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Failure is not an option: The Nashua PAC must be funded

By FRED S. TEEBOOM - Guest Columnist | Feb 16, 2020

The Nashua Performance Arts Center (PAC) originally proposed was undersized, under budgeted and unsafe:

• The Webb Management study for a PAC recommended the former Alec Shoe Store location on Main Street over a $4.5 million lower cost alternative in the city’s arts center on Court Street.

• The study also recommended a 500 tiered seating/1,000 standing/550 tabled seating theatre be constructed on the 2nd floor of the building, with a restaurant and retail space on the first floor. This ignored the fact that Main Street already has plenty of retail stores and restaurants and seriously complicated the design to exit 1,000 attendees plus performers safely in case of an emergency.

• The estimate of an experienced cost estimator hired for the study, Fennessy Consulting, came in at $16.4 million for constructing a proposed 56,840 sq. ft. facility.

• Alderman Brian McCarthy contacted Harvey Construction and asked for an “informal” (i.e. unpaid) review of Fennessy’s estimate. Harvey Construction reduced the estimate to $15.0 million by adjusting the size to 42,840 sq. ft and using Nashua area pricing. Then further reduced the estimate to $10.4 million by not raising the roof, reducing the size to 30,840 sq. ft., and using more of the existing HVAC.

• The city’s economics director, evidently guided by the Harvey Construction adjustments, announced construction cost for a 30,000 sq. ft facility for $11.5 million, citing review by several consultants but without providing details. Adding $1 million for architect fees, $1 million for theatre/audiovisual/furnishing and $2 million to purchase the building on Main Street set the cost for a 30,000 sq. ft. facility at $15.5 million.

• These summary figures are also shown in the study’s Final Study Report presented to the Board of Aldermen on May 2, 2017. Plenty of data was presented on floor layout, attendance and benefits, but no details on cost estimates. No mention was made of Fennessy’s $4.9 million higher construction cost estimates presented to the study’s Bruner/Cott architects in a detailed spread sheet four months earlier on January 11, 2017.

• The study presumed that the theatre operation needed subsidizing and recommended a $4 million endowment fund whose interest would finance the subsidy.

• This led to authorization of the $15.5 million bond conditional to $4 million being raised from private funds within a 2 year period.

• In absence of detail cost backup the aldermen accepted that the $15.5 million bond would be sufficient to design and construct the 500 seat theatre on the second floor, plus restaurant and retail space on the first floor, and voted it on the ballot in November 2017 where it passed with 155 votes out of 10,179 cast (1.5%). But clearly the project was underfunded by 30 % ($16.4M-$11.5M) and undersized by nearly 50% (56,800 sq. ft – 30,000 sq. ft) at the onset.

Then good things happened:

• The architect selected, ICON Architecture, immediately discarded the 2nd floor theatre concept.

• Spectacle Management who manages several theatres in the NE area offered to operate the PAC without needing a subsidy, on the condition that theatre capacity be increased from 500 to 750 seats.

• The city hired a fundraiser with the goal for securing private funding lowered to a more realistic $2.5 million, and another fundraiser to solicit tax credits with the goal of raising another $4.2 million.

What is the current status?

• In January ICON presented a total project estimate of $23.7 million for a 54,576 sq. ft facility. The construction cost came to $15.2 million for a 750 tiered seating/1,000 standing/270 tabled seating theatre, but without a restaurant and retail space.

• The 2-story building facing Main Street will be demolished, replaced with a 4-story audience chamber constructed on this site. The adjacent 4-story building will serve as the backstage. The website https://www.nashuacommunityarts.org/ provides details of the theatre configuration.

• The $23.7 million includes $1.2 million for an endowment fund that can now be discarded.

• The $23.7 million excludes external safety improvements for about $1 million to relocate hazardous electrical utilities and improve street access on Pearl Street.

• The $23.7 million includes $1 million for owner’s contingency which seems excessive. However, part of this contingency could be used to finance (1) a movable partition to acoustically isolate theatre performances from the lobby and (2) a balcony terrace to enhance the theatre experience.

• Subtracting $1.2 million for the endowment fund and adding $1 million for the external safety improvements brings the total cost to $23.5 million or $8 million above the authorized $15.5 million bond.

The fundraiser is confident $2.5 million can be raised from private donors. Uncertain is the $4.2 million in tax credits. The city needs to wait till this summer to find how much, if any, of tax credits are awarded.

The shortfall, between $1.3 million and $5.5 million depending on securing tax credits, should be financed by the city. The alternative is for the PAC project to fail. The sunken cost would be $1.5 to 2 million already spent on architect and CM fees, pre-design services and building protection costs. Furthermore, the building must be sold to recoup the $2 million invested in its purchase.

Groundbreaking is scheduled to start in August this year, or construction costs are expected to rise by up to 10% or $1.5 million each year of delay. Thus the success/fail decision must be made this summer.

In my opinion, failure is not an option. It is time to give our seniors and young adults a place to go without leaving the city. There are also significant economic benefits for downtown merchants from spending by theatre goers; the very reason the Main Street location was recommended over Court Street.

Success has many fathers but failure is an orphan. Let the Nashua PAC become a resounding success.

Fred Teeboom, a twice-elected former alderman-at-large, considers his major contributions to the city the Spending Cap, the Broad Street Parkway, the Public Access TV studio, and the privately funded New Hampshire Holocaust Memorial.

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