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Mayor Rahm Emanuel headed to the far Southwest Side last week to announce a deal to help bail out the financially struggling Beverly Arts Center.
As first reported by the Tribune, city will kick in $250,000 in leftover money from the 2012 NATO summit toward the arts center's debt. Fifth Third Bank, which has city business, will wipe off the books up to $2.2 million in loans.
"While it doesn't take a lot to bring my attention to what the Beverly Arts Center has done, and making sure the resources are there to keep the doors open," said the mayor, who was joined by Ald. Matthew O'Shea, 19th, Cook County Commissioner John Daley and others at the event outside the arts center.
"Today, we spent a lot about making sure we have the resources to keep the doors open, but really it's not about the doors, and it's not about keeping the doors open, and it's clear by the attendance here the passion everybody has here," he said. "But it's what goes on in here that's most important, the invention, the creativity."
As first reported by the Tribune, city will kick in $250,000 in leftover money from the 2012 NATO summit toward the arts center's debt. Fifth Third Bank, which has city business, will wipe off the books up to $2.2 million in loans.
"While it doesn't take a lot to bring my attention to what the Beverly Arts Center has done, and making sure the resources are there to keep the doors open," said the mayor, who was joined by Ald. Matthew O'Shea, 19th, Cook County Commissioner John Daley and others at the event outside the arts center.
"Today, we spent a lot about making sure we have the resources to keep the doors open, but really it's not about the doors, and it's not about keeping the doors open, and it's clear by the attendance here the passion everybody has here," he said. "But it's what goes on in here that's most important, the invention, the creativity."
In addition to being a political powerhouse, the 19th Ward is home to many city workers, some of whom have had their livelihoods affected by the mayor's budget austerity moves. Helping the local arts center could be seen as something of a step at detente.
Under the deal, the arts center will need to pay off a remaining $500,000 in loans in the next year. O'Shea said that fundraising effort is "a challenge" from Fifth Third to the Beverly community to take ownership of the arts center.
"For their part, Fifth Third will match, four-to-one, every dollar we raise," O'Shea said. "Together we will erase two-and-a-half million dollars in debt. We, as individuals and families, business and civic leaders, philanthropists and artists, we will raise $500,000 and Fifth Third gives $2 million."
The $250,000 in NATO money will be used to retire some of the arts center's nearly $4.5 million in mortgage debt. Fifth Third, which by many accounts was on the brink of foreclosing on the property, will nearly match that by forgiving $213,000 in debt.
The $250,000 in NATO money will be used to retire some of the arts center's nearly $4.5 million in mortgage debt. Fifth Third, which by many accounts was on the brink of foreclosing on the property, will nearly match that by forgiving $213,000 in debt.
Fifth Third held a contract to put automated teller machines at CTA stops, but a company spokesman said the bank and CTA have parted ways. Fifth Third also has a $20 million banking services contract with the city that dates to former Mayor Richard M. Daley's administration, according to city records.
The city's business relationship with Fifth Third had nothing to do with the deal hammered out to save the arts center, city spokesman Bill McCaffrey said. Asked why the bank was forgiving the arts center's debt, a Fifth Third spokesman said the motive was helping the community.
"What we are about is investing in the communities we work in, and the Beverly Arts Center is a perfect example of that," bank spokesman Andrew Hayes said. "At the end of the day, we want the Beverly Arts Center to be as profitable and successful as possible."
O'Shea said the financial problems at the center have been growing since it opened in a new building in 2002 that ended up costing $12 million. The center's revenue couldn't keep up with the resulting debt, he said.
Things came to a head about 15 months ago, and a leadership change resulted, said the alderman, who sits on the board. O'Shea credits the Emanuel administration for getting involved in the debt discussions.
"It's a vital institution in our community," O'Shea said of the center. "We wouldn't be here today if not for the mayor."
Government help is hardly unusual for the arts center. Over the last 13 years, it received nearly $2.8 million from the state.
O'Shea had to come in a save an institution which was never set up properly in the first place.
So, if I'm a Fifth Third stockholder I'm thinking, "huh?" Or, if I live in another part of the city, maybe I want my part of that $250k. Maybe hire more police with that money, or shore up police and fire pensions? What's the rest of this story, nobody gives away $2 million for nothing. Personally, I'd rather they spent the money to repair my sidewalks. The Art Center is an eyesore and been poorly run since it re-opened on Western. Sell it.
ReplyDeleteNice job Matt and the 19th Ward team. When things go right you should get the kudos. You guys deserve it. Thanks
ReplyDeleteBring back Reds!
DeleteFifth third bank had no options. What could they do foreclose and then have another Borders bookstore sit vacant forever
ReplyDelete"A plan to keep the Beverly Arts Center (BAC) financially viable was announced during a news conference at the facility on Sept. 26". -Beverly Review, 10-01-2013
ReplyDeleteI would say the bailout of the BAC is due to its severe lack of financial viability. In fact, I would hazard to guess that without tax payer funding and forgiveness of its debt by 5th/3rd Bank, that any other similar business proposal would be denied as nonviable.
What is a financially viable business?
A business that returns a net profit; covers all the costs of producing and selling its products and services and generates a profit.
Why not some forgiveness/extra cash/fund-raiser for KODA? Or better still, tear it down and build another park. If you build it, they will...............
In the name of cultural significance in a nonprofit progressive society, I defer to the powers that be who have decided in the necessity of saving the Beverly Art Center due to its prominence as a neighborhood beacon of hope, light, and various other synonymous rhetoric. Which begs the question;
Have the BAC sponsors presented a viable plan moving forward, or will they rely on continued bailouts at the taxpayers expense?
BTW, forgiveness of debt = write off against profits, which is a loss of tax revenue; $250k of leftover NATO Summit money? Where's the quid pro quo? Somebody pays, and as usual its the tax payer. Higher cost of services, property tax, sales tax, the list goes on.
So tell me again, why the Beverly Art Center is so viable?
Good points. I hope the BAC board is reading this.
DeleteThe BAC was set up wrong. Saddled with debt, it was nothing more than a high-priced construction project without an adequate revenue stream. A feeding frenzy.
ReplyDeleteBAC hired the contractors that they were told to hire.
When it came to running the place, all revenue shortfalls were blamed on the manager. A guy that did a great job considering what he had to work with. They made him wear the jacket for their own mistakes. How unjust is that? Fortunately, he has moved on despite the attacks on his reputation. Quality people always land on their feet.