News

Madison pledges continued support of embattled venue

Foreclosure possible for Overture Center; tries to pay off debts

Despite the current changes in operation, the Madison Cultural Arts District Budget and Audit Committee was told Monday the city of Madison will continue to provide financial support for the Overture Center.

According to Rob Chappell, spokesperson for the Overture Center, the Center will also change its operating calendar from a year-based budget to a season-based budget at the beginning of July.

The Overture Center was having difficulties operating on a calendar-based budget, Chappell said.

“The calendar year budget does not accurately reflect the way we operate,” Chappell said. “Until this point we’ve been basically guessing what [performances] we’re going to have in the fall and how well they will sell.”

Although the calendar change would allow the Center to plan shows in a more organized fashion and make more accurate budget predictions, the change does not coincide with the city’s budget policies, Chappell said.

He added the city’s budget runs from Jan. 1 through Dec. 31, while the Overture’s new budget will run from July 1 through June 30.

The city’s financial assistance is necessary, especially because the Overture Center is facing financial troubles that are largely a product of the slumping economy, according to Jennifer Post Tyler, director of planning and analysis at the Overture Center.

In October, the

According to Overture President Tom Carto, the liquidation of the Center’s trust fund is coupled with declining ticket sales and the possibility the Center will lose some financial sponsorship due to the economic recession.

However, despite the liquidation of the $93 million trust fund, the Overture Center is still responsible for paying an additional $28 million to the banks — JP Morgan Chase, the U.S. Bank and M&I Bank — that loaned MCAD money for the construction of the Center.

Currently there is an investigation regarding the liquidation of the Overture Center’s assets. Chappell said the banks liquidated the assets for $88.4 million, instead of the potential $93 million they were worth.

“The economy is just hurting, hurting us,” Overture Chief Financial Officer Chris Hunjas-Duerner said.

MCAD committee members discussed ways to prepare for the $28 million mortgage payment due in 2011 and ways to combat current financial difficulties. The banks are threatening foreclosure if the debt is not repaid by 2011.

Additionally, Hunjas-Duerner said the Overture CEnter is a few months behind in monthly budget finalizing.

Because a new software system caused problems for Overture Center employees, Hunjas-Duerner said assembling a budget in a timely manner is an obstacle.

The current turnover for a monthly budget is four to five weeks, Hunjas-Duerner said. She added budgets should be prepared two weeks after the month ends.

According to Chappell, the city provides an operating subsidy of $1.7 million for the Overture Center that makes up approximately 17 percent of the Center’s budget.

Although the city writes the checks for Overture employees, the money is drawn from Overture Center accounts, Chappell said. He added the city also establishes Overture Center employees’ wages and benefits.