Pablo Center at the Confluence Project Budget Update

The mission of the Eau Claire Confluence Arts board (ECCA) and Eau Claire Confluence Council board (ECCC) have been to construct and operate a fully functional state-of-the-art center that serves the many and varied needs of community arts organizations in the visual, literary and performing arts. The Pablo Center at the Confluence is charged with enhancing cultural quality of life and helping to ensure a sustaining economic vitality in Eau Claire and the Chippewa Valley Region. On September 22, 2018, a little less than 6 months from now; the Pablo Center will be hosting its grand opening. Budgeting has been a very fluid process, driven not just by the construction process for an arts center, but also responding to the unique and transformational opportunities associated with what a center of this magnitude can offer to the region in the form of community benefits, workforce development and innovation. On behalf of ECCA, ECCC and Pablo Center at the Confluence, we are providing a budget update on the project.

The total budget can be broken down by expenses incurred and funding sources attained. The attached page is a detailed and transparent budget update on the project.

Expenses

A) Construction Project Costs (Brick and Mortar) of the physical building

B) Design & Development Project Costs (Design, Architecture, Consultant, Engineers, Land Survey, Soil Testing, Legal, Insurance, Taxes, Interest Fees), Development Fees

C) Building Furnishings (Furnishings, Fixtures and Equipment)

D) Pablo Center Pre-Opening Expenses (Pre-opening systems and expenses)

Funding Sources

E) State, County, City, Philanthropy and New Market Tax Credits

F) Funding in Process

Below is a detailed budget explanation:

EXPENSES

(A) Construction Project Costs

Site acquisition and the original project cost of the building have remained the same since breaking ground. In order to value-engineer the building into the original budget, some items crucial to the multiple user groups were removed.

The mission of this building is to provide a functional visual, literary and performing arts center that will last for generations to come. To ensure the building fulfills its mission, ECCA, ECCC and Pablo Center at the Confluence staff have worked cooperatively to provide the necessary infrastructure in the building at opening. By adding necessary infrastructure items back into the project, there has been an increased physical construction cost of $1.86MM.

To ensure that any possible design coordination issues do not increase this presented budget between now and opening, a construction contingency of $540,506 has also been added. This contingency is meant to accommodate coordination issues that may arise in the closing months of construction of this project.

Market and Johnson is using a 2.5% management fee for Pablo Center at the Confluence. The average construction management percent used for a project of this scope is normally between 4% and 4.5% in this region. Market & Johnson’s percentage was the same percentage/fee schedule they used on the open bid proposal for the Eau Claire County Jail expansion.

(B) Design & Development Project Costs

The architects, sub-consultants, engineering fees for the design of the building and legal, entitlement and financing costs total just over $5MM.

Commonweal Development is receiving development and construction administration fees for managing this project for the owner (ECCA). These fees were verified to be dramatically below fair market rate by an independent reviewer. Based on Baker Tilly’s review of private and public development projects, typical developer fees range from 4% to 12% of total project costs. Commonweal has not increased their fees from their original proposal and those fees total about 2% of the revised project budget.

(C) Building Furnishings

The original budget accommodated for audio/visual items to be placed in the two primary theatres (JAMF and RCU). The Clearwater Room, three (3) rehearsal rooms, four (4) classrooms, the recording studio and lab spaces did not have technology for meetings or instructional uses.

These necessary audio/visual technologies were added into the budget to accommodate and ensure all users and groups have a functional arts center. These technologies came with a cost of $3.57MM which is well below the cost of technologies of a building of this nature which generally have a total audio/visual cost of 11%-15% of the total construction budget.

Furniture, Fixtures and Equipment (FF&E) are the “furnishings” that complete a building. Much like a new home does not account for appliances, furniture or furnishings, neither did this project. The total FF&E budget currently totals $4.32MM. This FF&E list has been prioritized and items will only be purchased as funds become available.

(D) Pablo Center Pre-Opening Expenses

All funds that have been donated to the project are going directly to the construction and furnishing of this tremendous center. To ensure funding of the operational needs prior to opening all of the pre-opening expenses from software, IT systems, website development, branding, and staff have been moved into the pre-opening expenses and added as part of the soft-costs totaling $926,500.

FUNDING SOURCES

Current funding stands at $50,999,853.

(E) State, County, City, Philanthropy and New Market Tax Credits

State, County and City Funding Sources: Taxpayer funding (State – $15MM, County – $3.5MM, City – $5MM) remains unchanged at $23.5MM. No new tax dollars have been or are being requested for this project.

Philanthropy: The philanthropy of this project has been incredible. Through the epic generosity of individuals, families, corporations and foundations we have raised $24MM for this once in a lifetime project.

New Market Tax Credit: As the hub to this regions creative economy, Pablo Center at the Confluence received new market tax credits totaling $3.475MM.

(F ) Remaining Funds Needed

Grant funding will be a crucial source to close the remaining funding gaps. ECCC has been actively working on numerous grants and feels positive that significant progress will be made over the next two months. Expected grants currently account for $4.19MM of the remaining funds.

Remaining funds to be fulfilled will come from gifts and donations from those who support and want to be a significant partner of Eau Claire’s renaissance. With incredible gifts from individuals, businesses and other regional partners like the Pablo Foundation (naming rights to the building), we will make great strides toward completing this transformative project.

The Pablo Center at the Confluence represents what is possible when we all work together on a common goal. This is a project that will transform the region by inspiring, entertaining, causing reflection and continuing the region’s tremendous growth.

Executive Director Jason Jon Anderson said, “Everyone will feel comfortable in this center as they grow, learn, imagine, create, cry, sing, laugh and experience the shared human-condition together. As the regions hub to the creative economy this building needs to be a beacon of our future possibilities. I truly believe this is a once in a lifetime opportunity to ensure current and future generations have access to the best art forms the world has to offer.”