip" article in the local paper will certainly not sway my NO vote. .

BTW, are Joe Jarvis and Mark Calhoun identical twins? Or are they actually the same person trying to screw up the TTC bottom line from two different positions? .

wenbr 2 years, 9 months ago

This thing has been a disaster from the very beginning. All the warning signs were there & our "leaders" weren't smart enough to recognize them.

Annsboy 2 years, 9 months ago

Correct me if I'm wrong but isn't the Pybus market another one of these tax payer funded white elephants? When are our leaders going to understand their role is not to be business people, risking tax monies for possible returns, that is the sole, IMO role of business owners and why they should be rewarded well for sucess and punished for failure. (read, lower taxes so they are not punished for sucess) Time to punish some elected officials next trip through the election cycle. Too bad we can't stick them for the bill on this one.

Complaining 2 years, 9 months ago

So I'm sure they are going to force this on us taxpayers no matter what we actually vote for or against. Does that mean we get to attend the events for free beings we are already paying for it? Why can't Town Toyota pay for this dead horse the city is beating us with? It's their name on the building, not mine! I'm sure with all the property he has sucked up in the past couple years, he can just dump more into the Center. If someone is actually held accountable for it, maybe it would do better????

Complaining, I agree. This reminds me a little bit of a debate we had when I was at school at WSU. The opening and maintenance of the new "REC" center (basically a really nice gym) was criticized by many students because EVERY student had to pay for the REC center in the form a mandatory fee tacked on to tuition.
. In my mind, however, the REC center was justified for two reasons: #1 - the fee was put to a student vote before the REC center was ever built, and #2 - every student had unlimited use of the REC center. . So, basically, the TTC is the REC center, except we didn't get to vote on whether it should have been built or not, and we don't get to use it. .

lonedog3 2 years, 9 months ago

how many of the people remember the open meetings where the people spoke out about this center? what happened? the mayor of wenatchee blew off the people and signed the checke to put in debt over it's head. Now if the people will pay very close attition he is doing the exact same thing, with public tax money, with PYBUS! Remember also the promise that this center would never cause taxes to be raised. Now the mayor of wenatchee wants to not only raise the citizens of wenatchee's taxes to bail him out but he wants to suck all of the surrounding communities down with him. Our mayors didnt vote yes for this center nor did our county commishioners. Mayor Johnson and his staff are the ones responsible and should be held accountable for the failure of this center. The writing was on the wall before the wall was even built Mr. Johnson! Everyone saw it but you and you went forward. Now you need to deal with it and I don't think you will get a lot of support from the people in passing this tax increase.

starpower 2 years, 9 months ago

Time to run Dennis Johnson and second in command Allision Williams out of city hall. They are both running this town into the ground. I worked at town toyota center; I'm voting NO if were ever given a chance to vote on this.

Dixie 2 years, 9 months ago

Brundage 2 years, 9 months ago

OK... Now, when one decides if such projects "pay for themselves" what does that mean? No. NOT a dumb question. Here's why. If you are THE owner and spend a million on a facility that will cost 100,000 to operate each year, you must bring in MORE than 100,000 a year PLUS enough to pay off the million it cost to build.

But in public ownership, (like the center) it is not enough to consider only that line of thought. Does the activity the facility creates, generate enough additional spending through the communities to make up for the building cost? In this case, does a citizen get $33 worth of value in a year?

MANY people WiLL believe they over-all benefit to the local economy is worth it.

It issomethjing voters should have a chance to make the decision.

The center is not making the money to cover current expenses so how can that make it a plus to the economy of the city overall? Right now this center is nothing more than a severe drain on the city economy and city hall has already tossed out the statement and it appears mr. Jarvis made this statement " The balance would come from the city’s general fund, which pays for all non-self-sustaining city services, including police and fire." So already they are threatning the citizens with cutbacks in police and fire services. Pretty sad when the people that made the decision to foolishly risk it all with at best risky financing blackmail the people in order to get their bond passed. I hope the people are smarter than to fall for that!.

BREWMAN 2 years, 9 months ago

I will pay! 33$ a year for all the fun I have had there.... bring it!

Wow 1 out of 40 not bad.. I still vote NO.

steph 2 years, 9 months ago

David 123 has some excellent points. Privatize the building and sell stock. It could work. Of course, the building is worth less than the City of Wenatchee paid for it, so they would have to eat some of the cost in the city budget, but that would be their cost for being so dumb in the first place. The rest of us shareholders, 10,000 people lets say, could pony up $2,500 each and forever own the TTC. All the operations would have to covered but it sounds like they already are. The surplus could be given back in dividends yearly!

If the people of Wenatchee were really smart, they would all vote YES on a ballot measure and snare all the rest of us!!

SumGuy 2 years, 9 months ago

Scott, is that how good government works? Is this fair? They tell us what is good for us? We elect them, we tell them we don't want to build an arena, they build it without a public vote, then they want us to vote to tax ourselves to pay for something we didn't want in the first place. They lied to us! This doesn't bother you? The end justifies the means?

The low income family that doesn't have entertainment money to go to the arena is suppose to pay for it? The low income elderly in the community who don't have entertainment money to go to the arena are suppose to pay for it?

This issue is dividing Wenatchee, is that what good government does? Divide people?

Looking at all the acts passing by this area this fall, I don't understand why some of these are not being booked. I am looking at the Puyallup Fair (www.thefair.com/concerts) concert schedule. Why couldn't they book a few of those acts for the TTC. I would see Willie, Billy or Dierks or even Heart.

SPORTSNUT 2 years, 9 months ago

I shouldn't be, but am surprised at how the World will print anything. We don't care, and wont pay the tax. Close the place and see if we care. Tired of the lies and B.S. coming out of the TTC and the mayors office. if the TTC expects voters to pay the bill. Then we should bea able to decide who and what comes to the TTC. Yes, I know they send out an online survey. But that should only be available to registered voters. Not to anyone who has an internet connection.

RonD 2 years, 9 months ago

Yeah this is LAME!!

Actually Bond, if they would fill out the calander they wouldn't need a handout, also Wenatchee wouldn't be begging everyone else to dig them out of their problem. I do support the TTC. I am a season ticket holder for the Wild, I have paid and attended Cats, Loggins & Messina, and the Globetrotters. I will only support the TTC with my money if they have something that interests me. Of course everything that they bring in does not interest me, nor will what I like interest everyone else. My point being that they must bring in the entertainment to get money. Being a resident of E. Wenatchee, I have no say or vote in the politics of Wenatchee, soooo Wenatchee, you are on your own. My vote is still no.

Just hire someone who knows how to schedule more events.

NotaHomer 2 years, 9 months ago

Quotes from the side margin:

"The big-name concerts there, including Merle Haggard and LeAnn Rimes, have been unprecedented in Wenatchee." ~~~ Big names? More like Old Names.

"Monster trucks and motorcycle super-cross events have sold out." ~~~ When I was at these you could have sat anywhere you wanted and had 5 seats next to you vacant. Sold out...wow I didn't see that.

whatnow 2 years, 9 months ago

NO....follow the money, some people made a lot of dough on this fiasco. Go to the very beginning and see who decided this was a good idea at this PLACE and time.

girlfawkes 2 years, 9 months ago

"You have potential bond defaults. It would definitely be a black eye for this community. People would wonder how viable this community is.”

When you are sick do you pay for medication, or spend that money on the movies? When you have only 100 bucks left in the account for the week and the fridge is empty, do you buy a new outfit, or groceries? So the city defaults, it's not the end of the world. People and communities not being financially "viable" is the new reality. The structure should never have been built, period. The surrounding communities (read: taxpayers) had no say and so they should have no culpability. If essential infrastructure VS entertainment is really the issue here, make this building part of the infrastructure. New high school, anyone?

"whyarealltheusernamestaken (Anon ymous) says... Just hire someone who knows how to schedule more events."

Good idea however the management at TTC have already gone on record stating they don't want to be "promoters" they want to just rent it to the promoters and have the promoters take the risk and reward........

HOW IS THAT WORKING FOR YOU?

The arena will NEVER generate income of $2,000,000+ that will be needed to cover the bonds ($3,000,000+ in the near future).

What we need is to hit the PFD over the head and say NO increase in sales tax!
Think outside the box for once in your lives! Sell stock in the TTC. Put a tax on hotels/motels/car rentals paid for by visitors. Charge for parking at the TTC. Hire a company that has PROVEN EXPERIENCE to run the TTC to maximize profits. Book more entertainment so that it is not dark 250-300+ days a year.

So many ideas that will all help the bottom line but the PFD just wants to take the easy way out by raising a regressive tax! Why not lets just make sure the poor and elderly are taxed the most for something they can't afford to use!

Dear Mr. Ribbs: I find it very sad that you have to resort to the "blackmailing "of the people to get them to approve this absurd tax increase. There are a lot of ways that the Wenatchee leaders can cut budgewts before they ever have to cut police or fire services. Let's look at the PYBUS debacle that The same people that brought us the arena have tax money earmarked for. Johnson and crew KNEw that the white elephand center was failing and in default before they agreed to spend more money on PYBUS, (whice has also shown no possible way to make money). What the communities that are involved in the dennis johnson financial nightmare need to do now is pullout! It is time the citizens of wenatchee step up and hold those involved accountable. As has been said by many, this venture was doomed from the start and the city leaders should never haveinvested the publics tax money in such risky financial dealings. So please let's leave the "blackmail" threats of no police or fire services if we fail to pass this bond.

Lolipop 2 years, 9 months ago

What ever happen to the White Elephant Arena Cheer Leader Linda Haglund??? Remember she was going to make the Arena profitable. http://www.wenatcheeworld.com/news/20...

Piston,

The $2-3 million dollars has to come from somewhere and they really don't have a choice but to do things like charge for parking. No matter what happens here there will either be one BIG sales tax increase or there will have to be 50+ little revenue generating (some taxes) options that go into effect. The sales tax hike was just the easy way out. When that is voted down be hopeful they don't charge you for the air you breathe when you are at an event.

GailG 2 years, 9 months ago

It will be terrible if the school district has a levy or bond on the same ballot as the Arena, causing them both to go down. It will unfairly cause a credibility issue with all taxing agencies. What a shame. We all saw this coming.

NorthCentralCitizen 2 years, 9 months ago

I think it's reasonable that the City and Toyota Center management didn't see the economic crisis coming. However, I'll always question the area's need for a center. Why was the decision initially made? Look at the customer population. Anyone too far east or south of the Wenatchee area will just go to Spokane. Anyone too west will probably go to Tacoma/Seattle. So that just leaves the immediate Wenatchee vally and north. And this is not exactly a high income valley. I'm puzzled how they thought our low income area could support a facility like that. I love the arena, but it just didn't make sense in my opinion.

In retrospect, I think the original plan worked perfectly. Some people made a lot of money from this fiasco. We taxpayers are left paying for it. The Pybus thing will make a lot of money for some people, and we taxpayers will pay for that too.

k_lee413 2 years, 9 months ago

Ummm...has anyone thought of writing president Obama? Maybe he could pay for this? He's signing blank checks left and right these days. Seriously though? This is really concerning for a fairly large group of residents, what is the plan? I see all that you are writing and all I see is a lot of finger pointing with only a few suggestions to make the situation better. The fact of the matter is that we have terrible representation in Wenatchee and as it applies to the board of the Arena. They are taking the easy road, I totally agree, the thing is that they should have been crunching numbers way back when because this was bound to be an issue. While everyone is patting themselves on the back for a job well done there is this monster escaping from the closet and no one noticed until...what..a few weeks ago? good grief ! Book more events, charge for parking as it applies to the events, reduce staffing as there seems to be alot of butt sitting and scratching. Increasing taxes on area residents is a sure way to really tick a good majority of the people off. We are overburdened as it is. Besides $33.00 doesn't seem like a lot, but that may mean for some people that they go to one or two less events every year...how does that help the situation? Dixie, you really need to get your terms straight before you post, if you haven't had the opportunity I suggest that you look up tea bagging, make sure you have taken your meds before hand tho. T-E-A P-A-R-T-Y, that is the republican movement. We want less government, less taxes, I should be able to decide where my $$ goes and why. It's a great concept, really. Try it, you might like it.

Sign in to comment

Or login with:

OpenID