City Beat

Sacramento city treasurer advises delaying major renovation of Community Center Theater

Sacramento city officials and arts groups agree that the Community Center Theater could use some upgrading. The 2,400-seat facility across L Street from the Capitol hasn’t had a significant renovation since opening its doors nearly 40 years ago.

But civic leaders are debating how much should be spent on the theater – and when the fixes should take place.

The city is under a judge’s orders to improve the facility’s access for disabled patrons, city officials said. Arts groups are pushing a broad, $50 million renovation of the theater that would help it comply with the Americans with Disabilities Act standards and better compete with other performing arts centers in the region.

The theater houses performances by the California Musical Theatre, the Sacramento Philharmonic Orchestra, the Sacramento Ballet and the Sacramento Opera. More than 250,000 patrons attend events at the theater each year.

Some city officials – including the city’s treasurer – caution that it might make fiscal sense to wait to make improvements until millions of dollars from a key revenue source earmarked for the project are available.

A tax placed on hotel rooms would serve as the foundation for the renovation project, but more than $8 million of that revenue is being used annually to pay off debt for the expansion of the Sacramento Convention Center in the mid-1990s. The convention center bonds will retire in 2021.

The $50 million renovation would require annual bond payments of $3 million, city Treasurer Russ Fehr said. The bonds would be backed by the general fund, but the city anticipates using hotel tax money to repay them. While those revenues are expected to increase in the coming years, Fehr said the city should wait until more of the money is available.

The city’s plan to help finance a new downtown sports arena is also playing a role in Fehr’s cautiousness.

Hotel tax revenue would act as security for the bulk of the city’s $258 million contribution to the project, should the primary financing method – revenue generated by parking operations – fall short of projections. The availability of the hotel tax as an arena financing security will also serve as a credit enhancement for the city when it issues bonds for the arena project, Fehr said.

The City Council voted earlier this year to devote $8.5 million from shuttered tax assessment districts to the theater project. City officials hope that naming rights and fundraising efforts will help close the gap, but acknowledge they are well short of being able to finance the entire project without taking on debt.

“For strictly financial reasons, I wouldn’t recommend debt financing (the theater) at this time except for the necessity to proceed due to the disabilities issues,” said Fehr, who will brief the City Council tonight on the theater financing issue. “We can do this at a minimal risk to the general fund, but I think we should wait a while before we do it.”

Councilman Steve Hansen, whose district includes downtown, said he will ask city staff tonight to provide details on what renovations can be made at different funding levels. He said he also wants to explore forming a nonprofit agency to take over operating the theater and raising money for the upgrades, saying such an entity might have better luck in soliciting donations than the city.

Hansen said he wants the City Council to vote on a renovation plan early next year.

“It’s a complex question, and I wish there was a clearer answer,” he said. “I believe ultimately we’ll renovate this theater, but right now, I don’t think anybody has made a strong case for one specific plan.”

Performing arts advocates argue the city should move ahead with the full $50 million renovation plan.

Richard Lewis, the executive producer of the California Musical Theatre, said the $50 million project – which would include improvements to the theater’s seating, restrooms and loading docks – would represent “not a 10-year fix, but a 30- to 50-year fix, in my view.”

“The fact that the building is not 100 percent (Americans with Disabilities Act) compliant is a serious issue,” he said. “And there are other elements of the project that are going to make the audience experience so much more gracious.”