December 27, 2012Less than a month after the celebrated unveiling of the site plan and design for the proposed $60 million Greensboro Performing Arts Center (GPAC), the funding for the facility is still a question.
Private pledges from unknown sources reportedly account for $20 million, and earlier this month the city was considering going $40 million into debt by issuing limited obligation bonds for the project. Limited obligation bonds do not require voter approval, but have a higher interest rate.
However, at its Dec. 4 meeting, the City Council voted to place bonds for GPAC on the ballot for the November election.
Now, according to the city councilmembers on the GPAC Task Force finance committee, it is not certain if the city will be able to piece together funds to service $20 million in debt. And even if successful, that leaves a $20 million hole in the financing.
Greensboro Councilmember Nancy Vaughan, who sits on the Financing Options Committee, said, "I don't want to say we're back at the drawing board." However, she said, some funding sources were being reconsidered or are off the table completely.
In November the committee was considering using the general fund to service $20 million of the debt for the GPAC. It was proposed that debt service for the other $20 million would come from user fees and a portion of the hotel-motel tax revenue and revenue from video sweepstakes.
Vaughan said that funding anything beyond the $20 million is way up in the air at this point. However, she said additional contributions from the city have not been ruled out.
Vaughan did say the city was trying to piece together money to pay for $20 million but one of those potential sources, the tax on video sweepstakes, was taken off the table when the ban on video sweepstakes was upheld by the North Carolina Supreme Court.
The finance committee had considered using money from the Economic Development Fund, but both Vaughan and Councilmember Zack Matheny, who also sits on the committee, vigorously opposed the use of those funds for the center.
The committee was scheduled to present a financial plan to the full City Council at its Tuesday, Dec. 18 meeting, but has put it off until the Jan. 15 meeting while they study their options.
"I believe Zack and I encouraged them not to do that because we didn't have any answers," Vaughan said. "I didn't think the meeting on the 18th would go well."
Vaughan said she thought the GPAC could be a good thing for the city, but said, "Our first commitment is to the City of Greensboro and its financial health."
Raising the Downtown Business Improvement District (BID) tax from 8 cents to 9 cents is another option being talked about, according to Vaughan.
Vaughan said that while the city has said from the beginning that the GPAC can be funded without raising taxes, it isn't very realistic. "You can really never promise that you aren't going to raise taxes," she said.
Vaughan also said she had concerns about the accuracy of the proposed budget for the project. She said that Coliseum Director Matt Brown had said that the GPAC as currently proposed would cost in the mid to upper $60 million range, rather than $60 million, although the task force consultants from AMS Planning & Research disagreed.
Matheny said the city is now reviewing if they have enough money in user fees and the hotel-motel tax to service $20 million in debt.
He said the remaining $20 million of the $60 million budget may be up to the state government, federal government and additional private donors.
Matheny also said that the design would likely have to be revamped to bring it back into the $60 million range.