Money for the Brown County Music Center from the CARES Act comes at a time when it is needed the most.
In December, management group board members said repeatedly in public meetings that the venue is “hemorrhaging” money. No shows can take place due to COVID-19 restrictions, and income possibilities remain limited.
As of Dec. 8, the music center owed about $12,000 in refunds to customers for canceled shows, which they were waiting on customers to claim, music center controller Jeff Overby said.
According to Overby’s profit and loss statement from January to November, the music center’s net income was negative $1,000. The income included a $32,600 grant from the Indiana Arts Commission.
Utility bills for the music center average about $8,000 a month, including $5,000 for internet. “Our typical utilities bill was around $15,000 back when we were running, and now we got it down to $8,600 this month,” Overby said. The electric bill for November was $1,800, management group Co-president Kevin Ault said.
“The bottom line is, we’re burning through about $35,000 to $40,000 a month in cash. If you look at the bank account level, it won’t take very many months at that rate to fully deplete the cash,” management group member Mike Lafferty said.
Lafferty is a retired certified public accountant and a former chief financial officer of a company in Columbus. He also serves on the venue’s finance committee.
Monthly expenses for the venue are around $35,000 a month, which cover utilities, insurance and paying the limited number of remaining staff, who have taken pay cuts.
The venue also has $200,000 in credit it can use if needed, along with a promised $150,000 reloan from the county coming to it in January if it needs it.
“If we knew when we were going to start back up, that would be an easier plan to make. I hate to see our cash deplete down to zero or less, then try to start up. That would be pretty tough,” Lafferty said.
Last week, Ault said that if the venue did not need another $150,000 loan, the management group would not take it. The recent coronavirus relief package approved by Congress included $15 billion for music venues.
“We will be applying for something and hopefully we will get something,” Ault said, adding that Webb and Overby were looking into the available money.
“We’re applying for any grant that we can possibly apply for,” Ault said.
“If something comes across our table and it’s reasonable, then we’re applying for it.”
At the end of December, Ault said the innkeepers tax fund had $234,116.05 in it. That’s the backup fund to pay the mortgage when the venue can’t make enough to cover it.
If for some reason the county council decided not to transfer the CARES Act money to the BCMC in January, Ault said the innkeepers tax could be used to pay back the $150,000 county loan before the county’s books were closed out.
At the December meeting, management group Co-president Barry Herring said if the venue could start selling tickets, even for shows that could happen in the fall, that would help build their income back up.
BCMC Executive Director Christian Webb said on Dec. 8 that he had a call with a booking representative from Live Nation, the company that books national acts for the venue, and was told that shows would not happen until late in the third quarter of 2021.
“They just don’t know how it’s going to really work, especially being indoors. They think outdoors will probably have a better shot moving first,” he said.
Webb also said that the venue would look at pushing back shows again that were scheduled for the spring and summer, including the sold-out Willie Nelson concert that’s supposed to happen in April.
Not only will shows be delayed later next year, but concertgoers could expect changes in how they buy tickets due to COVID-19, like a requirement to show they have been vaccinated before attending a show, Webb said.
“I really think, at the end of the day as this is looking at Q3, it’s scary,” Webb said.
“We’re hemorrhaging money. I don’t not how we’re going to be able to stop it.”
The venue has been able to receive grant funding from various organizations. In addition to the grant from the Indiana Arts Commission, the BCMC also received a $2,500 grant from the Independent Indiana Venue Allegiance. Webb said on Dec. 8 that the IAC had reached back out about BCMC being eligible for a $3,200 salary support grant, and he had accepted it.
Herring said if shows are slated to take off in the third quarter of the year, that means ticket sales could begin in the second quarter.
“We have to look at our cash projection that we’re not going to have any cash influx until April, May and June,” he said.
“We need to see how long this $89,000 will last (from the CARES Act).”
“If we get the same $150,000 (the reloan from the county’s MVH fund) that comes back on Jan. 1, that keeps us going for another couple of months,” Webb added.
The music center also has $13,000 sitting in its Save Your Seat fund at the Brown County Community Foundation. “It’s just money sitting in there, for us, whenever we want it, so that could be, again, a tourniquet,” Webb said.
He said venue has 15 shows in the lineup that have not yet been set on the calendar. “We said yes to them, but now they need to say yes back and approve an actual date,” he said.
He said he was also working with a dance studio in Columbus about filming a live production at the music center for a DVD that would equal about $1,200 in additional revenue.
The venue will be required to pay $55,000 mortgage payments beginning next year. The bank had previously only required the group to make interest-only payments.
Last week, Ault said the innkeepers tax fund paid $221,936.18 of the interest payments along with the county loan and the venue’s admission tax that was charged on every ticket since the fall. The innkeepers tax is a 5-percent tax paid on overnight room rentals in the county.
When the BCMC was built in 2019, the innkeepers tax was pledged as a backup revenue source if the center didn’t bring in enough money to cover its own expenses. Innkeepers tax revenue also pays to operate the Brown County Visitors Center in downtown Nashville and to market Brown County to tourists.
Lafferty told the management group on Dec. 8 that the CVC, the board that manages the innkeepers tax, may have to consider saving back 75 percent of the total tax revenue to cover those mortgage payments.
He estimated the total cost for the venue’s mortgage next year will be $665,000.
“The innkeepers tax is $900,000 a year if we’re lucky. That’s more than 50 percent. It’s probably time for the CVC start thinking in terms of more than 50 percent (earmarked for the music center),” Lafferty said.
“I think $900,000 is optimistic now, given the way our businesses have been impacted last month and this month,” Herring added.
Both Herring and Ault own hotels in Nashville. They both said they saw an increase in business in October, but that slid off in November and dropped further in December.
Despite the worldwide pandemic, the amount of innkeepers tax collected for October this year is up so far about $14,000 over last year. Some of that collection was payment from delinquent innkeepers, Ault added.
When asked if the CVB could expect a check from innkeepers tax for its operations in January, Ault said it will depend where the CVC stands with the State Bank of Lizton, which holds the music center’s mortgage.
“They (the bank) did say on the call that they still understand the survival of the CVB is paramount. Obviously, the payment of their mortgage is paramount, too. At least they are emotionally on board,” Herring said during the Dec. 10 CVC meeting.
“We just got to get this thing back open.”
