Court hears arguments on arena debt

OLYMPIA – The Washington Supreme Court considered arguments Tuesday over the debt troubles surrounding Wenatchee’s events arena, and justices explored what types of money should count toward local government debt limits.

The public facilities district responsible for the Town Toyota Center has been working to refinance nearly $42 million and sought money from Wenatchee to do so. A judge ruled last summer that relying on Wenatchee for that money would push the city over its debt limit.

An attorney for the facilities district argued Tuesday that Wenatchee would essentially operate as a lender, not a borrower, in helping the agency cover its debt. Attorneys for Wenatchee contend the district’s failure would fall on the city and that there is a decent chance of that happening given the arena’s struggles.

A lawyer representing taxpayers, Thomas O’Connell, said placing that burden on Wenatchee would create competition for money that would otherwise go to vital city services.

“Who suffers the consequences in this scenario?” O’Connell said.

“It’s going to be the taxpayers. It’s not going to be the city officials.”

An effort by some state lawmakers to help rescue the district from default died during the Legislature’s special session late last year as senators balked at the idea of acting as a backstop for bad debt. The Greater Wenatchee Regional Events Center Public Facilities District defaulted last month on the debt.

State finance leaders have been concerned that default would have a broader impact on other Washington jurisdictions that might want to turn to the bond market to fund projects.