Several hands popped in the air Thursday night when City Manager Steve Sugg asked how many people had heard that the City of University Place is going broke.
“We have a stable budget,” he told the crowd. “We have not touched our strategic reserve.”
City leaders held a 75-minute briefing with residents in an attempt to dispel rumors of the city’s impending financial ruin. About 40 people attended, including residents, council members, candidates and staff members. There were many questions but almost no comments.
The city has been the target of criticism for borrowing tens of millions of dollars for Town Center work with little to show for it, as well as how that debt is weighing on the city’s finances and services. Both the city’s finances and Town Center investment are sure to be major issues during City Council campaigns. All three open seats are being contested.
Eric Faison, the city’s deputy city manager for administrative services, said the city’s financial plan ensures the city will have sufficient revenue to pay off debt and maintain existing services through at least 2016 and create a substantial reserve. The plan doesn’t anticipate any Town Center sales.
The City Council’s decision to cut staff and services heading to 2010 is creating an annual budget surplus. The city intended to use that surplus to pay down a more than $12 million balloon payment on Town Center debt due by December 2013. The council will consider next month whether to refinance the entire debt this year to eliminate the payment and free up capital for the city, he said.
“We’re doing fine,” Faison said.
Sugg assured residents that the city can afford to hold to the city’s vision on Town Center. Asked when the economic recovery will enable the Town Center project to move forward, Sugg responded, “That’s the multimillion-dollar question. We don’t know at this point. We check the market like everyone else does. … I can’t say what that timeline will be.”
Jeff Kraft, the city’s broker for Town Center, said the freeze on retail lending by banks is the primary reason development has stalled but that he’s working with people who have more readily available financing.
“We are moving forward,” he said.
“We’re not letting this slow us down.”
The University Place Pierce County Library opened in February, but no other tenants have opened at the Town Center. Plans announced last year that Applebee’s would build a restaurant there took a hit recently when the franchisee delayed purchasing the property and voiced reservations about being the lone private tenant on the site.
Another potential hiccup is the city’s ban on drive-up service in the Town Center. The City Council will consider at a future meeting a recommendation for the planning commission to allow one stall where people can park temporarily to pick up their food, City Attorney Steve Victor said.
“They must have curbside to go,” said Victor, the city’s chief negotiator for the Town Center. “It’s an essential part of their business model.”
Christian Hill: 253-597-7390 christian.hill@thenewstribune.com
