03/29/1978 Meeting (2) - Laserfiche WebLink

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John Dykstra, consultant to Economic Research Associates, discussed fundi ng sources. ERA was recorrmendi ng very strongly the project be _ phased, with the first phase to be the Center for the Arts. Total con- struction costs are estimated presently at about $17.1 million. Phase II would be a parking structure and platform which is estimated at $1.6 million; with the third phase a corrmunity conference center of about $5 million. Regarding funding sources, the ERA had rejected private invest- ments as this is not to be viewed as a money-making project. Sources suggested were use of general obligation bonds, tax allocation bonds, EDA funding, other federal grant funding, and fund raising within the cOr.1Tlunity. ERA was not recommending total funding for the project with GO bonds, as that would be $24 million with an annual debt service of $1.7 million. It was suggested for Phase I (Center for Arts) that GO bonds be used after exercising the potential for fund raising. For the remainder it was recommended either/or EDA or tax allocation bonds. Mr. Dykstra continued that financial support outside of the municipal tax exempt bond issues could be found from the hotel complex ($289,000 tax incre~ent and $217,000 land rent); impose event ticket tax (20 cents per ticket for $30,000 per year); fund raising used on an annual basis; and National Endowment for the Arts funding of perhaps $25,000; raising Eugene's portion of room tax from three percent to five percent and applying 50 percent of the proceeds to funding; and using 100 percent of the hotel's tax. The latter two would generate an estimated $294,000 per year in revenues. He said when combining the debt service and deficits for total GO bond, would result in $2 million per year. Sources of out- side support would approximate $930,000, leaving approximately $1 million ~ to be funded. ., There was considerable discussion at the Civic Center Commission meeting held Tuesday evening regarding funding of the project. Mr. Dykstra felt it seemed reasonable to proceed on the basis of using GO bonds for a combination of Phases I and II, and then consider Phase III financing under EDA or tax allocation bonds. A series of organizational alternatives were considered. The major recommendation was that there be set up a non-profit operating corpora- tion to administrate the facilities, promotion of bookings, and marketing of conferences. Another alternative could be an organization as a City department under the City Manager's Office. ERA preferred a non-profit corporation. Also, there was a recommendation for a non-profit organiza- tion, Eugene Foundation for Arts, for fund raising and establishing membership for involvement to ~ursue grant sources. Mr. Haws questioned what the actual cost would be to the taxpayer, based on a $40,000 house. It was estimated between $25 and $35 for a 20-year period, with that anout declinin9 as the debt is reduced. Manager noted the tax base is rising rapidly and the actual tax rate for debt service would be reduced in turn. e 3/29/78--5 2.0'1-