Metro Sports Foundation seeks $1.36 million loan for Urban Plains Center
FARGO - The Metro Sports Foundation is seeking another $1.36 million to finish work on its south Fargo hockey center, while the group continues to raise money to pave the parking lot and add another four practice rinks to the complex.
The MSF is seeking permission from the Fargo Park District, which is the landlord of the Urban Plains Center, to borrow money to finish landscaping, mechanical work and other building construction, MSF President Todd Berning said.
Berning told the Park Board's facility committee Wednesday that the loan will complete the financing for the $25 million building.
In all, MSF has taken out $20 million in loans to pay for the arena, Berning said.
The MSF is seeking the latest loan from a consortium of local banks, led by Bremer Bank. The building will serve as collateral.
The banks already loaned the MSF millions to get the facility built in time so that it could secure a United States Hockey League team. After an initial struggle to find the needed financing, the MSF turned to the Park District for help in getting the facility exempted from property taxes.
In late 2007 the district agreed to become the landlord of the facility but accept no liability for the debt. If the MSF, which also operates the UP Center, fails to make loan payments on the arena, the Park Board would have to vote to take on the debt. Otherwise, ownership would revert back to the banks.
The new loan to finish construction is just the latest hurdle in the UPC's short life. And the challenges aren't done.
Originally conceived as a hockey complex with one main rink and four practice sheets of ice that were to be completed as early as this year, Berning now says any second phase to the project is "a ways out yet."
Berning said the MSF also is seeking other funds to pave the center's parking lot, a bone of contention with many who visited the UP this past winter for hockey events. The facility's lots are dirt and turn to mush with any amount of precipitation. That separate fundraising effort is proceeding, he said.
The facility committee agreed to take the MSF's request to the full Park Board on June 9.
The board will be asked to approve a landlord subordination agreement for the loan. The agreement is a continuation of the original contract, which gives the Park District the ability to approve or deny any debt the MSF seeks for the arena, said Jim Larson, the district's director of finance.
With the latest loan, any fees that could be received by the Park District from the arena would go to the banks if the MSF fails to make mortgage payments.
If the MSF defaults on the loan, the banks can take over as landlords, the contract says.
Park Board President Ron Sorvaag said the only way the Park District would take on any debt for the arena is by a vote of the Park Board.
Larson said there is no financial risk for the Park District or requirements to make payments.
"We believe that the success of this facility is very beneficial to the community," Larson said.