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HomeMy WebLinkAbout1997-02-19 Community and Economic Development Committee MinutesCOMMUMTY & ECONOMIC DEVELOPMENT COMMITTEE Wednesday, February, 19,1997 @5:00 PM MIJAYTES COUNCILORS PRESENT: Councilor James Tyler, Chair Councilor Michael Aube Councilor Joseph Baldacci STAFF PRESENT: Councilor Timothy Woodcock . Edward A. Barrett, City Manager Rodney G. McKay, Director of Community & Economic Development T.J. Marnial, C.D. Housing Resources Coordinator John Lord, Planning Officer Erik Stompfel, City Solicitor Norm Heimemn, Asst City Solicitor Gary Jewell, Parking Supervisor OTHERS PRESENT: Daryl Rhodes, The Northern Conservatory of Music John Supranovich, Bangor Resident at 101 West Broadway The meeting was called to order at 5:01 PM by Councilor James Tyler, Committee Chair. ITEM #1#1- Request fiomtesideN of 101 West Broadway for exception to Night-time Wintertime Parking Ban Jahn Supronovich, of 101 West Broadway, requested of the Committee permission to Fork his family's vehicles on Hayford Street (dead end side street adjacent to his property) during the wintertime nightime parking ban as he has limited space on his property. After some discussion, it was suggested by Committee to draft language to this ordirunce excepting Us was to the wintertime ban This ordinance will go to Council for first reading on March 12th. dam- TheNonhem Conservatory of Music City Manager Barrett updatedthe Committee on this item stating drat recently Daryl Rhodes ofihe Nonhem Conservatory of Music had spoken to him with regard to clarifying the feasibility or non -feasibility of the Maine School For The Ans project at the Presses building. At that meeting, Ed suggested to Daryl that the C&ED Committee should be pan of the discussion process before putting anything in writing. Mr. Barrett then introduced Daryl to the Committee to present his request as follows. Daryl Rhodes: I've come before the Committee today in hopes of finding out what exactly you would like to have on this matter. I should have materials ready by April in hopes of getting a go-ahead by mid-April so that we can get our capital campaign rolling. Daryl stated that he expects to have the figures on the building by the and of February and would like to request a special workshop be held to discuss all the figures that will be presented in terns of costs on structural corrections, gutting the building and new mechanicals. He stated that he hoped tonight's meeting suffices as a formal request to have a workshop to specifically discuss those figures. The figures may be favorably less than previously projected but the financial viability of their plan depends on them being able to completely pay off Phase I combustion costs which will be between $3-4 million In other words, they have to be able to move into the building without any debt service on Pham I in order to survive to get Phase B which is pretty common place when talking about schools around the state. Councilor Tyler asked Daryl to clarify his exact request Daryl replied that he would like to schedule a workshop with the full Council in order to discuss the costs for rehabmg the portion of the presses building for Phase I (for The Mame School For The Arts). Daryl: This way you understand what costs are involved and the importance of having Phase I construction costs paid for and that might be included in your feasibility assessment of thepm,ject. Awupleofthingsthatwewantedtoaskyouintermsofthemarkdt gplmis Nat we want to customize the marketing plan to meetyourneeds and as you know a private school brokers and looks for enrollments in different ways Nen public schools do for obvious reasons. Daryl indicated that he would like b get the Committee's feedback on what they're looking for in terms of a marketing plan. Daryl Are you looking for names of kids that are willing to pay tuition to go to school. or for a general market of demographics of kids don participate in the arts that would be apt to go to the school. The Bangor Region Arts Council in conjunction with the Maine Alliance for Arts Education recently had a conference which not only bared out what we've been saying for the last 3 years but I guess the situation the state is in in terms of art education is a little worse Nen we Nought; Nose kids need some place to go unless there's a 180 degree tum marts funding which isn't likely. So thafs a good place to start but l thought maybe you could give me your feelings on what you need to see. Councilor Mike Aube replied that my feeling is not so much the demographics such as were do you see revenue, coition or fee income coming from -- what kind of population is that not just in terms of numbers but is it helpful. I dont sec this as a pure demographics of analysis of what is in Maine but where is the market and does it have the ability to pay to around a facility like this in Bangor. - Daryl asked Councilor Aube: Then bow would you specifically say that we design a marketing plan to point our Nat; what do you want to see. Families that send us a letter and my they're willing to pay a $40,000 year order. Councilor Aube replied: No - I Nimdr that if someone would do a market modysis ofthat we would be able to, through a variety of data haus or survey instruments, probably look at other private schools that are similar in the country; wbws their costs associated with that both in kits of operational then that which deals with the whole debt service question which youre already beginning to look at seriously - which is can you do it without any debt service. If so, that would be a different issue. Daryl replied: In Phase I, Phase 11 and BI of course we expect to incur some debt service for interior design of the upper Floors. My question is how do we show this in a market analysis being aprivate school. We plan to survey both largest and smallest school systems per county in the state; plan to talk to guidance counselors suit arts teachers to find out if they have kids indeed that we could contact or would be willing to allow us to contact but if that sounds like the right direction then we'll go ahead and develop the plan like duet Statistics don't necessarily bare out with a school like this because it does have a significant degree of uniqueness and there but anything like it this side of Boston. This is a first-timeprecedent kind of study and obviously we want to do it right the first time and that you'd be willing to work with us. If it doesn't look light to you, then are you willing to tell us what docent look right and have us make the w1juswents. Councilor Aube replied: I thunk you're just going to need to —the convincing argument to not only the City but to foundations and others will be that there is a population out there - wherever that is will be up to you to determine -that is willing to pay a certain amount of money to attend this facility and that those revenues are sufficient with donations and other things to carry your institution. That's what I'm looking for. There have to be comparable activities that have occurred elsewhere in the United States would be my sense; maybe I am wrong but I would thunk there would be something similar Nat would have happened. Daryl replied: We haventfound one yet We've talked to the National Network of Independent Schools For The Arts; we havent found one that's structured just like this. Because of the integration of me family and tire high school aspect of the school, there we several more revenue resources that we available to other schools that just have extension programs. So, in terms of tuition, we're comparing m something like John Bapst or Dover Foxcmft Academy, we an do that kind of thing but to compare it In some other place in the country is jus[ so different in terms of per capita income here and the geographic distances. Councilor Aube replied: So you've made a conscious decision to limit your intake of students to a certain geographic area. Is that the premise? Daryl replied: No. We expect to attract kids from all over the country. Councilor Aube replied: Then I thunk you've got to look at it from a larger market sector. City Manager Banco: I know flare may not be many art schools but there may be offer speciali d high schools, like magnet schools. Daryl: The only other one is just outside of Boston and the tuition is $21,000 a year. his kind of ar elitist school. Ed Borten: One ofthe obvious places to look might be the magnet school in Limestone; it's not an arts school but his a specialized high school which whism; people from all over (publicly funded however). Daryl: There's a whole lot of difference between a publicly funded school and a privately funded school. We'll do our best and keep you posted in what were doing. Jim Tyler: It seems to me that its than, and l am not a marketer and dont pretend m be one, that if the other pieces of the analysis show that in one extreme you need a 100 students who are willing to pay $2 in tuition per year then that seems to be a no-brainer..it should be may to find a 100 kids who can afford $2. The other end of the spectrum if you say that in order to get the thing to work you need 10,000 students who are willing to pay 5100,000 a year for tuition because this is the kind of cash flow you need, that's ridiculous for you to expect to achieve. Somewhere there's some middle ground there which is what you really expect and what you really anticipate that people will be able to afford and there has to be some way to demonstrate where that middle ground is. UNbrtu rately, I cant tell you how to get there because I am not a marketer but someone ought to be able to know how to get there. Daryl: We included in our questionnaire to schools would students he willing to pay tuition and they had a chance to check off "Yes we would" "No we wouldn't" and that letter went directly to that child in that school. Would that be something you would consider? JunTyler: I would think that it would be supportive documentation. Ed Barrett: One ofthe questions there is -sure Iran willing to pay tuition, I am willing to pay a couple hundred bucks to send my kid to school -but tint's probably not what you're going to charge. I think you need to ask are you willing to pay $2,000 ayes: or $500 a yew; get some rough idea where that range would be. There comes a cut point-- do you want o send you kid to U Maine or are you going to send your kid to Harvard. _ Daryl: The tuition of the Maine School For The Arts will be competitive with other private schools in the state but because theres never been a private arts high school in the state we want to make sure we design the study to convince you that there we kids out there who would be willing to pay to go. Michael Aube: I am trying to able to be helpful in the sense that you have to establish a base line somewhere, and if 90"/0 of the population of the school is going to be Maine students, ages 14-19 or 14-18, whatever that is, hems the growth of that population over the next 10 years. Here's a percent that are musically incliadl or are inclined towards the arts. What percentage of that is in each school. There are ways of dealing with that that can help you better understand exactly where that targeted market group is. If it isn't focused on that I don't know how you develop a strategy to recruit them which would be the next pan. Because if you haven't really identified yet who they me it's very expensive to do massive campaigns. Daryl: People that attend the conservatory generally are the bind offamilies that are willing to pay for specialised education and because we've done over the years about 10,000 families we've got apretty good idea of how many families who would be willing to pay and it is out there but I want to make sate we customize our study as precedent setting. We really don't want to be held up any longer; we want to get on with this. FA Bamm You need to make a distinction. new are a lot of families willing to pay for their child to take music lessons but who are not necessarily interested in that child attending a specialized school in the ams. Councilor Woodcock: How many students to you froxwe being enrolled? Daryl: At the high school level, 400; but the itinerate student 1,200-1,300 from 4 schools are running Poll till Its a3 -phase project. The firm phase is just getting the conservatory in there on the 2nd floor and develop some capital from the first floor- some rental income from the first floor. To do that we have to have a severance of the Conservatory and The Maine School Fee The Arts. The Conservatory is going to own the first floor, pay property tax on just the first floor and the, with Erik Stumpfel's approval, give the money to The Maine School For The Arts in terms of rent. The Maine School For The Arts will get initial cash flow of $130,000 a yearjust to cover the overhead of the building, taz free- federally and state exempt. Ed Barrett: I don't know if it will help for discussion purposes but I did put down some of my thoughts in a memo, summarize them and share Nem with Daryl and give him a copy. This basically I think summarizes what we've mlked about before. I think in terns of the engineering analysis, things were looking at addressing are suitability of the premises to the proposed use. There are certain requirements mthe building code for school uses that have to be met and is this building mill going to W able to meet Daryl's needs within the building code. Structural defects which must be addressed to stabilize the building which pose significant barrier to redevelopment; slants and estimates for immediate roof repair was called for in the agreement and a cost estimate for remaining major snuctuml elements to the building to useable condition. It's not specifically listed in here but I funk that Daryl is going in the right direction; there has to be some general estimate of the cost because that then feeds into the fund raising plan. What is it going to cost to do this. The fund raising plan, in talking with Daryl, most of his effort is going to be directed towards foundations so the kind of information I drink we'd be looking at there is information on the foundations Nat they would be applying for including purpose of foundation, prior grmts which may have been made for similar purposes, arcual amount given, range of great amowts, the grant cycle which is going to play in here, percentage of request funded. I dont know If all of this information is available; I suspect that reference books can give you some of this percentage of request funded — if you apply to fcuadation acts and they give out a million dollars a yew and they get requests for a 100 million, Nat gives you some range of the competition. Any other information, because l don't know what else may be out there, which will be helpful in evaluating likelihood of success. Daryl: I'll be working through the foundation center in New York which provides a reference book of 4,200 sources of foundations and responsions that specifically give to these kinds of projects. And also we have a very exciting development director who is very interested in this project who just raised three and a half million for College of The Atlantic. Ed Barren And I think some of the other things that would be helpful is who will be working on the fwd raising with their background and what their past success has been. And then along with the foundation issue I know there can be other potential fwd misers and those ought to be identified (i.e. picture project), potential for individual contributors and things like that Again, with as much reasonable information as possible. If our goal is to miss $4 million we've planning to raise this much from this source, this much from this source, are. (grants from foundations and businesses; so much from individual contributors and here is how we're going to go about it). Daryl: Some of that has already been outlined in me booklets we passed out a couple of years ago and there were some specific foundations that were identified there and there is a profile listed so we'll use that as a model and extend that based on the new resources. Ed: In terms of the business plan what the agreement called for was a business plan which includes marketing plan, estimates onmition razes, revenue sources, Stafford other operating cons and expenses and operating performs. The marketing effort should be undertaken to identify both the market arta and the number of potential students who might be interested in attending. It should also be looked at in view ofmition rates to determine in fact affordability. Competing alternatives - and 1 know Daryl doesn't think there are any but that's part of the process - Such as other schools, existing programs in public and private schools, etce should be identified. Supposable estimates of the number of students being Summed; the operating gestama should look at what normally is covered; is the minimum period of time in get to stable operations and we talked about this which generally runs about 5 years; that picks up some of your start-up costs and gets those taken care of or your phase in costs. Basic questions on what's the potential market given the market size, how many students coin be attracted with anticipated motion rates, will she enrollment and rate estimate produce sufficient revenue with anticipated costs, if not, what other sources of revenue are likely and are they sufficient ent to cover the gaps. Daryl: And to what degree Widens will be off -set by endowments and also Maine State education because it will be an accredited school. Ed: Yes -- all Nose things have to be taken into consideration. Those are the things I came up with; there may be other questions that we have. One of the things I would suggest in putting together a business plan is to have your assistant help on some of the market issues and you might want to Stan talking to him, get Some of his ideas and maybe come back and pass Nem back to us. Again, it would also be helpful to know who you are working with, what their background and experience was in doing Nue things because that adds to the credibility. Councilor Aube: The only tiring I would suggest that we add to that Daryl when 1 heard you say accredited school you probably would need a time line here which talks about that whole accredidation process az it ties to not only the rehabilitation of the facility but the improvements - that whole time line may be stretched out longer because of me accredidation process. Daryl: The only weakness in this whole plan is that if you want to develop the building and obviously everyone does, you dealt really have to prove the feasibility of the whole running high school in phase I. What we can prove right out is that me C nwrvatory can operate in the building and develop in any direction. Ifwe get into the building we've got income from me first floor and the Conservatory is already very healthy and we decide well gee we dont want to go for an arcs high school we want to expand me conservatory over 4 floors that's also an alternative or if Polly Thomas wants to go in, and they've already expressed interest, we could develop just a family school of programming for the arts. So by locking us into proving figures on ahigh school or there could be just variables that we can't Prove before we actually move in. So we'll do the best we can and provide you with the mothers that we think are. Ed: The only cavern, and I'd have to go back and look at the agreement, is that it seems to me the agreement was premised on the development m some point of a high school. So that bas to be kept in mind. I ' Councilor Aube: Bmfth it'sfairtomythatifafeasibifitysn ywouldshowtlwtitis not feasible to Proceed with a high school, there may be alternatives that make it complimentary to the appropriate use of the building end thes fine too. Daryl: Yes, as long as everybody is open to those variances. We're convinced it's masiblq we don't know whether it's feasible in the Freeses building but were convinced it's feasible. Daryl was asked to give an update on the progress of rehab currently underway at the Fmeses building. He replied that structurally it is in good shape with area that need to be strengthened. His architect has spoken about replacing the columns as basically the plates above the columns have never been properly fastened but he states that the building is structurally sound. Bob Swift assisting the architect is very experienced with rehabbing older buildings. Daryl further stated that he is very pleased with the work theyre doing for the price. A proposed workshop the 1st week of March (but not the 5th) could be held with Daryl's architect. After a brief discussion, March 19th was suggested; Daryl will let either Ed Barrett or Rod McKay know if this date is agreeable with his architect. ITEM 43- Code Enforcement Update No items to report. ITEM -Planning Update Planning Officer John Lord stated that 2 zone changes will be coming back to the Committee from the Planning Board. ITEM #5 -Economic Development Update Rod McKay updated the Committee on several areas of Economic Development as follows. The Maine Partnership— this partnership at some point in the fffure will be approaching the City requesting acommitment of funding for a 3-year period to assist the Bangor region to concentrate on ecommic development and marketing. Rod asked Committee if they would like a complete Presentation of this item in the near future. Committee responded thatthey would atthe Committee level. Also, the Bangor Regional lnarmodal Development Committee which was initiated through the BACTS Committee; and the Maine International Trade Center which is intended to assist in putting mgether a local development corporation that will represent the intermodal facility in getting it set up, established and operating; the development corporation will potentially ran the facility. No location bas been decided on; the City of Bangor has applied for a grant to study the possible location. ITEM #6 -Community Development Residential Rehabilitation Loan -140 Hammond St. -7 units Approved. With no further business at hand, the meeting was adjourned at 6:15 PM.