Features

Confluence Primer Part 2 - How do we pay for it?

The April 1st election brings two referendums, one from the city and one from the county. It’s critical you understand how to vote, and get you and your friends to the polls.

Part 2

How do we pay for the Confluence Project?

1 With private investment from local enterprises

$21.5m

The unique public-private nature of the Confluence Project hinges in part on the willingness of private companies, led by Commonweal Development, to pursue an ambitious project in cooperation with UW-Eau Claire and the Eau Claire Regional Arts Council. Investors plan to spend at least $21.5 million of private money on a multiuse building that will include 100 apartments (enough space for 300 students) and commercial space for shops, restaurants, and offices.

2 With donations from private citizens and businesses

$15m

The Confluence partners are counting on $15 million in donations from citizens and businesses who want to help fund the $50 million performing arts center. Already, nearly $4 million has been pledged before things have really even gotten started, some from private individuals and some from major employers, including RCU, JAMF Software, U.S. Bank, and others.

3 With building money UWEC will spend regardless

$25m

UW-Eau Claire’s Kjer Theatre is in desperate need of replacement and facilities within Haas Fine Arts Center also do not meet the university’s current needs. This is what created the opportunity to collaborate with the community to build a shared performing arts center, and (pending state approval) UWEC will chip in $25 million – or half – of the arts center’s estimated cost. However, if the Confluence Project is delayed or falls through, UWEC intends to seek – by August at the latest – approval from the UW System Board of Regents for an on-campus arts center that wouldn’t have the same big benefits to the community.

4 With New Market Tax Credits

$3m

Project partners expect to seek $3 million in funding for the performing arts center via the federal New Markets Tax Credit program. This program gives investors a federal tax break if they help fund economic development projects in distressed neighborhoods.

5 Through a TIF district and taxpayer investment

$5m

TIF DISTRICTS ARE USED BY CITIES to foster new development. In October, the City Council pledged $5 million toward the performing arts center. That sum will be reimbursed to the city via new property taxes paid by the owners of the private, multiuse building that’s part of the project. (The developer is committed to building a facility worth at least $21.5 million – many times the current property value – meaning property tax revenues will soar.) Taxpayers face no up-front risk (and, when the TIF is paid off, no long-term costs) and stand to reap the benefit of new development. What’s more, the TIF won’t take any tax money away from schools, the county, or CVTC.

$3.5m

THE EAU CLAIRE COUNTY BOARD voted to pledge $3.5 million toward the performing arts center, contingent on voter approval of an $3.5m April 1 referendum. Over 10 years, the pledge would cost the owner of a $100,000 home only $5.93 more annually in property taxes. In return, in just the first year of the Confluence’s operation, it’s estimated the county could collect about $200,000 in new property taxes from the downtown “impact area” as well as $140,000 in new sales taxes.

What can I do?

So, when's
the vote?

The April 1st election brings two referendums, one from the city and one from the county. It’s critical you understand how to vote, and get you and your friends to the polls.

County Referendum:

Should the County of Eau Claire pledge $3,500,000 to help fund the construction of the ”The Confluence” Community Arts Project located in downtown Eau Claire?

“YES” would support the Confluence Project and send a message to WI state officials that our citizenry wants to help move this community forward.

“NO” would oppose the Confluence Project, likely turn away WI state support, and kill the project.

City Referendum:

Shall a charter ordinance be enacted that would require a binding referendum before $1,000,000 or more in city funds can be expended on any building contruction that is planned for dramatic, musical, or artistic performances?

“YES” would lead to a lengthy delay and second referendum on the Confluence Project, thus likely killing the project due to WI state funding timelines. But a ‘yes’ would also cause other unrealted problems and fights in the future for City governing and capital projects.

“NO” would defeat the proposal and allow the $5 million pledge the City Council already made to move ahead, which costs taxpayers nothing since it would be funded by the project’s future property taxes.


But I Heard ...

But I heard TIF projects just give away tax dollars to private businesses and don’t benefit the public.

That’s not true; the money to pay for TIF projects comes from the taxes on developers themselves. And TIF districts have been used to help many successful projects in Eau Claire, including bringing in employers like HTI or developing the Phoenix Park neighborhood, where the city has seen a 177% return on its investment.

But I heard that the City’s pledge to the Confluence Project will cause my city taxes to go up.

Nope. The city’s pledge toward the arts center will be completely offset by new taxes guaranteed to be paid by the private developer. City taxpayers will end up paying nothing of the $5 million pledge.

But I heard that taxpayers will be on the hook if the arts center goes out of business.

Unlikely. Plans call for a $2.5 million donor endowment that would serve as a “backstop” in a worst-casescenario in which the arts center fails. That would cover the community’s share for an estimated eight years.


The Confluence Project presents a once-in-a-generation opportunity to meet the Chippewa Valley’s cultural and economic needs by creating a shared performing arts complex, public plaza, and commercial development with housing in the heart of downtown Eau Claire. Over the next four issues of Volume One, we’ll be examining the Confluence Project piece by piece to provide answers to some of the common questions and highlight the enormous opportunities embodied in this ambitious and community-shaping effort.