Greeley leaders talk financing, numbers on proposed arena project

GREELEY — Dreams for a massive hockey arena, hotel, convention center and indoor water park are easy to get excited about, but Greeley City Council members on Wednesday learned that financing a $1.1 billion project is not so easy.

Windsor developer Martin Lind and third-party financial pros walked the council members through a potential financing structure for the proposed $1.1 billion west Greeley project — billed as the vehicle to change the trajectory of Northern Colorado —  but it will take a lot more study for officials to feel comfortable with a multi-pronged bonding approach that puts all the risk onto the city.

“This morning was the first time we heard more specifics about the potential financing of the West Greeley project and it is complicated!” Councilmember Deb DeBoutez said in an email response to questions after the council work session. “I need much more time to digest and learn about the costs and risks. The potential rewards are exciting, but the devil is in the details and that is what I am focusing (on) from now on.”

The entire project —  which would relocate the Colorado Eagles minor-league hockey team to Greeley in a new arena, add additional ice for youth hockey and national tournaments, build a hotel and convention center, and a massive indoor water park with 12 wrap-around slides, plus additional restaurants and retail —  is expected to cost $1.1 billion, all of which the City of Greeley would guarantee.

“We’re trying to be cautious and conservative as we move forward in this” phase, said John Hall, the city’s economic development director.

City leaders plan to continue to vet the numbers, and come back to the City Council by Dec. 2 with a final market study and an economic impact study on Dec. 16. If the council moves forward, construction would be expected to begin in the summer of 2025. Lind needs his team on new ice by June 2028, as his lease at Blue Arena will run out.

Lind brought the project to Greeley after a falling out with Larimer County earlier this year. What he also brought was five years worth of work on the project, including a plan for potential financing through a nonprofit agency created to take on the bonding and management of the project.

The project would be funded in a variety of ways: through the revenues it generates once it opens; $793 million in bonding for the hotel, arena and water park; $235 million for infrastructure, to be financed general improvement district bonds, and $62 million in bonding for water and sewer infrastructure. The main bonding for the project would be through a “conduit borrower,” set up as a 501(c)3 agency by Provident Resources Group out of Baton Rouge, Louisiana.

It was a complicated model with which even city leaders struggled. Councilmember Johnny Olson asking them to return with less-complicated language.

“The debt isn’t really in Greeley’s name, but Greeley has to guarantee it, like dad as the cosigner,” Lind said in an interview explaining the structure. “The bondholders know Provident and they only take on high-quality projects, so the appetite for the bonds is higher. Greeley giving the moral obligation assurance should lower the interest rates. They don’t have to use a nonprofit to be the vehicle, they could do it themselves. This is just a proposal we brought to them.”

The structure sets up seven different operating and reserve funds that the project would pay into before paying out any revenues to the city.

What seemed to give many a level of comfort was hearing about other projects that were built with similar funding structures, such as Union Station in Denver, Metropolitan State University of Denver’s hotel, or the Polaris Hotel in Colorado Springs. It also is the same structure used to create North Colorado Medical Center.

“We paid off original debt 27 years early (on Union Station), which was amazing, but it is generating lots of revenue,” attorney Dawn Bookhardt, of Denver-based Butler Snow LLP, told the council. “The economic vitality around it, it just blew up.”

Lind promises that his Cascadia project will do the same. That is one reason he said he’s willing to let go of ownership of the arena, hotel and water park.

“We’re going to be a tenant in the building,” Lind said in an interview. “We will have no ownership in anything, arena, the hotel, the extra programmable space.”

Lind does, however, have 1,000 acres of developable land around the project, which he has planned for 6,000 housing units, plus other commercial development. He all but guaranteed the council that another hotel would locate at the site.

“We have enough around it we can be successful on the ancillary value,” Lind said in an interview. “We don’t have to have the value coming out of the arena project.”

Rachel Flynn, deputy city manager, told the council that much of the project will pay for itself with expected revenues from the projects, as well as sales, lodging and property taxes. The city would, with the amount of bonding have to put up $12 million a year of actual capital for three years, after which the project is expected to start making money to pay back the city for that capital.

Councilman Tommy Butler said Lind’s long-term commitment on the project with the Eagles, being associated with the Colorado Avalanche, made him feel better about the risks to the city if they move forward with such a financing structure.

The Eagles are a feeder team for the Avalanche, and all players are on the Avalanche payroll.

“They have a facility in south Denver that is old, to say the least, but not as advanced of a facility of this magnitude,” said Ryan Bach, president of the Eagles hockey team. “They have already expressed interest in development camps, rookie tournaments.”

Lind and Bach explained that the youth hockey alone will help fuel use at the arena. In a couple of years, the Eagles organization will have its 25th anniversary, Bach said, which lends more credibility to their program.

“The youth hockey is important,” Bach said. “The biggest constraint we have is the lack of ice and the ability for these kids to develop through all age groups. For the Eagles we see this more than just an arena, but an enormous opportunity for Greeley residents and Northern Colorado as a whole.

“We know where we’re at from the growth for our fan base, which is all the way north to Cheyenne to Denver. Is it likely our affiliation with Avalanche will continue long term? Yes, We’re already in talks  … we don’t want to go anywhere, they don’t want to go anywhere.”

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