AUBURN — The City Council signed off on a $7 million bond Monday to buy Norway Savings Bank Arena.
The move, outlined during a workshop discussion last week, it meant to pull the city out of a 30-year lease agreement with developer and owner George Schott, who worked with the city to build the arena in 2013.
Assistant City Manager Phil Crowell said the remaining payments on the lease with Schott equal roughly $12.7 million. The city’s $7 million bond will add up to $10.45 million over 20 years.
The vote Monday, at 6-1, showed the council’s confidence in the decision, which many said was a sound investment in a community asset and a long-term savings financially.
Councilors Alfreda Fournier and Holly Lasagna said they had both heard concerns from residents over the bond, especially with the expenses of the new Edward Little High School coming into play soon. However, both said they were able to ensure that it is both a short and long-term savings.
Auburn Finance Director Jill Eastman said last week the city’s current lease payment is about $507,000 annually, and the annual bond payment would be “a little less than that.”
When the decision to build the arena was made in 2012, the Sun Journal reported Schott would borrow the $8.5 million to build the facility using private financing, and lease it back to the city each year for 30 years. During that time, the agreement stated, the city would have the option of buying the property.
It was planned to be a moneymaking enterprise, but expenses have often outpaced revenue projections. In fiscal 2017-18, it ran at a loss of $394,000. This year, it is expected to essentially break even.
However, city officials have recently doubled down on the arena and sports tourism efforts. The arena’s budget for next year has revenue projections rising significantly.
During a Monday workshop, Mark Gosselin, director of recreation and sports tourism, spoke to the council about a potential marketing initiative to capitalize on new events in Auburn.
He said the recent success of events like a country concert at the arena has given the city momentum and credibility.
“We don’t want to lose that momentum,” he said.
He said the city is looking at creating a structured marketing plan, and might issue a request for proposals for targeted marketing strategy, with an October launch.
Councilor Andy Titus said he wanted the council to have more time to decide what results it seeks to achieve.
“The council should decide what direction we want to go in,” he said. “Marketing is good, but it can be a lot of wasted money if there are not clear goals.”
Councilors Alfreda Fournier and Bob Hayes said they would like to see the almost-completed strategic plan before deciding on a marketing strategy.
COUNCIL SAYS NO TO AD HOC CHARTER REVIEW
Also on Monday, the City Council voted down a resolve that would have established an ad hoc charter review committee.
The majority of the council, in a 5-2 vote, argued the city should instead form an official Charter Commission in order to review the city charter, which is required once every 15 years.
The city administration, following a legal review in 2014, said the charter language can be interpreted that the council “does have the option of creating a committee to review and study the charter and report back to the council with proposed amendments.”
Mayor Jason Levesque supported the ad hoc review committee, arguing that establishing an official Charter Commission would leave the door open to wholesale changes in the structure of Auburn’s government.
Due to the timing of Monday’s decision, the charter review process will likely be handled by the next City Council.
“Fifteen years ago, we didn’t overhaul the system,” Hayes said. “I don’t see the delay as a bad thing.”
Resident Joe Gray questioned the legality of the ad hoc committee, saying state law only refers to an official Charter Commission handling the review.
Fournier, among others, said once every 15 years is “our opportunity to take a good look at it.” She also requested the city’s legal counsel take a look at the Charter Commission versus charter review committee argument.
Councilor Holly Lasagna said she disagreed that forming a Charter Commission could lead to an overhaul of Auburn’s entire form of government.
“Maybe it won’t lead to a lot of changes,” she said, “but at least we would’ve done our due diligence.”
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