Overture Center officials and banks have agreed to a deal to eliminate $23.6 million in debt, the biggest impediment to a stable financial future for the arts facility.
The debt is being settled with a combination of Overture funds, contributions from a group of private donors led by philanthropist W. Jerome Frautschi, who gave $205 million to build the arts center, and banks forgiving part of what’s owed, Overture officials said Monday evening.
No taxpayer money was used to build Overture and none will be used in settling the debt, the officials stressed.
“This is great news for all of us,” said Linda Baldwin, chairwoman of the Madison Cultural Arts District, an independent public entity created by the state Legislature that runs the facility. “It’s truly a milestone for securing the future of Overture Center.”
The agreement involves MCAD; the Overture Development Corp., which owns the building; 201 State Foundation, a nonprofit that supports the arts center; and the lenders — JP Morgan Chase Bank, U.S. Bank and M&I Bank.
“I’m pleased that the Overture Center and the banks have come to an agreement to settle the debt without city involvement,” Mayor Dave Cieslewicz said in a statement. “This agreement saves taxpayers up to $5.8 million that, without this agreement, would have gone to the banks.”
Overture officials and Cieslewicz declined to reveal details of the agreement until a press conference set for 10 a.m. today at the arts center.
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The agreement, reached after months of negotiation, will trigger a new debate on who should own and run the Cesar Pelli-designed facility on the 200 block of State Street.
“This is the first step,” Baldwin said. “We look forward to working with the city and other interested parties in the region to help us move forward.”
A plan will be offered “in the very near future,” Overture spokesman Robert Chappell said.
City leaders have said many questions remain about a new governance structure and acknowledge any proposal would face close scrutiny.
In May, Cieslewicz said that, after the debt is erased, a city purchase of Overture for $1 and a nonprofit running it is the best chance to secure the long-term viability of an institution important to the region in many ways.
“Not only is Overture critical to our quality of life and to recruiting talented people and businesses, it is an important economic engine bringing jobs, patrons, and tax base to keep our Downtown vibrant,” Cieslewicz said in the statement.
Despite its success as an arts venue, Overture has struggled to balance its operating budget and faces long-term maintenance costs estimated at $450,000 or more annually through 2025.