I often wonder what becomes of those grateful families on Extreme Makeover Home Edition in the years following the gift of a glorious new home. After the unveiling, after the tears of joy dry away, after they clean the yard of stray ”good luck” banners and coffee cups, they must eventually discover what it means to own a large, opulent, state-of-the-art home. What happens when they get their first heating bill? Their first electrical bill? Their first property tax bill? Their first insurance bill?
It’s not that the new home isn’t a wonderful gift to a worthy family. It’s just that the gift comes with liabilities nobody explains to them when they hand over the keys.
Such is the moment of truth in Madison, Wisconsin, where the City Council tonight debates and votes on who gets the keys to the Overture Center for the Arts…the multi-venue performing and visual arts center that’s half open, with the other half opening over the coming months.
The city has been asked to provide partial backup to a bond refinancing that would preserve a $100-million trust over the next 30 years (and keep the city out of the facility business). The mayor has determined the risk to the city would be too great, and prefers that Overture liquidate the trust to pay the bonds, and that the city buy the building for $1 (the city always had right of first refusal when the bonds were paid…but it wasn’t likely to happen for three decades). The city council tonight takes its first and last look at the proposal before they choose to pull the trigger on the refinancing or let it go.
So the question comes: would you buy your own cultural facility for $1…knowing what you know about the obligations, stewardship demands, and unexpected expenses that come along with it? The mayor believes he is mitigating the risks to the city by avoiding the refinancing and investment gamble. But he may well be forgoing reasonable risk in favor of actual future operating and capital repair expenses of up to $60 million over the next 20 years ($40 million in estimated repair and replacement costs, and likely another $1 million in annual operating support beyond what the city already provides).
If the city does buy the building — with no endowment, no trust, and poor odds of raising significant contributed income (who wants to write another check to the city?) — my thoughts will return to that Extreme Home Makeover family, standing in the front yard of their massive new home after all the busses, cameras, and crowds have gone. They’re grateful, to be sure, but completely unprepared — and woefully underfunded — for the radical changes the gift will bring.
I think it would be interesting to know why the city wants the bonds paid off right now as opposed to the set term. Based on what I’ve read in the press about the situation it seems the concerns over financial risk are over inflated, for example there’s never been a single mention in the press about any of the dynamic issues such as the distinct possibility that the center could pick up additional donors over time.
Whenever politicians tend to argue about problems down the road it really has more to do with issues in the here and now. The foundation doesn’t appear to have broken their agreement at any point yet so the concern from the politicians has to have some other motivation beyond concern for 30 years from now. I wonder if any of the cultural reporters in Madison have considered that?