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The Minnesota Management and Budget (MMB) 2020 Capital Projects support request presents a unique opportunity to bring this project to life. Should the project be funded, it will be up to the Steering Committee and local community leaders to raise the remaining amount, which will be necessary to receive any state funding. Therefore, it is imperative that a local group and the Batcher Block nonprofit begin working now on a fundraising plan in anticipation of the announcement of state funding. MMB requirements stipulate state funding should be encumbered within four years of the bond allocation, which provides the timeline by which matching funds need to be raised.

An important note: Capital funding for the rehabilitation of this building should not include any debt. Debt payments would place undue burden on the annual budget of the Opera House and/or the city, and annual expenses should be focused on personnel, programming, and space upkeep. The city, therefore, should work with the Opera House nonprofit to find ways to fund improvements and look to raise the amount remaining for renovation from grants, donors, and sponsorships.

Currently, the request to MMB stands at $8,500,000, half of the stated overall costs of $17,000,000. Based on similar projects in historic theaters and opera houses of the same size and structure across the country, we believe this number to be high, and we recommend further predesign work to find a more accurate approximate cost. Grant funding should be applied as soon as possible to predesign work to amend the overall project cost, as this will directly influence how much needs to be raised in a capital campaign before state funds are authorized. Currently, this grant writing has been done by city staff; moving forward, the board of directors of the newly-established nonprofit should engage with a fundraising professional or grant writer on a contractual basis.

This project will be eligible for a number of governmental and foundation grants local, regional, and national in scope. A list of potential grant opportunities is included in Appendix D.

Once the total buildout amount has been identified, the BBOH Steering Committee, city and community leaders, and the board of directors of the newly-formed nonprofit should identify a Capital Campaign Committee to oversee an ambitious capital campaign reaching individuals and companies both in the region and outside of it who may support this project. While fundraising for a potential match to state funding is contingent on receiving the funding, for now the campaign can begin to reach out to prospective major donors and articulate the important opportunity ahead of us.

Prior to the announcement in early 2020, the capital campaign should identify and cultivate those major donors to identify large gifts contingent on state funding. For each opportunity for outreach, the Capital Campaign Committee should identify the “why” in donating – each person or company will be affected by the opening of the Opera House in a positive way, and as a Committee these ways should be identified and articulated.

The renovation of the Opera House represents a renovation of Staples at large – with such a significant presence downtown, breathing new life into this building can help encourage more development and continued revitalization of the downtown core. The Opera House will begin to drive more development by the purchasing power of non-local audiences and the outside money that will flow into Staples. For local companies and organizations with a presence in Staples, a donation to the Capital Campaign represents a long-term investment in the health and vitality of the city.

The campaign must feel inevitable – you have to will it to happen. The Committee should loudly and quite often point to the unique opportunity for half of renovation costs to be covered by the state, and it should be made clear that both very few Opera Houses of this era still exist in such good shape across the country, and many of them do not have an opportunity like MMB funding in front of them. Therefore, this is the most important time for the community to support this project. Raising money for this project can project pride in the building, in the town, and in the region at large.

When things don’t go as planned, make a new plan!

The above fundraising plan assumes that the 2020 MMB Capital Budget project request is successful. If the project is not funded in FY 2020, that does not mean the end of the Batcher Block Opera House, nor does it mean the end of this program plan. What it does mean is that new possibilities open up for the use, timeline, and strategy for building renovation. Below, we have modeled out several possible scenarios and the benefits and drawbacks of each.

SCENARIO 1: RE-APPLY IN 2021 OR 2022

What: This program plan is meant to be evergreen – few changes will need to be made to apply for future funding rounds from MMB. A note: the MMB process also allows for Phase I funding for planning specifically. If feedback from the 2020 application encourages greater planning prior to reapplying, consider applying for planning funding specifically in the next application window.

*Additional information available in Appendix E and Appendix F

PROS: Program plan and application are complete.

CONS: If the bond is not approved in 2020, it may require additional planning or a new approach to parts of the application. Should the bond not be approved, we will work with the Steering Committee to determine what changes need to be made for the next round.

SCENARIO 2: APPLY FOR ALTERNATIVE STATE AND FEDERAL FUNDING

What: MMB funding excludes this project from receiving other state financing, including the state and federal Historic Tax Credit programs, which cumulatively can fund a significant amount of project costs. In addition, a Minnesota Historical & Cultural Heritage Grant from the Minnesota Historical Society (MHS) could fund either design or construction for this project, and the State Capital Projects Grants-in-Aid program could do the same if funding is appropriated to this program in the future.

PROS: This funding would not be contingent on legislative action. In addition, this funding model would allow the nonprofit to own the building directly should that be desired.

CONS: Historic Tax Credits generally fund only eligible expenses, which lessens the amount of the overall project cost that could be covered by state funding. In addition, State Historic Tax Credits are set to sunset at the end of 2021 without additional legislative allocation.

We recommend re-applying for MMB Capital Projects funding for future years should the current application not be approved. In the meantime, we recommend establishing the nonprofit and beginning fundraising. Most crucially, we recommend incremental funding to pay for predesign work to get a reasonable estimate for construction costs.