Politics & Government
Angels Sought to Lift PAC Bottom Line
New angel fund proposed to create public/private investment in center productions.
Burnsville may need to take on an even greater risk on the city-owned Burnsville Performing Arts Center’s financial future. But first, City Council Member Mary Sherry wants to know how much more taxpayers should be asked to pay to keep the facility afloat.
Since opening in 2009, the controversial $20 million center has faced its share of challenges. It has yet to break even and has required annual city subsidies for operations. Some say that improving the center’s financial performance is hampered because of conditions imposed by the tax-exempt bonds used to finance the project.
The BPAC advisory commission thinks it has a way around this by creating and angel fund to support a subscription series or other performances, which would be underwritten by private donors in partnership with the city. To make that happen, they suggest a $50,000 contribution come from the city Economic Development Authority to act as seed money. During its Monday meeting, the EDA approved the change to its 2011 budget to support the concept. However, before any of this can be acted on it will need City Council work and approval.
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Deputy City Manager Tom Hansen told Authority members the PAC currently operates as a rental-only facility. The angel fund would help move the center to a “presenting house” model and could increase its brand by creating a following to a subscription series. As a “presenting house,” acts would be booked and the production risk and profit would be shared between the investors, he said. “I think there is a consensus amongst a great number of people in the community that could be a useful tool for our performing center to have,” he said.
Sal Mondelli, chairman of the advisory commission, said three businesses have committed $10,000 each toward the effort, and they are looking for two more donors to total $50,000. “There is a lot of support for this,” Mondelli said.
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In response, Sherry asked why the city's contribution of $50,000 needed.
“I think our taxpayers have already made a huge contribution for this,” Sherry said. “We put in $680,000 into this facility last year and that’s not counting the electricity and all the other stuff. … I just don’t get it.”
She said the city should not take on more risk.
Dan Gustafson, EDA chairman and BPAC commission liaison, said he mistakenly assumed when the center was built there would be a fund available for presenting series.
“We’ve recognized there is only so far you can go as a rental theater,” he said. “It is just a good business decision,” he said.
EDA member Dan Kealey said this may be the only way to get the “shackles” off the ability of the center to bring in different programming.
“There is now a $20 million investment of taxpayers’ money. ... As a city-owned facility and not a privately held facility, we were handcuffed from the get-go," Kealey said. "We have to invest in building the revenues. We have to show some initiative on our part and we need the angel fund.”
Sherry countered, “I’m a risk-taker, but not with other people’s money. I don’t want the city to be the angel.”
Kealey suggested that rather than providing the money as a donation, the EDA loan the money, with the condition that it be paid back at a later date.
Though Sherry voted against the measure, the rest of the EDA approved the $50,000 change to its budget. The proposal was approved and staff was directed to develop loan and policy language for consideration by the city council.