GPAC Ownership Options on Table
According to Greensboro City Manager Denise Roth, the City of Greensboro may give up some ownership of the proposed downtown performing arts center once it’s built, despite paying $30 million of the estimated $65 million cost.
The Community Foundation of Greater Greensboro is expected to provide $35 million of the cost of the entertainment venue with private donations.
Until now, Roth has said that the city, which paid $11.3 million to buy eight parcels of land for the performing arts center, would own and operate it.
At the Oct. 3 meeting of the Guilford County Board of Commissioners at which the city won permission to use part of the hotel/motel occupancy tax to fund the performing arts center, Roth told the commissioners that the city would own the performing arts center.
A committee of the Greensboro Performing Arts Center Task Force in early October suggested that the city lease the performing arts center to a trust to operate it – but even under that proposal, the city would own the facility.
Roth said that “many models” of ownership and operation were being considered at the city staff level. One that is being considered is the performing arts center being owned by a public-private partnership.
Roth said this week that the private sector may have “some kind of interest in the project.”
“There’s no question of the city not having ownership interest, operating, long-term business interests,” Roth said. “We have been researching what else is out there. This is not something we have talked to council about or made a recommendation. I would be comfortable in saying that other constructions are being considered.”
One issue the City Council has already considered is that the $35 million in donations to the Community Foundation be secure. The City Council doesn’t want to go looking for the Community Foundation’s $35 million and not find all of it.
The city has stated that the Community Foundation will have to provide a letter of credit guaranteeing the donations.
Roth said the term “letter of credit” was used loosely, but that there would be some sort of financial security to back the pledges.
Roth said, “We put in ‘letter of credit’ to make it simplistic.”
Roth said the city’s bond counsel will have to approve “some level of financial backing” to make sure the city isn’t responsible for private-sector pledges. She said, “That is what we’re working through now.”
“It won’t be just somebody’s word or a handshake or a promise to pay,” Roth said. “It will be a financial security.”
What’s being considered by city staff behind closed doors seems to be that the performing arts center may be operated by the city, a private entity or some type of public-private partnership.
It had been said that the performing arts center would be run by Greensboro Coliseum Director Matt Brown.
That makes a kind of sense, because both Brown and AMS Planning & Research Corp., which did the feasibility study for the performing-arts center, seem to have a great deal of faith in the willingness of Greensboro residents to pay large sums for premium parking.
Brown wants to tear down War Memorial Auditorium to build premium parking, and AMS and the city think they can raise $10 million of the city’s $30 million for the performing arts center from premium parking.
AMS and the city expect people to pay $20 a pop for 37,250 parking spaces a year, bringing in $750,000.
Roth said the city and the Community Foundation are writing a document that will detail who will own and operate the performing arts center and how it will be operated, and they hope to get it before the City Council for a vote by the end of November.
Councilmember Tony Wilkins said a proposal for anyone but the city to have an ownership stake in the performing arts center was new to him.
“I noticed there was a small group meeting between [Mayor] Robbie [Perkins] and [Councilmembers] Nancy [Vaughan] and Zack [Matheny] and Denise Roth,” Wilkins said. “The subject was the performing arts center. I’ve been meaning to ask what that was about. But I’ve never heard anything about anyone else owning it.”
That meeting was scheduled for Tuesday, Oct. 22 and Councilmember Nancy Hoffmann was also invited.
“I can say this,” Councilmember Jim Kee said. “I am not comfortable with putting any money into a project that the city doesn’t own. Particularly when you’re talking millions of dollars.”
BY PAUL C. CLARK
October 31, 2013
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