Pablo Center Finishes Year One With Operating Surplus, but Construction Debt Looms
Sept. 22, 2018, was a historic day in the Chippewa Valley. After years of planning, fundraising, construction, and a final mad dash to make sure every detail was ready, that Saturday afternoon marked the grand opening of the Pablo Center at the Confluence, Eau Claire’s long-dreamed-of downtown arts center. The UW-Eau Claire marching band performed, a giant ribbon was cut, and an estimated 8,000 visitors streamed through the three-level Pablo Center, eager to see what the future had in store for arts in the Chippewa Valley.
“If we take care of the audience and we take care of the artists – of all mediums – the building’s going to take care of itself, and the profits are going to take care of themselves.” – Jason Jon Anderson, executive director, Pablo Center at the Confluence
Now, one year later, Executive Director Jason Jon Anderson says the whirlwind has calmed a bit and the Pablo Center is poised to launch its second season while courting donors to help pay off the facility’s construction debt. In a recent interview, Anderson noted that the Pablo Center hit a major milestone at the end of its fiscal year June 30 when it posted an operating surplus of $146,000.
“(The surplus) meant in a major way – regardless of where you stood on the issue of the building – that now we were an organization people could trust,” Anderson said. By contrast, the Confluence Council – the nonprofit that operates the arts center – had been $225,000 in the red just one year earlier. Anderson credits the turnaround to a number of factors, including a decision to keep the number of full-time staff small and an aggressive schedule of 238 performances in a little more than eight months of operation. By contrast, a 2013 feasibility study for what was then dubbed the Confluence Project forecast just 181 events in the arts center’s inaugural year.
NEAR AND FAR
During the 2018-19 season, the Pablo Center welcomed 80,000 unique guests, and on any given evening 60 to 80% of them were first-time patrons. And while six out of 10 attendees were from the Chippewa Valley, 12% came from the Twin Cities while others came from as far as Madison, Rochester, Duluth, and Chicago, which demonstrates that the Pablo Center can be a regional attraction, Anderson said.
“I never knew how the year would end, and the staff as a team chose to stay lean for the first year,” Anderson said. “I didn’t want to get to the spring not knowing how the budget would resolve and then say ‘I’m sorry, people don’t have positions’ or that we’re going to be way in the negative.”
The Pablo Center finished its first year with 12 full-time employees, a number that will expand to 16 in the coming weeks thanks to several new hires. Anderson acknowledged that there was high staff turnover during the past year, likely due to the aggressive schedule and frantic pace. “We burnt staff out,” he said. “There’s human lives that have to be lived, and you can’t do that if you live at your place of work every day.” Anderson said he expects the tempo to ease during the coming year, but he recognizes that turnover is still a possibility in a competitive job market.
DEALING WITH DEBT
While the Pablo Center’s operating budget stayed out of the red for 2018-19, the financial picture isn’t entirely rosy: A portion of the facility’s $60 million construction cost remains. A separate nonprofit entity, Eau Claire Confluence Arts Inc., built the Pablo Center and holds its mortgage – a mortgage with a $7.2 million balance.
“If there’s a dark cloud of any kind, it’s the fact that we have $7.2 million that’s there, and that’s a reality,” Anderson said. “It’s not going anywhere. That’s sort of the shadow that you look over your shoulder, and say, ‘OK, it’s still there.’ ”
The Pablo Center was built with funds from a variety of sources, including the state, city, county, federal New Market Tax Credits, and $26 million in private donations. In the near future, the Pablo Center hopes to retire as much of the remaining debt as possible. In June, Monica Frederick was hired to fill the newly created position of director of development to help with this task. The Pablo Center and its “landlord” – Eau Claire Confluence Arts – are working to retire the debt by talking to new donors as well as individuals and businesses that were generous in the past. In particular, those who made multiyear pledges toward the center’s construction are being asked to consider paying up early, which will reduce interest payments on the $7.2 million principal.
“It all sounds like a lot, and it is a lot, but the challenge doesn’t seem insurmountable when you think about the facility itself,” said Brandon Riechers, president of the Eau Claire Confluence Arts board of directors. Riechers, who is also president and CEO of Royal Credit Union, is optimistic that donors in the community have the capacity to close the debt gap.
The Royal Credit Union Foundation is one of the donors that has decided to make good on their pledge early: On Sept. 17, the charitable arm of the downtown-based credit union announced it will pay the remaining balance of its $1 million pledge six years early. The reduced cost of six years worth of interest will save Eau Claire Confluence Arts about $150,000, the Pablo Center said in a press release.
“Coming from the financial services industry, it’s not often that a startup – especially a startup of this size – can be profitable in year one,” Riechers said. This success may inspire potential donors who had taken a “wait-and-see approach” to the Pablo Center, he said.
Anderson, the executive director, is also optimistic about the Pablo Center’s coming year, both financially and artistically. He’s excited about the upcoming season, which includes an opening night performance by Cirque Mechanics on Sept. 26, as well as Ballet Hispanico, Tu Dance and Bon Iver, Wynton Marsalis, and much more.
“If we take care of the audience and we take care of the artists – of all mediums – the building’s going to take care of itself, and the profits are going to take care of themselves,” Anderson said.
Learn more about the Pablo Center’s upcoming season online at www.pablocenter.org/2019-2020season.