Assistant City Manager Rick Weise informed City Council that the new San Angelo Performing Arts Center could be constructed if the city mobilizes enough cash for the contractor's $10.7 million guaranteed maximum price. Adding $800,000 in design fees the project needs $11.5 million in cash to proceed. The project has 60 days from August 28th to garner the funds. The City is kicking in $6.2 million:
Remaining half cent sales tax funding from prior COSADC award - $1.9 millionAdd SAPAC's $5 million in naming rights, as shown on the city presentation, and construction can start with a mere $300,000.
New half cent sales tax COSADC award - $1.5 million
New City Council funding awarded - $2.5 million (half from Hotel taxes, half from Trash Contract Royalty)
Insurance proceeds for roof repair - $300,000
Weise hinted at the next big funding source, state and federal tax credits for historic preservation. Texas tax credits will fund 25% of eligible rehabilitation costs, while the feds will pick up 20%. That means 45% of the cost of rehabilitating the auditorium could be funded through tax credits. Neither will pay for the costs of a new addition, a significant part of the project.
City Council has three meetings to get this project approved before the guaranteed bid expires.
The (Texas historical preservation) tax credit is generally allowed in the taxable year that the rehabilitated property is placed in service or the project is completed. Unused franchise tax credit can be carried forward five years or transferred to another entity.Whatever amount the project gets in preservation tax credits should be added to the total funding provided by the City of San Angelo. It's the City Auditorium's age and character that qualify the project for historical preservation funding.
The hurdle to getting construction started is rather low. Raising funds for the myriad of needs post construction is much larger. That's another $2.6 million.
If tax credits can pay for a good chunk of the $10.7 million construction cost, that would free up existing funds for other purposes. We'll see how much funding state and federal tax credits reduce the burden.
Update 12-1-15: The Standard Times reported: "By extending the lease of office space, SAPAC could receive at least $1 million in historic tax credits." Add another $1 million courtesy of the city.
Update 4-20-16: Historic tax credits for the auditorium project will be at least $1.6 million. For this to happen the city must increase its support of the project to SAPAC, so SAPAC can "spend" the money and be reimbursed via the historic tax credits.