Northwest Sports Hub
The Lewis County Public Facilities District’s plans to refinance a more than $5 million bond debt to get $1.8 million in additional funding for an expansion at the NW Sports Hub are in a “holding pattern” while the district waits for the Board of Lewis County Commissioners to sign off on the move, said PFD Board Chairman Todd Chaput Tuesday.
“Nothing can proceed until the county agrees to be the guarantor for our bond,” Chaput said during a meeting of the district Tuesday. “Without the guaranty from the county, it pretty much grinds to a halt.”
Lewis County agreed to guarantee the original bond when it was issued in 2007 in the event the PFD couldn’t repay it.
The district’s board has discussed refinancing the bond to lengthen its repayment schedule and get more revenue for expansion of the sports hub since 2017.
Lewis County Commission Chairwoman Edna Fund said the commission is doing its due diligence before signing on to what amounts to more debt in the county’s books.
“Our counsel has said we need to have a review and this has to be done by folks that are familiar with bonds … That’s what’s happening now,” she said. “No decisions have been made. We want to hear what the experts have to say.”
Fund said the commission is happy with the work the PFD has done to develop the NW Sports Hub into a popular and busy attraction to Lewis County.
“I’m really happy in terms of heads in beds being put in Centralia as a result,” Fund said. “It’s doing its job. Now what we need to do is take a look at the financial situation.”
In addition to the county’s go-ahead, a feasibility study from the Department of Commerce is required to allow the PFD to extend the life of the bond.
Chaput said the Board of County Commissioners has expressed a reticence to sign off as a guarantor before the Commerce study is completed, but Commerce does not want to begin the study until the county signs off on the bond extension.
“Everything is in a holding pattern there,” Chaput said, noting that the study will cost the board $17,000.
The county has yet to sign an agreement to guarantee the bond contingent on the outcome of Commerce’s study, which could resolve the issue, Chaput said.
“It’s kind of a chicken and the egg,” he said.
The PFD’s bond was originally issued in 2007 for $5.795 million to build the Northwest Sports Hub.
In the first few years after the bond was issued, payments were for interest only. This year, the PFD is scheduled to pay back about $470,000 split between two payments including interest and about $185,000 in principle, County Treasurer Arny Davis said. The payments are scheduled to gradually increase each year.
The PFD still owes about $5.3 million in principle, he said, which is currently scheduled to be paid off in 2032.
In order to get a better rate on the bond, the PFD asked Lewis County to be a guarantor for the money, meaning that if the PFD is unable to repay, the county would be on the hook for the bond’s repayment.
“If something happens, is there money there to continue on?” Fund said. “We don’t want that to happen, but we want this review to be done so we know we’re going into this with our eyes wide open.”
A bill passed the state Legislature last year allowing for the bond extension, Chaput said.
To refinance and extend the life of the bond now, the PFD needs the county to again sign off on the extension as a guarantor.
If the extension and refinancing of the bond goes through, the PFD would get an additional $1.8 million in revenue to finish construction and expand the NW Sports Hub. The process would also set the repayments at a steady $440,000 per year.
If the PFD restructures the bond before 2020, the transaction will be taxable. If they wait until 2020 or after, it would be tax exempt, Davis and Chaput explained.
The PFD is also paying back money to Lewis County from its .09, or state distressed counties funds. The county provided $1.1 million, part of which must be paid back.
There is some confusion about the timeline for that repayment, Chaput said. The initial agreement required the funds be paid back in 10 years but gave no further details.
“For the county commission’s peace of mind, we need to tighten that up,” Chaput said.
Davis said he believes the issue is a matter of communication between the commission and district.
“I don’t think they’re reluctant, they had some concern about how the funding was going to be used and where we are on the .09,” he said.
With the bond extension temporarily on hold, the PFD board is entertaining the possibility of waiting to restructure the bond until 2020 or the county commission is unwilling to sign off as guarantor.
“I sent a letter (to Lewis County) on behalf of the Lewis County Public Facilities District board and I got some feedback it was probably not an appropriate letter to send,” Chaput said Tuesday.
Some members of the PFD board expressed concern about the tone of a letter Chaput sent to the Board of Lewis County Commissioners regarding the issue. The letter said the PFD could wait to refinance in 2020 and do it without the county’s help if the commissioners did not agree to guarantee the bond.
“It came across as threatening,” PFD board member Candace Hallom said, saying the letter sounded like an ultimatum. “It wasn’t the right message to send to them.”
Hallom, who works as a clerk in the commissioners’ office, suggested an in-person meeting with the commissioners would be a better way to explain the PFD’s situation.
The board agreed to set up such a meeting with the county commissioners to discuss the bond extension.
“The intent of the letter wasn’t to put the Public Facilities District in an awkward position with the county commissioners. It was more of an informational letter,” Chaput said.
Sports Hub manager Dale Pullin spoke against delaying the PFD’s efforts to expand.
“I’d hate to take away the momentum,” he said. “Sizing the facility up is going to attract more teams, more players.”
