The 2006 San Jose City Council unanimously approved a $2 million loan to the San Jose Repertory Theater, fondly known as The Rep. On Tuesday, the 2011 City Council will consider modifying this loan.
The Rep has made progress in getting out of the red and into the black by reducing staff, designing less expensive sets, shorter show runs and using San Jose State University (SJSU) students in the most recent play to reduce costs. In addition, The Rep welcomed independent traveling shows for short runs that are quite popular, as well as renting out the venue for private events. These cost reductions have allowed The Rep to make all of the interest payments totaling over $200,000. However, like some homeowners, The Rep was only paying interest and nothing on principal.
As a result of the The Rep not being able to keep its 2006 financial commitment, the council will consider modifying the terms of the loan to collect the debt over 25 years. The Rep knows there is no additional money available from the city. It also realize that it needs to make do with what it has while simultaneously making progress on the debt.
The Rep has been a trailblazer for San Jose’s downtown. The Rep is responsible for bringing people to downtown to enjoy theater. As a consequence, a portion of The Rep’s 75,000 attendees spend money before and after shows downtown. This activity has a $9.1 million dollar economic benefit, according to an independent economic impact assessment by Delloite. The Rep is a piece of the jigsaw puzzle that makes downtown similar to how ACT makes the theater district in San Francisco.
This summer I attended a fundraiser for The Rep, where I spoke with people from Hillsborough and Atherton. These affluent peninsula folks would not visit San Jose had it not been for The Rep, and they would possibly not be donating five-figure amounts to another San Jose organization. (By the way, your San Jose Museum of Art, Children’s Discovery Museum and Tech Museum also leverage donations from many people who reside outside of San Jose. These museums’ current buildings and The Rep were built with RDA funds.)
However, let’s look at this from a different perspective. Let’s say you were sick and tired of funding the arts and just wanted to call in the loan. Well, for starters, you may only be able to get $100,000 out of the $2 million that is owed, as The Rep would file for bankruptcy. You then might be able to liquidate some set props and some costumes for pennies on the dollar. You could not rip out the seats and sell them since the city already owns the physical seats. Oh, okay, perhaps you could roll up the curtain and sell that along with the golf nets purchased for $2.26 million.
What you would be left with is an empty Phil and Susan Hammer Theater without the theater company providing programming. Many of the attendees that came to shows and spent money downtown would be gone, and that piece of the downtown jigsaw puzzle would be missing. In addition, the city of San Jose would then have to pay to maintain the building but with no benefit of theater patrons and commerce Downtown.
So will it be the final curtain?
Finally, if you look at your recent property tax bill, you will notice your PERS levy tax or county pension tax. This tax has been collected since 1945 and goes towards paying a portion of the pensions for County employees. Santa Clara County is the only County in California that has this tax. In fiscal year 2010-2011, this tax raised $109 million for pensions alone.
Pierluigi,
Do you really think the peninsula folks want to be in San Jose with our weekly murders? Cutting SJPD’s staffing is going to cost us more than $9.1 million.
Once again city hall can’t seem to realize that discretion is the better part of valor. It’s not only a good idea but makes business sense to cut our losses and be done with failed ideas like the Rep and the airport (aka money pit ). But no, let’s keep pouring money into those sinking ships. Brilliant.
Hell, at least mothball the Rep for a year and save money on the operating expenses. Think about it
Great article Councilmember. Thanks for telling us that the city has made yet another poor financial investment that will basically be a gift at the cost of the taxpayers. Further, this poor investment cannot be gone back on because we will lose our investment, or we can wait for 25 years to break even. I also appreciate the caveat that we have to pay for pensions with a tax that no one else has. This clearly leads us to believe that pensioners should be demonised while a theater can bring in business to downtown bars and restaurants? What is the point of your article? That your incompetence is not your fault? I guess the voters have no one to blame but themselves or those that voted before them…
Pier,
To save the Rep and other worthwhile projects, why can’t we cut the city council in half, and have the mayor and council members serve for a stipend like all the surrounding cities? This would free up millions for the Rep, etc. I would like this to be something we could vote on to make the council a volunteer position.
Good idea. If they only fund things in the charter, that would cut their job duties considerably. Reduce the number of councilmembers and their corresponding staff.
How many of these “LOANS” exist in the city? How do we get an accounting for ALL non profit, not for profit and pet projects the city has? I think in the end we may be able to open a few libraries, staff public safety and put money into proof positive organizations.
In closing Pier, if you will give me full access to the city books and meet “ALL” my request for disclosures, I will find the money. I await your answer. My friend!
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One would assume the County Tax Office -would be accountable for all that money, it’s investments etc.
and even though Councilman Oliverio and the rest of the Council are “city” employees that $109mil collected in the name of county employees will help to ensure that PLO, Mayor Reed etc… PERS Pension Check arives right on time.
You’re such a phoney Pier! You and the rest of the term limited opportunists on the Council will carpet bomb the City of San Jose’s Retirement system for dedicated career employees (librarians, gardeners, janitors and public safety alike)to ensure you own PENSION INTERESTS.
It is the career employees that made San Jose the Safetst City in America. The title that you Pols should have used to attract business to San Jose. Instead you (personally and collectively) squandered that title thinking you could do “more with less” and built LOW INCOME housing by awarding wealthy real estate developers and specualtors with rights to build.
It doesn’t take a rocket scientist to conclude that LOW INCOME is a euphemism for TAX DOLLAR VACUUM. They consume welfare and public services (including public safety)at rates that far exceed the mid/upper class. Worse their “businsess” is crime, be it dope, robbery,burglary drivng without license/insurance… and the ripple effect from that negatively affects us all.
Nobody wants to come to DTSJ because it is not safe. Brian Kneis and the DT Association complained that the COPs made patrons feel uncomfortable. He/They lobbied using the MERC to reduce policing DT. They got what they wanted – fewer police – and guess what crime rose.
A light (albeit a dim bulb) might have gone on at the Merc. After the City’s 7th officer involved shooting yesterday (the 6th since SEPTEMBER??? uh that is just last month!) Foriegn workers and foreign business prospects interviewed openly state that from what they have seen recently SAN JOSE IS NOT SAFE AND THEY ARE RECONSIDERING PLANS TO SETTLE HERE!
THANKS REED! THANKS CONSTANT! THANKS PIERLUIGI! THANKS FIGONE! THANKS LICCARDO, NGUYEN, ROCHA, HERRERA……
Past City Council votes that keep on giving.
Thank you Forest Williams, Cindy Chavez, Nora Campos, Dave Cortese,etc…
Whatever the case, they too got their CalPERS Pensions.
Nice cheap shot AGAIN, at the end of you manifesto PO. Yes the city is not safe due to all you clowns hiding money claiming a fiscal emergency. You lay off 66 officers with more retiring or just going to another city.
Then you fact out refuse all proposals from the Police Officer Association after your last council meeting. The mayor was so bored he should of stayed home.
And now your attack on retired employees:
Naturally, the City negotiators have chosen to be deceptive in how they steal our benefit. It’s written as a “suspension” of the COLA until 2017. However, the measure then goes on to read that following 2017, a list of specific criteria must be met prior to restoring the COLA. The criteria must be met for three years. Thus, the COLA is eliminated until at least 2019.
It gets better. The City Council, after 2019, could decide to restore “part” of the COLA. They wouldn’t have to fully restore it to 3%. Additionally, they would not make up on the money they’ve cheated you. The restoration would only apply to the future. Also, they could choose not to restore it. It would be their choice.
Citizens need to get educated before the March special ballot measures to cut the heart out of public safety and those who have already retired. Your master plan to bust the unions are in place. SJ citizens quit drinking the cool aid and step up to the corrupt city council. Research facts how this city is hiding money and making very poor financial decisions losing millions.
And quit believing all the crap the Mercury News is printing!
You and the city manager consume over 10 million dollars a year, and doubt if we cut service to the city council , mayor and city manager the residents would see little effect. The mayors officer annually give 40,000 dollars worth of gifts to whom? What about the cost of paid leave bonus you crooks give one another. Yes just the tip of the ice burg that is melting. If you were smart you would step down leave for Canada and pray you do not end up in court soon. Maybe the mayor can use some of that $500,000 he spent on lawyers for his ballot measure.
for the special March ballot and the pending law suits. This will never end until Chuckie and Deb are gone along with about half of this dysfunctional council.
This will get into the millions of our money to fight count battles that higher courts have already say are illegal,
P.O.:
Didn’t you just pen an article on how the City Council had approved $32 million for an incubator program that provided no benefit to the City (well of course you didn’t say that) and now this week you mention how we have foolishly spent more money. Yes thanks for bringing to our attention again.
How did the stadium land deal meeting go last week?
Meyer Weed , Bravo you hit it right on the head! hopefully now people will realize what is going on and start asking the hard questions of this Morally Corrupt Mayor and Council . The residents of San Jose need to wake up and start demanding accountability for all of the Stupid decisions that this council has made.
to continue to build low income housing without creating new jobs is killing this city. To lay-off Police Officers and Firefighters , when these 2 departments were already the lowest staffed in the nation is sheer stupidity.Take a look around violent crimes are up ,response times are getting longer. this city council is moving forward with the Ballpark plans and have diverted funds to do so(more than likely illegally).This Mayor is moving forward with his ballet initiative to destroy the pension system, even though it is ILLEGAL! This city never even considered the coalition of unions offer , that would have saved this city $500 million dollars …..unbelievable . these bad decisions going to cost us taxpayers in to the millions and in the end the residents of San Jose lose
Sums it up who runs the police department, THANKS DEB & CHUCKIE
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Posted by POA
It should come as no surprise to anyone that we received a rejection to our pension proposal in the form of a counter offer from the City today. We were told that our offer was rejected because it did not provide a sufficient reduction in the cost of benefits. They also said that the CalPERS route would take too long to implement. (FLAT OUT LIE)
They have made it very clear that they are intent on having a special election in March of 2012. (VERY TRUE)
YES SPEND MONEY ON THE REP, WHO CARES ABOUT PUBLIC SAFETY ANYMORE.
PO, by now your sitting in your city hall office, reading responses and composing next weeks post to piss off more people who care about how you are dragging the city down.
I used to look forward to coming downtown as long as it was early and before the out of town bar crowd would come, good eats, good entertainment, no free parking, but no longer will I spend a penny in your district including WG. Thanks to you, I no longer feel safe with my family at Christmas in the Park or any other event which will probably disappear as well.
Thanks for ruining a once proud city.
PLO , I seriously hope you were a decent (DOUBT IT) bartender because you stink at being a councilman. You vote to give “the Rep” 2 million dollars and then give a jab at the pension system. You are not qualified to be a Bathroom attendant! People are fed up with the way this city is being derailed by you and the rest of the clown court.
Seems like the Sharks or Sports in general is a better investment than Theater as more people go to games.
“The Rep’s 75,000 attendees spend money before and after shows downtown. This activity has a $9.1 million dollar economic benefit, according to an independent economic impact assessment by Delloite.”
The San Jose Repretory Theatre deserves years of encores!
This wonderful theatre provides great entertainment (anyone catch Spring Awakening? Awesome! Last Romance? Sweet) and a collaboration with other partners to bring the SJ community (and beyond) events such as CreaTV Creative Awards, the SJ Jazz Festival, and a lecture series by 1st Act to name a few.
Arts and culture provides opportunity for surrounding businesses to thrive, enterprising artists to showcase and succeed and a places/spaces for community to engage.
If I were to use a human body as an analogy; the arts and culture scene is the Chi, or Life Force. (And to further the analogy, the SJPD and Fire Department are important as well..like the immune system is when called upon.)
Pierluigi, thank you for another great blog post and I hope the City Council will look at the good work the Rep has done to set a path for success, and help it by modifying the terms of the Rep’s loan. The San Jose Repretory Theatre deserves many more encores.
Tina
$2 million for The Rep or a pension tax on my home every year for $109 million?
PO has sooo much time to blog he doesnt have time to do his real job as a councilman!!!! Please take your $650 month car allowance and drive on the taxpayers money to take yourself to the rep whre you probably get free tickets becauseyou dumbasses keep giving all the money away then blame it on the employee pensions….show us the books in the metro or the murcury news… show us the MONEY !!!!!!!!!
Pierluigi,
Your position on this issue makes sense and cents. The Rep appears to making progress on repaying its debt and local government is making interest on the loan and local tax revenue. There isn’t a better alternative here. San Jose has benefitted from its art scene – let’s keep it alive in these tough economic times.
This joke of a city is screaming that it is financially strapped …………….but its o.k. to waste 2 million dollars on “the rep”, an institution that has never been a money maker. wasted monies , No new jobs in san jose , too much low income housing , a decimated public safety, a full-of-himself-mayor,an arrogant city manager,a clown court……………….gee! whats there not to like about San Jose? no wonder people are moving out of this latrine of a city