Most Minnesotans are used to their hometowns topping the list of best places, but Vadnais Heights now has the not-so-proud distinction of being one of the worst credit risks in the state.
Following the Detroit bankruptcy, the website Newsmax put together a "worry list" of cities to watch for financial troubles -- and Vadnais Heights made the list.
Although a recent investment may have been a bad deal, the city says its books are solid.
Building a sports facilities complex that would pay for itself sounded like a great idea three years ago, but today, the city's credit rating is in the basement after it decided to stop being the one and only tenant.
Build it and they will come -- that's what the city of Vadnais Heights thought when they sold nearly $25 million in revenue bonds to build the second-largest dome in the state. Unfortunately, the sports center never began to break even.
"It appears that they've been running shortfalls because, I suppose, the size of the community is too small for the size of the venue," David Vang, of the University of St. Thomas, told FOX 9 News. "So, the city has been stepping up to the plate and honoring these shortfalls."
The money the facility brought in was supposed to pay for the bills, keeping the lights on, the ice cold and repaying the loan. Instead, the city has spent $5.5 million out of pocket. Finally, the City Council decided enough was enough.
"The city was a lease holder on the facility, so we had the option to opt out of being a lease holder," City Administrator Kevin Watson explained. "Like anybody else leasing a commercial site, there was that option."
So why was the city's credit rating dropped to junk bond status, landing Vadnais Heights at rank 18 on the list of Top 20 cities on shaky financial footing? Watson says he's really not sure.
"It seems a little far-fetched," he said. "They obviously didn't talk to us. They didn't look at the city's books."
Watson said the city's finances are "very healthy," but he said they would have gone broke if they kept paying for the shortfall at the facility.
"I think it's unfortunate the situation we're in, but I don't believe the bond credit rating is -- it's not indicative of our current financial status," he said.
The sports complex is now on the market with a listing price of $13 million. The real estate agent who is handling the deal told FOX 9 News there are several interested parties who could pick it up for as little as $8 million.
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