The Crested Butte News Serving the Gunnison Valley since 1999
Cash flow gap hitting
By Mark Reaman
While Crested Butte Center for the Arts representatives admit that ideally the new facility would have been up and running a month ago, they say the project is under-budget and, given recent progress with inspections, there’s a good chance you could be watching a show in the new theater by the end of the month.
A cash flow crunch is admittedly hitting the construction project. Center for the Arts development director Ed Schmidt said that was to be expected, since major donations are tiered to come in over three to five years.
“The biggest delay has been the final inspections,” Schmidt explained. “In one case the inspector determined that the platforms for the new seats have to be treated as part of the overall building system since the motors are hardwired into the building. The platforms came in today [Monday] so they’ll be installed this week and then the last part of these inspections can take place. The town and fire inspections are scheduled for next week and once we have those, we expect to be issued a temporary C.O. [Certificate of Occupancy]. That’s when we’ll start moving things like offices from the old building into the new. We are very close.”
The upcoming town inspection is expected to result in a manageable “punch list” of little things to complete to finish the project.
“We can’t know which one but we are hoping to have an event in the new theatre at the end of August,” added Center for the Arts board president Joel Benisch.
The cash flow gap is not small but its expected appearance was included in updates given to the Crested Butte Town Council over the last couple of years. Schmidt said as the final construction wraps up, the final big bills come due, but pledges don’t match the cash on hand to pay those bills. As of this week, the Center doesn’t have the money to cover a $980,000 bill for work done in July. A similar sized bill is expected for August work and then the numbers should decrease significantly, according to Schmidt, as smaller punch-list items are attended to.
“That’s why we are still continuing with the fundraising campaign,” said Benisch. “The cash right now is coming in dribs and drabs and there isn’t enough on hand to cover the gap we all expected. The good news is that no one has not paid their pledge and we have an understanding and solid handle on the situation. Crockett [Farnell of Black Dragon Development] is in the loop. This was not unexpected.”
Schmidt said the development team has been ramping up efforts to increase immediate fundraising to help bridge the financial gap. He also said that the Center has been working with a local financial institution to capitalize the future pledges to help provide money for immediate bills.
“Before the end of this part of the project we will have raised more than is needed to pay for Phase 1 of the project,” said Schmidt. “That additional money will be there to set up the second phase of the Center renovation. Frankly we’ll always be in a fundraising campaign.”
Schmidt emphasized that the Phase 1 part of the project, the new expansion element, is coming in at about $1.5 million under budget. Schmidt said the original budget presented to the town in 2016 was about $20 million. That included not just the hard construction costs, but everything that went with it, including things such as furniture and fixtures, and soft costs like architectural and legal expenses, as well as fundraising and marketing expenses.
“At the time, the original contract with Crockett was about $12 million with another $4.5 million to fill out the building with furniture, lights, fixtures, etc. A decision was made to roll that $4 million into Crockett’s contract since he could handle the procurement elements,” said Schmidt. “So as of now, the original budget was about $20,585,000 and we are projecting we will come in at about $19,038,000. The physical building is about $1 million of that.”
“We either have cash or pledges that equal the amount to finish the building,” emphasized Benisch.
“The big pledges are spread out over three to five years and that’s why we have the gap that is there now,” said Schmidt. “The capital campaign is still open to try to bridge that gap.”
Touring the new building this week, it is obvious there are a lot of finishing touches yet to complete. Ceilings were being finished and floors still being laid. Painting in some areas has to be completed and there are doors still to be hung. But the meat is on the bones and it looks like an arts center with high-end soundproofing, theatre lighting and glass installed everywhere.
“We need to get past the final hurdles and that’s where we are right now,” said Schmidt. “The building with the new seats and everything will be completely finished by December but we’ll be using the new facility very soon.
“Like any construction project, whether a house or a big facility like this, the final work goes faster than expected,” concluded Schmidt. “We have given up making predictions on exactly when it will be done but, like Joel said, we plan on having an event in the new theater by the end of the month.”
