CB Center for the Arts asks town to transfer ownership

Move would solidify finances for the future

By Mark Reaman

Changing tack, representatives of the Crested Butte Center for the Arts have shifted from a focus on what to do with the original Center building and are instead lobbying the Crested Butte town council to transfer ownership of the Center from the town to the nonprofit group. The expectation is that the move will open the wallets of potential Center donors, stabilize its operating costs and make an upgrade to the original building more likely after several years of renewed stability. Councilmembers expressed a guarded willingness to further explore the idea and asked the town manager and town attorney to come up with some preliminary analysis of the idea to be further discussed this summer.

Center executive director Jillian Liebl and finance and development director Brett Henderson presented the title transfer concept to the Crested Butte council on Monday, April 7. “We want to attract long-term and sustainable funding,” Liebl told the council. “I think we are all trying to solve the same problem.”

Liebl said she had communicated with art and municipal leaders in other communities, and none had a facility ownership structure like the one in Crested Butte where town owns both the Center buildings and the land. The Center leases the facilities for $1 per year under a 50-year lease with two 10-year extensions. The Center is responsible for insurance, maintenance and utilities which currently amounts to about $300,000 per year.

 The closest situation she could find was where a town owned the land and leased it to the arts centers in places like Vail and Jackson, Wyoming which then had responsibility for operating and maintaining the facility. She said those leases included terms that included protections mandating the buildings be used for public benefit in perpetuity; allow the nonprofits to borrow against their facilities; provide for reporting and transparency; and revert the facility back to public ownership in the event of a lease termination.

“We’re not reinventing the wheel here. It works for these entities,” she said while also noting that major donors did not want to contribute to the Center if the building was owned by the town.

Henderson indicated at least five of the Center’s top 10 donors to the original capital campaign made clear that future capital support was contingent upon the Center owning the building. He said donors want to contribute to people they know and trust and town ownership of the building weakened donor trust. He said philanthropists wanted to “leave a legacy” and ensure their gifts had long lasting impacts and they want to support their preferred nonprofits and give back to the Crested Butte community.

“We have a pledged gift of $1 million to eliminate our remaining debt if the ownership structure is changed,” Henderson said. “That would result in a $1.4 million savings over 10 years. We see this as somewhat transformational for the community. We calculated what contributions could be expected in capital fundraising with the new ownership structure and it’s close to $12 million.”

“As a partner with the Center, we are looking at the long view and asking you to help in a collaborative way,” added Liebl. “Changing the building’s ownership structure will best support the Center’s long-term success and security.”

“It’s nice that we want the same thing, and we all want this to succeed,” said councilmember John O’Neal. “I feel open to a transfer of ownership, but it feels a little scary. We need to ensure it’s always used for community benefit. It’s not a matter of council control but a matter of being a good steward. What would the oversight structure be?”

“A land lease could provide the same protections we already have but it opens up some philanthropy,” said Henderson. 

“We are open to looking at all options with oversight,” said Liebl.

Councilmember Gabi Prochaska asked town attorney Karl Hanlon what would happen if the nonprofit failed while a loan encumbrance was on the building.

“You would probably get back a building with an encumbrance,” he responded. “We would certainly need to look deeper to see how the town could be fully protected.” He warned that in a worst-case scenario, the town could be forced to take legal action “but there is a need for a lot more research on the issue of encumbering the property.”

“Encumbrance isn’t what this is about. It’s about more efficiently being able to raise funds for things like a long-term endowment,” said Liebl. “We don’t want to come to the council with our hat in our hands looking for money in 10 years.”

O’Neal asked if the council could mandate not allowing the nonprofit to encumber the building with a loan and Hanlon said that was possible even with a transfer of title.

“I like the idea of the Center getting in a more secure financial position,” said councilmember Kent Cowherd. “With that, it is important that we have legal protections we think could work. Whatever happens, we need to make sure there are flexible community spaces that can be used. And affordability needs to be addressed as well.”

Liebl said programming can be very expensive and the understanding between staff is that the Center is both an art space and a community facility. “We need to hold onto both of those things,” she said.

Councilmember Anna Fenerty admitted that while Crested Butte was growing and becoming more affluent, she didn’t want to turn into Jackson or Vail.

“The goal is to not emulate the model of their programs but to learn from their mechanism that governs the facility,” said Henderson.

“Donors have little to no say on what we program or what we charge,” Liebl emphasized. “We try to maintain the community values.”

“That’s the long-term fear,” said O’Neal. “That the money comes with strings. We trust you two, but 10 years down the road, we won’t know who will be on the board or sitting in your seats. There is some fear that eventually money will drive the programming in the future.”

“Conceptually, it could look like deed restrictions on affordable housing to protect its use,” said Liebl.

“Except that it is the major building in the middle of town,” said Prochaska. “That’s very different if there’s an issue.”

“As the town is talking about the need for more efficiency, I’m open to learning more about the idea. But there are a lot of details to talk about,” said Fenerty. “I’m excited to see what the Center could be and I want to support it and local artists.”

“I’m open to exploring it as well,” said Prochaska. “My fear is what it looks like 50 years from now. I want it to be a community space that supports art and culture. But I am okay exploring what it could look like.”

“After talking to Jillian, I’m also in support,” said mayor pro tem Mallika Magner who ran that part of the meeting after mayor Ian Billick recused himself from the issue. “I will be very interested in the metrics expressed in the documents. There are a lot of details to discuss before transferring the title.”

Billick stepped down from the discussion explaining that the Center had approached RMBL about a possible partnership involving phase-2 of the Center development, potentially giving his employer a stake in the outcome of the discussions between the town and the Center.

Hanlon said he could look at the similar leases and come back with some preliminary ideas for council to discuss at a work session. 

Town manager Dara MacDonald said she was a bit surprised at the shift in focus. “What gives me pause is the shift in the conversation from a transfer in ownership to facilitate the construction of phase-2 (the old building) to transferring the building to facilitate ongoing operations,” she said. “We all want to see the Center succeed. It’s just interesting how the conversation has changed.”

Henderson said the evolution stages may have gotten out of line and the mechanics of ownership should be settled before moving onto phase-2.

“I want you to be in a place where you can succeed but there has to be certainty with what will happen there in the future,” said O’Neal.

“If there are deed restrictions needed for the town to feel secure, let’s talk about them,” said Henderson.

Hanlon said he could put something together on a potential deal structure for the council to consider “but the devil will be in the details,” he said. 

The council and the Center representatives agreed to hold a summer work session to continue talking about the idea.