Overture Center for the Performing Arts. Comment Responses.

Tuesday's post, Why Should City Residents Be Coerced Into Expensive Bailout of Overture Center? received many valuable and insightful responses.

Bob D'Angelo, former director of both Overture and the Madison Civic Center, wrote:

MCAD and 201 State were not responsible for the current situation. Investingating the wrong time by the current owner - The Overture Development Corporation caused by the problem with the banks. The operating budget is completely separate and is supported by ticket sales, rentals, fees and a contract with the City to operate the place in the community interest. Thur far the city has saved about $10,000,000 in capital maintenance costs for the old Overture Center.

The real problem is the long term maintenance of the Center. Paul's figure of $120,000,000 over the next forty years may actually be low using examples of what costs were incurred by other centers facing renovation over the years... To solve that pending obligation will take a very substantial endowment.

D'Angelo is correct in that neither MCAD or 201 State are not responsible for the current situation. Unfortunately, they are responsible for two of the current issues. First there are structural problems in the management of Overture. The original design created a board that was  appointed by elected officials but responsible to no elected body. The new board will be even more insulated. That is why the recommended "Focus Model" receives so little support except from those most intimately connected to the problem.  

No one should take comfort in D'Angelos' observation "Paul's figure of $120,000,000 over the next forty years may actually be low..."  Whatever disagreements D'Angelo and I have had over the years is bridged by our shared belief that Overture must have a substantial endowment, a recommendation of our Ad Hoc Committee.

Linda Baldwin, chair of MCAD, wrote:

The City of Madison wasn't involved in the bank debt negotiations because they refused to be. Time and time again, the Mayor indicated that the city would not be a part of the debt settlement...So members of the volunteer and appointed boards, in order to save the Overture Center from going dark or being foreclosed on, moved forward with negotiations with the financial institutions to resolve the debt issue. Conditions of that settlement were imposed by the parties involved and the city was made aware of those conditions during the negotiations.

Invited to sit at the table, but refusing to participate in the negotiations is unacceptable leadership. The city can sit at the table and simply say "no' to participating in the debt settlement. Now the city finds an agreement in place with it owning the building, an unverified economic analysis, management conditions that do not meet its standards, and an unrealistic deadline. Wow.

Tom Bozzo raises one of the most critical challenges inherent in this discussion, one I hope to address in the future:

The real issue to address is whether the percent or so of city expenditures above what would have been spent on the old Civic Center is better spent elsewhere...

I disagree with Tom's categorizing the costs of Overture as being a small percentage of the city budget. In normal economic times even a million dollars is enormous, even though it is less than 1% of the city budget. Viewed by advocates who need as 'little' as $50,000 to continue a program, it is significant. Another was of looking at the issue is to examine the discretionary portion of the budget. As much as 95% of the budget are fixed costs related to basic services, the salaries of those who provide the services, and the equipment they need to carry out the services, ranging from fire fighting and election administration to police and date processing costs.

In a $200,000,000 budget, $1,000,000 is a significant amount. At this point $700,000 represents a significant expenditure in a city with record levels of poverty.

Pete Gruett knows relationships but not proportions. We are not a "tiny Midwestern hamlet saddled with a fancy, New York arts center", but we are a city of 220,000 with an Overture Center for the Performing Arts, a center far more expensive and delicate than anything else in our county, and it is more appropriate for a city of at least 1-2 million.

Given that it took from the 1960's until now for Madison to grow from 160,000 to 220,000, we are not going to hit 400,000 anytime soon, especially since annexation possibilities are virtually eliminated and the city adopted zoning and building codes that inhibit dense development.

 

 

 

Comments

[One Thin Dime]

B. D'Angelo wrote that MCAD and 201 State were not responsible for the current debt situation, but Overture Development was. If that was in response to my comment on Soglin's 10/19 post, it misses the point. My point was that the people who ran Overture into the ground should not be choosing the new management entity. Overture Development is one architect of the proposed bank settlement, and thus part of the group selecting the new management, no?

Anyway, maybe somebody here can address the question of why forcing the banks to foreclose would be so evil. Here's how I see that playing out. The banks foreclose on the mortgage. The banks don't want to own Overture, so they will have to put it up for auction. No private entity wants to buy Overture because it is a money-losing business model.

The only potential private bidders are scavengers who would strip out the sellable items like sound and lights, and then stop paying the property taxes. How much would they bid? Seems to me it would be less, maybe far less, than the private donors are now proposing to give towards paying off the bank debt. So, at the auction, those private donors need only to outbid the scavengers to obtain ownership of Overture free and clear, with the bank debt fully erasaed. Those donors can then sell Overture to the city for the proposed $1, and the additional money they are now proposing to give to the banks can instead become an endowment towards maintenance. The only losers in this scenario are the banks, who would get back much less than in the current proposal. (But, they were the fools who loaned money to play the markets without sufficient safeguards to keep the loan value above the collateral value.)

[One Thin Dime]

To clarify my previous comment, I'm not saying that it is necessary to ACTUALLY force the banks to foreclose, only that I don't see why that is not a reasonable backstop as a negotiating position. The current settlement appears to give the banks far more than they have any hope of recovering by exercising their available legal remedies, and I don't understand why. The banks may be getting at least $10M more than in a foreclosure. What are the private donors buying with that additional payment? Why is avoiding foreclosure worth that much?

[Pete Gruett]

My point was that I would be more convinced by your argument if someone presented a straightforward comparison of costs going forward for Overture vs. the old Civic Center along with a comparison of the size of the city and its budget when the Civic Center was built vs. the present. I'm not interested in comparing Madison to other cities, we've always had a stronger commitment to the arts. I'm interested in comparing Madison to Madison and I'm concerned that, as the city has grown, its attitude has shrunk.

If we are going to compare ourselves to other cities, though, perhaps you could name a city with a population of 1-2 million (at least twice the size of Milwaukee) that has combined opera, symphony, broadway and contemporary visual arts facilities smaller than Overture.

[Rob Chappell]

"Unfortunately, they (MCAD and 201 State) are responsible for two of the current issues. First there are structural problems in the management of Overture. The original design created a board that was appointed by elected officials but responsible to no elected body."

You're right that the structure is the problem. However, that's not the fault, necessarily, of the current members of those boards. And it's certainly not the fault of current management staff.

Also, small nitpick - it's Overture Center for the Arts, not Overture Center for the Performing Arts. Lots of visual arts happening there, too, all free and open to the community.

[Davin Pickell]

Rob Chappell, Overture Spokesperson: "You're right that the structure is the problem. However, that's not the fault, necessarily, of the current members of those boards. And it's certainly not the fault of current management staff."

I won't nitpick your statement about the members of the boards, Rob, but from a scientific perspective, I'd suggest a complete cleaning of the house of cards, er boards, would help solidify in the minds of the public that the new boards are not part of the problem. I don't know if there is a scorecard of which members have been part of the mess from the git-go, and which ones are newbies. In this case, the fact that a good number of the board members are dual-citizens only helps to clarify and confuse the concerns simultaneously.

Altering the Overture management structure, and the inherent shell games, that both help confuse the public and help enhance the lack of transparency, have been options available to both boards from they day they were created, I think. Most boards have the authority to change themselves, and put themselves out of business. It only takes a sufficient number of votes, the cumulative courage to acknowledge the existence of a better alternative, and the cumulative will to head in a better direction.

Given the size of the egos on many boards, this doesn't happen too often, but the reality is that the greater good is often best served when egos are checked at the door, regardless of the context.

Given that the President of Overture is involved in both boards, I also think it is disingenuous to suggest that current management isn't somewhat culpable. Michael Kaiser hasn't stayed at any Arts institution, prior to the Kennedy Center, for more than three and a half years before that institution was turned-around, and able to stand on its own. The current Overture President is past that point, and no discernible progress has been made towards a more responsible future, if you cast aside the current hot-air proposal which is unfeasible, financially, and has no plan of how to achieve the impossibilities they 'forecast.'

[Ben Masel]

Would the Ho Chunk Nation bid if they were offered a full casino license for the lobby and a lease back for the original Civic Center stage?