HOLLIS __
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A special meeting of the Board of Aldermen was held Tuesday, May 2, 2017, at 7:00 p.m. in the
Aldermanic Chamber.
President Brian S. McCarthy presided; City Clerk Patricia D. Piecuch recorded.
Prayer was offered by City Clerk Patricia D. Piecuch; Alderman David Schoneman led in the Pledge
to the Flag.
The roll call was taken with 12 members of the Board of Aldermen present; Alderman McGuinness,
Alderman Cookson and Alderman LeBrun were recorded absent.
Mayor James W. Donchess and Corporation Counsel Steven A. Bolton were also in attendance.
COMMUNICATIONS
MOTION BY ALDERMAN WILSHIRE THAT ALL COMMUNICATIONS BE READ BY TITLE ONLY
MOTION CARRIED
From: Brian S. McCarthy, President, Board of Aldermen
Re: Special Board of Aldermen Meeting
MOTION BY ALDERMAN WILSHIRE TO ACCEPT AND PLACE ON FILE
MOTION CARRIED
PRESENTATION
Presentation on Performing Arts Center Phase Il Feasibility Study
Tim Cummings, Director of Economic Development
We are here this evening to close out a project that started before my arrival where we engaged Duncan Webb
to undertake a Phase | Feasibility Study. That Phase | concluded in the summer, early fall of 2016. Then we
started Phase II, which is the report you are about to hear this evening which | will now turn over to Duncan to
go over more detail on.
Duncan Webb
Thank you for giving us the opportunity to come and present our the results of our work this evening. It’s been
a long and involved process. We've been in your community a number of times over the past year and a half
to complete this work. We had public meetings, group meetings, town hall sessions and collected a
tremendous amount of very valuable information from your community. This evening I’m going to remind you
of the work we did back in the first phase, mostly in 2016, and then work through the second round of work
which is a combination of business planning that I’ve undertaken with my firm and physical planning which was
done by Scott Aquilina and his firm, Bruner/Cott.
| am a management consulting to people who build, renovate and operate performing arts facilities. | have
bene doing this work for 30 years around the country working for cities and developers, art organizations and
educators for buildings of various sizes and types. | started my practice in 1997, and we just started project
390. We come into a community, speak truth to power and then get out of the way.
The idea of arts facilities in Nashua has been around for some time. In fact we worked in one of the previous
studies ten years ago. We were a subconsultant to an architect. Since that last round of work, there’s been a
lot of development, cultural and economic and community development in Nashua. There has been the sense
on the part of leadership that new cultural facilities might have a catalytic effect on Nashua. Our job was to
establish whether not such an idea is feasible.
Special Bd. of Aldermen — 5/2/17 Page 2
The first part of our work was to assess this basic idea: what, if anything, should we do? Is there an audience
for new facilities? Are there users? What's wrong or lacking with the facilities you’ve got. And then, most
importantly, from a broader perspective, how do additional cultural facilities help you achieve your goals as a
community around things like economic development, building cultural tourism, helping you recruit companies
to locate here, enhancing the quality of life for your residents. We did that work and reached positive
conclusions. Now we’re looking at essentially putting the flesh on the bones of an idea.
I'll just remind you a few parts of that first round of work. The key issue is what the market area is. We
collected ticketing data from Court Street and a number of other groups in the community to get a sense of
how far people are traveling to Nashua. There’s a high concentration within a 15-mile radius and many more
coming within the 40-mile radius. The market area is quite big despite the fact that there are other
metropolitan areas with larger cultural facilities in the same region. That led us to a number of market
conclusions.
Nashua, with its population near 90,000, is slower grower but still has interesting opportunities for new
programs and opportunities for families and a need for price-sensitive programs, things that can be affordable
and accessible to a broad cross-section of the population. In the 15 and 40-mile radius, we see regions
growing more rapidly, diversity in terms of families and Millennials, and out at the 40-mile radius there’s more
families, higher levels of educational attainment, strong ethnic diversity. What's appropriate locally versus
regionally, it’s a little bit different so we would recommend a general approach of a segmented marketing
strategy, thinking about serving different audiences in different areas. Overall, we conclude that the market
has the size and the characteristics to support more activity.
There is a detailed report that summarizes all of the work we’ve done over the last year and a half that should
be posted on the Economic Development website tonight. I’m just glossing over a few things to give you a
sense of the work that we do. This is how we look at facilities. The horizontal axis looks at the capacity; the
vertical axis are a judgement of quality. What we see in this chart that looks at local and regional facilities is
some significant gaps at the low end, 100-150 seats, locally at the mid-size, 300 seats, and just as importantly
up over 500 seats. There’s some real gaps in that current local and regional inventory.
We also looked at meeting and event facilities because we recognized from conversations within the
community that there’s also an interest and perhaps a demand for better meeting and special event facilities in
downtown Nashua. Most of the hotels that support that now are not in the downtown, more in the northern and
southern areas of the town. We also looked at demand on the part of artists and art organizations in the
community. This chart identified 20 different groups that were looking for spaces of different capacities. We
also did a similar exercise two months ago. We held a scheduling charrette where we had a number of the
arts organizations here. We talked about how they would book facilities, what groups would pay to use the
facilities and encouraged them to help advise us on policy that would make them meaningful to them. That
helped us reaffirm demand at different size levels: 600-seat hall, 300-seat range and a smaller 150-seat
multipurpose room. We saw varying levels of demand for all of those spaces.
We also stressed the importance of partners for the utilization of facilities. The educational sector, given the
educational institutions active in and around Nashua, local developers who are interested in projects that
include and arts and cultural component, and the technology and business community that expressed to us an
interest in higher quality meeting and event facilities.
The fourth issue then was connecting this project to the broader goals that you set for the community. One of
the studies that we looked at was your Arts & Cultural Plan published in 2015, that established a number of
goals for the arts around identity, education and commerce that this project, we feel, fits quite nicely. On the
basis of that analysis, we reached conclusions that the market is diverse, large enough and has the
characteristics to suggest an audience for facilities. Wwe noted the gaps in the existing set of facilities. We saw
that there is significant demand for performance facilities at different capacity ranges, and we came to believe
that new arts facilities align with many of the goals that you have identified for your community moving forward.
Special Bd. of Aldermen — 5/2/17 Page 3
On that basis, we presented some ideas to the city in May of 2016. Based on feedback, we determined the
best course of action was to consider a couple of things. One, a larger venue capacity that could be for arts
and events that could serve a range of nonprofit groups, commercial promoters and also serve as a downtown
meeting and event menu. We also recommended the development of small and affordable spaces and we’re
wondering if Court Street might be part of that solution. Finally, we advocated for the idea of a downtown arts
district thinking of these pieces that we are recommending as anchors in that district. That then provided Scott
and his firm with the information he needed to start doing his work in the second phase.
Scott Aquilina, Bruner/Cott Architects
What we did starting in the fall of 2016, once the fundamentals were established about the marketing study,
was take on looking at sites in downtown Nashua that would lend themselves to the kind of development that
was suggested by the report. Since there wasn’t any detailed brief about the facility, we developed a model
program. We developed it based on looking at precedence of other theatres and multi-purpose event spaces
that were of this size and character. We developed the model program and then applied the program to
specific sites to see if there was a fit to function and then tried to narrow down those sites moving forward.
As we got started, we had certain architectural and programming aspirations that we were looking to achieve.
That is, something that would be visible, highly accessible and something that would be vibrant and really be
an attraction for downtown Nashua.
We weren't looking to do a single purpose formal theatre. We were looking to models of event venues that
could lend themselves to a lot of different uses. This is actually the Woodman Center in Rhode Island and was
just completed. It’s one room but it does three things very well. It is a theatre, has a stage. The seats can be
retracted and it can become an event center for a community event. It can also be a place where there could
be a party, wedding, etc.
We looked throughout downtown Nashua to find a site that might be appropriate for this kind of development.
Working with a bunch of your leaders, we narrowed it down to five looking forward to what would make this
successful - access to parking, visibility on Main Street or to Main Street, proximity to retail. We know
whatever we build needs to feed off of our current retail and restaurants. We needed an adequate footprint
because a theatre of this size, 350 and the 600 and the 150, has a certain footprint that’s required. There’s
shoulder space that they need. You need a lobby, restrooms, concessions. In the back you need loading,
storage, costume shop, dressing rooms. From our experience in designing performing arts, we have a feeling
for what that footprint might be.
Based on that criteria, we eliminated the Indian Bank building. It’s a beautiful building; there could be a lot
done with it. It doesn’t have the footprint to build the venue and the front and back of house that is required to
support the facility. We eliminated Water Street because it didn’t have any pedestrian connectivity to Main
Street. Spring Street is an open site. We designed a conceptual plan for it. We looked at a building that
would be around 32,000 square feet. We looked at Court Street because it is existing and in a good location.
It has a lot of life in it. We also found Main Street, the corner of Pearl and Main, the former Alec Shoe Store,
and we were immediately excited about the possibilities there.
Court Street came to us as something that really fit a particular need, the 200-300 seat venue and also fitting
the need for local community arts groups. They are currently using it very actively. The vision is that Court
Street is something that the City would continue to maintain. The building has suffered from lack of investment
over the years. It has a lot of advantages and a lot of possibilities. That is not our primary focus, but we think
it merits some investment to sustain the local art community and the small companies.
Special Bd. of Aldermen — 5/2/17 Page 4
Mr. Webb
We are taking the position that Court Street should be improved when that is possible for you to consider. We
think that a portion of the building, not all of it, can be restored for use by local theatre groups. We think in that
lower Court Street component of the building, we can have space for theatre, rehearsal space and various
support areas. Our suggestion is that this portion, lower Court Street, could essentially be operated as a co-op
by a set of community-based arts organizations. They could do it together or one group that’s a more
dominant user that we would look to help other art groups gain access. The city’s financial goal for Court
Street is to have those user groups pay a rent sufficient to cover basic operative costs. The idea is that the
users provide some of the services that are required in and for the building except for capital maintenance of
the structure.
Mr. Aquilina
From an architectural point of view, we would envision that the uses would be maintained, that the theatre,
itself, would be maintained. We would like to look for opportunities to make improvements to the lobby to
make it more accessible, more visible. You can’t really find the entrance when you are coming from Main
Street. We would see the lower level as being renovated to fit the needs of the particular users. There is a
studio in the basement that could be reopened for rehearsals. Not a lot of major changes, just making it a
healthy, comfortable environment. The capacity is about 250 seats in a tiered setting, kind of a more formal
theatre setting. We don’t have details about what the renovation scheme would be, but minimally 19,000
square feet. If you wanted to take on more of the facility, it might be more square footage. What is needed is
some exterior repairs to make it weathertight, and really the fundamental investment is a new heating and
ventilating system which is beyond its expected lifespan. Depending on what is required, the budget maybe
somewhere between $2.5 million and $5 million.
Mr. Webb
As part of this exercise, | got current operating budget information for Court Street and then made some
assumptions about new activity and more efficient operations based on those physical improvements. We
believe that we can make the building self-sustaining with some support from the user groups and with a
combination of monthly rentals and daily rentals on the part of those users. Let’s keep the cost for users down,
let’s keep the services to a minimum and ask for their help in physically operating and sustaining the building
after the renovations such that it can have a long life as an active supporting facilities for organizations now in
your community.
Director Cummings
What was just discussed over the last few slides is above and beyond the scope. It can about discussions in
collaboration with the working groups and comments that have come from the community where Duncan and
Scott felt the need to give some sort of direction for the Court Street Theatre despite it is not our preferred
development site, recognizing that it is an asset for the community and we have an obligation to be stewards of
that asset.
Mr. Aquilina
We really focused on the former Alec’s Shore Store on Main and Pearl as being a site with tremendous
opportunity. In terms of the criteria we were using to select the site, it does have access to parking and
incredible visibility on Main Street, and proximity to retail. It’s right there. We love that. It has an adequate
footprint. The Alec’s Shore Store is a 1960s building with a 10,000 square foot square footprint, a lot of
capacity for developing it in different ways. It has a building immediately behind it. | think it’s a 1910 building.
It’s a residential building that also has a lot of capacity to take on smaller spaces like offices, bathrooms,
staircases. It has a lot of legs.
Special Bd. of Aldermen — 5/2/17 Page 5
Again, it has this great presence on Main Street, a nice canopy, glass fagade along Main Street. You turn the
corner, and it already has a secondary entrance on Pearl. The ability of developing a project that has more
than one entrance on the street and is very welcoming and dynamic on the street front is all there waiting to
take advantage of. The site, itself, is well placed. It’s within easy walking distance of the Garden Street
parking garage. There’s a landscaped pedestrian alley from the garage to what we would propose to be the
entrance to the new theatre on Pearl Street. There’s a loading dock towards the back of the furniture store and
that’s essential to the theatre operations and obviously the connection to what’s happening on Main Street and
the pedestrian access to Main Street is all very apparent.
These are broad concept plans. We developed this model program of the different pieces that would probably
be required to support a theatre event space. We applied them to the existing building. What we are proposing
is the front along Main Street, at the street level would be maintained as retail, primarily, with very little change.
That’s leasable, that could be income stream. The street level of the 1910 building, which has smaller spaces,
tighter column spacing could be the entrance to the theatre area where we could develop restrooms,
concessions, ticketing. We have indicated a restaurant or a function space on the ground floor. That’s the
150-seat multi-purpose space that Duncan articulated in his plan.
A new stairway, you come up the elevator, and that’s where you find this new theatre event space. It’s
overlooking Main Street. We developed the support spaces around it. How might this be developed and what
might it look like. First of all, a nice big square room about 97 by almost 180, a nice big footprint for a lot of
different capacity for a formal theatre setting, maybe 500 seats but different events would have different
capacities. On the upper left is a picture of what it looks like today. To the right is a precedent of a
commercial building in Brooklyn, New York, that was recently renovated. What they did to that building is they
basically raised the roof. We would need to create higher ceilings on that second floor to be able to create a
viable theatre and event venue. You need the height for lighting, scenery. Here’s a view of the second floor of
Alec’s Shoe Store before it closed. Again, we would be reframing the roof with some trusses and open up the
floor space to develop it and give ourselves the height that we needed.
Downstairs, minimal changes, but it could be a very open, glassy lobby arts center and/or retail. A little
investment to make that something that would work. In all, 30,000 square feet, on two floors. There would be
interior and exterior renovation. A new theatre, support facilities, entry lobby, event space as | showed you on
the ground floor and then maintaining quite a bit of retail on the street level as well. We worked with a cost
estimator and a local contractor and we came up with a budget of about $15.5 million total project cost to
develop this property for a new venue.
Mr. Webb
With that physical plan developed, we came back and wrote a business plan. |’m referring to it as an arts and
events center because | want to stress that functionality. | want us to think of it as a functional, flexible place
for a much broad range of programming from traditional performing arts program to more contemporary
entertainment to a range of different meeting and events because that’s the thing that’s going to make it very
busy and make it sustainable on an ongoing basis.
To start the business plan, we have written some goals which are about providing high-quality arts and
entertainment for the community. We think it is important to support local businesses, government and
citizens with professional meeting and event facilities. WWe want to stress the importance of affordable access
to good facilities for local arts organizations. Contribute to the economic vitality of Nashua and the wider
region. Each one of those separately is not such a big deal, it’s doing them all together in such a way that you
have a sustainable business model which driven by earned income as opposed to contributing.
We looked at various ways it could be operated, and our recommendation is that the City of Nashua should be
the owner and the operator of this building. At the same time, there are two important groups that should be
brought along. First, a private foundation to represent the interests of the private sector. Secondly, a
Special Bd. of Aldermen — 5/2/17 Page 6
programmer, a professional individual or firm, that is contracted to do some of the riskier part of the building
which is generally about booking arts and entertainment programs and taking the risk associated with that. We
had a couple of discussions with firms based in New Hampshire, Massachusetts, that have expressed interest
in programming and perhaps even operating this.
We think this is a good direction to go. The City has the ability to recruit the skills and resources necessary
and your mandate to serve local residents is consistent with the goals that we have established. That
foundation is very important. It is a way for you to bring private sector leaders to the project and get their
support in getting this up and running. The best thing about budgeting this outside programmer is you can use
the completive bid process, a RFP process essentially, to recruit that programmer and partner.
In our written report, we have written extensively on operating policy. A lot of this came out of the charrettes
and meetings we had with local arts organizations. We have written about how access is managed who gets
first dibs on dates, how to set rental rates and fees, the idea of having some resident users, groups that get
preferred cost of access and first crack at the calendar, the importance of ticketing systems and the analytics
that come with them, food and beverage operations, not just for traditional concessions but importantly for
catering support and even daytime food and beverage operations. We believe Nashua has the kind of
community that can provide significant volunteers support for not only leading on boards and advisory groups
but also supporting the day-to-day operations. Finally, we stressed the importance of green operations, being
environmentally sensitive in a way that the building is operating, particularly given that we are starting with an
adaptive reuse opportunity. We set a staffing plan. The blue boxes are fulltime staff, yellow are part-time and
red are event staff. We put the City on top, but this chart works no matter who the operator of the building is.
The most important part of our work in this round was developing a pro-forma operating budget which is
suggesting how the building is sustained over a period of time. This is a live, excel-based model and after
tonight we will be handing this spreadsheet over to you so you can play with it because it is the kind of thing
you can say what if we increase the capacity by 100 seats. What does that do to the bottom line?
The theory of these pro-formaas is it’s all about projecting activity. We can project how many times there will be
rentals at different price points. How many times there will be presented events, meetings, weddings/ We can
get a pretty good handle on sales which then allows us to project expenses. We have developed this budget
on the assumption that you want to hit the ground running and you will spend significant capital dollars. The
operating budget is based on the idea that the day you open, you are fully staffed. You have a full set of
programs ready to go. You have an option to take a slower approach to getting the building going. You can
decide to be a little bit more cautious and conservative and have a smaller staff and gear up in a more
incremental fashion over the first few years. We formed our budgets by looking at a lot of other buildings in the
regions. These are some examples of other buildings in New Hampshire, Vermont, Connecticut to estimate.
We estimated activity, the key step, so in our main theatre, we are being very conservative. We are estimating
in the first year about 172 days of use with about 76 performances. That grows to almost 200 days of use by
year five. | think we’re being very conservative with this and leaving significant capacity for growth. The multi-
purpose space, we’re also being very conservative around the level of utilization. Even with that, you will see
in the first year, there are 25,000 people coming to performances and that grows to almost 30,000 by the fifth
year. That activity then leads to our estimates of rental revenue for the building.
This is a summary of the budget, itself. It shows in the first year earned revenue, rentals and ticket income and
food and beverage, is about $700,000. That grows to $850,000 by year five. The operating expenses that go
with that start at about $900,000 in year one and grow to a little over $1 million by year five. We are basically
cover three-quarters of the operating budget with earned revenue from the beginning and that percentage
increases to 80 percent by that fifth year. What that leaves is contributed income. Some people may look at
that and say we’re coming up short so we have to chip in some more money. The way | would like you to think
of itis this building is delivering value to your community, value that warrants ongoing support. We have
estimated contributed income from individual appropriations, a little bit from foundations, and a little bit from
Board of Aldermen Page 13
June 28, 2016
NEW BUSINESS — RESOLUTIONS
R-16-044
Endorser: Mayor Jim Donchess
Alderman Richard A. Dowd
Alderman Ken Siegel
Alderwoman Mary Ann Melizzi-Golja
Alderman Sean M. McGuinness
Alderman Don LeBrun
Alderman-at-Large Michael B. O’Brien, Sr.
Alderman Tom Lopez
Alderman-at-Large Brian S. McCarthy
AMENDING R-15-188 TO ALLOW THE CLOSING FOR PURCHASE OF THE HYDROELECTRIC
FACILITY IN MINE FALLS PARK TO OCCUR ANYTIME BETWEEN DECEMBER 15, 2016 AND
DECEMBER 15, 2017
Given its first reading; assigned to the COMMITTEE ON INFRASTRUCTURE by President McCarthy
R-16-045
Endorsers: Mayor Jim Donchess
Alderman Ken Siegel
Alderman-at-Large Lori Wilshire
Alderman-at-Large Michael B. O’Brien, Sr.
Alderwoman Mary Ann Melizzi-Golja
Alderman Tom Lopez
Alderman June M. Caron
Alderman-at-Large Brian S. McCarthy
ESTABLISHING AN EXPENDABLE TRUST FUND FOR STATE EMPLOYER PENSION COSTS
Given its first reading; assigned to the BUDGET REVIEW COMMITTEE by President McCarthy
R-16-046
Endorser: Mayor Jim Donchess
Alderman-at-Large Lori Wilshire
Alderwoman Mary Ann Melizzi-Golja
Alderman June M. Caron
RELATIVE TO THE ACCEPTANCE AND APPROPRIATION OF AN ADDITIONAL $39,862
FROM THE STATE OF NEW HAMPSHIRE, DEPARTMENT OF TRANSPORTATION INTO GRANT
ACTIVITY “TRANSPORTATION ALTERNATIVES PROGRAM (TAP) GRANT” AND
TO AUTHORIZE THE TRANSFER OF MATCHING FUNDS IN THE AMOUNT OF $7,972.40
Given its first reading; assigned to the HUMAN AFFAIRS COMMITTEE by President McCarthy
R-16-047
Endorser: Mayor Jim Donchess
Alderman Siegel
Alderwoman Mary Ann Melizzi-Golja
Alderman-at-Large Michael B. O’Brien, Sr.
Alderman Richard A. Dowd
AUTHORIZING THE MAYOR AND CITY TREASURER TO ISSUE BONDS NOT TO EXCEED
THE AMOUNT OF ONE MILLION DOLLARS ($1,000,000) FOR VARIOUS IMPROVEMENTS
AT THE SOLID WASTE DEPARTMENT FOUR HILLS LANDFILL
Given its first reading;
MOTION BY ALDERMAN DOWD TO ACCEPT THE FIRST READING OF R-16-047 BY ROLL CALL,
ASSIGN IT TO THE BUDGET REVIEW COMMITTEE AND THE BOARD OF PUBLIC WORKS, AND THAT A
PUBLIC HEARING BE SCHEDULED FOR MONDAY, JULY 25, 2016, AT 7:00 PM IN THE ALDERMANIC
CHAMBER
Special Bd. of Aldermen — 5/2/17 Page 7
non-local government. We've also added a significant chunk of support from an endowment. We are
estimating an endowment of $4 million that is generating about four percent to sustain operations. That
endowment we’re proposing is the private sector role in the financial success of the building. We're looking to
the public sector to provide bonding support for capital and looking to the private sector to raise money from
the outset to endow operations. Endowment is really the most certain way to have a successful building
because it is there. It’s money that is protected and can sustain this building a long time out in the future.
The last big piece of analysis was we projected the economic impact of this building on the county economy.
We buy these multipliers from the Bureau of Economic Analysis in Washington. Those multipliers allow us to
say when a dollar is spent in Hillsborough County in a certain industry; it gets re-spent and re-spent and re-
spent and ultimately has a larger impact depending on the industry. That allows us to project direct, indirect
and induced impacts of both building the building and operating the building.
Construction impacts of $12 million generates in Hillsborough County about $20 million in new sales. For
example, a certain amount of money is spent on lumber in a Hillsborough County lumberyard. That
lumberyard operator in turn spends that money on computers and stationery and so on. That money then gets
re-spent. That’s the idea of the multiplier effect. That leads to new sales of $20 million, earnings at $6 million
and 112 person-years of employment in the county as a result of this project.
Then we have the impacts of operation. Every line item in the operating budget, excluding staff, we have
applied the multiplier to. There’s a certain amount of money spent on utilities, on waste removal, on
administrative services, and building services. We apply the multipliers in order to show how $900,000 spent
not on personnel leads to significant impacts beyond that.
The third type of impact, which is often the most important on these projects, is the impacts of audiences.
People coming to performances. We know from American for the Arts, we know how much they spend on
retail and eating and transportation and staying over. We are able to calculate then those expenditures and
the total impacts relating to them. The economists in the room will say you have to be very careful about
economic impacts because we can’t count money that would already be spending in Hillsborough County.
They are just bringing it to another part of the region. The only money we can really count here is the audience
coming from outside the county and the audience that would otherwise gone outside the county. Those two
components, which we estimate at about 50 percent of the total audience, allows us to project the impacts of
audience. If you combine those annual operating impacts with the impacts of audiences, in every year the
operation this building drives $1.4 million in new sales, $300,000 in new earnings in the county and it creates 9
new jobs in addition to the jobs in the theatre, itself. It’s jobs associated with the economic activity that the
theatre brings.
In addition to those quantitative impacts, there are some significant qualitative impacts associated with this
project. We believe this is a catalytic project for the redevelopment of downtown Nashua. The presence of
this building will drive commercial development which will lead to other gains in economic output as well as
those other issues like corporate recruitment. We believe the project will attract companies, workers and
residents to downtown Nashua, and we see this as a key attraction within a district for tourism development in
Nashua.
Finally, we have estimated how you move forward from here. There are three parallel tracks. One is related to
fundraising, one is related to physical planning, and one is related to planning for operations. Physical
planning, if you initiate the work of forming a building committee and thinking about getting more specific costs,
hiring a design team, going through phases of construction, heading into construction in the earlier part of
2019, you’re essentially in a position to open the building in the fourth quarter of 2020. That is a not-rushed but
fairly steady pace. The purple squares is a reminder that you can’t wait until the building is about to open to
start thinking about operating. You have to start setting policy, hiring staff, getting vendors involved. There’s a
lot of work to do to be ready. The third track is related to fundraising. There’s a couple of important elements
as Tim will outline in a minute. The first thing is to come forward with a bonding request to fund the capital
Special Bd. of Aldermen — 5/2/17 Page 8
component of the project fairly soon. Then, equally important, is the effort to form a capital campaign in order
to take on the challenge of raising the endowment to sustain it. That occurs later in 2017. A campaign
consultant is hired, they do their research and then initiate the campaign in the middle part of 2018 so enough
of the chunk of funding is placed so you and the community is comfortable with proceeding with the issuing of
bonds. Knowing that endowment is in place should give you the confidence that the bonds can be supported.
Also as a final step there’s some work being done to get a naming gift, an additional financial benefit.
The element of the financing that | had not included in this budget is | did not put the retail income associated
with the ground floor in the budget. It’s a little premature to do that. That's another arrow in your quiver
potentially available to help service the debt associated with the project.
Director Cummings
Thank you, Duncan. Mr. President, the reason why we are here tonight is | wanted to make sure we had a
very clear understanding in terms of the expectations and commitments that would be needed by both the city
and the private sector to be able to move this project forward. The very elementary next steps is we would
need to have some upfront funding for seed capital which would be money to help us procure a capital
campaign consultant to help us do some elementary design and physical planning. That would ultimately help
us move toward that endowment type of programming in that $4 million range. Ultimately the city needs to
understand that they have to be comfortable to achieve the type of programming that was outline tonight a
$15.5 million bonding request and the debt service should nto be expected to be paid back. If you wanted to
go in the direction of the preferred alternative building, which would be the recommendation of this group, you
are looking at the Alec’s Shoe building. It is privately owned. We had very positive conversations with the
current owner. He is willing to enter into an option. We would need to have that conversation with him sooner
rather than later because he obviously wouldn’t want to hold up his private sector plans indefinitely. We would
need to put some sort of payment to him monthly that would get credited to the final payment to him if we were
to move forward. That’s all be discussed in advance in some sort of understanding so we would have a clear
land acquisition cost in the pro-forma. Those are the immediate issues.
What I’m hoping to gain from you tonight, Mr. President and to the body, is some direction and some
understanding as to what the city would like to do so we can move this conversation forward in terms of
planning for the next steps.
Alderman Siegel
| have quite a few questions and comments. The $15.5 million, | assume this does not include the purchase of
the building. Is that correct?
Director Cummings
It does.
Alderman Siegel
You have an idea then of what the building would cost?
Director Cummings
Correct.
