Ramsey County is considering making a bid for the Vadnais Sports Center, a state-of-the-art ice arena and athletic complex built by the city of Vadnais Heights three years ago for $26.5 million and now on the market for about half that cost.
The County Board voted earlier this month, in executive session, to direct staff members to do a thorough analysis of the center's financial picture and programming to see if it is both economically feasible and will serve the recreational needs of area residents, said County Commissioner Blake Huffman, whose district includes Vadnais Heights and nearby communities.
The county can't pass up a rare opportunity to at least consider buying a new facility, which includes two ice rinks, a domed field and track plus ancillary space, Huffman said. But it's essential that the numbers show it can be self-supporting. "For me, it's a non-starter if we have to raise taxes," he said.
The county owns 10 modest-sized rinks, plus Aldrich Arena in Maplewood, most of which are older buildings. Vadnais Sports Center represents a significant upgrade, Huffman said — and at a bargain price.
While the asking price is $13 million, bids are unlikely to be below $10 million, said Ray Giannini, first vice president for investments at Marcus & Millichap Real Estate Investment Services, the Milwaukee firm handling the sale.
At this point, Ramsey County's expression of interest in the sports center has few specifics, not even a price, he said. The deadline for bids is Sept. 6.
Interest in the sports center has been intense, Giannini added, with offers coming from across the nation and even from other countries. "Investors see this as an opportunity," he said. "Universally, people see this as a state-of-the-art arena, nobody has ever questioned that."
The arena is self-supporting now and has good cash flow, he added, which reflects the asking price.
The city of Vadnais Heights built the sports center by issuing bonds and transferred ownership of it to the nonprofit Community Facilities Partners in Deephaven, with the expectation that revenues would cover the cost of debt service. But along with other problems, the revenue and use projections turned out to be way off. The city, which acted as leaseholder, paid the debt service for a while before walking away from the sports center.
Proceeds from the sports center sale will go to the bondholders, who are expected to sustain major losses.
The county's due diligence also will include protecting the county from any potential legal entanglements stemming from the sports center's troubled past, Huffman said. "Any agreement we enter into will separate the past from the future."
The County Board will meet again behind closed doors on Tuesday to go over the numbers and possibly decide on whether to proceed, Huffman said. "We're going to hear the numbers and see if they work out," he said. "If they do, we'll maybe try to enter into more exclusive negotiations with the sellers."