A timeline of developments in the financing of the Overture Center for the Arts. Information courtesy of The Capital Times and the Wisconsin State Journal.
Created by jwarner on Sep 20, 2008
Last updated: 03/12/10 at 03:34 AM
The Overture Center for the Arts announced that a consortium of banks will convert its investments into cash, using the proceeds to pay off a substantial part of the outstanding debt.
Under the terms of the December 2005 refinancing, Frautschi is responsible for paying debt service for up to $5 million for the next two years, with the arts district covering the next $2.5 million.
http://www.madison.com/tct/mad/sports/badgerblitz/305796
Philanthropist W. Jerome Frautschi, whose original $205 million gift laid the foundation for the Overture Center, will give another $3 million to the struggling trust fund to keep it above the $97 million level. At this level, the banks could demand the fund be liquidated into cash and CDs.
The Overture Center trust fund stands at 99.25 million -- dropping about $10 million since it was refinanced in December 2005. The trust has only gained 2 percent since Oct. 1, 2007, rather than the anticipated 8.25 percent needed to cover all responsibilities.
Philanthropist W. Jerome Frautschi, whose $205 million gift laid the foundation for the Overture Center, is obligated to provide emergency funding for the center's debt center under terms of the 2005 refinancing. Frautschi is the first of three financial firewalls in place to partially cover debt payments if the fund falls below $100 million. Philanthropist W. Jerome Frautschi covers the first $5 million, with the Madison Cultural Arts District picking up the next $2.5 million. The city of Madison is the third financial firewall.
The Overture Center trust fund stands at $98.9 million as of March 31, down from $106 million at the end of $2006.
http://www.madison.com/archives/read.php?ref=/tct/2008/04/07/0804070261.php
The Overture Center trust fund falls to its lowest point thus far to $100.1 million -- just above the $100 benchmark, below which financial firewalls are enacted to help cover the construction debt.
Philanthropist W. Jerome Frautschi covers the first $5 million, with the Madison Cultural Arts District picking up the next $2.5 million.
http://www.madison.com/archives/read.php?ref=/tct/2008/03/27/0803270351.php
The Overture Center trust fund, having dipped below the $104 million mark, drops its $1.4 obligation to the arts district for an operations and maintenance reserve and will only provide $900,000 in 2007 to the arts district, according to Madison Cultural Arts District Board Treasurer Dana Chabot.
http://www.madison.com/archives/read.php?ref=/tct/2008/01/04/0801040234.php
The Overture Center trust fund reaches $103.31 bouncing back from a steep drop to $100.86 million. The current total is still below the $104 million mark, meaning the Madison Cultural Arts Support Trust Fund will no longer be able to deliver all of its pledged annual payment of $1.4 million to help operate the Overture Center.
The Overture Center trust fund falls to $100.86 million Aug. 15 from $105.83 million on July 13. The trust is slightly above the $100 million level, below which city taxpayers would eventually pay up to $2 million a year to help cover the construction debt for the Overture Center. That's in addition to any shortfall to be made up on the $1.4 million pledge for operations. But the current total is still below the $104 million mark, meaning the Madison Cultural Arts Support Trust Fund will no longer be able to deliver all of its pledged annual payment of $1.4 million to help operate the Overture Center.
The Overture Center trust fund is at $103.98 million, just slightly below the first of three financial benchmarks.
If the fund falls below $104 million, it will no longer be able to deliver all of its pledged annual payment of $1.4 million to help operate the Overture Center. City taxpayers could be asked to make up the difference.
The latest decrease comes from a $750,000 for an early withdrawal premium. City and Overture officials say the decrease will be returned over five years on a special investment.
http://www.madison.com/archives/read.php?ref=/wsj/2007/04/18/0704180013.php
http://www.madison.com/archives/read.php?ref=/tct/2008/01/04/0801040234.php
City Comptroller Dean Brasser prepares an internal report that shows returns have been lower than the goal of 8 percent, causing the trust fund to fall from $109.3 million to about $105.8 million as various expenses are paid.
The Overture Center trust fund rises to $108.54 by mid-March.
About $16 million is moved to cash equivalents from a $27 million hedge fund managed by the Fairfield Greenwich Group.
Cash equivalents -- conservative invests with modes, even returns -- now account for about $64.7 million of the fund's overall value, leaving about $40.9 million in equities and other investments -- which have to earn about 13 percent in equities markets or other investments to avoid shrinking further.
Overture Foundation President George Austin says the Madison Cultural Arts Support Trust does not plan to keep the fund in such a conservative investment portfolio.
http://www.madison.com/tct/archives/index.php?archAction=arch_read&a_from=search&a_file=%2Ftct%2F2006%2F07%2F26%2F0607260433.php&var_search=Search&keyword_field=&pub_code_field=tct&from_date_field=20060726&to_date_field=20060726&var_start_pos=40&var_articles_per_page=10
http://www.madison.com/archives/read.php?ref=/tct/2008/01/04/0801040234.php
As details for the approved refinancing wrap up, the Overture Center trust fund increases by $1.5 million to $108.5 million in four weeks.
http://www.madison.com/archives/read.php?ref=/wsj/2005/12/08/0512080032.php
The City Council approves a refinancing plan for the Overture Center trust fund in a 15-5 vote. The plan keeps intact the $107 trust fund and requires the city to back a second series of bonds to cover the construction debt.
The trust fund will provide collateral for an $87.3 million piece of the $115 million construction load. will make interest payments, and will provide up to $1.4 million annually for operations and maintenance. The city provides collateral for six years on the $27.7 million piece of the loan.
In favor: Alds. Brian Benford, Judy Compton, Ken Golden, Tim Gruber, Austin King, Brenda Konkel, Isadore Knox Jr., Judy Olson, Noel Radomski, Santiago Rosas, Jed Sanborn, Paul Skidmore, Cindy Thomas, Mike Verveer and Paul Van Rooy.
Opposed: Alds. Zach Brandon, Tim Bruer, Lauren Cnare, Larry Palm and Robbie Weber.
http://www.madison.com/archives/read.php?ref=/tct/2005/10/19/0510190366.php
The City Council delays its vote on refinancing the Overture Center after the Board of Estimates voted against supporting the plan. Ald. Jed Sandborn tells The Capital Times that the refinancing situation is "bad," but the the city taking ownership of Overture is "the worst of all the possibilities." Sandborn added that the issue was "a tough one" and allowed that he still was not sure how he would vote.
Alds. Mike Verveer, Judy Olson and Brian Benford vote in support of refinancing. Alds. Tim Bruer, Zach Brandon and Paul Van Rooy vote in opposition to refinancing. Mayor Dave Cieslewicz splits the tie, voting in opposition.
Fearing shaky market conditions, Mayor Dave Cieslewicz says taxpayer risk would be best limited if the city bought the Overture Center for $1.
The trust grew an average 2.2 percent annually in the post-Sept. 11 stock market, rather than the anticipated 9.2 percent.
Cieslewicz said for the refinancing plan to work, the stock market would have to return 8 percent annually over the next six years.
If not, the city likely would have to buy the building for millions of dollars, not $1, Cieslewicz said .
"In that case, taxpayers would be reasonable to ask why we had not taken the building for free when it had been offered," Cieslewicz wrote in a memo to the Board of Estimates.
Philanthropist W. Jerome Frautschi and Overture Foundation president and Frautschi spokesman George Austin both oppose city ownership, which would require liquidation of the trust fund and settling the building's debt..
http://www.madison.com/archives/read.php?ref=/tct/2005/10/13/0510130369.php
Madison Mayor Dave Cieslewicz schedules a special Board of Estimates meeting to go over the question of whether to refinance the Overture Center's underperforming trust fund or have the city purchase the center for $1 and take responsibility for operations and maintenance
The Board of Estimates serves as the City Council's budget committee.
At the meeting, Cieslewicz, along with Ald. Zach Brandon, 7th District, showed skepticism toward the refinancing option. After the meeting, the other four Board of Estimates members -- City Council President Paul Van Rooy and Alds. Mike Verveer, Judy Olson and Brian Benford -- informally voiced support for refinancing.
Of Frautschi's $205 million gift to the Overture Center, $100 million was set aside in a special trust to serve as collateral for a $115 million loan borrowed to begin construction, as well as make payments on the loan and bring in $1.4 million annually for operations and maintenance.
http://www.madison.com/archives/read.php?ref=/wsj/2005/09/20/0509200040.php
The first phase of the Overture opens to patrons.
Philanthropist Jerry Frautschi announced a $205 million donation toward construction costs of the Overture Center.
"I believe the facility will meet and exceed the expectations of the community," Frautschi said in a statement, "and I'm excited that we're nearly done so the community can enjoy the wonderful art in Overture Center.
Of Frautschi's $205 million gift to the Overture Center, $100 million was set aside in a special trust to serve as collateral for a $115 million loan borrowed to begin construction, as well as make payments on the loan and bring in $1.4 million annually for operations and maintenance.
http://www.madison.com/archives/read.php?ref=/wsj/2004/07/29/0407290013.php
Philanthropist W. Jerome Frautschi made an emotional appearance before the Overture Center governing board, saying he would donate $100 million to help fund the world-class arts center.
http://www.madison.com/archives/read.php?ref=/tct/2001/04/25/0104250205.php
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