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Sales tax is key to arena staying open

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WENATCHEE — The thermostat has been turned down and the lights are being shut off early these days at the Town Toyota Center. Now ticket sales for what is normally the arena’s best-selling show are sketchy.

The question on everyone’s minds these days is how long can the arena stay open under its current legal and financial constraints.

Arena Manager Mark Miller has been assuring ticket sellers that the arena is not going to close its doors. Wenatchee Wild owner Bill Stewart promised thousands of fans at a recent hockey game that the center was not closing and the team would not be leaving.

But how do they know? Officials from many of the nine governments that are being asked to help rescue the center from default are questioning out loud whether the facility will stay open and for how long.

The answer seems to hinge on whether a regional sales tax increase is approved by voters.

The two-tenths sales tax increase and building staying open go together,” Wenatchee Mayor Frank Kuntz said in an interview this week. “The city (of Wenatchee) can’t go it alone without help from the cities and counties. The city can’t afford the debt.”

The nine government entities that make up the Greater Wenatchee Regional Events Center Public Facilities District, which owns the arena, have been asked to allow a 0.2-percent sales tax increase to be posed to voters in April. All nine must agree before it can be placed on a ballot. If just one says no, the vote won’t happen.

Douglas County commissioners have said they may likely stop the vote.

I’ve been told (by Wenatchee officials) that I was going to be the one that turned the key on the Town Toyota Center … that closed the doors,” Douglas County Commissioner Steve Jenkins said this week. “I don’t take coercion very well.”

East Wenatchee Mayor Steve Lacy told the commissioners on Tuesday that if the nine entities ultimately decide not to pursue the tax increase, then they will be deciding that “we don’t care if it stays open.” That would result in the facility “being in mothballs,” he said.

I’m not so sure that’s a great thing, but it’s one eventuality,” he said.

If voters approved a sales tax increase, then the revenues would be used to sell bonds to pay off the majority of the arena’s outstanding $42 million debt, which went into default last month. Once the debt is taken care of, the PFD would no longer be paying out hundreds of thousands of dollars to attorneys, which will ease the current drain on its budget.

Without the legal bills and the debt, the arena’s operating expenses and revenues are breaking even.

For now, to cut costs, the arena has lowered the temperature in the community rink from 55 to 45 degrees, and is keeping the main ice rink at 55 degrees (rather than 68) except during Wild games. They are also turning off lights in the two facilities at 5 p.m. unless there is an event, and only security lights are on through the night. The parking lot lights are also being turned off at night.

Miller told the arena board last week that ticket sellers are having trouble selling tickets for the upcoming Stars on Ice event because potentially buyers think the arena will be closed by the Feb. 26 show.

We will attack this head on,” he said. “This board has directed us with the responsibility of running this facility. … With sales, though, we just have a few hurdles in front of us.”

Pete Fraley, attorney for the PFD, told the arena’s governing board last week that the sales tax increase appears to be its only option for paying off the debt. Without it, “our options are at an end,” he said.

The arena board has spoken with a bankruptcy attorney, but has not retained an attorney to pursue that option yet.

Fraley said in an interview Tuesday that if the nine governments allow a vote, Wenatchee officials have indicated the city will cover the arena’s budget shortfalls until the vote occurs.

A lot of this is one day at a time,” he said.

As for what happens if the sales tax is not an option, Fraley said, “We need to let that run its course before we start jumping to conclusions.”

The PFD board has the final say in whether the building stays open.

Lacy said Tuesday that if the nine governments ultimately decide not to pursue the sales tax increase, it will likely lead to the closure of the facility.

Michelle McNiel: 664-7152

Reach Michelle McNiel at 509-664-7152 or . Follow her on Twitter at @MichelMcNielWW.