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Out with the Gold, In with the New

A Minnesota youth sports assocation develops a joint private-public partnership with the local city government and school district to help serve the needs of more than 3,000 students and athletes.

by Danielle Catalano

About 30 miles northeast of Minneapolis sits the Maroon and Gold Arena, home of the Forest Lake Area Schools boys' and girls hockey teams. While the Rangers enjoy a strong fan-base, the same can't be said about the decades-old arena.


"While there is history with Maroon and Gold, it's not necessarily positive," Laurie Kumerow says. "Yes, it was built by a lot of volunteers and has been there a long time, but people are now embarrassed by it. It was built cheaply, is very cold inside for spectators, and the roof leaks."


Kumerow is a member of the Forest Lake Area Athletic Association, a 501(c)3 umbrella organization that serves 3,000 youths in the 13 communities that compose the Forest Lake Schools.


The FLAAA recently undertook a $1.2 million fundraising effort to finance a new sports complex, replete with two ice sheets (a year-round indoor rink and outdoor, fabric-covered rink), a field house, weight room, café, a converted summer-time synthetic turf field, and community meeting room.


Due to joint public-private partnership among the FLAAA, the city of Forest Lake, the school district, and private investors, that sports complex will be the Rangers'—as well as a local youth hockey association—home for years to come.


INDUSTRIAL REVENUE BONDS
The FLAAA oversees eight sports programs and the management of the sports complex. The association is organized similarly as a high school umbrella athletic club, with a Board of Directors, officers, a representative from each of the nine entities (the eight sport programs plus sports complex), a representative from each of the 13 communities the association serves, and four members at large. Each entity is independently run. The day-to-day operations of the sports complex are run by three executive board members, one of whom is Kumerow.


The idea of an ice arena loomed for years as city leaders wanted to add a facility to Forest Lake's existing Community Center Complex. Funding had always been an issue, and it wasn't until the school district's concerns regarding the Maroon and Gold arena were expressed that the opportunity for change occurred.


"Several years ago the city of Forest Lake set aside 600 acres for park land and appointed a Community Center Task Force to explore what recreational and civic amenities should be on that land," says Kumerow, who was also part of the task force. "We surveyed residents, benchmarked what other cities were doing, and originally planned out a $30-million complex that included outdoor fields and a community center with ice arena, aquatics, gyms, and a fitness center."


A voter referendum was needed to approve the cost of the facility, but resident feedback from a 2006 survey revealed not enough support existed among the public. Kumerow says the task force decided to divide the project into "more manageable phases" to make the initiative more appealing.


"The task force recommended that Phase I include the two most urgent amenities: First, outdoor fields, which are relatively inexpensive, and the city is paying for them through housing developer park dedication fees. Second, the sports complex, which we could finance through industrial revenue bonds that don't affect taxpayers."


According to the FLAAA, industrial revenue bonds are securities issued by a government agency for development, but backed by the credit of a private enterprise, such as a local bank. What distinguishes these bonds from other bonds is that the facility's operating revenue—not the government agency—fulfills the bond's obligations.


Larry Schminski is another executive board member of the sports complex. He is also the president of a local bank and treasurer of the Forest Lake Youth Hockey Association. (In an unrelated measure last year, the youth organization formed a partnership with the FLAAA.) Schminski introduced the industrial revenue bond idea to the FLAAA and talked with three other local banks to help underwrite the bond. The banks agreed.


Next, a steering committee (which includes Kumerow and Schminski) created an operating pro forma. A pro forma helps determine how much profit a facility needs to raise to pay down industrial revenue bonds. The steering committee studied the sports complex's anticipated ice and field house rental fees, net concession sales, gate receipts, and vending commissions. After deriving at a feasible revenue-to-debt ratio of 1.48, the bond was issued in March 2007.


FINDING MORE FUNDS
Following the sale, $1.2 million was still needed. The steering committee shifted its focus to fundraising, honing in on four methods: donor/sponsorships, naming rights, advertising, and grant writing. Several months later, the committee kicked off its fundraising during Forest Lake's Fourth of July celebration, with a food concession booth. Since then, it has raised more than three-fourths, or $870,000, of the necessary funds.


The money raised is the result of the steering committee tuning into its surrounding communities. "For advertisements, we looked at what other arenas were doing and charging," Kumerow says. "However, we decided to keep advertising to a minimum because we didn't want to have a cluttered environment. For example, no ads on dasherboards or steps of the arena."


Instead, FLAAA developed advertisement options in such forms as backlit wall signage in the field house, individual room signage, field house vinyl banners, and ad space on the association's Zamboni. So far, $143,000 has been raised through these endeavors.


Local events, gifts-in-kind, and family and small business donations have brought in $110,000, while FLAAA sport groups have donated $117,000. As recognition of thanks, donors contributing $50 or more will find their names engraved on a puck or wall plaque, to be hung on the Wall of Honor in the lobby area of the sports complex's main floor.


The largest amount of funding received, though, is from two separate grants, totaling $500,000. "We used the Minnesota Council on Foundations Web site to find grants that aligned with our project," Kumerow explains. "For the [Fred C. and Katherine B.] Anderson grant, we were told about that foundation from some people who received a grant for a YMCA in a nearby town. A local man who is an executive director of the Hardenburg Foundation brought the second grant to our attention. He suggested we submit to his organization."


The group did, and received the shock of a lifetime. "Our biggest surprise was opening the mail one day to get a $250,000 check from the foundation," Kumerow says. "We had applied for a grant, but assumed we'd get a phone call with questions first. Getting that check really energized the group."


Earlier this month, the FLAAA finalized plans with architects on the sports complex design. The facility will break ground in March, and construction will last through the summer. The FLAAA will officially open the sports complex in August.


For more information about the Forest Lake Area Atheltic Association and its new sports complex, visit: www.flaaa.org. Read Getting to Yes to learn how athletic administrators worked with their communities on voter referendums.



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