This March 2020 phgoto shows Juneau’s City Hall. (Peter Segall | Juneau Empire File)

This March 2020 phgoto shows Juneau’s City Hall. (Peter Segall | Juneau Empire File)

Opinion: City can’t plow streets but plows ahead on $77M megaproject

It may be a terrific deal for the arts in our community, but it’s not clear that’s true for taxpayers.

  • Thursday, January 20, 2022 11:52am
  • Opinion

By Win Gruening

One would think that after voters nixed a 2019 proposal to give $4.5 million to the Juneau Arts and Humanities Council to subsidize a new cultural arts center, the Juneau Assembly would be chastened enough to rethink and revise the whole concept.

Well, they rethought it. By combining it with necessary upgrades and modifications to Juneau’s Centennial Hall convention center, the cost of the joint development (now dubbed the Capital Civic Center) has ballooned to an estimated $77 million – almost double what the original combined projects were slated to cost.

To be fair, city officials admit they don’t know what it will really cost. So, after much hand-wringing, the CBJ Assembly approved a $2 million expenditure for a partial design that presumably would determine a firm project cost.

It’s hard to understand.

Somehow the city has been hood-winked into taking responsibility for the New JACC project when it’s been obvious for some time that the plan, as envisioned, is too grandiose to be financially viable. Proponents cobbled together a skimpy pro-forma reflecting a break-even operation but it had more than a few questionable assumptions.

JACC boosters initially insisted the facility would be privately funded. But after years of fundraising, they failed to raise more than 20% of the proposed cost. Their pleas for more money from the city never garnered enough votes from the Assembly or the voters.

Now, they apparently have engineered a dramatic turnaround. With the city proposing to own the project and be financially responsible for its operation, the JACC sponsoring organization, the Partnership, will no longer need to fundraise and any revenue shortfalls would be covered by taxpayers.

Given the additional financial risk assumed by the city, why isn’t the Partnership paying for at least half of the $2 million the city committed to the Capital Civic Center?

This may be a terrific deal for the arts in our community, but it’s not clear that’s true for Juneau’s taxpayers.

The combined project has been touted as a necessary amenity but it was sold on the premise that it would be more efficient than two large standalone projects. However, it doesn’t appear that any effort has been made to downsize either one – just merely smash them together.

In the process, the two projects are being treated as one but, in reality, the need for each is different. It is well-established that Centennial Hall needs updating. Little has been done on the facility (aside from the $4.5 million in improvements currently underway) and it’s sadly in need of modernization. Voters have been willing to go along with those expenditures, until now. But conflating the need for a renovated Centennial Hall with the proposed need for a brand-new arts and cultural center is, at best, not being honest with tax-paying voters who clearly expressed their unwillingness to financially support the New JACC.

City officials and supporters have hinted that large grants and, possibly, federal monies, are available to fill the funding gap that is widening daily as inflation and supply chain issues dramatically escalate building costs. If so, that would help make the project more palatable to all concerned.

But the project cost is only half the calculation.

Why wasn’t an analysis of revenues and expenses undertaken before committing millions to design? The operating costs of this facility will be many times what the combined operating costs were for the two existing buildings and, without that information, financial feasibility remains a question mark.

Remember, Centennial Hall required an annual $600,000 subsidy before COVID-19 hit. While Juneau (and Alaska, in general) enjoys a mystique and cachet that many other destinations do not, independent travelers will incur high transportation costs and limited lodging options when visiting Juneau. Rosy revenue projections for conventions or cultural events that are based on large numbers of visitors from outside Juneau should be viewed with healthy skepticism.

The only way to gain wide-spread public support is through a financial vetting of the project that reflects no increased subsidies or taxes to pay for it and doesn’t require sacrificing plowed streets in the winter.

Our community doesn’t need another snow job.

• After retiring as the senior vice president in charge of business banking for Key Bank in Alaska, Win Gruening became a regular Opinion Page columnist for the Juneau Empire. He was born and raised in Juneau and graduated from the U.S. Air Force Academy in 1970. He is involved in various local and statewide organizations. Columns, My Turns and Letters to the Editor represent the view of the author, not the view of the Juneau Empire. Have something to say? Here’s how to submit a My Turn or letter.

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