Jan. 10 2019 09:48 AM

Public-private partnership drives construction plans


    Lansing Mayor Andy Schor is anxious to break ground on a downtown performing arts center.

    Larger cities like Grand Rapids and Detroit for decades have stolen away concert crowds that might have otherwise landed in the capital city, if only it had a venue to accommodate them. Officials have long toyed with the concept of building a new stage. But financial restraints have repeatedly pushed the plans to the backburner.

    But not this year. Schor, alongside his newly minted Arts and Culture Commission and the Lansing Symphony Orchestra, are looking to move past trends set by prior city administrations. And he hopes that some “clever” financing mechanisms will ultimately allow shovels to hit the dirt on a new, downtown venue by the spring.

    “It’s important for a city the size of Lansing to have its own performing arts venue,” Schor said. “We have a large population of people here in the city who would love to bring these shows closer to home. This is something that has been worked on for at least 20 years. We’re taking a run at it as well. It’s an important asset for the city.”

    Early plans call for a luxurious auditorium with an upper deck that seats 300 people, with flexible seating for up to 1,200 on the ground floor. The location is far from finalized, but officials agreed: It needs to be downtown. Space could also be created there for the Lansing Public Media Center, small retail shops and an attached hotel.

    But how can Lansing afford to build a performing arts center that’s estimated to tally as high as $40 million to $50 million? The short answer: It can’t. Officials said other items (like fixes for crumbling roads) almost always take priority.

    But exploratory plans for a public-private partnership might allow Lansing to dodge the bill altogether.

    Dominic Cochran, the city’s director of community media, said officials don’t want to build a city-managed facility. They’re instead exploring plans for a public-private partnership that would leverage public access fees against a multi-million-dollar bond for new construction. And he said an unnamed developer could help cover the rest.

    “We also want to collaborate with the symphony or create a standalone nonprofit to manage the whole operation,” Cochran added. “We could bond against that steady flow of income. It can be used as seed money. That helps cover the performing arts and media center portions, but it’ll save costs on the whole thing.”

    One unique source of revenue would likely be the small portion of fees local cable TV subscribers pay for access that includes a few cents each to the city for the Lansing Public Media Center. Those fees — known as public, education and government fees — total to about $350,000 annually and can only be used for infrastructure to enhance public access programming, Cochran said.

    Over the years, those funds have swelled to about $1.6 million, with $200,000 projected to be retained this fiscal year, according to city records. If the Media Center were to move into a freshly built performing arts facility downtown, those PEG fees could eventually be allocated to help cover the costs. And the city could then use the fees to cover a $4 million to $5 million construction bond, Schor said.

    “We’ve had at least three different entities approach us about creating a performing arts center,” Schor said. “We’re open to all of them. They all have different financial challenges and we’re figuring out how we can do this reasonably and affordably for everyone. We’re putting together finance deals and that can be complicated.”

    Cochran also suggested that the city subsidy — depending on how the plans come to fruition — could eventually be eliminated altogether. Schor said some part of the annual fees could also be paid as rent for the media center and be allocated toward infrastructure costs. The fees could also be leveraged in “other ways.”

    “It seems that with any of the ideas on the table, it’s going to need to be a moneymaker for someone,” Cochran added. “There’s this multi-use possibility that might not even have it subsidized at all. A nonprofit could just create an endowment, and we have this pot of money we could use. We’d want to maximize revenues there.”

    Consultants are working with the city on the best governance models and business plans, Cochran said. The end-result could also look similar to a public-private hybrid like the Lansing Entertainment and Public Facilities Authority, but “all options” are still on the table as the plans continued to be hammered out this week, he said.

    Only Jeff Deehan at Urban Systems has been identified as a possible developer to partner on the project. He couldn’t be reached for comment, but Cochran confirmed his involvement and suggested the project could total to “easily over $100 million” when factoring in a parking ramp and other mixed-use amenities in the building.

    Of course, city subsidies from the PEG fees couldn’t be used for the more luxurious portions, he emphasized.

    “We plan on moving as quickly as any of the developers that would want to work with us,” Cochran said. “We don’t want to be the stick in the mud here. We’re in the process with the consultant, but that shouldn’t take more than a couple months. I’d say we’re really looking to move quickly on this one.”

    Lansing Symphony Orchestra Executive Director Courtney Millbrook said a “key component” of the plan involves the governance structure that will eventually oversee the operation. She’s hopeful a partnership with the right nonprofit will bolster orchestra performances beyond the walls of the Wharton Center in East Lansing.

    “Before the Wharton was built, we were performing in high schools in East Lansing,” Millbrook added. “It’d be nice to have a home closer to the downtown area. Wharton is fantastic, but it’d be nice to have more than one option. Also, with the availability, it can sometimes be hard to get dates for performances and rehearsals.”

    Cochran said new space, with an estimated 1,500 seats, would also fill a gap in the entertainment market. Broadway performances like “The Lion King” can fill the Wharton’s Great Hall, but the theater is often too large for others. And the 585 seats in Wharton’s Pasant Hall can sometimes be too cramped for mid-ranged talent.

    “People are still driving across the state on a weekly basis to find these shows,” Cochran added. “If we’re going to be a part of the talent part of that equation in Lansing, that’s not going to happen without a performing arts center. This option offers a middle ground and won’t really compete with any of the existing facilities.”

    Visit lansingcitypulse.com for continued coverage as plans for a performing arts center continue to advance.

    kyle@lansingcitypulse.com