Gainesville City Commission approves $45k forgivable loan for Heartwood Soundstage, proposes ongoing loan program for arts organizations

BY JENNIFER CABRERA

GAINESVILLE, Fla. – During the afternoon session of its April 2 meeting, the Gainesville City Commission approved a $45,000 forgivable loan for Heartwood Soundstage and asked staff to come back with options for a loan program that would support arts organizations.

At the City Commission’s March 5 meeting, Commissioners asked the City Manager to come back with options for accommodating Heartwood Soundstage’s request for $55,000, and on April 2, Interim City Manager Andrew Persons said staff had come up with three options:

• A loan, with terms to be determined by the Commission;
• An advance grant with a requirement for backup documentation of expended funds, along with the ability for the City to audit the expenditures;
• A reimbursable grant with similar requirements.

Persons said the Commission should “at least put it on the record, that we would need to vet any potential expenditures in conjunction with Financial Services and the Attorney’s office, to make sure that any expenses were of public interest.” He said that ongoing operational expenses would be easier to justify as being in the public interest than paying down pre-existing private debt.

Commissioner Casey Willits: “I don’t feel good about retiring debt. I feel much better about paying people’s salaries.”

Commissioner Casey Willits said, “The support is kind of a general support, kind of a bridge to get to the future… I don’t feel good about retiring debt. I feel much better about paying people’s salaries… And I’m still not sure that I will support this because it’s mid-year [for the budget]. It’s tough because it is a really good chunk of entertainment downtown, and it does make a lot of sense.” He said he would prefer to consider it during the normal budget process.

Mayor Harvey Ward: “There are businesses surrounding it that are there because Heartwood is there, and that is an important consideration as we move forward with this.”

Mayor Harvey Ward said, “To be clear, this is a nonprofit, and as they provide an opportunity for a variety of arts for the community — some of it open to the community, some of it ticketed — it also is an economic development issue, and that’s the way I look at this, 100%. There are businesses surrounding it that are there because Heartwood is there, and that is an important consideration as we move forward with this.”

In response to a question from Commissioner Ed Book about the financial picture of Heartwood, Director Chelsea Carnes said, “This is a one-off. We’re doing really well. It’s just that I’ve inherited some debt — and to address the conversation about whether it should go toward debt or future expenses, either one would do the trick.”

Book pointed out that the City has frozen 30 positions internally, and they just got an email this week from another nonprofit that wants to double its funding: “So these are the things that I struggle with,… even though I know the funding streams are different.”

Commissioner Desmon Duncan-Walker: “There are a lot of organizations that need help, so I’m struggling now with making sure that there is a fair way… that we’ll be able to do this in the future, because we’re already getting emails,… and there will be more.”

Commissioner Desmon Duncan-Walker said, “We have, I think, a case where we have an arts presenter that is not fitting within our definition of an arts presenter, and I’m interested, as a board, to figure out a way how we might be able to reconcile that… There are a lot of organizations that need help, so I’m struggling now with making sure that there is a fair way… that we’ll be able to do this in the future, because we’re already getting emails,… and there will be more… And nobody’s going to be concerned with what our bottom line is, or our budget is. They’re just going to say, ‘You funded Heartwood.’… I’d like for us to look internally at our process and ask the Cultural Affairs Council what they would need… to move forward [with] a grant program that would include organizations like Heartwood.”

Commissioner James Ingle said, “I would really like to find some way to move forward with this. I think it’s important, not only to Heartwood, but also a lot of other businesses around there.”

Commissioner Willits: “These are things that people in the state legislature probably won’t want us to participate, but we’re free to do it for now.”

Willits said some of the scheduled shows at Heartwood are “things that people in the state legislature probably won’t want us to participate, but we’re free to do it for now.” He asked Persons for more information about a loan.

Persons said, “To be honest, this is kind of new territory for the City… We would look for the Commission [to indicate] if they wanted it to be forgivable or zero interest — we could work with that and then come up with terms.”

Mayor Ward: “What if we went in the direction of a loan, a very low-interest loan, that we could then turn into a revolving loan opportunity for arts-presenting organizations, so as that is paid back, we then make that available to other arts-presenting organizations on the same sort of basis?”

Ward suggested “a very low-interest loan, that we could then turn into a revolving loan opportunity for arts-presenting organizations, so as that is paid back, we then make that available to other arts-presenting organizations on the same sort of basis.”

Commissioner Bryan Eastman said, “I think that losing Heartwood Soundstage would be devastating for South Main, which we have invested a lot of money into, over time… It is truly an anchor business down there. It would be a loss to our music community, which has lost a lot of its medium-sized venues over the last couple of years.” He said the money would need to go to events that benefit the community and asked Carnes for her thoughts about a loan.

Carnes said a loan would be “less helpful than the other options. Maybe it is a band-aid, but then we would owe you the money in a year or two… I would favor the options of a forgivable loan or an advance grant.”

Eastman said his idea was to offer a forgivable loan that would be contingent on having publicly accessible community events over a three-year period, “but that does not solve the overall question of how you ensure this is done fairly.”

Commission has provided at least three grants outside of the budget cycle in the last few years

Ward pointed out that the Commission has given this type of grant at least three times in the last few years: $75,000 for Working Food, $150,000 for the Hippodrome Theatre, and $100,000 for Bread of the Mighty, “and I’m pretty sure that they were all unanimous… This is not out of the ordinary in the greater scheme of things.”

Ingle said he favored establishing a long-term program to make loans available, “both for economic development and arts programs.”

Commissioner Cynthia Chestnut said she was having “a real problem with it… I’m having a problem with signing off on it today. I did not support giving money for an auditor [consultant] this morning, for a City program, so I really have a problem trying to fund this now.”

Book agreed and said he had also voted against the money for the City Auditor during the morning session (it passed 4-3); he added that he didn’t think the City should prop up a nonprofit after only seven months of trying to raise private funds. 

Ward said there were no other lights, so “that leaves us at zero.” He suggested a motion to ask the City Manager to come back with “an idea of what a loan might look like, and what a grant might look like, and how that would be possible, in a more specific basis. And if nobody wants to make that motion, then that means we don’t want to do this, and that’s okay, as well.”

First motion

Willits made a motion to ask staff to bring back to the next General Policy Committee (GPC) meeting “the option of an advance grant with required backup documentation for expendable funds and a City ‘right to audit’ requirement and some sort of expectation of public access events in a time period, for the full $55,000.” Ward suggested the April 23 GPC meeting instead of the next GPC meeting, and Willits agreed. Ingle seconded the motion.

Persons said that if the Commission wanted to grant Heartwood money for some number of events per year that are free and open to the public, they could make that decision immediately instead of needing to bring it back to a future meeting. He added that his preference would be for Heartwood to spend the money to replace aging equipment because that would have a long-term benefit.

Commissioner Bryan Eastman: “We have events that are open to the public, that people can come to; that is a part of what we do as a community. This is just sort of an extension of that to an organization that does that very, very well.”

Eastman said it “doesn’t feel right” to grant funds to pay for equipment for “what is essentially a private organization.” He preferred a grant or forgivable loan based on a certain number of events per year for the public and suggested a three-year forgivable loan with four events a year that are open to the public: “We have events that are open to the public, that people can come to; that is a part of what we do as a community. This is just sort of an extension of that to an organization that does that very, very well.”

Ward said he also liked the idea of a three-year forgivable loan, and Willits said that was also his preference, so he withdrew his motion.

Second motion

Duncan-Walker made a motion to direct staff to come back on April 23 with options for a loan program that would support arts organizations that are not currently served, and Chestnut seconded the motion.

Persons asked if this was intended to serve Heartwood, and Duncan-Walker said that was her intention, but Carnes said, “Well, this is great for the community, but it’s not actually what Heartwood was requesting. We were requesting money we wouldn’t owe you… I’m trying to avoid being back here next year… I would certainly apply for this to kick the can down the road and keep things going, but I do worry that it wouldn’t be ready for us in time for summer.” Duncan-Walker said, “Then this may not be for you. It remains a motion.”

Persons said that if it’s not time-sensitive, it could be brought forward as part of the budget process. Duncan-Walker removed the deadline of April 23 from her motion, and the motion passed unanimously.

Third motion

Eastman said that since the Hippodrome had asked for $250,000 and the Commission gave them $150,000, “in the same spirit,… I move to approve $45,000 to be taken out of excess fund balance as a forgivable loan to Heartwood Soundstage, to be forgiven over three years, contingent on continued operations and hosting at least four free publicly-accessible community events per year, with standard reporting and ‘right to audit’ requirements.” Willits seconded the motion.

Eastman added that the City currently hosts events downtown for about $5,000 each, so 12 of those events (four events each year for three years) would cost $60,000, and the $45,000 would be less money for the same number of events.

The motion passed 4-3, with Book, Chestnut, and Duncan-Walker in dissent.

Carnes thanked the Commission “for taking all the time to discuss this thoroughly, through multiple meetings. We’re honored by the time you put into it, and we’re grateful for your support of Heartwood and for the arts. Thank you.”