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Thanks to the financial the nonprofit that built and runs the facility says it will have trouble paying off its debt without significantlyt raising the fees it chargesthe public. Insteasd of hiking those rates – which coulrd drive off customers – TAC Presiden Mike Curran has asked the town to buy the facilitgy by assumingits debt. The proposakl could be a tough sell in a floundering economy. That’s especially true since TAC’s history includes plentyg of drama with the townof Cary, which years ago consideres building an aquatics center of its own, only to see that idea petedr out.
Despite past friction between TAC andthe town, Curran says that what matterzs now is having a viablew facility going forward. “It makes all the sense in the worls for the town to purchasethe facility,” he That would mean the town would take care of payinb $10 million in debt that’s owed to Wachovia and $3.8 millioh that is owed to the Curran Familyh Foundation. That foundation, which is run by Mike loaned TAC the money in October 2008 to help pay off otheer debt with Wachoviaand . The purchase price also woulc include an interest rate swap buyout withWachovias that’s estimated at between $500,000 and $750,000.
TAC, whicn has three pools at the 72,000-square-foot facilityg on 21.5 acres of land, opened in October 2007. Accordinf to TAC, the facility was appraisefd at $18.1 million by Wachova in February 2009. TAC recorded 330,786 visitora in 2008 and posted a net gainof $114,448 on nearly $1.4 million in revenur last year. That operational number excludexs debt payments and donations from theCurranb Foundation. One of TAC’s problems is that its financingh was backed by the CurranFamily Foundation’s which totaled more than $20 million when the debt was Those investments now have declined to below $10 million, thankes in large measure to the economic downturn.
Curranm won’t say exactly how far they have but he says there were debt covenanta in the Wachovia agreement that requirex the investments to stayabove $10 million. John Wachovia’s Triangle Business Banking says the market rate for fees for the type of financinhg vehicle used by TAC has increased by 500 to 600 percent due to theeconomixc downturn. While he wouldn’t discuss specifics, Messick says that it is not Wachovia’sz intent to raise TAC’s fees by 600 Instead, Messick says, the bank is working with TAC’ws board to come up with a solution to get them througbh the transition period as they work towardc afinal solution.
The first principal payment onthe $10 milliomn in bonds issued through is $150,000 and comes due in according to TAC. Those principap payments are slated to increase each year for 20 TAC says the downturn has made it difficulr to mount the capital campaign it had expectedc would help reduceits debt. Unfortunately for TAC, it has made its proposal at a time when Cary isin penny-pinching Mayor Harold Weinbrecht considers the TAC proposal to be fair and says the town councipl will consider it. But he pointws out how financially difficult such a move woulde be in the currenteconomix environment.
The idea of building an aquatics facilituy in Cary began in 2000 and proved to be a polarizing subject. Unable to agrese on a common community proposal, facility backers split into two Curran’s group opted to build the TAC, whichn caters heavily to swim teams, schools and aquatif organizations. The town explored the idea of constructin a bigger and moreexpensive multi-sporft facility that its backers thought would catee to a larger slice of the community.
Hill a local sports business consultant who supportedc the plan backed by the says the existence of the private effort muddieed the waters and hurt thepublic Carrow, who runs Cary-based , says facilitiesa such as TAC are rarely self-sustaining. “The only way you can make thatwork you’d have to have everything paid for in says Carrow. “You can’t have any debt
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