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O R A N G E C O U N T Y
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: MARCH 15, 1994
Action A ends
Item # X-
SUBJECT: OVERVIEW OF ARTSCENTER'S CAPITAL CAMPAIGN
DEPARTMENT: COUNTY MANAGER PUBLIC HEARING: Yes —X—No
ATTACHMENT(S) : INFORMATION CONTACT:
JOHN LINK, COUNTY MANAGER, EXT. 2300
TELEPHONE NUMBERS:
Hillsborough - 732-8181
Durham - 688-7331
Mebane - 227-2031
Chapel Hill - 967-9251/968-4501
PURPOSE: To receive a report on the ArtsCenter's capital
campaign and the specific requests from local area
governments in support of that campaign.
BACKGROUND: See attached report.
RECOMMENDATION: Receive as information.
1
THE ARTSCENTER, INC.
SUMMARY OF PROPOSAL Prepared 9 March 1994 2
The ArtsCenter will embark on a major fundraising campaign begining January 1994 and
continuing through December 1995. The campaign is divided into three individual campaigns:
* $575,000 to purchase the building
* $125,000 annual operating fiords
* $200,000 funds for elimination of construction debt
Commitments to Date:
Building Purchase QWrating Debt
Foundations $75,000
Corporations $150,000
Government $10,000
Individuals $10,000
$95,000 $150,000
Requests in Process: Foundations-$400,000, Corporations$75,000
Local Government Requests:
The ArtsCenter has asked a major foundation to up-front$300,000 for the purchase of the
building. We will then ask the Towns of Chapel Hill]and Carrboro and Orange County to enter
into a service contract with The ArtsCenter. The fiords received for the services provided will be
used to repay the initial investment by the foundation. This option allows the governments to
spread the payments over a tan year period.
Why Purchase:
Current Occupancy Cost After Purchase Cost
Rart $ 44,500 $ 0
Maintenance 7,400 7,400
Insurance 3,100 1,000
Taxes 9,300 9,300
$ 64,300 $ 17,700
• Note payment of$132,000 included in purchase and$133,000 debt forgiveness from
Babcock Foundation, if building purchased
• Assessed value of building$1,200,000 and The ArtsCenter has invested$700,000 in
renovations
• Currently operating with no lease,possibility of loss of space or rart increase
300-G East Main Street, Carrboro,North Carolina
(919) 929-2787
ATTENDANCE STATISTICS
3
ARTSCENTER EVENTS
AVG
1993 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOT ATTN
THEATER 1 1 1 3 1 4 1 1 2 4 1 2 22 9,900
FAMILY 1 2 4 1 3 1 1 2 2 2 2 21 6,300
WORLD 1 1 1 1 4 1,000
FOLK/TRAD 3 1 1 3 2 3 3 1 1 18 4,500
JAZZ 2 1 3 2 2 2 5 6 3 3 5 1 35 7,000
GALLERY 1 1 1 1 1 1 1 1 1 9 1,980
TEEN 1 1 1 1 4 600
MISC 1 1 1 6 5 3 1 1 19 4,750
TOTAL 1 6 10 10 14 12 15 10 9 11 16 12 7 132 36,030
ARTSCHOOL CLASSES JANUARY - DECEMBER 1993
SESSION VISUAL PERFORMING LITERARY CHILDREN TOTAL
FALL 27 24 5 18 74
WINTER 50 29 5 16 100
SUMMER 17 12 1 16 46
WORKSHOPS 5 5 10
SWING 30 30
TOTAL 99 100 11 50 260
TOTAL AVERAGE ATTENDANCE - CLASSES 5720
TOTAL AVERAGE ATTENDANCE - PRESENTATIONS 36,030
TOTAL ATTENDANCE 41,750
TOTAL EVENTS AND CLASSES 392
4
"1993-1995 Campaign for the Arts"
The ArtsCenter, Inc.
Orange County, North Carolina
Case in Support of The ArtsCenter
The ArtsCenter, Inc.
300-G East Main Street
Carrboro, North Carolina 27510
Phone: (919) 929-2787
Contact:
Ida H. Friday, MPH, Campaign Co-Chair
Philip Nelson, Ph.D., Campaign Co-Chair
Fred Good, Board of Directors, President
Eileen M. Helton, Genera/Manager
Julie Tomkovick, Development Director
THE ARTSCENTER, INC. 5
ORANGE COUNTY APPLICATION
EXHIBIT F (DETAILED REQUEST) 11 MARCH 1994
BACKGROUND
Incorporated in 1974, The ArtsCenter, Inc. is a multi-cultural, multi-disciplinary,
community arts facility serving children and adults from a broad range of social and
economic backgrounds. It is recognized by the Internal Revenue Service as a private, not-
for-profit organization under section 501 (c) 3 and as a tax exempt organization by the
State of North Carolina. The ArtsCenter is accessible to a number of Triangle
communities. Chapel Hill, Pittsboro, Hillsborough, Sanford, Durham and Raleigh are all
within a 30-mile radius of The ArtsCenter. Interstate routes 40 and 85 are within minutes
of the center as are State routes 15-501 and 54.
By offering over 390 different classes and events each year,The ArtsCenter serves
over 40,000 people: of this number,90% reside in the immediate 10-county area,
although attendance has been documented from residents of 50 of North Carolina's
100 counties.
AUDIENCE DEMOGRAPHICS
By Race By Gender By
70%White 50%Male 10 % 3-18
25%Black 50%Female 5 % 18-24
4%Hispanic 38 % 25-40
1% Asian 37 % 40-65
10 % 65+
TRIANGLE AREA DEMOGRAPHICS
70%White 11.5% 20-24
20%Black 46.5% 25-35
7%Hispanic 32 % 36-65
3%Asian 10 % 65+
MISSION
The ArtsCenter is an arts organization. It is community-based and multi-cultural. It
promotes, nurtures and challenges the creative spirit by providing an environment for arts
education, participation and appreciation.
300-G East Main Street, Carrboro, North Carolina
(919)929-2787 1
THE ARTSCENTER, INC.
ORANGE COUNTY APPLICATION 6
EXHIBIT F (DETAILED REQUEST) 11 MARCH 1994
THE IMPORTANCE OF CULTURAL ACTIVITIES IN THIS COMMUNITY
A community in close proximity to a major corporate location like Research Triangle Park
has certain criteria to fulfill if it wishes to attract business and tourism and promote
economic growth. They are: educational services, health services, high quality civic
activities and major arts and cultural activities. These are the main building blocks for a
community to participate in the "Global Village".
Orange County is rich in all four areas. However, its arts and cultural activities must be
preserved and expanded. The ArtsCenter plays a critial role in this plan. By supporting
the only center in Orange County that provides such a wide range of services for the artist
as well as the general public,the community increases its appeal to business, visitors,
students and residents.
The ArtsCenter consistently earns over 60% of its income. Compared to the national
average of 40%, it shows excellent financial acumen. The ArtsCenter, compared to other
arts facilities in the Triangle area, stands up well. It is one of the only organizations to be
able to maintain an operational budget. It is not supported by a university or a foundation
and it is not part of a local government. The ArtsCenter is the only arts center in
North Carolina that pays more than a nominal rent(usually$1 per year).
Local Government support in helping purchase a facility will allow The.ArtsCenter to
expand programming. In 1989, 35,000 people came through the doors of The ArtsCenter.
Careful planning and development of outreach programs has increased attendance to over
40,000 in 1993. This was all done with a small budget (less than one half of the 1990
budget) and a staff of three full-time and two part-time positions. The ArtsCenter's focus
is to increase these numbers, include more outreach programs and continue the high
quality programs offered. To do this, the building needs to be owned, debt-free and the
staff needs to be increased.
Local government support will provide the impetus to revitalizing the center and making it
a showplace for Orange County.
300-G East Main Street, Carrboro, North Carolina
(919) 929-2787 2
THE ARTSCENTER, INC.
ORANGE COUNTY APPLICATION
EXHIBIT F (DETAILED REQUEST) 11 MARCH 1994
PRINCIPAL ASSUMPTIONS
1. The owners of the building have signed a purchase and sale agreement with The
ArtsCenter.
2. The ArtsCenter is able to maintain operational stability.
3. Coincident with purchase of the facility, The ArtsCenter will obtain forgiveness of a
$133,000 obligation(including interest)to The Mary Reynolds Babcock Foundation,
thus reducing the long-term liability of$430,326 to $297,326.
4. Coincident with purchase of the facility, an additional $139,976 upfit loan will be paid,
further reducing the long-term liability of $297,326 to $164,350.
5. The ArtsCenter is the only arts center in Orange County and facilitates other arts
organizations under its umbrella.
6. The purchase will be all cash with no acquisition of debt.
7. The Triangle Community Foundation(TCF)has agreed to handle the Capital
Campaign funds. All donations to the capital campaign(except operational funds)will
be placed in this fund and TCF will oversee distribution of the money at closing.
8. At the campaign's completion, The ArtsCenter will own its building and have no debt.
9. It is assumed that the Capital Campaign will run from January 1994 through December
1995 (see following page for flow chart).
10. According to projections, purchase of the building will result in total contribution by
the local governments of approximately$500,000 over the next 10 years. Without
ownership, The ArtsCenter will have to seek contributions of$750,000 over the same
period. See Attachments A and B.
11. Once the funds to purchase the building($575,000) are raised, the remaining debt can
be reduced at a slower pace. The ArtsCenter is currently paying approximately
$25,000 each year in debt repayment which includes some interest(Attachment C).
Restructuring $164,350 is well within the center's capability.
300-G East Main Street, Carrboro, North Carolina
(919) 929-2787 3
t
THE ARTSCENTER, INC.
ORANGE COUNTY APPLICATION 8
EXHIBIT F (DETAILED REQUEST) 11 MARCH 1994
CAMPAIGN TIME-LINE
JAN 94 MAR 94 APR 94 AUG 94 DEC 94 DEC 95
MCRB X
FOUNDATION APPROVAL X
GOVT APPROVAL x
GRASSROOTS
CAMPAIGN OPENS X
SERVICE CONTRACT Y
FOUNDATION EQUITY x
BUILDING SURVEYS
AND ZONING x
PURCHASE OF BUILDING ,{
CAMPAIGN ENDS x
300-G East Main Street, Carrboro, North Carolina
(919) 929-2787 4
THE ARTSCENTER, INC.
ORANGE COUNTY APPLICATION 9
EXHIBIT F (DETAILED REQUEST) 11 MARCH 1994
OVERVIEW OF CAPITAL CAMPAIGN
The Capital Campaign is divided into four(4) sections: Building Acquisition,
Campaign Organization,ArtsCenter Operations and Long-Term Debt Elimination. It
will focus on six (6) sources for generation of donations: Foundations, Major
Corporations, Local Government, Other Government, Grassroots Individuals and
Foundation Equity. Its financial goal includes retirement of all debt as well as building
purchase and annual operations.
The space being purchased encompasses a visual arts gallery, classrooms, dance studio,
darkroom, ceramics studio, large theater, small theater, office space and public facilities.
The building was improved in 1986 by The ArtsCenter at a cost of$700,000. The
ArtsCenter owns the upfit. This proposal will cover the real property purchase.
CAPITAL CAMPAIGN SECTIONS
1. Building Acquisition: includes the purchase of the real property consisting of 19,000
square feet. The acquisition will require some subdivision and survey work in order to
separate the property from the existing strip mall. Architectural and survey fees are
anticipated and included in the Project Budget, Attachment D. Legal fees have also
been considered and are included as well.
2. Campaign Organization: The cost of running the entire campaign(excluding the
April 9th Campaign Opener)is included in the$8,000 fugure(see Attachment D,
Project Budget). This cost includes attorney and accounting fees as well as materials
and labor for campaign production. All campaign workers are unpaid volunteers
except for the current five(5) staff members.
3. ArtsCenter Operations: Because the capital campaign will be running at the same
time as our normal fundraising campaign, it is prudent to run both together.
$125,000 is the usual amount raised in annual fundraising and is used to support
ArtsCenter operations.
4. Debt Elimination: The original $700,000 construction debt has been reduced to
under$200,000. This amount is also included in the campaign. A breakdown of the
actual amounts is available on request.
300-G East Main Street, Carrboro, North Carolina
(919) 929-2787 5
THE ARTSCENTER, INC. 10
ORANGE COUNTY APPLICATION
EXHIBIT F (DETAILED REQUEST) 11 MARCH 1994
SOURCES OF CAPITAL CAMPAIGN FUNDS
1. Foundations: Expected income from North Carolina and National Foundations is
$195,000.
2. Corporations: Small, medium and large businesses and corporations in RTP,
Durham, Orange and Wake Counties are expected to provide$250,000 from their
marketing, advertising and corporate giving funds.
3. Local Governments: The campaign will ask that the towns of Carrboro, Chapel Hill
and Orange County enter into a service agreement for a ten year period. The
agreement will stipulate that The ArtsCenter provide arts programming in Orange
County. The ArtsCenter will use this service contract as a guarantee to local
Foundation for repayment of its equity.
4. Other Government: The North Carolina Arts Council(NCAC),National
Endowment for the Arts(NEA), Southern Arts Federation(SAF), Change County
Arts Commission(OCAC) are expected to continue their support and increase grants
over the next two years. This section will bring $25,000 to the campaign.
5. Grassroots Individuals: This portion of the campaign is community support. We
expect to launch this portion in April 1994. $130,000 is expected from the
community.
6. Foundation Equity: A local Foundation has agreed to front $300,000 toward the
purchase of the building. This equity will be repaid through an agree-meat among The
ArtsCenter, the three local governments and the foundation. This agreement will
include a service contract which will be expected to continue over a ten year period,
thus allowing The ArtsCenter to repay the equity advanced by the foundation. The
ArtsCenter is working with the three local government attorneys to draft a contract.
300-G East Main Street, Carrboro,North Carolina
(919)929-2787 6
1
THE ARTSCENTER, INC.
ORANGE COUNTY APPLICATION 11
EXHIBIT F (DETAILED REQUEST) 11 MARCH 1994
CAMPAIGN STRUCTURE AND OVERSIGHT
The campaign is now being planned by The ArtsCenter's Board and Advisory Council.
The fundraising efforts began in September 1993. The official campaign will run from
January 1994 through December 1995 with the opening announcement in April 1994.
This opening announcement will be the commencement of the Grassroots portion of the
campaign. The purchase agreement expires April 1995.
The campaign strategy was brought before the Major Campaign Review Board(MCRB)
on 19 January 1994. The campaign has been reviewed and scheduled.
Contributions are being solicited on an individual basis by the members of the Advisory
Council. These contributions are from corporations, foundations and private individuals.
FIRM COMMITMENTS REQUESTS IN PROCESS
Foundations $ 75,000 $ 375,000
Corporations 150,000 75,000
Individuals 10,000
Other Govt 10,000 35,000
This Request 20,000
$ 245,000 $ 505,000
*This proposal requests a long term commitment through a service contract for a ten year
period from Orange County.
300-G East Main Street, Carrboro,North Carolina
(919)929-2787 7