Arlington County’s Continuing Artisphere Boondoggle
The Arlington County Board took at least 15 significant actions, not including “actions related to the procurement of various capital contracts or the amendments of those contracts” between September 2007 and January 2011 regarding the Artisphere. And, that does not include a major discussion at the budget work session follow-up on April 7, 2011 (see the informative staff response to a question raised by a Board member at the March 31, 2011 Parks, Recreation and Cultural Resources work session -- requires Adobe).
So now comes news that at its November 29, 2011 recessed meeting, the County Manger presented the Board with her new 14-page business plan plus two-pages of financial information and 16-pages of “metrics” for the revised plan (accessible from the Board’s November 29 recessed meeting agenda). Finally, the county’s press release is here.
In today’s Arlington Sun Gazette, Scott McCaffrey reports:
“County Board members on Nov. 29 reacted with cautious optimism to County Manager Barbara Donnellan’s rescue plan for the year-old Artisphere cultural center, while still holding out the possibility that the Rosslyn facility will be shuttered if it continues to swim in red ink.
“Donnellan plans to move the facility’s management from the Department of Parks, Recreation and Cultural Resources to Arlington Economic Development, using its staff to promote corporate rentals of the space to subsidize arts programming.
“The reorganization also adds a chief financial officer to oversee the rescue, cuts hours the facility is open to the public, abandons plans for a full-time restaurant, closes the gift shop and cuts staff.
“As a result, officials predict the annual taxpayer subsidy to fill the Artisphere’s deficit will shrink to $1.6 million, about $1 million lower than had the changes not been made. And they expressed hope that the changes would give the facility a fighting change at long-term success.”
Here’s how ARLnow.com began its discussion of the story of the “major changes proposed for Artisphere:”
“A plan to boost the finances of Artisphere, the struggling county-run arts center in Rosslyn, includes dramatic changes to the original vision for the venue.
“A revised business plan, which will be presented to the County Board this afternoon, will suggest slashing Artisphere’s hours, shuttering its restaurant and retail store, and generating more revenue via corporate event rentals.
“Even if the plan is implemented, however, the task force expects Artisphere to burn through more than $2.3 million in taxpayer funds in financial year 2012 and another $1.6 million in financial year 2013. If the new plan is shelved, Artisphere will require nearly $2.7 million in taxpayer support in FY 2012, the task force said. The one-year-old venue’s original business plan projected only $739,975 in county taxpayer support in FY 2012."
In the Washington Business Journal today, reporter Missy Frederick makes a major point, writing:
“The task force met with stakeholders such as the Rosslyn Business Improvement District and community arts groups before presenting its findings.
“I think there were some pretty big constraints and limitations that we found throughout the work of the task force that I don’t think were really well known by a lot of folks,” Vasquez said.
“The task force looked at several of the project’s strengths and weaknesses. It praised the facility’s Metro-accessible location, experienced leadership staff and ability to draw attendees from outside of Arlington. But it also found that the project had branding issues concerning exactly what the space does and suffered due to the sluggish economy.
“Staffing at Artisphere will remain relatively unchanged in terms of number of employees, though some new positions have been created and others eliminated.”
There’s no doubt that there’s more to growl about this boondoggle, but in the meantime, here’s how Arlington's preeminent budget watchdog, Wayne Kubicki, looks at the Artisphere and its new business plan, and makes the following 13 points:
- Before the Artisphere plans were approved, the County Board laid out a marker for then County Manager Ron Carlee – that the facility would require no “new” net tax support, and could break even with approximately $700K of net tax support, which was already being spent for pre-existing County art programs that would relocate to the former Newseum site. Not surprisingly, a business plan meeting that test was produced, and the project went ahead, costing the County $6.7M for construction.
- The operating numbers now tell the tale – the Board budgeted $1.3M of tax support for FY12. Staff now estimates they will miss that number by an additional $1.4M, bringing total support for FY12 up to $2.7M. The revised business plan presented yesterday projects FY13 needing $1.6M in operating support – nearly $1M more than hoped for.Was the Board sold a “pig in a poke” with the original business plan? Hard to see how one could argue otherwise with a straight face.
- The shortfall has come on both sides of the ledger – revenues nowhere near projections (missing the targets by nearly $1M per year), and expenses also running $1M higher than originally anticipated.
- The failures have been well documented – among them, a very poorly planned operational launch, questionable management of events, poor audience targeting and the total failure of getting a revenue producing restaurant.
- The new plan, released yesterday, relies heavily on increased event rentals for corporate and social events. Well and good, if it works – but, in truth, this would probably take this business away from Arlington’s private sector hotels, other conference facilities and restaurants.
- Was this all a mistake in the first place? I submit it was.
- As currently projected, by the end of FY13, Artisphere will have cost Arlington taxpayers a total of $10.6M in construction costs and unanticipated operating subsidies.
- How long can this go on? Can we count on better oversight from the County Board?
- Comments from two separate Board members at yesterday’s meeting reveal the Board’s collective mindset.
- One member stated that “free things aren’t necessarily free.”
- Another, referring to the figures being presented and the new business plan, said “I’m not in a position to question or challenge any of this.”
- That tells you about all you need to know? Unfortunately, I think it does.
- Tax-supported things that don’t work are expensive – and the taxpayers get to pay.
In retrospect, it’s unfortunate the Board didn’t have the foresight presented in the task force’s business plan. That said, it’s not clear the new business plan will fix what needs fixing. What is clear, however, is that government should restrict itself to core government functions such as police enforcement, and stay out of places where it doesn’t belong, e.g., the arts.
UPDATE (12/02/11): ARLnow.com provides the critics reaction today to the county government's Artisphere's new business plan. Critics include Wayne Kubicki and your humble scribe.