CULTURAL ARTS CENTER PROJECT
 
Bidding and Construction Schedule, etc.

Jim Lohse, FFKR, reported he is in the process of completing the second bid package, which is for the footings and foundation, site utilities and a subdrainage system below the basement level. This subdrain system will allow the drainage to flow into a storm drain on the northwest side of the property and eventually empty into Farmington Bay. Hogan Construction is planning to send this project to bid on April 7, 2009. The third bid package is scheduled to be released for bid on May 7, 2009. This is for the structure–i.e., steel, windows, and masonry walls. The bid for the interior walls, tile, carpet, seats, etc. is scheduled for release mid June 2010. Updated cost estimates will be presented at the RDA meeting on April 21, 2009, along with the results of the footings and foundation bid. 

Mike Hogan, Hogan Construction, distributed a construction budget for the Davis Cultural Arts Center as of February 23, 2009. Mr. Hogan said he can guarantee to build the Davis Cultural Arts Center for $14,000,000. Mr. Hogan said it will cost an estimated $70,000 for the masonry upgrades that were discussed in the February 23rd meeting.

Design Issues, Including Approval of Building Exterior (FFKR)

Jim Lohse, FFKR, displayed drawings of the proposed Davis Cultural Arts Center. The building will be constructed of split-face colored concrete block in earth tones that will be carried into the inside of the building. The earth tones were chosen so that it will be in contrast with the MTC building. The Committee discussed the exterior of the building including ideas to “soften” the exterior of the building. Mr. Lohse discussed subtle changes that could be made to the trellis and window coverings that would help “soften” the exterior of the building. Landscaping and a water feature would also help to “soften” the exterior of the building. The architects will give some more thought to how to make the exterior more interesting or appealing.

Feasibility Study Final Report and Financing

Cody Deeter, Lewis Young Roberson & Burningham, Inc. distributed the feasibility analysis. Mr. Deeter explained the tax increment leverage has been increased to $6 million in construction proceeds by committing 90 percent of the unobligated tax increment until the RDA expires. The RAP Tax revenue projections for both cities have been reduced through 2010 because of the current economy. The actual leverage is $12.3 million in terms of the bond, with the cash from the 2008 RAP Tax collections, tax increment on hand, and the County contribution providing another $2 million cash up front.

Mr. Thacker expressed concern about the projection of using sales tax revenues. Blaine Lutz, Centerville City Finance Director, explained the other tax revenues are actually doing better than expected.  Lawrence Wright, Centerville RDA, also expressed concern about the possibility of using sales tax to help repay the bonds, and other possible unforeseen revenue requirements such as UTOPIA that might come in the future. Mr. Lutz said the tax increment has very little risk, and the projection is based on the assumption there will be no growth or taxable value added in the coming years.

Mr. Deeter said the operations analysis forecast for the arts center is based on 70 percent occupancy, and black box tickets will add additional revenue. It is hoped that donations, sponsorships, concessions, and the gift shop will also add additional revenue. Rodgers Memorial Theatre is currently being operated with one full-time employee, but the new facility will require three full-time employees. The new facility will also require a large volunteer contingency to operate it. 

Blaine Lutz reported the final resolution for bond financing is scheduled for the April 21, 2009 Council meeting. Ron Russell explained RDA bonds are not very marketable in the current economic market, and it was determined that it would be better for Centerville City to issue the bonds and use the sales tax pledge for bonding. Ron Russell, Blaine Lutz, and Jason Burningham went to San Francisco last week and met with three different bond rating agencies and presented the project information, and the companies will give their decision on the bond rating soon. Mr. Deeter said credit spreads between the rating levels are at an historic high, and an underwriter is still in the process of being selected. The full pledge of Centerville’s sales tax gives an opportunity to eliminate a significant amount of interest cost. 

Lease and Operating Agreement

Lisa Romney, Centerville City Attorney, explained the draft lease agreement is conditioned upon the construction of the facility. A special ACB meeting will be tentatively scheduled for April 21, 2009 at 5:00 p.m. to approve the lease. The lease will have an initial term of 12 years, with an additional term of ten years, so there is an occupancy of ten years since it will take two years to construct. At the end of the initial term, the terms of the agreement can be renegotiated. 

Under the lease agreement, all funds generated by the theater will be used for the benefit of the theater.  There will be a base rent of $6,000 to be paid monthly that will go to the RDA Theatre Fund. A variable rent provision will also apply with any extra money going for repair or improvement of the theater with the RDA’s approval. Lisa Romney distributed a chart showing the proposed flow of funds for the Operations Reserve Fund, Maintenance Reserve Fund, and RDA Theatre Reserve Fund.  The lease agreement encourages donations, some of which might be used for the initial construction.

Fund Raising Plan Presentation by Theater Team
 Kevin Ellis, Rodgers Memorial Theatre, is employed by NCR Corporation, and is also a trustee for the theater. There are three areas of focus during this transition period: management of the current theater; campaign for the future theater; and management of a future sustainable theater.  Mr. Ellis explained the timeline that will take place with the fundraising that will begin in June 2009.  

Fund raising challenges are: Current operations (close out) $50,000; Interim Development Funds $450,000; Bricks and Mortar Commitment $500,000; and New Theater Operations Endowment $750,000. In the near future, a development person must be hired to manage the fundraising process. Mr. Ellis discussed the fundraising timeline for donations, and key preparation efforts have already begun.

The meeting was adjourned at 7:15 p.m.

________________________________   _______4-21-09____________
Steve Thacker, RDA Executive Director                       Date Approved

________________________________   ________5-04-09__________
Ronald G. Russell, RDA Chair/ACB Chair               Date Approved

________________________________
   Connie Larson, Recording Secretary