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Special Bd. of Aldermen — 5/2/17 Page 15
Mr. Webb

We have not included those numbers in the operating profile for the center. Those are numbers that will need
to be calculated and looked at very closely in order to respond to the bonding request.

Director Cummings

It’s not just that alternative revenue that you are pointing out. There’s also tax credits that could potentially be
available. There’s other alternative revenue sources that could help drive down the bonding request. We
wouldn’t know that at this stage. | want to make sure this body is comfortable with understanding that to
achieve the type of program that was outlined tonight at a maximum, you are looking at $15.5 million.

Alderman Lopez

| understand the need for an anchor but not necessarily the need for the biggest anchor in the area. If we
planned with the intent of trying to raise the revenue for this so we don’t just bond it, the arts community clearly
showed up. The public is clearly supportive of it. | would like to see a little bit more creativity in terms of who
would be willing to participate in the fundraising. Just saying let’s put it on the credit card, | don’t think enough
work has been done on that.

President McCarthy

| think that is part of the next step. | think what we’ve heard is an upper bound on what it would cost and what
the worst case financing by the city would be. It’s up to us now to look at who can we reach out to talk about
contributions, etc. Some of that has already started, and | think that will proceed as the proposal goes forward.

Alderman Moriarty

It’s certainly no secret that | am a fan of the arts community. I’ve been a Positive Arts groupie for years now.
I’m on the Board of Directors for Opera New Hampshire and have only missed on Symphony New Hampshire
event in 5 % years. | play bass, my son plays clarinet, my daughter will probably go to acting school. But you
lost me as far as voting for a bond with that $38.5 million max out the credit card paving. Going from $2 million
a year to $7.5 million of paving, you could have doubled from two to four and gone for a smaller bond and
gotten a free arts center. For $38.5 million of bonding, was it really that necessary to max the credit card that
much, and now we’re coming back and asking for another $15.5 million. Alderman Siegel is talking about how
we’re going to pay for it, and Alderman Deane is talking about how are we’re going to pay for it. Had you
given this presentation a month ago or a month and a half ago, we might have been inclined to do it. Then
when we talked about the road paving, we might as thought maybe we'll back off the road paving bond and get
both. But that’s not the case. It comes down to do you really want it or not. This administration is good at
finding ways to spend money so I’m sure it will happen.

Alderman Wilshire

| certainly understand the competing needs of the city, the budget, the Spending Cap. But when is it ever time
to support the arts in this fashion here in this city? We have a community who is looking for and has been
asking us this for years. This is the furthest along we’ve come in this process. | really think the time is never
going to be right. We're always going to need to repair this, just like at home. | understand it is a lot of money.
It’s always a lot of money when we want to do something good in our community. | think the time is now to
give the arts a chance. We've not done this for too long. | look forward to the ongoing discussion.

Special Bd. of Aldermen — 5/2/17 Page 16
Alderman Clemons

| think Alderman Deane said it best earlier. It’s a nice narrative as far as maintaining the building and making
sure we have capital expenditures to do that because that’s exactly the problem with the roads. That’s why we
had to bond fixing our roads. As somebody who has served on the board previously and previous to this two
years and four years before that, knowing that Alderman Deane is probably a conservative and me being a
liberal was very surprised when he supported the road paving bond. His support of that led to my support of
that. The reason being is because he is right. You have to maintain our roadways. But here is where |
disagree with Alderman Moriarty. | don’t’ see it as one versus the other. | see it as a holistic approach to our
city. Cities are expensive to operate. They have lots of different competing interests within them, and they
have a diversity of people that want a diversity of things. It is incumbent upon the city council, in this case the
Board of Aldermen, to make sure that we listen to what those needs are and balance them out. We have to do
a number of different things. One of them is taking care of our roads. The other one is taking care of our arts
community. | don’t see them as competing interests. | certainly would support this project. | think it is
worthwhile. | think if it funds itself year after year then more could we really ask for?

I'd like to also respond to what Alderman Lopez said in regards to what the community can contribute. Part of
the plan is a $4 million endowment to be raised by the private sector by the community so the operational costs
are such that the city doesn’t have to contribute on an annual basis to the operating cost. | think there is going
to be an awful lot of community involvement. | think the city is getting a bargain at $15.5 million. | will tell you,
Director Cummings, if no one else will, but I’m sure they will, | certainly will support legislation to bond so we
can have this discussion. If that’s something you would like to do, please tell corporation counsel and he can
put my name on it as a sponsor. Thank you.

Alderman Dowd

| think we should have the next step. | think during the budget process we’re going through right now that we
ought to have an update of the bonding and look at the bonding plan going forward and see where we are at.

Alderman Siegel

| want to address Alderman Moriarty’s claim that somehow if we had just reduced the amount of paving to $5
million we could have had this for free. | would agree with my colleague but then we would both be wrong.
The problem is the number was arrived at because that’s what it takes to get our streets up to a point where
they are not fading below a certain critical level which is incredibly costly to repair. Yes, | suppose we could
spend less. For that matter, let’s make up any arbitrary number and fill in some other desirable item. But at
that point, the streets decay and we’re looking at hundreds of millions of dollars down the road. That's why we
made the decision collectively to do this.

This is a very separate issue. | would urge Director Cummings to come forward with a plan that addresses the
mechanics. You have to explain how this actually works in our budget given the way our budget works in
Nashua. Then we can debate this.

Alderman Schoneman

I'd like to get back to some of the projections because if we’re going to be talking about this further | think the
projections are going to be key. Page 36, the pro forma operating budget. I’m wondering how this volume
compares to the volume that we presently have in Nashua with the Symphony and with the various theatres.
Is this taking all of those folks and grouping them to a new location or does this represent an expansion, and
what percentage of expansion beyond what’s already happening.

Special Bd. of Aldermen — 5/2/17 Page 17
Mr. Webb

The new venue and the investment at Court Street don’t really support the Symphony’s main theatre. They
have expressed some interest in coming into a smaller venue on an occasional basis, but this is not their new
home. We're not pulling them into this project. Court Street is largely to take care of the bulk of the local arts
organizations that are there now and hopefully the improvements to Court Street will make it a little bit more
useable. Both to the main theater and the multi-purpose room, | would anticipate that at least half of that. In
the main theatre, we’re projecting about 2/3 of those performances and use days are incremental, meaning it’s
additional sort of touring programs, additional rental activity that doesn’t occur like the same group is doing
different things or more of what they are currently doing. The meeting and event business, which maybe we’re
taking a little bit of that out of hotels, but | think is more incremental activity because we’re providing a new,
high quality downtown location. A good chunk of that activity, both in the main theatre and the multi-purpose
room is incremental.

Alderman Schoneman

We have to dramatically increase the volume of arts activity in the city presently, which brings me to the overall
economic development plan. The whole theory of kind of raising the entire area of economically requires a lot
of things happening maybe simultaneously. Will the theatre bring the people in, or do we need to have the
people here first that will want to go? We’re talking about the potential of a $15.5 million bond, and this is as
Director Cummings said, one part of the overall economic development strategy. You mentioned getting more
market rate housing. What else would the city need to do as part of an economic development plan that could
require a bond of this size? Is this the largest thing that we would be funding? Are there other things that
might do more for us in a shorter term than an arts center that would require this kind of bond?

Director Cummings

At this level, this would be your largest and your only publicly driven type of investment. Most of it will be
setting the stage for private sector investment. Ultimately, making sure that we articulate our rules and
regulations in a way that will spur positive economic investments such as the Brady Sullivan project where they
took essentially an empty building and are rehabbing it into 200 market-rate units. That’s being done by the
private sector which is a great ingredient to the downtown. This is one of the ways the city could play a role in
helping to add an ingredient to the downtown to help not the artists but the Main Street merchants and the
small businesses along the corridor that are also looking for that revitalization.

Alderman Schoneman

When we look at the other communities, Richfield, Connecticut and Stowe, Vermont, how did the arts center fit
into the timing of the overall economic growth? Was it one of the first things that was done or was there
something happening already and this came in the middle or the end of a surge of economic development?

Mr. Webb

There are some communities where the arts go into a place first. The old line we use is that artists are the
Stormtroopers of gentrification. All over our country you see examples of artists that are just looking for cheap
space, bringing their energy and vitality to undeveloped or challenging neighborhoods. They, all by
themselves, drive that economic development which ultimately leads to gentrification which ultimately pushes
them out of that neighborhood. Projects like this, what has to come first is the intention to make it happen.
Then you look at your tools as an economic developer. There are some communities that deal with the theatre
first, but lve said before and | will continue to say, you need to do the theatre as part of a set of projects that
happen if not concurrently that happen in close succession. What really matters in a performance space and
what really brings people is programming. It’s not the building; it’s what goes on in the building. You're ability
to have a place that can be an excellent venue for local arts organizations to perform that attract people or to

Special Bd. of Aldermen — 5/2/17 Page 18

have touring artists and entertainers that attract people. That’s really the key, catalytic event. Once those
people are seen on the sidewalk and active, that’s the thing that encourages entrepreneurs. Then these other
efforts work on the barriers. What really matters is taking down the barriers, like addressing people’s concerns
about parking, safety, will there be somewhere to go afterwards to eat. That drives participation further and it
starts this virtuous cycle where more people, more activity, other things develop and ultimately it becomes a
destination which is then part of this idea of a district. If you want to attract tourists and visitors to Nashua, it’s
very hard to do that with just a theatre, one anchor. You have to give them a series of things to do and
experience in Nashua. We say here’s a building that makes sense, but please think about this building as an
anchor in a district because that’s the thing that’s really going to put it over the top.

Alderman Dowd

| know this isn’t on the scale of the Palace Theatre in Manchester, but the last few months because of my
granddaughter’s stage presence, I’ve been up there probably more often than | wanted to be, and they were
double-booked a lot of times with practices, rehearsals, performances. They seem to be doing phenomenal.
Are they a similar type of setup with an endowment? They do have plaques on the walls of residents who
have donated money to the theatre, but they seem to be doing really well. | Know they are bigger. Is there any
relationship in what you are proposing to the way the Palace Theater operates?

Mr. Webb

The scale is different, but the impacts are the same.

Alderman Deane

You're perceived impacts are the same as the Palace Theatre?
Mr. Webb

In terms of direction. It does the same good things in a small theatre, in a small community as it does in a
bigger theatre in a larger community.

Mr. Aquilina

From an architectural point of view, bigger is not necessarily better. The Palace Theatre has its own
challenges like a theater in downtown Boston. They have 750-800 seats. They have to basically fill those
seats in order to make it viable. Their whole pro-forma is different. They have to succeed at doing something
different. They have their own challenges because of their size. A theatre at 500 seats can succeed in ways
that the Palace Theatre couldn’t because they don’t’ have the same operational challenges.

Alderman Lopez

| really don’t like hearing artists being called Stormtroopers. | think when artists are bringing vibrancy to a
community, they are just authentically expressing themselves. Usually the gentrification starts when someone
gets an agent and then suddenly people are noticing the local vibrancy and trying to capitalize on it. | think
what we have here in Nashua is a lot of very strong local groups and a lot of local talent which is why earlier |
was trying to reinvigorate the idea of the arts district. | think this is a scenario where the artistic community of
Nashua is where many hands make light work. | think that’s a strength we should not ignore. As aldermen, we
Cleary have to take a close look when someone suggests a project that’s going to cost us $15 million. It’s our
responsibility to vet it. | also think this conversation should really be a conversation of not if but how. How do
we get to the point where we can get the full anchor that we are looking for at Alec, and what pieces do we
have in place right now that we might be able to enhance to bring more money into the scene, more tourist,

Special Bd. of Aldermen — 5/2/17 Page 19

more interest. | think this Saturday's Nu Muse Festival is a huge example of how we can create destination
interest and get people using those roads.

By the way, | think we did exactly the right thing with repairing the roads. When you have a road that starts to
degrade and it starts to collapse it costs more fix it. | think our arts scene, as Alderman Wilshire point out, is
starting to face the same risk. We can’t continue to turn down opportunities like this. We do have to get
forward motion on this. This project has taken a couple of years of discussion. We have to figure out how to
do this, | just want to make sure we’re doing our full due diligence as we do that.

Mayor Donchess

| would to first thank Duncan and his team for doing this project. If we think back a couple of years ago where
we were and what we were thinking about, the fact that you have brought professionalism and experience to
this has given us far, far more insight into what we should consider and how it might be a success. | think
without your efforts and input, we would be way, way behind where we are now. | also want to thank the
owner of Alec, John Koutsos, for holding his building stable while we’re looking at this project, and Tim
Cummings for helping to advance it. I’d like to thank all the people who came out tonight and at our other
presentations. There’s been a lot of citizen interest. And, all the people here who have contributed in other
ways have really helped us formulate ideas regarding how we should proceed.

We haven't yet talked about the new market tax credits which might be available and have been used in other
civic projects around New Hampshire. There’s no guarantee, but they can be potentially obtained and reduce
the cost of the project, the overall capital cost, and Director Cummings can correct me if I’m wrong, in the
range of 25 to 30 percent. On a $15 million project, $4 million or something like that.

| think Duncan and his team have been enabled us to consider an exciting project, a project that could take
place at an exciting location. | and others really appreciate everything you’ve helped us accomplish.

Director Cummings

What I’m looking for tonight is a motion or some sort of direction that you would like me to come back before
you with the financing plan in relatively short order because the opportunity to explore the Alec Shoe Building
is slipping. If we want to advance this conversation, we need to work diligently. We could take in some
alternative funding sources, like tax credits. We could anticipate other revenue streams. We could anticipate
disposing of other city assets that might help us bridge the gap. There are many ways we can arrive at the
$15.5 million figure. | would like that opportunity to bring that before you so you can have a good, honest
robust discussion comparing it to your other capital needs. Also, in addition to that, understanding that we
would need to also appropriate some money in short order to help also advance the conversation, whether it’s
a capital campaign consultant, whether it’s helping to do some design work, and also understanding that we
would have to put an option on the Alec’s Shoe building for a certain time period. | would like to come back
before you in relatively short order and present this plan and help you advance this conversation.

President McCarthy

| think that’s the direction | want to take. It’s no secret that | havfe supported doing a performing arts center for
some years now. We started this with my resolution a couple of years ago on the parking garage rooftops,
which lead to the Spring Street proposal, which lead to getting a contract with Duncan so we could actually
understand the need, etc., etc. This is one of the most solid economic forecasts | have seen in a long time on
this Board. | understand we have skepticism about what was said about the Broad Street Parkway, but there’s
a lot of reasons for that. That project was one thing and became another. | think you will also see that it is
having an effect with things like Brady Sullivan, etc., but they take a lot of time. Real estate deals do not pop
up overnight and zoning just change and assessed values don’t go up as quickly as we might like. | think we
see evidence that some of that is happening. | think there’s good evidence here that this will have a

Special Bd. of Aldermen — 5/2/17 Page 20

tremendous effect. | will be happy to work with you on trying find answers to some of the questions that got
asked here tonight. | think Alderman Siegel brought up a lot of points that we need to fit.

We have a template that says it’s possible. We need a template that says it’s optimal by doing some more
work. Unless anybody on the Board wants to make a motion to the contrary, | think we'll give a
recommendation to Director Cummings that he pursue getting a concrete proposal before us that we can look
at and in the course of the budget we review the bond schedule again so we understand what our debt
tolerance is over the coming years.

Alderman Lopez

Does it make sense to form a committee for the building plans? | thought one of the recommendations was
that we form a committee.

Mr. Webb

There are three committees that we recommended. One is related to find funding, one related to physical
planning, and one related to operations.

President McCarthy

| think we'll figure out how to structure that in the proposal that comes forward.
Alderman Deane

Wouldn't this fall under the Committee on Infrastructure, the former Committee of Lands and Buildings? | take
it the deal here is we’re going to use Alec’s Shoe. Am | right?

President McCarthy

That’s the proposal. The Infrastructure Committee is not appropriate to manage that on a day-to-day basis.
We are going to need something to deal with the programming and the operation of the center if it is going to
work.

Alderman Moriarty

In reference to what Alderman Schoneman was saying, is there any chance in the future you might be giving
us a presentation on a cost of a commuter rail station? Have you done any work of any sort towards that
endeavor?

Director Cummings

| have been diligently working on trying to develop a way to bring passenger rail up into Nashua and then
further north to Manchester. Is there any proposal to come before you in any short order? The answer to that
is no. There’s a lot of work ahead. Would | be looking to possibly fund a short appropriation to help bring in
some consultants to help fine tune that plan, to bring professional staff in as consultants such as Duncan to
help the city move forward, that would probably be the only type of proposal that would be coming before you
but nothing in terms of this order of magnitude at all.

Special Bd. of Aldermen — 5/2/17 Page 21

President McCarthy

Before | ask for a motion, for those of you that are in the audience who would like to get opinions to us, | would
suggest you send them through the web either through our legislative assistant or to me. I'll collect them up
and make sure that we get everything out to the whole board. | would ask for comments, but there are a lot of
people here and it is getting late already. We will undoubtedly have additional meetings where there will be
more opportunity for public input.

ADJOURNMENT

MOTION BY ALDERMAN WILSHIRE TO ADJOURN
MOTION CARRIED

The meeting was declared adjourned at 3:49 p.m.

Attest: Patricia D. Piecuch, City Clerk

building creativity

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Agenda

Needs assessment summary
Physical and business plans for Court St.

Physical and business plans for a new facility

Webb Management Services Inc. Page 1

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Webb Management Services

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Webb Management Services, Inc. is a management consulting \ =a
practice for the development and operation of performing arts ul

facilities. We work for governments, schools, developers, and
arts organizations on facility feasibility, business planning, and
strategic planning. Our practice was founded in 1997, and we
just started our 390" assignment.

In 2001, we completed the original feasibility study for this
project. Other regional experience includes projects in Gilford,
Keene, Lowell (MA), Framingham (MA), Lynn (MA), Worcester
(MA), and Fitchburg (MA).

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