Council to consider issuance of $15M in bonds for ice rink acquisition

Decorated cars line up to show their support for the Ice Station rink in Valencia Sunday afternoon. April 26, 2020. Bobby Block / The Signal.
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Santa Clarita City Council members will host a public hearing Tuesday and consider whether to approve the issuance of $15 million in bonds to finance the costs of acquiring the Ice Station Valencia. 

The costs of financing the purchase will be funded entirely by the proposed lease revenue bonds, of which 75% will be issued as tax-exempt and 25% as taxable, ultimately providing the city “flexibility in terms of the potential private use of the (ice rink), its future management contracts, and revenues generated by private use. Any future lease agreements or management contracts will be brought to the City Council for their consideration,” according to the city agenda report. 

With lease revenue bonds, voter approval is not required, according to Carmen Magaña, director of Administrative Services for the city. Unlike revenue bonds, lease revenue bonds, which mirror that of a typical financing lease, have a lessee that pays rent to use the facility and rent payments are used to pay back investors who purchased the bonds for financing, according to the California State Treasurer. 

The bond proposal comes after the City Council approved a $14.49 million acquisition of the 93,000-square-foot ice rink last month. The total cost includes the $14.2 million purchase price and $45,000 for title, escrow and due diligence costs, as well as $250,000 for improvement costs. 

“Funding from the proposed bond issuance will be used to reimburse the city for the $14,200,000 purchase price,” according to the agenda report, which added that “annual debt service payments are anticipated to be approximately $730,000, beginning 2021 through 2050, payable from city’s general fund.”

The building’s use would mostly support ice sports but other potential uses include business meetings, conferences, trade shows and other recreational type activities, city officials have indicated, adding that these uses will boost economic activity. 

The Ice Station, a three-sheet facility used over the past two decades for the local hockey and skating community, also includes a pro shop and restaurant. Since the purchase, the city has solicited proposals for the operation of the facility, including the ice rink, shop and eatery. 

The public hearing is scheduled for Tuesday during the City Council meeting, which begins at 6 p.m. Members of the public can tune in to the meeting via santa-clarita.com/agendas and submit written comments or speak during public participation by entering an electronic speaker form at least 30 minutes before the start of the meeting via santa-clarita.com/writtencomment or santa-clarita.com/speakersignup.

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