by Dennis Dalman
The Sartell City Council voted 4-1 at its June 8 meeting to give the Sartell Youth Recreation Center the equivalent of nearly $1.5 million to build another arena outside of its current facility, the Bernick’s arena.
Council member Mike Chisum voted against the proposal. He emphasized he is a strong supporter of hockey, the arena efforts and a city partnership with the hockey association. However, he would like the city to wait until the results of a bank loan agreement with the association so the city could determine exactly how much extra money would be needed for the arena.
The city and the SYRC plan to partner to obtain what is called a conduit bond. That would allow the SYRC to obtain a bank loan with a fixed interest rate possibly as low as 3 percent, saving as much as $50,000 per year on repayment costs.
The SYRC and the Sartell Youth Hockey Association have raised more than $3 million so far toward the estimated $5.2-million cost of the arena project. The new arena, to be built just south of the current one, would be an enclosed structure with fabric roof that could be used all year, including an artificial turf in summer for any number of sports, as well as for community events such as concerts.
The June 8 council decision is as follows: Up-front money to help build the arena is $450,000 from the city’s portion of half-cent regional sales tax revenue, which is all the sales-tax funds the city now has left in the fund. Ongoing city contributions will come from money the city receives annually from a lease agreement with the private company that leases city-owned land for a golf course. That amount, over a 20-year period, would total an estimated $482,000, which would be given to the SYRC. Currently, about $60,000 annually from the golf-lease money goes to support baseball in the city, it was noted.
In addition, the city would waive fees and other charges per the following: $62,000 in building fees; $205,000 in water- and sewer-access charges; $72,000 in demolition work for the outdoor rink and shelter; $72,000 for ground work and utility work; and $11,000 annually for utilities.
At a council meeting in May, Chad Ritter, president of the SYRC, asked the city to chip in $130,000 per year for a 20-year period, plus other costs, for the new arena. All told, that amount would total nearly $2 million. Fundraising has been adversely affected by the economic jitters caused by the virus pandemic.
Ritter also spoke at the June 8 meeting, stating there is currently a projected shortfall in funding of about $90,000 per year for the arena plans.
Chisum asked why the school district hasn’t been asked to bear more of the financial cost since it and its students will benefit most from the arena by using it for sports activities. Ritter noted the district will rent space at the arena, and full usage would amount to about $150,000 annually over a 20-year period.
Chisum said he is strongly concerned the city is spending money it doesn’t yet have and will deplete the sales-tax revenue as financial uncertainties loom in the future. What if there is a major recession sometime during the next 20 years?, he asked.
Sartell Mayor Ryan Fitzthum said the city is still strong and growing, that the local economy appears to be improving and that the arena is an economic growth plus for Sartell, as the current Bernick’s Arena has been.
Chisum agreed the arena is a worthy project, but he noted the city’s current debt load is about $77 million, and the city must pay $5 million toward debt service annually from Sartell’s income of about $18 million. Sartell, Chisum repeated, would be best to wait until after the conduit bond is negotiated and then determine how much to contribute to the arena project. Chisum also said the city has been very generous to the current arena, having spent $700,000 to construct a parking lot there two years ago.
After more lengthy discussion, Fitzthum made a motion to approve the funding. It was seconded by council member Brady Andel, and the motion passed.