- November 22, 2024
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Should a new Sarasota Performing Arts Center be built, it would inject more than $150 million into the local economy each year, not including $562 million in temporary spending and more than $300 million in new property tax and other tax revenues over 30 years.
Those are the numbers provided by HR&A Advisors, a New York City-based economic development public policy and real estate consulting firm that specializes in public-private project financial analysis.
The recently prepared report is one of the tools being employed by the Sarasota Performing Arts Foundation to garner public and philanthropic support for the project, currently estimated at approximately $275 million. Should it win eventual approval of both city and county governments, the investment will be equally divided between the public and private sectors.
Public funding would be in the form of tax increment financing district revenue on improved property value in the areas surrounding The Bay Park, state and federal grants, penny tax revenue and ticket surcharges. The remaining $138 million would be funded by philanthropy, per agreement between the city and the foundation.
“From an economic perspective, the numbers are tremendous,” said SPAF CEO Tania Castroverde Moskalenko. “You need to make a case for support on the economic engine that a new performing arts center creates for a community. When a new performing arts center comes in that does fuel the economy. New restaurants, coffee shops and hotels are built. I could go down a long list of what it does for a community, not to mention the tax base as people start moving here.”
According to the HR&A report, the additional seating capacity and other features planned for the SPAC will bring an additional 30% more economic benefit than does the current Van Wezel Performing Arts Hall, like the planned SPAC also a city asset that is likely to remain in some form as the city’s Purple Ribbon Committee explores potential repurposing of the building.
Although not under the auspices of The Bay Park Conservancy, the SPAC would serve as the anchor to The Bay, the 53-acre city park under development by the BPC but owned by the city. The Bay is also a public-private venture with a similar funding model between the BPC, the city and the county.
At Monday’s meeting, the City Commission voted to approve a contract with the Genoa, Italy-based architecture firm Renzo Piano Building Workshop of up to $44 million for all SPAC design work and related expenses. The firm has selected Sweet Sparkman Architecture of Sarasota as the architect of record for the project.
Two county commissioners who serve on The Bay Park Improvement Board last month said they will not recommend approval of the county’s $11 million TIF revenue share for the Renzo Piano agreement. Mark Smith and Ron Cutsinger said they need more financial details on the actual cost of the project before they can suggest their colleagues release those funds.
The city’s representatives on the board, Mayor Liz Alpert and Commissioner Debbie Trice, countered that those details cannot be provided until preliminary design is complete, and that can't happen without the design agreement.
To ensure the project moves forward, the SPAF committed not only its half of the funding for the design agreement, but what would otherwise be the county’s portion as well.
“We were just wanting to be really thoughtful to express that we hear the concerns of the elected officials, and so we are going to advance the funds much like The Bay Park did in their Phase 1,” Castroverde Moskalenko said. “Then that gives us time to answer the questions that are being asked to because we don't have the answers. Until we have that design concept, we're not going to have the answers, so my board made a decision to advance the funds and it will count toward our 50% contribution.”
The HR&A report estimates direct economic impacts from on-site construction spending, operations and programming-related expenses plus off-site spending by SPAC visitors and cultural tourists. In addition, it factored indirect and induced impacts generated by the purchases made by suppliers of direct employers (indirect) and household spending of direct employees (induced).
Those indirect and induced impacts known as the multiplier effect.
Economists suggest each new dollar spent in a local economy generates between $1 to $3.50 in new spending as that dollar circulates, depending on the type of project. On average, the multiplier effect is about 2 to 2.5 times each dollar spent.
For the report, Indirect and induced impacts are estimated using the IMPLAN economic analysis software input-output model, a widely accepted model among public agencies to estimate the effects of new investments. IMPLAN industry data for Florida and Sarasota County as of 2020 were used to estimate impacts by industry. The resulting multiplier effect was added to direct expenditures to arrive at a project’s total impact.
Contributing to the impact are the creation of 3,200 temporary jobs, 1,200 permanent jobs and at least $1.7 billion in new development on surrounding parcels catalyzed by the SPAC and The Bay. The estimated $150 million in new annual economic activity is nearly twice the city’s general fund spending of $86 million in fiscal year 2023.
“That impact is due to more seating capacity, more spaces and also year-round programming, which is one of the things that we are planning on that we don’t have at this point,” Castroverde Moskalenko said.
The design agreement now codified, the SPAF and government officials will await the estimated cost of the project, at which time both the city and county commissions will weigh that against the economic and cultural benefits to determine whether to move forward.
