Public process explained: Consideration of funding the New JACC

Right now, there are two ordinances going through the Juneau Assembly public process related to the funding of a new Juneau Arts & Culture Center – also known as the New JACC – and a third ordinance that will soon be introduced. Here’s an explainer on what’s going on and how you can stay in the loop.

First, a little background: In 2012, the Juneau Assembly adopted the Willoughby District Plan, recognizing the need to look forward for land use purposes in an area with great development potential. The plan envisions significant public and private investment in the neighborhood, including a new performing arts and culture center, but the plan is silent on how the new arts center would be funded.

A few details to keep in mind regarding this issue: CBJ owns the current Juneau Arts & Culture Center (JACC) building and Centennial Hall, and all of the land surrounding both of the facilities. The JACC is run by the nonprofit Juneau Arts & Humanities Council (JAHC), and as of July 1, the CBJ began contracting with the JAHC to operate Centennial Hall. It made fiscal and practical sense to have the JACC and Centennial Hall, which provide similar and complementary services across a parking lot from each other, to be run by one management structure.

At its recent July 23 Regular Meeting, the Assembly introduced two ordinances related to the funding of the new arts center. Ordinances are introduced for the purpose of alerting the public about issues that are under consideration, but at an introductory meeting, no testimony is taken, no debate is held.

One ordinance would ask voters during the October 2 Regular Municipal Election whether CBJ should issue $12 million in general obligation bonds to partially fund the New JACC and renovations to Centennial Hall, which would include HVAC system upgrades, expanding the lobby, and constructing an enclosed and heated corridor between Centennial Hall and the proposed New JACC. This is how CBJ would pay off the debt – The temporary 1% sales tax approved by voters during the October 2017 general election will pay for $4.5 million of the debt service. The remaining $7.5 million of debt and interest would require .15 mills in property taxes for debt service payments for 15 years. This would require an annual property tax increase of approximately $15 per $100,000 of assessed value (.15 mills), or about $59 for an average single family home. The annual payment funded by property taxes would be about $719,000. If approved the voters, this ordinance would mean that CBJ would own the New JACC.

The other ordinance introduced at the July 23 Assembly Meeting would ask voters in October whether to increase the hotel-motel bed tax (also known as the bed tax) from 7 percent to 9 percent. The bed tax is charged on top of the five percent general sales tax, so under this proposal, the total bed tax would increase from 12 percent to 14 percent. The bed tax was last increased in 1988. The increased rate authorized by the ordinance would initially generate an estimated $440,000 per year in additional revenue. The funding would provide partial funding for capital improvements for either the old or New JACC and for improvements to Centennial Hall, and visitor information, marketing and other tourism and visitor services and facilities. Additionally, if both questions are approved by the voters, proceeds from the bed tax could be used to help pay for bond debt service related to the new JACC or Centennial Hall, meaning the increase to property tax would be lower.

Both these ordinances are scheduled for a public hearing during the August 13 Regular Assembly Meeting. The public will have the opportunity to provide comment at that meeting. But before this regular meeting, the Assembly will meet in a Special Meeting on August 9 to introduce a third ordinance, an alternate option to the $12 million in general obligation bonds ordinance.

Under this ordinance, which is in the process of being written, the New JACC would not become a municipal facility. This ordinance would ask voters during the October 2 Regular Municipal Election whether to issue $7 million in general obligation bonds for improvements only to Centennial Hall. The intent of this approach would be for the Assembly to provide a cash grant of $2 million to the New JACC. Under this scenario, more funds would be provided to Centennial Hall than under the $12 million scenario. The $7 million in bonds would again be partially paid with $2.5 million of sales tax, bed tax (if approved) and/or a property tax increase. The Assembly plans to have another Special Meeting August 20 to hold a public hearing on this ordinance.

The Assembly has many choices to make on what to put in front of the voters. The bed tax ordinance could be passed as a stand-alone measure, or in tandem with either of the bond concepts. As always, the public is encouraged to attend Juneau Assembly meetings for information and to provide public comment. If you can’t attend the meetings, you can always reach out to the Assembly by emailing [email protected].