Financial chaos puts civic arena plan on hold
Standing on a barren tract of land near downtown Grand Junction nearly six months ago, local developer Reed Mitchell spoke boldly of his vision of building a civic arena that could host sporting contests, concerts and special events.
He was “extremely confident” he would be able to obtain a $25 million loan guarantee from the U.S. Department of Agriculture to finance the bulk of the project. He claimed investors were lining up to subsidize the balance of the costs.
The tanking of the U.S. financial markets, however, has cast a large cloud over Mitchell’s plans.
There are doubts about whether Mitchell can convince a bank to loan him the money he needs to build a 141,000-square-foot, 5,000-seat center, the blueprints for which he rolled out in February. A feasibility study that was supposed to be done this past summer remains incomplete and likely won’t be funded by a USDA grant.
Plus, a letter of intent between Mitchell and the city — in which the city would lease a portion of the 66-acre Jarvis property for the civic arena — says the arena must be built by Dec. 31, 2009, according to Debbie Kovalik, who is overseeing the city’s economic development efforts as director of the Visitor and Convention Bureau, Two Rivers Convention Center and the Avalon Theatre.
“I’m not sure how that’s going to happen,” Kovalik said of the prospect of meeting the civic arena completion deadline.
Mitchell said last week he isn’t in a position at this point to say the project is moving ahead or has been called off.
“It’s kind of in a holding pattern, all of it,” he said.
Mitchell said he is certain he can secure the USDA loan guarantee, which can lead to lower interest rates.
“Whether I can borrow the money on it is another thing,” he said.
The loan would cover most of the civic arena’s estimated $35 million price tag.
Mitchell said last spring he had spoken with representatives from two minor-league hockey leagues and planned to contact a minor-league basketball league and an indoor football league. Last week,
Mitchell said nothing has been “firmed up” with any of those leagues.
Mesa County and Mitchell joined together on a feasibility study of both the county fairgrounds and the civic arena. The study is expected to examine services and facilities that should be offered by the public and private sectors, the civic arena’s footprint on the city-owned Jarvis property and the financial prospects of the fairgrounds and the arena.
Officials initially said the study would be done in June or July.
“We keep hearing it will be completed soon,” said Tom Fisher, the county’s regional services director, who said he meets with Mitchell weekly to stay updated on the project. “Quite frankly, there has not been a lot of progress.”
Asked about the study, Mitchell said it “ought to be coming up at any time.”
The county applied for a $70,000 USDA grant to pay for the study, but Fisher said the county likely won’t receive it.