Have we reached the point of no return in the construction of the Performing Arts and Events Center? Will it get built no matter what the changing circumstance might be?
And if that’s true, what do our city leaders do if the cost actually comes in higher than predicted? And remember the term “change order,” you might hear it again. That is a financial adjustment after construction starts that increases the price.
Or what if some of the money doesn’t materialize as expected?
The city did get some good news when two funding sources, including the state budget, came through with $4 million. But there is still divided opinion on the eventual outcome.
Events center supporters still show absolute blind confidence in the plan coming together. Others have reservations, but also have their fingers crossed. Still others don’t believe the plan will come together and that more taxpayer funds will be needed. The reason for concern is all the moving parts that must come together in the manner expected.
But there are other residents who are simply cynical about the whole process and they may have good reason.
The most recent discussion by the City Council on Mayor Jim Ferrell’s recommendation that the city use a Community Development Block Grant loan for funding rekindled a “Back to the Future” moment. Everyone was reminded of then-Councilman (and candidate for mayor) Ferrell’s 2013 accusation that funding in this manner was like opening a credit card account and he, Councilwomen Kelly Maloney and Susan Honda voted “no” on Mayor Skip Priest’s proposal.
It passed after discussion by the council, majority suggested the loan could be used for other needs, not just the events center. This time, it was Ferrell’s request that the council activate and use the credit card he previously opposed. Honda again voted no on the loan, while Maloney voted yes and it passed.
However, the debate seemed to give substance to those who felt the council had been disingenuous in 2013 on how the money would be used.
It was also noted that even if the city’s share of block grant funds is lowered, the $192,000 20-year price tag to pay off the loan from block grant funds would remain the same.
Loans are troubling, but other parts of the financing are also still fluid. Naming rights, and tax credits, along with annual local fundraising needs to be resolved. And there is a belief that the city staff is already considering additional financial options. That is likely true, but also shouldn’t be a surprise.
Others have raised another interesting question. Is our grasp on the New Market Tax Credits program so flimsy that the city needed to change the name of the building to the Performing Arts and Events Center to increase our competitiveness?
The May 2014 report of the mayor’s Blue Ribbon Panel mentioned the risk in allocation of the funds from the tax credit program, although some council members still thought the funds would be approved last fall.
They weren’t. In January at the mayor-council retreat, city staff reported that they would be traveling to San Diego and Washington D.C. to meet with representatives and consultants involved in the tax credit program.
The mayor quoted the clearing house representative as saying he could “almost guarantee it,” meaning the receipt of the tax credit funding.
However, that consultant didn’t come through, and now the city is working with someone else. City staff also stated they expected an announcement in May or by June 1. It is now July and the city is saying it may be another 30-45 days.
The report also contemplated a three-year loan from the city, and the potential of higher ticket prices that the finance director mentioned last year. The panel put a lot of emphasis on hiring an executive director with the right experience. The new director is now in town and seems capable. But she came from a different model than what the public expects here. Federal Way residents expect the Performing Arts and Conference Center — oops there I go again — I mean the Performing Arts and Events Center, to show a profit in a very short period of time.
There is also concern about the actual construction costs. The Blue Ribbon Panel stated, “The committee did not analyze the construction and development cost estimates, but Mortenson Construction is reputable and their budget is judged to be reasonable by Lorax partners. The committee finds that the financial projections made by the city and the various fundraising consultants are reasonable.”
Neither of those statements should be characterized as an in depth review or stamp of approval by the panel. But that is how they have been portrayed in the community.
Although the report provided much needed political cover for the elected city officials to continue on the path of building the conference center, oops the events center. I’ll get it right by the end of the column.
The report goes on to say that it was city staff that “quantified the estimated one-time construction and ongoing economic and fiscal impacts” while substituting for a consulting firm unable to perform the task. That may not be the independence the public was looking for.
I can already hear Performing Arts and Events Center, see got it right, supporters warming up their computers and letters to the editor to go on the attack toward anyone who dares to raise questions.
But residents have questions about the biggest project in city history, about their political leaders’ questionable lack of candor on the tax credit program, and it is hard to ignore all the loose ends and moving parts when the city wants to break ground this fall!
But despite the number of questions that remain, the Performing Arts and Conference Center, Performing Arts and Events Center, or the Piquette-Priest-Ferrell Building will get built, whether the finances come together or not.
We are way past the fail safe point and there is too much ego and money, and too many political futures involved for it not to go ahead.
At this point, we all have to hope that this city-organized house of financial cards will actually come together.
But what happens if it doesn’t, or if the financing plan is significantly different than what has been discussed so far? How will that get explained to the public?
Federal Way resident Bob Roegner is a former mayor of Auburn: firstname.lastname@example.org.