The future of the $22 million theater had been in doubt when the state Legislature, at the urging of Gov. Jerry Brown, eliminated redevelopment agencies in 2012. The non-profit Livermore Valley Performing Arts Center had been planning to utilize redevelopment money from the city to build a 2,000-seat arts center on the vacant block between Livermore Avenue, Railroad Avenue and L St. When the performing arts group lost the law suit against the state after state officials rejected its attempts to say it already had committed more than $120 million (although ground had not been broken), the die was cast.
The city and county came up with $875,000 in loans to the non-profit group to keep it afloat and the doors of the Bankhead open in 2013. After lots of negotiation and work, the city bought the theater this week when it approved the deal.
It will issue what amounts to mortgage bonds against its $9.2 million share, while the county will contribute $2.8 million. Debt payments for the city are expected to be covered by landfill fees. Bank of New York Mellon, which holds the $22.5 million note, will forgive $7.5 million in the debt.
The arts center has committed to $2.7 million to complete the financing package.
The deal is good news because the theater is one of the lynchpins to the downtown redevelopment—the other very important one is the movie theater complex. The activity created by those entertainment magnets attract the crowds that patronize the restaurants, the bars and the coffee shops.
The celebration this week is welcome and deserved. The bigger challenge will come in 2015 when the performing arts group needs to operate the Bankhead in a financially sustainable manner. The prior plan had the two theaters working in tandem, but now the 500-seat theater—home to nine arts groups—must function on its own.
The package includes the agreement for the arts group to operate the theater for seven years and to provide the city with monthly financial reports. The city's general fund is now standing behind the theater—something that both proponents of the non-profit and the city never imagined a few years back.
The city regains the control of the vacant lot that its now defunct redevelopment agency had owned. The parcel is quite valuable for development and it's likely the city can attract investors interested in building there—prior to the big theater plan, there was a private development plan for the site.
The theater group is receiving some financial breathing room—the return of $3.75 million from the state that will go into maintenance and operations. That likely will cover any shortfall for 2015, but it is one-time money.
