The Madison Cultural Arts District has asked the city, county and state government entities to be guarantors on the refinancing of $25 million of existing Overture Center bonds.
Philanthropist Jerry Frautschi contributed $205 million toward the construction of the Overture Center for the Arts, 201 State St., which began in 2001. $100 million of this was left as an endowment, which has been gaining interest at $1.4 million a year. The Overture Development Corporation will continue to collect the revenue from the endowment until 2036 when the bond term ends, totaling $40 million.
However, a post-Sept. 11 economy has resulted in a $750,000 debt that would delve into this endowment fund to finance Phase II of construction if the government does not provide assistance, said Overture Foundation President George Austin.
For this reason, the Madison Cultural Arts District proposed to the City of Madison's Board of Estimates Monday night to be guarantors of the refinancing. Scheduled to kickoff April 1, Phase II includes the construction of the Madison Museum of Contemporary Art and the remodeling of Oscar Mayer Theatre. Construction is scheduled for completion in 2006.
\Most members of the Board of Estimates are supportive of the concept of assisting the Overture Center,"" said Ald. Mike Verveer, District 4.
However, the Board of Estimates did not reach a decision Monday night. The issue is controversial because the city will have to bear the financial burden if the Overture defaults on the bond. Ald. Kenneth Golden, District 10, voiced concern about how the cost would be distributed between the city, council and state governments if this should occur.
""I'm very pessimistic that Dane County or the State of Wisconsin will be helpful in that regard,"" said Ald. Mike Verveer, District 4.
Performing arts centers, however, are typically designed to run on a deficit. Most of their finances are covered by government subsidies and private parties, such as Frautschi.
""If there is an increase in [city] tax dollars, though, there should be an increase in accountability and oversight,"" Mayor Dave Cieslewicz said.
