By Jason Crane
The Aurora City Council is considering a Resolution directing officials to proceed with the implementation of Phase I of a 3-phase financial sustainability plan for the Aurora Civic Center Authority (ACCA) in an amount not to exceed $13.8 million.
City government of Aurora documents show since the COVID shutdown and despite its best efforts, ACCA has experienced continual financial challenges in its operations. Theater operations were closed for an extended period. Once the theater company was able to re-establish operations, attendance for performances lagged as people re-adjusted to being in public again. At the same time, the cost structure of the theater industry as well as in the general supply chain increased significantly and inflation was elevated for an extended period.
In response to these challenges, ACCA received significant financial assistance from various sources. The city of Aurora contributed a total of $11.5 million from various Federal grants and assistance sources, primarily ARPA funds.
While attendance is finally returning to pre-pandemic levels, the significant increase in the expense structure of ACCA has remained problematic and will likely be permanent. In addition, the pandemic experience has introduced more competition into the entertainment industry creating challenges to increasing ticket prices for performances.
Recognizing the challenges that would occur, the Administration and Council tasked City and ACCA staff members to develop and present for approval, a long-term plan for financial stability of the organization. The plan has been developed and is presented herein. The plan achieves financial sustainability for ACCA in approximately 5 years and will take approximately 2-3 years to implement.
•A video of the presentation can be viewed on the city government of Aurora’s YouTube page after the 47-minute mark by clicking here.
At this time, ACCA’s operating losses total approximately $6 million annually. These losses are projected to continue and gradually worsen as inflation continues over the coming years. Without some immediate action, ACCA’s current level of activity and programming will not be viable. It is not a sustainable model in its current state.
The proposed plan has 3 phases:
- City of Aurora purchase from ACCA the parking garage at 2 W. New York Street (the valet garage) and reimbursement of expenses related to rehabilitation of the Riverwalk Promenade and development of the Stolp Island Theater. This acquisition would occur within 60 days from Council approval and would be financed with issuance of a bond in the short term. The total cost of this phase is estimated to be approximately $13.8 million.
- Issuance of bonds for the construction of a new venue, the City of Lights Center (CLC) and reimbursement of the costs related thereto. The CLC represents construction of a 4,000-seat performance center for holding various concerts and events owned by the City and operated by ACCA. At this time, the City and ACCA are engaged in a due diligence process on the CLC and will be presenting those results in 1Q2025. It is anticipated that the construction of this Center would allow for additional revenues and resources to be utilized to provide operational capital for other performance series and enhance and compliment ACCA’s downtown venues, further stabilizing and funding the operations of ACCA long term.
- The potential acquisition of the North Island Center (NIC) office building. The City and ACCA would continue to discuss the City’s acquisition of the North Island Center to allow the City to be able to lease the NIC to ACCA for continued operations. Additionally, there would be opportunity for City/Civic and/or private sector use within the building allowing for potential rental revenue generation to offset the City’s investment. Should both parties wish to proceed, this phase would likely be executed in late 2025 or early 2026.
The first phase of the plan calls for the purchase of the parking garage across the street from the existing casino site at 2 W. New York Street. The purchase price is $10 million as appraised.
The City would utilize the 535-space garage to provide additional public parking capacity in the downtown in the immediate future and not have to construct a costly new facility.
At this time, the casino leases the deck and pays approximately $14,000 per month in lease charges. That $14,000 monthly revenue would then be paid to the City to partially offset debt service costs until the casino relocates. The casino is estimated to move in 1Q2026. As the casino relocates and the existing casino site is redeveloped, the City plans to allocate spaces to the new development to provide an attractive parking amenity on the land the casino will vacate. The parking garage will also be revenue producing for patron parking when the CLC is completed.
Included in the immediate Phase One is reimbursement for expenses incurred during the development of the Stolp Island Theater (SIT). The cost to develop SIT was approximately $3 million. Additional costs were incurred because of the general inflationary conditions impacting construction costs as well as specific expenses related to the construction of the set/environment necessary to “set the stage” for the Million Dollar Quartet series of performances. The City would fund approximately $1.3 million of the $3 million in construction costs in recognition of its long standing and beneficial partnership with ACCA. The City is the fee simple owner of the Stolp Island Parking Garage and the renovated Stolp Island Theater. The already well-attended performances at SIT will provide additional parking revenues and economic activity in the downtown
The last phase of the $13.8 million bond would request $2.5 million in costs related to the rehabilitation and reconstruction of the promenade riverwalk which runs along the east side of the Paramount Theater next to the Fox River. This promenade has needed reconstruction for some time. The walkway has substantial public benefit and much of the traffic utilizing the walkway is not related to ACCA/Paramount Theater operations.
In the past ACCA officials had applied for and received a State grant to be able to reconstruct the promenade. However, the funding from the State was placed on hold while funding was being secured in Springfield and the promenade was not able to be improved. Delays in funding plus cost increase/inflation resulted in $3 million in total payment cost even after going twice out to bid. We will be financing in this third phase approximately $2.5 million of promenade related costs, net of the state grant which have been/will be paid by ACCA for this project.
During 1Q2025, the City will present the full plan for the construction of the CLC. The proforma indicates that the CLC and all of its entertainment, dining, and special event amenities would provide significant additional revenue and resources for ACCA operations. The City would finance the construction of the facility via a bond issue and retain ownership of the facility as well as the obligation for ongoing debt service payments. The venue will be located at New York and Lake St. The Center is anticipated to open during June of 2027.
Additionally, the City will fund the $6 million deficit ACCA anticipates during 2026. Should the decision be made to proceed with improvements to the North Island Center Plaza, those improvements would also be reimbursed through City funding and the related bond issue. The North Island Center Plaza Improvements are estimated to cost approximately $1 million. It is therefore anticipated that the amount of City funding related to the ACCA portion of the funding would approximate $7 million. This constitutes Phase II of the plan outlined.
The third phase of the financial sustainability plan calls for continued evaluation of the City’s Purchase of the North Island Center building and an ongoing mutual initiative between the City and ACCA that seeks maximized operating efficiencies and capitalizing on various revenue sources within market parameters. These efforts and initiatives would include monitoring, evaluating and implementing most effective ticket pricing, instituting head taxes in all theaters, additional private and public fundraising, additional public and private grant availability, additional expense and operating efficiencies, and consideration of Board of Director enhancements commensurate with the growing family of ACCA facilities and performance venues.
In addition, the City and ACCA will work together to provide additional revenue enhancement opportunities to capitalize on the increased number of performances and the City’s growing base of restaurant capacity in accordance with recent economic development initiatives. It is anticipated that ACCA’s sale of this facility to the City of Aurora would provide approximately $4 million which would provide funding for ACCA to bridge the gap in its financial performance and obligations for 2027 when the CLC opens.
After the opening of the CLC, it is anticipated that the CLC and ACCA’s other venues would be performing at a self-sustaining level. The City would continue to pay for the debt service related to the bond for construction of the CLC as well as capital needs for the facility.
The City’s continued support for ACCA and the expansion of entertainment options in the City should lead to increased revenues and profits for the City’s businesses, translating to increased food and beverage taxes. Employment should rise as more jobs are created by the enhanced economic activity. The success of the downtown businesses will spur additional development. An example of these synergies is the success of River Edge Park which helped draw the Christkindlmarket to the downtown along with its approximately 250,000 visitors. The residential building now under construction on the east side of the Fox River draws from this same pool of energy.
If the plan is not approved, substantial changes would be necessary to ACCA’s programming and operations. If not approved, the financial viability of ACCA would be in significant doubt absent subsidy from the City. In addition, the City would not recognize the benefits from additional economic activity and tax revenues related to the construction of the CLC.
City staff members are seeking a recommendation to approve the three phase financial sustainability plan for ACCA in concept. Staff is further seeking a motion to approve the Resolution authorizing the staff to proceed with Phase One of the plan which calls for the purchase of the Parking Garage at 2 W NY Street in an amount not to exceed $10 million plus applicable closing costs, reimbursement of expenses related to the construction of Stolp Island Theater in the amount of $1.3 million, and reimbursement of costs incurred and to be expended for the reconstruction of the Promenade Walkway next to the Paramount Theater in an amount not to exceed $2.5 million. The total amount of Phase I is not to exceed $13.8 million.
Staff members will present the formal authorization and approval for the bond issuance at a future date; this step merely directs staff to prepare the related documentation and begin the process.
Phases 2 and 3 will be brought forward for formal City Council approval at a future time.