A failed minor league hockey franchise has left Fresno taxpayers holding the bag to service debt issued to spruce up the team’s arena.
The Fresno Falcons abruptly announced on Dec. 22 that they were shutting down, effective immediately, after playing 32 games of their scheduled 72 in the ECHL hockey league.
The Falcons, who operated as a professional minor league franchise in Fresno starting in 1995, were acquired by their current owners in 2006, and the ownership group said it simply couldn’t sustain any more financial losses.
The team had returned this season to the city-owned, 42-year-old Selland Arena in downtown Fresno, after five years in a newer arena on the Fresno State University campus on the city’s outskirts.
The team signed a 20-year lease with the city in 2007, in which the team committed to play at Selland Arena for 20 years and the city committed to many improvements at the arena, including new seating and a new ice-making plant.
“The Falcons’ license to utilize Selland Arena will provide the required revenues to support ongoing operation costs as well as the funding needed to support the debt service for approximately $3.9 million in capital improvements including replacement of the existing ice floor, premium seats, Zamboni, and other equipment necessary to a hockey competition,” according to a staff report prepared for the City Council in August 2007, when the lease was approved.
“Since rental revenue will service the bond issuance, no fiscal impact is anticipated,” the report said.
Now there is no team and no rental revenue.
Selland Arena improvements were financed from a 2006 Fresno Joint Powers Financing Authority bond issue of $18.7 million for the improvements to the city’s convention center, which includes Selland Arena. The lease-revenue bonds are ultimately backed by the city’s general fund.