Even though there are roadblocks in the way of selling the Falleti Ice Arena, a majority of Batavia City Council members said last night they to find out how much revenue could be generated by selling it. They also want more details about the original purchase.
On a 4-3 vote, after much discussion, and more information from City Manager Jason Molino on the difficulties of a sale, the council instructed Molino to gather facts about the purchase and, if the rink was sold, the options of handling the money.
With councilmembers Kathy Briggs and Tim Buckley absent, Councilman Frank Ferrando called for a vote at the next meeting on whether the city should continue to look at a possible sale of the arena.
Councilmembers Bill Cox, Bob Bialkowsk, Sam Barone and Rose Mary Christian all voted in favor of getting a professional appraisal.
As for the difficulties involved in selling the arena, Molino explained that the city had recieved $1.2 million for energy capital improvements. It was a 15-year loan.
Approximately $630,000 of that was spent on improvements at the ice rink.
The upgrades included; new lighting; an energy-management system; refrigeration improvements; foil ceiling to keep heat out; new exterior doors; a ventilation system to vent out carbon-dioxide from the Zamboni; and a new boiler that is used for heating both the ice rink and the fire department, which are connected.
These resulted in lower utility costs. The city's lease contract with Firland Management called for Firland to pay the city the difference due to the improvements. That's about $25,000 per year for the city -- roughly 30-percent of the annual $84,000 payment the city has to make for the 11 years remaining on the loan.
According to Molino, the rink was built in 1978 with a Community Development Block Grant, which required the city to build some type of multi-use community center and the vote went to putting up the arena.
Since it was built with CDBG funds, if the rink was sold, the revenue would have to be used to benefit low- to moderate-income families. The project would also need to be approved by the federal Department of Housing and Urban Development.
So the money would probably have to be used to build another community center or to put improvements into an existing one, yet it is not certain if the latter would be allowed.
Councilman Bill Cox asked Molino to submit a formal request to HUD to see what the money could be used for and find facts as to what could be done with revenue if the rink was sold.
Revenue from its sale could not go toward the city's loan. Batavia would have to pay the balance with other money.
The city would also lose the $25,000 Firland pays toward the loan debt each year.
If the city maintains ownership and renews the agreement with Firland -- which the company wants to do -- the city could expect a total of $400,000 from Firland over the next 11 years. That's enough to cover debt service, including the $75,000 still owed on the Zamboni.
In a previous report, Molino guessed that the sale price might only be four or five times current revenue, or between $300,000 and $400,000. City Attorney George Van Nest has cautioned council members that finding a buyer could be difficult.
The city also receives $5,000 per year for five years from Falleti Motors, which won the bid for the naming rights in December 2006.
After expenses, the city still profits $10,000- $15,000 per year. The money goes into a rink reserve account, which is used for any repairs or building upgrades that may be needed. Any money the city puts into the rink, is money received from the rink.
After listening to Dave Meyer speak at last night's meeting, Councilman Frank Ferrando changed his position and now strongly opposes selling the arena.
He said the council was spending too much time on the issue -- treating it like it is critical to sell the arena.
"We are receiving money and there hasn't been a problem," Ferrando said. "We aren't in business. We aren't doing payroll."
He said Meyers had a good point by referring to the arena as "a park in the wintertime" and offers a lot for kids, families and even adults.
"I am kinda proud that we as a community provide the facility and we provide it in a way that isn't a burden to us," Ferrando said, "and we have income coming from it. We are making a complicated issue out of a simple issue."
Ferrando stated that selling the arena is "as ludicrous as dividing up Kibbe Park and selling it as property. ... I'm not interested in selling that ice rink."
Councilwoman Rose Mary Christian, who's in favor of the sale, argued that "I am not getting any service from the rink" as compared to the fire department and other services.
Councilwoman Patti Pacino responded by reminding Christian, that unlike the fire and police departments that are free to everyone, this is a different type of service because the people that play hockey, pay to use the arena. So the taxpayers aren't paying for sports there that not everyone plays.