These minutes are for informational purposes only. For official minutes contact either the Town Clerk's office or the First Selectman's office.

Special Meeting

February 17, 2000

1. CALL TO ORDER

The meeting was called to order at 7:40 p.m. Present were First Selectman Anita Mielert, Deputy First Selectman Joel Mandell, John Romano, Madeleine Gilkey and Thomas Vincent. Also present were: Paul Fetherston, Assistant to the First Selectman, Bob DeCrescenzo and Jim Conner, Town Attorneys, and other interested parties.

2. DISCUSSION AND POSSIBLE ACTION ON REQUEST BY CHAMPION SKATING CENTER TO APPROVE ACQUISITION OF INTERNATIONAL SKATING CENTER OF CONNECTICUT, LLC PURSUANT TO THE TERMS OF THE GROUND LEASE BETWEEN THE TOWN OF SIMSBURY AND ISCC

Mr. Conner stated that they reviewed the materials from ISCC LLC. He stated that they were provided with a projection of revenue and operating expenses based on inflated historical items. Mr. Conner stated that the ISCC LLC balance sheet indicates that they are paying $5 million for the ISCC and they have cash reserves of less than $150,000. He stated that they reviewed the background and experience of the individuals at ISCC LLC and he noted that there was a net loss at Cromwell. He stated that they did not receive specifics on the cost savings due to the operation of 2 facilities. Mr. Conner stated that the insurance certificates are in compliance with the lease and assure ongoing dealings with the Town on insurance matters. He stated that no levels of replacement reserves were provided. Mr. Conner stated that the lease does not require a estoppel certificate and the Town has limited liability under the lease. He stated that the form of the proposed assignment and assumption agreement would release the original lessee and the Town is not required to release them. Mr. DeCrescenzo suggested that some financial materials require additional probing.

Louis Green, Attorney for ISCC LLC, stated that they have agreed to waive the language releasing the original lessee from the contract. He addressed the estoppel and stated that they have not been made aware of any defaults, but have no problem with providing estoppel. Mr. Green stated that reserves are obligated in the lease, but they thought that as long as the building is maintained the Town didn't look for reserves. He stated that they will continue to maintain the building, and noted that reserves would effect their cash flow to some respect. Mr. Green pointed out that they paid $5.2 million in cash for the facility and have $150,00 in operating capital until they are up and running. He addressed Cromwell's net loss and stated that they took a cash flow in the building of approximately $500,000 and put it back into improvements in the building.

T.J. Donohue, Attorney for Dick Wagner, stated that Mr. Wagner is concerned with the environmental risk factor since Mr. Wagner executed an indemnity agreement for 10 years. He noted that this agreement states that it is the responsibility of the beneficiary to provide plans of the building, as well as an operating and monitoring report of the wells. He stated that this information was never received by Mr. Wagner. Mr. Donohue questioned Mr. Wagner's obligation under the indemnity to fill the terms of the agreement. He requested that the BOS look at the agreement and provide Mr. Wagner with this information.

Mr. Green stated that the beneficiary appears to be the Town and doesn't appear to be an obligation under the lease. Mr. Donohue stated that whoever operates the facility may operate at a loss and effect Mr. Wagner.

Leonard Jacobs, representative of the present operator, stated that if there is any risk his client and the new operator will be liable. He pointed out that it was the responsibility of the Town to provide this information.

Jim Ray, 18 Tolland Circle, stated that his family has experience with Bob Crawford and the Cromwell facility. He stated that they have had a good experience in Cromwell and Mr. Crawford is always willing to help. He stated that Mr. Crawford will be a good neighbor to Simsbury and is a good facilitator of youth skating and hockey programs.

Mr. Mandell stated that the environmental issue appears to be between Mr. Wagner and the Town, and maybe the Town didn't provide the information they should have. He stated that he knows some of the local businessmen involved in this deal and is comfortable with their purchase of the facility. Mr. Mandell stated that $5 million is significant equity and with the mortgage there will be more due diligence. He stated that he feels the Town has done as much diligence as required under the lease and the assignee and the assignor are still responsible for anything happening to the building and land. Mr. Mandell questioned whether ISCC LLC is prepared to make the $125,000 payment in April. Mr. Green stated that they are well aware of the $125,000 payment in April and they will pay it.

Mr. DeCrescenzo stated that he was faxed 3 letters this afternoon concerning the new ownership of the facility. He stated that a coach and skaters will not confirm that they will remain at the ISCC. He pointed out that they do not know the financial impact of that decision. Ms. Mielert stated that Mr. Fish told her that (1) he intends to fire Bob Young and (2) he will request a $30,000 reduction in the lease from the BOS. She pointed out that Mr. Young was the connection which brought the international skaters and coach to the ISCC, and she expressed her concern with the future nature of the business at the facility and the financial impact. She suggested that if $30,000 is important then maybe the financial viability is not that great. Ms. Mielert stated that based on these letters, events and sponsorships could disappear and financial sponsorships accounted for $300,000 in 1998. Ms. Mielert discussed the history of the ISCC and economic development. She suggested that if they take the cache of the world skaters away from the facility they will lose that economic development piece of the center. She pointed out that the ground lease states that they will attract world class athletes and she expressed concern that the same character of the business remain here.

Mr. Romano stated that he is concerned that the competition between Cromwell and Simsbury will create a loss of identity for Simsbury. He stated that he wants to continue to draw a level of expert ice skaters. He suggested that all aspects of Mr. Wagner's inquiry should be resolved before a final decision on the sale is made.

Ms. Gilkey stated that she had questioned the stability of the contracts at the ISCC and she is concerned if one of the owners wants to terminate one of the contracts. Mr. Vincent stated that the Town should correct the problem with Mr. Wagner and supply the information to Mr. Wagner before the end of the week. He stated that if no one else purchases the ISCC they may lose the people contracted anyhow. He pointed out that Simsbury residents use the rink and the new owners have the right to run the rink as they wish. Mr. Vincent stated that he hopes the new owners would support and keep people as part of the town's economic development interest.

Alan Lazowski, ISCC LLC, stated that the ice skating portion of the facility is one of the reasons they want to purchase the facility. He stated that they are not planning to terminate anyone, including Mr. Young. He stated that they have a 50%:50% partnership with Mr. Fish and his group's part is to manage the rink.

Karen Pomerantz, Learn To Skate Program Director in Cromwell, stated that they went from 0 to 2,000 students in this program. She noted that some of the skaters continue into an advanced figure skating program. Mr. Lazowski noted that the Cromwell rink sponsors Katie Orchard, who came in third in the national competition. He stated that they met with Mr. Young and he applauded their commitment to figure skating. Mr. Lazowski stated that they told Mr. Young that they will bring in Dave Roberts to run the hockey side of the rink. He suggested that Simsbury can have world class figure skating and hockey. He noted that the Cromwell facility has provided economic development for Cromwell. He stated that they have no intention of firing Mr. Young and they have a signed agreement to continue to pay Mr. Young's contract. He stated that Mr. Fish had discussed the original assessment of $125,000 and they assume the agreement is as stands and they plan to pay the $125,000.

Charlotte, Mr. Fish's Assistant, stated that she and Mr. Fish met with Galina Zmiereskaya to assure her that nothing would happen to the contracts. She stated that Galina doesn't want to leave Simsbury because she feels it is her home. She noted that Galina was happy the Mr. Fish would be involved with the rink again.

Mr. Jacobs expressed his concern that the longer the deal is left in limbo the more doubt that is created and the more time before these people can be put under contract with the new owners. He suggested that personnel matters are not issues for the Town, and they should simply address whether this is a viable entity who wants to buy the facility. Ms. Mielert pointed out that with the last purchase of the facility the Town had 60 days to do their due diligence, not 14 days.

Mr. Mandell moved to enter Executive Session pursuant to 1-200 subsection C of the Freedom of Information Act at 6:42 p.m., to include Bob DeCrescenzo and Jim Conner. The motion was seconded by Mr. Romano and carried unanimously. Mr. Romano moved to enter Regular Session at 7:32 p.m. The motion was seconded by Ms. Gilkey and carried unanimously.

Mr. Mandell moved to approve the transfer of the International Skating Center of Connecticut in accordance with the request of ISCC LLC. The motion was seconded by Mr. Romano.

Mr. Mandell urged the Town to take any necessary action to satisfy Mr. Wagner regarding the indemnity agreement.

Ms. Mielert stated that she has some misgivings based on the fact that the Cromwell facility's financial statements show the majority of revenue from the fitness side of the business. She noted that the ISCC configuration is different and there are the contract considerations of the figure skaters. She stated that she hopes the nature of the operation doesn't change.

The vote was unanimous. The motion carried.

3. ADJOURNMENT

Ms. Mielert moved to adjourn the meeting at 7:35 p.m. The motion was seconded by Mr. Mandell and carried unanimously.

Approved February 28, 2000