A plan to rewrite North Platte's controversial 20-year-old obligation to the Golden Spike Tower & Visitor Center won parting City Council unanimity in Tuesday's last full meeting of the council's eight-member lineup.
Council members voted 8-0 to authorize Mayor Brandon Kelliher to negotiate a city loan to the nonprofit Bailey Yard attraction to replace its outstanding construction loan from the U.S. Department of Agriculture.
City Hall's plan would give up the city's legal option to take title to the Spike in exchange for early payoff of the USDA loan and winding down the tower's support from the 2% city hotel-motel "occupation tax" adopted in 1999.
North Platte City Council to mull loan to pay off Golden Spike Tower's USDA loan
The federal loan's terms, Kelliher told the council, doesn't let the city reduce its occupation-tax rate or spend its proceeds on anything but loan repayments and the Spike's operation.
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Refinancing through the city, he said, would let the city redirect some occupation-tax proceeds toward other "sports tourism" improvements -- starting with long-overdue repairs to Bill Wood Field, the Dowhower Softball Complex and other city ballfields.
"There is a whole list of things here that the community either is working on or could be working on" to bring in visitors and boost both sales tax and lodging tax proceeds, Kelliher said.
Negotiations with the Golden Spike Tower board will follow Tuesday's council vote, he said, with a goal of bringing a loan agreement to the council by March.
Council members Mark Woods and Donna Tryon joined in the unanimous endorsement of Kelliher's strategy. Nick McNew and Rod Dye, elected Nov. 5 to Woods' and Tryon's seats respectively, were present Tuesday and will be sworn in Dec. 3.
Two-decade saga
The Spike's USDA loan, originally for $3.728 million, won council approval on Nov. 18, 2004 -- 20 years and one day earlier -- but also set off nearly two years of legal strife between the city and local residents suing over the deal and the hotel-motel tax paying for it.
Construction of the eight-story tower didn't begin until 2007, after a Nebraska Supreme Court appeal was dropped prior to oral arguments. The Spike opened on June 16, 2008, and averages 30,000 to 40,000 visitors a year.
Less than $1 million remains unpaid on the USDA loan, which is scheduled to be fully repaid on Feb. 17, 2029.
In explaining the plan along with City Attorney Bill Troshynski, Kelliher said the city has the funds to pay off the USDA loan and take over as the Spike's lender.
The city's "contingency" budget could be tapped, he said, as could local sales tax proceeds not already planned for. City staff is working to identify "the most responsible source," he said.
Were the city to exercise its ownership option, Kelliher said, it would simply take title based on all the occupation tax money that the Spike would have received by 2029.
But "I don't want the city of North Platte to own the Spike," he said. "I don't think there's anyone who wants the city of North Platte to own the Spike."
The USDA loan requires the Spike board to accept a payoff loan if one is offered by another lender and its terms and rates are reasonable, Troshynski said.
The Spike board has been paying $22,853 per month to the USDA, most of which now goes to reduce principal, Kelliher said. The loan carried a 4.125% interest rate.
A payoff loan from the city likely would last 20 years, he said, but would carry a far smaller monthly payment on the order of $4,500 per month.
That would let the city cut the Spike's share of its occupation tax revenue to 35% in the loan's first year, then reduce it 5% a year to just 15% by the time the USDA loan would have been paid off.
After Feb. 17, 2029, the tower wouldn't automatically receive city funds. But Kelliher said its board "could come to the city and request funds, like any other nonprofit" such as Nebraskaland Days and the North Platte Area Chamber & Development Corp.
Positive reception
The mayor's plan to alter the city's Golden Spike role won over Woods and Tryon -- frequent critics the past four years of the city's economic development course -- along with holdover Councilman Ed Rieker.
Woods said it was "extremely good to hear" that the plan includes weaning the Spike off occupation-tax support.
"The only thing that worries me is I've never seen a council that voted against a tourism request," he said.
"I wasn't going to vote for this, but after hearing it all, I will because at least for a while it will be taking a burden off the taxpayer, which is what I feel I was put here to do."
Tryon also agreed. "It seems to me that there hasn't always been good stewards of taxpayers' money (going) to the Golden Spike," she said.
Councilman Brad Garrick, also a member of the Golden Spike board, said he believes the tower would have no trouble handling the much lower loan payments the city has in mind.
"One of the things I really like about this deal is it gives the Spike a soft landing (and) gives them time to sharpen their pencils and really take a good, hard look at this and operate in a way that they haven't in the past," Garrick said.
"By doing this, the City Council gets control of these (occupation tax) funds, which is how it should be," added Council President Jim Nisley.
Refinancing the USDA loan also would enable the Spike to remain "a community asset" and should "improve their ability to raise money" as other North Platte nonprofits are able to do, Councilman Ty Lucas added.
"I like this plan because we're four years away from something having to happen with it," he said. "Iron Eagle was such a divisive issue for the city that I never want to see something like that happen again."
Lucas referred to the city's former Iron Eagle Golf Course, which opened in 1994 along the South Platte River but suffered serious flood damage four times over the next 20 years. An affiliate of Grand Island's Chief Industries bought the course in 2021 and plans to fold it into other developments.
Council members subsequently gave first-round approval to ordinances reorganizing but not substantially changing city codes regarding occupation taxes. A third such ordinance was pulled from the agenda.
Other business
Also Tuesday, the council agreed 8-0 to buy a 40-foot by 60-foot steel shelter to be installed on Cody Park's east end. Newburn Fund interest and a $4,700 Mid-Nebraska Community Foundation grant would pay the $269,287 cost.
The shelter would be the second at North Platte's oldest and largest park and the city's fourth overall counting shelters at Memorial and Centennial parks, said city Parks and Recreation Director Lyle Minshull.
All three existing shelters are in high demand, with Cody Park's shelter near Cody Park Rides is rented out for events almost every weekend day between May and September, Minshull said.
The council tabled a similar proposal in December 2022, but Lucas observed that the Newburn Fund's $900,000 in available interest money is triple what it was then.
Council members also renewed Ryan Kuhlman's annual contract to haul yard and tree waste from the city's transfer station and ratified Kelliher's appointment of Lauren Sheard to the city's Library Advisory Board.
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