The Crested Butte News Serving the Gunnison Valley since 1999
This time over the length of the lease
by Mark Reaman
Another long Town Council discussion on Monday, January 6 about a proposed lease between the town of Crested Butte and the Crested Butte Center for the Arts ended with the same result as the last three council meetings: the discussion was continued to the next meeting. This time the hurdle was a request by the Center to extend the term of the lease in order to placate donors. Town and Center representatives will discuss the topic in the next two weeks and the lease will be considered again at the January 21 council meeting.
The previous hurdle about the lease focused on inside lighting of the Center and it appeared that issue had been resolved between the lawyers with some adjustment in language. But on December 31 town manager Dara MacDonald said she received a request from the Center asking that instead of a 30-year lease with three 10-year extensions, the town consider a 50-year lease with another 50-year extension.
Center board of directors president Joel Benisch told the council that the Center was in a difficult position since it didn’t own assets that could be used to secure a loan or make donors comfortable in terms of long-term planning and direction of the Center. He and executive director Jenny Birnie said several donors had told them they decided not to give money to the facility since the town retained ownership of the building. The council made it clear several times at the January 6 meeting that the town had zero desire to take over the building, or to not have the Center board run the facility in perpetuity.
Benisch said the hope was that a longer 50-year lease with a similar extension would placate some of the pushback from donors and potential lenders. He cited a current half-million-dollar matching grant offer that could be obtained with a longer lease. He said the donor wouldn’t contribute with the current 30-year lease set-up. “Several donors feel like they would be giving money to the town since the town owns the building and they are not comfortable with that,” he explained.
Benisch also said the Center’s expected annual operating costs were expanding and were now expected to be in the $2.6 million to $2.7 million range. And he said there are still items to purchase in the new Phase 1 expansion while the Phase 2 remodel of the old Center building is hanging out there in the future. He wanted as much flexibility as possible to garner future funds.
“We have a pretty fatigued donor base right now,” Benisch admitted. “We raised $19 million in three years and can’t do that over and over again. It would be great to own an asset to borrow against and while we think it is legally possible, that is not the request tonight. We just want a longer term on the lease. We are a growing business, a big operation with no balance sheet with assets. Our hands are tied quite a bit.”
He said about $3 million in pledges are anticipated to come in over the next three or four years. Benisch said there has been little default on pledges thus far and as a businessman he was “trying to position the Center to be a bigger, more well-run business than it has ever been in the past.”
Council member Laura Mitchell cited an occasional lack of trust on both sides but said she was “willing to go out on a limb because the survival of the Center is important.” She said she would entertain the idea of a longer 50-year lease with a 49-year extension.
Council member Will Dujardin agreed there were trust issues and asked, “When is the asking going to stop? Are we listening to our constituents or the donors and their whims? I’m fine with the proposed 30-year lease.”
Benisch admitted that aside from the donor offering the half-million-dollar matching grant, he didn’t know for sure if other donors or financial lenders would be satisfied with a longer-term lease. “But we have heard that is an issue,” he emphasized.
A section of the lease dealing with town review of the Center operations every five years and what would happen if the town was not satisfied came into play by the council as well. So that, along with the potential length of the lease will be discussed by representatives of both sides in the next two weeks and considered by the Town Council as a whole at the next town meeting on January 21.
