By Jake Rossen
By Jesse Marx
By Michelle LeBow
By Alleen Brown
By Maggie LaMaack
By CP Staff
By Jesse Marx
Some MCDA analysts have warned that the city may be getting in over its head. A recent report by the agency's staff suggests reevaluating the theater district, noting that a Mann subsidy could add millions to the city's existing liabilities. "Our theaters are currently not exactly creating revenue to cover their expenses--or making any sort of profit," Moir notes. "Obviously the private market can't support these things. That's why the city has to step in."
Though Moir points out that he is not an elected official and therefore not in a position to comment on policy issues, he suggests that the key concern for city officials might be when the city's investment will approach a point of diminishing returns. "It makes perfect sense to have a theater district," he offers. "The question is: How much do you want to spend on it?"
Whether the city's faith in Artspace proves well-placed may depend largely on the developer's pending request for bonding money from the Legislature (which, if approved, would allow Artspace to finance the renovation via state-sponsored tax-exempt bonds). And given Gov. Jesse Ventura's professed aversion to state funding for projects of local interest, this could be a difficult year for metro arts organizations at the capitol. According to Sheila Smith, executive director of the lobbying organization Minnesota Citizens for the Arts, the Shubert and like projects face problems because of the governor's proposed $462 million cap on the bonding bill. "The climate at the session will make it extremely difficult for these projects to get through the Legislature," she explains.
The Shubert renovation is a particularly hard sell because of a bill, passed last session, under which projects seeking state bonding must demonstrate that they "fulfill an important state mission" and must not "create inequities among local jurisdictions."
Judging from a Minnesota Department of Finance analysis of Artspace's bonding request, the Shubert could create a dilemma for the state: If bonding for the project is approved, the document notes, "other communities would inevitably seek similar state funding. Theater projects in Hopkins and St. Cloud have recently received modest state capital assistance, which has caught the attention of project sponsors in Minneapolis. Other cities will likely follow if this project receives state financial assistance."
Andrea Hart-Kajer, the city's chief lobbyist, explains that as more and more cities apply for state bonding, they are competing for pieces of a shrinking pie. Though she will not speculate on Artspace's chances at the capitol, Hart-Kajer says the city's first bonding priorities are the "empowerment zones," an estimated $9 million redevelopment project for the Near North and Lake Street areas; the city's wish list also includes a $25 million boost for a riverfront Guthrie Theater and a $3 million down payment on a new downtown public library. The Shubert is not technically a city project--Artspace has proposed Minneapolis Public Schools as the requisite "public partner" for state bonding. Still, says Hart-Kajer, lawmakers may look at the total of Minneapolis-related bonding requests as a rather hefty lump sum.
If the schools were to act as fiscal agent for the Shubert Project, they would own the theater. According to city council member McDonald, last week Artspace also approached the city council about filling that role. In McDonald's opinion, the request is evidence of "pretty serious cash issues" on the developer's part; Artspace's Holmes Nelson asserts that an arrangement with the city represents only "plan B" should a deal with the schools fail to materialize.
Whether sponsored by the city or the schools, notes consultant Morison, state bonds are critical to Artspace's capital campaign because public support "leverages" private and foundation contributions. "I'm not saying they necessarily can or can't raise it," he says. "I think you need to have a good mix of corporate, individual and government [sources]. And there are an awful lot of theaters lying in the weeds waiting for money right now."
Artspace's Nordyke also concedes that the project may be impossible without some measure of state support. "Aside from the monetary side, major patrons expect to see some sort of public/private partnership," he says. "Frankly, the city's leap of faith was very important to getting this off the ground."
Convincing the state to take the same plunge may prove more difficult. Wy Spano, a veteran lobbyist and coeditor of the newsletter Politics in Minnesota, expects that unless the bonding bill ends up in the $600 million-$650 million range, the Shubert will have a slim chance at best. "If I were the lobbyist for them and I got it," he chuckles, "I'd give myself a week off."
According to Spano, Artspace's best bet may be the patronage of Sen. Linda Higgins, the influential first-term legislator who is sponsoring the group's bonding request. Higgins herself is guarded about the bill's chance of passage: "It's in the mix," she says. "We'll sort it out as time goes on, but it's way too early to say right now. I hope people will like the project; it's a great project, and I think we can show statewide significance. But right now it's in the mix with everything else."
If Artspace doesn't make good at the capitol, it will face the daunting prospect of trying to squeeze the entire $22.5 million from private and foundation sources. "The problem with asking 'Can they?' is that they never have before," notes Neal Cuthbert, program officer for the arts at the Minneapolis-based McKnight Foundation. "They're a really smart and creative bunch, and they're not interested in flights of fancy, so clearly they've come to the judgment that this is realistic."