Leafs Centre Bondholders To Take Massive Hit Under Latest Plan

By CAYH Editor

Just when you thought it was safe to go on the ice in West Dundee, we get an update on the ongoing saga that is the Leafs Ice Centre in Crain's Chicago Business. The Leafs "venture", which includes that hockey club, are offering bondholders a 35% haircut in a deal that leaves them in charge of their destiny. WHAT!?!

Aside from that little tidbit, this looks like a pretty good offer to me ... given that bondholders in the nearly identical International Ice Centre in Romeoville received a 90% haircut in the foreclosure sale to Canlan Ice Sports Corp. of Canada. You can find our previous coverage here. How depressing is it that we have so much previous coverage on the topic?

If bondholders take the deal, the Leafs Ice Centre will still be upside down to the tune of $4.5 million according to Ken Male, Vice President of Partnership Solutions for Canlan. He thinks the facility is worth only about $8 million, and I would take his word over anyone in Chicago if I were you.

We also get confirmation in the article of the worst kept secret in the northern burbs - the sparkly new North Shore Ice Arena is not profitable!

A similar ice complex, the International Ice Centre in Romeoville, was foreclosed on and sold in 2011 for $3.7 million, much less than the $20.7 million owed on it. A foreclosure suit is pending against the Lake Barrington Field House, which has been taken over by a receiver after defaulting on $28.5 million in bonds sold in 2007.

Another facility, the North Shore Ice Arena in Northbrook, is making its bond payments but is not profitable, according to IFA filings.

The West Dundee facility is worth only about $8 million, said Ken Male, vice president of partnership solutions for Canlan Ice Sports, the Canadian company that bought the three-rink Romeoville facility out of foreclosure.

Canlan is interested in buying the Leafs Ice Centre, but not while it's saddled by debt payments that exceed its construction costs, he said. He called the sports facility bonds a “flawed” financing model and said restructuring the property's debt is the best option for the club and its creditors.

“The (court's) trustee is taking the right track on this, as much as I'd like to own it,” he said.

I bet you would, Mr. Male, I bet you would.

Remember this cautionary tale if someone knocks on your door trying to sell you a piece of the Morgan Park Sports Center. That $4 million financing gap has to be filled by someone! Do you feel lucky?

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