Analysis of cost factors and potential revenue raises questions about city’s capacity to cover expense
The total cost to the City of Sarasota for constructing the proposed Sarasota Performing Arts Center (SPAC) within The Bay Park on the city’s waterfront would be more than $427 million, the former independent auditor of the Shubert Organization in New York City has calculated, based on a financial analysis of the latest information provided to the City Commission about the plans.
Moreover, if the Sarasota County Commission declined to agree to help pay for the SPAC with money out of a trust fund that the two local governments agreed to establish in late 2020, the city could be left with only about $145 million from that source to cover its share of the new complex’s cost, city resident Ron Kashden of Sarasota, a Certified Public Accountant, wrote in an analysis he has released to the public.
As The Sarasota News Leader has reported, representatives of the Sarasota Performing Arts Foundation told the City Commission during a Feb. 11 workshop that the revised plans for the SPAC have put the estimated total expense at $407 million, with an April 2022 Partnership Agreement between the Foundation and the commission calling for the city to pay for half of that.
Kashden has factored in other expenses that the city would have to shoulder that are related to the creation of the new venue , including bond interest.
During the Feb. 11 workshop, Jennifer Jorgensen, director of governmental relations for the city, talked of the potential that the city could issue bonds to cover its share of the expense.
Kashden noted in his analysis that, given the $407-million estimate for construction, the city’s expense would be $203.5 million. If that were the bond principal, he wrote, the interest on a 30-year bond would be $155,527,500, based on bonding standards for The Bay Park and other city projects. Thus, he added, the total construction bond expense would be $359,027,500.
Yet, not only would the city be responsible for its half of the construction expense, Kashden continued, but its preliminary agreement with the Foundation calls for it to provide the necessary parking for patrons of the SPAC. As Jorgensen also pointed out to the City Commission on Feb. 11, Kashden wrote that a new parking ramp constructed under The Bay Park facilities would be expected to cost $30 million, with another $1 million needed to cover an updated parking area for the city’s 10th Street Boat Ramp. He then estimated $18,810,000 more would be anticipated to pay for the additional parking needs.
Data that Jorgensen and the Performing Arts Foundation presented the City Commission indicated that 627 parking spaces would be necessary outside the park.
Kashden used Jorgensen’s Feb. 11 figure of approximately $30,000 per space in a parking garage as part of his calculations.
Therefore, Kashden pointed out, the total parking cost to the city would be $49,810,000.
Kashden noted that he also incorporated the city’s $18,450,000 half of the $36.9-million architectural design fee for the SPAC in his total cost calculation.
Last year, the two Sarasota County commissioners serving on the board that oversees the use of a designated trust fund for amenities in The Bay Park balked at Jorgensen’s request that the trust fund be tapped for the fee to the Renzo Piano Building Workshop based in Genoa, Italy, which the Foundation selected as the architect of record for the new performing arts center. In the aftermath of the county commissioners’ decision, the Sarasota Performing Arts Foundation agreed to cover what then was put at $44 million for the Renzo Piano fee; the Foundation specified that that would be part of its 50% share of the SPAC expense.
Lingering questions about the tax-increment financing plans
In another section of his analysis, Kashden provided details showing that the tax-increment financing plan for The Bay Park would be insufficient to cover the city’s expense for the SPAC.
In November 2020, as the News Leader has reported, the City of Sarasota and County commissioners seated at that time approved an interlocal agreement to establish a tax-increment financing district (TIF) to generate revenue for Bay Park projects. That document also called for the creation of a five-person Bay Park Improvement Board (BPIB). Two county commissioners and two city commissioners are appointed by their boards to serve on the BPIB, with a member of the community holding the fifth seat.
In late 2020, the total projected cost of the park was put at $100 million.
The TIF district that generates the revenue for Bay Park amenities includes not just the 53 acres of the park itself but also surrounding property. The base year for the district was set as 2019. Every year subsequent to that year, if the value of the property in the district rises, then the lower of the city and county millage rates for that year is applied to that value to determine how much revenue will be set aside in the trust fund established for the park.
Although the term for the TIF district is 30 years, then-County Commissioner Alan Maio called for the interlocal agreement to include a clause that would allow the county to terminate the district sooner, if the revenue needed for the park amenities was raised before the end of the 30 years. As Deputy County Administrator and Chief Financial Officer Steve Botelho told the County Commission during their regular meeting on April 23, 2024, the revenue thus far has well exceeded county expectations.
During the May 7, 2024 Bay Park Improvement Board meeting, Jon Thaxton, a former county commissioner who serves as director of policy and advocacy with the Gulf Coast Community Foundation, agreed with county Commissioners Mark Smith and Ron Cutsinger that the provisions of the TIF district agreement did not cover the architect’s fee for the SPAC. Thaxton noted that he had been involved with plans for The Bay Park since their origin more than a decade earlier.
Moreover, since Commissioner Tom Knight — a former three-term sheriff in the county — was elected to the County Commission in November 2024, he has expressed worries about the county’s being able to pay for a new jail, with estimates in the $700-million range. (See the related article in this issue.)
In 2020, then-Commissioner Mike Moran declined to approve the TIF district interlocal agreement, citing his concerns that the county likely would have future projects for which money going into the trust fund would be needed, yet unavailable.
During the Feb. 11 workshop with the Foundation representatives, city Commissioner Jen Ahearn-Koch told her colleagues that she believes it is unrealistic to rely on the county for the TIF funding to help cover the expense of the proposed new performing arts center.
Given the more recent TIF district discussions, Kashden agreed with Ahearn-Koch’s comment, without referencing it. Therefore, he provided what he characterized as “an optimistic scenario of TIF capacity available from city-controlled funds alone” for the new performing arts center.
He pointed out that, in 2023, the city issued bonds worth $44,460,000 to pay for Phase 2 of The Bay Park, which is underway; the interest on those bonds is $33,979,121, he added, citing a city document.
The third phase of the park, and potential plans beyond that, have been estimated at $54,750,000, he continued. If the city were to issue bonds for that amount, Kashden noted, the interest would be $41,843,400. Thus, the total Bay Park funds needed would be $175,032,521.
A 2023 estimate of the TIF revenue accumulated over 30 years — including the county funds — was $464,160,000, as provided by consulting firm HR&A, Kashden continued.
Given the above figures for the park plans other than the new performing arts venue, Kashden’s spreadsheet showed, the amount of TIF revenue left would be $289,127,479. The city’s half of that would be $144,563,740, his spreadsheet noted. Therefore, the spreadsheet showed, the maximum bond principal available for the SPAC would be $81,940,040, with interest on those bonds calculated at $62,623,700, for the total of $144,563,740. He arrived at the interest figure, he wrote, by using the same terms as the bonds issued for Phase 2 of the park.
Kashden then emphasized that the $81.9 million “is significantly less than the $203.5 million bond principal for the city’s share of construction.”
He did acknowledge that the city could use its share of the county’s current penny sales tax revenue program, Surtax IV, to help pay for the SPAC. In fact, the list of projects that a prior City Commission approved for the November 2022 county referendum on extending the sales tax revenue program through the 2039 fiscal year included $12 million for The Bay Park; no separate breakout was provided for the SPAC.
Additionally, he wrote, the city could try to secure federal and state grant assistance. However, Kashden pointed out, “[T]he current political environment is decreasing spending on arts.” He cited Gov. Ron DeSantis’ stripping of all arts funding from the state’s 2025 fiscal year budget.
Kashden did not address President Donald Trump’s efforts to curtail federal funding since Trump began his second term in late January.
Competition for philanthropic funds
Another important factor for the City Commission to add into its decision about paying for the SPAC, Kashden noted in his report, is that “[w]hile the [Performing Arts Foundation] remains focused on its own specific needs, it does not operate in a vacuum.”
He listed multiple other endeavors that are underway or planned that will compete with the Foundation’s efforts to raise philanthropic funding for the SPAC. He listed Mote Marine’s Science Education Aquarium underway between Nathan Benderson Park and the Mall at University Town Center, whose expense has been cited as $130 million; the new Fruitville Road venue for the Sarasota Orchestra, whose expected cost has not been made public; plans for a Ringling College Signature Academic Building, at an expense of $175 million; the second phase of Selby Gardens’ downtown Sarasota campus, which has been put at $60.9 million; the Florida Studio Theater Arts Plaza, estimated at $57 million.
‘Operating challenges’
Yet another facet of Kashden’s analysis put the proverbial spotlight on what he called “operating challenges.”
The first, he noted, is the fact that the Straz Center for the Performing Arts in Tampa has “contractual blackout clauses which block booking at nearby venues,” especially in regard to first-run Broadway on Tour shows and certain artists.
An analysis of the future economic potential of the Van Wezel Performing Arts Hall, issued in 2015 by the firm AMS Planning & Research Corp. of Fairfield, Conn. — on behalf of what was then the Van Wezel Foundation — noted those clauses.
Kashden quoted Mary Bensel, executive director of the Van Wezel, as having confirmed that situation in a March 29, 2023 email to then-City Manager Marlon Brown: “In the past when I got here the Straz was not blocking us and we played shows during the same year. As we started doing better they blocked us in the same year and we would do the next year. As we got even stronger they started not only blocking us but asking for a repeat second play before we got to play the show at all and while they wouldn’t play the show two years in a row it might take 4 or more years at the minimum before we got a play with the show growing colder as we went. The Straz on Broadway also blocks the Mahaffey [Theater in St. Petersburg], the Ruth Eckerd Hall [in Clearwater] and the Lakeland Center. I have learned to work with partners.”
In response to a News Leader request for information from the City of Sarasota as to whether that situation with the Straz remains in effect, Communications Assistant Luke Mocherman sent the following statement on March 4, on behalf of the city, he said: “Theaters can negotiate a radius clause with each specific show during the booking process. The Van Wezel Performing Arts Center has included radius clauses in contracts. There is no standard, though, and they’re not always included in show contracts.”
The statement added, “The Straz Center for the Performing Arts often gets Broadway shows first in our area due to its theater size, as Broadway shows typically play larger venues first.”
The Carol Morsani Hall within the Straz has 2,610 seats, the theater’s website says. Plans for the SPAC have increased its large theater’s capacity to 2,700 seats.
Kashden also has offered the following comments on the “blackout clause issue” in a presentation to the Coalition of City Neighborhoods Association of Sarasota (CCNA): “Mary Bensel does quite well at booking desired acts. However, she does have to contend with Tampa. With a much greater population than Sarasota, the Straz Center in Tampa can maximize their attendance by adding geographical backouts to nearby cities, like Sarasota. Think the NFL not showing the Bucs on TV in order to get people to the stadium. We’re never going to have more people than Tampa so they will always have the edge. This is not unique. The Kravitz Center in West Palm Beach also gets restricted by the Broward Center, because there are more people living in the Miami region than West Palm Beach. Kravitz had to wait five years longer than Broward for Hamilton; also five years longer for Wicked.”
Next in his analysis, Kashden pointed to information provided to the City Commission for the Feb. 11 workshop on the SPAC, including the plans for the large theater and a 300-seat multi-purpose room. The Foundation projected that the average attendance for all shows in the large theater would be 75%, with the average ticket price expected to be $101.25 For the multi-purpose room, the average ticket price “for most events” would be $35, the Feb. 11 report said.
Kashden emphasized the expectations that the number of tickets sold for SPAC performances would be three times the count for the tickets being sold at the Van Wezel — 362,475 compared to 105,906. He used data from 2015 through 2023 to calculate the Van Wezel figures, he pointed out.
Moreover, he noted that, from 2014 through 2024, 89% of the shows at the Van Wezel had empty seats. His data excluded 14 shows that had attendance below 15% — a situation he indicated was likely attributable to the COVID-19 pandemic, based on the dates involved, which ran from late October 2020 through Sept. 19, 2021.
The Foundation document provided to the City Commission in advance of the Feb. 11 workshop factored in annual income from ticket sales at $32.6 million, which would represent 84% of the total earned income for the SPAC.
Further, the Foundation report called for an average facility fee of $9 per ticket; $4 would go to operating income, with the other $5 to be used initially to pay back the city bonds and then to help with maintenance expenses.
Year 3 was seen as the first year of financial stability for the SPAC, as noted during the Feb. 11 presentation.
Corporate and artistic rental income also has been anticipated, the Foundation report said. Additionally, the Foundation is expected to need annual philanthropic contributions of $3.4 million to balance the budget by the third year the SPAC is in use, the report showed. The Foundation has been raising $2.5 million to support the Van Wezel, the report said.