Performing Arts Center: The Wrong Path

The News and Record reports today that some kind of consensus among the Melderec crowd is developing that the performing arts center needs to be located downtown in spite of the additional cost:

“I am not looking at this as something we are going to fail on,” the mayor said. “We are going to make it work.”

Asked if Brown’s coliseum concept might be an alternative, Perkins said, “I think it is going to be downtown. ... This city doesn’t need a backup plan.”

Here are some thoughts regarding how the city should proceed:

1. Matt Brown should not be permitted to make any presentations; nor should be be permitted to advocate for the center.   The city council's decision to place him in the driver's seat was a huge mistake.  The council does not have any basis for deciding that is the best way to approach this issue.  Facts should be obtained and decisions made first before any consideration of involving Brown in the process.

2. A number of parties have referred to the performing arts center in Durham-- DPAC.  It should be noted that DPAC is operated by a private organization; and it generates a profit.  The city of Durham built the facility, and shares in the profits.  If you have Matt Brown and the Coliseum management run the facility, chances are good that it will be a big money loser for the city.  If the facility in Durham can turn a profit, we should have every expectation that any facility located in Greensboro will do so also.

3. Facts and details should be obtained from Durham before proceeding.  The Greensboro Coliseum has an influential but entrenched group of supporters who represent vested interests.  These supporters should not be permitted to have undue influence over the process. 

4. My own opinion is that we should not have another bond referendum on this matter.  The voters have already rejected it twice; and we do not need more debt. 

5. But if the bond referendum proceeds, the language on the ballot should be very specific regarding where the facility is to be located, and how it is going to be run.  City staff has already been quoted in a news article suggesting it is permissible to place non-specific language on the ballot.  But this is an invitation to mislead the public and play games behind the scenes-- similar to what occurred with the aquatic center.  The ballot language needs to be an accurate, specific reflection of what is being planned.  That means all the research and information-gathering and planning needs to be performed before the bond referendum is placed on the ballot.

Comments

[Andrew Brod]

"A number of parties have referred to the performing arts center in Durham-- DPAC. It should be noted that DPAC is operated by a private organization; and it generates a profit. The city of Durham built the facility, and shares in the profits."

You're close. In fact, DPAC is owned by the city, which hired a management company to run the place. For that company, DPAC generates a fee, not a profit. If it generates a profit, it does so for the city alone.

So the primary difference is that DPAC is run by outside managers, while the Greensboro Coliseum complex is run by city employees. That's an important difference if it's true that DPAC makes money for the city of Durham.

But first, IS it true?

[Joe Guarino]

This gives information on the management team for the DPAC:

http://www.dpacnc.com/center_info/management_team

The information made available to me is that the city of Durham gets 40 percent, the management group 60 percent. I am told the city of Durham earned $1.3 million each year for the first two years. This would mean the total the facility generated for the city and the management group(s) was in the range of $6.5 million for those two years.

The city built the facility, and yes, it still owns it. The city acts as landlord.

There is doubtless more to learn and discover about this arrangement. But the point is that rushing headlong into an arrangement whereby Matt Brown and the Coliseum folks run the thing would be extremely unwise. But that is apparently where this city council is headed.

Again, I don't think we should float any bonds for this proposal; and even Ed Cone and the News and Record are counseling caution. The message is-- slow down. Of course, there might be a political calculus involved. They might be thinking that this is not a good election year to pass this particular bond issue.

[Andrew Brod]

The information made available to you? You were told? Perhaps you could share that info with us, unless it's confidential (which of course would be outrageous for a publicly owned venue) or mere word of mouth.

[bubba]

"The information made available to you? You were told? Perhaps you could share that info with us, unless it's confidential (which of course would be outrageous for a publicly owned venue) or mere word of mouth."

Why don't you find it yourself, instead of wasting our time here?

You don't agree with the position taken? Provide some facts that support your opinion.

This is not Cone's blog. You enjoy no special privilege here.

[Billy Jones]

Slow down? Slow down? What, you expect the pigs to go without their slop? Hungry pigs are vicious animals.

Besides: Why not East Greensboro for half the money and no need for a bond issue? http://greensboroperformingarts.blogspot.com/

[Billy Jones]

Professor Andy, "For that company, DPAC generates a fee, not a profit."

You mean there's no profit in the fee? How could an economist believe a company could stay in business with no profits?

[Andrew Brod]

Yes, Bubs, you're very scary. Do you always mark your territory in this way?

In any case, Joe can choose to ignore me without your help. Perhaps he doesn't consider a request for information to be a "special privilege."

Billy, I don't believe that and I didn't say that. Any business person understands the distinction I made.

[bubba]

"Yes, Bubs, you're very scary. Do you always mark your territory in this way?"

This isn't my territory.

What's really scary is some people consider you an "authority" of some sort or another, but we see scant evidence of that here. All we have to show is your snark directed toward Joe, with no substantive contribution from you otherwise.

If you don't think what Joe said is true or advisable, provide some substance to support your opinion.

[Hartzman.blogspot.com]

Are principal and interest payments
included in the DPAC math?

The operating earnings for the pool
do not include p & i.

[Andrew Brod]

If you reread my comment, you'll see that I didn't accuse Joe of saying anything untrue or inadvisable. He made a claim and said it was supported by some information he'd received. I asked him to share the information.

Sorry my request offended your delicate sensibilities.

[bubba]

"If you reread my comment, you'll see that I didn't accuse Joe of saying anything untrue or inadvisable."

No, of course not. Your snark meant nothing of the sort, did it?

"I asked him to share the information."

He did. The "gotcha" you were looking for wasn't there.

"Sorry my request offended your delicate sensibilities."

I'm not sorry you're incapable of accomplishing your intent in this thread.

[Andrew Brod]

Yeah, you're right. I'm probably not going to get any information.

[Joe Guarino]

Here is a press release and financial statement that demonstrates DPAC generated $401,000 for the city of Durham during its first eight months of operation. That amount was distributed to the city as its 40% share from the LLC that runs DPAC:

http://www.ci.durham.nc.us/departments/manager/pdf/dpac_finance_report_1109.pdf

[Joe Guarino]

During the first two years and eight months of operation, Durham's 40 percent share was $2.64 million. The gross revenue the facility generated was $19 million during that time period. This is apparently in excess of what the Greensboro Coliseum generates.

Abner, the city of Durham owns the facility, so the taxpayers are liable for principal and interest payments. The financials of the LLC do not reflect those costs. The city can use its income received from the DPAC LLC to help pay down the principal and interest payments; but the taxpayers are still on the hook for that money, strictly speaking.

[Andrew Brod]

Thanks for the info.

[Joe Guarino]

I have reviewed an audit of the DPAC LLC dated 12/5/11 covering the fiscal years ending in June, 2010 and June, 2011. It was performed by Zwick and Banyai, a Michigan auditing firm. The city of Durham's 40 percent share for 2010 was $1.2 million. The city's share for 2011 was $1.0 million.

It should be noted that these numbers do not seem to include parking revenues. That is a potentially big number, although it is unclear who gets revenues from parking at DPAC.

I don't think the city should proceed with this project. But if the city ultimately proceeds, the choice is a clear one. Do you place this facility within Matt Brown's ever-expanding public sector fiefdom, and watch the dollars drain away; or do you turn its management over to a private entity that has a profit motive?

[Billy Jones]

Professor Andy, "Any business person understands the distinction I made."

You wrote: ""For that company, DPAC generates a fee, not a profit."

Fact is: you made no distinction whatsoever. You made the claim that the company made no profit when in fact the company profits from the fee.

"Distinction
n.

1.The act of distinguishing; differentiation.
2.The condition or fact of being dissimilar or distinct; difference: "the crucial distinction between education and indoctrination" (A. Bartlett Giamatti). See synonyms at difference.
3.A distinguishing factor, attribute, or characteristic.
4. Excellence or eminence, as of performance, character, or reputation: a diplomat of distinction.
5. A special feature or quality conferring superiority.
Recognition of achievement or superiority; honor: graduated with distinction."

Read more: http://www.answers.com/topic/distinction#ixzz1kqxyo3QK

Are you sure your degree is from a real university?

And Joe, just so you know, I'm 100% in favor of keeping Matt Brown out of the picture and bringing in or establishing a private company to manage an East Greensboro Performing Arts Center: http://greensboroperformingarts.blogspot.com/

[Billy Jones]

PS. Andy, having actually been in business, I understand there had better be a profit built into the fee. And unlike you, I made a distinction.

[Andrew Brod]

And you just spent two comments continuing to miss my point. If you're really interested in understanding what I said (and I suspect you're not), you can contact me separately.

[bubba]

"If you're really interested in understanding what I said (and I suspect you're not), you can contact me separately."

If you're really interested in making your point, you would have done so on this blog.

You aren't, and you won't.

That's pretty clear, and it's standard procedure for you.

Billy's question about your academic background is well taken. It must have been a hoot hearing you defend your theses in grad school. Perhaps you simply lucked out by having people as obtuse as you making you defend your theses.

[Billy Jones]

When you're hunting ducks and a duck flies within range, you shoot it.

[Joe Guarino]

When you do a legitimate feasibility study or a business plan, you need to identify who the customers are going to be, and estimate to what extent they will use your business. These questions need to be answered. You also need to reasonably know what your costs are going to be.

What ever happened to the concept of regionalism? This has been highly valued in some circles locally. Perhaps we should involve other jurisdictions and municipalities in surrounding areas; and perhaps we should seek their input. Instead, Melderec Greensboro plows forward with typical hubris-- and has already decided that a downtown Greensboro public sector facility run by Matt Brown is the best approach. But people from surrounding areas are presumably going to use the facility. Let's remember that Greensboro is a fairly small city-- only has 250,000 people. You need more folks than that to support a major performing arts center.

[Sal Leone]

I remember years back that this area was thinking of a major league baseball team but couldn't do so because there is not enough of a population to support it. I can say the same about the Arts Center, we already have enough in greensboro that adding another center will be hard to fill. The city council needs to complete an impact report for the area, done by an independent agency. I would love the center but will it bring in money or cost. The GAC in my belief cost us money, the coliseum already costs us money, we got to slow down.

[Joe Guarino]

Sal, this particular crowd doesn't want to slow down. They see they have an opportunity, and want to capitalize on it, no matter how reckless their actions may be. They are even beginnning to draw soft reprimands from the News and Record.

[Billy Jones]

Joe, It appears Allen Johnson agrees with you: http://greensboroperformingarts.blogspot.com/2012/01/woah-not-so-fast.html

[bubba]

"When you're hunting ducks and a duck flies within range, you shoot it."

The constant quacking is pretty obvious.

[Joe Guarino]

Billy, yes, and Yes!Weekly even editorialized against reflexively giving it to Matt Brown.

[Billy Jones]

Joe, thanks, I'll put the Yes!Weekly editorial in the ammunition locker.