The Civic Auditorium is facing a potential $29 million tab for basic upkeep, and city officials say they realize a decision is coming about the future of the aging arena.
That price tag, outlined in a new study on the 56-year-old building, would be a steep, perhaps unaffordable cost for the City of Omaha, which is dealing with tight finances and debt payments on CenturyLink Center Omaha and TD Ameritrade Park.
While the city isn't obligated to make those repairs, it's not the only significant cost bleeding out of the Civic.
With tenants leaving the downtown auditorium for a new arena and free rent in Ralston, the Civic is projected to lose $150,000 to $250,000 annually by staying open.
Although officials have yet to release the full study, those financial findings are two of its major conclusions.
The study, funded by the nonprofit fundraising group Heritage Services, does not recommend whether the city should pay the repair bill, shutter the Civic or turn the property into something else.
That decision is now in the hands of city officials, who say they will be analyzing the Civic's future.
"That's been quite a facility for Omaha over the years," City Council President Tom Mulligan said. "But I don't know if it's run its course."
Steve Oltmans, Mayor Jim Suttle's chief of staff, said that the mayor was briefed on the study and that the renovation and maintenance costs are a concern.
In a statement, Oltmans said officials “will need time to analyze the findings and make a thoughtful determination of ways the city can proceed which satisfy the best interest of the community and its taxpayers.”
For perspective, Ralston is building a 3,500-seat ice and events arena for $32 million.
That events center, due to open next year, has helped push the Civic Auditorium to a financial tipping point.
Ralston will lure away the Omaha Lancers hockey team from the Civic and has been negotiating a deal with the Omaha Beef indoor football team. The Omaha Vipers soccer team, another of the Civic's tenants, has cancelled its 2011-12 season.
Meantime, the University of Nebraska at Omaha men's basketball team is committed to playing at Ralston, after initially considering the Civic.
Even with increased competition from Omaha's new downtown arena and the Mid-America Center in Council Bluffs, the Civic had held its own in the market, typically generating an annual profit. But that changed in the 2009-10 fiscal year — the latest year results are available — when the Civic lost $30,000.
While the Civic draws high school graduations to the arena and occasional shows to its Music Hall, the financial losses are projected to accelerate with the lost tenants.
If the Civic lost $250,000 from its continued operation, that money would come from city funds.
Under its management agreement with the Metropolitan Entertainment and Convention Authority, the city pays the first $250,000 in losses. Then MECA pays the next $250,000 in losses.
MECA President Roger Dixon said that with sports teams leaving for Ralston, there probably is no longer a demand for the Civic in that market. MECA, he said, can't match the rent deals being offered in Ralston.
The Civic still attracts a number of events, mainly in the Music Hall, Dixon said. While the facility can continue to operate, he said it is at risk of a major building system failing.
“The reality of it is, it's a facility that's seen its useful life,” Dixon said.
“A tough decision has to be made — is there a better use for it or a better use for the property.”
The city's 2009 downtown master plan suggested using the Civic Auditorium and surrounding properties for a seven-block redevelopment site with an office tower, shops and housing.
With that vision in place, the question remains when that redevelopment might happen, City Planning Director Rick Cunningham said.
Cunningham said the city has not discussed ways to move toward that type of project. Even if the city turned the property over for redevelopment, that would present costs to the city.
Right now, the city is focusing redevelopment attention downtown on the intersection of 10th Street and Capitol Avenue, where a developer was chosen to build a hotel, shops and apartments, Cunningham said.
“We will only be able to do so much,” he said. “It's going to come down to priorities.”
Mulligan said a repair costing tens of millions of dollars would be “a huge additional investment for the City of Omaha” and represent a huge decision.
“We're going to have to do a hard analysis to see if (the Civic) still fits into the picture.”
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