That doesn't tell the whole story. I am not going to pretend to know the goings on in Wasilla, Alaska, but I will tell you what I do know from over 9 years experience in local government. The Sports Arena was funded in Wasilla was funded with a bond issue. Bond issues, while debt, are not that bad of a way to finance if the city can get a low interest rate. Likewise, bond issues are usually backed by a revenue pledge - in this case a sales tax revenue, if I've read correctly. As I understand it, the Arena and the bond issue was voter approved? So, what's the fuss, unless of course its by the losing political party or candidate running on sour grapes?
When I worked in government, (I worked in a town about the same size as Wasilla), we did a bond issue. The bond issue allowed us to pave roads, improve downtown, and build a civic center. The bond money was held in reserve and paid to the contractors as the projects where completed. Tax law says that if you make more interest on the bonds than you pay out, the local government must pay arbitrage. However, you can break even and we did. This bond issue allowed us to build up our fund balance reserves to a healthy 15% of budget.
I haven't seen Wasilla's financial statements, but just from the info I have seen, the sound like there in good shape. Also, Civic Centers and sports arenas never make money. Ours was used for concerts, sporting events, ect. but they never make money. So why do them? Because we built it, restuarants, hotels, and new stores moved it. That increase our overall tax base, brought in new growth, new residents, and revived downtown. Try and put a value on that, you can't. We saw an increase in property taxes and in sales taxes. Therefore, I would say that it pays for itself, even though on paper it doesn't. Again, I don't know Wasilla, but I understand the population is growing and that new stores and restuarants are moving in. Good for them.