Former Mayor Praises Rotering's Theater Response
Though he thinks the closures of the Highland Park Theatre and the Port Clinton Parking Garage could have been avoided, Mike Belsky credits the current mayor and city coundil for a swift, transparent response.
Mayor Rotering and the City Council should be commended on their swift action in closing the Highland Park Theatre and the Port Clinton Parking Garage due to violations of the fire code. I also commend their efforts to inform the public through a community meeting. Public safety is and should be the priority of any city government.
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However, what I do object to, as I have in the past, is the previous City Council's insistence on cuts instead of using available resources to sustain services in the aftermath of the "Great Recession." One of the casualties in this effort to cut the budget, (led by then Council Members Rotering and Mandel), was fire and building inspection services.
Less government sometimes can have dire consequences.
Infrastructure and assets need to be maintained, otherwise it can result in negative consequences. Closing the Theatre will not only cost the City in sales tax, but will negatively impact the surrounding businesses as well. The closing of the Port Clinton Garage is a disruption to the local economy and the businesses located in the building. (It should be noted that Port Clinton Associates has done a good job through providing valet parking). One critical resource to monitoring infrastructure and assets is constant inspection so repairs can be made as opposed to needing major replacements when things get beyond repair, as is the case with the sprinkler system in the garage.
All this could have potentially been avoided if the Council would have taken then City Manager Limardi’s advice to use the more than 50 percent of general fund reserves to maintain services until sales taxes normalized. Since 2008 revenues declined by 20 percent for state and local governments across the country. We were lucky in Highland Park in that we only experienced a 10 percent decline, however, add to this declining property values and foot dragging by the State of Illinois on its annual income tax distribution to the City. Having an excess fund balance of 10 percent (mind you we had 50 percent) is considered a best practice by all of the rating agencies and Government Finance Officers Association. Highland Park’s policy of keeping a range between 25 percent and 33 percent excess fund balance is one of the major reasons we have a Aaa rating by Moody’s Investor Service (this top rating allows the City to borrow at the lowest possible interest rates).
The reason an excess fund balance is considered a best practice is so cities can avoid increasing taxes or cutting services or raising taxes in a down economy. This is accomplished by using planned draws on fund balance until the economy rebounds. Further, the City is obligated through its own policy to not go below 25 percent (well above the 10 percent best practice). Fortunately, for the City fund balance can also be used for one time capital expenditures and emergencies. So bringing both the garage and theatre up to code should not result in a tax increase or further cuts.
The Theatre is a slightly different matter in that it unfortunately became a political football in the last Mayoral campaign. While, I am aware not everyone agrees, the purchase of the Theatre was deliberated with a lot of thought. The City became aware of the sale of this building through a request for parking waiver in connection with converting the Theatre into an office building. This would have eliminated an economic engine for our downtown.
Successful cities all over the Country make strategic purchases of land for economic development, and many have purchased theatres. According to “Americans for the Arts and the US Conference of Mayors” for every dollar spent on entertainment several more dollars are spent in the local economy. One only needs to go to the Highland Park Theatre on a Saturday night and see people streaming out to our local restaurants. This multiplier results in a $50,000 annual net benefit, after paying the expenses and for the private operator of the Theatre.
When the sale of the Theatre became know the City was also approached by local performing arts groups, historic preservationists and downtown business owners urging a purchase by the City.
Contrary to what was spun in the election, close to half the purchase of the building came from tax increment dollars generated by the downtown (the balance came from excess fund balance). Tax increment financing is an economic development tool where the taxes generated from increased property values, resulting from public and private investment, are used to finance public improvements that facilitate economic development. This includes the purchase of public assets and land. This is how many of the improvements were financed for Port Clinton and Renaissance Place. In fact up to a few years ago the City owned the land under Port Clinton and Shops on Elm. Further, the purchase of a building to support the Arts is not unprecedented in Highland Park as we purchased the Legion Hall and this was renovated as the current Art Center bringing several hundred if not a 100 people a year into our City to take art classes and attend art shows.
Similar to the not for profit Art Center it was and should still be the intent of the City to sell the building to a not for profit or for profit owner. However, the city should retain the underlying land as discussed below.
The Council felt this was a good strategic investment in that it was next to an existing parking lot and that in the worst case we could expand parking at a very reasonable cost. An additional option was to sell the property to a developer for housing, retail or a boutique hotel. The vision here was to combine the Theatre site and the adjacent lot into one piece of property and have two levels of parking below that could serve the public and the tenants of the new building. In this scenario the city could fully recover the cost of the purchase and perhaps a profit if the land value increases in the future.
In effect the parking and development scenarios are an insurance policy if the Theatre does not work out. I truly hope the City brings the building up to code, but I also hope they push for a concept that we discussed in my last few months in office. That is, have a developer renovate the Theatre into the following: a place where food and drinks can be served(i.e. Snack food so as to not compete with local restaurants or have these restaurants provide the food); a multipurpose theatre that can also be used for live performance such as comedy, jazz, and readings from professional theatre companies downtown(e.g. Steppenwolf); and a digital theatre where first run movies can be shown but also have the ability to stream in operas, symphonies, and sporting events such as the Super Bowl and the final four.
To me this concept makes a lot of sense. The last census indicated that our population is aging in place. The venue could provide an alternative for senior who no longer want to travel downtown and one only needs to go to a bulls game to see all the Highland Parkers that love sports.
Delaying progress on the Theatre delays investment in maintenance that could be the responsibility of a new owner.
Having said all this I, again commend the Mayor and Council for committing to making the necessary investments to assure the public is safe.