Foreclosure Suit Hits Big Suburban Ice Complex
Although the article blames slack demand for ice time at a three pad (sheet of ice) facility and location in distant Romeoville, the real culprit was the expense of servicing the facility's debt relative to the utilization that the Huskies could achieve by themselves. The Huskies compete only in the Central States Developmental Hockey League (CSDHL) and the Northern Illinois Hockey League (NIHL), with no corresponding house league teams in residence. Another hockey association in the building could have gone a long way to servicing that heavy debt load.
The fact that you can get on the ice for a few bucks at a Stick and Puck or Pond Hockey during peak hockey season is a dead giveaway that internal demand from Huskies' teams was not great enough. The latest financials filed by the Huskies in 2009 showed a loss of over $2 million. With only $2 million in cash in the bank, that left liquidity for 2010 in real question.
2009 Financials.pdf
For comparison, consider the one pad North Shore Ice Arena recently built at half of the cost of the IIC by both Wilmette and Winnetka Hockey Clubs. As our recent census shows, these are among the largest travel hockey clubs, and they both share one pad with multiple high schools and others.
The Huskies have posted a letter on their website assuring their members that the operations of the rink and the club will not be affected by the foreclosure proceedings.
At Chicago Area Youth Hockey Blog, we want to see youth hockey grow and thrive. The halo effect from the Chicago Blackhawks winning the Stanley Cup is not enough for all rinks or clubs to overcome a shaky economy. Join us in wishing the Huskies and their members the vision and fortitude to get through this very trying time.
Foreclosure suit hits big suburban ice complex
ReplyDeleteBy: Alby Gallun January 26, 2011
(Crain's) — The owner of a three-rink ice complex in southwest suburban Romeoville could be headed to the financial penalty box for failing to make interest payments on more than $18 million in bonds.
A trustee for the bondholders has filed a foreclosure suit against the International Ice Centre, a four-year-old hockey and skating facility at 1581 W. Normantown Road, on the south side of Interstate 55. The case raises the question of whether there's enough demand for ice time in far suburbs like Romeoville to support three rinks and a big debt load.
“It's just simply too expensive of a facility to make any sense,” says Tony Rossi, a Chicago-based apartment developer and vice-president of USA Hockey, the sport's national governing body. “Selling ice time on weeknights and weekends in the winter is pretty easy. Selling ice time during the weekdays is pretty hard.”
The International Ice Centre is the home ice of the Huskies Hockey Club, a youth hockey organization that moved there from Darien, the impetus for the 106,000-square-foot project. Huskies officials lead the venture that owns the property, which has failed to generate enough cash flow to cover interest payments.
The Illinois Finance Authority issued the bonds, which pay interest that is exempt from federal taxes. The venture defaulted on the bonds when it stopped making payments in June 2008, according to the foreclosure suit, filed last month in Will County Circuit Court.
Including unpaid interest, the amount due totals $20.7 million, says the complaint, which was filed by the Bank of New York Mellon Trust Co., the trustee for bondholders.
Huskies President Bob Graham, an officer of the venture, did not return calls for comment.
The facility's location is another negative, Mr. Rossi says, noting that many Huskies players didn't make the move from Darien to Romeoville.
“If you have a little 7-year-old with a 5:30 or 6 o'clock game in Romeoville and you work downtown, you're just not going to make it,” he says.