For Sale: Vadnais Arena, just $13 million!

[Shinbone_News]

This has come up on the board before. It's hard to reconcile this with the supposed shortage of ice around the Twin Cities. Did they overbuild?

Next question: How about Bernie buys it????


http://www.twincities.com/localnews/ci_ ... er-up-sale

Troubled Vadnais Sports Center on sale -- half off
By Sarah Horner


Bondholders who financed the sports center in Vadnais Heights are likely to take a hit on their investment
when a new owner is found for the debt-ridden arena.
The 200,000-square-foot domed complex went on the market last month for $13 million, about half of what
it cost to finance it, said Dan Nelson, general counsel for Community Facility Partners, which owns the
facility.
Proceeds from the sale will first go toward covering fees owed to the bondholders' trustee and the broker
marketing the center before reaching those who actually put dollars into building it.
"(The bondholders) will be taking a loss," Nelson said.
It appears bondholders decided selling the complex was the best strategy for recouping at least a portion
of their investment, Nelson said.
The trustee representing bondholders, U.S. Bank, declined to comment on the sale.
The Vadnais Sports Center has had a checkered financial history since opening in November 2010.
It was originally promoted as a project that would pay for itself through rental fees and would clean up a
blighted corner of the northern suburb. The city council opted to financially back the bonds sold to pay for
the arena, putting taxpayers on the hook for any financial shortfalls.
The facility did not meet expectations and quickly became a drain on city finances, leading the city council
to pull out of the agreement last August.
The move effectively ended the city's financial obligation to the complex and placed its fate in the hands of
bondholders.
Though allowed within the city's contract with Community Facility Partners, the decision led national
bond-rating agency Standard and Poor's to drop the city's long-term rating on lease revenue bonds from
an A- to a CC.
Its general obligation-backed bond rating -- the key measure typically used to measure a city's credit --
also fell.
With the city out of the picture, the sale of the building and its roughly 10-acre site is being brokered by
Marcus and Millichap Real Estate Investment Brokerage Co., according to U.S. Bank's notice to
bondholders announcing the sale.
The trustee and Community Facility Partners hired the company, which did not respond to a request for
comment.
Interest in the site has been high, Nelson said, who said at least two offers are under review.


The complex houses two hockey rinks, a domed field and a running track. There are also locker rooms, a
concession area and office space. Sak's sports bar is attached to the building.
There are also three outlying lots on the site that have not been developed.
"The majority of the potential folks are looking to preserve it as a community sports facility," Nelson said of
the potential buyers.
Board members reported an uptick in activity at the arena this spring after signing a deal with new anchor
tenant Northern Educate, an intensive sports training program for students in kindergarten through 12th
grade.
A broader marketing approach also helped land a craft show as well as dog racing events in the space
this year.
Community Facility Partners board member Steve Collins said a new owner probably would continue to
seek alternative uses for the center.
"I'd imagine the goal would be to try and rent it out as much as possible for anything that needs a roof,"
Collins said.
Despite the increase in activity, revenues were not enough to cover the principal payment owed to
bondholders Aug. 1, Nelson said.
Revenue failed to cover both the principal and interest payments owed back in February, according to
U.S. Bank's note to bondholders.
The trustee will hold a conference call to update bondholders on the status of the sale Aug. 13.
Sarah Horner can be reached at 651-228-5539. Follow her at twitter.com/hornsarah.

[BluehawkHockey]

No, they overpaid. $26 million for 2 sheets of ice and a dome. The builder saw them coming. There is no way to generate enough revenue from the 3 surfaces to pay for it. $13-$15 million could have been doable but the surfaces need to be busy all of the prime hours and much of the spring and summer as well.

Coon Rapids is likely to have a similar issue. $12 million for an indoor and an outdoor sheet of ice is a pretty steep price tag. Need the indoor sheet to be fully booked year round to make it.

[Shinbone_News]

No, they overpaid. $26 million for 2 sheets of ice and a dome. The builder saw them coming. There is no way to generate enough revenue from the 3 surfaces to pay for it. $13-$15 million could have been doable but the surfaces need to be busy all of the prime hours and much of the spring and summer as well.

Coon Rapids is likely to have a similar issue. $12 million for an indoor and an outdoor sheet of ice is a pretty steep price tag. Need the indoor sheet to be fully booked year round to make it.

Egad. Both the builder and the decision-makers should be ashamed of themselves. Sounds like an inside job with closed-envelope bids or something.

[C-dad]

It is overbuilt in some ways - not very efficient for space utilization but I would guess it was bid during a poor bidding climate as well to run that high.

[thefatcat]

No, they overpaid. $26 million for 2 sheets of ice and a dome. The builder saw them coming. There is no way to generate enough revenue from the 3 surfaces to pay for it. $13-$15 million could have been doable but the surfaces need to be busy all of the prime hours and much of the spring and summer as well.

Coon Rapids is likely to have a similar issue. $12 million for an indoor and an outdoor sheet of ice is a pretty steep price tag. Need the indoor sheet to be fully booked year round to make it.

Egad. Both the builder and the decision-makers should be ashamed of themselves. Sounds like an inside job with closed-envelope bids or something.

The builder was Engelsma Construction...owned by a member of the Engelsma family who also owns Kraus Anderson Construction. I've had dealings with him in the past, seems like a decent guy...arrogant but decent. The irony is that I see him at MN Made regularly.

[Ugottobekiddingme]

What district does the Vadnais Heights complex rest in the middle of?...Umm, never mind. It's free money, it's your money D2.

[edgeless2]

What district does the Vadnais Heights complex rest in the middle of?...Umm, never mind. It's free money, it's your money D2.

Shady all the way around....weren't the Ducks in D2?

[Ugottobekiddingme]

What district does the Vadnais Heights complex rest in the middle of?...Umm, never mind. It's free money, it's your money D2.

Shady all the way around....weren't the Ducks in D2?

No, the Ducks are stuck in California but concession stands are left unintended at most D2 arenas.

[O-townClown]

Ducks storyline was District 5 vs. 6. Banks played for the cake eaters, but was actually zoned for working-class D5. I assume that meant he would have lived somewhere in SW Mpls, likely walking distance from the Convention Grill without an Edina address.

Heck of a player.

[C-dad]

Ducks storyline was District 5 vs. 6. Banks played for the cake eaters, but was actually zoned for working-class D5. I assume that meant he would have lived somewhere in SW Mpls, likely walking distance from the Convention Grill without an Edina address.

Heck of a player.

Only because they redrew the District lines and no one noticed until the old guy who sharpens skates figured it out.