Meeting focuses on ways to balance ECA’s financial challenges, gym revenue opportunities
By Harry Gatjens
The Edmonds Center for the Arts (ECA) is facing a financial crisis that requires a contribution of over $200,000 from the City each year. How did this happen and how can it be rectified? And could the facility’s gymnasium space provide additional revenue opportunities?
The issue began with bonds issued in 2008 for Capital Improvements for the ECA.The bonds were to be paid by a contribution from the Snohomish County sales tax each year. The ECA — originally built in 1909 as Edmonds High School and also home to a junior high and a private college before being transformed into a performing arts center — was already receiving an amount of dollars specified when the Snohomish County Public Facilities District was set up about 10 years ago. This District included the ECA, Comcast Arena and several other arts facilities in the county. However, in 2007 the economy was booming and excess funds were available for these organizations and so it was decided to make additional contributions to each organization. Based upon the increased funding level the 2008 bonds were issued.
After the first year, the economy went in the tank and the added contribution was no longer available. This has left the ECA with a severe ($200,000 annually) shortage. Additionally, the bonds were issued by the City of Edmonds as the City had the borrowing authority.
As the ECA does not have the cash flow to make the bond payments due to the county’s reduced sales tax contributions, the City of Edmonds is responsible. That is why the City can’t just tell the ECA “that’s your problem.” So the ECA has been seeking ways to help make up the difference. And as a non-profit “arts” organization, there isn’t enough room to make up the difference by cutting costs.
The ECA has been working hard to generate more revenue, with a more robust schedule of both private and public events, adding more marketable features (i.e. streaming Internet broadcasts) and reducing costs where possible. They are also negotiating with potential partners on naming rights and other sponsorship ideas.
If all this works out, it will significantly reduce the required contribution from the City, but not eliminate it. So even more ideas are being sought. One group, the Edmonds Sports Academy, has pointed to the ECA’s current gymnasium space, suggesting that the gymnasium has more potential to be used and generate rents than it is now doing. This has led to considerable friction between the ECA and the sports academy, which in the past has leased gym time from ECA but now is using the gym at the Edmonds Church of God.
That friction lessened last week when a collective meeting was held with both ECA and sports academy management, and several City Council members. All sides decided to be more flexible in their approach and see what could be worked out.
The ECA has stated that earning more revenue from the facility’s gym is not as simple as just renting it out more aggressively. Several problems exist in greatly expanding the use of the gymnasium, and one of the biggest is that significant structural improvements need to be made. The roof leaks and has deteriorated to the extent that it can’t be repaired and must be replaced. The locker room is down a narrow windy set of stairs and in order to be renovated would require extensive remodeling in order to conform with current Americans with Disabilities Act and other safety standards. Additionally, the arts side of the organization needs the gym facilities to help with certain productions.
Further, with an already tight budget, where does the ECA come up with the manpower to oversee the facility? During last week’s meeting, management admitted that utilization of the gymnasium hasn’t been given the attention to maximize its revenue; their charge has been to develop the arts side first.
It was further pointed out that with the economic peril currently facing the ECA, there was no easy way to acquire the funding that would be required to update the gymnasium. While no actual bids have been sought (these are costly, too, with design fees) it’s estimated that costs associated with these upgrades could easily exceed $1.5 million to $2 million. It was suggested that grants might available from athletic foundations to cover the costs, but no one has actually pursued such grants.
As the meeting concluded, the general agreement was that gym use, funding for improvements and all the related activities should be looked at, but that those studies should be made according to the ECA’s comprehensive strategic plan, which the organization has on its agenda to be developed in the coming year.
This is hearsay but, my understanding is that the combined income of 2 or 3 employees, one being the Executive Director, of the ECA is 400K. I see the potential of a 200K savings in just salary alone. Is there a way to confirm salary levels?
#1) Wow! Nothing like starting innuendo and speculation on hearsay.
Well Jim, the thing about innuendo and speculation, the best way to put is to rest is to lay out the facts. Here’s a very simple question, what are the annual salaries at ECA?
If they’re asking the taxpayer’s to cough out their shortfall, it seems to me we have a right to know.
Facts are difficult to come by in Edmonds. We ask the question, but somehow the city or those in charge never provide the answers. When we press, it seems friends of those in charge fire back with nasty remarks.
We heard last year how they turned the corner on profitability, but of course that was only by setting aside payments on their long term debt. Now if every company could do the same when it went to the bank for a loan wouldn’t life be grand.
Ron, much like the constant debate about salaries for the city of Edmonds, if you want to attract quality talent you need to use the comparables from similar cities. The same thing goes with the ECA, and if the comparables come back high then yes, someone should take action. Any business knows that labor would be the first thing to get cut during an economic downturn. I would hope that the city (and county?) would have looked into this first thing.
I’m not really sure who you were addressing about the nasty remarks of “friends” but my issue with the above comment only stems from the fact that we don’t really need to start a witch hunt. Let’s get the facts and move on from there.
Jim, no but if they are running to the taxpayers each year to fill their financial gap the public has a right to have all salaries and other forms of compensation disclosed along with a list of other expenses. If salaries are really that high, the gap could be due to mismanagement – if they want more and more money lets find out.
This business of comparing salaries is always an excuse for paying high salaries but often such comparison, when you peel away the layers, is like comparing apples to oranges.
In finances the devil is always in the details.
@ Jim,
I asked a simple question. And, depending on the answer, there may be an easy solution.
I do agree that people are should be paid what they are worth. However, if the ED of the ECA and the other people in charge of turning a profit at the ECA are not and putting us in a hole, then they are not worth the money we are paying them.