Amherst officials Tuesday said they have been assured that financing a new ice arena with tax-exempt Industrial Development Agency bonds has several precedents across the state and that none of these projects has been challenged on legal grounds.
They also said the financial firm that last week estimated the town would save $3 million by bonding the four-rink ice complex itself now says town financing actually would cost $4.7 million more than if the project were bonded by the Amherst IDA.
The Town Board Monday approved lengthening the proposed lease from 10 to 25 years. If the board had not lengthened the lease, that would have ruled out IDA financing.
Lawyers recently questioned if state IDA legislation permits a local IDA to finance a municipal project. The answer apparently is yes, according to the Buffalo law firm of Hodgson, Russ, Andrews, Woods & Goodyear.
A letter from the law firm, released by Amherst officials Tuesday, listed seven examples of IDA involvement in municipal projects. These included ice rinks in Troy and Albany County, a golf course and city office building in Albany, a parking garage in Schenectady, a sludge disposal facility in Amsterdam, and a Schoharie County IDA-financed ski resort.
"Several of the projects listed have incurred financial problems. Some projects have been refunded. However, none . . . has been challenged by state review or litigation as a valid IDA project," attorney A. Joseph Scott III of Hodgson Russ wrote in his report.
However, Ronald Coan, executive director of the Erie County IDA, said his agency needed special permission from the state to help Buffalo and Erie County build the Marine Midland Arena.
"When the ECIDA received inquiries to build an ice rink . . . we had to go to Albany for special legislation because it was outside our jurisdiction," Coan said. "State IDA legislation precluded us from financing a project . . . built for and on behalf of a municipality."
James J. Allen, executive director of the Amherst IDA, said he believes his agency can finance the arena off Millersport Highway near the University at Buffalo, although it will be the agency's first involvement in a municipal project.
Meanwhile, town officials received a new project cost comparison from Evensen Dodge, the town's outside financial adviser, which puts the price of town financing at $22.6 million and IDA financing at $17.9 million. Last week, Evensen Dodge said it would cost $3 million less for the town to finance the rink than to have the town IDA do it.
"If you aren't confused about this wild price range, you ought to be," Council Member Bill Kindel told a crowd at Monday night's Town Board meeting.
But Council Member Jane S. Woodward said Evensen Dodge's revised financial analysis was based on new information that wasn't taken into account in the first report.
According to the new report, total debt service on a town project financed over 25 years would be $43 million, compared to $36.6 million for an IDA-financed project. Paying off the bonds in 20 years would reduce the totals to $37.7 million and $32 million, respectively.
In a related matter, the preferred developer of the Amherst ice-rink project is fighting back against critics, arguing that he has done everything the town has asked him to do and that some Town Board members are unfairly attacking his company's proposal.
"We have worked on this a long time and done everything they asked," said John E. "Skip" Cerio of Edgewater Ventures Co. of Syracuse. "We have passed every test they have thrown out at us."
Edgewater began talking to the town about working on the four-rink ice arena project when a study commission was formed in 1996, Cerio said. Edgewater was selected preferred developer in May after its proposal was deemed to be the most complete of three submitted to the town.
The company thought the project was progressing fine, until some Town Board members in recent weeks stepped up their criticism of financial and design proposals that other town officials endorsed months ago, Cerio said.
Cerio argued that his company followed the town's guideline's throughout the process. Edgewater was initially told by the town that the project could not be done with town bonds, Cerio said. As a result, Edgewater proposed using IDA bonds and still believes it is the least expensive way to build the project, Cerio said.
Cerio also said town concerns about someday getting back title to the site, which would be transferred to the IDA for the project, are unfounded.