Revenue from ticket surcharge and Van Wezel Foundation grant to cover the cost
With Sarasota City Commissioner Hagen Brody casting the lone “No” vote, his colleagues have approved the $493,316 purchase of a new “chiller” to provide air conditioning at the Van Wezel Performing Arts Hall.
The action came on May 4 — two weeks after an April 20 discussion during which Brody also argued against paying that high an expense with what he cited as ongoing uncertainty about whether the Van Wezel even will be able to open later this year.
Ultimately, the commissioners agreed on April 20 to defer their decisions on a number of business items until May 4, given meeting constraints produced by the COVID-19 pandemic.
Commissioner Willie Shaw made the May 4 motion to direct staff to proceed with purchasing the new chiller from Tampa Bay Trane, to supplement the other Van Wezel chiller. Both of the air conditioning units at the performing arts hall are 21 years old, Mary Bensel, executive director of the Van Wezel, told the commissioners on May 4. The one that will be replaced no longer functions, she stressed, giving rise to concern about how long the other one will last. (Backup agenda material for the meeting said the equipment at the heart of the discussion ceased to work in December 2019.)
In light of questions about the expense — with uncertainty about how much city revenue will be lost during the the rest of this fiscal year — City Manager Tom Barwin asked Bensel “to paint a scenario” about a breakdown of the other chiller while a Broadway touring production was underway at the Van Wezel.
Bensel pointed out, for example, that the performing arts hall is scheduled to host the popular Broadway production Come From Away during Thanksgiving week. It costs between $750,000 and $1 million per week for such a show, she stressed. If the air conditioning system failed, she continued, “We would be on the hook [to pay that money].” Moreover, she emphasized, such an incident “would put an enormous smear on the Van Wezel’s name.”
Bensel reminded the commissioners that she and her staff have to compete against other venues to land performances. Between 10 and 15 shows are scheduled for the Van Wezel in October and November, she continued.
Barwin also noted that if shows had to be cancelled, ticket refunds would be necessary, adding up to more lost revenue.
Further, Bensel pointed out, the expense of the new chiller would be covered by funds that the performing arts hall receives through a $3 surcharge on each patron ticket, along with a $50,000 Van Wezel Foundation grant. In other words, she added, the expense would not be borne by taxpayers.
Additionally, Van Wezel General Manager Anthony Becich told the commissioners that even with the expense of the new chiller, the performing arts hall would have approximately $400,000 to $500,000 remaining in its capital projects fund balance.
Vice Mayor Shelli Freeland Eddie asked whether Tampa Bay Trane would provide the city any type of credit or incentives in response to the city’s decision to purchase the new chiller from the company.
“Keep in mind that these two [air conditioning units] ‘talk’ to each other through software,” Bensel told her. “They go on and off,” a process that helps extends the life of the equipment.
That was why staff had suggested getting another Trane unit, she said. If a new chiller were purchased from a different manufacturer, she continued, then provisions would have to be made to ensure the replacement unit could function smoothly with the existing one.
Barwin added that the price of the Trane chiller includes a 10-year warranty.
Replying to yet another question from Brody, Bensel said, “When [the chillers] were installed, they’re in a room that is not climate-controlled. … It’s amazing that these chillers have lasted this long.”
In response to an additional question from Freeland Eddie, General Manager Becich said that — as evidenced by the fact that the remaining functional chiller is 21 years old — the equipment can last two decades if it is maintained well.
“I think it should be noted that these chillers are quiet,” Barwin also told the commissioners. “They’re right next to a performing arts hall, so that’s important.”
“We have three graduations right now scheduled for July,” Bensel continued. “We’re doing everything we can to help these students graduate.”
Commissioner Brody then asked why the graduations still are being planned. “We’ve cancelled special events … through September. This commission has not had the opportunity to talk about large events [in the future],” including those at the Van Wezel,” he added. “Why are we talking about having thousands of people attending graduation?”
For that matter, he said, no one knows when the Van Wezel will be able to host performances again. “There’s no evidence or science telling me that’s going to be a realistic possibility.”
Even with the social distancing guidelines from the U.S. Centers for Disease Control and Prevention, Bensel responded, the Van Wezel can accommodate up to 585 people. She also reiterated that Come From Away is scheduled for the last week of November.
“Obviously, if the governor or the city manager maintained that we could not be open,” Bensel continued, “we would not be open.”
Moreover, she explained, it takes about three months to install a new chiller, and that is a process best undertaken with no performances on the schedule.
Barwin also stressed, “In our warm, humid summers and falls,” the potential for mold growth increases significantly in any facility without air conditioning. “We’ve experienced that in other buildings …”
Purchasing and installing the new chiller, he added, “really is protecting our investment, is how we’re looking at it.”
When Brody persisted in asking about the scheduling of graduations, along with performances in the fall, Barwin told him, “All the planning we’re doing is contingency planning. … There are not guarantees … right now in terms of anything happening [at the Van Wezel] for sure.”
“Don’t you suspect that the Van Wezel enterprise budget is going to be in the red this budget year?” Brody asked, and possibly in the 2021 budget year?
(“Enterprise” refers to departments that pay for themselves through fees they charge. For example, the Utilities Department covers its expenses through customer payments for water and sewer service.)
“If the [remaining functional] chiller goes down,” Bensel told Brody, “we could … literally lose millions of dollars. … That would be a major loss to us.”
Further, she emphasized, “The Van Wezel has been able to run on no city money whatsoever” over the past several years, thanks to ticket revenue.
“If I didn’t think [buying this new chiller] was crucial,” Bensel said, “I wouldn’t be suggesting this.”
When Brody again voiced concerns about the city budget, Bensel replied, “I can tell you that we are anticipating … closing out this current year even.” Before the pandemic struck, she added, she expected the Van Wezel would have had its best year ever in terms of finances.
Moreover, Bensel continued, “We have operated better than [any other venue] in the country.”
Finally, Commissioner Shaw asked that the commissioners move on to the making of a motion and a vote.
He ended up offering the motion to approve the purchase of the new chiller, pointing to the financial health of the Van Wezel over the past eight years, during his tenure on the board.
Commissioner Liz Alpert seconded the motion, concurring with the concerns expressed about the potential for the remaining 21-year-old chiller to fail.
“Once our communities get back up and running,” Vice Mayor Freeland Eddie said, the Van Wezel will have to compete for big shows. “I would hate to lose productions,” she added, because of a loss of air conditioning during a performance and the ensuing spread of that news.
Then, as City Auditor and Clerk Shayla Griggs called the roll, only Brody voted “No.”
The May 4 meeting was conducted via videoconferencing software called Webex, with no commissioners or staff in the Chambers within City Hall in downtown Sarasota.