Journey to cultural center presented challengesJanuary 31, 2019
By LEANN BURKE
JASPER — This spring, construction crews with Krempp Construction of Jasper will break ground on the Thyen-Clark Cultural Center.
It’s been a long time coming.
The Jasper Community Arts Commission and Jasper Public Library first started talking about a joint project at the Hoosier Desk site, located at the corner of Third and Mill streets, in 2014, but the old factory site had been on both entities’ radars before that. In 2010, the library board discussed the site as a possible site for a construction project, and in 2013, the City of Jasper, of which the arts commission is a part of, identified the site in its Downtown Riverfront Master Plan. Once the library board voted to partner with the city on the cultural center in September 2015, the two entities teamed up to make the $17 million project a reality.
Of the $17 million, $13 million was earmarked for construction of the roughly 62,000-square-foot facility. The remaining $4 million is for land acquisition; professional services, such as engineering and architecture; land acquisition; and soft costs, such as furniture and fixtures. The budget also includes a 10 percent contingency for unforeseen costs.
“The $13 million has always been our goal for construction costs,” said Library Director Christine Golden.
Krempp Construction’s bid came in at $13.8 million, but officials are confident the total cost of the project will stay within the $17 million budget.
“We have to,” said City Attorney Renee Kabrick. “That’s all the funding we have.”
One of the first challenges the project faced involved funding. For the library to complete the project, taxpayers needed to pass a property tax referendum that would allow the library to take out $6.5 million in bonds for the project. The referendum passed in November 2016. So far, the library has taken out $1.65 million of the $6.5 million approved by the referendum. Of that, $1.1 million went to acquiring the Hoosier Desk property in December 2016. The rest will go toward future expenses.
On the city’s side, the Common Council approved taking out a $6 million economic development income tax bond for the project.
Since the project is repurposing an old industrial site, the Indiana Economic Development Corporation awarded $3.5 million in tax credits that will be sold to help fund the project. The sale is still in the works, but city and library officials estimate that once finalized, the sale will yield about $2.9 million.
“Investors need to earn something on their investment,” Kabrick said to explain why the sale will be for less than the tax credits’ full value.
The rest of the project funding will come from the fundraising campaign, Jasper LEADs (library, enrichment, arts and downtown). The campaign launched in 2016 with a $1.7 million matching grant from Jim and Pat Thyen of Jasper and a goal of raising $6 million.
So far, the campaign has raised $4.8 million, with $4.3 million earmarked for the cultural center. The other $500,000 went to completing The Astra and to endowments for the arts and library.
The Jasper LEADs team — made up of library and city officials — plans to continue the campaign to meet the $6 million goal. The team had backed off fundraising in 2018 to focus on designing the building and setting up the legal and funding structures, as many of the same people involved in those processes are also on the LEADs team.
The other big challenge with the project has been setting up the legal and funding structures. As government entities, the city and library each have legal requirements they have to follow for building projects. The tax credits add another set of legal requirements, and using fundraised money has another set of requirements. Figuring out how to make it all work together was a monthslong process.
“All of those requirements have to be met by the transaction that will ultimately result in the cultural center,” Kabrick said.
The key to making it all work is the Jasper City/Library LLC that is managing the cultural center project in a structure similar to the building corporations schools use for major projects. The city and library will forward their monies for the project to the LLC, who will forward the funds to a trustee at Huntington National Bank to take care of paying bills during construction. Donations from LEADs will also go to the trustee.
The tax credits follow a slightly different structure. Since the investor that buys the tax credits will not pay until the end of the project, the city will open a line of credit that will be used for expenses toward the end of the project and paid back once the funds from the tax credit sale come. The trustee will be in charge of drawing from those funds as well, with the exception of the 5 percent the city must draw to open the line of credit. The city plans to use that draw to pay the interest, Kabrick said.
Both Kabrick and Golden acknowledge that the process would be easier and a bit cheaper if the project were happening on an empty parcel of land. But then the project would not have qualified for tax credits from the IEDC, and a vacant building would still be standing in the Jasper’s downtown.
“That’s what we’re proud of,” Golden said. “We’re taking an empty building and building something beautiful.”
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