Cincinnati Museum Center expects $33 million loss during massive Union Terminal renovation

CEO: Project would create 'new opportunities'

CINCINNATI – Cincinnati Museum Center expects to lose $33 million while Union Terminal is renovated if Hamilton County commissioners place a quarter-cent sales tax on the ballot and voters approve it.

Some of the arts organizations that call Music Hall home would see a financial impact from renovation work there, too, although not nearly as big.

"We're not going to be different from any other business that goes through construction," Museum Center CEO Doug McDonald said. "You know that when you get to the other side of that, it creates new opportunities for you. It's a good thing."

The quarter-cent sales tax would be a major source of funding for $187.7 million in repairs and renovations for Union Terminal in Queensgate and $109.5 million to restore Music Hall in Over-the-Rhine.

A Cultural Facilities Task Force comprised of local business leaders recommended the tax increase to Hamilton County commissioners on June 23. The commissioners haven't yet decided whether to put the tax increase on the November ballot. Hamilton County's sales tax rate is 6.75 percent, or 6.75 cents on the dollar. The increase would raise it to 7 cents on the dollar.

If the tax goes on the ballot and is passed, the bulk of the Museum Center's $33 million loss would come from losing the proceeds of a Hamilton County operating levy scheduled to expire at the end of this year.

Part of the task force's recommendation is for the Museum Center to give up the operating levy if the sales tax proposal goes on the ballot. The reason is that a renovated Union Terminal would reduce the building expenses that the levy has helped fund.

The county's Tax Levy Review Committee hasn't yet made a recommendation on that to Hamilton County commissioners. The operating levy generates about $3 million a year for the Museum Center.

'A Conservative Approach'

Even if voters approve the quarter-cent sales tax increase in November, McDonald said it could take as long as six years to complete the massive renovation of Union Terminal.

That time frame includes as many as 18 months for design work, three months to bid the project and as many as 30 months for construction.

McDonald also expects it to take at least six months before the Museum Center can be fully operational after construction is completed. And he's built in some time for delays and snags to come up with a conservative financial estimate, he said.

"I'd rather be ahead of the timeline than behind," he said. "We've taken a conservative approach on this and make sure we don't put risk out there for anybody."

During construction, the Duke Energy Children's Museum will remain open as will the large exhibition space near the children's museum.

But McDonald said the Omnimax Theater, the Cincinnati History Museum and the Museum of Natural History & Science would close during the work.

That likely would result in lower attendance for the Museum Center as a whole, McDonald said. But he said he's not planning any mass layoffs of employees of the closed attractions during the project.

Employees who now work at one of the attractions that would be closed would be re-deployed, he said. Some could help with digitizing old photos in the nonprofit's collection, for example. Others could help make the exhibition space near the children's museum more active or staff traveling exhibits the Museum Center wants to develop for use during construction.

The Museum Center has 389 employees, which includes staff at the National Underground Railroad Freedom Center on the riverfront.

About half those employees work part-time, McDonald said.

Arts Organizations Will Perform Elsewhere

The financial impact of construction will be less dramatic for the arts organizations that call Music Hall home, said Scott Provancher, the president of Provancher + Associates who has been working as a consultant for the Cultural Facilities Task Force.

 

The various arts organizations that perform at Music Hall have made arrangements to perform in other locations. The Cincinnati Symphony Orchestra, for example, would perform at the Taft Theatre downtown during construction if the project moves forward.

The CSO, in fact, helped raise money to renovate the Taft so the theater would be better equipped to handle those performances, Provancher said.

The symphony and Cincinnati Opera are the two organizations that will be affected the most, he said.

A spokesman for the symphony couldn't provide financial impact estimates before the deadline for this story. A representative from the opera could not be reached.

The opera should be able to keep its offices at Music Hall during the renovation work, said Anastasia Mileham, vice president of communications for the Cincinnati Center City Development Corp., or 3CDC, which would oversee the work at Music Hall.

Offices for the symphony and the Cincinnati Arts Association would have to be relocated temporarily, she said.

Cincinnati Ballet will see almost no financial impact from the project, said Missie Santomo, the ballet's managing director.

The

ballet's administrative offices are not located in Music Hall, and its entire 2013-2014 season was performed at the Aronoff Center for the Arts in Downtown, she said. The entire 2014-2015 season will be at the Aronoff, too, she said.

"We can't wait until Music Hall is done, and we're in it full-time," she said. "That is our goal. But financially for us, being out of the facility, there's not a major impact for us."

The financial impact of the construction on the Museum Center and the arts organizations housed at Music Hall wasn't something the Cultural Facilities Task Force studied in detail, said Kathryn Merchant, CEO of the Greater Cincinnati Foundation and member of the task force.

"We know there's an impact, but it wasn't our task to sort that part out," Merchant said. "And one can only assume that Doug McDonald and the others are not so crazy as to embark on a mission that would put them out of business."

McDonald stressed that he and the rest of the Museum Center staff will have time to prepare for construction at Union Terminal before it starts.

"If we're on the ballot, and if we're successful on the ballot, it will be two years before construction starts," he said. "So we have time to work through these things."

 

For more stories by Lucy May, go to www.wcpo.com/may . Follow her on Twitter @LucyMayCincy.

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