HomeMy WebLinkAboutAgenda - 05-04-2021; 6-a - Authorization to Proceed with New Orange County Arts Commission Office and Arts Space and Associated Lease Agreement with Hedgehog Holdings 1
ORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: May 4, 2021
Action Agenda
Item No. 6-a
SUBJECT: Authorization to Proceed with New Orange County Arts Commission Office and
Arts Space and Associated Lease Agreement with Hedgehog Holdings
DEPARTMENT: Orange County Arts Commission
ATTACHMENT(S): INFORMATION CONTACT:
Eno River Arts Mill Project Outline Katie Murray, 919-245-2335
PURPOSE: To receive information on the proposed Eno Arts Mill Project and approve the Orange
County Arts Commission (OCAC) and staff to move forward by authorizing the Manager to sign a
lease agreement with Hedgehog Holdings for Suite 17 at the Eno River Mill in Hillsborough.
BACKGROUND: To address the identified needs of the arts community, the OCAC received
BOCC approval in October 2019 to enter into a lease agreement with Hedgehog Holdings, a
family-run, historic preservation development firm based in Raleigh and owner of the Eno River
Mill in Hillsborough. The partnership allowed the OCAC to offer eleven studio workspaces for local
artists. The spaces opened in February 2020, and proved successful and profitable in the first
year, exceeding projections even despite the pandemic.
In July 2020, the OCAC entered into "Phase 2" of the original plan and began renting Suite 29, a
large, open space for classes, exhibits, and events. Suite 29 is connected to the current OCAC
office. Due to the inability to host gatherings, the space was instead rented by three large-format
artists. In early 2021, two front-facing office suites (17 A&B) very close to the artist studios became
available. At the same time, owners of the Eno Mill were approached by a tenant interested in
renting Suite 29 and the OCAC office.
Hedgehog Holdings has offered 17 A&B to the OCAC at the extremely generous rate of $1 per
square foot. The space, which is just under 7,000 square feet and ideally situated in an easily
accessible location, will allow the OCAC to expand its offerings to the community in ways that will
fundamentally change the arts landscape of Orange County and provide real solutions to the
identified challenges facing the arts. Suite 17 will offer class space, exhibits and event space, a
welcoming office for the OCAC, and affordably-priced offices for local cultural organizations.
FINANCIAL IMPACT: Conservative budget projections predict Suite 17 will be self-sustaining
and profitable, continuing to support additional accessible programs and space. An initial upfit
expense of $70,000 will be needed to install additional doors and a small kitchenette. The OCAC
has incorporated this cost, as well six-months operating expense, into a larger proposal
requesting allocation of American Rescue Plan funding to the arts industry. Hedgehog Holdings
has offered to pay for any upfit expense in excess of $70,000 as well as the expense of paint,
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ceiling repair, and improved lighting. Hedgehog Holdings has also offered to pay for the cost to
move the OCAC from the current office and Suite 29 into Suite 17.
SOCIAL JUSTICE IMPACT: The following Orange County Social Justice Goals are applicable
to this item:
• GOAL: ENSURE ECONOMIC SELF-SUFFICIENCY
The creation and preservation of infrastructure, policies, programs and funding necessary
for residents to provide shelter, food, clothing and medical care for themselves and their
dependents.
• GOAL: ENABLE FULL CIVIC PARTICIPATION
Ensure that Orange County residents are able to engage government through voting and
volunteering by eliminating disparities in participation and barriers to participation.
ENVIRONMENTAL IMPACT: There is no Orange County Environmental Responsibility Goal
impact associated with this item.
RECOMMENDATION(S): The Manager recommends that the Board:
1. Approve the proposed occupancy of Suite 17 and authorize the County Manager to sign a
lease agreement with Hedgehog Holdings for up to five years consistent with the rent
schedule outlined in the attached project outline. This authorization is contingent on
approval by the County Attorney; and
2. Authorize the County Manager to sign sub-lease agreements with local cultural
organizations and/or artists according to the sub-lease rate schedule detailed in the
attached project outline, pending review by the County Attorney.
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ORANGE COUNTY ARTS COMMISSION
ENO RIVER ARTS MILL
BACKGROUND
In 2o16,the OCAC began to examine the challenges facing the creative community of Orange County. Data was
gathered through listening sessions, surveys, and meetings. The top three needs according to our research were:
1. A strong Local Arts Agency.The OCAC,the Designated County Partner with the NC Arts Council, has
significantly strengthened its role as the primary arts agency for Orange County over the last several years.
z. Space. A lack of space for artists to thrive is the primary factor impacting the county's creative community.A
healthy arts ecosystem offers artists the opportunity to affordably live, as well as work, learn, and create. It also
offers residents the opportunity to experience the arts not only as observers, but participants.
3. Access. Despite the wealth of human services offered in Orange County,the arts are primarily available to
residents with the financial means to pay.They should be integrated into all aspects of the community, but this
is only possible with increased space.
To begin to address these concerns,the OCAC received BOCC approval in October, 2019,to enter into a lease
agreement with Hedgehog Holdings, a family-run, historic preservation development firm based in Raleigh and owner
of the Eno River Mill in Hillsborough. The new partnership allowed the OCAC to offer eleven studio workspaces for
local artists.The Eno Mill Artist Studios opened in February 202o, and proved successful and profitable in its first year,
exceeding projections even despite the pandemic.
Last summer,the OCAC entered into"Phase 2"of the original plan and began renting Suite 29, a large, open space
originally intended for classes, exhibits, and events. Suite 29 is connected to the OCAC office. Due to the inability to
host gatherings,the space was instead rented by three large-format artists. In early 2021,two front-facing office suites
(17A&B)very close to the artist studios became available; during the same time, owners of the Eno Mill were
approached by a tenant interested in renting Suite 29 and the OCAC office.
ENO ARTS MILL MULTIPURPOSE ARTS SPACE
Hedgehog Holdings has offered 17A&B to the OCAC at the extremely generous rate of$1 per square foot.The space,
which isjust under 7,000 square feet and ideally situated in an easily accessible location,will allow the OCAC to expand
its offerings to the community in ways that will fundamentally change the arts landscape of Orange County and provide
real solutions to the identified challenges facing the arts.
• A large class space will allow regular arts classes for the community, a long-time need for the Hillsborough
area.This will allow the OCAC to generate revenue in two ways by hosting our own classes and by renting out
the room to organizations and artists wishing to hold their own art classes.
• A large exhibits and events space will allow Eno Mill artists, a well other local artists, high-quality gallery space
to display and sell their work.The space can will also be used for small events and gatherings, offering the
OCAC another opportunity to generate revenue through rentals of the room.
• A welcoming office with a front-facing door. Unlike the current OCAC office whose interior location is difficult
to find,the new office will be a bright and centrally located welcoming point for visitors.The space will offer
storage, a spacious conference room (currently lacking)as well as an additional room for small classes
• Six affordably priced studios or offices for local artists and organizations.These spaces come at a time when
some local organizations have lost space;the prospect of finding new space at this rate is nearly impossible. For
other organizations,these spaces will allow them to expand their footprint to Hillsborough and/or share space
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with other creative organizations.The OCAC is currently discussing monthly rental options and shared
class/event space with the following community organizations:
• Art Therapy Institute • Music Maker Relief Foundation
• Bull City Music School • NC Mosaics
• Chamber Orchestra of the Triangle • Occaneechi Tribe
• Hillsborough Arts Council • Orange County Artists Guild
In the event that local organizations do not occupy all six spaces,they will be offered to local artists as
additional studio space or explored for additional OCAC programs such as the membership-based community
dark room
Potential Economic Impact:
• Class participants, parents of children participating in youth programs, event attendees and artists will regularly
visit the mill, creating a built-in customer base for nearby restaurants and shops.
• The presence of artists and creative space will continue to grow the property value of ERM, and therefore tax
revenue for the county. Following restoration work at ERM, property tax grew from $26,800 in 2015 to$52,600
in 2o18.
Financial Impact:
Conservative budget projections predict Suite 17 will be self-sustaining and profitable, continuing to support additional
accessible programs and space.An initial upfit expense of$70,000 will be needed to install additional doors and a small
kitchenette.The OCAC has incorporated this cost, as well six-months operating expense, into a larger proposal
requesting allocation of American Rescue Plan funding to the arts industry. Hedgehog Holdings has offered to pay for
any upfit expense in excess of$70,000 as well as the expense of paint, ceiling repair, and improved lighting. Hedgehog
Holdings has also offered to pay for the cost to move the OCAC from the current office and Suite 2g into Suite 17.
Five-year budget forecast:
ENO MILL 17 A&B Annual Budget YEAR ONE NOTES
REVENUE Year 1 Year 2 Year 3 Year 4 Year 5
CLASS REVENUE
Large Room $33,600.00 $35,280.00 $37,044.00 $38,896.20 $40,841.01 1 class per week,3 hours/$35 pp/20 pp
TOTAL CLASS REVENUE $33,600.00 $35,280.00 $37,044.00 $38,896.20 $40,841.01
GALLERY REVENUE
Work sold $60,000.00 $63,000.00 $66,150.00 $69,457.50 $72,930.38 Gross
Donations $1,200.00 $1,260.00 $1,323.00 $1,389.15 $1,458.61 $100/mnth
TOTAL GALLERY REVENUE $61,200.00 $64,260.00 $67,473.00 $70,846.65 $74,388.98
Rent Revenue(arts organizations or artist studios)
Large Classroom Rentals $21,600.00 $22,680.00 $23,814.00 $25,004.70 $26,254.94 2 per week/$75 per hour x 3
Small Classroom Rentals $8,640.00 $9,072.00 $9,525.60 $10,001.88 $10,501.97 3 class per week/$30 per hour for 2 hour
Gallery/Event Rentals $9,600.00 $10,080.00 $10,584.00 $11,113.20 $11,668.86 2 per month @$100/hourfor4 hours
Space $7,800.00 $8,190.00 $8,599.50 $9,029.48 $9,480.95 Interested tenants:
Art Therapy Institute
Space B $7,800.00 $8,190.00 $8,599.50 $9,029.48 $9,480.95
Chamber Orchestra of the Triangle
Space C $7,200.00 $7,560.00 $7,938.00 $8,334.90 $8,751.65 Bull City Music School
Space D $6,600.00 $6,930.00 $7,276.50 $7,640.33 $8,022.34 Orange County Artists Guild
NC Mosaics
Space E $6,600.00 $6,930.00 $7,276.50 $7,640.33 $8,022.34 Occeneechee Tribe
Space F $6,600.00 $6,930.00 $7,276.50 $7,640.33 $8,022.34 Several individual artists
TOTAL RENT REVENUE 1$82,440.00 1$86,562.00 1$90,890.10 1$95,434.61 1$100,206.34
GROSS REVENUE $177,240.00 $186,102.00 $195,407.10 $205,177.46 $215,436.33
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EXPENSE
CLASS EXPENSE
Supplies $2,400.00 $2,520.00 $2,646.00 $2,778.30 $2,917.22
Staff $2,160.00 $2,268.00 $2,381.40 $2,500.47 $2,625.49 9 hours/mnth @$15/hr
Teacher fee $16,800.00 $17,640.00 $18,522.00 $19,448.10 $20,420.51 50%of gross-large class only
TOTAL CLASS EXPENSE $21,360.00 $22,428.00 $23,549.40 $24,726.87 $25,963.21
GALLERY EXPENSE
Artist payments for work sold $42,000.00 $44,100.00 $46,305.00 $48,620.25 $51,051.26 70%of gross
Supplies $2,400.00 $2,520.00 $2,646.00 $2,778.30 $2,917.22 Refreshments,general supplies
TOTAL GALLERY EXPENSE $44,400.00 $46,620.00 $48,951.00 $51,398.55 $53,968.48
OUTSIDE RENTAL EXPENSE
Staff $6,480.00 $6,804.00 $7,144.20 $7,501.41 $7,876.48 9 hours/wk @$15 hour
TOTAL OUTSIDE RENTAL EXPENSE $6,480.00 $6,804.00 $7,144.20 $7,501.41 $7,876.48
OCCUPANCY EXPENSE
RENT $84,000.00 $86,100.00 $88,252.50 $90,458.81 $92,720.28
Utilities $6,000.00 $6,300.00 $6,625.00 $6,945.75 $7,293.04
TOTAL OCCUPANCY EXPENSE $90,000.00 $92,400.00 $94,867.50 $97,404.56 $100,013.32
TOTAL EXPENSE $162,240.00 1$168,2S2.00 J$174,S12.10 1$181,031.39 1$187,821.49
MONTHLY NET REVENUE 0 0 1 0.
ENO ARTS MILL: OTHER PROJECTS
Suite 17 is part of an overall plan to activate the Eno Mill through community arts programs. The OCAC is currently
working on additional programs that would take place at the Eno Mill:
• A new, accessible children's theater company that would offer high-quality theater education to youth ages 8-
18 regardless on socio-economic status.The project would incorporate transportation from Orange County
Title 1 schools and a sliding-scale tuition structure.
• A community ceramics studio, in partnership with the Hillsborough Arts Council.
• A membership-based community dark room, offering work and teaching space for local photographers.
• Rehearsal space for two local orchestra companies: Chamber Orchestra of the Triangle who is currently in need
of new office and rehearsal space, and Bull City Music School who plans to launch a youth orchestra this fall.
• The Shop Spaces:three large, sub terrain workshop spaces ideal for heavy machinery work such as
woodworking and metalsmithing.
ENO ARTS MILL 6
Multi-use Arts Space
Suites 17 A&B
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Entrance
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Artist Studios
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Eno Mill
Suites 17 A&B 7
437 Dimmocks Mill Rd. Eno Mill Artist Studios
Hillsborough
Hallway
4 Rest- Restrooms
F E D OCAC room
15'6"x 16' 16'x 16' 17'x 16' 11'5"x 11'5"
250sf 256sf 272sf 132.25sf 3
OCAC Class/Rehearsal
Exhibit/Events 11'8"x 29'2"
Space 345sf Space
24'x 44' 24'x 44'
1056sf 2 975sf
OCAC
11'5"x 11'6"
134sf
A B C
16'x 19' 16'x 19' 16'x 14'5"
304sf 304sf 232sf
OCAC
15'5"x 19'2"
298sf
Parking Expedition School --->
KEY Rent
Space A:Arts organization or artist studio space $650/month OCAC 1: Reception area/lobby
Space B:Arts organization or artist studio space $650/month OCAC 2: Director's office
Space C:Arts organization or artist studio space $600/month OCAC 3: Board room
Space D:Arts organization or artist studio space $550/month OCAC 4: Small class space
Space E:Arts organization or artist studio space $550/month
Space F:Arts organization or artist studio space $550/month Unlabeled spaces: Storage
Events/Exhibit Space $100/hour
Class/Rehearsal Space $75/hour