WALNUT CREEK -- Long discussed but never acted on, privatizing what some call the economic engine of the city's downtown, the Lesher Center for the Arts, is being explored by the city.
The idea of turning over any Lesher Center operations -- including the Bedford Gallery and the city's theater production company Center Repertory Company -- is not new. But with the city predicting multimillion-dollar deficits for the foreseeable future, finding another way to finance the center, or getting help to do so, generated interest at last week's City Council meeting.
The recommendation from city arts officials is to continue existing city support for the center, the gallery, family festival and the theater company, but also to move toward a nonprofit taking over at some point in the far future.
"We recommended that we explore a more sustainable funding model," said Lesher Center Manager Scott Denison on July 2. "We believe program quality will improve ... and it may reduce the program impact on the general fund."
Denison went onto say that moving toward any form of privatization for some or all of the city's performing and visual arts will take time, because there are many details to work out.
"It would sustain the arts programing for the future, (but) the danger is we don't want to put too much on the nonprofit and risk it failing," he said.
The city's performing and visual arts costs $5.9 million a year, with a revenue of $4.8 million; that translates to an 82 percent cost recovery. More than 300,000 people go to the Lesher, and its 800 annual events, every year.
The likely, and identified, candidate to take over any programs or operations at the Lesher Center is the Diablo Regional Arts Association, a nonprofit that raises money for activities at the center.
A study done by Americans for the Arts found that the Lesher Center generates $32.5 million in economic activity in Walnut Creek.
The council must recognize the center as the "economic driver" that it is, said Scott MacCormac, president of DRAA.
"It's clear that the city's budget for the arts is simply not just an expense; it's an investment with returns that really brings back dividends to the city," he said at the July 3 meeting.
Any cutbacks to the program would affect the quality of programs and hurt both the association's ability to raise money and the downtown economy, he said. To that end, his group is willing to pursue a new finance model that could lead to the association taking over some of the city's visual and performing arts costs.
"We are not pursing this alone and definitely have the desire to work alongside the city in an effort to find the best solution for all parties," MacCormac said.
Some who frequently rent space at the Lesher Center worry that costs may go up if the funding model changes at the theater.
"I am concerned, and I know our board is concerned, about the fiscal consequences of trying to alleviate the city's budget concerns," said Sherry Dorfman, president of the Diablo Theatre Company at the meeting. "Because one of the natural consequences of that might be to shift some of the costs to companies like ours."
But Denison said the goal of a new finance structure and partnership is not to increase fees or improve cost recovery. Rather, the plan would be to create a quasi-enterpirse fund that will allow the center to keep revenue it makes and reinvest back into programs.
What was also clear at the meeting is that even if the DRAA takes over some expenses or operations, the city is not getting out of the theater business.
"It's not likely that the city will ever be able to stop funding it if it wants to continue the programs there," said Barry Gordon, director of the arts programs for the city. "It's just the magnitude of that funding."
Councilwoman Loella Haskew said the city continuing to support the Lesher is a must.
"It does have a dramatic impact on community," said Councilwoman Loella Haskew. "It is incredible jewel and one of the biggest draws. We need to have those kind of impact places to bring people into our city and keep it growing and vibrant."
Contact Elisabeth Nardi at 925-952-2617. Follow her at Twitter.com/enardi10.