Bob Moore, President of the Fairfield Arts and Convention Center Board, spoke to the Fairfield City Council Monday evening. Mr. Moore reviewed the center’s revised business plan and some of the center’s highlights from 2009.
Some of the highlights include;
- 262 Events in the Sondheim theater
- 325 Meetings and expos
- Nearly 14,000 out of town visitors
- $5 Million of spending influx from those visitors
Even with all the good news, the center is still unable to fund the debt, or the annual operating expenses. The board has a two-part fund raising plan, one to retire the $950,000 non-mortgage debt, and one to supplement operating revenues estimated at $306,000 for 2010. The plan is to approach past donors first, those donors generously gave $400,000 to the center last year. Mr. Moore stated that the next 3-4 months will determine the future of the FACC.
The FACC has been appraised at $1.75 million as an operating facility, this figure fits favorably with the amount hoped to be reallocated from city and county Local Option Sales Tax (LOST) funds. As required by the USDA, the mortgage guarantor, the FACC building is currently for sale, however no interested buyers have yet surfaced and the FACC board has little confidence that one will appear.
In an effort to keep the refinancing process moving forward, Mr. Moore asked that the Council schedule a public hearing for the first meeting in January. This would be the first step in the process of getting the LOST reallocation to a public vote. The Council voted unanimously to hold the public hearing January 11, 2010. It was suggested that consideration be given to holding the meeting somewhere other than City Hall in order to accommodate the large crowd that it will undoubtedly attract.
So, the question is; should the city & county reallocate LOST revenue to the FACC?
UPDATE: click here to download the FACC Business Plan.
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So how much are they asking from tax payers? I just don’t see this passing in the current economy. Tax funded bailouts or whatever you want to call this is not popular right now.
I keep asking myself, what would happen if the FACC didn't get rescued by the taxpayers?
Is it going to be vacated and sit empty? – unlikely.
Are the people who already invested heavily into the center going to cut their losses? – unlikely.
Is it going to be purchased by a business/manufacturer that would pollute or disrupt the area? – unlikely.
So if there is no downside to a "no vote" from the public then . . . why vote yes?
While I am not a huge fan of the FACC (mainly because they haven't had any programming that appeals to me in the past 8-12 months), I do see it's value and want it to succeed. My question is whether or not a "no vote" is in conflict with the FACC succeeding.
What is the LOST revenue in question currently being used for?
Ok, so here we go again.
I have what is very likely a dumb question, so I'm probably just missing something – but I'll ask anyway.
What qualifies the FACC to be eligible for LOST funds? Is there anything stopping any other business from requesting the same access? Heck, is there any reason I can't ask for some LOST funds, too?
I just keep thinking that it's like a group of my friends and I going out to buy a Lamborghini to share, taking turns with the car to get our kicks. Then, when we realize we can't pay for it, we go out and ask our families to foot the bill.
Maybe I'm off base here, but that's what it seems like to me.
To me, it's the principle of the thing. Plain and simple. The public didn't want it in the beginning, and now it's here (thanks to private funding), can't sustain itself, and is asking for a bailout because it purports to be such a benefit to the community. Tthat's the bottom line. It just irritates the heck out of me.
This raises two questions:
1. How is that $5 mm figure arrived at? Did they call each of the "14,000" out of town visitors to find out what they spent while they were here?
2. What's the definition of "Out of Town?" Is Libertyville, Lockridge, Packwood, Richland, or any of the other MANY small communities around here considered "out of town?" Many of those people come here to spend their money anyway. I'd be more interested to know the breakdown of what percentage of "out of towners" came from 30 miles, 60 miles, or farther away.
All,
As promised, the FACC has launched a website with the business plan, news, facts, and additional information at http://www.FairfieldCenterInfo.com
Feel free to share that URL with your friends
So wait a minute. You’re going to say that the center brings in 5 million dollars and then say you don’t really know for sure?
This is going to be an easy vote!
LOL. John, what I am saying is simply that $5MM is a low-estimate based on State guidelines. We're just trying to honestly depict the numbers rather than make claims that we couldn't possibly back up…
I've often felt the greatest opportunities of the infrastructure was wasted through limited community involvement, and illogical marketing budgets.
Fairfield has a rich theatrical community and I feel like there was never enough cooperation between these groups and the center.
It would be wonderful to see a mandate for some community involvement agreement in the spirit of FPAC or KRUU. It would be good to see that with or without the tax revenue.
Hoping to answer a few of the questions posed about the use of the local option sales tax for the FACC: The current allowcation of LOST taxes is 50% to street repair, 25% sewer repair and 25% to a general category of community betterment. The last few years 25% generated approximately $200K. Out of that we have funded some capital items from departments like gear for fire department, equiptment for recreation, benches for the parks. We have also contributed to the development of the trails, support for art walk, little league, fairfield soccer, babe ruth, fairfield beautification, all things italian festival and more. If the voters pass the election to suppport the FACC over 10 years for $650K it will reduce the community betterment portion to 10 or 12% from 25%. The focus on the downtown redevelopment including the FACC and the marketing efforts of the CVB and development of festivals like the 1st fridays art walk have all contributed to the growth of the LOST revenue. SInce 2001 the revenues have grown 38% or $225,000 new revenue (representing $22.5 million in new economic activity).
The city has always been supportive philosophically and financially because we view these as investments that allow us new revenue from visitors to our city help us spread the buden of money needed for streets and sewer and off property taxes. If it passes we would have less money for the other projects, but the good news there is that we have been fundibg trails for nearly 10 years and they are about done. The best case scenario is the sales tax continues to grow and we have more gross revenues to work with. That will surely not be the case if the FACC doesn't make it.
This is a great discussion. It's critical whether we all agree, or agree to disagree, that we all act on facts…not rumor, conjecture, or wild speculation. I'm not sure if my comments will clarify or blur things, but here we go. Some of this has been discussed so I apologize for repetiion. I'll be splitting this into separate posts.
$1.75mm is the current appraised value of the center as a going concern. So, this is the number USDA and ISBT would accept from a willing buyer on the open market. So, far there has been little interest shown by private buyers despite aggressive marketing by a commercial realtor from Cedar Rapids. If a private buyer doesn't materialize (and that isn't looking likely), there are two remaining options: 1. The public/private partnership that is being talked about, or 2. foreclosure by the bank (which will shut down the center and lose the good momentum it's gained).
The public/private partnership is proposed as follows. The city, county and private contributors will come up with $1.5mm to pay off the long-term debt on the facility and receive title to the property and a full release from ISBT and USDA. (Yes, this is less than the $1.75mm the bank/USDA wants but it's $1.5mm more than any offer they've got and it's what we believe we can reasonably and responsibly raise.) Obviously, the bank and USDA will be substantially writing down their loan. The city will contribute $650,000, the county will contribute $350,000 (the city and county contributions would be subject to public approval by vote) and private contributors will contribute $500,000 (additionally, the FACC board is seeking to raise another $500,000 to pay off equipment leases and accrued payables).
The city will borrow the $650,000 through sale of bonds. We will pay that debt back by pledging city LOST funds. Preliminary calculations (by Piper Jaffray) have indicated that if we dedicate approx. $100,000 per year for 9 years (9th year will be less), the debt will be retired. $100,000 is approximately one-half of the community betterment part of city LOST revenues. So, of the 25% community betterment piece of the LOST pie, we would spend about half of it on civic center debt for about 9 years. Of course if LOST revenues continue to increase, we can elect to pay the debt off early. The other half of that revenue would continue to be used to help plug holes in our general fund budget (e.g., police car) and help fund other worthy community non-profit "quality of life" projects (e.g., little league).
Yes, there would be less for non-profit "quality of life" projects for a few years, although I personally consider FACC to be the single biggest improvement to the quality of life in Fairfield in the 51 years I've lived here. (I know there are those that disagree.) No, there would NOT be an increase in anyone's taxes. This is a proposed shift in the use of existing sales tax revenue. It is not a new tax or an increase in tax.
On a personal note, the large group of people who worked for years to create this center worked their tails off and gave thousands of hours and lots of money to make this incredible facility a reality for Fairfield. They dreamed big, maybe too big. I guess I don't have a problem with that. From the city's standpoint, to think that we could possibly retain local control of this facility, and see it continue to stabilize and grow in the future for $650,000 is, in my opinion, a bargain we should not pass up. I've been involved with downtown revitalization and economic development discussions for almost 20 years and the FACC has consistently been considered a powerful engine for economic development and downtown revitalization. I think it's now proving that proposition. In my opinion, as a community we should do everything reasonably possible to avoid losing it.
I don't think we should do ANYTHING to decrease the amount of money available for street repair. Fairfield's streets are HORRIBLE. If I have to have one more repair to my vehicles due to the crappy condition of the streets, I'm sending the bill to the city. Sidewalks have to be near perfect – but oh yeah! the city doesn't pay for them. This town is such a load of crap.
All the facts have been laid out by Daryn, Ed, and Myron. Using half of the 25% of Local Option Sales Tax set aside for community betterment to purchase the Arts & Convention Center will not affect street repair or any other vital city services. It is completely in line with the voters' decision to support a ten-year extension of the LOST tax with 25% of the revenue allocated to these kinds of quality of life projects. Because this would be a specific re-allocation of LOST funds the decision to support the Center in this way will once again be made by the voters. The City Council will only be deciding whether or not to create a referendum so that a vote can happen.
I understand why some people are hesitant to support public funds being used to support a private facility. When I went door-to-door during my campaign I heard a lot about people's anger over how the Center was mismanaged, how they never wanted it to begin with, how it wasn't built for them and they have never used it. They don't want a penny of their tax money being spent on something they don't use.
My response to them has always been the same. Yes, there was some mismanagement in the first year of the Center's operation, but the past is the past. Now that's it's been built and has momentum we need to figure out what to do NOW. And the new management at the Center has been working very hard to diversify their events and bring ticket prices down. They've sponsored professional fights and wedding receptions and proms and conferences and local music and theater – there really is something for everyone.
The Center truly is a community facility, and we can make it whatever we want. If we stand by and watch as it goes dark then we'll be shooting ourselves in the foot: if you want more money to be spent on other community projects then we need the Center to continue to serve as the economic engine it's become. Attracting visitors to spend their money in Fairfield is a big part of our overall economic development potential, and the things that attract visitors are the same things that enhance the quality of life for those of us who call Fairfield home.
I appreciate everyone's comments and insights. A lively debate on this topic is very important. One thing I would like to see discussed by proponents and management of the center is much more detail on plans to increase revenue in the future.
I have seen little about plans to add additional types of events and what those events would be. For example, I have never seen (although I haven't been following this in detail) any country music events happening. This would be a good area to expand into.
(Cont.) It would be very useful to know how much of the capacity of the center is currently being used and how much is still available to host additional events and thereby increase revenues. Also I haven't seen anything about how the center is being marketed and what is being done to attract (or create) new revenue generating events.
I read the business plan and it doesn't cover areas like marketing or how the projections for revenue for 2010 would be achieved. There have been general comments about outreach and expanding the types and numbers of events (and hence revenue) but I haven't seen anything about how this will be achieved. I hope to see more on this soon. I am sure there are very many people who would like to have this information and I think it would add some real substance to the conversation.
As Alice says, you bring country music in and you get my vote. Does the FA&CC board even have anyone who represents the country music tastes of a large population in and around town?
Alice & Dan – did either of you attend the Branson on the Road concert? That was pert dern near country if ya ask me. There may have been some others, but I'd rather eat a stomped-on-toad-frog than listen to country, but that's just the city boy in me.;)
Lots of comments, this is awesome.
Alice and Saffi commented about revenue and marketing. Here's what I can tell you. Firstly that per Alice's request, we added a contact page to the FACC Info site that, in addition to direct email to Rustin, is the perfect vehicle to recommend shows and events. I know that it sounds silly Saffi, but the Center is a lean organization and Rustin is handling many of the duties that staffs handle in similar facilities.
Rustin has his finger on the pulse of the community. He is learning a lot about what we like and don't like and what fills seats. We're averaging 300 attendees for all of the new events that he has brought to the Center and we are now budgeting with that figure in mind – something to the effect of, let's budget for selling 250 tix at a reasonable price and then make some money on the additional 50 seats. With me so far? The events I'm referring to are things like what Michael Halley mentioned – fights, the Sondheim Artist Series, Saturday Night at the Sondheim – like that. Then there are meetings, conventions, and now, weddings. For the former, Rustin is working on the schedule for 2010. Contracts are being signed. Plus, as different artists begin to establish tour schedules, we will find out about them and see who we can book and when. Having had experience in promoting concerts, I can tell you that in the music business, many tours are not planned as far in advance as you'd think. Not only that, dates change faster than I can write this comment! Still with me? Each of these events is marketed via a combination of social media, radio, TV, and print advertising. And the Sondheim Series was supported by a beautiful 4-color brochure that was mailed to everyone on our list – and then some. This will be repeated for 2010 Sondheim Artist Series.
For the latter then, meetings, conventions, weddings, holiday parties, etc – anything NOT held in the Sondheim – this is where we see lots of growth opportunity. (In fact, I already know about a MAJOR convention-type event coming to town that we're just not going to promote until the contract is signed.) To take advantage of that growth, you'll see budget in the business plan for marketing, and, a marketing director will be hired to specifically focus on those efforts.
So to recap, even if we took the number of shows that we've booked in 2009 (that number is in the business plan) we can still book more in 2010. That is upside potential #1. Then, on the meetings and conventions side of the house, there is a LOT more capacity that we can tap into. And the beauty of that part of the house is that they are more profitable – we don't have to pay for talent and talent related costs – AND they bring in even more money for the community as many of these are multi-day.
I know for a fact that Rustin is looking into every type of event that he and his staff believes can sell seats in the Sondheim and Country is CERTAINLY one of them. I know that Greg Brown was in town this year, and he sold out, but I'm not sure what other Country shows we did. I can only echo what another commenter wrote and that is that you can rest assured that Rustin is looking into Country acts who are affordable and good enough to warrant you buying a ticket for them!
Alice, Saffi, have I addressed what you were after?
Mark you said, "I know that it sounds silly Saffi, but the Center is a lean organization and Rustin is handling many of the duties that staffs handle in similar facilities." Why would you assume I find this fact silly? For an organization not to achieve its potential because it is understaffed (especially when it is a large investment and asset to the community) is what seems silly to me.
In the business plan, this fact is highlighted as a challenge. Rather, where is the plan. Where are the third party facts highlighting the typical staff levels at similar organizations. What are the job descriptions and recommended salaries. What is the planned to achieve these staffing goals over the next years.
Unless it is not being shared, there simply aren't enough concrete plans.
Everyone likes to point out all the reasons why there has not been success and why it is so difficult to run the FACC. Well, we are not talking about managing the super collider in CERN. I am sure that there are many best practices in existence that instruct how to achieve success in managing a facility of this type. A well conceived plan and business focus that is properly staffed should have no problem succeeding.
The existing staff should focus on building revenue, through the most effective channel available to the FACC (there are many revenue channels, which are the most profitable and which focus for 2010). Achieving results should be a separate focus from the debt issue. The debt issue is of critical importance, but if the energies of the staff should be focused on 2010. If the underlying results are successful, it will be self-evident to the public.
Question – The outside organization that was hired to manage the facility a while back… They were not successful. Why not? Was it a poor selection process? Did that group not have enough experience in our demographic? Is there anything to be learned from their experience as to avoid making the same mistakes?
And I have to ask — fights? What kind of fights?
Will,
I think you had asked about the leases. Here is the answer from our expert on the board. The lessors are secured creditors who can repossess the equipment if FACC does not pay the discounted buyouts that have been negotiated. For that reason, all scenarios involve satisfaction of the lessors. The needed amount is about $350,000. The proposed $1.5M purchase of the facility from the bank will involve payments totaling about $350k to the lessors. The bank and USDA will get the net proceeds.
Thanks for the additional info. However, the Business Plan (at least the one linked to in this article) DOESN’T have any the information in it about how much of capacity is currently being used. I read it twice just now to make sure. And it’s not covered in any of the major articles on the FACC site either.
There is info on how many events were held but nothing about how much of capacity that represents. And there really isn't much in terms of specifics about what the marketing plans are. Like the fact that with only 25% utilization at present, you’re concentrating on the Expo Hall because it has the most capacity remaining and represents the most profit potential. Nor does it say what the additional revenue would be if you reached say 50% in 2010. It also doesn’t say that Sondheim is at 80%, which means that it is nearing capacity. Projections and budgets are not broken out by the different venues either.
Mark: (cont) The marketing issue has been addressed in general terms but I haven’t seen too much about what types of events you think could be attracted to the Expo hall, especially given parking constraints, etc. If people are going to take the business plan seriously then this stuff has to be in there. Just adding the info from your reply to me would go a long way. These are things that people expect in a credible Business Plan.
I know it's a Catch-22. Everyone involved is no doubt so busy DOING that they don't have time to flesh out the paper plan to keep up with what's really going on. But if you're putting a plan out there, it should include the stuff from your answer plus longer-term projections beyond 2010. Many of the people you want to draw into this are business people who can afford to make donations and get behind the Center and they will expect more from a business plan than what is there now. Thanks for all the work everyone is putting in on this.
All,
After the comments we've received, many from this particular post, we have updated the business plan with more conservative figures for the revenue generated by the Center. And, at your request, have provided the details on page 29 of the updated plan. If you recall, $5MM was the original figure and we have ratcheted that down to $2.5-$3.1M. Over the coming days we will add the marketing plan Alice requested and additional details. Thank you all for the spirited debate! Here is the revised plan http://www.fairfieldacc.com/wordpress/wp-content/...
I can’t tell why google sent me to your blog but I can say I have become quite intrigued by the comments you have patched together. How many years did it take to begin to get that many hitting to your blog? I am pretty new to this web thing.
Doug – I don't recall the percentage of the LOST revenue that would be redirected. One point to remember is that the LOST money comes from a one percent sales tax on retail purchases in the city, it is not property tax money. No one would see any change regarding their taxes if this vote would pass. The same money is being collected now, it would just be spent on a different purpose.
Will – what is the scenario that you foresee if the vote fails?
Thanks for the great discussion Will. While I understand that not all programming will appeal to everyone, I am making a concerted effort to have a variety of performances, comedy, music, dance, lecturers, etc. I want the programming to reflect the diversity of our market and at affordable prices. I'm in the process of putting together a season the next season, along with special attraction performances. What would appeal to you? I ask this to everyone on the Voice, let me know what trips your trigger to get you to the Center.
Erik – This was covered at the first Council meeting a few months ago, I am unable to answer as I don't recall exactly what it would be taken from. Perhaps Mark Cohen can address that.
CORRECTION: Kirkwood repaving (5th St to 2nd St) is paid for by Federal Stimulus money (not LOST funds), as reported here: Track Stimulus Spending in Iowa.
That project is also listed on the recovery.org here<a/>.
Last year a business I founded when under with the economic downturn. We were only employing eight people in Fairfield, but our overhead and funding requirements were much smaller too. I could make an argument for LOST funds for that business at a scale commensurate with what FACC is asking.
I never considered that because it's absurd – right?
So why is the FACC different? Is it equally absurd for them to ask for funds vs. say a business like the recently closed Small Planet?
Having said that, I would vote without much thought for allocating funding to Parks and Rec.
Is FACC more like Parks and Rec or Small Planet? Not to be silly, but that's really the question I am trying to answer for myself.
GLB – First of all I think you would need to be a non-profit to ask for LOST funds. I know they commonly give LOST funds to Art Walk, Little League, etc. One of the stated purposes is to further tourism.
That's really nickel and dime though compared to the escalating monies being requested by FACC.
Earlier this month it was $650k, now it appears they are asking for $1.75M!
I guess my questions at this point are:
a) Why is the number now $1.75M?
b) How much LOST money it there available?
c) How did it get spent over the last 5 yrs?
d) How would it get spent the next 5 years if the FACC gets $1.75M?
e) Is the city projecting an increase or decline in LOST funds?
Will, that's an easy one, Small Planet was for profit , I'm sure that was the intention even if it was not the outcome.
Park and Rec – Art Walk – Little League – FACC – etc. are all non-profit entities, that is the first filter.
I don't have all the details and a big question I posted concerning the mortgage was not answered on Mark's article, but . . .
If the vote for public funding fails (which I think is very likely given the current national political climate and public reaction to "stimulus/bailiout/rescue" plans), then what? Is Iowa State Bank going to foreclose? Or will they restructure the debt? If they foreclose who will buy it? Will the current shareholders cut losses and totally drop the project? I think not.
imo a "no vote" will result in the private parties coming back the table and coming up with a plan.
I will, just getting the best info I can so that it is clear and concise.
Let's be clear about something. This is not a bailout. By voting to invest in the Center, the city will be ensuring millions of dollars of investment into the economy. And on the soft benefits side, a better quality of life – we can debate this all we want but we may just need to agree to disagree. I contest that facilities like this improve the community in many intangible ways.
Regarding your last quote Will, that is certainly a possibility. But do you honestly think that there is a higher probability for an investment of that size to be made in this economic climate or for a vote which will not cost the taxpayers more money, but may result in funding tradeoffs – again details to come – to happen? Are you suggesting that the Center doesn't contribute economically or to our quality of life? That is what you infer with mentions of the no vote IMHO.
What was your mortgage question? I think I missed it.
All of your questions are good ones, I think if taken to the point of foreclosure, the center would likely close and that would likely mean losing all of the momentum that has been built in the last several months. Perhaps we will ultimately find out, but I don't really see a problem in moving LOST funds to that purpose.
I'm sure there are a lot of people that made smaller donations in the beginning that are not able (or willing) to pony up in the range that will be required to do this all privately. (I'm in that category) It's gonna be an interesting winter.
Let's call the kettle black: the FACC is coming to the city, the people, and asking for tax dollars to rescue, bailout, help out . . . basically they need help. Can I call it "helpout"?
I see your point though. It's being pitched as an "investment", which is true, but it is also true that this investment is only being offered because the FACC is in financial trouble. Maybe the proper word is "invest-out"?
I don't want to argue the merits of the facility – I am not going to disagree that it provides value to the community, even though I may question specific claims and data.
So, we do agree.
We also may ultimately agree that allocating LOST funds to "invest-out" the FACC is a good idea (a yes vote to public funding).
Before I get to that place though I want to know many more details and specifics about the money trail. And on this point you should agree with me – if this is an investment, then due diligence is part of closing that deal.
There should be no delay in providing those numbers by the parties interested in seeing this deal close.
Agreed?
Let's call the kettle black: the FACC is coming to the city, the people, and asking for tax dollars to rescue, bailout, help out . . . basically they need help. Can I call it "helpout"?
I see your point though. It's being pitched as an "investment", which is true, but it is also true that this investment is only being offered because the FACC is in financial trouble. Maybe the proper word is "invest-out"?
I don't want to argue the merits of the facility – I am not going to disagree that it provides value to the community, even though I may question specific claims and data.
So, we do agree.
We also may ultimately agree that allocating LOST funds to "invest-out" the FACC is a good idea (a yes vote to public funding).
Before I get to that place though I want to know many more details and specifics about the money trail. And on this point you should agree with me – if this is an investment, then due diligence is part of closing that deal.
There should be no delay in providing those numbers by the parties interested in seeing this deal close.
Agreed?
Will, I think you may be confusing numbers. We're launching a website tomorrow with all of the numbers on it, so it will become clear. Regardless however, the $650k is what is being requested from the City of Fairfield as part of the LOST revenues that the city collects. $350,000k is what would be requested from the County – again, LOST revenues, and $250k from FACC donors. That would purchase the Center from the bank for $1.5MM. 1.75 is what it was appraised at.
Again, I'll address LOST, hopefully tomorrow, although I can't tell you how it was spent over the last 5 years. And as for the next 5, a city councilman told me that every year they earmark it for different community projects that they believe warrant the investment. For example, one year a new Little League field was built with a portion of that money.
Help-out, I like it. You know, the thing is that most if not all facilities like this end up getting funded with taxpayer dollars – usually upfront – and that's the unfortunate part as we wouldn't be having this debate if that had been the case.
But it's not, and I agree, due diligence is of the utmost importance. To that end, I can guarantee you that the FACC management and board are 101% committed to transparency. We're publishing a bunch of numbers tomorrow…
I don't agree that the "public didn't want it", but nevermind. The FACC is here now. So the only relevant question is, "now what?"
Mark said at the top of this article there was "$5 Million of spending influx from those [nearly 14,000 out of town] visitors". That seems like it IS "a benefit to the community." A benefit worth continuing our public investment in.
Great questions.
We looked at all zip codes in our ticketing database and were able to surmise which were not within a few miles of the Center. It wasn't perfect, it may have included people who would have come here to spend money anyway. As you'd suspect, we CANNOT be 100% certain.
But what is important to note is that, according to State statistics, and other related sources of information about the economic impact of arts and convention centers, that people who buy tickets go to other businesses when they buy the tickets as well as before and/or after the events that they attend.
$5MM is a low-ball estimate, taking the fact that we cannot be 100% certain into consideration. And is based on State of Iowa estimates of the economic impact that facilities like this have on other communities that have them.
Perfect? No. But we're still talking a pretty substantive economic impact.
IIRC, a good portion of LOST money goes into the General Fund, which is used to provide funding for various projects throughout the year, I beleive the repaving of Kirkwood ave at 2nd/4th is one of those projects. Another I believe is the sidewalk project, etc. It is also used to fund non-profit entities and other donation-type items.
But the general fund is not only funded by LOST. Revenue streams into the fund from the Franchise Agreements as well as other sources. I know that when FPAC sells a DVD, the funds go into the General Fund. However, I believe those funds are earmarked for us until the end of the FY, at which time, if we don't spend it, we lose it.
Agreed, John. IF it even gets to that point, and I hope not.
I just read the biz plan. Seems like a LOT of speculation, estimates, and even some inconsistencies in their own numbers. I don't see much hard, factual evidence proving anything.
Grant, as we know, business plans are always based on estimates. Even companies like P&G, GE, etc can only go by history to determine what the future will bring. If they could actually predict the future, damn, now there is a goldmine business
What really concerns me about your post however, is that you reference inconsistencies in the business plan. Can you kindly point out exactly what you mean? That would be a great help, thanks!
LOST does not go into the general fund. The approximately $800k annually is broken into three pots. The 1 cent you and I pay is allocated as follows: 1.) 50% or $400k +/- to street improvement projects to suppliment our road use tax dollars collected at the gas pump and distributed by the state and federal government 2.) 25% or $200k +/- goes to sewer improvements to reduce/eliminate sanitary sewer overflows as mandated by the DNR and EPA, and 3.) 25% or $200k +/- to community betterment. This third pot of money is where, if the voters approve, the $650k would come from. Currently groups such as Art Walk, Fairfield Volunteer Center, FPAC, Little League, Fairfield Fire and Police, Beautification, Park and Rec, Farmers Market and many others have benefited from this portion of the tax. The previous ten year tax, prior to renewing to the current structure, went to the Law Center and when it was paid for then was realocated by election to provide $1.4m to FACC, the downtown street scape and many of the other groups listed previously.
I will continue.
Franchise agreements are created to allow companies such as Lisco, Mediacom and Waste Management to operate under set guidelines of the city. No money is generated from them but there is some in-kind value assigned such as equipment for FPAC, live feed connections to schools, city hall and FACC, garbage and recycling pick-up in city parks.
General funds, from property taxes, go toward payroll of city personnel such as the street department, police, fire, city hall, park and rec, library, and yes even city council members and the mayor. The list continues with electric bills, facilities up keep and repairs, supplies, equipment, even library books. If you would like more information the annual budget is on record at city hall and your council members receive a bi monthly expenditure report.
The water and Sewer departments are a city municipality. They are operated by the funds generated from your utility bill each month.
Thanks for Clarifying that, Daryn. It had been explained the other way to me some time ago, and I apologize for the mis-information
Daryn, thank so much for taking the time to explain this to us!
More discussion on Page 18 would be helpful. Why do the projections not include debt servicing? What is includedin Cost of Sales? Not all debt will be retired correct? Won't there still be some level of a "mortgage" payment. Where is that represented?
The $5 million number really is worth revisiting.
No worries Grant.
As for the $5MM, I know that it sounds unrealistic, but again, according to state estimates, it is actually very reasonable. If we used their exact numbers, it would actually be higher! I'll have to find what I'm referring to and post that.
You're welcome. I've been a councilman for several years and I'm by no means an expert on this cities finances.
My apologies, Mark. What I thought was an inconsistency was a differentiation between a segment of the business and the business as a whole.
You're right about the fact that business plans are based on projections and guesstimates. What I guess I'm trying to say is that I think it's delusional for the center to TRULY believe that it brought $5mm in additional money to this area. As a potential – albeit unwilling – investor in the FACC, I'm just being realistic.
Good point Saffi, the discussion is had in the presentation. This is what was presented to donors and the City Council and our board president added the "color" if you will.
Good questions about the debt. it doesn't include it because we are planning on retiring it all. Leases are being negotiated away and we will pay those off. The mortgage will also be taken care of through either a sale or the public-private partnership. That will only leave us with operating costs.
You make a good point though about the mortgage payment. There MAY be one, dependent upon what happens. Of course, the preferred scenario is the public-private partnership where we will an owner in addition to the City and County. So in that case, there will be a payment but we don't expect that to be too high.
I'll get the skinny on the stats that make up the $5MM so that everyone can see for themselves that it is a reasonable figure to quote – thus the reason why we presented it to the City Council and our donors.
Hi, Daryn! Thanks for the answer. Hope all is well with you.
If I were still a Fairfield resident, I'd want to know the impact on other projects of shifting more LOST money to the civic center. Although I hope the FACC succeeds, I certainly wouldn't want to see the other organizations you listed be hurt.
Thanks for the number Myron!
650 + 350 + 500k = 1.5M. I understand you believe that would cover the full release.
So my question is, how big of a Gorilla in the corner is the need to pay off the equipment leases? For instance, assume the public funding is approved, but the board fails to raise another 500k . . . what is the impact?
"anon", see relevant topic: Residents on Damaged Cromwell Ask City Council for Action.
It's not an easy issue to solve, although I agree on the importance. I assume your question is: "does the allocation of LOST funds to the FACC mean less street repair?"
That's a great question, and maybe someone can answer it for you and other's who live on streets in need of repair.
anon,
please re-read Ed Malloy's facts about the LOST money – the Streets are at 50% and Sewers at 25% of money coming in, and will only be used for those purposes. Keeping the momentum of FA&CC by supporting with only 10-12% of the Community Betterment allocation will help ensure the LOST funds continue to grow.
It is important to understand the facts, as Myron says, or we risk making bad decisions about our future. We are all in this together and hopefully all want what is best for Fairfield and generations to come.
This is the best argument I've heard yet for the FACC funding. As a fence sitter on this issue, I suggest the FACC board focus on this message above all others. This is positive "math".
As one board member, I can tell you that I concur Will.
Got it. Thanks.
Just want to point out that we're only "all in this together" because of a only a "few" people that put us here.
Shifting LOST funds as proposed will not take a penny away from streets. Streets are a problem. Many are in bad shape. Keep in mind that the $400,000 per year of LOST funds we now have earmarked for street repair hasn't really had a chance to be used yet for general street repair. In our first year of having such funds available, we were forced (and I'm not suggesting in a bad way) to spend lots of money on the intersections with business 34 through town because the state was pouring $15mm of road repair into Fairfield. We obviously had to fix our intersections while the state was doing their work so we poured a bunch of money this year into that, as opposed to general street repair. I know it's difficult to be patient when the street in front of your home or office is a mess but I predict that 5 years from now there will be significant improvement to our streets as we start aggressively pursing improvements.
Will,
You'd probably have to have the FACC board answer your question. I'd say it's more like an anxious chimpanzee than a gorilla. The board has been doing a good job of keeping the lessors placated although, as I understand it, they sometimes get impatient and the board has to calm them down. I believe the board has some contributors who are willing to buy-out the leases but only if the center stays open. And, I can't blame the contributors for taking that position. That's the extent of my knowledge on leases.
I agree, we need to hear more from those who will be managing the facility about their plans for securing revenue generating events and promoting those events. Maybe the web-site that was set up to promote the center could create a form dedicated to submitting ideas for entertainment options where the community could submit ideas. Each time someone has an idea I hear "you ought to tell Rustin about that". That certainly can't be the solutation.
Also, what type of analysis was performed in "sizing" the facility? For example, if the Sondheim has 522 seats (it seems larger to me), then a consulting firm of sorts must have statistics regarding the limitations on the types of acts that can be attracted due to the constraining factor that only 522 seats exist. This has to be a very real constraint that limits the types of acts that can be attracted (especially, given that high ticket prices will be constraint too). Before we move forward, shouldn't we reacognize realistically what the potential for revenue generation is and what it is not.
Further, given the limited number of hotel rooms and restraurants, no amtrack connection, and the fact that we are not near an airport, how do these facts constrain our ability to attract conferences. Given the level we are able to compete at in the market place, what is our competition for conferences? Is it realistic to expect that we can compete effectively.
Myron's comment "They dreamed big, maybe too big." inspired my post above. I agree that the facility may have been four steps forward when one step forward would have been a nice first step.
Having said that, for quite some time, I have worried that the size (which is probably too large for 'one step forward') may actually be hindered by the fact that, in the end, it is too small to be viable on a regional level and that regional support may be the only ticket to survival.
I hope this thought is expressed clearly enough.
I agree. If the community is going to be asked to vote to support the FACC, broad-based input regarding the uses of the facility should be encouraged. Maybe the web-site that Mark Cohen pointed us to could be modified to collect suggestions.
Yes it is helpful. One issue you didn’t address is how much is left. For example, are you near capacity in Sondheim but have a lot of room left in the schedule in other spaces? It sounds like Rustin is doing a great job but, it would be helpful to know how much potential for increase there is in the number of events that can be brought in. For example, if we're at 75% of capacity for Sondheim and 50% for the remaining spaces that means that with continued marketing efforts and word of mouth we could expect a truly significant increase in revenue over the next few years. On the other hand, if we're at 90% in all the venues, there is only so much more that can be done on the revenue side from the Center itself and outside revenue streams will have to play a larger role on an ongoing basis. I hope the question makes sense.
PS Thanks for adding the Contact link. I only submitted the suggestion yesterday afternoon and it's already up
You're referring to the Ultimate Fighting events? I have not been to one but I believe they are extremely popular – I was surprised at how many people I knew that attended.
Not my "cup of tea" but smart programming.
Saffi,
In order to get the Center back on its feet, they have been running a lean, mean, fighting machine. it is not a matter of not reaching its potential, simply a matter of generating revenues that will fund additional staff. The fact of the matter is that the Center has met revenue goals in 2009 and is practically breaking even on an operating basis. More staff would not have changed anything other than making the current staff's lives easier – something we DEFINITELY strive for, but they understand the budget situation.
As far as the staffing plan, etc goes. That's not something that is typically included in a business plan just as a full marketing plan isn't. I can tell you for a fact that what IS included in the plan is a marketing director which Rustin identified as the next most important hire.
Great points Saffi and I can assure you, the current staff is all about generating revenue and customer satisfaction, which leads to repeat business. In fact, their focus on customer satisfaction = repeat business as indicated in the 12/16 news release found here http://www.fairfieldacc.com/wordpress/?page_id=14
From what I have been able to gather, that organization who was hired wasn't able to lock into the community and its needs as quickly as had been hoped. Not an easy task for anybody, in fact, it is simply amazing that Rustin has been able to do so in a relatively short period of time. Yes, the staff and board HAVE learned from their mistakes which is why this is now a turnaround story instead of an empty building sitting in the middle of town.
Hi Alice, great! And I'm glad your request was handled quickly, I believe you'll find that it works now as well
As for capacity, another great question! Assuming 335 programming days (taking out major holidays and other dates that can be questionable for events such as Super Bowl Sunday, 9/11, etc…), and taking 2009 as an example, here is how the numbers can work. Oh, before I go there, at current staffing levels there are typically two, sometimes three events in the Center on many days so that is a continued possibility and, obviously, if we are fortunate enough to book 3 events a day every day, we'll be able to afford additional staff pretty quickly
Anyway, the numbers – which are all in the business plan by the way – the Sondheim had 262 shows, the Expo hall had 78 events, and the meeting and conference rooms were used 247 times. So the Sondheim is at about 80% capacity, meeting rooms at about 75%, and the Expo hall – which we have called out as having the biggest upside potential, is only at about 25% utilization. That is why we are also planning on hiring a marketing director whose primary focus will be on the Expo hall. Not only does this impact Center revenues, but the Expo hall has an even more dramatic impact on local business than Sondheim or Meeting room events. Plus, they are lower overhead than Sondheim events where we have to pay talent in addition to staff and marketing expenditures.
So yes, your question makes perfect sense and is right in line with what the board – and Rustin – is focusing on.
yes, Will is correct. Not my cup of tea either, but these are events that sell well here. So did Thunder Down Under – again, not my cup of tea