Maple Leaf: A failing strategy?

Guest Opinion: Published in the Brown County Democrat – Aug 22, 2018.

Will more money be a recurring theme?” was the subject of my last Guest Opinion published in the Democrat on July 25, 2018, on the topic of the government-owned Maple Leaf music venue. I described the fast-track process, deliberate lack of public meetings, questionable efforts to ensure due diligence and a disregard for conducting a thorough review of a complete business plan. I also stated that County taxpayer money should never be considered in support of this project. (1)

As Maple Leaf attempts to work through their current financial challenges (they have requested support from the Community Foundation and have recently identified a need for a line of credit of $200,000),  some citizens are suggesting that since this government-owned music venue is being built, that the community should come together to ensure its success.

To support the involvement of more citizens, the Maple Leaf Management Group has commissioned the development of a strategic plan that will now involve more citizens in building support for this project. The management group acknowledged to the consultant that they did not have a feasibility study. Councilman Darren Byrd, who is also a member of the Maple Leaf Management Group, stated that an informal study was done when some members took a trip to Effingham to look at a venue there and looked at numbers when the Opry (1975-2009) was thriving.  (2)

A feasibility study generally precedes strategic planning and a strategic plan typically is developed to support major decisions. The major decisions that will determine the success or failure of this venue have already been made.

Regarding the value of a feasibility study, the Commissioners required a feasibility study at the cost of $17,250 to help justify a proposed $10 million Justice Center but not the Maple Leaf at an estimated cost of $12.5 million and climbing. Further, in support of the Justice Center study, the County Council contracted for a financially related feasibility study that included an estimate of the individual property tax increase that would be needed to fund this project. (3)

Development of a strategic plan includes an analysis that considers the strengths, weaknesses, opportunities, and threats (risks).  A thorough analysis would involve a series of public meetings to obtain input from citizens. At the Maple Leaf Management Group meeting conducted on August 7, 2018, the preference expressed by Commissioner Biddle is to rely on input provided by focus groups as opposed to open public meetings. This approach is consistent with the strategy applied to fast-track this project. The needed focus at this point may be damage control and risk mitigation. (4)

For “non-supporters” of Maple Leaf, the process used to fast-track this project can be characterized by deficiencies in three areas: Check and balances on power, due diligence, and respect.

Checks and balances on power are needed to ensure that a proposed project will result in outcomes where all citizens benefit, or at least, are not any worse off in the long-term.  In this case, the innkeepers on behalf of the tourist industry initiated this project with collateral to be provided by profits and revenue from the Brown County Innkeeper’s Tax. The revenue from this tax is a county asset and can be used to promote “any” type of tourism. Only the commissioners and council were authorized by law, to approve the Maple Leaf project.

Long-time Brown County business owner and icon Andy Rogers reinforced the need to maintain the right balance of tourism. He remarked: “We don’t need to be slick and highly commercial” which is supported by the lack of citizen support for an electronic sign for Maple Leaf.  He also stated: “We need to be more country. Country is what we sell. I always talk about the flavor of Brown County. Brown County is many things, it’s many architectural styles, some rough, some not so rough. … We’re just a flavor. You have to come down here and savor it. We need to maintain that. Once you destroy that, it won’t come back.”

Citizens can demand that a strategy for tourism be included in the County Comprehensive Plan and aligned with development and economic plans. Commissioners and Council can direct how revenue from the innkeeper’s tax should be invested in support of the tourism strategy through their appointments to the Convention Visitors Commission (CVC). The county council by law is responsible for reviewing and approving the CVC budget which is another check to ensure that actions align with the vision. The Brown County innkeeper’s statute can also be amended to broaden the requirements for those eligible to serve on the CVC.

Citizens have a key responsibility for ensuring “checks and balance” on power. The CVC obtained the support from business owners that rely on tourism. The commissioners and council held no public meetings to ask for citizen input on the desirability of this project, the type of project (music venue vs. other options) or concerns regarding the business plan and feasibility study.

Due diligence, in this case, is taking action to ensure the best outcomes with an acceptable degree of risk.  The fact that this project was fast-tracked to exclude public meetings, lacked a feasibility study and a failure to notify the public of meetings where the business plan was to be reviewed, increased the risk that this project may be an embarrassing and a historical level disappointment for the county.

Lack of respect in this situation is defined as not acknowledging the role of citizens in our system of government. This includes showing little interest for citizen concerns or acknowledging that citizen input is important. Refusal to hold public meetings and answering questions indicate a disregard for the citizenry.

Elections provide citizens with the responsibility and opportunity to provide feedback on the actions of elected representatives.

Will county citizens – who were not asked about the desirability of this project, be potentially and financially obligated to support this venue forever? The President of the County Council – David Critser at the council meeting to approve funding for this project stated that in a worst-case scenario, the county would allow for default. I asked a county attorney if a clause could be added to the resolutions approving funding that would prevent any future transfer of this debt to the county taxpayers. He said that it could not be added. Elected representatives can decide to bailout this venue if and when needed. Note that at least $30,000 of county taxpayer money has been used so far to pay legal expenses.

In addition to default, other options for disposition of the venue include a sale, re-purposing, or demolition depending on the degree of completion. The sales price would be determined by the success of the venue which reinforces the critical importance of a feasibility study.

This project was sold as “too good to fail.”  Let’s hope that is true but “hope is not a plan.” Just because a venue may be built and might be successful to the extent that a taxpayer bailout is not needed, does not mean that it will necessarily be accepted or supported by the community at large. A risk that should always be considered in today’s world is the impact of social media where local successes or failures can gain national and international notoriety. The fast-track process without citizen engagement for this government-owned music venue will always be part of its legacy.

Using revenue collected from taxes to fund what is generally considered a private sector venture without needed checks and balances, not ensuring due diligence by applying a process that results in earning the trust and confidence of citizens, and not respecting the input and concerns of citizens will not be quickly forgotten.

Despite the start of construction, it is not too late to put this project on pause.  I acknowledge that this would be a courageous decision but the right one for the county. Contract for an independent feasibility study and begin a series of public meetings to engage citizens in identifying the way ahead.

ENDNOTES

(1) As a member of the Redevelopment Commission  (2016-2017), I coordinated the initial analysis on Maple Leaf, and I have been following the project for over a year. I have been contacted by respected professionals that based on their review of the information presented to the public, expressed concerns  that the projected ticket sales are significantly overestimated,  a knowledge of the requirements  for operating a successful music venue was not apparent, and the project will likely require a significant influx of additional capital – possibly 2-4 million. The likely source for this capital is more revenue from the innkeeper’s tax and county taxpayers. These concerns would be identified in a business plan. Risks were not identified in the plan approved by the commissioners or council.

It is not unusual for government projects to have significant cost overruns. Once the costs start accumulating, the justification for more tax money is that the capital already invested is too much to abandon. In this case, I would not be surprised if there are numerous angry citizens that support the digital equivalent of tarring and feathering supported by social media.

(2) Austin Resignation.  Lack of an independent feasibility study was reinforced by former commissioner Bill Austin who resigned from the Maple Leaf Building committee citing availability and concerns with the process. He stated: “… having an independent review of the county-owned concert hall project before bids to build it are opened makes sense. There is insufficient transparency, and too much dependence on one person, and lack of oversight. I don’t want my name to be included as being the oversight when I am not. … I was supportive and am supportive if it’s done”   (Residents scrutinize Maple Leaf processes, Democrat, 4/24/2018.

(3) Remonstrance. In the case of the Justice Center, citizens can petition (remonstrate) to object to the acquisition of more Financing Maple Leaf did not require a bond. The debt was secured by profits and revenue from the innkeeper’s tax. LETTER: June 12, 2018. New Courthouse Proposal.  Letter: Consider other ways for projects to proceed

(4) Councilman Darren Byrd, who is also a member of the Maple Leaf Management Group, stated that an informal study was done when some members took a trip to Effingham, IL to look at a venue there and looked at numbers when the Opry (1975-2009) was thriving.    This level of analysis alone reinforces the need to place this project on a ‘strategic pause.”

Additional Information

 

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