Overture: Now Is the Time To Act

The offer from the Madison Culture Arts District (MCAD) board to turn the Overture Center over to the city of Madison is the best start possible to resolving the issues confronting the performing arts center. As the Wisconsin State Journal reported,

Owner wants to give Overture Center to city; not a good idea, mayor says

Overture Center's owner wants to give the $205 million arts facility to the city of Madison or another entity for $1 as part of a complex deal to secure its long-term future, a letter obtained by the Wisconsin State Journal shows.

City officials are balking about taking responsibility for the gleaming but financially strapped facility on the 200 block of State Street.

The alternative may be a bank foreclosure on the building, the letter says.

The next step is to create a city commission to look at the the three fundamental issues: resolving the debt related to construction, a new structure for Overture, and a long term planning regarding finances and programming.

This commission might have to work for six months or longer. Critical points that need attention:

• A city management board, structured after the old Civic Center Board needs regional participation but only if there is a regional commitment to support Overture. If there is no regional support there should still be some appointees from outside of Madison.

• The city cannot take over the facility unless the construction debt issues are definitely resolved.

• Recognizing that Overture is doing as good a job as possible filling seats from September through May, experts and the public should be brought in to discuss utilizing the facility during the summer.

• Consideration needs to be give to a nominal sales tax (fractions of a percent ) to support the arts as is done in Colorado and Minnesota.

• There must be a true public planning program that invites everyone to come to the facility both literally and figuratively. The unintended top down original structure for Overture created a sense of isolation.

The public did not believe they were welcome to do anything but buy tickets and sit in their seats. That is not a true public arts facility.

Comments

[antpoppa]

As a citizen that enjoys going to various functions in the art community, I am not looking forward to having the City of Madison or any taxing authority, in command of the art venue.
The Overture will not be closed next week.
With bankruptcy, with a full public accounting of finance and administration we might find the solution. Bankruptcy is not the bogeyman most capitalists portray it to be. An entity as large as the Overture is not going to be put on the block and auctioned off, the court will attempt to save it. And during that time things might turn around in the financial arena.

[A.J. Love]

I'm biased but I think saving the Overture and making it a viable part of every day Madison life is one of most important issues looming for Madison.

[Mark Kochanski]

It is obvious the City of Madison will have to take control of this facility. Unfortunately, this is a waste of city resources. This facility should be sold to the highest bidder. Or did Doyle, Falk or Mayor Dave ask for a Federal bailout?

[Lou]

Maybe put Overture for sale on Ebay.

[Peter Gruett]

There are only two possible buyers for the Overture Center. The city or (if you really think about it) the University. Neither would be very eager to do it but, the fact is, these things don't make money. Even if they sell out all their shows, performing arts centers lose money (I haven't heard directly how the museum is doing) so there's very little prospect of a private buyer.

Assuming the city bites the bullet, we have to remember that community involvement isn't a panacea. Overture Hall seats fewer than 100 people more than the old Oscar Mayer. If you think the center was overbuilt, the albatross is the Capitol Theatre. Functionally, the center would've been better served by a dedicated concert hall but deference to history and community sentiment saved the Capitol. I think it was the right decision but there are still consequences. It might be possible to fill in with lower-cost, more popular acts that might even turn a profit but, if money can be made on something, there's a private promoter who's going to resent the competition from a public entity.

Still, the Overture Center needs a bailout and that's going to require a lot of public good will. You're probably right on the head with what needs to happen.

[One Thin Dime]

First, let's be clear about how the people running Overture dug themselves into this mess: they had a limited size gift, but they wanted to both pay for construction AND create an endowment to help cover future expenses. So, they decided to borrow some money, using Frautschi's gift as collateral, and play the market with it -- just in time for the 9/11-tech bust in 2001. With their fund then depleted, they had a great fallback strategy: let's refinance the loan and play the market again! Just in time for the Crash of 08. It was foolish to gamble with Frautschi's gift, but they did it, and now they and the banks are holding the bag.

Second, our host regards the latest Overture proposal as "the best start possible" to reaching a stable outcome, but doesn't really tell us why. I want to know why he thinks the City should pay another $12M -- or even one thin dime -- to the banks to help pay off the loan. The alternative may be that Overture goes into bankruptcy, but why is this bad? In bankruptcy, the banks will be able to recover the few million $ that Overture still has, and maybe the money that Frautschi and the City have already agreed to pay as debt service, but that's about it. The banks have a mortgage on the building, but that's useless to foreclose on, because they can't sell the property in any kind of competitive way. There won't be any buyers except the City.

As far as I can see, if Overture goes through bankruptcy, Overture's cash funds get wiped out (as in the current proposal), the City gets the building (as in the current proposal), but the City does not pay $12M to the banks. Instead that $12M debt is discharged and is a loss to the banks. Does our host work for the banks? If not, I'm unable to see why this proposal is such a great start to the discussion. Frankly, it seems preposterous. And the fact that nobody from Overture spoke at the Board of Estimates meeting to support it tells us how seriously they themselves take it.