Commissioners cite concerns about city shouldering half of project expense, which could be about $350 million
On a unanimous vote March 21, the Sarasota city commissioners adopted an agreement with the Van Wezel Foundation that outlines responsibilities of both the city and the nonprofit in the development of a new Sarasota Performing Arts Center as part of The Bay Park on the city’s 53 waterfront acres.
However, the motion that Commissioner Hagen Brody made called for specific changes in the document before it wins final approval — and that revised version will come back to the board members for review and a formal vote on April 18.
An implementation agreement that the commissioners will approve in the future with the Foundation will have more specific details about the city’s expense for the new facility, which has an estimated cost between $300 million and $350 million. The city’s share of that will be 50%.
Commissioner Liz Alpert seconded Brody’s motion.
“We need a new performing arts center,” she said. “There’s nothing we can do” to the Van Wezel Performing Arts Hall, she added, to ensure it stays profitable in the future. “It needs an awful lot of work.”
Alpert also pointed out, “Having a world-class performing arts center in our area does keep us in the running as one of the top cultural centers in the country.”
City Manager Marlon Brown noted that $50 million will be dedicated to the project out of the tax-increment financing (TIF) plan that the City Commission and the Sarasota County Commission agreed to in late 2020 to pay for The Bay Park. The boundaries of the TIF district go beyond the park site to encompass new construction in that area.
As city and county administrative staff has explained, Jan. 1, 2019 was the date set for the tax value of the property in the TIF district. Therefore, every year that the property values rise, city and county staff will apply the local governments’ millage rates to the difference between the 2019 value and the new figure to determine how much money will be set aside for The Bay Park.
Jim Travers, chair of the Van Wezel Foundation, explained that the firm that provided the estimate for the new performing arts center has “a good track record” in making such projections; that gave the Foundation board members confidence.
Cheryl Mendelson, CEO of the Foundation, added that the figure was based on a square footage formula, which has yet to be finalized.
Brody talked of having undertaken his own research into the expense for new performing arts venues, adding that he had found the estimate to be in line with what he had read.
“This is a great project,” Mayor Arroyo said, “but we want to go into this with our eyes open … Facilities of this type rarely make money.”
Mary Bensel, executive director of the Van Wezel, “has been very successful in keeping [that hall] in the black,” City Manager Brown pointed out. The hope is that the new facility will follow that pattern.
The Foundation will be responsible for “the success or the failure of [the SPAC],” Mendelson noted.
“This has to be a partnership,” Travers told the commissioners. “A true partnership means we both take risks, OK.”
Commissioner Jen Ahearn-Koch asked the Foundation group whether the agreement could include a cost cap. She worried, for example, she said, that the overall expense could balloon to $800 million.
Attorney Dan Bailey of the Williams Parker firm in Sarasota responded that the City Commission would be able to address that issue in the implementation agreement. “We can make it more explicit.”
Referencing both his own concerns and those that some of his colleagues had expressed, Brody also included in his motion a call for stronger language that would benefit the city in the alternate dispute resolution clause in the agreement, including the provision that no litigation would ensue.
Arroyo also had sought a clause to ensure that if the city has to end up issuing bonds to help cover its portion of the cost of the new facility, a revenue bond would be issued instead of a general obligation bond.
However, City Manager Brown noted that revenue bonds would be good for the life of the new hall — which could be 50 years. A surcharge on each ticket sold to an event there would go toward paying off the bonds. Conversely, he said, city voters would have to approve a general obligation bond.
Arroyo and other commissioners noted the fact that the facility will be a regional one, so they said it would be unfair to ask city residents to shoulder a portion of the building expense on their own, in the form of a general obligation bond.
“There’s nothing in this agreement,” City Attorney Robert Fournier pointed out, that mentions a bond. If the time came for city staff to recommend issuing bonds, he added, the board members could discuss the details then.
Concerns about a delay on the vote
During the discussion, Ahearn-Koch noted her desire to see the changes Brody included in his motion before the board members voted on the agreement. Therefore, she offered a friendly amendment to specify that.
Brody then asked the Foundation representatives if they objected to the delay.
“I’d rather have the vote today,” Travers responded. The Foundation has been working on the project for three-and-a-half years, he stressed, and it has raised $2.5 million in private funds that have gone toward the necessary research to reach this point.
“I just want to make sure you understand the commitment this Foundation has already made,” Travers added.
Following Travers’ remarks, Brody said, “I don’t necessarily need to see it come back again before we vote on it. I think we’re going to end up bickering on the same things in two weeks.”
“I wouldn’t say this is bickering,” Ahearn-Koch responded. “This is one of the largest steps we will have ever taken,” she emphasized. “I would ask that you consider letting us see an actual, complete agreement. … I just want to make sure we get the details right.”
City Manager Brown suggested the April 18 meeting date for the commissioners’ final vote.
City Auditor and Clerk Shayla Griggs pointed out that the agenda for the April 4 regular meeting would be released on March 24, indicating that City Attorney Fournier would have little time to complete the necessary changes in time to meet that deadline.
In fact, Fournier added that it likely would be a few days beyond the deadline for release of the April 18 agenda before he could have the revised draft ready for the commissioners.
“I’d be OK with that,” Ahearn-Koch told him.
“As long as we’re in agreement on the major business terms,” Travers said, then the Foundation group would be willing to wait.
Attorney Bailey had emphasized the fact that the approval of the agreement would give the Foundation representatives better footing in their efforts to secure private funding for the nonprofit’s share of the project expense.
Diving into the details
During the Foundation presentation, Mendelson noted the community outreach the Foundation had undertaken to learn residents’ desires for features in a new performing arts hall that will supplant the Van Wezel. (The latter still would be used, as Mendelson made clear in later exchanges with Ahearn-Koch. However, it would host events that would not be considered competition for the new facility. For example, Mendelson said, arts and cultural organizations in Sarasota that produce their own performances could schedule those in the Van Wezel.)
The new Sarasota Performing Arts Center (SPAC) will have a 2,250-seat main stage, Mendelson said, plus a 400-seat flexible performance and event space. It will be designed to be environmentally resilient; it will have state-of-the-art patron amenities; and, as the public made clear, center aisles, which the Van Wezel lacks.
Given the design of The Bay Park, she continued, the SPAC also will have multiple outdoor public spaces, including an event lawn with a simulcast screen.
Following her comments, attorney Bailey reviewed major details in the proposed public/private agreement.
Any grants the city might receive from the state or federal governments — or any extra funding the Sarasota County Commission might provide for the SPAC — would count toward the city’s 50% share, Bailey said. (See the related article in this issue about the March 10 Sarasota County Tourist Development Council meeting.)
Further, the city will provide the water and sewer utilities infrastructure for the site, the agreement notes, and the city will make certain that the site is construction-ready.
Additionally, based on a parking study that the city commissioned, the city will have to provide 1,000 parking spaces to serve the SPAC, and the city will have to coordinate with private entities to provide shuttle services to patrons who end up to using off-site parking facilities.
“I know we’re all hoping to jetpack or beam each other somewhere” in the future, Ahearn-Koch said, instead of continuing to use motor vehicles. “Unfortunately,” she added, “we’re all going to be using cars” for the next 10 to 15 years. Yet, she asked about the potential of less parking, given the prospects for new forms of transportation in the years to come.
Mendelson responded that the total number of spaces would be determined after an architectural firm has worked on the design. However, she noted that approximately 125 to 150 spots would be constructed beneath the SPAC, which likely would be reserved for patrons.
Further, the city will “provide municipal services and routine maintenance to the Bay Park and to the [SPAC],” including trash collection and landscaping.
Commissioner Alpert told the Foundation team, “It seems like we’re doing 75% of the funding for this …”
City Manager Brown explained that, just as with the rest of The Bay Park, the city would provide the major water and sewer connections, not the actual plumbing for the SPAC. Moreover, he noted, the agreement does not call for the city to pay for all the parking spaces that will be needed. For example, he continued, developers with parking spaces in the area could allow patrons to use those spots and charge for the service.
Of the 10 members of the public who addressed the commissioners about the agreement on March 21, business owner Martin Hyde voiced the expectation that the SPAC will lose money. The city is looking at an expense of $500,000 a month for 30 years, he said.
Attorney Dan Lobeck of Sarasota referred to the plans as those for a “Taj Mahal performing arts center” to replace the Van Wezel. He also expressed doubt that revenue bonds would be able to generate all of the money the city will need to cover its 50% share. “You’re telling me that $450,000 a month of profit is going to come from ticket sales and parking fees?”
In his opinion, Lobeck said, general obligation bonds will be necessary. And what will happen if the voters do not approve them, he asked.
Among the supporters, Virginia Haley, president of the county’s tourism office, Visit Sarasota County, said, “The need for this facility is enormous” to keep the city of Sarasota competitive for major arts and cultural events.
Jim Shirley, executive director of the Arts and Cultural Alliance of Sarasota County, pointed out that events at the Van Wezel are one of the primary reasons visitors come to Sarasota. That has helped the city become known as the Cultural Coast of Florida, he added.
The county realizes an economic impact of about $400 million a year from arts and cultural opportunities for visitors and residents, Shirley said.