ETSU requests city land donation for performing arts center

By Jeff Keeling

East Tennessee State University needs 1.5 acres of city-owned land next to the Millennium Centre donated to it – and soon – for its preferred location for a new Fine and Performing Arts Center (FPAC) to be feasible.

That was the message ETSU’s Bridget Baird conveyed to the city’s Public Building Authority (PBA) at the PBA’s monthly meeting May 27. The university has an agreement to purchase the 3.6-acre “Lot 1” from Bank of Tennessee, which foreclosed on it several years ago, but Baird said the bank’s management has decided to keep open its adjacent branch, which ETSU originally had hoped would be available for sale as well and could have eliminated the need for the city land.

“The building would be too big (for just Lot 1), so we need the courtyard portion, and we really can’t commit to buying Lot 1 until we have that property,” Baird told PBA board members (the PBA officially owns the land). She touted the potential benefits to the Millennium Centre in the form of pre-performance food and drink sales, and additional revenue possibilities from occasional use of the FPAC space.

PBA board members and City Manager Pete Peterson were cautious and full of questions, but encouraging. By Monday, a quickly established subcommittee had held a meeting to begin working out details in time for a land transfer by June 15 to give ETSU time to close on Lot 1.

ETSU has state approval to build the FPAC in Millennium Park, but with the fiscal year ending June 30, it must close on Lot 1 within several weeks to keep the architectural process moving forward.

A land donation would mark yet another cooperative element between the city and ETSU as the university attempts to create an FPAC that can have more of a positive impact on the city and region than an on-campus building might. ETSU has asked the city to consider adding an estimated $4-7 million to the FPAC’s $40 million construction budget in order to bump up the main auditorium’s seating total from 750 to 1,200 to 1,400 (see related story, page 5).

In exchange, the community could hold an as-yet-undetermined number of events annually, from concerts to touring plays – with the hope being that the arts center enhances the tax base via visitors and the city’s ability to grow through its enhancement to Johnson City’s quality of life. Officials from ETSU and the city have speculated the larger auditorium size would be sufficient to draw popular entertainers and plays that wouldn’t consider a smaller venue.

By meeting’s end, members were convinced the legalities of giving the property to ETSU could be worked through fairly swiftly. The PBA leases the property to Johnson City. The city would have to relinquish its lease so the PBA could then transfer the property to ETSU – more specifically, the ETSU Foundation, which would face fewer delays to using the land for the FPAC than would the university proper. The City Commission Monday put approval of such a deal on its June 4 meeting agenda.

The PBA board’s greater concerns centered around reaching an agreement to insure the Millennium Centre and the city both would benefit from the FPAC’s presence there. Such details would include specifics regarding periodic use of the FPAC space by Millennium Centre to enhance its conference hosting abilities, as well as how much ancillary business the center’s management group (currently Sodexo) might expect from FPAC visitors wanting a drink and/or food prior to concerts or other ETSU arts events.

The group quickly established a subcommittee, which met Monday to work on details. PBA Chairman Mike Eddy said Tuesday morning that meeting went well, though he’s not thrilled with the short timeline ETSU provided. An attorney is working on a binding letter of intent covering as many details as possible. “We came up with a nice list yesterday,” Eddy said.

The letter will be submitted to ETSU’s attorneys, and if both sides agree, submitted to the City Commission for final approval. The goal is to have that and the land transfer finalized by June 15 to give ETSU time to close on Lot 1.

“Our whole goal is to protect ourselves, the PBA and the City of Johnson City,” Eddy said, adding that regardless of good collaboration now, leaders will change over time and a binding agreement is the best protection.

“It’s hard to go into a lot of details,” Eddy said. “We have no idea what the size of the building will be or even where it’s going to be. We are just having a generic set of agreements that we will go back into detail on later.”

Any long-term net positive for the Millennium Centre and city wouldn’t come so much from food and beverage service before ETSU events, which Eddy said aren’t real moneymakers, but rather from the ability to use some of the FPAC space on occasion.

“Where we plan on making money and reducing the deficit for the Millennium Centre is inviting larger groups, larger conferences, and utilizing the larger breakout rooms and even the arena. That’s where this is going to help us out.”

Millennium Centre General Manager Ken Misterly said drafting a narrative about what Sodexo would like to get on its end, and the value that could add, was easy. The difficulty, he said, lies in determining the equivalent of “blackout dates” – times when Sodexo couldn’t market the extra space due to ETSU’s needs.

“We need it when our customers need it, and then we need not to be bumped by a higher authority,” Misterly said. “Those are the devil in the details. Do I write it for the PBA to work out with ETSU, do I have a management agreement between my company and ETSU, or do we all just smile and hope?”

Misterly also attended Monday’s meeting and said afterward he believes something can be worked out, and that it can benefit the Millennium Centre over time. Eddy agreed, adding that the university still has an on-campus option should the parties not reach an agreement.

“I feel real good about it,” he said. “I think we’ll be fine, we’ll get it done, and hopefully it will work out for both.”