TCA Statement

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Aug. 24, 2018

A recent opinion column in a local publication contained inaccuracies and unbalanced statements about the operations of the Tempe Center for the Arts (TCA) and lacked many facts about arts and culture in Tempe.

The City Council voted in June to put an arts sales tax question on the Nov. 6 ballot. Proposition 417 proposes a new sales tax and use tax of one-tenth of one percent to be implemented when an existing one-tenth of one percent tax expires in 2020. The funds would be used for arts and culture throughout Tempe, as guided by the city’s 2015 Arts and Culture Plan.

In 2015, the city finalized its Arts and Culture Plan, which was crafted through months of research and collaboration with nearly 1,000 community members. Since then, Tempe has been working to execute the recommendations of the plan, which include initiatives like developing more after-school and summer arts programs for youth and bringing art of all kinds into neighborhoods to enrich quality of life. The plan is available at www.tempe.gov/arts.

Back in May 2017, the City Council directed that city staff pursue a future ballot proposition to request a permanent arts and culture sales tax. As city staff presented to the Council then, annual operating costs for TCA are about $4 million and a tax at the proposed level would generate an estimated $8-9 million a year, allowing for the maintenance and expansion of arts and culture offerings throughout Tempe as recommended in the Arts and Culture Plan.

Some topics that the recent opinion piece misconstrued include:

TCA as a rental facility

Renting TCA is a past and present practice that will continue. The City of Tempe has always sought to share the community’s beautiful art center with residents, businesses and visitors at free events as well as at those that are associated with rental fees. Thousands of events – weddings, meetings, corporate gatherings and more – have been held at TCA since 2007, over and above performances and gallery shows. Tempe has always wanted to open the facility’s doors for all types of community events and the most treasured memories of people’s lives. That’s a good practice because it shares the asset that taxpayers have invested in and it helps provide funding to partially offset the cost of operations.

The arts as a revenue generator

It is a rare public sector arts center that makes money from performances and visual arts and does not need to offset its operations by some means. Nationally in the arts environment, that reality is common knowledge and accepted because communities provide arts opportunities for many reasons. They know that the arts enrich the lives of residents of all demographics and create community. The arts become part of the fabric of a community, which attracts and appeals to businesses – just as good roads and schools do. Tourism also benefits.

Tempe has had a transportation sales tax since 1996 because voters thought it vitally important for their city to provide multimodal transit operations and infrastructure. Transportation services are not revenue generators, but they are essential to community quality of life.

TCA consistently sees substantially more than 100,000 visits every year. The Tempe History Museum, another city arts and culture asset, had 33,000 visits last fiscal year. Thousands have participated in other city arts and culture offerings at city parks and other locations. Those are remarkable numbers and Tempe wants to continue striving to improve the quality, reach and impact of arts and culture opportunities.

TCA construction costs

TCA, which opened in September 2007, had a $65.7 million cost to build. That is more than what estimates had been in 2000 for several reasons. After multiple public meetings, the City Council decided to locate the TCA at Tempe Town Lake at a former landfill site that required remediation. While land costs were not a factor for TCA, remediation costs were. As the cost of construction of the TCA grew, the Council approved additional funds with stakeholder input and following the open meeting procedure. 

During the planning phase and with public input, the main theater grew to 600 seats from 500 seats. Construction costs were higher than anticipated, namely the cost of steel. In any construction project and in any economy, costs can escalate for materials and labor.

Establishment of an endowment

While the establishment of a TCA operating endowment was part of financing conversations discussed among Council and community members in 2000, it was not included in Proposition 400 ballot language in 2000. Voters approved a one-tenth of one cent sales tax “to be used for land acquisition, design, construction, operations and maintenance costs for a performing and visual arts center.”

Economic downturns in the early 2000s and beginning in 2008 led to less-than-anticipated sales tax revenues to the city – for the performing arts fund and all other city funds that rely on sales tax. Unpredictable recessions coupled with higher-than anticipated construction costs changed the funding discussion regarding TCA and made an endowment unfeasible.

By 2015, half the bond debt for TCA had been repaid, which opened up funding that could be spent on the Arts and Culture Plan.

Oversight of tax funding

The city’s existing Arts and Culture Commission, which is one of several advisory bodies to the City Council, will be charged with fiscal oversight responsibilities. This model – city commission oversight of budgets – is already in existence with the Tempe Transportation Commission, which serves an oversight function related to the 1996 Transit Tax. In order to better accomplish this expansion of the Arts and Culture Commission’s charge, the City Council on Aug. 30 will consider an official action to require specific financial expertise from several members of the commission. Moving forward, dedicated positions on the Arts and Culture Commission will require that expertise. 

 

The City of Tempe and its employees are governed by Arizona law prohibiting the use of city resources to influence an election. (A.R.S. § 9-500.14) Nothing in this distribution is or should be construed as an attempt to influence the result of any election, and is provided solely for informational purposes.