Rexburg council authorizes negotiations on private‑built ice rink after debate over liability and terms

The City of Rexburg on March 6 authorized staff to negotiate a public‑private partnership (P3) to build and operate an indoor ice rink on city land, after an extended council debate over liability, financial terms and a request from developers for quick procurement of long‑lead refrigeration equipment.

Under the letter of intent described by staff, the city would retain ownership of approximately 35,000 square feet of land; a private developer would construct and initially operate the ice facility at its own expense, pay a minimal annual lease, and begin “donating” a portion of the building’s fair market value back to the city each year. Staff described a minimum donation schedule of roughly 4 percent of fair market value in year one with flexibility to increase the percentage annually; staff said a developer could operate the facility for up to 25 years and would retain cash flow to cover operating expenses and to recoup construction costs plus an agreed rate of return before any profit sharing to the city.

Multiple council members and the city’s legal advisor sought clearer terms. City attorney (speaker 17) advised the council that a letter of intent is not a final binding contract but is the strongest non‑contractual affirmation the city can give to let developers begin procurement and early work. The council repeatedly asked how insurance and liability would be handled; staff said the city would work with its municipal insurance pool (ICRIMP/ICRIM‑type provider) to clarify coverage for land, assets and operations and to define whether private operators would carry primary liability for activities such as lessons, rentals and events.

Councilmember questions also focused on the undetermined split of revenue after the developer has recouped construction costs and the proposed timeline. Several council members, and the developer representatives, highlighted urgency for ordering chillers and other equipment with long lead times so construction could begin in time for a potential fall opening; staff said that approving the letter of intent would allow negotiations to proceed and materials to be ordered while the final contract is prepared and returned to council for approval.

After discussion, the council voted to approve the public‑private partnership letter of intent and authorized the mayor and staff to finalize and negotiate contract terms for a formal agreement that will return to council for final approval. Legal counsel and finance staff said they aim to complete the contract negotiation in weeks, not months, but stressed the agreement will need detailed provisions covering insurance, assignment of operational responsibilities, inspection rights and the post‑recoup profit split. The council did not set the final profit‑sharing percentage at the meeting.

Mayor Jerry Merrill said staff would seek to expedite the final contract, possibly via a special meeting if necessary, and emphasized the city’s intent to keep risk low while enabling the project to proceed. "If we are going to move forward, these guys need to be getting stuff on order," the mayor said in the meeting.