Richmond City Council voted Monday to transfer the CenterStage Foundation $1.75 million for an overdue real estate tax bill the group didn’t expect to receive and couldn’t pay.
The bill covered five years of unpaid taxes on the Altria and Carpenter theaters, which are owned by the city, but leased by RPAC Inc., a private group that has helped bankroll renovations on each facility through historic tax credits. Members of the RPAC board in attendance described the transaction to council as a “check swap,” because the money would immediately be repaid to the city, which sent the tax bill.
Council voted 7-2 to approve the measure, with council members Parker Agelasto (5th District) and Chris Hilbert (3rd District) voting no.
“[Without the money], the theater can’t operate without dramatically increasing ticketing prices or the rents to performing arts organizations that use them,” said Grant Neely, a city spokesperson who addressed council on behalf of the group.
Agelasto questioned why council should approve the money transfer from the city’s rainy day fund when nearly 20 other tenants in city-owned buildings have no trouble paying their tax bills. The lack of a long-term solution left Agelasto and Jon Baliles (1st district) skeptical. “What’s going to happen when the tax bill comes next season?” Baliles asked.
Agelasto motioned for the measure to be continued two weeks to the next council meeting, but his colleagues voted down the idea.
Thomas Farrell, chairman of the RPAC board and CEO of Dominion, told council the bill was already overdue, and delaying the measure could jeopardize the organization’s historic tax credit investors who are funding about half of the $60 million in renovations to the Altria Theater. The city contributed $14 million to the project, and the organization fundraised $18 million, Farrell says.
Since 2009, Farrell told council, “We have not called on the city for a single dime. This is probably the only performing arts center in the country that pays for itself.”
City Council increased the meals tax from 5 percent to 6 percent in 2003, and pledged the added revenue to help fund construction of a downtown arts center. Former mayor Douglas Wilder ended payments from that funding stream to the organization in 2005, but the tax increase, which was supposed to end that year, is still in place. The city's non-departmental budget has contained a line-item titled "RPAC matching funds" for $500,000 from fiscal years 2011 to 2015.
Neely said that RPAC would seek an opinion from the Attorney General’s Office on the matter, and would pursue a legislative solution in the General Assembly to avoid future unexpected bills.
Richmond magazine published a two-part series on CenterStage. See links to those below ("Fortune or Folly" and Deconstructing the Performance").