The Overture Center for the Arts, 211 State St., faces a budget crisis forcing those involved to confront realities of a money shortage.
Mayor Dave Cieslewicz is expected to announce his position on the future of the Overture Center at a Board of Estimates meeting today, according to Ald. Mike Verveer, District 4.
The Overture Center began with a gift of more than $200 million from Jerry Frautschi. Of that money, $115 million directly paid for approximately half of construction costs.
The remaining money??-approximately $100 million-was put into a trust account and invested in the stock market. Leaders expected the money, after growth, to cover remaining construction and maintenance costs.
That was in the late 1990s, when the stock market was booming. Shortly thereafter, the stock market slumped and the money, according to Michael Goldberg, current president of the Overture Center, \didn't grow.""
Now, the Overture Center faces two options for its financial future, and the city of Madison will decide which of the options will be put in place.
The first option is a refinancing plan that would spread the payment of the remaining construction costs over the next six years.
The first four years would be guaranteed by the money remaining in the trust-approximately $106 million, but payment for the final two years is uncertain. Proponents of the refinancing plan claim the trust would grow and pay for the full six years plus later maintenance.
However, if the trust money does not grow, the city would be financially responsible, which is its primary concern in refinancing, said George Twigg, Cieslewicz's spokesperson.
But, Goldberg said, ""The city would be the party of last resort.""
The second of the two options would require using the $106 million in the trust to pay the remaining construction costs immediately.
This would leave the Overture Center paid for but with no money to cover inevitable maintenance costs. The city would then purchase the building for $1 and assume full responsibility for upkeep.
Madison currently gives the Overture Center approximately $1.6 million in annual subsidies.
Taking on maintenance costs would add to the amount of taxpayer money going into the Overture Center but would remove doubt about the building's financial future.
The Madison Cultural Arts District, the board responsible for running the Overture Center, has given the city an Oct. 31 deadline to come to a decision.
Although Cieslewicz values the Overture Center, he said he is still unsure about which option he will choose, Twigg said.
""We don't have a bottomless capital budget.""
