Palm Springs to provide $20 million more for Plaza Theatre renovation
The city of Palm Springs will now front the bulk of the money for a planned overhaul of the Plaza Theatre under an agreement approved by the city council Thursday.
The council had been asked to provide $20 million in city funds to cover more of the cost of renovating the historic movie house, which a foundation headed by former City Councilmember J.R. Roberts has been fundraising to retrofit into a modern performing arts venue capable of hosting a variety of live events.
Roberts told the council that the foundation was asking for the city to front the money after construction bids for the project exceeded previous expectations by nearly $10 million.
He said the city money would allow construction to start in the near future, and that if the council voted no, the bids would have to expire. That would delay the project while more funds were raised and eventually require a new bidding process and what would almost certainly be a higher construction price tag.
The council unanimously approved the agreement, which will allow $13 million in funds that had been allocated for other uses in the city’s current budget to be diverted to fund the construction of the theater. Multiple councilmembers said they supported the diversion because the city will be able to replenish the funds before they are needed.
Following the discussion, the council voted to amend the proposed agreement and source the funds from the following funds within the city’s budget:
$7.5 million in Measure J funds. Measure J is the city’s extra 1% sales tax that is used to fund infrastructure projects. Of that $7.5 million, $5.85 million had been budgeted toward the eventual construction of a new fire station while the rest was set aside to fund future projects initiated by the community.
$6.9 million from the city's unassigned reserves, which total $85 million
$4 million that had been set aside to fund what a staff report calls "police future study and services." Police Chief Andy Mills said the study had already been delayed for other reasons.
$1.6 million in funds that had been budgeted for workforce development but not any specific program.
The council also added a requirement that the city assign a project manager to oversee it. Councilmember Jeffrey Bernstein, who rotated into the mayor role on Thursday, said that manager would be important to ensure the project stays on track and avoids further cost increases.
The contract also includes language legally requiring the foundation to continue to fundraise to repay the city $10 million, or half the amount the city will now provide, within three years of the completion of work on the theater, which is currently projected to be finished in 2025.
So far, the foundation has raised about $12 million from private donors, plus $2 million more that the city had previously committed and which will not need to be repaid. City Attorney Jeffrey Ballinger said that if the foundation did not repay the $10 million, the city could sue the foundation and terminate the agreement allowing the foundation to manage the theater once it is renovated. However, he noted that the city does not expect any problems with the repayment.
The council initially discussed putting language into the contract stating that the foundation would raise the full amount the city was fronting, but later agreed to limit the repayment requirement to $10 million after Roberts said a higher fundraising goal would get in the way of raising additional funds for programming at the theater, which had been the foundation's intention once the construction was funded. Roberts has said the city will still effectively be repaid for the other $10 million because an operating theater will increase the city's sales tax collections by $2 million to $4 million a year, according to the foundation's projections.
During the discussion, multiple councilmembers said they wanted to clarify the city’s involvement in funding the project.
“I think one thing that’s been misunderstood by the public or the media is if we’re lending a private foundation money and what that looks like,” Councilmember Christy Holstege said. “But really were coming together to jointly develop this project.”
Councilmember Lisa Middleton, meanwhile, said it was not the case that the city was asked between building a fire station and funding the theater, because the fire station is not ready to be built.
“We're being asked whether or not we are willing to begin construction on the project that's ready to begin construction and then move forward on those other projects at the time that they are able to begin construction,” she said.
Bernstein said that because the theater is a historically protected site that is required to remain a theater but must be restored to function, “there’s not a lot of other options for this unless we let it sit there.”
Correction: A previous version of this story misstated the terms of the city's agreement with the Plaza Theatre Foundation regarding repayment. The agreement obligates the foundation to repay the city $10 million within three years of the end of construction.
Paul Albani-Burgio covers breaking news and the city of Palm Springs. Follow him on Twitter at @albaniburgiop and email him at paul.albani-burgio@desertsun.com.
This article originally appeared on Palm Springs Desert Sun: Palm Springs to provide $20 million more for Plaza Theatre renovation
