millvillefirst.org

CLICK HERE FOR THE    Financial fact sheet Levoy  (scroll for text version below the following letter to the editor)

Regarding the Levoy Theatre…

 Ladies and Gentlemen,

 For years, many folks in our region have chanted: “Bring back the Levoy Theatre, and it’ll bring back downtown Millville.” I respect well-intended efforts to revive our local economy, but have to wonder about this particular initiative.

 By some accounts, the Levoy has attracted funding and commitments from government-related sources of about $9 million.  In times when financial resources are strained, that’s a lot of money.  Yet, the chant continues:  “That investment will lead to added employment; greater business income; and, more income taxes.”

 That would be fine, if the benefits exceed the public’s investment.  New employment at the theatre has been estimated at less than 12 full-time-equivalents.  Greater business income may flow from ticket sales, but much of that money would either be forwarded to defray production costs, or retained by a tax-exempt entity.

 What about added employment and greater income for the rest of High Street?  That would depend on the ‘draw’ of the Levoy that, in turn, depends upon market conditions.

 Any healthy business, be it involved with auto parts, collectibles or some other enterprise, needs a ‘critical mass’ of customers to survive. It’s my belief that the region would be hard-pressed to support another performing arts center.  Just look at business at the Guaracini Center, and the Landis Theater.  The Levoy would be competing with those centers (at least), and I don’t think it’s going to have a distinctive competitive edge for attracting either talent or patrons.

 The recent collapse of the Levoy is unfortunate and tragic.  But, so would an unreasonable dependency upon a new Levoy for economic development.  The last memories of the Levoy should be good ones, and not reminders of an expensive, forced solution that failed.

 David McCann

Levoy Financial Fact Sheet

February 8, 2011

The cash began to flow from the City to the Levoy Theater Preservation Society (LTPS) in January 2004 and as of April 2010 the City has committed  $6,401,760 of taxpayers’  money to rebuilding the Levoy.  

In addition the LTPS has obtained $1,952,092 from the federal government, and borrowed $1.6 million from Sun Bank.  The State has co-signed for $800,000 of the Sun Bank loan. The City has cosigned for the balance. The LTPS is not legally obligated to pay the $105,000 interest on the CCIA loan. If the LTPS defaults on the  Sun Bank loan, the City will owe another $500,000. Total City money $6,401,760, State money $800,000, Federal money $1,952,092 for a grand total of $9,153,852 of taxpayer money to build a theater on High Street with no parking, within a stone’s throw of three other state of the art theaters: Lakeside School, Guaracini Center at the County College and the Landis Theater in Vineland.

In addition the City has paid a consultant, The National Development Council (NDC), $222,000 for “Economic Development Consulting Services”, the bulk of which was for work in connection with the Levoy and the New Market Tax Credits according to the City’s economic development director, Don Ayres.

The LTPS is a non-profit corporation, will never pay taxes; neither real estate, nor income. Its non profit returns report that  99.58% of  its finances are from Government/Public Funds.  Projected employment: 4 full time 8 part time come at a cost of $750,000 per job. The LTPS business plan is seriously flawed and  unrealistic in all its projections. The income is grossly overstated claiming attendance of 80,000 people the first year and 120,000 attendees thereafter. Do the math. The expenses are woefully understated, not providing for debt service or realistic operating expenses. It cannot be a financial success. However,  Commissioner Derella on October 6, 2009 said: “I’m very confident that the Commission will…provide any kind of cash to help them for their operating expenses, because I believe the project will be a big success.”  That means that in addition to the nearly $9 million plus dollars of taxpayer money the Levoy will continue to be an ongoing expense and burden on the taxpayers of Millville. Why?

City Ledger sheet  paid                             $5,388,558.55

Reserved                                                              3,116.45   

RAD Grant                                                      375,000 (Sun Bank Guarantee)

Interest to CCIA yr 1                                        30,085

Interest to CCIA yrs 2 thru 10                        105,000

UDAG                                                             500,000 (Sun Bank Guarantee)

City Total                                                    $6,401,760

NMTC                                                           $1,952,092

NJEDA                                                             800,000 (Sun Bank Guarantee)

Grand total                                                    $9,153,852