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Tuesday, November 26, 2002 - Page updated at 12:00 AM

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McCaw Hall has reason to celebrate

Seattle Times staff reporter

Seattle's new performance hall will get the $27.8 million "bridge loan" it needs to finish construction in time for its scheduled opening in June.

The Seattle City Council yesterday OK'd the loan to make up for gaps in public and private fund raising for a new $128 million hall to replace the Seattle Center Opera House, which is being refurbished and renamed Marion Oliver McCaw Hall.

While the council agreed it would be silly to halt the project, which is 60 percent completed, most council members were uncomfortable with the way the city got left on the hook for the $27.8 million loan — which came on top of a $4.75 million loan already made this year.

The council approved a resolution, sponsored by Councilman Nick Licata, stating that in the future the "city does not want to be put in the position" of having to "commit significant unplanned City resources to complete major capital projects" when other fund-raising sources fall behind schedule.

Despite denials by city officials, the loans appear to clash with what voters were told when they approved a $72 million levy in 1999 that included $29 million for the new performance hall.

The levy ordinance said it was "not the City's intent to consider using the City's debt capacity to cover any shortfalls in non-City funding." City Council President Peter Steinbrueck said the fact that the city is now using its debt to cover such a shortfall "erodes the public confidence" in such electoral promises.

But Seattle Center officials and Mayor Greg Nickels have argued that the loan does not violate the spirit of that levy because the city's general fund won't be used to pay for the loans — meaning no other city services will suffer as a result.

If public and private fund raising falls short, the directors of the Pacific Northwest Ballet and Seattle Opera have pledged to cover the difference by paying higher rents or other fees.

Some council members yesterday objected to the resolution, saying it was unfair to characterize the McCaw Hall project — which will result in a new city-owned building — in negative terms.

"We are not making a loan. We are borrowing for interim financing on this project. This is our project," said City Councilwoman Margaret Pageler.

McCaw Hall's cash shortfall happened mainly because boosters were overly optimistic about getting money from the state and King County.

While they planned for $12 million from the state and $5 million from the county, so far each has given $2 million. The prospects for getting the rest of the money are uncertain.

King County officials say they don't have money for arts projects. Nickels has asked Gov. Gary Locke to include $6 million for McCaw Hall in his proposed state construction budget next year.

Meanwhile, the Seattle Center Foundation is trying to meet its goal of $72 million in private donations before the building opens in June. So far, the foundation has secured about $60 million — an outpouring of philanthropy that supporters say is unprecedented for an arts project in the region.

The council resolution would ask the city Finance Department to report by June whether the city could do a better job in evaluating financial assumptions on future projects.

The McCaw Hall project originally was supposed to cost $110 million — split 50-50 between public and private funds. When the cost increased to $128 million, the Seattle Center Foundation agreed to seek more donations to cover most of the additional costs.

The council's action yesterday reaffirmed its inclusion of McCaw Hall loan money in the 2003 budget approved earlier this month. The loan will become official after the city sells bonds to raise the needed cash early next year. The resolution passed on a 6-3 vote, with Pageler, Jim Compton and Jan Drago voting no.

Jim Brunner: 206-515-5628 or jbrunner@seattletimes.com

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