Plans for two proposed multi-million dollar building projects are advancing following discussion at the city council meeting Monday night. The question now is how to pay for them.
Amid a packed agenda, the council heard the results of a feasibility study on a proposed City Center for the Arts, as well as an updated indoor recreation facility planned for the area next to Cairns Arena in Veterans Memorial Park.
South Burlington City Center for the Arts
This project first surfaced in 2015, followed by a May 2016 presentation to the council by Tim Barden, co-owner of Spotlight Vermont dance and performance studio in South Burlington. He founded a 501(c)3 non-profit group, the Burlington City Center for the Arts, and created a board.
A feasibility study was commissioned with consultant Don Hirsch of Don Hirsch Design Studio based in Montpelier. Hirsch is also a member of the American Society of Theater Consultants.
Barden and Hirsch appeared before the council Monday night to discuss the feasibility study, which Hirsch has been working on for a year.
“It’s about a 30,000-foot view of the space as far as what can happen,” Hirsch said. “I took a very conservative approach.”
What is proposed is a state-of-the-art 500-600-seat mainstage theater, a smaller 150-seat multi-use black box theater, scene and costume shop capabilities, new media production and arts education space, gallery space for visual art exhibits, rehearsal space, and production and administrative office space. There would also be an emphasis on youth theater and summer programming, as well as local, community-based performances and projects. Events may include community gatherings, plays and musicals, creative theater residencies with workshops, master classes, discussion sessions, and commissioned projects for new works.
The project is considered a mid-size performing arts facility, something that Barden said is lacking in the region.
“It’s something in between the black box theater, Main Street Landing, and the gem of the community, the Flynn Center for the Performing Arts, which has about 1,400 seats,” Barden said. “There is nothing in the middle. A mid-size venue can house a lot of uses that are not currently available.”
Barden said a key component of the business plan is to run the center with a focus on production and rental capability to generate necessary revenue, saying that focus group feedback indicated the space would host 233 events a year. That production approach will also create much-needed jobs, he said.
“We’re looking at this as a producing venue with our friends in regional theater and in New York,” he said. “And it’s not just about being on stage. There is marketing, and development with an eye toward attracting people to come here and stay here and get kids not to leave here when they finish school.”
On the South Burlington City Center for the Arts website, the concept of a future arts venue is described as such:
“It will be a facility that doesn’t just embrace the future, it will help build it.”
City Manager Kevin Dorn said the high level takeaway from the feasibility study is that the center could make money and be sustainable within a few years of opening.
“It can be successful to run in the black after a few years,” he said earlier Monday. “The long term expectation is that it will be self-sustaining. In other words, if you build it, you can run it.”
Dorn said the city is also in discussion with a city center landowner about the possibility of building the City Center for the Arts on the property as a half commercial, half arts center venture. He declined to name the landowner, but said details would emerge in the coming weeks. Councilman Dave Kaufman asked at Monday night’s meeting if there were talks with developer Larkin Realty, but Council Chair Helen Riehle told him that discussion was premature.
Dorn said the very early estimate for the cost to build the arts center is $30 million, adding, “that is ball park at best.”
Option Tax Financing
Dorn said that city staff has been working on a proposal to pay for both the city center for the arts and the new recreation facility without raising property taxes. He proposed adding another 1 percent to the local option tax on sales, rooms and meals.
Currently, option tax revenue is used to pay down for the bond on the South Burlington Police Station, and to supplement and keep property taxes down.
Once changes are approved by voters a city charter must be amended by the Legislature in order to be implemented, and the state takes 30 percent of the option tax revenue. The city keeps 70 percent. Dorn said the City of Burlington currently has an agreement with the state and keeps 100 percent of its 2 percent option tax revenue.
The current 1 percent option tax on sales, rooms and meals generates $3.5 million annually for the city, Dorn said. He added that given that the school district’s sole reliance on property taxes to fund its budget given the state’s education funding system, his staff did not want to use a property tax hike to pay for the two proposed projects.
“What we recommend would be an increase in the 1 percent option tax to 2 percent,” he said. “2 percent on sales, 2 percent on rooms and meals, until the debt is retired, at which time the additional 1 percent would sunset.”
In other words, the option tax would return to 1 percent once the arts center and the rec facility are paid for.
He also said the city would ask the state to let it keep the full 100 percent of the option tax revenue, rather than sending 30 percent to the state as it does currently under law. That would significantly reduce the time necessary to pay off the bonds incurred.
For instance, Dorn said if the arts center cost $30 million and the rec facility cost $15 million, the city would have to raise $45 million. If the 1 percent option tax increase were approved by voters and the legislature, and the state agreed to let the city keep 100 percent of the proceeds, Dorn said both projects would be paid for in 10 years. The additional 1 percent would then be taken off the option tax, or sunsetted, and revert to the current 1 percent. Keeping the current 1 percent option tax with the regular 70/30 percent split with the state, Dorn said the projects could be paid off in 15 years.
In order to get the charter change/option tax question on the Town Meeting ballot, Dorn said the council would have to approve the proposed charter language by early January 2019. If voters approve the question, the proposed charter change would then go to the Legislature for approval. If the Legislature approves the charter change, Dorn said there could be a special vote to bond both projects in June or September.
With a positive bond vote, the arts center project could break ground in spring 2020, Dorn said.
Not so fast
By the end of the discussion Monday night, the council was clearly split in its view of the option tax hike proposal.
Councilor Kaufman said he was concerned that so much depended on what the legislature would do.
“I’m all in favor of paying for the rec facility with the additional 1 percent option tax,” he said. “But the arts center would have to run in the black. The legislature could raise the rooms and meals tax. It’s impossible to predict.”
Councilor Tom Chittenden agreed, saying he wanted more information and discussion.
“We need to flesh this out,” he said. “I don’t want to restrict (the additional option tax revenue) to specific projects.”
Councilor Meaghan Emery said she liked the sunset clause of the additional 1 percent.
“I’m not in favor of this being indefinite,” she said.
It also came to light that if the option tax increase were approved, South Burlington would be the first municipality in the state with an 8 percent sales tax.
“It’s been long established that there is a need for indoor recreation space in South Burlington, but I am increasingly skeptical of being the first to go to 8 percent,” Chittenden said.
In the end, the council agreed to engage the city Charter Committee to look over the option tax proposal and craft new language for the proposed charter change.
“I think this is an exciting concept and we look forward to continuing the conversation,” Riehle said.
To read the South Burlington City Center for the Arts feasibility study, visit www.citycenterarts.org.