A year ago Town Toyota Center was used as an example of how arena spending could drag down the finances of a medium-sized city. Today, after some slight adjustments in the revenue formula, the arena receives a small city subsidy and is back on solid financial ground.
You know the story: the good folks in Wenatchee, Washington, were persuaded by Global Entertainment to invest $52.8 million into a new arena to house NAHL hockey, curling and other community events. Sales-tax revenue was slated to fund the facility, but that revenue came up short, and Wenatchee was stuck holding the bag on paying back the Town Toyota Center bonds. Faced with annual payments of $2.1 million, the city was looking at some pretty massive layoffs to cover debt.
Instead of accepting the fate, city leaders decided to go after new revenue sources to pay down Town Toyota Center debt, asking the public for a very small rise in the sales tax to cover debt while also issuing new bonds on the facility. From Wenatchee World:
The events between the sad then and the happy now were unlikely to find their way into a Hollywood script. City councils and county commissions of the PFD put it on the line to allow a public vote on a tax surcharge. The Legislature voted to allow Wenatchee to impose a 0.2 percent sales tax hike. A 0.1 percent hike went on the regional ballot and passed overwhelmingly. New bonds went on sale and investors grabbed them. Previous short-term debt holders were paid in full. For 2013 the city of Wenatchee will budget $200,000 for Town Toyota Center contingencies, less than 10 percent of what it set aside the year before. And they say, chances are it won’t be needed.
Too many arena-funding plans are the result of wishful thinking and poor planning. Wenatchee residents were lucky enough to get a second bit at the bonding apple, and the result is a happy ending.