Steps taken to fund Maple Leaf venue

The Maple Leaf Performing Arts Center has received two votes of approval from government groups, and it will go before the Brown County Council for an additional vote on financing Monday night.

On Nov. 14, the Brown County Convention and Visitors Commission voted 4-0 to use innkeepers tax revenue to fund the building of the proposed performing arts center. The commission approved a resolution “irrevocably pledging certain innkeepers tax revenues” to make loan payments for 30 years.

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CVC member Barry Herring told the county commissioners Nov. 1 that building the Maple Leaf will cost no more than $12.5 million. That is the maximum amount that would be borrowed from a bank.

The resolution the CVC signed allows innkeepers tax revenue to be used to pay the loan if the Maple Leaf does not make enough in profits, Herring said.

Projections Herring shared earlier this month show the Maple Leaf making $341,422 in annual net operating income before the $559,000 mortgage payment is made. Herring suggested that extra fees could be added onto the cost of tickets to make up the difference between income and the mortgage, or innkeepers tax could be used.

The Brown County Council will be asked to vote on whether or not to enter into an installment purchase contract on Monday, Nov. 20. Thomas A. Pitman, an attorney with Barnes & Thornburg, said the county council would not be contractually bound to enter into the contract at that time, but that it would be authorized to do so.

At the Nov. 15 commissioners meeting, some residents asked that more time be taken to study the project; others urged them to get the deal done.

Funding details

The Brown County Commissioners voted 3-0 to send a resolution to the county council asking council members to approve funding for the Maple Leaf.

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A nonprofit building corporation will contract with the CVC to take the innkeepers tax revenue to make the mortgage payment, Herring said. Those members will be appointed by the Brown County Commissioners. CVC President Kevin Ault said the county auditor would be involved in actually transferring the money and making the payment.

Forming a building corporation is necessary because a loan is being considered and not a bond, Herring said.

Herring talked with the State Bank of Lizton about financing the project with a traditional loan, which would not require the county to spend or put up any county tax money as collateral — except for possibly the innkeepers tax, which is paid by hotel guests, he said. With the loan, the bank requires only the innkeepers tax and the mortgage as collateral.

Through a special arrangement with the bank, the annual mortgage payment would be $559,000 until 2023, when it would go up to $733,000. The lower initial payments would give time for the Maple Leaf time to establish itself in the entertainment community, Herring said.

To make up the difference between the Maple Leaf’s expected initial revenue and the mortgage payment — about $230,000 — Herring proposed that a $3 “facilities fee” and a $1 entertainment tax be added onto ticket prices. The entertainment tax would need to be established by the state legislature.

If the new per-ticket fees don’t go into effect, Herring projected the Maple Leaf would still be able to pay its mortgage and even make a profit by supplementing its revenue with innkeepers tax, without affecting the budget of the Brown County Convention and Visitors Bureau. The CVB also uses innkeepers tax money to run the downtown Visitors Center and market Brown County. To do that, innkeepers tax collections would need to rise by 20 percent between 2018 and 2019.

County commissioner Diana Biddle asked attorney Pitman if Maple Leaf debt could ever be put on the county taxpayer in the form property or income taxes.

Pitman said the debt would not be put on the county taxpayer; it’s on the innkeepers tax.

The only time local taxpayers would pay the innkeepers tax would be if they rent a hotel room or vacation cabin in Brown County.

Commissioner Dave Anderson said there are no liabilities to county taxpayers under the deal. “This is a good thing for Brown County. I can see no exposure to liability for our taxpayers, and that’s a biggie for me,” he said.

Resident Sherrie Mitchell asked why the county was listed in the resolution as purchasing the property for the Maple Leaf. She wanted the resolution to be rewritten to say that the CVC is buying it, in order to further protect county taxpayers.

Biddle said the county will buy the building, but only “with certain funds.”

Pitman said writing such language into a loan document isn’t something he’s seen before, and he didn’t think a bank would go for it.

“I don’t think that it would be in the county’s interest to have what amounts to be a department of the county to be in the driver’s seat on a project of this magnitude,” Pitman said. “… I would question whether a financial institution would be willing to loan millions of dollars to a convention and visitors commission directly. I’ve never seen it done.”

Pitman said the loan documents will limit the financial liability only to Maple Leaf revenue and the innkeepers tax.

Resident Paul Navarro questioned the actual amount the county would be paying for the venue. He added up the cost of the payments from the first five years at $559,000 and the next 25 at $733,000 to get a total actual cost of about $22 million.

Jason Semler, with the county’s financial adviser, H.J. Umbaugh & Associates, said the actual cost of the loan is still being negotiated with the bank.

“It’s (the rate) actually fixed for 10 years, and then it resets after 10 years over a 30-year period. The actual total amount of that 30-year loan, or actually 31-and-a-half years, won’t be known for 20-something years,” he said.

“That would be the maximum if that were the rates that are finally determined once the loan closes,” Semler added about the payment figures Navarro used to get the total cost.

Semler said the first payment that comes out of net operating revenue of the facility or the innkeepers tax won’t be until 2019.

More time

Other community members in the commissioners’ audience asked for the vote to be postponed until a meeting was set specifically to allow for public input about this project.

“This resolution to me sounds like you’re approving the project for the next step to be taken by the council, so my request was have the meetings before you sign the resolution,” Tim Clark said. “That shows good faith you haven’t already made up your mind, and, ‘Oh, by the way, we’ll have these public meetings just to say we’ve met a statutory requirement.’ The integrity of the process is listen to people before you vote on a resolution. That’s my request.”

Navarro agreed. “(The vote) should be delayed until you give the people an opportunity (to speak). You were elected to represent the people. You gave your opinion; give them the opportunity to give theirs,” he said.

Resident Chris Ross handed the commissioners a list of 34 questions and comments from citizens about the Maple Leaf which she said she had compiled from an online survey. The comments and questions centered on a lack of hearings for public input; ownership of the venue; the need to see actual documents and plans; the possible impact of a 2,000-seat concert venue on emergency services and taxpayers; and the need for a commitment that no public money will be used beyond the innkeepers tax.

“If the details are worked out, then documentation should be available to the public. If they haven’t, it is inappropriate to vote on funding,” one person wrote.

The commissioners did not object to organizing a public meeting to get input.

“You elected us to fulfill a need in the community, and we certainly beg for your input. You can trust in us in making some decisions that may ultimately determine whether this moves forward or not,” commissioner Jerry Pittman said. “I’m wide open to a public meeting at any point in time. You schedule it and I’ll be there.”

League of Women Voters President Julie Winn said the league is willing to moderate a community conversation before Dec. 15, which is the deadline to close on the purchase of property for this venue. A tentative agreement is in place with Chuck Snyder for 13.472 acres of his farm, behind Brown County Health & Living Community.

Winn said League members’ opinions are split on the Maple Leaf project, but they are concerned about opportunities the public has had to give input.

“I am concerned about when the public input — in the form of an official public hearing or community conversation or whatever — is going to take place. And will it be scheduled, given the quick passage of events, in such a way to have actual meaning — that is, the input has a chance of meaning something towards the future of the project?” Winn said. “The project obviously has the potential to do tremendous things, but it also has some pitfalls that I think need to be thrashed out.”

Resident Robyn Bowman encouraged the commissioners to pass the resolution.

“If they really, really wanted to oppose it, this room would be packed. They don’t. Don’t delay it anymore,” she said. “Let’s move forward. Do the resolution. Let the council do their job. Buy the darn land and let’s move this project forward so we have something.”

Bowman and commissioner Anderson talked about the history of resistance to new projects in the county, like the Brown County YMCA and the Brown County Public Library.

“They fought the Y. They fought the library. Enough. These things are fabulous. We need them. I don’t care if it’s $22 million. I’ll be dead. But Tanner (her son) will have something here,” Bowman said.

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Traffic flow

At a different meeting across town, a concern emerged about proposed changes to traffic flow on State Road 46 to accommodate the Maple Leaf.

Nashville Chief of Police Ben Seastrom told the town council Nov. 16 that he’d read about new concrete curbs possibly being put in the middle of State Road 46 between the intersections with Hawthorne Drive and Snyder Road, to separate the eastbound and westbound lanes.

Seastrom said he and fire department leaders were not asked what they thought about those road changes. His concern is that if there’s a lot of traffic and cars need to move over for emergency vehicles, they won’t be able to get over far enough to allow police and firefighters to “part the seas” and drive through. Normally, emergency vehicles would be able to drive in the middle of the highway if they needed to, but not if curbs are placed there.

Town council President “Buzz” King suggested Seastrom get ahold of the Indiana Department of Transportation to share that concern, but Town Manager Scott Rudd encouraged Seastrom to approach the Maple Leaf committee members first.