Metropolis' total village funding could exceed $5 million

If Arlington Heights approves Metropolis's request for $450,000, it will push the village's financial involvement with the performing arts center to more than $5 million in the last decade, according to village documents.

On Thursday, the village board will take up the performing arts center's request for an immediate infusion of $450,000 to keep the theater operating until the end of the fiscal year in April 2015.

The meeting will begin at 7:30 p.m. at village hall, 33 S. Arlington Heights Road. Possibly the most serious crisis involving Metropolis since it opened in 2000, Metropolis officials say the theater and school will close at the end of October without the additional money.

Arlington Heights has been actively subsidizing Metropolis Performing Arts Centre since 2005, using money collected by the village's food and beverage tax and not property tax funds. Including the $2 million the village spent to buy a portion of the Metropolis complex in 2005, the total investment so far is $4.7 million.

Under the current structure of support and subsidies, the village has enough food and beverage taxes in reserve to give Metropolis the $450,000 one time, Arlington Heights Finance Director Thomas Kuehne said Monday.

But “that level of funding couldn't continue forever,” he said. “This isn't something we could continue without finding an alternative revenue source.”

The village's arts and entertainment fund, where the food and beverage taxes are held, has a working cash balance of $305,000 and a reserve of $400,000, Kuehne said. The fund's primary purpose is to subsidize Metropolis, but it also contributes to special village events like Mane Event, Sounds of Summer and Fourth of July festivities.

The $450,000 would represent the village's largest single cash influx into Metropolis since it bought the portion of the Metropolis complex that includes the theater, school and offices in 2005.

The purchase money came from tax increment financing proceeds — money above a frozen amount of property taxes earmarked for local governments — and the village bought it straight up, with no mortgage. It is tax-exempt, due to its nonprofit status, Kuehne said.

The other $2.7 million in village contributions has come in the form of annual subsidies, capital expenses and maintenance to the building, as well as an additional $300,000 payment in 2012 when the theater was going through another period of serious financial difficulty.

Since 2005, the village has given Metropolis a fluctuating annual operating subsidy, between $150,000 and $250,000 annually. For fiscal year 2015, the $165,000 subsidy has already been paid and spent, which is why, according to Acting Metropolis Director Neil Scheufler, the theater will run out of money next month without additional cash.

In addition to the annual subsidy, since 2007 the village has invested money on capital expenses or infrastructure updates to the theater and building, which in the past few years has included an updated sound system and a new digital ticketing system, Kuehne said.

As well, the village has been putting $9,700 annually into the fund for ongoing cleaning and maintenance of the building's common areas — such as air conditioning, heating and bathrooms — which has increased to $14,000 for fiscal year 2015, Kuehne said.

Despite the village funds, Metropolis has operated at a deficit for years, according to documents in a 2013 independent task force review of Metropolis.

Since opening in 2000, the performing arts center has never achieved the level of private donations its founders anticipated, forcing the theater board to rely more heavily on ticket sales while eventually cutting back on programming and related expenses. In fiscal year 2012, for example, Metropolis took in $196,325 in donations and another $116,698 in fundraising, according to the task force report.

In May of this year, Executive Director Charlie Beck left, and Scheufler was named interim director.

Metropolis now has an annual budget of more than $2.5 million, with more than half its revenues coming from ticket sales and tuition from the Metropolis School of the Performing Arts.

Should the village board decline the request for $450,000 and the Metropolis close, money would still have to be put out, officials say. The Metropolis nonprofit would still owe the village $106,881 in past due maintenance fees and the building would still have to be cleaned and maintained, an annual cost of $76,416.

There is also $326,900 that Metropolis has collected on prepaid tickets and tuition. The village could choose to refund that money but is not legally obligated to do so.

As well, closing Metropolis could also have an undetermined detriment on local businesses and leave a hole in the local arts scene, officials say.

“We've heard anecdotally from area restaurants that they get significant business from patrons at Metropolis, but there's not a clear number on the economic benefit,” Kuehne said.