Mission Statement: Waynesboro Downtown Development, Inc. was organized to ensure the long-term viability

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1 WAYNESBORO DOWNTOWN DEVELOPMENT, INC. Position Statement Wayne Theatre Alliance Funding May 2007 Mission Statement: Waynesboro Downtown Development, Inc. was organized to ensure the long-term viability of the downtown area as a center of commerce, a source of civic activity and pride, and a resource to attract new businesses and residents. Critical to this effort is promoting small town quality of life, preserving historic and cultural resources and capitalizing on the City s unique and splendid natural setting. Waynesboro Downtown Development, Inc. We will be actively involved in and provide support for the arts in Waynesboro. We will endeavor to preserve Waynesboro s history for future generations. Waynesboro City Council Vision for 2018 Attendance at arts events generates related commerce for local businesses such as restaurants, parking garages, hotels and retail stores. Data collected from 94,478 attendees at a range of events reveal an average spending of $27.79 per person, per event in addition to the cost of admission. This spending generated an estimated $103.1 billion of valuable revenue for local merchants and their communities in Nonprofit arts and culture organizations in the United states drive a $166 billion industry a growth industry that supports 5.7 million full-time jobs and generates nearly $30 billion in government revenues annually. This study lays to rest a common misconception: that communities support arts and culture at the expense of local economic development. In fact, communities are investing in an industry that supports jobs, generates government revenue, and is the cornerstone of tourism. Arts & Economic Prosperity III, 2007 Americans for the Arts very few projects have as catalytic an impact on a downtown as a vibrant, active theatre. Rescuing and Rehabilitating Historic Main Street Theatres, Main Street News, Sept At the same time that the theatre was brought back to life, Tarrytown began to change and it is presently flourishing. The streets are generously lined with shops and restaurants; not ONE boarded up store exists. Tourism is popular and people are scrambling to move and live here. Twenty-four years after the Music Hall was to be demolished, people are treasuring it and cannot get enough of what they so nearly lost. Case Studies on the Economic and Cultural Impact of Historic Theatres, The Woodward Opera House Cultural activities attract tourists and spur the creation of ancillary facilities such as restaurants, hotels, and the services needed to support them. Cultural facilities and events enhance property values, tax resources, and overall profitability for communities. In doing so, the arts become a direct contributor to urban and rural revitalization. National Governors Association The Role of the Arts in Economic Development, 2001 Arts & Economic Prosperity, Americans for the Arts

2 WAYNESBORO DOWNTOWN DEVELOPMENT, INC. EXECUTIVE SUMMARY Position Statement Wayne Theatre Alliance Funding As stated in the just released Arts & Economic Prosperity III report by American for the Arts, The arts mean business. Waynesboro Downtown Development, Inc. (WDDI) believes the restoration of the Wayne Theatre into a successful performing arts center would have a catalytic impact in the continued economic growth of the central business district. The Wayne Theatre project is a model of the type of public/private partnerships that have proven successful in Main Street communities across the country. Based on research conducted by the staff of WDDI, which reviewed the economic impact of similar projects in similar communities across North America, WDDI has concluded that a successful performing arts project creates economic value for the city by way of increased jobs, increased local tax revenues (through increased property values, taxes on ticket sales, increased sales, lodging and meals taxes), increased building occupancy within the central business district and an elevated quality of life for the City s residents. Beyond the repeated affirmations of every project reviewed that the intangible benefits of renewed community pride, accomplishment, and cultural enrichment are equally important to economic factors, there are measurable economic impacts: South Boston realized a 54% increase in lodging tax revenues in FY following the first year of operation of the Prizery an industrial building that was renovated into a performing arts center and welcome center. The 25,000 recreation visits to the Prizery during its first year of operation provided direct benefits of $474,750 in sales within the community. The rehabilitation of the Stanley Theatre in Vancouver, British Columbia spurred a 21% increase in restaurants, cafes and bars and a 107.7% increase in retail sales between 1998 and The increase in total retail sales of $112 million generated approximately an additional $8 million in sales taxes. The Flynn Center for the Performing Arts in Burlington, VT conservatively estimates the economic impact of the Center to be $20 million a year (2004 dollars) Playhouse Square Center, the second-largest performing arts center in the nation, estimates that in 2003 their total output impact on Greater Cleveland equaled $43 million. WDDI has reviewed City Council s Resolution and supports Council s leadership decision to responsibly contribute to the Wayne Theatre restoration as well as its decision to request that the Economic Development Authority (EDA) facilitate the process. WDDI supports the Stage One transfer on the basis that it is sound business practice to invest funds in a project that will generate higher future return on investment. WDDI supports the Stage Two pay-for-performance funding structure, as it links future funding to tangible, objective performance measures that will require the WTA to show steady progress in their business model. If the WTA does not meet the performance standards set by City Council and the EDA, the City is under no obligation to continue supporting the project. WDDI believes this is the responsible way to oversee economic development incentives. In conclusion, the Board of Directors of WDDI supports City Council s investment in the Wayne Theater, as structured in the Resolution, as an economic development catalyst to the revitalization of the central business district and further supports the EDA being the facilitating organization for overseeing and protecting the City s investment.

3 WAYNESBORO DOWNTOWN DEVELOPMENT, INC. Position Statement Wayne Theatre Alliance Funding May 2007 The beauty and health of Waynesboro s central business district is currently challenged by a high storefront vacancy rate, frequent merchant turnover, several dilapidated buildings, and a lack of private funds to renovate them. In its current state, the Wayne Theatre s appearance and poor structural integrity are contributing to this downtown blight that must be addressed if downtown revitalization is to proceed. Waynesboro Downtown Development, Inc. (WDDI) believes the restoration of the Wayne Theatre would have a catalytic impact, thereby stimulating the continued economic growth of the central business district. Further, the Wayne Theatre project is a model of the type of public/private partnerships that have proven successful in Main Street communities across the country. Based on research conducted by the staff of WDDI, which reviewed the economic impact of similar projects in similar communities across North America, WDDI has concluded that a successful performing arts project creates economic value for the city by way of increased jobs, increased local tax revenues (through increased property values, taxes on ticket sales, increased sales, lodging and meals taxes), increased building occupancy within the central business district and an elevated quality of life for the City s residents. Beyond the repeated affirmations of every project reviewed that the intangible benefits of renewed community pride, accomplishment, and cultural enrichment are equally important to economic factors, there are measurable economic impacts: South Boston realized a 54% increase in lodging tax revenues in FY following the first year of operation of the Prizery an industrial building that was renovated into a performing arts center and welcome center. The 25,000 recreation visits to the Prizery during its first year of operation provided direct benefits of $474,750 in sales within the community. The rehabilitation of the Stanley Theatre in Vancouver, British Columbia spurred a 21% increase in restaurants, cafes and bars and a 107.7% increase in retail sales between 1998 and The increase in total retail sales of $112 million generated approximately an additional $8 million in sales taxes. The Flynn Center for the Performing Arts in Burlington, VT conservatively estimates the economic impact of the Center to be $20 million a year (2004 dollars) Playhouse Square Center, the second-largest performing arts center in the nation, estimates that in 2003 their total output impact on Greater Cleveland equaled $43 million. As every community and every performing arts center is unique, it is difficult to compare projects. However, combined with ongoing City efforts to improve the streetscape infrastructure and building facades, as well as WDDI s efforts to attract visitors and new businesses to downtown, the Wayne Theatre s potential impact is tremendous. Like many significant redevelopment projects, the Wayne Theatre restoration has a funding gap between the private funds available and the total cost for the project. The Wayne Theatre project may not be feasible without some level of City support. WDDI has reviewed City Council s Resolution and supports Council s leadership decision to responsibly contribute to the Wayne Theatre restoration as well as its decision to request that the Economic Development Authority (EDA) facilitate the process. The bulk of the City s contributions to the Wayne Theatre will be contingent on the successful operation of the theatre and the resulting revitalization of downtown. The pay-for-performance model adopted by Council ensures a return on investment for Waynesboro taxpayers and insures the City s investment is protected should the project be less successful than anticipated. Additionally, tasking the EDA with creating quantifiable performance measures on which to base future funding ensures that the City s funds are invested only in an economically sound project.

4 Stage One - $300,000 Transfer Stage One of City Council's Resolution is a cash grant intended to jumpstart the Wayne Theatre project, secure the physical integrity of the building, and provide immediate funds to match a state grant that would otherwise be lost. WDDI supports this Stage One transfer on the basis that it is sound business practice to invest funds in a project that will generate higher future return on investment. The roof of the theatre is currently failing and threatening the physical integrity of the building. The estimated cost to demolish the building would be at least $300,000. The estimated cost to repair the roof is $417,000. The value of the grant, $300,000, is equal to the minimum amount the City would need to invest, as owner of the building, to either demolish or maintain the building whether or not the Wayne Theatre Alliance s project moves forward. Essentially the City has three options: (1) secure the structural integrity of the building as dictated by city ordinance, (2) seek permits to allow the demolition of an historic structure, or (3) sell the building. By deed of gift from R/C Theatres, the City of Waynesboro is the current owner of the Wayne Theatre building. When the City received designation for the Downtown Historic District in 2001, the building was established as a contributing historic structure. In 2005, in an effort to protect downtown buildings of historic significance and to encourage the use of historic tax credits, City Council established Ordinance Number , creating Waynesboro City Code Section , which states that Owners of historic landmarks or contributing historic buildings and structures shall not allow them to fall into a state of disrepair so as to endanger their physical integrity or the public health and safety. This ordinance created a legal obligation for all historic property owners, including the City, to maintain historic buildings. Thus, the City is legally obligated to maintain the Wayne Theatre building even if the WTA s renovation project does not proceed. For several reasons, WDDI would not support tearing the building down. First, the building is an historic landmark. Second, as stated above, the cost to demolish the building is equal to the grant Council has committed demolition provides no cost savings to the City. Further, an empty lot would create an unattractive hole downtown that would generate no tax revenue. Other options might include creating a parking lot, which would cost the City further funds and would generate no direct tax revenue. Or the City might try to sell the property on the open market, hoping for a new building project appropriate to the downtown. This option takes control of the property out of the City s hands and makes the property s future economic impact uncertain at best. It seems clear that the payback to the City for spending $300,000 to demolish the theatre is limited to none; the payback from a renovated, successful performing arts center would be significant and ongoing. Stage Two - $700,000 Incentive Package WDDI supports the Stage Two pay-for-performance funding structure, as it links future funding to tangible, objective performance measures that will require the WTA to show steady progress in their business model. If the WTA does not meet the performance standards set by City Council and the EDA, the City is under no obligation to continue supporting the project. WDDI believes this is the responsible way to oversee economic development incentives. While the initial $300,000 grant is necessary to secure the physical integrity of the building, the $700,000 incentives will be contingent on the Wayne Theatre Alliance implementing and executing a successful business plan. WDDI is committed to the success of the Wayne Theatre project as an integral part of the economic revitalization of downtown and will partner with the WTA in appropriate ways to assure that success. Possible performance measures WDDI would endorse include the following: New tax revenue resulting from increases in affected Central Business District property values. An incentive formula based on the number of tickets sold and their associated tax revenue. (For example, we can assume that for each 100 tickets sold to major events, X% of attendees will pay meals taxes and Y% of attendees will pay lodging taxes that night).

5 Incentive payments that recognize downtown revitalization associated with the Theatre. For example, we anticipate seeing new restaurants opening downtown once a performing arts space is drawing evening visitors to Main Street. Others as established to be appropriate as the project moves forward. Lastly, the City should take an ownership and leadership role in the revitalization of the downtown. Future investors will be more attracted to our City once we ve demonstrated our own commitment to caring for our historic and artistic resources. WDDI believes this project demonstrates that commitment. In conclusion, the Board of Directors of WDDI supports City Council s investment in the Wayne Theater, as structured in the Resolution, as an economic development catalyst to the revitalization of the central business district and further supports the EDA being the facilitating organization for overseeing and protecting the City s investment. KW, May 2007

6 Attachments: Rescuing and Rehabilitating Historic Main Street Theatres Kennedy Smith, Main Street News No.232, September 2006 Arts & Economic Prosperity, III The Economic Impact of Nonprofit Arts Organizations and Their Audiences Americans for the Arts, Measuring the Impact of Investments in Cultural Facilities (PowerPoint) Ryerson University 2003 Portion of Beyond Anecdotal Evidence, The Spillover effects of Investments in Cultural Facilities Ryerson University, Arts & Economic Prosperity The Economic Impact of Nonprofit Arts Organizations and Their Audiences Americans for the Arts, Restoring Our Theatres; Rebuilding our Communities Featuring the Economic Impact of Cleveland s Playhouse Square Paul E. Westlake, Jr. FAIA Westlake Reid Leskosky, October 1998 Playhouse Square Center: Economic Impact and Contribution to Northeast Ohio Center for Economic Development, Maxine Goldman Levin College of Urban Affairs, Cleveland State University October 2004 Case Studies on the Economic and Cultural Impact of Historic Theatres The Woodward Opera House, Mount Vernon, OH 2007 Economic Impact and Significance Analysis Prizery GCX: Global Corporate Xpansion Quality of Place Halifax County Tourism Department Lou Ann Thomas, Spring 2007 Edition

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