Wenatchee Toyota Center losses projected

WENATCHEE -- With mounting legal bills, the Town Toyota Center is on course to start losing money by March.

It's unclear yet how the money shortfall might affect special events or the daily activities of the arena.

However, Wenatchee officials fear that they will be asked to bail out the center.

"Without a local solution to our default status, we are going to be looking at a restructuring of what services we provide and what staff we have to provide those services," Manager Mark Miller told the arena's governing board this week.

Though the arena's daily operations are breaking even, attorney's fees associated with its almost $42 million debt are draining the budget.

Last year, the board used revenues from a state sales tax kickback to pay legal fees. Starting in January, those tax dollars will be used to pay back investors who bought bonds backed by the tax rebate.

The 2012 budget adopted by the board last week projects a $400,000 shortfall by year's end.

"I had heard that they were going to be running out of money, but I didn't know if it was going to be in three months or six months," said Wenatchee Mayor-elect Frank Kuntz. "This really compounds the problems here. You have the issue of the $42 million and how to pay for that, and now you have the issue of running out of money."

With some cash carryover from 2011 to supplement income for the first two months, the arena is forecasted to be operating in the red by March. The shortfall for March is expected to be about $34,000.

That loss could be smaller if a plan is worked out for repaying the arena's debt, which went into default Dec. 1. Or it could be even greater if a pay-back plan is not worked out and bondholders start filing lawsuits, said Pete Fraley, the PFD's attorney.

Right now, legal fees for the first three months are budgeted to be about $115,000.