By Andy Mannix
By Caleb Hannan
By Olivia LaVecchia
By CP Staff
By Aaron Rupar
By Jacob Wheeler
By Olivia LaVecchia
By Aaron Rupar
Rather than defer or write off any debts, or implement a hotel/motel tax subsidy from the city, the council decided to extend RiverCentre's debts into the future, in the hope that the agency will eventually be profitable enough to honor all of its obligations, including the $660,000 that was deferred in 2001. Under this new debt structure, the agency will owe more than a million dollars annually through 2013, and nearly $500,000 a year from 2015 through 2030.
Those who defend the current management structure at RiverCentre point out that the agency has consistently run at an operating profit, that its red ink is the result of past debts, much of it incurred by two prior mayoral administrations. Certainly, the annual $660,000 payments on the refinanced Civic Center bonds and the debt on the Minnesota Moose dasher boards and seating predate Coleman's time in office. (Other debts, for parking-ramp improvements, leased kitchen equipment, and concourses now being built to connect the convention center with other public facilities such as the library, are more recent.)
But it's been known for years that RiverCentre's debt payments would go up sharply beginning in the year 2000, and little planning has been done to prepare for it. Perhaps RiverCentre officials were counting on the annual $500,000 savings that the joint operating agreement was supposed to create, or a groundswell in convention business brought about by the opening of the nearby hockey arena and the science museum. Whatever the case, for anyone from the Coleman administration to complain about dealing with debts created by his predecessors is ironic, given the hundreds of millions of dollars in debt he has generated to fuel his development boom, a debt that will be borne by his successors for decades to come.
The other argument offered up by RiverCentre's defenders is that, unlike the vast majority of convention centers across the nation, the facility is not provided with public subsidies to supplement its budget. This is not entirely true: $220,000 of hotel/motel taxes are used each year to help pay off the refinanced Civic Center bonds, and a portion of the half-cent sales tax is what is being used to finance the bonds on Touchstone (as well as part of the city's payments on the Xcel arena). But even if one were to grant the point, it is still worth noting that the old Civic Center complex operated profitably and paid off its debts for decades, with even less in city subsidies.
Even with its debt restructured and with no money being set aside for repairs and maintenance, RiverCentre is expected to post a net loss of $380,000 in 2002. Despite this, Kimberley told the city council two months ago, "We do not believe it is time to reduce marketing efforts. [SPAC] believes the focus should be on growth of revenues rather than cutting expenditures." Meanwhile, with the departure of Mische, RiverCentre currently does not have an executive director to oversee SPAC.
An ideal person for the job would be Martha Fuller, who negotiated the Xcel arena financing deal on behalf of the city, then jumped over to work as chief financial officer for the Wild, and has since been recruited back to serve in the Kelly administration. There is probably no one better versed in the details of RiverCentre's joint operating agreement with the Wild. But alas, Fuller has her hands full. She is working on ways for St. Paul to creatively finance proposals for transportation, a baseball stadium, and other development projects. The chamber of commerce will be pleased.
Correction published January 30, 2002:
In the version of this story that was originally published, writer Britt Robson misidentified Wildside Caterers. The above version reflects the corrected text. City Pages regrets the error.
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