For the week of December 4 - 10, 2002

The proposed Bill Janss Community Center, which could be built on Ketchum’s park and ride lot, might look something like the rendering above. However, city leaders and Janss Center board members are still trying to iron out financing for the $14 million center. Courtesy rendering

City advisor disputes Janss Center financing

Ketchum council wary of large, long-term debt

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By GREG STAHL
Express Staff Writer

Financing proposals for a $14 million recreation center in Ketchum are in flux after the Ketchum City Council expressed growing trepidation over schemes that subjected the city to large debts over 20 years.

Citing a recently obtained financial opinion from Seattle-Northwest Securities Corp., which bonded Ketchum’s park and ride lot in 1990, Ketchum Mayor Ed Simon said the state-of-the-art, 68,000 square-foot Bill Janss Community Center proposal is not ready to move forward.

Conceptual architectural designs for the project indicate it would include a regulation ice rink, fitness center, aerobics area and gym, climbing wall and an array of outdoor swimming opportunities. A leisure pool, including lap swimming lanes, would be complemented with several hot pools, which could be heated naturally using the nearby Guyer Hot Spring in Warm Springs Canyon.

Meanwhile, in anticipation of a financial partnership with Ketchum, the Janss Center Board of Directors has undertaken an $8 million fundraising drive to finance part of the construction costs. Another $7 million was slated in original financial plans for the city to repay over 20 years.

The center has raised $1.3 million so far.

"It sounds like a wonderful project for the community," wrote Seattle-Northwest Securities Corp. Vice President Floyd Ayers. "Unfortunately, the debt portion is pretty sketchy and, from the information available, it does not appear to be a project that would be publicly financeable in the capital markets."

The financing that was proposed, formation of a 63-20 nonprofit corporation, is sketchy, Ayers said.

"The investment universe that usually purchases 63-20 paper has virtually dried up since the Spokane parking garage, a 63-20 project, has gone into default," he wrote. "In fact, the law firm that gave the legal opinion on the bonds has since closed its Spokane office because of the backlash from this default.

"It would be very difficult to sell 63-20 bonds publicly for any project in the current market environment."

While Janss Center Board Chair Cynthia Murphy rebutted a number of Ayers’ points, she wrote in response, "We all sense that the 63-20 is not the best option."

More recently, Janss Center board members are revising their financial proposals and are negotiating with a third party, Murphy said.

Councilman Randy Hall said a potential partnership appears workable.

"My understanding is, if we build it they will operate it and manage it," he said.

Murphy said the Janss Center Board of Directors is trying to work out details with the potential third party and is hoping to host a public meeting on a new financing proposal in the very near future.

Ayers’ analysis comes just three months after the Ketchum City Council told Janss Center Board members the city needed more assurances before it could move forward.

"Somehow, we’ve got to get a confidence level built up," Councilman Maurice Charlat said in the August meeting. "The pieces will help build confidence."

Charlat said the proposed Janss Center operating budget needed meticulous explaining. How much money will a proposed ice skating rink make or lose? How will the operating budget change if a component of the project changes, or is removed from the proposal?

A meeting among Janss Center financial planners and the Ketchum City Council was slated for Nov. 12, but was scrapped when the parties involved were unprepared, Simon said. Ayers’ opinion was obtained in preparation for that meeting.

For the time being, Simon said he would not ask the public to approve a questionable proposal.

"There were a number of questions raised," Simon said. "Until I have solid financial information, I wouldn’t take it to a vote of the public."

 

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