ESCONDIDO — The city is looking for a new entity to take over the operations and financial obligations of the California Center for the Arts, which would help relieve pressure on its growing budget shortfall.
The city’s $11.3 million structural budget deficit is expected to grow over the next few years without a new source of revenue. Last year, it began exploring ways to reduce funding non-essential services while seeking fresh revenue streams.
The California Center for the Arts is a 191,000-square-foot building in downtown Escondido. The complex includes 1,500- and 400-seat theaters, a conference center, an art museum, offices and outdoor space. The venue was completed in 1994 at a cost of approximately $81 million.
The center’s intention was to provide a space for visual and performing arts events and to encourage cultural and educational opportunities for the community. However, since the facility opened, its operations have not generated effective revenue, forcing the city to subsidize its operations through the general fund.
The average five-year annual subsidy cost to operate the facility is nearly $4.6 million. Part of that cost is a $660,000 annual payment to the California Center for the Arts Escondido Foundation for operations and management services. This agreement is valid through June 30 of this year, with an option to extend another year.
To ease that financial burden, the city has requested proposals from entities seeking to use and operate the arts center. The application process opened on May 15 and will end on Nov. 1, with a new operator expected to be chosen by April 2025.
Negotiations will also determine who will be responsible for the center’s nearly $5.8 million in additional modernization repairs. Necessary upgrades include kitchen plumping, carpet, roofing, feeder seating, sound absorption, LED lighting conversion, wiring, plant chiller and reheating system, among others.
Council members were concerned about a new entity’s influence on the center’s operations and how the move would impact the city’s control.
“We could lose influence over what we’d like to see at the center,” said Deputy Mayor Christian Garcia at the May 8 council meeting.
The council will have the final say on a contract award to manage the arts center.
In the end, the City Council approved the request for proposal process in a 4-1 vote, with Councilmember Consuelo Martinez opposed.
Martinez objected to the plan because it was different from other proposal processes. She was uncomfortable with the idea that two council members would be directly involved in proposal review.
Martinez also felt it was odd to add the $5.8 million in maintenance repairs, noting that they should be the city’s responsibility.
“It’s our building,” she said.
Director of Economic Development Jennifer Schoeneck said divulging all potential maintenance needed for a building during real estate negotiations is fairly typical, as some tenants can take on such repairs.
“We’d like to include all available information to allow potential entities to take it all into account,” Schoeneck said.
Councilmember Mike Morasco was “completely behind” the process, noting that requesting proposals is another tool to help address the city’s growing budget shortfall.
“It’s not reinventing the wheel by any means,” he said.
Schoeneck said one prospective tenant was interested a week before the application period opening.
