State studying details of proposed ETSU-Johnson City partnership

Jeremy Ross

Jeremy Ross

By Jeff Keeling

Working out details of a deal with Johnson City regarding a multimillion dollar investment in East Tennessee State University’s proposed Fine and Performing Arts Center (FPAC) was going to be complicated enough for the state of Tennessee. With eventual handover from the city of the Millennium Centre and its parking garage now part of the proposed deal, the State Building Commission’s (SBC) work to vet the deal has become even more complex.

“I don’t sense that there’s hesitation to do it,” ETSU Chief of Staff for External Operations Jeremy Ross said Monday. “I think maybe, if anything, there’s more talk of how can we do it. To get us to a binding agreement, there’s a lot of specific questions.”

The SBC is at that work now, Ross said, 25 days after the City Commission voted 4-1 to spend up to $8 million, plus interest, to help bring the FPAC main hall’s seating capacity from the state-funded 750 to 1,300. The final proposed memorandum of understanding between the city and ETSU had language that would start the clock on a Millennium Centre and parking garage handoff “within three years of the opening of the Fine and Performing Arts Center.”

While city leaders and ETSU President Dr. Brian Noland had discussed potential Millennium Centre transfer informally for more than two years, it didn’t enter the FPAC discussions until very late in the game. The center’s operations create a deficit for the city that averages about $650,000 annually.

Ross, who has helped lead talks with the city since late 2013, said because ETSU could use some of the Millennium Centre space for classrooms and use its existing food service provider to operate it for events, taking over operations could benefit the university as well as the city.

Noland put it this way in a letter to the city dated Oct. 8: “The University understands that this proposal stands to benefit ETSU, the City, and the region as a whole, and we would like to take ownership of the facility.”

But the new element to the MOU, he said, just added to the existing questions about FPAC usage by the city and other questions related to the $41.7 million arts center.

Ross rattled off a litany of factors the SBC has to consider as it determines whether the MOU is workable from the state’s perspective.

“They’re looking at the whole document, and since it addresses the Millennium Centre, from a building point of view they’re wanting to know what are the operational costs, what is the maintenance cost of the facility, what are your capital deferred costs? What about the parking garage – there’s an agreement with the hotel – if that agreement stays in place who’s liable for it, is it the state or the hotel?”

Ross said he’s been in Nashville several times the past few weeks and that SBC staff have told him they want to meet with him and Noland to cover some of those questions.

“You’ve got three pieces, the Millennium Centre, the parking garage and the Fine Arts Center,” Ross said. “I guess it’s the equivalent of if I say I’m going to give you a big yacht and a yacht slip out in California, you’d be saying, ‘well, what shape is the boat in? What’s it cost to operate, and is there taxes, who has insurance?’ That’s kind of what they’re going through. It doesn’t mean you don’t want the yacht.”


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