Elgin council approves rental, back rent agreement with Elgin Symphony
By Janelle Walker For Sun-Times Media September 11, 2013 10:50PM
Heavy users of the city-owned Hemmens Cultural Center, plus non-profits and local organizations, will get discounts for rent of the facility under a new fee schedule approved by the city council. | Sun-Times Media file photo
Updated: October 15, 2013 6:59AM
ELGIN — The Elgin Symphony Orchestra intends to pay back the city, with interest, $233,930.21 for rent owed on using the Hemmens Cultural Center over the course of the next 15 years.
The city council voted 6-3 Wednesday night for a resolution that approves such a payment plan and sets out conditions to ensure it is met. Councilmen John Prigge, Toby Shaw and Terry Gavin voted against the resolution.
The vote comes after more than a year of talks between the city and symphony leaders regarding back rent due for use of the Hemmens — the downtown, city-owned performance venue that the symphony has played at since the early 1970s.
According to City Manager Sean Stegall, the ESO has not paid rent for the Hemmens since May 2011 — when the last allocation from the city to the organization ran out. At one point, the city figured the back rent had reached $303,000. However, the city agreed to discount the last year of rental costs while the two organizations have been in negotiations.
A new rental fee structure for the Hemmens — on which that discount is based — was approved unanimously by the council. The repayment resolution “has some teeth in it” to ensure the city is not only paid for the rent owed but also gets its rental fees paid going forward, Stegall said.
If either the loan or ongoing rent payments are not made within 30 days of their first-of-the-month due dates, the city can then lock the ESO out of the Hemmens.
If the ESO were to default on the terms for the funds owed to the city for Hemmens rent from May 2011 through November 2012, the city would get the symphony’s name, trademark, logos, copyrights, “goodwill, and books and records relating to or used in connection with the operation of the Elgin Symphony Orchestra,” according to the resolution.
With the agreement, the symphony also will play at least 75 percent of its performances at the Hemmens and continue to use the city-owned facility through the 15-year agreement.
Several council members said that while the agreement was not “perfect,” it does help ensure the symphony’s viability while also ensuring Elgin taxpayers are paid back.
“This allows us to help maintain the health of the ESO and allows them to handle their other debts,” said Councilman Richard Dunne. “It is not the greatest plan, but I am going to support it. For the long-term health of the ESO and the city, it is the best plan.”
Councilman Terry Gavin and the other “no” votes said they were not happy with the 15-year schedule. City staff decided on that number, Stegall said, based on the symphony’s current financial picture.
“It is based on an analysis of their ability to pay. Due to the state of their financial condition, anything less than 15 years seemed out of reach for them,” Stegall said.
“The longer the repayment agreement, the better the chances of us to be able to receive the money.”
If finances — and the overall economy for arts organizations — improve, the symphony can prepay the debt without penalty.
Going forward and when the symphony’s 2013-14 season begins in October, the ESO and all Hemmens renters that use the facility more than 50 times each year will see discounts — 50 percent off the base rent, 50 percent off labor rates, and 50 percent off equipment rental.
Prior to ending all discounts for nonprofit organizations using the Hemmens in 2012, the symphony was given a 45 percent discount on base rent only. The new fee schedule reinstates those rental discount rates — 35 percent for nonprofits renting the facility, and 25 percent for Elgin residents and organizations that show proof of being located in the city.
The discounts for the symphony are the best way to ensure the organization’s fiscal health without making a direct contribution, Stegall said.
Mayor David Kaptain said the city, the ESO, the Hemmens and the Grand Victoria Casino need to sit down and find ways to use all of their assets together. Kaptain noted he has spoken with ESO Executive Director David Bearden and Grand Victoria Casino General Manager Jim Thomason about working together, and he directed city staff to set up a meeting with all of the parties to make that happen.
Kaptain said possibilities could include the Hemmens acting as the box office for the casino and the symphony, sharing resources and doing some joint marketing for events and Elgin restaurants.