Work Session Summary for AR2025-308: Anchorage Performing Arts Contract Extension (Oct 16, 2025)
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Anchorage Municipal Assembly Work Session: PAC Contract Extension & Funding (October 16, 2025)
On October 16, 2025, the Anchorage Municipal Assembly held a work session to discuss Resolution AR2025-308 and Memorandum 759-2025 regarding the extension of the management agreement with the Alaska Center for Performing Arts (PAC) and the financing structure to support it. Administration officials provided a historical overview of the 1987 partnership, detailed a significant operational pivot in 2023 with the introduction of "Broadway Alaska," and proposed a solution to keep the facility open for the next 18 months without using general government tax dollars. The assembly members engaged in discussions regarding the sustainability of the current model, the adequacy of the reserve account, and comparisons to other regional facilities.
Consent Calendar
- No consent calendar items were discussed during this work session; the meeting focused entirely on deliberative discussion of AR2025-308.
Public Comments & Testimony
- Jared Kirker (Administration): Expressed concern regarding a recent public campaign by PAC leadership that he characterized as presenting a "one-sided argument" about the municipality failing to take care of the building, stating it was not a collaborative approach to problem-solving. He emphasized the need for the assembly and PAC to work together rather than pointing fingers.
- Council Member Baldwin Day: Expressed appreciation for the briefing and stated she shares the goal of finding a way forward for the PAC. She acknowledged that the broader community shares responsibility for issues that could have been addressed decades ago, citing legacy projects like Project 80s. She specifically requested data on how the proposed operating model compares to similarly situated performing arts centers elsewhere in the country.
- Cody Castellar (PAC): Offered to provide examples of operating agreements from similarly sized performing arts centers outside of the current meeting to address the council's inquiry regarding national benchmarks.
- Council Member Vaughn: Supported the notion of exploring synergies between Visit Anchorage and the PAC, such as utilizing the PAC for convention keynote speeches to optimize facility usage.
Discussion Items
- Historical Operating Model (1987–2023): Administration explained that the original 1987 agreement envisioned the PAC becoming self-sustaining, with the municipality funding 60% of operations initially, declining to 50% by 2005, and dropping below 50% subsequently. This funding gap was historically filled by ticket sales, rentals, and philanthropy.
- Impact of "Broadway Alaska" Pivot: Speakers discussed a dramatic spike in the PAC's operating budget starting in 2023 due to the introduction of "Broadway Alaska." While this increased the facility's profile, it did not generate sufficient revenue and resulted in a structural operating loss of approximately $550,000 to $600,000 annually for non-Broadway operations when isolated from the Broadway-specific revenues.
- Proposed Management Fee Increase: The administration proposed increasing the annual management fee by $1,000,000, bringing the 2026 budget to roughly $2.6–$2.7 million. This increase is intended to:
- Eliminate the non-Broadway structural operating loss ($580,000).
- Fund general repairs and address vandalism ($150,000).
- Cover CPI-driven compensation increases (~$100,000).
- Cover utility and security cost increases (~$100,000).
- Cover other non-discretionary cost increases (~$104,000).
- Funding Strategy (The "Four-Part Puzzle"): To fund the increase without general tax dollars, the administration outlined a package requiring:
- Extension of the management agreement.
- Use of MLMP (Municipal Lease and Management Proceeds) proceeds to defease (pay off) the 2005 roof bond, freeing up ticket surcharge revenues.
- An ordinance to reprogram the $3 adult ticket surcharge from paying off debt to supporting contract costs.
- Programming of approximately $750,000 annually in tourism-related bed taxes (from the 12% pool) to fill the gap if ticket surcharges fall short.
- Capital Needs and Future Planning: Discussion noted that the PAC's capital reserve account is currently inadequate for aging infrastructure needs. Administration indicated a future bond proposal to address critical safety issues like the fire alarm system. There was also discussion about potentially restructuring the PAC's management under the same charter provisions that successfully fund the Denina and Egan centers in the long term.
- Visit Anchorage Relationship: Members discussed the existing dual contract between the municipality and Visit Anchorage (managing convention centers vs. tourism promotion). The consensus was that Visit Anchorage would be a key partner in integrating PAC operations into the broader tourism strategy, potentially reallocating funds from traditional advertising to facility support.
Key Outcomes
- Decisions & Directives: No final votes were taken during this work session; the session served to inform the upcoming Tuesday meeting where formal consideration will occur.
- Next Steps:
- The administration will provide a detailed breakdown of the MLMP defeasance costs to public finance to confirm if there are any interest savings in retiring the debt early.
- The PAC will provide data comparing the proposed fee structure to similar national performing arts centers.
- The assembly will prepare to consider a four-part legislative package (resolution, debt ordinance, surcharge ordinance, and tourism tax programming) on Tuesday.
- Stated Goals: The immediate goal is to secure 18 months of operation for the PAC while the municipality and PAC leadership conduct in-depth negotiations to determine a sustainable, long-term operational model.
Meeting Transcript
I'm here, thanks. I'm hello at the performing art center. I'm here. Okay, hold on, let's do this one at a time. Um, I heard somebody from the performing arts center. Is that Cody? Yes, this is Cody Castellar from the Performing Art Center. Okay. And I was that Ms. Baldwin Day as well. Yes, Karen here too. Thanks, and that's Mr. Myers as well. Yeah, sure, thanks. All right, and we're not yet doing introduction, we'll get to that in just a minute. But is there anyone else on the phone that we know of? Oh, okay, that's it. Okay. Um, it's a little bit tricky to park today because if it is occurring, we had intended to keep this uh time and space open for no meetings today and tomorrow, but life happens. And so um we needed this work session before the meeting on Tuesday. So I'm gonna go ahead and call to order this work session. We're here to discuss AR2025-308 and the associated memorandum seven fifty-nine-2025. It's a resolution of the Anchorage Municipal Assembly authorizing the use of MLP. So proceeds to retire ACPA roof bonding camera tax system municipal debt pursuant to municipal charter section thirteen dot one one part A. A memorandum from the mayor of the municipality of Anchorage seeking assembly approval to amend the management agreement between the municipality of Anchorage and the Alaska Center for Performing Arts by extending the contract term to June 30, 2027, increasing the management fee by one million eighty-nine thousand dollars to two million six hundred and eighty-seven thousand dollars. We'll start with introductions in the room. We have Jared Kirker. Uh, by eighteen months, and then uh increase it by about a million dollars annually. And a related item, uh AR 2025 308, um, which goes to how we would partly pay for that increase. And my goal today is to sort of situate this in the larger context and give you a kind of uh administrative take on how we landed here. Um and so I'm gonna begin at the beginning and take you all the way back to 1987 and remind us that the performing arts center has been managed by a sort of purpose-built nonprofit that was incorporated March 25th, 1987, before the PAC was even finished and before it had opened. At the time, it was incorporated for the purpose of operating, maintaining, and promoting the performing arts center. This is the very first contract that we had with the performing arts center back in June of 1987. The assembly has always been involved in improving improving these contracts. And that framework has largely carried forward uh even through today. So the agreement that we are extending now or proposing to extend now was executed in 2015, um, and otherwise would expire at the end of the year. And so you see the same refrain that we have had since the beginning that we are hiring the uh Alaska Center for the Performing Arts Inc. for marketing, repair and maintenance, operation and management of the concessions and the commercial premises of the PAC. Um, we earlier had a presentation from the PAC at a work session where they were describing the capital needs of the building and also some of the operational challenges, and they showed you this graph, and I wanted to give you sort of an administrative take on this graph. The management fee that the municipality has paid has historically been one component of the overall annual operating budget of the PAC. And so this was showed to you before, and by way of reminder, our management fee is the red line, and the blue line is the actual operating budget. And so one way of looking at this graph is to say, well, how uh how did it all work? How did the PAC not go bankrupt? And the idea, of course, was that beyond the management fee, the way you get from the management fee the municipality is offering to the actual expenditures annually, is then you fill that gap with the revenue that the facility can generate. And we were actually just doing a deep dive on the finances over time, and it looks like uh at the very beginning, the Muni was paying about 60% of the overall operating expenses of the PAC that decreased over time to about 50% by somewhere around 2005, and it's been less than 50 percent since then. And that seems to have been the operating understanding from the beginning. So I think Mr. Parjetter was one of the first heads of the nonprofit, and when asked by Fred Dyson all the way back in 1987, how's this all supposed to work? He says, Well, we're hoping within four years the operating costs will be supported by revenues and about half of it will come from the meeting. So, a couple things to notice about this arrangement.
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