With $1.5 million from the city, the Napa Valley Opera House intends to wipe out its $3.4 million debt by year’s end as part of a plan to safeguard its future.

The city’s financial support comes as a loan that won’t have to be repaid if the Opera House follows through on plans for greater economic self-sufficiency.

In effect, the city’s contribution will serve as a challenge grant, making it easier for Opera House supporters to run a capital campaign to eliminate the debt incurred a decade ago during the building’s restoration, Bob Almeida, chair of the Opera House’s board of trustees, said Thursday.

The city is committing special redevelopment money that must be spent on downtown revitalization. By obligating the funds, the city further safeguards redevelopment money for local use that Gov. Jerry Brown has been threatening to pull from redevelopment agencies statewide to help solve the state’s budget crisis.

Council members voted unanimously Tuesday to make the $1.5 million forgivable loan, saying that the Opera House was a community “jewel” deserving assistance.

“This isn’t a giveaway of funds. The city is actually getting something,” Councilman Mark van Gorder said.

The deal requires the Opera House to transfer ownership of the Main Street building, a National Register landmark built in 1879, to a new nonprofit, Historic Theatre of Napa Valley.

In turn, Historic Theatre will contract with the Opera House, also a nonprofit, to operate the facility as a venue for entertainment and activities.

This will allow the Opera House to focus on programming, while maintenance and building improvements become the job of Historic Theatre, Almeida said.

Historic Theatre of Napa Valley is obligated to never use the property as collateral for a loan or otherwise encumber it. “It will essentially be a community facility for the rest of its life,” Almeida said.

As part of the deal, the city is requiring that the Opera House rent its facilities at a discounted rate to nonprofit organizations for their first two events of the year.

After that, the Opera House can charge a higher rate. “At some point, the Opera House has to make a profit,” Cassandra Walker, the city’s community development director, told the council.

The deal gives the city the right to rent the Opera House for 24 days a year “at cost” for city functions.

The Opera House charges $2,500 for a commercial rental, while nonprofits pay $1,500, Almeida told the council. Some community events, such as the fundraiser for Napa’s sister city in Japan, are free, he said.

Eliminating the building’s debt will save the Opera House about $100,000 annually in interest payments, Almeida said.

“To have $100,000 less would be wonderful. It’s a strain to have to do that every year,” he said.

Until now, Opera House supporters have had to raise about $800,000 annually to balance the facility’s $2 million operating budget.

As a nonprofit with a theater of only 455 seats, the Opera House does remarkably well to generate 60 percent of its revenues through ticket sales, Alameida said. Nationally, small nonprofit venues typically generate only 40 percent, he said.

Contributions from the Opera House’s board of directors and the Napa Valley Opera House League plug about half of the annual deficit. The other half comes from “non-insider sources,” Almeida said.

Opera House backers have several initiatives in the works that may increase revenues by $200,000 annually, Alameida said.

The Opera House hosts 100 to 120 events annually, attracting nearly 30,000 customers, Almeida said. In the future, the Opera House expects to ramp up to as many as 220 events per year, many of them run by community organizations, he said. Films and other events will be added to the mix.

Councilman Jim Krider said the Opera House was the ideal candidate to receive redevelopment funds, which come from the growth in property tax revenue in downtown.

The city is using redevelopment funds that had not been committed to any other downtown project, Jennifer LaLiberté, the city’s redevelopment manger, said Thursday.

The agency collects about $5 million annually from the downtown redevelopment zone. This figure represents the increase in property values since redevelopment started more than 40 years ago.

Downtown redevelopment is scheduled to phase out at the end of 2012, ending the city’s ability to pay for new projects.

Since its reopening in 2002, the Opera House has served as a catalyst for new restaurants and had raised the bar for development downtown, city officials said. Opera House customers spend an additional $2.4 million annually in downtown, the city estimated.

Having secured city support and some large private donations, backers  will take the Opera House’s capital campaign public, he said.

(28) comments

orchid lady
orchid lady

Mr. Amleida, What you and the Opera House have done is NOT lost on me. I understand very well what point you are making. However at a time when our economy is quite literally non-existent/stagnant, I do NOT feel that funding to keep the Opera House mortgage payments afloat are a priority over those who need a quality education including the arts. The funding if returned to the state would allow programs for our communities most vulnerable to continue to receive the care they need, in programs like Adult day centers, childcare subsidies for parents who are scraping by in this sad economy, childrens' mental health services, and many other valuable resources, for those who cannot afford your venue.

I understand the 'free tickets' to students and bringing in guest speakers for schools, but if the funding for the school art programs dries up, what good will that do? What will free tickets do for the groups above mentioned? Sadly, you are appreciated in your efforts, but NOT with RD funds

Checker
Checker

To be clear, we are not teachers and cannot supplant in-school educational programs that are sorely needed. However, we have supplied thousands of dollars of free tickets to students to attend shows at the Opera House. We provide access for hundreds of students to perform on the stage of the Opera House each year. We have brought artists to schools for outreach concerts and in-class instruction.

We pay for these things out of our limited budget and money that we raise, because we believe that participation in the arts increases students' confidence and educational outcomes.

Respectfully,

Bob Almeida
Board Chair
Napa Valley Opera House

orchid lady
orchid lady

Bob Almeida, you mean?

orchid lady
orchid lady

[quote]antipc said: "Almost forgot, I appreciate Barry Martin entering into fray and offering up an explanation. That's a rare trait among public servants (no disrespect intended) in this day and age. I seldom agree with his position but it's nice to see that he's willing to stand on his principles and reasoning publicly. Elected officials ought to have the same decency. "[/quote]

Agreed.

antipc
antipc

Almost forgot, I appreciate Barry Martin entering into fray and offering up an explanation. That's a rare trait among public servants (no disrespect intended) in this day and age. I seldom agree with his position but it's nice to see that he's willing to stand on his principles and reasoning publicly. Elected officials ought to have the same decency.

antipc
antipc

LOL OL, Yoda is just tempting your resolve. :)

orchid lady
orchid lady

"-We support local schools and artists by dedicating a substantial portion of our calendar to community programming."

OH really? You mean those music and theater and art programs that the schools have NO FUNDING for? That is absolutely laughable! REDEVELOPMENT money should have went back to the state for education.

Unless you are going to tell me you will match OR donate a higher amount of money (cold hard cash) to local education, once your profits expand?

Checker
Checker

To set the record straight:
-The Opera House is not a failed business; we have been open almost 9 years and are currently booking shows well into 2012.
-None of the money from the City or from other donors to this capital campaign can be used for operations; it can only be used to pay off the mortgage.
-Our impact on the redevelopment of downtown is clear. When we broke ground on our renovation there were 8 restaurants within 6 blocks; today there are 30. There were no major hotels open within that area; today there are 4. The same growth has happened with wine bars and tasting rooms.
-A recent study shows we contribute over $4 million each year to the downtown economy. Paying off our mortgage frees up money to expand programming and increase that contribution.
-We support local schools and artists by dedicating a substantial portion of our calendar to community programming.


Respectfully,

Bob Almeida
Chair of the Board
Napa Valley Opera House

orchid lady
orchid lady

"I also believe the council ran right out and spent it to keep from having it confiscated by the state. This council should be ashamed."

Exactly!

"Not to mention the spend it or lose it mentality that has government agencies throughout the state teetering on insolvency. "

So true!

"What gives the city council the right to select winners and losers when it comes bankruptcy? As mentioned above why not Copia? "

Yea, what gives? Oh no, am I going over to the dark side? Or have we found the miracle topic that both sides can agree on?

Gov. Brown wanted to re-absorb the Re-Development funds back in to the General fund, and use that money to help California's Schools, and various other programs that are ACTUAL NEED'S vrs. WANT'S.

Raven
Raven

"The money was confiscated (through taxation)"

no matter how many times this line is tossed out...doesn't make any truer.

antipc
antipc

With all due respect Mr. Martin, your summation of the situation is rhetorical. What art and what culture? The money was confiscated (through taxation) from other businesses and/or property owners and distributed to a single entity that the city council deemed more deserving than all other businesses combined. What gives the city council the right to select winners and losers when it comes bankruptcy? As mentioned above why not Copia? Like the regional housing program this is no more than a taxpayer subsidized attempt at social engineering and political payback for knowing the right people. Not to mention the spend it or lose it mentality that has government agencies throughout the state teetering on insolvency.

Corruption 101.

Old Time Napkin
Old Time Napkin

I should check my spelling. First sentence should be "funds were to be used".

Old Time Napkin
Old Time Napkin

I thought redevelopement fuds was to be used to improve streets, buildings and infastructure in a certain area designated for redevelopement. Now the Opera House is a completed building funded in the beginning by private citizens who went about and gathered funds to save the building. The money given to the Opera House is NOT FOR ANY IMPROVEMENTS! The building has already been completed. Plain and simple it looks like the council bent the rules and gave the Opera House funds simply to keep it afloat. So should the council have given these funds to Copia? Maybe they should have given the money to banks in the redevelopement district to make sure they stay afloat.
It all amounts to rules being bent to help a specific organization that is floundering and cannot generate enough money to pay the bills. I also believe the council ran right out and spent it to keep from having it confiscated by the state. This council should be ashamed.

Raven
Raven

amazing what actually reading the story can do...

cordell
cordell

And what exactly would be the purpose of a "smokescreen" and "propaganda" from our City government and Redevelopment? The City cannot choose to use every source of funding for fixing potholes. If you don't like the system, vote to change it. Everything is not a conspiracy. Try listening to another radio station. Rush is turning your brain to mush.

reason-ator
reason-ator

[quote]1Napanow said: "....Perhaps if "readers" of NVR would actually read the article and think about what they just read they might come to a more considered conclusion instead of flying off the handle."[/quote]

Of COURSE !

We should just read the clever releases of people who are trained to deceive the voters. The kinds of releases that say that intersections are safer even though their data says that there were increased accidents.

Yes. We should just think about the propaganda, and not for ourselves.

Ahh, the Redevelopment smokescreen. Yes. That's so much more legitimate. That money just magically appeared. It didn't come from anywhere else.

Our bLeaders want us to believe what they tell us. We should not think for ourselves. We should think as you've been trained to think.

No wonder Napa is going to NapaPipe in a handbasket.

1Napanow
1Napanow

paranoidinthetrees- Paragraph 4 starts with:
"The city is committing special redevelopment money that must be spent on downtown".
This is fairly clear isn't it? Perhaps if "readers" of NVR would actually read the article and think about what they just read they might come to a more considered conclusion instead of flying off the handle.

paranoidinthetrees
paranoidinthetrees

Perhaps the headline should have indicated that funds were coming from Redevelopment instead of the city in general. It might have been less incendiary that way. It is totally understandable that citizens would be outraged at this expense in light of present economic conditions and the state of other infrastructure that we all use, not just those who can afford a night at the operahouse.

At any rate, I'm glad the article was published and we can see how our local government thinks . . . or doesn't.

Barry Martin
Barry Martin

What is often overlooked is the fact that Redevelopment funds can only be spent on projects in the Redevelopment area - in this case, downtown. Street work, sidewalks, parks and other needs are often paid for with these Redevelopment funds, but only within the Redevelopment area. It should also be considered that, as the story indicates, arts and culture are an economic engine for our City, and since the goal of Redevelopment is to generate economic activity, supporting arts and culture is in line with our goals.
Barry Martin, Community Outreach Coordinator, City of Napa
258-7843

reason-ator
reason-ator

If someone brings proof to the OurPauper House that they do NOT live in the City of Napa, will they get a discount ?

amazed
amazed

Outrageous. Meanwhile, we plan for two years of deficits? Which councilmember is up for reelection next?

reason-ator
reason-ator

[quote]CLRAE said: "A "" Forgivable Loan"". Now, just what is that? ...."[/quote]


It is something I want.

I would go and try to wave traffic through the red light at a RedFlux camera intersection for that much money.

Seriously, can you IMAGINE the things the City bLeaders could be doing with our money now with that attitude.

Just the fact that they are NOT ashamed to be pulling this stunt in front of our eyes shows how badly their seriously mis-directed myopic vision and perspective is.

I think it's obvious that somebody somewhere is getting $omething. I would like someone outside of Napa to investigate.

I mean, hypothetically and metaphorically speaking, don't alot of thieves get caught because they get arrogant and complacent ?

backinnapa
backinnapa

Sorry - "waste."

backinnapa
backinnapa

What a wate of taxpayer money.

CLRAE
CLRAE

A "" Forgivable Loan"". Now, just what is that? Does the Opera House show a profit? Or not. It is nice to have an opera house in town but unfortunately--many people cannot afford to attend the events. Shouldn't more money be spent that will affect the majority of Napa residents? I thought Napa like many other towns--was short on money to spend. Guess I am wrong. How about parks and playgrounds with some great equipment-swings and super slides, etc.? With the movie theater moving-? how about some $1 matinees for families with kids? I could think of a lot of ways to spend $1.5 Million Dollars.

CLRAE
CLRAE

A ''FORGIVABLE"" LOAN !?

reason-ator
reason-ator

This is offensive and wrong at SO many levels I don't knw where to begin.

There are a bunch of losers just waiting to be ousted.

If the City is in such a strong financial position that they feel that they can give away (straight talk for the falsehoods we are being fed) our tax money to any private enterprise that will provide returns to the City, with no quantitative analysis to support that assumption, then we should NOT have to listen to 'lack of funds' for ANY of the lack of support for its RESIDENTS are obligated to receive.

This darn City spends more money to collect rewards than the rewards are worth and then GIVES the money away to their selected private citizens.

I hope they saved enough for a special Recall Election, and I hope the money they're giving away is to attorneys who will defend them from any potential civil or criminal actions.

In the interim, I think it's time to go Hercules.

What are the procedures for initiating a City Council Recall ?

Steelhead
Steelhead

so much for paving streets, fixing sidewalks, etc. While the Opera House is nice, they could have built it for a third of the price had they knocked it down and started from scratch, and then they would have a fund to work with. The arrogance of the so called preservationists is the reason they have financial problems. The City could have loaned the money but instead they got caught up in this continuing saga....as a taxpayer I am not happy about this...

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