A resolution that would allow the Prince George's County government to issue $20 million in revenue bonds for the Capital Centre was introduced in the council business session this week.
The resolution part of a package deal made in 1973 with the Washington National Arena Limited Partnership (WNALP) that owns the Capital Centre, would allow the tax-exempt bonds to be sold to the Equitable Life Assurance Society of the United States at an interest rate of 9 per cent.
This could amount to a substantial saving for the owners of Capital Centre, who originally secured financing for construction and capital improvements during the early 1970s when interest rates were higher.
The county may issue the bonds under a state law that allows local governments to aid industrial development. The county would not be liable for nay indebtedness incurred by Capital Centre, nor would the bonds affect the property tax rate.
"If there is a public purpose and public benefit and public need, then the local government can sell the bonds under the county's name," said Ellis Koch, attorney for WNALH. "The lower financing cost would free up money for upkeep of the property and help keep down the cost of tickets at the center.
The county has previously authorized the sale of revenue bonds for local industries, including bonds for the relocation of Merkie Press and the Warner Fruehauf Trailer Company, but this is the first time a bond sale of this magnitude has been considered.
The resolution is certain to rekindle the "preferred status" criticism the Capital Centre has received since its inception in 1971. Its dual nature as a privately owned corporation on county property and the close relationship between Peter O'Malley, a power in the county Democratic party, and Abe Pollin of WNALP has drawn fire over the years from political opponents of O'Malley and critics of the center.
In 1975, former county executive William W. Gullett said that Pollin was getting preferential treatment after the Capital Centre was ruled county land, and thus not taxable because it is a park facility.Pollin had been ordered to pay $814,000 in taxes for the facility before the property tax appeals board overturned that ruling by the county assessor.
The nond resolution, which was sent to the board's Fiscal and Planning Committee, will ruled on before the end of the legislative session, according to council staffers.