Press Release: Reston 20/20 analysis of proposed Reston visual and performing arts center shows it will be costly and require tax increases.

 PRESS RELEASE

December 9, 2022

 

Reston 20/20 analysis of proposed Reston visual and performing arts center shows it will be costly and require tax increases.

 

In a detailed analysis released today, December 9, 2022, Reston 20/20 analyzes the 20-year future cost of building and operating a visual and performing arts center in Reston Town Center as $164 million.  The report details how over half of that cost will require tax increases for Reston or county taxpayers.

The analysis, based on the recent experience of non-profit performing arts centers nationwide and several feasibility studies of prospect arts centers, fills a void left by Fairfax County and the Reston Community Center (RCC) which have provided no analysis of the center’s prospective financial burden to date.  The only financial RCC’s consultant provided was a rough order of magnitude forecast that the proposed arts center would cost $81.4 million if built in 2030, probably the earliest date one could be completed. 

The Reston 20/20 analysis, prepared by long-time Restonian Terry Maynard, details of the financing cost for building such an arts center over 20 years, estimating the cost over that timeframe at $135.9 million.  The report adds that the cost could increase more than the three percent per year assumed due to construction cost escalation, greater inflation, and delays in launching construction.  If financed by Restonians alone through STD#5, construction would require a 46% increase in the local tax rate in 2030.

The operating costs of such an arts center—some $28 million over 20 years--also pose tax challenges.  The report notes that the nationwide non-profit theater industry has only been able recover about 42% of its operating costs through annual revenues, relying on outside sources—taxes, endowments, donations, etc.—for the remainder.  Start-up arts centers have generated only about 22% of the revenues needed to meet expenses, escalating to 42% over several years.  Reston 20/20 forecasts these costs would require an eight percent increase in Reston tax rates in 2030 if RCC managed the center.

“The county and RCC have failed to provide the community any reasonable estimate of future costs associated with the proposed arts center,” according to Terry Maynard.  “While RCC has asserted it could manage the theater in a more streamlined manner than others have, it has not conducted the analysis to show how this might be achieved or the impact on existing RCC offerings.  It is irresponsible to proceed with the consideration of a Reston VPAC without a detailed estimate of the center’s future impact on Reston and county taxes,” he added.

The report says, “Reston and Fairfax County have much more important needs for the use of their tax dollars over the coming decades (including) more schools, improved transportation capabilities (transit, pedestrian/bike, and auto), urban parks, and protection of the environment, among others.”  According to the report, there are at least 31 visual and performing arts centers of varying sizes within 10 miles of Reston.

The report concludes that, if a performing arts center is to be built in Reston, “it should be a county arts center as described in the Reston (Master) Plan entirely funded by the county—including all construction and operating costs.”

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Estimating the Cost of the Proposed Reston VPAC: Construction and Operating Costs, December 8, 2022

The following is the opening paragraph of a detailed financial analysis of the cost of building and operating a Reston Visual and Performing Arts Center.  You may read the 10-page report in its entirety on Scribd.com at this link.

After a series of presentations from an RCC consultant and two district town hall meetings, there remains little clarity on the cost of proceeding with a 57,000 square foot Visual and Performing Arts Center (VPAC) in Reston Town Center as proffered by Boston Properties.  To date, the only financial information the community has received is the consultant’s ROM estimate that its proposed VPAC would cost $58 million if built this year and $81.4 million if built in 2030.  It provided no insight on the long-term capital or operational position of such a facility.  Based on the information provided by the consultant and our review of several other consultant reports on performing arts centers, we believe the following is a fair summary of the best cast scenario costs for a Reston VPAC built in 2030:

Table 1:  20-Year Total Cost
of Reston VPAC

 
Construction Cost                            $135,938,000
Operating Shortfall (Best Case)       $ 28,311,321
 Total Cost                                           $164,249,321

Comment on RestonNow article ignoring park option for Block J in Reston Town Center

 The following is an extended comment we made on RestonNow regarding its one-sided focus on an arts center for the proffered Block J in Reston Town Center.  

This article literally tells only half the story about this proffer, the one RCC and Supervisor Alcorn have been trying to sell for months.  Specifically, as stated in the proffer, it calls states, “Block J may only be used for the Arts Center or as a park open to the public.”

A park, indeed any meaningful open space, is sorely lacking in Reston’s transit station areas (TSAs).   In fact, here is the standards in the county’s framework for urban parks: “New developments generate (park) need at a rate of 1.5 acres per 1,000 residents and 1.0 acre per 10,000 employees. Within urban, mixed-use development areas, a full complement of urban park types is desirable to create robust park networks.”  Reston’s draft plan calls for over 40,000-67,000 new residents in the TSAs and 56,000-86,000 jobs in the TSAs depending on the growth scenario.  That increase requires 72-106 acres of added public parks in the TSAs, not counting what is already owed for the existing population and job growth in these areas.  To date, the county has only planned generally for three ballfields.

Indeed, on the few occasions that the county has mentioned the park alternative, it has always referred to it as “a ballfield.”  It is clear that the site is not large enough to accommodate a full-size baseball or soccer field.  A softball field alone requires 1.5 acres, not counting seating, etc.  A full-size soccer field needs 1.8 acres and a baseball field needs 4.5 acres.  With Block J only about 60,000 SF or about 1.4 acres, fitting a real ballfield here appears impossible, especially with its irregular shape. 

A real park, one for people to come and enjoy the outdoors and some smaller recreational facilities, such as a playground and maybe some pickleball courts, is not only feasible, but it would serve a far larger cross-section of the TSA’s population than mini-ballfields placed there.  This is a far more useful use of this small area in serving the 60,000-87,000 people planned to live in the TSAs, about half in the Reston Town Center area.

In fact, it could be argued that using Block J for a ballfield of whatever size would not meet the terms of Boston Properties’ generous offer—to be used “as a park open to public.”  No one would ever confuse FedEx Field for a park.  Why would one do so with Block J?

On the other side of the ledger, building and operating an arts center would be extremely expensive and is unneeded.  Hunter Mill District—the area immediately around us—holds nearly one-fifth of the arts centers in the county.  And our neighboring districts—Dranesville and Providence are equally well endowed.  That’s over half of the county’s arts centers within ten miles, and many are accessible by the Silver Line—including the new Capital One Center in Tysons.  Why should Restonians or even all county residents pay nearly $240 million to build and operate another small theatre and art center in Reston over the next 30 years--$8,000,000 per year?

 

Buyer Beware: The Proposed Reston Visual and Performing Arts Center

 RCC and the county are proposing an expensive and flawed arts center to be paid for by Restonians.

Tuesday evening, October 4, 2022, at 7:30 PM, Supervisor Alcorn is holding a so-called one-hour town hall meeting at the South Lakes High School auditorium for Restonians to hear about the Visual and Performing Arts Center (VPAC) proposed by the Reston Community Center (RCC).  It remains unclear how much they will be able ask about it or challenge its legitimacy given the limited time and a county presentation, but this is another RCC and county boondoggle of the highest order and you should know about it. 

Some of you—especially those active in the arts—may have attended either in person or virtually the several meetings last spring led by a consultant seeking input on what a Reston VPAC should be able to do.  Videos of the meetings and the presentation are available at a county webpage for the proposed arts center.  

         

Figure 1 Conceptual layout of Reston arts center.

The bottom line from this effort, published in the consultant’s final report was that a 65,000 GSF arts center could accommodate a 500-seat performing arts theater and a small visual arts gallery (7,400 GSF), plus ancillary spaces for both, on the 27,000 square lot proffered to the county by Boston Properties. 

This proposed VPAC is underwhelming in meeting either its stated goals or Reston (and broader) arts needs.  RCC’s goal in tasking the consultant was to address:

·       The absence of a medium capacity performance venue (500-1,000 seats) with a large-footprint stage. The major types of performances would be music, dance and theatre (musical or large casts).

·       Also missing are small intimate venues designed for spoken word, comedy, jazz and other small groups outside of restaurant and bar venues.

·       There are fewer amenities for visual arts in the region.

The consultant could only fit a 500-seat theater in the space provided by the proffer and meet some of the visual arts objectives.  At just over 4,000 NSF, the proposed stage generally meets the call for a large footprint stage. Merchant Hall at GMU’s Hylton Performing Arts Center has a comparable stage, but it also has over 1,100 seats. 

In contrast, the proposed 7,400 GSF visual arts program area is slightly more than half again as large as the RCC addition to RCC Lake Anne in the last year, 4,500 square feet, according to RCC Director Leila Gordon.   That space will be used for: “art studio classes that are twice as large; a 3D media room; two additional pottery wheels (one of which is ADA-accessible), bringing the wheel spaces to 10; two rooms outfitted with spring floors and mirrors that will be used as dedicated fitness studios; a wellness studio; and a new heating and air conditioning system.”  Regrettably, this doesn’t meet Reston’s visual arts needs by a long shot and is basically a throw away space. 

The consultant’s report also goes on to provide a rough order of magnitude (ROM) cost for the project:  Its cost estimate is $58 million this year if the construction begins this year, including contingency costs, mushrooming to $81.4 million in 2030 as construction costs grow.  That’s a nine percent per annum inflation in costs, which is actually less than the recent record of performing arts center cost growth of more than 12 percent per annum.

The key question then becomes:  Who pays for the construction and operation of a Reston VPAC?  The county and RCC have been impossibly vague on the matter, in part to get community buy in for the project before its costs are known. 

RCC has pursued the VPAC for years and has the Reston Special Tax District #5 (STD#5) to pay for it.  The county has its range of taxes to cover the needed construction and operating costs.  From what we can discern, the county is likely to propose an industrial bond to cover the cost of construction.  Two key points:

·       An industrial bond, issued by the Fairfax County Economic Development Authority (FCEDA), does not require a referendum, merely a Board of Supervisors approval.

·       The bond does, however, require an identified, reliable income stream to cover the bond payments.  The only available such stream is Reston’s STD#5.

RCC claimed for months—indeed it’s in the consultant’s report—that the VPAC would not result in any Reston STD#5 tax increases.  That is simply not true and, indeed, the county has softened RCC’s comments on this.  The bottom line is that you cannot add nearly 40% to RCC’s expenditures and not increase STD#5 taxes on Reston residents and businesses.  In fact, if the project began in 2030, the tax rate would need to increase 72% to $.081 per $100 valuation from its already excessive $.047 per $100 valuation in 2030.  That rate would slowly decline as real estate values increased, but would still be $.069 per $100 valuation in 2050.

      

Figure 2 Estimated Cost of VPAC and Impact on RCC STD#5 Budgets.

In the county and RCC’s mind, who better to pay the additional $152 million in industrial bond payments and roughly $50 million in anticipated VPAC operating cost shortfalls over 30 years than the residents and businesses of Reston’s STD#5?  That’s $200 million that could be used on new or expanded schools, improved transportation, new public open space in transit station areas, affordable housing, and environmental stewardship being spent on a barely mid-sized theater and a small art gallery.  And all of that $200 million comes from Restonians’ pockets.

Moreover, there are literally dozens of alternative performing and visual arts venues around the county, including RCC’s own venues at Hunters Woods and Lake Anne and two theaters at the Tysons Capital One Center—a 1,600 seat large performance theater and a 225 person “black box” theater—plus public art.  There is no shortage of artistic opportunities in our county for residents or visitors who want to attend.  To build another one in Reston at taxpayer expense, especially Reston STD#5 expense, is utterly irresponsible.

Terry Maynard

Reston, VA

October 3, 2022

This article was also posted on Reston Patch in the "Neighbor Posts" section.