City asks county to reconsider team ownership issue

StoryImage( ‘/Images/Story//Auto-img-116785707628660.jpg’, ‘Photo by Stuart R. Wahlin’, ‘Rockford Ald. Frank Beach (R-10) argued to separate renovation bonds from bonds to acquire a hockey team.‘);
StoryImage( ‘/Images/Story//Auto-img-116785709428660.jpg’, ‘Photo by Stuart R. Wahlin’, ‘Rockford Mayor Larry Morrissey (I) said an agreement with the IceHogs would require a 10-year commitment at a higher rent.‘);
StoryImage( ‘/Images/Story//Auto-img-116785711228660.jpg’, ‘Photo by Stuart R. Wahlin’, ‘Rockford IceHogs fans watch to see how the mayor and aldermen will react to the no-ownership restriction applied to the intergovernmental agreement by the Winnebago County Board.‘);
StoryImage( ‘/Images/Story//Auto-img-116785721829807.jpg’, ‘Photo by Stuart R. Wahlin’, ‘Rockford Ald. Linda McNeely (D-13) said, "I think there was some wisdom with what the county did last week, contrary to some of you that may have been offended by what was said."‘);

Jan. 2, Rockford Mayor Larry Morrissey (I) and the Rockford City Council picked up the broken pieces of their plan to allow the MetroCentre and the city to purchase a hockey team.

The city had planned to vote on the authorization of $23 million in bonds to finance both arena improvements and the purchase of an American Hockey League (AHL) franchise.

Just five nights earlier, however, the Winnebago County Board sent a clear message to the City Council and MetroCentre: stay out of the business of owning a hockey team if you want our $9 million.

The board amended its end of the intergovernmental agreement to include this condition, effectively destroying the MetroCentre’s chances of purchasing an AHL franchise as planned.

The MetroCentre Authority was unable to persuade the County Board to believe an AHL team would be profitable, and was therefore a risk to taxpayers in the event it operates at a loss.

Centre Events Board Chairman Gary Marzorati and MetroCentre General Manager Corey Pearson said, by their plan, owning a team is essential to the operations of the facility.

“The renovation cannot happen without enhanced revenue,” Ald. John Beck (R-12) argued, “which would come from the ownership of a team.”

“We knew, based on the pro formas that were discussed, a certain amount of revenue was gonna come in under that unified ownership model,” Morrissey explained. He also presented the only other option: “A traditional lease arrangement between the MetroCentre Authority and the IceHogs organization.”

In a memorandum circulated to aldermen Jan. 2, Morrissey wrote, “Many of the County Board members may not have realized that their vote puts the taxpayers at greater risk because the project loses so much revenue and increases costs under a traditional lease unless it substantially increases the lease payment and is guaranteed for 10 years by the IceHogs.”

IceHogs owners Dr. Kris Tumilowicz and Craig Drecktrah should have no problem committing to a 10-year deal, assuming a fair lease price can be negotiated. The owners have publicly stated numerous times their desire for a new five-year lease with an option for an additional five years.

While owners have said their team was never for sale, the mayor’s memo included a number of e-mails, including one from Tumilowicz to Pearson from Oct. 15, which seemed to indicate a willingness to sell the IceHogs name and assets for $540,000.

Tumilowicz and Drecktrah have stated, however, the MetroCentre Authority named its own price and threatened to take the team by force if they didn’t accept.

Pearson and Marzorati have denied conducting negotiations in this manner.

“There were some confidential e-mails in there that probably should have been kept private,” Tumilowicz said, reacting to the memo Morrissey distributed. “It would certainly make me think twice before sending an e-mail to certain individuals.”

The packet included e-mails supplied by Corey Pearson and City Administrator Jim Ryan.

“This is the IceHogs owners’ chance to demonstrate to us their ability to make the deal work in a way that moves this community forward,” Morrissey offered.

Tumilowicz was optimistic, despite facing a certain rent increase at the MetroCentre.

“If we have better revenues because of skyboxes, and food and beverage, and club seats,” Tumilowicz surmised, “that could work for both parties.”

Owners are to resume talks immediately with the MetroCentre Authority. If a lease agreement can be reached, the United Hockey League (UHL) IceHogs may be lacing up for many seasons to come in the 25-year-old arena.

In the event an agreement is not reached, or the County Board doesn’t reverse its decision, Morrissey said the Feb. 12 bond sale would be called off.

“This agreement’s just a 10-year deal, and we’re selling bonds and we’re gonna be on the hook for paying them back for 20 years,” 11th Ward Ald. Jeff Holt (D) reminded the Council. “There’s no guarantee, after 10 years, that our taxpayers would be protected for the additional 10 years.”

Holt said taxpayers are at risk regardless of which plan the city goes with, and turned his attention to the city’s $912,000 annual subsidy for MetroCentre operations, which is to be diverted to repay bonds.

Holt noted the subsidy is funded by the 1 percent Food and Beverage Tax, which is set to expire in 2018. Because the city’s commitment to the project is 20 years, Holt introduced a resolution to extend the tax by 10 years.

Fourth Ward Ald. Carl Wasco (D) agreed with Holt’s assertion the taxpayers are ultimately responsible for the payback of bonds, regardless of the direction taken. He then blasted the County Board for meddling in city business.

“I do say to my colleagues across the street,” said Wasco, referring to the board, “that they owe us an apology.”

Wasco said he hopes the board will rethink its amendment, adding the county was only asked to assist with funding the renovations.

At the Dec. 28 board meeting, Winnebago County Board member Mary Ann Aiello (R-9) argued most board members represent at least some part of Rockford, and should have a vested interest in what happens in their districts.

Ald. Dan Conness (D-14) said of the board’s amendment: “It ties the MetroCentre’s hands behind their back and doesn’t give them the leverage that they need to be able to negotiate the best deal possible to be able to pay the $23 million bonds off in 20 years. I hope that the county reconsiders this.”

Not every alderman feels slighted by the board’s decision.

Ald. Linda McNeely (D-13) told her fellow councilmen: “I think there was some wisdom with what the county did last week, contrary to some of you that may have been offended by what was said. They did separate between doing the renovations for the MetroCentre and the amount to acquire a team.”

Ignoring the board’s stipulation, the city chose not to remove the $3 million for the acquisition of a hockey team from its end of the agreement.

Attempts by Aldermen Frank Beach (R-10) and McNeely to separate the issue of the $20 million renovation from the $3 million team purchase failed during the Dec. 26 and Jan. 2 meetings, respectively.

“I just don’t believe that you can vote on an intergovernmental agreement where the other party has voted something contrary to that,” McNeely told the mayor, suggesting the vote be held off until an agreement is reached with the county.

Despite the board’s warning, the council voted to pass an ordinance authorizing the full $23 million in bonds, which made some wonder what message was being sent back to the county.

“Essentially, we’re asking the County Board to reconsider their vote,” First Ward Ald. Joe Sosnowski (R) explained, defending the unified ownership model whereby the MetroCentre would own and operate a hockey team. “If you cut out a middle party that would be looking to make a profit, you’re creating less risk as this process moves forward.”

Morrissey explained: “This allows us to keep this very time-sensitive matter moving forward, to work with the county and try to get back in a position of making this thing work.”

Ald. Ann Thompson (D-7), who is in favor of MetroCentre renovations, agreed the $20 million and $3 million should have been separated. By keeping the two issues together, Thompson felt she was forced into an all-or-nothing proposition.

Thompson, McNeely and Beach voted against approving the full $23 million.

“They’re in debt $1.9 million,” Thompson reported, adding that was the original cost of outfitting the MetroCentre with a sheet of ice. “They’ve only been paying interest.”

Thompson questioned the MetroCentre’s ability to repay the bonds.

Despite its version being quite different from that of the County Board’s, the City Council passed an ordinance recommending the approval of the intergovernmental agreement between the city, county and MetroCentre.

McNeely and Thompson offered the only nays.

Ald. Victory Bell (D-5), who voted to build the MetroCentre more than 25 years ago, said he still believes i

n the building’s importance today.

“I supported it then because I believe we do need a MetroCentre,” Bell said. “I believe we need a rehabilitated MetroCentre, and I believe we need it in downtown Rockford.”

Ald. Doug Mark (R-3) urged the renovation project keep moving forward: “We all share in downtown. It’s everybody’s ward. It’s everybody’s heart of the city.”

From the Jan. 3-9, 2007, issue

Enjoy The Rock River Times? Help spread the word!