Arena bond sale prompts questions
Powwow: Plymouth Township Treasurer Ron Edwards, back to camera, meets with USA Hockey officials prior to public hearing on Compuware Arena bond sale.
Jan. 26, 2015 PLYMOUTH EAGLE.
Plymouth Michigan News
“The substance of what’s covered in the resolution is that the authority needs local approval in order to quality for a loan, and that’s it!”
By: Don Howard
Several Plymouth Township residents have expressed skepticism regarding the involvement of officials in a $25 million bond sale to finance the purchase of Compuware Arena.
Township officials scheduled a public hearing during the regular board of trustees meeting Jan.13 to accommodate a finance plan by Colorado Educational and Cultural Facilities Authority to issue $25 million in tax exempt revenue bonds for the purchase and renovation of Compuware Arena, recently sold by owner Peter Karmanos, Jr. Karmanos announced last week that he had also sold the Whalers hockey team to Rolf Nilson, an industrialist from Flint who will move the team to that city.
The proceeds of the bonds will be loaned by the authority to Plymouth AC, LLC, of Colorado Springs and used to finance the acquisition and improvements at the arena and facilitate a lease with USA Hockey, Inc., the governing body for amateur ice hockey in conjunction with the U.S. Olympic Committee. USA Hockey acknowledged the acquisition would be funded by tax-exempt bonds based on their status as a non-profit 501(c)3 District of Columbia corporation.
USA Hockey, now based in Ann Arbor, presented plans for taking over the Plymouth Township arena and moving youth hockey teams into the facility at a recent board meeting.
According to Plymouth Township attorney Kevin Bennett and information detailed in the board meeting packet, the issuance of the bonds must be approved by the local governmental unit on behalf of which the bonds are issued as part of the Internal Revenue Code. In a published Notice of Public Hearing, the township claims the arrangement will not constitute indebtedness or create a liability for the township.
Several residents expressed speculation as to the township involvement and proper investigation into the sale of the bonds, other than that of an interested third party, especially after township officials thwarted efforts by a City of Plymouth group to develop a recreation facility at the Central Middle School and stalled efforts by L.A. Fitness to develop a fitness center on Ann Arbor Road, a case finally resolved in Wayne County Circuit Court last fall. Those questioning the proper handing of the hearing say they surmise the township might offer a tax-free proposal to USA Hockey in exchange for use of the facility during off months for a unilateral in-township recreation program proposed by Township Treasurer Ron Edwards.
Residents skeptical of the Compuware bond sale transaction say they are suspicious of covert action by township officials and Edwards, who last year voted down an opportunity to work with supporters of the proposed Plymouth Arts and Recreation Complex (PARC) to be located at the site of Central Middle School in downtown Plymouth and rejected a request to join a feasibility study for the community center plan. Board members also voted to abstain from any joint agreements with the City of Plymouth on any project for three years. Edwards was adamant at the meeting that a recreation plan he proposed, including a $1.9 million bond sale to fund a pavilion and amphitheater as part of a township-controlled recreation department, not be “tossed aside” for the PARC proposal.
The board of trustees also entered into a protracted legal battle with L.A. Fitness in an effort to prevent construction of a recreational/sports complex on Ann Arbor Road. The lawsuit, settled last fall, allowed L.A. Fitness to proceed despite the efforts of the township to halt the project. The facility has not yet begun construction. Those issues, and others, sparked the recall campaign currently under way against Township Supervisor Richard Reaume, Edwards, Conzelman and Trustee Kay Arnold, who all supported Edwards’ plan.
During the board meeting power point presentation last week by USA Hockey Director of Operations Scott Monaghan, Trustee Chuck Curmi questioned board officials as to whether or not Bennett approved of the arrangement and if the taxes currently collected for the Beck Road facility would be coming off the tax rolls.
Bennett said he felt the resolution drafted by the township clerk was “proper and formal.”
“So you feel the language sufficiently indemnifies the township and makes it clear we’re not responsible for any debt whatsoever in the event of a bankruptcy….or drawn into a lawsuit from the lenders?” Curmi inquired.
“I’ve read the resolution, but I’ve not seen the contract… The authority needs local approval as part of the internal revenue code in order to qualify for the bond.”
“So you’re OK going forward?” Curmi asked.
“The substance of what’s covered in the resolution is that the authority needs local approval in order to quality for a loan, and that’s it!” Bennett responded.
Conzelman indicated she felt there was “no problem” with the language.
Curmi pressed further questioning whether Compuware is on the tax roll as a commercial property.
“I’m trying to do due diligence. Will it or will it not be on the tax roll?”
Reaume, noticeably annoyed at Curmi’s questions responded, “ Foundations are not exempt from paying taxes!”