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December 1, 2011 at 4:33 PM

Wenatchee agency defaults on arena debt, but there's talk of late payment

By MIKE BAKER, Associated Press

OLYMPIA – A Wenatchee-area agency defaulted on $42 million in debt tied to an events center Thursday as state lawmakers formulated a new plan to mitigate any fallout.

Democratic Rep. Ross Hunter, chairman of the House Ways and Means Committee, said it will consider a measure Friday that would make a belated payment to bondholders.

State officials have been warning that the default would make it more difficult for local governments in Washington to borrow money.

“A late payment would likely be received by the market much differently than a simple default,” said Chris McGann, a spokesman for the state Treasurer James McIntire.

Lawmakers have been reluctant to endorse any rescue plan, worried that it may make the state a backstop for bad debt. The proposal would use money from a state-managed fund that collects local taxes to cover the debt, then allow local jurisdictions to pay it back over time.

It wasn’t clear whether there was enough support in the Legislature to approve the measure. The state Senate lacked the votes, though Sen. Linda Evans Parlette, R-Wenatchee, said she would work over the weekend to persuade her colleagues.

Parlette said lawmakers have been hearing fresh concerns from local officials, including the CEO of the Spokane Public Facilities District, who believe a default will make it more difficult to finance future projects.

“There truly is a ripple effect out there,” Parlette said.

 

Comments | More in General news, Government | Topics: Wenatchee

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