Chief
08-30-2007, 07:37 AM
JEFFREY MIZE, columbian staff writer
March 25, 2001; Page A1
Vancouver put an exclamation point on "done deal" Saturday as the city council left little doubt it will build a special events center. Six of seven council members, after a marathon six-hour session, agreed the potential benefits of the $59.1 million project outweigh the possible risks.
Councilman Jim Moeller said the current plan is vastly superior to past proposals, and it won't get much better with further delay.
"This particular project is a keystone, a linchpin, in the entire development of a great city," he said. "And that's what I want to be, a great city."
If the events center and adjacent convention center perform as consultants predict, the city won't have to chip in a dime.
However, if forecasts prove overly optimistic, the council could have to divert millions away from other projects and services to make annual debt payments.
Several council members said that's extremely unlikely.
"I think it's about as risk free as you can get," Councilman Dan Tonkovich said.
"A meteorite could hit the building halfway through (construction)," Councilwoman Pat Jollota said. "I think that's about the risk we're looking at."
No votes were taken Saturday, but it was apparent that six council members will back the project.
Councilwoman Jeanne Lipton remains the lone holdout. Lipton says she believes the council should pledge to hold taxpayers harmless should the project bomb.
"If it's such a good project, then why don't you say to citizens, 'We will not hold you liable for any higher taxes,' " she said afterward.
"Government is about providing services, not sports event centers."
None of the project's most vocal opponents attended Saturday's session. Reached by telephone afterward, Larry Patella of Citizens for Common Sense said his group would continue to fight for a public vote on the project.
Brent Boger, an assistant city attorney, said he believes a provision in the City Charter allowing residents to collect signatures and force a public vote is superseded by state law granting cities the power to form a public facilities district to build these type of projects.
That position raises the possibility that Citizens for Common Sense would need to go to court and argue the city is ignoring its own charter, something Patella said his group is prepared to do.
Three actions needed
The city council must take at least three separate actions, the first coming Monday night, before construction can start:
* Amend the Vancouver Public Facilities District's charter to remove "exploring the possibility" and other limiting language, thereby opening the door for it to proceed with construction.
The city council will have a public hearing on that amendment at 6 p.m. Monday at Vancouver City Hall, 210 E. 13th St.
* Pass a resolution giving City Manager Pat McDonnell authority to sign construction documents and other agreements. A hearing has been scheduled tentatively for April 16.
* Agree to bond covenants that require the city to pay off bondholders if revenues aren't sufficient. The council might have a hearing on that issue in mid-June.
As recently as March 7, Mayor Royce Pollard said there would be public hearings before any final decision is made. Given Saturday's discussion, those hearings could be mere formalities.
"To be blunt, I think the mayor and probably the majority of the council have lied to us all along," Patella said. "They have repeatedly said this is not a done deal. They're just bulldozing this thing through."
Tax-exempt financing
Long-term interest rates are near historic lows, which has made the project more feasible, but the big change was a shift to tax-exempt financing.
As of last year, Vancouver was planning to use taxable bonds to build the events center. With taxable bonds, investors have to pay taxes on their income; with tax-exempt bonds, they do not.
The difference in interest rates is significant, from 4.7 percent on tax-exempt bonds to 7.8 percent on taxable bonds.
William Doyle, an attorney with Orrick, Herrington & Sutcliffe in Seattle, said his firm has studied the issue and is confident the city can use tax-exempt bonds.
"You're not going to have our signature on the dotted line unless it's airtight legally," Doyle said.
Stephen Janik, a Portland attorney who has worked on the Rose Garden and the Seattle Seahawks stadium under construction, said most of the project's risk ultimately lies with the city.
However, Janik said Vancouver's risk isn't any greater than what Portland took with the Rose Garden or what Washington state is taking with the Seahawks.
The real risk, he added, is based on marketing the final product.
"It's when you build it, will they come?" Janik said.
EVENTS CENTER
* WHAT: Vancouver decides to build special events center.
* DESCRIPTION: Events center with 6,500 seats and convention center with 28,000 square feet of exhibition space, and privately financed 174-room hotel.
* LOCATION: Spread across four blocks immediately south of Esther Short Park in downtown Vancouver.
* COST: Events center and convention center would cost $59.1 million to build, with $50 million in bonds paying most of the bill. Another $39.9 million in interest and other financing costs would be spread over 25 years.
* SCHEDULE: Demolition of existing buildings could begin this summer, with project completed in fall 2003.
EVENTS CENTER TIMELINE
1993
* Identity Clark County surveys 67 community-business leaders on what county needs. Respondents name convention center as a top priority.
1997
* Nov. 26: City receives only one development proposal, from Jerry Jenkins of Renaissance Resources Group, for special events center, convention center and hotel complex.
1998
* Jan. 5: Vancouver City Council adopts downtown redevelopment plan that includes convention center-events center south of Esther Short Park.
* April 20: Vancouver City Council approves 2 percent hotel-motel tax to help pay for project.
* Oct. 5: City council hires Deloitte & Touche of Los Angeles to prepare feasibility study on project.
1999
* Jan. 7: State Rep. Don Carlson, R-Hazel Dell, says he will sponsor legislation allowing Vancouver to receive tiny slice of sales tax now flowing to state to help pay for construction.
* Jan. 27: Gov. Gary Locke, meeting with Mayor Royce Pollard and other leaders, asks poignant questions about stability of minor-league sports teams, including "What happens if you count on them for 10 years and they leave after four?"
* Feb. 15: Deloitte & Touche predicts project would succeed, but says more research is needed on ability of Portland-Vancouver market to support two hockey teams.
* March 15: Washington Senate approves sales tax credit for project.
* April 14: House approves sales tax credit.
* May 4: Gov. Locke signs sales tax legislation during brief ceremony in Esther Short Park.
* June 29: Clark County tells city it won't seek $6 million federal loan to help pay for construction.
* Sept. 9: Greg Sundberg, managing director of Piper Jaffray in Seattle, gives project lukewarm endorsement. "This is a very thin project in the sense there are not obvious surplus cash flows," he says.
* Oct. 18: Vancouver forms public facilities district to finance, build and own events center and convention center, but limits district's role to study only.
* Oct. 27: Identity Clark County holds community meeting. Ken Hodge, general manger of Portland Winter Hawks, attends but does not speak. Afterward, Hodge says he's intrigued by "very interesting project."
* Nov. 10: Developer Jenkins says rising interest rates have sliced projected profits in half. "My staying and will power is diminishing greatly," he warns.
* Dec. 6: City council hires Economics Research Associates of Los Angeles to do additional market research.
* Dec. 10: In second round of bidding, Renaissance Resources Group again submits only proposal to build project.
2000
* March 15: Steve Burdick, Vancouver's economic development manager, says rising interest rates have removed financial "cushion" and pushed project dangerously close to break even.
* March 22: Economics Research Associates predicts project would make $1.8 million profit in first decade if properly marketed and operated.
* March 29: Sundberg of Piper Jaffray says investors won't buy bonds without guarantee from city or other deep pocket. "The investment banker is always the one that rains on everyone's parade," he says.
* April 29: City council spends four hours in unusual Saturday session before agreeing to five conditions Renaissance Resources Group must meet for project to go forward.
* Aug. 24: Philanthropist George Propstra announces he will pay $2.5 million to have convention center named after him for perpetuity.
* Sept. 12: Renaissance Resources Group announces tentative agreements to bring four minor-league franchises to Vancouver: hockey, indoor soccer, team tennis and basketball.
2001
* Jan. 3: Federal Reserve lowers key interest rate by half a percentage point.
* Jan. 30: Vancouver officials says Bank of America has come forward with financing proposal, adding that lower interest rates and ability to use tax-exempt financing have improved project outlook.
* Jan. 31: Fed lowers interest rate by another half a percentage point.
* Feb. 5: City council hears latest information. Five of seven members make positive comments and seem ready to proceed.
* Feb. 8: KATU poll finds 39 percent of respondents support project, even when warned city could be shackled with big debt should projections prove wrong, but 89 percent think there should be public vote.
* Feb. 26: City council asks state to begin setting aside sales tax credit approved in 1999.
* March 7: Citizens for Common Sense holds community forum. Despite repeated invitations to council members, no one shows up to "debate" opponents.
* March 15: Directors for Vancouver Public Facilities and Vancouver Downtown Redevelopment Authority go over final details, forward positive recommendations to council.
* March 20: Fed cuts interest rate by a half percentage point, third cut in 11 weeks.
* March 21: Identity Clark County poll finds 19 percent of respondents "strongly support" and 44 percent "somewhat support" project. Almost one-third aren't aware of proposal.
* March 24: City council gives tentative approval to proceed.
March 25, 2001; Page A1
Vancouver put an exclamation point on "done deal" Saturday as the city council left little doubt it will build a special events center. Six of seven council members, after a marathon six-hour session, agreed the potential benefits of the $59.1 million project outweigh the possible risks.
Councilman Jim Moeller said the current plan is vastly superior to past proposals, and it won't get much better with further delay.
"This particular project is a keystone, a linchpin, in the entire development of a great city," he said. "And that's what I want to be, a great city."
If the events center and adjacent convention center perform as consultants predict, the city won't have to chip in a dime.
However, if forecasts prove overly optimistic, the council could have to divert millions away from other projects and services to make annual debt payments.
Several council members said that's extremely unlikely.
"I think it's about as risk free as you can get," Councilman Dan Tonkovich said.
"A meteorite could hit the building halfway through (construction)," Councilwoman Pat Jollota said. "I think that's about the risk we're looking at."
No votes were taken Saturday, but it was apparent that six council members will back the project.
Councilwoman Jeanne Lipton remains the lone holdout. Lipton says she believes the council should pledge to hold taxpayers harmless should the project bomb.
"If it's such a good project, then why don't you say to citizens, 'We will not hold you liable for any higher taxes,' " she said afterward.
"Government is about providing services, not sports event centers."
None of the project's most vocal opponents attended Saturday's session. Reached by telephone afterward, Larry Patella of Citizens for Common Sense said his group would continue to fight for a public vote on the project.
Brent Boger, an assistant city attorney, said he believes a provision in the City Charter allowing residents to collect signatures and force a public vote is superseded by state law granting cities the power to form a public facilities district to build these type of projects.
That position raises the possibility that Citizens for Common Sense would need to go to court and argue the city is ignoring its own charter, something Patella said his group is prepared to do.
Three actions needed
The city council must take at least three separate actions, the first coming Monday night, before construction can start:
* Amend the Vancouver Public Facilities District's charter to remove "exploring the possibility" and other limiting language, thereby opening the door for it to proceed with construction.
The city council will have a public hearing on that amendment at 6 p.m. Monday at Vancouver City Hall, 210 E. 13th St.
* Pass a resolution giving City Manager Pat McDonnell authority to sign construction documents and other agreements. A hearing has been scheduled tentatively for April 16.
* Agree to bond covenants that require the city to pay off bondholders if revenues aren't sufficient. The council might have a hearing on that issue in mid-June.
As recently as March 7, Mayor Royce Pollard said there would be public hearings before any final decision is made. Given Saturday's discussion, those hearings could be mere formalities.
"To be blunt, I think the mayor and probably the majority of the council have lied to us all along," Patella said. "They have repeatedly said this is not a done deal. They're just bulldozing this thing through."
Tax-exempt financing
Long-term interest rates are near historic lows, which has made the project more feasible, but the big change was a shift to tax-exempt financing.
As of last year, Vancouver was planning to use taxable bonds to build the events center. With taxable bonds, investors have to pay taxes on their income; with tax-exempt bonds, they do not.
The difference in interest rates is significant, from 4.7 percent on tax-exempt bonds to 7.8 percent on taxable bonds.
William Doyle, an attorney with Orrick, Herrington & Sutcliffe in Seattle, said his firm has studied the issue and is confident the city can use tax-exempt bonds.
"You're not going to have our signature on the dotted line unless it's airtight legally," Doyle said.
Stephen Janik, a Portland attorney who has worked on the Rose Garden and the Seattle Seahawks stadium under construction, said most of the project's risk ultimately lies with the city.
However, Janik said Vancouver's risk isn't any greater than what Portland took with the Rose Garden or what Washington state is taking with the Seahawks.
The real risk, he added, is based on marketing the final product.
"It's when you build it, will they come?" Janik said.
EVENTS CENTER
* WHAT: Vancouver decides to build special events center.
* DESCRIPTION: Events center with 6,500 seats and convention center with 28,000 square feet of exhibition space, and privately financed 174-room hotel.
* LOCATION: Spread across four blocks immediately south of Esther Short Park in downtown Vancouver.
* COST: Events center and convention center would cost $59.1 million to build, with $50 million in bonds paying most of the bill. Another $39.9 million in interest and other financing costs would be spread over 25 years.
* SCHEDULE: Demolition of existing buildings could begin this summer, with project completed in fall 2003.
EVENTS CENTER TIMELINE
1993
* Identity Clark County surveys 67 community-business leaders on what county needs. Respondents name convention center as a top priority.
1997
* Nov. 26: City receives only one development proposal, from Jerry Jenkins of Renaissance Resources Group, for special events center, convention center and hotel complex.
1998
* Jan. 5: Vancouver City Council adopts downtown redevelopment plan that includes convention center-events center south of Esther Short Park.
* April 20: Vancouver City Council approves 2 percent hotel-motel tax to help pay for project.
* Oct. 5: City council hires Deloitte & Touche of Los Angeles to prepare feasibility study on project.
1999
* Jan. 7: State Rep. Don Carlson, R-Hazel Dell, says he will sponsor legislation allowing Vancouver to receive tiny slice of sales tax now flowing to state to help pay for construction.
* Jan. 27: Gov. Gary Locke, meeting with Mayor Royce Pollard and other leaders, asks poignant questions about stability of minor-league sports teams, including "What happens if you count on them for 10 years and they leave after four?"
* Feb. 15: Deloitte & Touche predicts project would succeed, but says more research is needed on ability of Portland-Vancouver market to support two hockey teams.
* March 15: Washington Senate approves sales tax credit for project.
* April 14: House approves sales tax credit.
* May 4: Gov. Locke signs sales tax legislation during brief ceremony in Esther Short Park.
* June 29: Clark County tells city it won't seek $6 million federal loan to help pay for construction.
* Sept. 9: Greg Sundberg, managing director of Piper Jaffray in Seattle, gives project lukewarm endorsement. "This is a very thin project in the sense there are not obvious surplus cash flows," he says.
* Oct. 18: Vancouver forms public facilities district to finance, build and own events center and convention center, but limits district's role to study only.
* Oct. 27: Identity Clark County holds community meeting. Ken Hodge, general manger of Portland Winter Hawks, attends but does not speak. Afterward, Hodge says he's intrigued by "very interesting project."
* Nov. 10: Developer Jenkins says rising interest rates have sliced projected profits in half. "My staying and will power is diminishing greatly," he warns.
* Dec. 6: City council hires Economics Research Associates of Los Angeles to do additional market research.
* Dec. 10: In second round of bidding, Renaissance Resources Group again submits only proposal to build project.
2000
* March 15: Steve Burdick, Vancouver's economic development manager, says rising interest rates have removed financial "cushion" and pushed project dangerously close to break even.
* March 22: Economics Research Associates predicts project would make $1.8 million profit in first decade if properly marketed and operated.
* March 29: Sundberg of Piper Jaffray says investors won't buy bonds without guarantee from city or other deep pocket. "The investment banker is always the one that rains on everyone's parade," he says.
* April 29: City council spends four hours in unusual Saturday session before agreeing to five conditions Renaissance Resources Group must meet for project to go forward.
* Aug. 24: Philanthropist George Propstra announces he will pay $2.5 million to have convention center named after him for perpetuity.
* Sept. 12: Renaissance Resources Group announces tentative agreements to bring four minor-league franchises to Vancouver: hockey, indoor soccer, team tennis and basketball.
2001
* Jan. 3: Federal Reserve lowers key interest rate by half a percentage point.
* Jan. 30: Vancouver officials says Bank of America has come forward with financing proposal, adding that lower interest rates and ability to use tax-exempt financing have improved project outlook.
* Jan. 31: Fed lowers interest rate by another half a percentage point.
* Feb. 5: City council hears latest information. Five of seven members make positive comments and seem ready to proceed.
* Feb. 8: KATU poll finds 39 percent of respondents support project, even when warned city could be shackled with big debt should projections prove wrong, but 89 percent think there should be public vote.
* Feb. 26: City council asks state to begin setting aside sales tax credit approved in 1999.
* March 7: Citizens for Common Sense holds community forum. Despite repeated invitations to council members, no one shows up to "debate" opponents.
* March 15: Directors for Vancouver Public Facilities and Vancouver Downtown Redevelopment Authority go over final details, forward positive recommendations to council.
* March 20: Fed cuts interest rate by a half percentage point, third cut in 11 weeks.
* March 21: Identity Clark County poll finds 19 percent of respondents "strongly support" and 44 percent "somewhat support" project. Almost one-third aren't aware of proposal.
* March 24: City council gives tentative approval to proceed.