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Special Bd. of Aldermen — 5/2/17 Page 9

Alderman Siegel

That’s good to know. The budget! saw there doesn’t seem to be any element that deals with bond debt
service. That’s important because we have $15.5 million that we’re talking about bonding. The implication
would be that the city pays for that out of taxpayer's money but then there’s this endowment fund. Obviously a
$4 million endowment fund can’t carry the bond debt of a $15.5 million bond. | wish | could have an investment
like that but that’s not going to happen. You’ve allocated that money elsewhere. | need some of those
questions answered. The staff expenses that you listed, you have them starting in year one but in fact your
staff expenses happen well before year one because you are staffing in advance of having any revenue or
openings. That's something that probably needs a correction.

Mr. Webb

The staff is in there year minus one. They are hired the year before the building is opened. During the pre-
opening about half of the staff are hired.

President McCarthy

Year one is the first year anything happens but it is not the first year it is running.

Alderman Siegel

My apologies. The assumption with the bond debt is that the city pays the bond debt.

Mr. Aquilina

The reality of these buildings they do not have that capacity to service debt beyond operable.

Alderman Dowd

Does that design cover handicapped access and an elevator to the second floor?

Mr. Aquilina

Absolutely.

Alderman Clemons

Looking at the operating budget that was presented, it seems some of the items under contributed income
seem generous. Even if they were to happen, my question is where would the other 25 percent come from to
operate the theatre every year?

Mr. Webb

Earned income covers % of the budget. The contributing income piece covers the final portion.

Director Cummings

The bulk of that would essentially be the endowment so there wouldn’t be an ongoing cost to the operational
budget of the city in essence is the theory.

Special Bd. of Aldermen — 5/2/17 Page 10
Alderman Clemons

What is non-local government mean, and what are some examples that would be eligible for Nashua?

Mr. Webb

We are presuming state, federal and regional grants. There is a fundraiser on the staff. Their job is to pursue
fundraising in order to sustain the building. We set what | believe very conservative targets for individuals,
corporations, as well as that regional coverage.

Alderman Clemons

Do you have any specific examples of what other theatres in New Hampshire get from non-local governments?
Mr. Webb

Generally more than that. If you look at facilities such as Concord and Manchester, they raise a lot of money.
Because our strategy here was to focus on local government providing the capital financing and look to the

private sector to provide the balance or most of the rest of the support. Inevitably there will be grant
opportunities that will arise that a development director will see. We think those are realistic.

Alderman Siegel

Would this bond debt be under the Cap or subject to the Cap or outside of the Cap?

Attorney Bolton

Debt service would be incorporated yearly and count toward the limitation that the Cap provides. The bond,
itself, is not.

Alderman Siegel

An estimate of that amount of money, anybody?

Mayor Donchess

A little over a million. $750,000 a year on principal; 3.5 percent, $600,000.

Alderman Siegel

That’s $1 million that we have to have with our existing Spending Cap.

Mayor Donchess

If you were to finance it with an even payment so the principal at the beginning is lower, it would reduce it to
some degree but you would not have a declining principal requirement as you went along.

President McCarthy

It is also replacing the existing debt that is being paid off. There is some offset in the way the budget changes
from year to year.

Special Bd. of Aldermen — 5/2/17 Page 11

Alderman O’Brien

For our investment of $15 million, what do you think is the life expectancy of this facility?

Mr. Aquilina

The kind of construction that would be incorporated into renovating it typically has a 25-30 year life expectancy.
What | am talking about is the mechanical systems. When | talked about Court Street outliving its lifespan it
really has to do with mechanical systems installed probably 40 years ago. Then certain areas of the roof and
the masonry that requires maintenance. There’s a lot of Court Street that was built in the 80s that is still very
viable. It just need an investment to renew some of those pieces. The building at Main Street would probably
have require some investment in its system replacements within 20-35 years.

Mr. Webb

On the bottom of the budget here, there’s a line called “allocation of capital reserve” Every year the bottom line
improves a little bit with contributing income basically staying flat. A little bit of inflation escalation. Every year,
we get a little bit busier, attendance gets a little higher. The bottom line improves. Starting in year four, we are
grabbing money and putting it into a capital reserve in order to fund the capital replacements that are required
over time. If that reserve is allocated and used properly, the building has a very significant lifespan.

Alderman Deane

That’s wishful thinking, but we don’t do that in this city. Our school district is a perfect example of that. We go
in to replace HVAC systems and 15 to 20 million dollars later, we renovate the entire school. | find your
economic impact, your quantitate/qualitative interesting. We just spent about $80 million on a roadway out
here that was supposed to generate all this economic impact down in the Millyard. All sorts of things were
supposed to happen. | believe that road is receiving maybe 15 percent of the traffic. It’s not doing much of
anything. It is costing us. We bonded about $40 million to build this roadway, but it really hasn’t delivered any
goods. Unless the economic development director wants to correct me on that, there’s been little or no spur of
economic growth down there.

Director Cummings

Alderman Deane, you are absolutely correct. | would just caution that the parkway just opened and these
types of infrastructure improvements takes time. | believe the Millyard will increase in value as well as other
opportunities closer to Broad Street. As of today, you are correct. The roadway is not used to the projection
level or to capacity.

Alderman Deane

Nowhere near. Let’s be honest about it. It was years in the making. It’s not as though that roadway popped
up. People knew about it. That’s another issue. I’m really leery of these economic impacts, although this is
different. We're talking about business and industry and these incubators, | think that was a little key word
used during the last election, about all the incubators that were going to be down there. This is different. This
draws a different crowd of people. It has a different interest. I’m just leery of these economic impacts.

Mr. Webb

It’s certainly not a guaranteed thing. The one suggestion | would make is when you are able to do so, | would
encourage individually or as a group you go and visit some theatres in towns like this in the northeast, whether

Special Bd. of Aldermen — 5/2/17 Page 12

that’s in Portsmouth or Rutland or Keene or other communities where we’ve seen investment in cultural
facilities drive significant economic development. And learn from them what they did in order to achieve those.

Alderman Deane
But you seem to be a believe because you’ve used the “we believe” numerous times on numerous slides.
Mr. Webb

Well, 30 years and basically 400 projects around the country, | have seen what these facilities can do to
communities. In my experience the mistake some communities make is they put all their eggs in let’s fix up the
old theatre and hope that in and of itself will drive revitalization or economic development. The truth is adding
a venue like this needs to be thought as one element or a larger plan. Your economic development team
recognizes that. This is an anchor of a larger plan. | think if you approach it that way, you have a high
probability of success.

Alderman Deane

The Court Street building that you mentioned, did you walk through that building and provide information out of
the goodness of your heart or did you charge the city some money for performing that evaluation?

Mr. Webb

Tim used the word, beyond the scope. It wasn’t really beyond the scope because we looked at Court Street
initially to see if Court Street could be the primary solution. We recognized that that was difficult, but in talking
with lots of people in the community, we came to the conclusion that it is important. It is a community asset,
and there is a relatively efficient way to sustain the life of that building that becomes one of the pieces of the
puzzle. We've identified it as the longer term solution to be a good 300-seat plus or minus venue that is
available and accessible to the community and arts organizations as and when you are able to fund that.

Alderman Deane

Are you familiar with the history behind that building?
Mr. Webb

We struggled with it when | was here 12 years ago.
Alderman Deane

The one thing about that building is the communication lines that run to fire alarm. Fire Alarm used to be in the
front of that building. That’s an old hose tower out front. That building will always be there because if we
would have to borrow money to move all of that, that would be an absolute nightmare. That building, | don’t
know when it was built, maybe the 60s. It is not a functional building outside of a theatre. When you look at
the space in there, it’s a white elephant.

The other thing that we talked about that President McCarthy mentioned is we will be retiring debt, but we are
also letting debt as well. We have a number of competing projects that we are looking at. There’s the paving
project that we just approved. We have a building on Burke Street that we are looking at. There’s school
projects. There are a number of projects that are coming through. It will be interesting seeing what happens
with this moving forward.

Special Bd. of Aldermen — 5/2/17 Page 13

Director Cummings

To clarify my earlier comment, the Court Street business plan pro forma and excel spreadsheet that was
included was above what was originally anticipated to help explain how you would make that building solid.
Additionally, | want to circle back to some comments made to further illustrate the point that we are looking to
help redevelop Main Street and help revitalize Main Street. Study upon study and from an urban planning
perspective, we know that Main Street as a corridor is changing from a retail district to more of a cultural and
arts type of community district. To develop an anchor to be a critical component to contribute to that type of
economic activity will only help with stabilizing the neighborhood. This would just be one piece, one ingredient.
We would need to continue on other efforts as well, whether that’s introducing more market-rate housing into
the downtown, introducing other types of uses. We need to continue to make these investments if we are
going to enhance our community. | think what you will hear is some of our smaller businesses, our merchants
are looking for assistance in trying to help stabilize Main Street, and this is just one way of doing that.

Alderman Siegel

Philosophically, I’m in favor of this type of project. | think it would make sense. Unfortunately | sit here and |
understand the constraints that we’re under. We may be retiring some bond debt. Is that bond debt we’re
retiring, is it under the Cap, over the Cap, what’s the timing? Now you're taking a big chunk of money and we
already have this problem. Strategically, | say that’s great and it makes sense. It’s a powerful driver of
development. |’ve been talking with Director Cummings, and | think he has some very good ideas and overall
strategy. But | just want to understand in the City of Nashua, given our financial constraints that we have, and
the mechanism that do constrain us, how do we make that happen? | need that explained. None of that is up
here because that is very, very specific to Nashua. | do appreciate the studies that you have done. It is very
clear that you’ve been diligent. But somebody somehow has to explain to me how we get from here to there
given that we have a situation where we’re looking at whether or not we can fully staff the police and fire
department given our Spending Cap issues. Now we're talking about potentially a million dollars. Where does
that come from? That's my open question.

President McCarthy

| think that’s the discussion we’re going to have to have after this meeting.

Alderman Siegel

But not tonight.

Alderman Lopez

When we do a large scale development project without necessarily making the links necessary to make it a
comprehensive plan, you have issues like a road that people are under-utilizing that doesn’t have a destination
attraction. My understanding of the Broad Street Parkway was it was supposed to reduce the traffic load on
Main Street by giving the drivers another route out of the downtown area. But we also have to look at the
connecting roads and rehabilitate how they work now that there’s a presence of a new incoming and
outcooking roadway. When we come up with an isolated plan without integrating it into larger city priorities, it
doesn’t necessarily payoff.

| would also say as someone who grew up in Concord and watched how the performing arts center there
really, really, really revitalized their downtown, the impact that is being suggested here as likely is not really
rocket science. It has been proven to be viable in communities similar and near in location to ours. | think the
concept of a Main Street Performing Arts Center with a corner of it is certainly a good one. Personally, I’m very
much in favor of making sure that the existing theatre is taken care of and that our smaller local groups, as
they have been referred to, are getting the attention they deserve. We also have to make sure that the artists

Special Bd. of Aldermen — 5/2/17 Page 14

that are emerging in our local community are getting the support that they need. While not the ideal, | was
definitely appreciative of the work that was put into looking at that building even though it is a little bit of a
quagmire.

The real question | have is looking at the Alec’s building and not necessarily turning the whole thing into a
theatre, but turning it into that holistic building that has multiple support structures to it, I’m in favor of that. But
earlier in the review process, we were talking about creating an arts district based on a smaller scale
investment, trying to cultivate the local artists in the downtown population with things like festivals. It seemed
like when Alec’s came onto the market, we revamped that plan entirely. | don’t think Alec’s is in the performing
arts district that was identified. If | remember, it was closer to the river over by where the river walk is,
Peddler’s Daughter. How would this create that arts district or would it move it?

President McCarthy

The proposal for the district went from the Elm Street Junior High to Court Street when it was in the original
recommendation.

Alderman Lopez

As | remember, the Elm Street Junior High was actually considered a pseudopod. It was specifically stated in
at least one meeting that it shouldn't try to extend all the way. It should be more concentrated.

Director Cummings

We don’t technically have an “arts district.” One of the ways we could look to address that issue is we could
look to do a zoning overlay and articulate that we want to encourage performing arts and other types of artists
within a certain land use area within the city. Ultimately in the downtown area, you’re going to need some
critical assets to achieve that goal. The example that was given is you could use a performing arts center as
one of the couple of anchors. | would suggest that we have a budgeting arts district coming together from the
river radiating out, whether that’s at Riverwalk or Court Street Theatre. We definitely have a strong component
of different artists and artist type uses.

One of the elements that | am hoping to take away from this evening is a clear direction that there is an
ambition by this body for me to put togheter a proposal that can be presented to you that will ultimately be a
bonding request of $15.5 million, understanding that it would have to be accommodated by the city. You then
during that discussion can do what | would very much expect you to do as you are obligated to, which is to
make sure that this request kept a stable residential tax rate within your current financial picture. You would
want to make sure that this capital request, whatever dollar figure it may be, can be accommodated and you
can then compare it accurately against the other needs that may be coming before you. That is ultimately what
| would think would be a good next step. To be able to do that, | want to make sure that this body has an
understanding that debt service, in particular, would need to be covered by the city.

Alderman O’Brien

| see we’re going to acquire the 1910 building, the first two floors will be used for the theatre. What about the
additional two? Would that be office space and an income generator to this particular project? Also, the first
floor street level is going to include a restaurant and retail area. Would that not be an economic generator to
this particular project? If that is the case, | did not see any numbers for the potential. | did not see how much
we would be getting per square foot of retail space, but | would like to know that number so we can forecast
that as we deal with the bond issue.

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.

Board of Aldermen Page 14

June 28, 2016

A Viva Voce Roll Call was taken, which resulted as follows:

Yea: Alderman Wilshire, Alderman Clemons, Alderman Deane, 15
Alderman Cookson, Alderman Dowd, Alderman Caron,
Alderman Siegel, Alderman Schoneman, Alderwoman Melizzi-Golja,
Alderman McGuinness, Alderman LeBrun, Alderman Moriarty,
Alderman O’Brien, Alderman Lopez, Alderman McCarthy

Nay:

MOTION CARRIED

R-16-048
Endorser:

Mayor Jim Donchess
Alderman-at-Large David W. Deane
Alderman-at-Large Lori Wilshire
Alderman Ken Siegel

Alderman Richard A. Dowd

Alderman David Schoneman
Alderwoman Mary Ann Melizzi-Golja
Alderman Michael B. O’Brien, Sr.
Alderman Tom Lopez
Alderman-at-Large Brian S. McCarthy

APPROVING A LOCATION OFF STADIUM DRIVE AS THE REPLACEMENT SITE FOR THE DAVID W.
DEANE SKATEBOARD PARK CURRENTLY LOCATED ON BRIDGE STREET
Given its first reading; assigned to the COMMITTEE ON INFRASTRUCTURE and the BOARD OF PUBLIC
WORKS by President McCarthy

R-16-049
Endorser:

Mayor Jim Donchess

Alderman Lori Wilshire

Alderman Benjamin M. Clemons
Alderman Richard A. Dowd

Alderwoman Mary Ann Melizzi-Golja
Alderman-at-Large Michael B. O’Brien, Sr.
Alderman June M. Caron

Alderman Tom Lopez

Alderman-at-Large Brian S. McCarthy

AUTHORIZING THE CITY TO ENTER INTO A TWINNING (SISTER CITY) AGREEMENT FOR THE
ESTABLISHMENT OF FRIENDSHIP AND COOPERATION WITH THE CITY OF MYSORE,
KARNATAKA STATE, INDIA

Given its first reading; assigned to the PERSONNEL/ADMINISTRATIVE AFFAIRS COMMITTEE by President

McCarthy

Alderman Lopez

Can it also be referred to the Cultural Connections Committee?

President McCarthy

That is a good suggestion, yes it can.

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