STIC in the mud
Tired of hearing the same song with a different tune, the City Council has given creditors of an ill-financed ice rink until March 30 to locate a suitable investor with a viable plan or face eviction.
The city terminated the South Tahoe Ice Center lease in November and will force creditors to remove any improvements at the Rufus Allen Boulevard site by May 1 if there isn’t resolution this spring.
“Since no one has come forward, how long should the city wait before wiping the slate clean and soliciting for proposals?” asked Councilmember Kevin Cole.
There have been several interesting developments in recent weeks regarding the rink. A group of community members ordained in October to find fiscal solutions and possibly reopen the center was disbanded due to complicated legalities and the ambitious pursuit of prospective financiers.
John Wareham, the man who has devoted four years to STIC operations, has entered the fray again. Wareham wanted to disassociate his name with the ice center because it was perceived that some of the public had lost faith in him. He has stated that he continues to represent the interest of the creditors, who are owed approximately $400,000, but won’t have any part in future management functions.
“I want to make it abundantly clear that I am working on behalf of the investors,” he said. “I have no intention of operating the STIC. I just want to facilitate a takeover so that the people who put money into the rink can recoup some of their costs.”
Once again Wareham has promised to search for investors but said his hard target search will be toward management firms that have experience with ice rinks. One such agency has expressed interest and will submit a proposal to Wareham next week. VC Ice, a Cleveland-based company with a short track record, is looking to expand its business nationwide. Currently, the company runs an ice center previously owned by the city of Cleveland. The rink reportedly didn’t turn a profit until VC Ice took over.
Company Vice President Joe Carney said he wants to manage another ice center and Tahoe is one of several that is currently under consideration.
“There is a great opportunity in Lake Tahoe,” Carney said during a phone interview on Friday. “You have a great climate, location and year-round tourism. At this point it’s preliminary and a lot of the answers wouldn’t come from us but rather the approval from the creditors.
One option available to the parties would be a plan that converts the debt into equity, making shareholders out of the creditors. A stipulation has been added, however, that would require a potential investor to enclose the rink. The cost of adding a roof is approximately $300,000.
“That would be acceptable,” Carney said. “We wouldn’t want to come in with half of a loaf.”
The Tahoe community has remained patient amid the storm of controversy surrounding the rink. The STIC was built in late 1996 and despite the absence of a financial plan, opened in January to moderate crowds. A few months later, the center was closed because the cooling system was unable to keep the ice frozen under direct sunlight.
The ice may have melted away but the debt has remained. V&C Construction is the largest of the many creditors, owed more than $200,000 for development costs. Nearly every option has been exhausted, including running national newspaper advertisements, having V&C owner Ray Van Winkle take over the rink and asking the community to spearhead the revival efforts.
Van Winkle and various subcontractors who built the ice center don’t want to dig up their underground improvements, some of which can’t be recovered, if evicted. Wareham said some of the funds used for environmental studies can’t be returned via a check to creditors.
Wareham hasn’t impressed the panel of judges – the five-member City Council – over the last year. This is probably Wareham’s and the creditors’ swan song before the city takes over the reins.
Wareham is fearful that the city will erase the debt and allow investors to move in at bargain rates. He said it isn’t fair that the creditors’ interests are cast aside just so the rink can open to the public.
“We already lost one season,” Cole said. “So whatever move we make, we want to do it early.”
Support Local Journalism
Support Local Journalism
Readers around the Lake Tahoe Basin and beyond make the Tahoe Tribune's work possible. Your financial contribution supports our efforts to deliver quality, locally relevant journalism.
Now more than ever, your support is critical to help us keep our community informed about the evolving coronavirus pandemic and the impact it is having locally. Every contribution, however large or small, will make a difference.
Your donation will help us continue to cover COVID-19 and our other vital local news.
Start a dialogue, stay on topic and be civil.
If you don't follow the rules, your comment may be deleted.
User Legend: Moderator Trusted User