Today’s Indy Star featured a long article on the economics underlying Carmel’s Center for the Performing Arts (Carmel’s Center for Performing Arts plan vs. reality: miles apart). The story of the Center is a cautionary tale for all of us (very much including myself) who have supported large civic projects.
Some of the highlights:
- The initial “sales pitch” and presentation of the Center projected a worst-case government operational subsidy of $309K/year became a $2.5M annual subsidy.
- The initial concept of operations was that the Center would be a for-hire venue, with concert promoters bearing the risk and costs of show production. However, many supporters — including Mayor Jim Brainard — wanted the Center to be a venue for shows that went beyond those that are commercially viable (i.e. many classical concerts) that would help Carmel be more nationally competitive for high-end businesses and affluent workers (boosters compared the proposed Center to Carnegie Hall!)– and pushed the Center in that direction.
- The mayor assured the community that a $40M endowment could be raised privately to support operations and enhancements. Unfortunately, the economic downturn occurred right in the middle of construction, and the endowment never materialized.
- The Center faced a number of contractor disputes, including a recent $575K settlement with Bloomington contractor Crider & Crider.
All in all a must-read about the unanticipated risks and vagaries of large civic projects.