The Brown County Music Center was on track to have a profitable year in 2020 when the world essentially stopped in its tracks last month.

Last week, the Brown County Council approved a resolution that will transfer up to $150,000 from the county’s motor vehicle highway fund to a special line in the county’s general fund. That money will be used to pay interest-only mortgage payments on the 2,000-seat venue for the next three months.

The music center’s doors remain closed due to social distancing restrictions put in place by the state and federal governments. No reopening date has been set.

The money transferred from the MVH fund will have to be repaid by the end of this year, according to the resolution approved at the April 15 meeting.

The State Bank of Lizton loaned the county $12.5 million to build the music center and buy the land it sits on from Snyder Farm. The monthly mortgage payments were $55,000. Starting in June, the payment will be around $35,000 each month, county commissioner Diana Biddle said.

The money is being borrowed from MVH under Indiana Code 36-1-8-4, she explained. “We have used this method before to pay for health insurance where we borrowed money from the MVH fund for a short period of time in order to pay it back,” Biddle said.

Under Indiana Code, only revenues collected from special taxes, like gas tax, will be used. “There will be no personal property tax or county income tax funding used in this process,” Biddle said.

In February, the music center was set to “blow all of our estimates out of the water with every projection we had made,” Biddle said.

“No one in the world anticipated any kind of event like we’re under right now. This is something that hasn’t happened in over 100 years.”

A 2020 financial forecast was presented at the March 10 meeting of the venue’s management group. The venue was projected to bring in $4,762,662 in revenue this year based on factors like ticket revenue, facility rental income, concessions income and sponsorship income. After paying for expenses, like artist fees and operating expenses, the venue was projected to have enough money to cover its mortgage payments for the year.

Then, COVID-19 hit Indiana.

Last week, BCMC Executive Director Christian Webb said that expenses were “slashed” weeks ago with only a small staff and basic utilities being paid for now.

Biddle said the music center is part of the foundation for the county’s economic recovery, so it’s important for the county to step in and help now.

She added that the music venue is keeping enough money in its account in case it has to refund money for cancelled shows.

Webb said last week that the venue is not automatically refunding tickets, as it follows the industry trends.

“These shows are not cancelling, they are being postponed to a later date, where your current tickets will still be valid,” he said.

“The magic of live music is that ‘the show must go on,’ and it will, it just may not be on the original date as planned. We will continue to monitor and have dialogue within the industry and to our wonderful fans as we all try to get thought these abnormal and historical times.”

Every show in March, April and May has been postponed except for Willie Nelson, ABBA: The concert, and .38 Special. A new date has been secured for Martina McBride, and Webb said that will be announced shortly.

County council Vice President Dave Critser said there was no downside to borrowing the money from MVH to cover the payments for the music center.

“If they screw up and do not pay it back by the end of December, then the State Board of Accounts is going to come down hard, and then you’ll have to pay it back the next year,” he said.

“It’s not like we’re going to lose this money.”

Council member Darren Byrd, who also sits on the management group board, said that disaster relief funds from the government would be available to the venue, and that this loan is only to get the venue to the point where it can get additional assistance.

County resident Tim Clark said that when this music center project was first proposed, the council had committed to not using any other tax dollars to support it besides the innkeepers tax, which was pledged to make the mortgage payments in case the venue did not make enough to cover them.

The innkeepers tax is “pretty much zero right now,” Biddle said.

“I don’t think this is going to be the end of it,” Clark said of using more taxes to support the venue.

“The council made a commitment at the beginning they wouldn’t do a bailout; they would turn it back over to the bank. Look at the financials. Look at the future. Anticipate drops in the revenue from the innkeepers tax. And what are you going to do, council, for this facility? You ought to tell people. If we’re going to start subsidizing this, fine; you need to tell people and you need to prepare for it.”

Byrd said this pandemic is something no one could have planned for.

“This is the black swan, government worldwide shutdown of the economy that nobody would have ever anticipated. This is not an ongoing subsidy; this is a bridge loan until we can get disaster relief, which has been promised by the government,” he said.

The resolution authorizing the temporary transfer of funds for “cash flow purposes” was approved unanimously.

Checking in

Last week, Webb said in an email that the music center has been hearing about how much artists want to get back on the road and perform for fans.

“In that regard, we are excited for the future; however, we are cautiously concerned for the nation as well as the local economy,” he said.

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Some music center employees have been furloughed to save money. Essential staff members still on board are working from home.

Management group Co-president Barry Herring said the abrupt closure has been “hard to emotionally wrap our heads around.”

“I feel such sadness driving by the venue and witnessing the empty parking lot only to remember just weeks earlier it was a vibrant and positive force within our community,” he said.

Webb said the impact of the pandemic on the music center’s budget is still unknown.

“The budget was built with all the variable show revenues and expenses forecasted, along with our fixed expenses of the venue. We have mitigated our fixed expenses to help lessen the impact of our bottom line, to ensure that when we begin operations again, we will be stronger and more resolved to move forward in 2020 and beyond,” he said.

Herring said the funding from the county will help the venue get through the next three months. “It’s our hope that the venue will be at least somewhat operational during and beyond that point, but we will have to take a ‘wait and see’ approach at that time,” he said.

Management group Co-president Kevin Ault said when the music center project was being planned, there were discussions about a “black swan” event, but they did not expect such an event to happen less than a year after opening.

He added that the money from the county may help the Brown County Convention and Visitors Bureau get some money from the innkeepers tax, but “time will tell.” The CVB, which markets Brown County, also receives its funding from the innkeepers tax.

Using the innkeepers tax to pay the BCMC mortgage is “first priority,” Herring said.

Herring and Ault both sit on the Brown County Convention and Visitors Commission, who handles the distribution of innkeepers tax.

“The CVC will have hard decisions to make if the venue cannot get back open to help drive the economic engine of the innkeepers tax,” Herring said.

Herring and his family also own the Brown County Inn. The inn’s business was up over 25 percent to date in 2020 when BCMC closed its doors, he said. The Brown County Inn is now temporarily closed as well.

“I am hoping that this type of increase was being felt countywide and left the innkeepers tax in a good place before the venue closed,” he said.

Ault owns Hotel Nashville and the Seasons Lodge and Conference Center. He has kept staff on at both hotels, he said.

The Seasons and Hotel Nashville have rented very few rooms since the pandemic began, and mostly to locals who need a place for a night or so. All business conferences and most room reservations are canceled through mid-May at both hotels, Ault said.

“Our businesses were up in revenue for the first couple of months of the year and 2020 was looking to be a good year. We have a long, uphill road in front of us,” he said.

Webb said that when the time is right, music and events will be back at the Brown County Music Center and in the community.

“We are going to continue to work hard to give the best experiences, along with showcasing the best artists at our venue for the fans to enjoy,” he said.

“Stay positive and we will see you all soon.”

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