Heading into the new year, many eyes are on the Brown County Music Center as expenses continue to accumulate and the schedule remains empty. Indoor live music shows are predicted to start later in the year.
But the music center and its management group received some good news at the end of 2020: The bank holding the building’s mortgage is not expecting any payment on the principal this year, only the interest.
In June, the State Bank of Lizton, which holds the mortgage, allowed the venue to make interest-only payments, costing the venue about $35,000 a month. The management group had been preparing to start making full $55,000 mortgage payments at the start of 2021.
The 2,000-seat venue had closed its doors due to COVID-19 last March.
“If we get back in business to where we get vaccines and life goes back to normal as much as it can, then as soon as we’re able, I would expect us to start making principal payments, but we have that leeway of only paying interest for the next 12 months,” county commissioner Diana Biddle said at the Jan. 6 commissioners meeting.
Resident Kevin Fleming asked if the bank was freezing the amount of interest charged on the mortgage. “That would make the payments escalate even though they are interest-only,” he said.
Biddle said she was not sure about the interest increasing. “The Securities and Exchange Commission is involved in these things at some level. There is going to be some give and take. It’s not just us. This is nationwide,” she said.
“Once we get back to doing principal-only payments, we’ll be looking at the rest of those details.”
A loan that the county made to the music center last year also was paid back to the county by the end of 2020, as stipulated in the agreement.
Last April, the Brown County Council approved transferring $150,000 from the county’s motor vehicle highway fund to a special line in the county’s general fund. That money was used to pay the interest-only mortgage payments.
Originally, the plan was to use a portion of the $239,000 in CARES Act funding the music center was set to receive to pay that loan back. But the county council did not approve the transfer of the CARES Act funding to the music center at their December meeting due to questions around the memorandums.
The $150,000 was instead paid back to the county from the innkeepers tax fund at the end of the year. As of Dec. 30, the innkeepers tax fund had around $84,000 in it after the loan was paid back, said Convention and Visitors Commission President Kevin Ault. The CVC is the board that manages the innkeepers tax.
Ault also serves as the co-president of the music center’s management group.
At their Jan. 19 meeting, the council is set to vote on transferring $239,000 in CARES Act funding to the music center.
The memorandum of understanding (MOU) between the county and the music center includes reimbursing the BCMC $239,000, after the county used it to hold jury trials and other functions, like county board meetings.
The 2,000-seat auditorium allowed some of those events to go on in person instead of over the phone or on Zoom.
The music center also has an MOU with the commissioners and the Brown County Health Department for the building to be used as a COVID-19 testing site, as temporary office space for the health department’s nurses, and for any health department trainings and health board meetings. Compensation for this MOU was set at $20,000 and is to come from grant funding, not from the CARES Act.
The venue has been able to receive grant funding from various organizations. In addition to a $32,000 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.
The recent coronavirus relief package approved by Congress included $15 billion for music venues and the music center plans to pursue funding from that relief package, too.
In December, BCMC Executive Director Christian Webb told the management group 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.
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.
If new shows are scheduled for the third quarter of this year, that means the venue could start selling tickets late spring and early summer.
As another avenue to boost financial support for the music center, the CVC is also working with the county’s attorney, Barnes and Thornburg, on legislation to increase the innkeepers tax. Currently, visitors pay a 5-percent tax on overnight room rentals in the county.
At the Jan. 6 meeting, Biddle said that legislation was still being pursued. She said she suggested that the state allow the county to go up to a certain percentage of innkeepers tax “and allow the local county council to set the rate annually,” she said.
Marion County has the highest innkeepers tax rate in the state, at 10 percent. In talks about increasing the tax here, percentages ranged from 8 to 10 percent, but leaders say that increase would not happen all at once.
“We would definitely not go in and say it’s going to be 5 percent this year and 8 percent next year. It would be a gradual increase over a term of years,” Biddle said.
Commissioner President Jerry Pittman said he liked the idea of increasing the innkeepers tax since it’s a tax that most residents do not pay. “I’m going to take a wild guess that probably 95 percent of that would be money coming from visitors to Brown County and not Brown County’s citizens,” he said.
The 2021 legislative session started on Jan. 4 and will end in late April.
As of last week, no legislation had been filed in the Indiana General Assembly to increase the county’s innkeepers tax.
