St. Louis Community Ice Center in Maryland Heights, Missouri, has drawn on a debt service reserve to make payments on its unrated Series 2018A revenue bonds and defaulted on its 2018B subordinate bonds, a little more than three years after a delinquent debt service payment triggered a two-notch downgrade that sent the city's certificates of participation rating to junk.
The facility, known as Centene Community Ice Center, is privately managed by OVG360, a division of Oak View Group, a Denver-based sports and commercial real estate company.
The center is the practice facility for the National Hockey League's St. Louis Blues and the home rink for Lindenwood University, which in 2022 reclassified its hockey program to NCAA Division I status. It is adjacent to St. Louis Music Park, a 4,500-seat amphitheater, and near Hollywood Casino St. Louis.
The bonds were issued by the Maryland Heights Industrial Development Authority in August 2018. The series A's original principal amount was $50.2 million; subordinate B series was $5.5 million.
The issuer made an unscheduled draw on the debt service reserve to cover part of the principal payment due on March 15 for the Series 2018A bonds, according to a
The authority disclosed a principal and interest payment delinquency on the Series 2018B bonds, with the March 15 interest payment remaining only partially satisfied, according to the notice.
The trustee received a restricted contribution on March 11 that was applied toward the payment of interest on the Series 2018B bonds.
The revenue fund balance currently stands at zero, according to the notice.
The Maryland Heights City Council was expected to take up legislation by mid-April that would appropriate nearly $1 million to the Series 2018A reserve account, restoring its balance to the required $3.12 million level.
In October 2022, the city
S&P Global Ratings at that time downgraded the city's issuer rating to BBB-minus from BBB-plus, and its 2015 certificates of participation to BB-plus from BBB, citing "the city's unwillingness to support the bonds (particularly the 2018B bonds), which we view as a risk management, culture, and oversight weakness under governance risk."
The rink project was also a factor in S&P's March 2021 downgrade of the city to BBB-plus from AA-minus.
In December 2023, S&P affirmed Maryland Heights' BBB-minus issuer credit rating and the BB-plus rating on the city's Series 2015 COPs, and removed the ratings from CreditWatch negative. The outlook is stable.
"The CreditWatch removal reflects our receipt of additional information relating to actions that the city has taken to increase pledged revenue for the unrated series 2018 IDA revenue bonds and its associated uncured payment-related default," S&P credit analyst Coral Schoonejans said in the rating report.
In 2022, the issuer and the city expressed optimism about the rink's prospects amid an uptick in local economic activity.
But the contractor had filed a mechanics lien action against the ice rink's nonprofit operator in 2021, which was settled in 2022. While financial terms of that settlement were confidential, it could have impacted funds available for debt service, according to reports at the time.
The facility — which features four NHL-sized ice rinks — was once expected to make the area a destination for hockey tournaments and special events. But it closed for a time during the COVID pandemic and
The ice center's general manager, Jeremy Huelsing, did not respond to emails seeking comment.
Maryland Heights Finance Director Danielle Oettle did not respond to phone calls seeking comment.
S&P did not respond to questions by press time.
