Council agrees to conduit financing for Scheels Complex

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by Dennis Dalman

news@thenewsleaders.com

An ambitious expansion project next to Bernick’s Arena in Sartell will be paid for via a city-backed financing method known as a “conduit bond lease.”

The name of the project is Scheels Athletic Complex, so-named because of  a major corporate donor.

At its July 13 meeting, the council voted 4-1, with member Mike Chisum voting no, to approve the financing plan, in which the city will back the bond sale to acquire the $5 million for the project. Because of Sartell’s excellent bond rating, the loan acquired will have a low interest rate, saving as much as $50,000 per year in payback costs.

In addition, at its June 8 meeting, the council voted 4-1 to provide the project with more than $1.5 million during the next two decades. That will include $450,000 in the city’s share of the regional half-cent sales tax revenue; $482,000 throughout a 20-year period of revenue received from leasing land for a private golf-course; and the city’s waiving of fees and other charges for building permits; water-and-sewer access charges; demolition work for the current outdoor rink and shelter and also waiving $11,000 for utilities.

Other than the up-front sales-tax money, the city funds would be paid toward the project throughout a 20-year period – about $130,000 per year.

So far, the Sartell Youth Recreation Association and the Sartell Youth Hockey Association have raised about $3 million in donations and long-term pledges for the athletic complex, according to project planners.

The total project is estimated to cost $5.2 million. 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 and trade shows.

At the July 13 meeting, five men spoke in favor of the city-private partnership.

Chad Ritter, president of  the Sartell Youth Recreation Association, said that nearly 20 years ago, when the Bernick’s Arena was built with financial help from the city, many were opposed to that plan. Since then, however, the arena has proven to be very successful and has operated with fiscal responsibility. The Scheels Athletic Complex, Ritter added, will cater to multiple families with multiple backgrounds. He also said he is confident in the future there will be more sales-tax money to build other recreational amenities in Sartell, such as perhaps a pool or skate park.

Cory Oberg, who has coached hockey, said he believes the new complex will bring lots of value to the community. He said he and his family moved to Sartell largely because of hockey amenities.

Brian Zimney worked on a committee for the Scheels Athletic Complex project. He said he met with many business people, including restaurant owners, who said an athletic complex would be a big plus for business. It could encourage residents stay in town for sports and other events and attract many out-of-towners to the city, Zimney said.

Craig Ritter, a member of the athletic-complex finance committee, said the complex would be an asset to Sartell in many ways for many people.

Three people spoke against the city helping fund the athletic complex.

Summbla Anjum said the city needs more of a variety of activities and amenities for a wider variety of people. Hockey, she said, is limited to just a certain group of kids. What’s needed, she said, are amenities all people could enjoy, such as a pool and a library.

Joe Perske, former Sartell council member and mayor, said the council passing such a financial arrangement between the city and a private interest is unprecedented in Sartell history. The council and residents, he said, do not know enough of the details – the costs of operating the complex and the exact amount of contributions given or promised at this point. The city, he said, is guaranteeing a payment of $27,000 a month for 20 years.

“Where’s the transparency?” Perske asked. “Where’s the public input?”

The city, he said, is signing on for a $5-million loan without any guarantees. The outdoor ice sheet now next to the Bernick’s Arena should be kept in place for all kids to use, Perske said.

Council member Chisum said he reluctantly voted against the financial loan plan, even though he thinks hockey is good for Sartell and that he appreciates the hard work hockey enthusiasts have done to raise so much money.

Since 2003, when the Bernick’s Arena was built with city help, Sartell has spent $1,427,000 for the arena, including a recent $700,000 parking lot. Recently, the council voted to pitch in another $1,563,324 throughout a 20-year period for the Scheels Athletic Complex, Chisum said.

He said he agrees the complex would benefit a lot of kids but that kids who are not especially athletic would not benefit from it.

“I’m very concerned about being ask to guarantee that loan,” said Chisum, adding there are too many “what if” questions: What if the pandemic cancels hockey play? What if corporate sponsors shut down businesses like the recent closing of HealthPartners in Sartell? What if business owners who pledged money decide to sell their businesses? What if private individuals who made pledges lose jobs or suffer financial setbacks?

Chisum said the council must be very attentive to such details because taxpayers’ money is on the line. Council members, he said, should be able to scrutinize the finances of the project planners.

“At this point, I cannot commit the city’s money for a 20-year period based on what I know today,” Chisum said. “Maybe more information would allay my concerns . . . Is this the right project for right now?”

Before voting, council members and the mayor praised the hockey enthusiasts for their hard work in raising funds and agreed the complex, with its indoor winter capabilities, would benefit all kinds of sports, as well as community activities such as flea markets and concerts. They also agreed the complex would have a substantial positive effect on the entire community.

Author: Dennis Dalman

news@thenewsleaders.com

Dalman was born and raised in South St. Cloud, graduated from St. Cloud Tech High School, then graduated from St. Cloud State University with a degree in English (emphasis on American and British literature) and mass communications (emphasis on print journalism). He studied in London, England for a year (1980-81) where he concentrated on British literature, political science, the history of Great Britain and wrote a book-length study of the British writer V.S. Naipaul. Dalman has been a reporter and weekly columnist for more than 30 years and worked for 16 of those years for the Alexandria Echo Press.

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