The Clearwater City Council is confronting a problem not unlike that of stock market investors and people managing their 401(ks): Do they invest now and take advantage of a down market, or do they hold on to their cash in case worse times lie ahead?
Tonight the council is scheduled to vote on whether to buy the 1920s-era Royalty Theatre building on Cleveland Street downtown along with the adjacent Pat Lokey building, and partner with Ruth Eckerd Hall to turn the structures into a live performing arts venue.
In good times, it would be an easy call. But in these times, the $2.3-million purchase price leaves some council members feeling a little queasy, especially since the city recently voted to buy a trouble-plagued bar in North Greenwood as well as the foundering Clearwater Country Club's clubhouse, which sits in the middle of a city-owned golf course. Still looming is a decision about what to do with the aged Harborview Center on the downtown waterfront. And construction of the city's boat slip project on Clearwater Harbor begins next year.
Is now the right time to buy and retrofit a downtown theater that needs a lot of work?
There are some significant reasons to decline the deal. The city's revenues are down, forcing cutbacks in staffing and programming. The city's reserve fund is declining at what some consider an alarming rate. Politically, it is bad timing — people who are cutting back on groceries look askance at a city government buying property that is not essential to city services, and some city residents complain that officials are spending too much money downtown.
And the price still seems too high. The negotiated price for the theater, which is in foreclosure, is $975,000. The price tag for the smaller Lokey building is $1.335-million, though it sold four years ago for only $700,000 and property values have fallen substantially since then.
Yet there are also compelling reasons to go ahead with the purchase now. At the top of the list is the opportunity to partner with Ruth Eckerd Hall. Under the proposed arrangement, Ruth Eckerd Hall would raise $3-million for renovations to the structures, and together with the city would seek another $4-million in grants and other funds to renovate the buildings. Ruth Eckerd Hall would also provide a $5-million endowment to operate the venue.
Ruth Eckerd Hall knows how to raise money. It also knows how to successfully operate performing arts venues. The hall's leaders are confident that even in this economy, the promised funds could be raised and the location would succeed at drawing the public to live performances suited to smaller venues than enormous Ruth Eckerd Hall.
Another reason to proceed is that property values are down and downtown has not yet made the turnaround that may come when the economy improves and people begin moving into the recently constructed highrise condos. The theater and the Lokey building should cost less now.
Local preservationists would argue that another reason to buy now is that the owners of the properties are willing to sell to the city, and that provides an opportunity to save a historic structure. If the city doesn't buy the theater, it could one day be purchased by someone else and razed.
A successful, busy performing arts hall would draw new people into downtown who might also provide a customer base for struggling restaurants and retail stores there. And for people hungry for more exposure to the arts, it would be a new and exciting option.
There is no denying that the timing could be better. But only the property purchase is necessary now. The renovations would not proceed until the money for them was raised.
The City Council should rely on the best advice of its finance staff about the possible impacts on the city budget and essential services if the property is purchased. The council should ensure that it has driven a hard bargain on the purchase price, perhaps even walking away for a time from that $1.3-million Lokey "deal."
But if council members then decide to go ahead, they will be making a positive investment in the future of downtown Clearwater.