LEWISTON — Managers of the Androscoggin Bank Colisee will get more time to repay their mortgage to the city, councilors agreed Tuesday, but the city gained more oversight of day-to-day financial operations.
Councilors approved an addition to the 2008 mortgage agreement with Firland Management, extending the contract from 2027 to 2032.
Jim Cain, owner of Firland Management, said Tuesday that difficulty keeping a regular team on the Colisee ice has made it tough to meet financial obligations.
A 2012 deal that brought the Portland Pirates to Lewiston for a season didn’t bring in as much money as Cain expected. An effort to replace them with a junior hockey team, the Maine Timberwolves, evaporated in September.
“The absence of a team has caused some stress in the business,” Cain said. “Hopefully, the council will approve a restructuring of the debt, and that’s all this is.”
According to the City Council’s resolve Tuesday, Firland will pay a total of $5,000 through June 2015, the end of the current fiscal year. Payments then would go up to $70,000 per year, to be paid monthly.
Cain said he was in negotiations to bring another junior hockey team to Lewiston for regular games.
“We are not ready to announce anything, but we will within a week or so,” Cain said.
Lewiston Finance Director Heather Hunter said the agreement adds clauses for default, requires filing financial documents with the city and makes other financial management changes.
“It shortens the late-fee payment, assigns their accounts receivable to us and requires our pre-authorization before the Colisee organization assumes debt or pays dividends or salaries to their owners or managers,” Hunter said.
Hunter said the changes would help the city.
“Although it’s an unfortunate situation, I think the negotiated terms of this allow the city to strengthen its position,” Hunter said. “(Firland has) been very amicable about opening communications.”
Firland took over ownership of the Colisee in 2008, agreeing to pay $1.2 million in 15 payments. Under the terms of the original agreement, Cain’s first mortgage payment to the city was due July 2013.
Firland’s payments were set at $50,000 per year beginning in 2013 and $100,000 per year from 2023 through 2028.
A renegotiated mortgage late in 2012 sped up the mortgage term, with the company agreement to make additional payments once the ice arena showed a $200,000 net operating income for three consecutive years.
The new deal, approved Tuesday, requires the company to make up to $70,000 per year in mortgage payments beginning in July 2015 through 2032. Hunter said the payments would be made monthly.
“I think that will program into their cash flow much more positively than the once-a-year, lump-sum amounts have impacted their budget,” Hunter said.