Tentative agreement: Restructure Chiefs stadium debt; city forgive $1.2 million in bonds
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- Published on Thursday, 25 April 2013 19:30
- Written by Paul Gordon
An agreement has been reached between the Peoria Chiefs and other parties to restructure the debt on the downtown baseball stadium, for which Caterpillar Inc. will have the naming rights for the next 10 years.
But the agreement, which is worth $7.35 million to the ballcub and will also include new money from the group of owners and a reduction in outstanding bank loans, will hinge on whether the Peoria City Council agrees to forgive $1.2 million in bond repayments over the next eight years.
The council will vote on the proposal at a special meeting next Tuesday, a vote that is unlikely to be a unanimous approval because taxpayer money will be used to cover that bond debt.
"I am hopeful it will be more than a simple majority who will see the importance of approving this agreement and keeping professional baseball in Peoria," Mayor Jim Ardis said during a news conference at Chiefs Stadium that was called to announce the tentative agreement.
Ardis would not go so far as to express confidence in the council vote beyond that because, he said, he had not had the chance to discuss with individual council members as of yet. The council went into executive session on Tuesday to briefly discuss but no vote was taken. Instead it schedule the special meeting to allow the opportunity for public input.
Chiefs President Rocky Vonachen said without the council's approval the entire deal falls through. That would include a $1.2 million reduction in bank loans that would occur when Morton Community Bank would take over the loan from a consortium of seven banks that made the original loan a dozen years ago.
(Photo by Paul Gordon) Mayor Jim Ardis, front, discussed a tentative agreement reached between the Peoria Chiefs, the city and others involved in the ownership of Chiefs Stadium that would restructure the debt on the stadium. To his left is a placard spelling out the agreement during a news conference at the stadium on Thursday. The agreement hinges on the City Council approving it next Tuesday.Also out would be $2.7 million in new investment from the group of 50 owners, most of them local.
Jim Baumgartner, head of public affairs for Caterpillar, said that would include that company's agreement to acquire the naming rights for $2 million over the next 10 years.
Baumgartner and Vonachen said a name for the stadium hasn't been chosen yet and won't be until after the agreement is finalized.
If the council doesn't approve the deal, Vonachen said it would be back to the drawing board to find another way to restructure the debt, which is needed quickly because the original loan is coming due but the ballclub has been losing money the last few years.
The original debt structure is one reason for that, he added. "So we reached out to see what we could do. The goal is to keep the stadium privately owned," he said.
The city's bond was issued for $1.675 million at 4.25 percent interest, to be repaid over 20 years at about $150,000 a year, City Manager Patrick Urich said. The bond was used for infrastructure needs when the stadium was built, with the stadium owners obligated to repay it. If the agreement is approved, the final eight years worth would come out of the city's general fund.
Ardis said he wanted to put down any misconceptions the agreement was reached to put money into the pockets of the team and stadium owners. "That is not accurate," he said, adding they will still meeting other obligations to keep the team playing and the stadium in use. "Having a dark stadium is not an option," he said.
Part of the agreement with the city would include allowing others to use the stadium for other events, such as concerts, when the Chiefs or Bradley University teams are not using it. Bradley, as per the agreement, will pay $250,000 over the next 10 years to rent the stadium for its games.
Ardis said he is pushing for approval of the agreement because the Chiefs are important to the entire region, even beyond the $180,000 in annual property taxes the stadium generates. "This ballpark is an amenity to this city and it fits well with the new construction downtown and the Warehouse District," which surrounds the stadium, he added.
Ardis said he has heard from others, including officials at the University of Illinois College of Medicine at Peoria, that having professional baseball in a city this size is an important tool in recruiting teaching and research talent to Peoria.
Baumgartner said the same is true for Caterpillar. "It goes to the issue of quality of life. Having activities for young professionals is important in our recruiting efforts," he said.
The special City Council meeting will begin at 7 p.m. at Peoria City Hall.
