City considers $8 million investment in ETSU performing arts center

Gary B. Gray • Updated Aug 7, 2015 at 10:04 PM

Research is underway that could end in a “business agreement” between Johnson City and East Tennessee State University in which the city invests $8 million to increase the seating capacity of the new performing arts center’s main theater from 750 to 1,200.

City commissioners met Thursday with Jeremy Ross, ETSU’s chief of staff, and Douglas McCarty, president of Knoxville’s MHM Architects, to discuss the pros and cons of increasing the 30,000-square-foot stage, seating area, bathrooms, mechanical room and other rooms and structures near the main stage to 41,000 to 42,000 square feet. Bathrooms, stairways and mechanical and storage all would have to be increased in size to meet code, McCarty said.

“This city has discussed, dreamed and held referendums for the last 25 years about building a performing arts center,” said City Manager Pete Peterson. “The stopping point has alway been money. To end up with 1,200 seats in a partnership between the city and ETSU, that really means a lot as far as quality of life, education and cultural opportunities. Never again will Johnson City have this opportunity.”

The state has approved a $40,650,000 budget for the complex, which is under preliminary design and will be located next to the Millennium Centre. If a deal can be worked out, the total price tag would jump to between $48 million and $49 million.

The entire center would expand to 54,000 square feet when its smaller theater, 250-seat recital hall, art gallery, recording studios and facilities, dance department, teaching and rehearsal space and other areas are accounted for.

Thursday’s workshop was just that — no deals were made. However, there now exists a general agreement that the architect will use information from consultants and others to refigure needs and requirements. Meanwhile, commissioners and city staff will specifically explore the means with which to fund the investment.

“We’re not asking the city for a gift; we’re asking for a partnership,” Ross told commissioners.

Mayor Ralph Van Brocklin said he and Peterson met with McCarty about the proposed layout before the workshop, which preceded the regular City Commission meeting.

“The commission needs to be on board, and if a monetary commitment is made we need to know the number of seats that will be there would have more than university appeal,” Van Brocklin said. “The starting point needs to be: Is the City Commission willing to make this commitment.”

As things stand, the two bodies will work toward what they hope will be a memorandum of understanding — not quite an agreement or contract — but an official, authorized and agreed upon move toward a common goal.

They are expected to regroup in 30 days.

Commissioners say there are several funding methods. The most obvious is the additional $500,000 in revenue that will start coming in from an increase in hotel and motel tax rates from 5 percent to 7 percent. The general idea is the city would borrow the money and have a recurring revenue stream to pay off the debt.

The majority of that money already is designated in 2016 and 2017 to Freedom Hall and Winged Deer Park. But after that, most commissioners are confident that an upgraded arts center will mean more people come to Johnson City. If more people choose the city for arts, entertainment and conventions, more people will stay in Johnson City hotels, which means an increase in tax revenue.

“When you look at the economic impact alone, there’s much more there,” Ross said. “I’ve spoken with entertainment agencies and asked what 1,200 seats will get you. They said that with 1,200 seats, you can book large, regional events. We are not talking Broadway shows, but consultants have said there is a psychological factor, and the size of the venue is a factor. We’re going to book shows we think will be most successful.”

Commissioner Jeff Banyas agreed this was a “once-in-a-lifetime opportunity for the city, but he also reminded commissioners they needed to be absolutely sure they knew what they would be getting.

“We need to have a certain level of explanation — that there will be ‘X’ amount of people attend these shows,” he said.

Commissioner Jenny Brock said she fully supports the idea.

“I know we have a philosophical decision to make,” she said. “I’m absolutely for committing a portion of the hotel-motel tax. This will help bring in new people. I look at this as a window we’re never going to have again.”

Commissioners also approved on Thursday the first annual $3 million expense for street resurfacing and a 3-year plan which will run through fiscal years 2016-2018.

The rate of road repair is supposed to increase fivefold in the 2016 fiscal year, and that’s due to the 10 cents of the city’s recent 25-cent property tax rate increase going directly toward road repair. That means 40 percent of the total property tax increase will go toward this effort, bumping the Public Works Department’s projected annual output from $1.3 million to $3 million.

Elizabethton’s Summers-Taylor, which does the majority of larger jobs for the city,was the only bidder in what will be a renewable yearly contract between the city and the company. The $3 million is designated annually, but what if the costs run over $3 million?

Public Works Director, Phil Pindzola, said the prioritization was done based on the condition of the streets. A typical “neighborhood,” which also can be delineated in street resurfacing terms as a subdivision, and sometimes sections of subdivisions, costs about $500,000 to repave.

Businessman Sanjay Bakshi was procedurally cleared by the city Thursday to develop a small, vacant, city-owned commercial lot to the owner of the former People’s Community Bank building at 202 E. Main St.

Commissioners voted unanimously on third reading to approve a sales agreement giving a 4,100-square-foot lot to Bakshi for free. But the agreement calls for Bakshi to take ownership of and repair the failing wall on the north side of the building — the side nearest the lot — relieving the city of any financial and legal responsibility.

Bakshi plans to lease the property to support a mixed-use development, which includes a restaurant on the first floor and five loft apartments on the second floor. He also plans to construct windows on both floors and convert the city-owned land to a 1,000-square-foot outdoor dining patio.

Commissioners also approved a first reading of an ordinance to rezone about 20 acres of land located at the end of Garland Farm Boulevard. Michael Garland, managing partner for the Garland Family General Partnership, has requested the annexation.

Approval of three readings would redesignate the land from an unincorporated agricultural zoned tract of Washington County into the city with a R-2A (low density residential) zoning. This would allow Garland to develop 27 new single-family lots, which would be consistent with the existing development.

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