Sunday, December 14, 2008

Dazzling holiday lights and news of layoffs and budget cuts at the Overture Center for the Arts

Overture Center for the Arts
The ebullient enthusiasm with which Madison rushed into the construction of the Overture Center for the Arts without a lot of thinking about the underlying economics was part of the bubble economy that tanked so recently.

Overture Center for the ArtsThere was a manic rush to rebuild the downtown on a massive scale without seeming limit. There was business to be done, condos to be built, and the "condo magnet" was at the heart of it all. Now the consequences are all too clear. Now there is news of layoffs, declining budgets and reduced revenues. Overture president Tom Carto sketched out the new realities:
"It's a perfect storm in the demise of the trust fund and the financial crisis everyone is feeling right now," Carto said. "The 2009 budget is looking pretty dire. We have to respond. We're compelled to have a balanced budget. We're going to do that."

Overture expects to end the current year with a $380,000 shortfall, which will be covered with a surplus from 2007 and about $100,000 from the private 201 State Foundation, Carto said.

Carto said he and managers combed through the budget to find savings for next year, but it became clear that layoffs were unavoidable.
But, man, they sure do put on a gorgeous light show for the holidays.

1 comment:

Dr Bud Diablo, heap leacher said...

It's funny how commentators are retroactively calling out the Wall Street sharpies and giddy deevelopers who blew the biggest financial bubble since the tulip craze. Hindisght isn't just 20/20. It's 20/10.

There's an old saying in the gold mining industry, with which I have an amateur familiarity: You don't finance when you want to; you finance when you can. It takes huge amounts of capital to build a gold mine, and hundreds of millions must be raised through share offerings and loans. The construction and permitting can drag out for years.

The visionaries who build these mines know that there will be dips in the gold price and troughs in the business cycle while the Lucky Strike and Lost Dutchman are under construction. When cash is flowing freely, they scoop it up with both hands, hoping they can hang in there, conserve cash, and continue their projects, perhaps completing the mine just as gold demand soars again.

In the same way, it was the right move to spend lavishly on the Overture Center while funds were available. Madisonians, rightly or wrongly, view their community as an artistic hotbed, and should be exultant about getting the Overture built while the building was good. These days, it's harder to rustle up funding.

The Overture will survive its lean times. Thank God that those who erected Notre Dame and other wonders didn't forebear for fear of getting caught in an economic downturn.

Busts are temporary, just like booms. All of those downtown condos will one day be occupied, although they will not fetch the prices their developers counted on. The area will thrive again, and so will the Overture Center.