City Council may pledge money to Civic Auditorium

by Carol Crump
Wednesday, September 3, 2008 8:43 AM MDT

If the last kinks in a memorandum of understanding can be worked out, the Citizens for a Civic Auditorium may have a lot more money from a new partner. The Casper City Council reviewed the draft MOU at a work session on Aug. 28.

The council's financial commitment in the draft document includes $1.4 million to acquire a minimum three-acre site in the Old Yellowstone District, $2.9 million in dirt work, surveying and installation of utility lines to prepare the site for construction, and $1.25 million in cash toward actual building costs.

In addition to the $5.55 million, the City would agree to help the CCA apply for two grants totaling $3 million from the Business Resource Council (BRC), $5 million from the Amoco Reuse Agreement Joint Powers Board (ARAJPB) and any other grants that could benefit the project.

As part of the MOU, the payback to the City for the financial outlay would come from the trona royalties pledged to the CCA as a charitable donation by John Wold.

How and when the CCA would repay the City for its financial commitment from the trona royalties depends on when the asset is mined and if assignment to the City can be made.

Wold has pledged one-third of 1 percent of the gross revenue stream of the leases -- approximately $6.8 million -- in what is the most profitable area of the Sweetwater Basin to the Civic Auditorium project.

FMC, the company that bought the leases from Wold, has publicly stated it will mine the leases, although there is no current date for when the mining will start.

Additionally, the City would pledge to provide $300,000 in non-repayable operational funding to the CCA for 10 years. The City would own the building.

The MOU also requires a financial commitment from the CCA. The citizens' group would be required to contribute $9.5 million in cash from pledges.

With approximately $7 million in pledges so far, the CCA will commit to collecting all of the pledged amounts and about $2.5 million in new paid-up pledges.

Without the successful fulfillment of all of the City's and CCA's financial commitments in the MOU, the deal will be off. Those commitments include $5 million from the ARAJPB, $3 million from the BRC, $9.5 million in cash from the CCA and a site optioned or purchased by the City.

The deal also could be off if the CCA is unable to get the assignment of the donated trona royalties switched from the CCA to the City.

The assurances in the MOU drafted by a committee of CCA, council members and City staff were not enough for some council members to agree to bring the document forward for final council approval.

Council members Maury Daubin and Tom Walsh questioned the lack of a specific timeframe for the actions outlined in the MOU.

"It still doesn't say when this has to happen by," Daubin said. "It's been open ended up until now. It needs to not be open ended for perpetuity."

The council's newest member, Joel Burdess, questioned the uncertainty of the return from the trona.

"FMC is in the business," the CCA's Ken Barbe told the council. "They're telling us they'll keep the reserves and mine them. All I can do is believe them."

There were also concerns with the projected total cost of the project as time passes and the listed cost of land.

The MOU will be reworked by the committee to include a timeline for compliance with the terms of the MOU, clearer language on land costs and a possible opportunity for council members to visit with a representative of FMC.

The MOU will be back before the council at a work session on Sept. 8, and possibly be voted on in a final version at the regular council meeting on Sept. 16.

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