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HAS ARENA LOAN COLLAPSED?
NBA MAY HAVE RAISED OBJECTIONS TO FINANCING OF JAZZ FACILITY

SHARE HAS ARENA LOAN COLLAPSED?
NBA MAY HAVE RAISED OBJECTIONS TO FINANCING OF JAZZ FACILITY

A financing package for a new arena for the Utah Jazz may have fallen through - apparently the result of objections by the National Basketball Association, sources said.

The NBA general counsel's office told the Deseret News the financing package must be approved by the NBA if part of any loan is secured by the franchise. Miller has not requested approval yet, but chances are he would be denied if he so requested, sources said.The NBA was concerned about a loan from a Dutch bank because so much of the franchise was leveraged.

Jazz general manager Tim Howells would not confirm or deny that the Dutch deal has fallen through - but said Miller and Robert Hyde, vice president of finance for the Jazz, were involved in a "major meeting" Monday morning.

Salt Lake City's Redevelopment Agency, which has committed $27 million to Miller to acquire land for the arena, believes the Jazz owner will be successful in financing the sports complex, said Mike Chitwood, RDA executive director.

Consequently, the agency is going forward with negotiations to acquire the final two land parcels for the arena and continuing with demolition of existing buildings.

The RDA has agreed to sell $27 million in bonds to acquire the land for Miller's arena and make improvements to the public land surrounding the facility. The city would own the property and lease it to Miller.

Sources said Miller has another financing deal in the works, which apparently is the reason for Monday's meeting.

Chitwood acknowledged Miller and the Dutch bank previously thought to be financing the deal haven't reached an agreement on terms for a loan.

"A few parts (of the loan package) were troublesome to him (Miller), and he was looking to other lenders for the development of that package," Chitwood said. Chitwood declined to identify the other lenders.

However, Shearson Lehman Hutton Inc. is thought to be the possible primary lender in the alternative funding package, one source said. The firm may arrange for a taxable bond to be sold for Miller.

A Shearson Lehman representative could not be reached by press time to confirm that report.

Progress of negotiations is enough to instill confidence in Chitwood that the RDA/Miller partnership should continue. "I feel very comfortable with Larry and what he's trying to do," he said.

The RDA has already acquired half of the block destined to be the site of the new arena. Agreements on two parcels owned by Fimsa Inc., a holding company for First Interstate Bank, and the Senior Corp. have been signed, Miller said.

Negotiations with Travelers Insurance Co and Triad America - owners of the other half of the block - are continuing, Chitwood said. Last month the RDA voted to begin condemnation proceedings against Salt Lake City's Redevelopment Agency, which has committed $27 million to Miller to acquire land for the arena, believes the Jazz owner will be successful in financing the sports complex, said Mike Chitwood, RDA executive director.

Consequently, the agency is going forward with negotiations to acquire the final two land parcels for the arena and continuing with demolition of existing buildings.

The RDA has agreed to sell $27 million in bonds to acquire the land for Miller's arena and make improvements to the public land surrounding the facility. The city would own the property and lease it to Miller.

Sources said Miller has another financing deal in the works, which apparently is the reason for Monday's meeting.

Chitwood acknowledged Miller and the Dutch bank previously thought to be financing the deal haven't reached an agreement on terms for a loan.

"A few parts (of the loan package) were troublesome to him (Miller), and he was looking to other lenders for the development of that package," Chitwood said. Chitwood declined to identify the other lenders.

However, Shearson Lehman Hutton Inc. is thought to be the possible primary lender in the alternative funding package, one source said. The firm may arrange for a taxable bond to be sold for Miller.

A Shearson Lehman representative could not be reached by press time to confirm that report.

Progress of negotiations is enough to instill confidence in Chitwood that the RDA/Miller partnership should continue. "I feel very comfortable with Larry and what he's trying to do," he said.

The RDA has already acquired half of the block destined to be the site of the new arena. Agreements on two parcels owned by Fimsa Inc., a holding company for First Interstate Bank, and the Senior Corp. have been signed, Miller said.

Negotiations with Travelers Insurance Co and Triad America - owners of the other half of the block - are continuing, Chitwood said. Last month the RDA voted to begin condemnation proceedings against Travelers while continuing negotiations.

In late August, Miller hailed the completion of the financing package as the most important step in building the new arena and keeping the NBA franchise in Utah. Miller's monthly payments of about $640,000 would begin upon completion of the arena.

Miller's biggest fear was that the arena would open too soon before the 1991-92 basketball and hockey seasons, and he'd have to make payments without the income from a full schedule of events.

As of Aug. 29, Miller expected groundbreaking within six weeks. The construction was expected to take about 18 months.

Construction of the new Jazz arena will play an imporant role in Utah's bid for 1998 Winter Olympics. Organizers want to hold hockey events in the new facility.