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York City Council approves ice rink deal
The York City Council on Tuesday unanimously approved a deal to rent out space and ice time at the York City Ice Arena to a youth hockey club, a deal that looks to bring in hundreds of thousands of dollars to the city over the term of the lease.
The Maryland-based Skipjacks hockey club will rent the ice rink out during the day, when it normally sits empty, so officials gladly received the idea of bringing in a large sum of money while losing little.
Under the terms of the seven-year lease, the organization will pay $20,000 the first year and then that fee plus an additional 3 percent each year thereafter for use of the facilities. On top of that, the group will pay for ice time, which could be as much as $100,000 a year, Jim Gross, the city's public works director, told The York Dispatch last week.
But the city won't see most of that money for a couple of years, said Eric Menzer, president of the York Revolution, which the city contracts to manage the arena at 941 Vander Ave.
That's because the rink will need to undergo $225,000 worth of renovations to get the facilities ready for the club, Menzer told the council during the meeting. But the work won't be paid for with taxpayer money, he said — the Skipjacks organization will make "a pretty significant upfront investment" to cover the full cost of the work, which will involve turning several hundred square feet of what's now the lobby and pro shop into the arena's 13th locker room, which will be specifically for the hockey school.
Because the club is paying the entire $225,000 or so, the city plans to give it that much credit in ice time, so its players will skate for free for two to three years, Menzer said.
The payment doesn't apply to the annual fee — the organization will still pay the $20,000, he said. And after that, for the rest of the seven-year contract and then both of the possible subsequent five-year options, the organization will pay the city the going rate for ice time, which will start off about $50,000 to $75,000 at first, and then likely more as the program expands.
The worst-case scenario, Menzer said, would be if the hockey club goes belly-up in a couple of years. But the city wouldn't lose money on that. The renovations, paid for by the hockey club, will wrap up in the next couple of months, so the city would just be back to the spot it was in before the agreement, Menzer said — but with a newly renovated ice rink.
The council had few questions before the five members voted.
"I can't see any downside to this," Councilman Henry Nixon said.
In 2001, the city took on $7.3 million in debt to build the rink. Menzer at that point was the city's economic development director; he advocated strongly for building the rink.
The city defaulted on a payment on that debt two years later, in November 2003. It has made regular payments since. The city has budgeted a payment of $621,402.50 in 2016, and about the same for each of the following five years. The current plan is for the city to pay off the bond by 2021, according to this year's budget document.
There's been conversation about "monetizing the asset" — selling off the ice rink — but no plans to do that are imminent. This contract would not stand in the way of that, business administrator Michael Doweary said in response to a question from the council Tuesday night.
The York Revolution is now contracted by the city to operate the arena. The city and that organization came to a four-year agreement to that effect in 2014. As management of the arena, the Revolution negotiated the Skipjacks' lease on behalf of the city, Menzer said, but the money will go directly to the city.