Good evening.

Welcome to the committee on the finance regular meeting.

On it is Tuesday, November 4th at 532.

I'm province councilwoman Joanne Ryan.

Madam Clerk, would you please hold the role?

Chairwoman Ryan.

President.

Thanks, Chairman Taylor.

Yeah.

Councillor Ainfo.

Here, Councilwoman Grace.

President.

Counselor Sanchez.

Yeah, by present, we have a forum.

Okay, let me reflect that we are joined by Delta McGuffills and Council One Peterson.

So noted.

Okay.

What I'd like to do is um question that to recognize theme.

Thank you.

Okay, with that, on I'd like to take uh an item out of order because we've got so many people here for item two.

So I'm gonna ask for motion to take item two first.

May I have that motion?

So made by the legislature second questionable executive by council and by all they were aye, those I have it, motion carries.

Madam Clerk, would you kindly read item two until writing?

Resolution requesting the mayor providence to authorize and to execute the attached leads with water fire providence for the property located at 475 ballast.

Okay.

Um why don't we get everybody that is going to testify on water fire?

Um are there any residual people here for the other matter?

Yes.

Liz is here, but that's what she's testing.

Okay, I'll just say we can do it all at once.

Let's oh yeah, Madam Clark, would it be okay to swear?

Well everyone yes, both items.

Is it true?

The whole truth and nothing but the truth.

Yes, I do please.

And please state your names for the record you can start on the side.

Sorry, so there, I'm sorry.

Okay, welcome to the table.

Thank you.

Um Director Wilson and I are gonna go through the lease and then we're gonna invite the water fire team to come up and talk about why we're doing this, let them comment on their organization to support fiscal mistake and their plans for the future.

Um so in summary, the lease before you um is a 20-year lease between the city and water fire.

Um the rent for the lease is a dollar a year.

Um the purpose of the lease is to provide for water fire providence to use it for its operations kind of as it is now or as it sees fit.

The city's not taking ownership over the operations of the building at all.

Um water fire will maintain responsibility for 100% of the maintenance and operations of the building, all repairs, um, and they have an obligation to keep the building um kind of at its current state or better.

Um, they also have a responsibility to ensure the building.

Um, and then there are you know a bunch of kind of standard legal lease terms.

Um terms of why we're doing this, we talked about it a little bit as it relates to the bonds that came before you.

Um, you know, the mayor and his team believe that water fire is a really important asset uh to the city.

Um the mayor often says that when he's traveling, the first thing people say to him is oh, we're in the city that lights the rivers on fire, that's so cool.

And we believe in the possibility of what this organization can achieve in the future.

We all know that Waterfire has had a history of financial challenges and have had the benefit of spending some time with both the board and the leadership team to understand their approach to overcoming those challenges and feel confident in their ability to do that.

And this transaction, you know, different from other times when organizations come before us and ask for grants, provides the city with an asset.

You know, we will be purchasing the building for a little bit less than half of what its current appraised value was.

Um and we expect the building to appreciate over time, and the city will have future ability to do with that building and sees that.

Um so different than just giving the organization a grant.

This is a transaction that we believe from a fiscal perspective makes good sense for the city.

Um I will allow Director Wilson to comment further about the organization.

Um before I do that, I also want to say that I've been around a lot of nonprofit boards.

Um I have been very impressed by the commitment of this board to both provide oversight, but also actually do work that helps the organization, which makes me personally feel much more confident and really live this forward.

You're gonna hear from some of those board members tonight, but I think it is a testament to how important this organization is to the city and the state that the um caliber people that have committed themselves to the organization are also doing significant work to help move it forward.

And Director Wilson sits on that board as part of his official capacity.

Um all I want to add is that um there are things that are iconic uh in this city and the state.

Um we talk about you know, the what do you hope again if we talk about the bucket of calamari that was at the Democratic National Convention?

We talk about the cohorts that we put in airports, but there is no signature event that brings the people of Providence and this state and region together like water fire.

Um, and I think that it is an important time for the city to make a statement here by investing in one of our, if not most important cultural assets in this city.

This goes at the heart of our identity as a city.

Um, and I'm I don't think that any of us want on our watch to see a piece of our identity, our soul ripped away because of the challenges that the organization Carl faces.

And to the chief's point, sitting on this board, I have witnessed the level of care and expertise of thoughtful collaboration that has gone into uh not just seeing this purchase as a band-aid, but as a sizable shift in how the this institution, the culture of how this institution does its business.

Um, and so on behalf of the Department of Articulture and Tourism Tourism, the City of Providence, as a proud member of this community and of the state, um, I think this is singularly one of the most important investments in our cultural landscape that we are making in a generation.

Um this is an important investment.

It's a smart investment, it's a strategic investment.

Um, and so I full I full heartedly support of this work and um and you'll have really talk enough in the class.

So I don't think this is an important investment, and the city would be stupid to not uh double down on what the board is trying to do uh and what we are trying to do in terms of the mayor's office and making sure that water fire once and for all remains at the center of the identity of our uh city, but more importantly, celebrating we believe, I believe first, I believe was one of the most important uh infrastructure investments um in a century, which was uncovering that river and what that is meant for downtown and then for Providence, um, and really um what is meant for this truly generational investment in terms of our work from so that that's all I have.

Thank you.

Should I invite the water parking members?

Okay, um before you speak.

Well, I would like um to ask the committee's members for the motion to add item two A seen path of uh letters that we speak on as Mad uh into the record man of that motion.

Motion made by uh Councilwoman Reeves said goodbye, Council Vice Taylor, all in favor.

I and it was in carriage leave um attachments are attached.

Okay.

Thank you, madam chair, members of the committee.

My name is Bob Walsh.

Uh, after a brief 16-year absence, I terms with the waterfire board last year.

Um, and I've got the easiest job of the board youngers testifying tonight.

Uh, first, I want to say that our chair, uh, Kate Branson very much wanted to be here.

She had a business commitment, but she watched the tape.

So I make sure I mentioned that Kate Ramson wanted to be here tonight.

Um really, I just want to start with thank you.

Thank you to the city council, thank you to the mayor and the many mayors before for 30-year relationship.

It's called Waterfire Providence for a reason.

It is a partnership uh that works uh for all three parties very well.

And this uh the lease before you tonight and the bond that you have already moved uh strengthens and expands and allows that partnership to really continue for another 20 years.

Uh, when I returned to the board last year, I realized uh some things are exactly the same that we had a wonderful event that many of you have participated in and seen on the river, and we had something they didn't have uh when I left, uh, a waterfire arts after a building, a place for the community to gather in a different way than they gather at the waterfire events, and both are important.

And I've got experts to talk tonight about why.

First, you're going to hear from Barnaby Evans, who we all know, who is the creator and still uh live participant and making sure that the art uh and soul of the event continues.

Uh, then you'll hear from uh Kristen Adamo, who is uh a waterfire board member, but you'll hear from her also in a day job as the head of Go Province, the Province World Investive Bureau to talk a little bit about the economics.

And uh I saw Kristen and her crew at Waterfire on Saturday night with 30 travel writers from around the country so they can go and extol the virgins of coming to the province.

And finally, you'll hear from Mark Allen, who we brought on just last year as our interim executive director, and as of tomorrow's board meeting will be our permanent executive director um to help us uh move forward into the future.

Uh we have a real challenge uh that uh was fairly obvious when I came to the board.

There was you know this COVID thing that caused us not to be able to do events, and uh that uh caused a pretty big financial hit to the organization.

But the good news, uh, while we did not have an endowment, we did have a building, and the building was essentially the endowment part of the organization.

And uh, you know, in the fiduciary responsibility of board members, we had two potential directions.

We could sell out, and Courtney uh pointed out uh uh the cost of the building they're paying is less than half the appraised value.

Say, why would a former banker like me, you know me as a union guy, Joey?

The chair remembers that I was a banker in my early life, do that because well, you put the rest of the value into the lease payment.

So you get a deal on the building, and we get a deal on the lease, and you still have a wonderful economic value for the whole package, but it causes a partnership between us that we'll go for the next 20 years.

And that is the beauty of a win-win deal like this.

You don't get many win-win economic deals, and this is uh uh certainly one of them.

But it also keeps that other part of water fire alive.

There's water fire grew in my absence.

It's not only the event on the river that gets the national attention, it's the building, the art center that brings the community together in a very different way.

I'm excited uh to be here and to say thank you and to encourage you to support the lease as the final part of the transaction.

And I'm excited to be back involved on the waterfire board.

Uh you know, I'm one of those born in the province landing hospital kids, so it's also where my soul is.

And I'm just uh I'd certainly be happy to answer any questions.

We're gonna hear from the experts, and I'll probably give you all the answers.

Thank you very much.

Um greetings, everyone.

I would again like to start with thank you.

It's been an amazing 30 years of collaboration from I've known many of you as I look around the room.

Um, we've had he brought what 30 people down from uh part of the Kennedy School of Government that the two fires ago.

We've had so many collaborations, we started celebrating the Providence school teachers about 16 years ago, and now we do it statewide.

And the concept of water fire was first when they uncovered the rivers, which was I agree, an absolutely brilliant piece of uh urban development.

You still had to get people there.

And so I I watched almost a year while things were not happening there and wondered if we couldn't use art to be that pump primer to get people down there because once you get people there, that possibility could happen there.

And I watched all the bankers for Providence Place.

She brought down, they happened to bring them by a water fire line, so to speak.

Remarkable the uh the uh the orientation of how they chose their dates.

Um, but the idea of water fire was what could we do to bring the entire community around a universal symbol of welcome and warmth, which is the warmth and light of the bonfire, and to build in a uh metaphor of volunteers keeping our city alive and bright and engaged.

And that's what we do with waterfire.

I did want to send bring in two more letters here and hope we can introduce them with the permission of the chair.

Um, one is um a letter of recommendation from Jordan Seaberry, who's a wonderful black artist and professor, and I'll send those down.

There's there should be a copy for each of you, but I want to make sure it gets into the record.

And then also these are testimonials from four of the uh students from our accelerate program who are a program we did to um create opportunities to be engaged with the uh the arts who might not otherwise have access through going to our school or something like that.

Um that's all I'm just saying now.

I'm sure you'll have questions and we're available to answer them.

But the idea was to celebrate everything that is positive about provenance and engaged people in about what we loved about our city, and then sharing those ethnic resources and stories we have.

Wonderful.

Okay, members, can I please um have a motion to add these two letters?

Um is uh waterfire province at the top, uh selected testimony excerpts from 2025 and so uh that's one letter, and then there's a second one to this body uh from Georgia Seabury.

You all have a copy of it.

I'd like to call this packet of letters um exempt to be.

All in favor, I suppose I seven motion carries, so we have those added to the left.

Okay.

Um, have you concluded your testimony, Bonnie?

Thank you so much.

Yes, sir, questions.

Okay, who's up next?

Yeah, guys, are very efficient.

Thank you.

We'll do it.

I'll pick us off then.

Uh good evening, as uh my colleague Bob Walsh said.

Uh I am Christina Damo.

I am the president and CEO of Co-Providence, uh, the Providence Warwick Convention and Visitors Bureau.

I also happen to be a proud member of the Waterfire Board of Directors.

Uh, my organization, as many of you know, brings visitors into the city through meetings, conventions, sporting events, and leisure travel.

Uh, in 2024, eight million people visited Providence, which is more than um slightly less.

I'm sorry, slightly less than the entirety of Newport County.

So uh tourism is big business here.

Last fiscal year, my team booked 233 meetings, conventions, and sporting events that were worth about 98 million dollars in direct spend revenue to Rhode Island.

And I can tell you, with the exception of the Rhode Island Convention Center, there is no single more powerful draw or Providence than Waterfire.

It is the one unique experience that you can find here that you cannot find anywhere else in the world.

Uh, and as a matter of fact, I'm on a committee that Commerce has convened to look at the effectiveness of events and research that was conducted by them in the last few months.

Found that the only event in Rhode Island that is a worldwide draw with worldwide recognition is water.

Um past couple of years, we've been compiling hotel data from water fire weekends and looking at that with weekends in those same months that do not have a water fire.

And what we found is water fire does drive up hotel occupancy, but more importantly, it drives up rate, particularly at this time of year in the soldier sheet shoulder seasons when our hotels you know have a little bit more of a struggle to fill them.

So, for example, a November lighting in Providence yields an average increase in occupancy of 15.7% and an average increase in rate of 57.4%.

So that is a resulting hotel revenue increase of 83.3%.

And then what we did is we looked at the rate increases applied to water fire, and then we looked at the state hotel tax revenue.

That that was the change in that, and then we multiplied that by a 20-year term, which is the term of that this lease.

That water fire effect, just using 2025 numbers is an additional 15, 50 million dollars into the state of Rhode Island.

Uh, the other thing we did is, like all of you, we wonder who comes to Water Fire.

So we did something a little creepy, but also very effective.

We drew a digital fence around the August 9th water fire and took a look at the zip codes of those in that footprint.

Overall, Massachusetts had the highest number of visitors by state, but there were visitors from 27 states at that one water fire.

The zip codes were very diverse, as people really come from all over, but the top four zip codes were actually in the city of Providence.

And so what that says to me is water fire is beloved by visitors, but it's also beloved by local locals.

As Joe said in his testimony, Waterfile is really emblematic of Providence.

It's a resting imagery is something that we use in all of our marketing materials.

And uh, I've been doing uh PR for this city for 20 years, and it is the consistent thing that people ask about.

Uh, as Bob mentioned, uh, we hosted 30 journalists over the weekend from the Society of American Travel Writers, and we were able to get them all out on books uh from Waterfire.

But what you might not know is it's also a powerful sales tool for us.

As we're booking these meetings, conventions and sporting events, we'll often have groups that will do a fund a partial or basin water fire, and then without questioning any group that's coming in, will ask us if that is if they happen to be here over a water firing fund.

So I can tell you also as a member of this board uh that we along with the staff have been working diligently to strengthen the organization, and we really look forward to the future, and we think thank you all because I think after all these hard times, I think we all need a little light.

So thank you.

Thank you.

This round.

Thank you all for having us there to explain our situation and to answer questions.

Thank you, Chair Person, for inviting I'm going to hand this out.

I think we may have received this ahead of time, and I'm going to oh you didn't.

I'm going to all the protocols if I do send it all into my committee that we need.

Okay.

Um, do all have a copy of this document on a um type of city counseling finance committee 2004, 2025, Mark Allen Executive Director Waterfire.

It is a five-page document, six-page document.

Uh now I have a motion to enter this as exhibit two seen.

Second by Council and Reagan.

All in favor of those eyes have it, motion carried.

Mr.

Allen, please.

Thank you.

Thank you very much.

Uh my role here today is to talk about the financial aspect of water fire.

So I'm going to focus on that.

First talking about what I found and what we've done in the 10 or 11 months I've been here, and then what our future route is going forward with your assistance.

I came here about the first of 2025.

Um, and I found a notifier providence that had lost $900,000 in 2023.

Basically, all cash reserves were gone, and the organization was living on the line of credit of $650,000.

So financially, not a pretty picture at all.

And in fact, at the beginning, there were questions of whether we could even go on.

And my assessment was this could be needed to work, but not easily.

Um, and not the uh assistance.

So the first year we took a series of actions uh to improve things.

We stabilized the finances, but with a dire cash situation.

We filled the central positions that were vacant, but we told them staff in further and eliminated three additional positions.

So we're down 26% staffing in the past two years from 2023.

So we have cut very substantially.

We restructured management roles and added missing functions, such as human resources, financial analytics, and legal counsel, legal counsel pro bono, the others who can exist instead.

No additional cost, but functions that are essential that weren't actually in place.

We managed to cash pay period to pay period to stay solvent enough to meet our payroll.

We began creating data and analytics to manage the bottom line performance as a way to move out of this.

And then two things I'll touch on more.

We initiated a major donor program and we created financial improvement plan formal.

Finally, we renegotiated with Barnaby a new licensing agreement.

The previous one was running out this year.

And the new arrangement, importantly to say, is exclusive licensing, borderlow diamond, which is unconditional, the revocable, and imperpetuate, which means that the board of directors holds in effect the licensing rights permanently to water fire, and I would say holds it on behalf of the people of Providence, for which this really exists.

The board of directors of a nonprofit exists for the benefit of so this arrangement is a very important step.

And that's signed and sealed.

As of August 28th, 2025.

Yes.

So what remained actively steps and improvements and strengthening was still an existential financial challenge.

Our cash situation was we were drawing down the private credit, just can be payroll.

And this was too dire to build that work out of over the years.

We're on the verge of ending.

Our path to future financial strength has two parts.

The first is the purchase of the building at the city and lease batten at effectively no cost, which reestablishes cash and reserves.

So we're not on the book.

The second is a full and aggressive implementation of the financial plan to create positive annual results and stability operating in the black, not in the left.

And they're not the same thing.

The sale gives us that existential base, but we face the same challenges we had before that in terms of each year covering that costs.

And that's what the financial plan is designed with doing this.

And I'll go through this quickly.

Three parts to it.

The first is management effectiveness, the second is revenue optimization, improving what we have.

And the third is revenue expansion, some new pieces that will never be different.

In effectiveness, key elements are I put strong leadership.

I have done a lot of this.

Lean staff, I already talked about the fact we have cut back 25% of our staff in two years since that very difficult year.

Tight management.

Management sophistication and effectiveness are being improved, leading to greater efficiency, focus, and impact.

The tools of business can also serve an arts organization as it attends simultaneously, mission, strategy, and the bottom line.

But everything I've done has been mission-driven, serving low-income people, people struggling with different uh conditions, and that is what I do, but you still need to run it like a business with all those tools because you have the responsibility to the people to do that to make as much use of resources as you can.

So that's what we're bringing.

And it's a check.

Staff bottom line accountability.

Staff would be given clear accountability for the bottom line performance linked to an enterprise-wide income optimization, education, and engagement process.

We have deep dedication, who are sitting there on their own, and they're doing PowerPoint presentations about the financial functioning of their part of the operation and how to improve it.

And I didn't ask for PowerPoint.

I'm tired about it.

But people are hungry for tools to be more effective because the staff all really care about particularly.

So that's management.

Revenue optimization is doing better with what we have.

We have a donor base that's fairly large with small gifts.

We can grow that further.

We have some very good uh data based software we've never used effectively.

We have someone who's doing that, and we can increase the average group.

We're stabilizing corporate sponsorships, the glory days of corporate support are gone, but combining that with uh more small scale lightings, which have less total cost, we're able to create uh basin lightings that financially work and are possible.

State government is still going to be important, grants and special events we hope to expand.

So the expansion has three pieces.

A major piece that's already actually in place is increased supporting the tourism taxes, and that has been dramatic from 2024 to 25.

We've gone from 195,000 and 345,000.

And one of those people and the person who was at the largest impact is sitting, and this is a tremendous help to the organization, but it also reflects what we provide for the city in terms of economic.

So this is transactional and mission driven trust signal tenants, and that always works the best of all, right?

Second is the newest thing, which is a major large donor program.

We're 30 years old, and we have never really pursued in any organized way major donors.

The early days we had some large gifts that wasn't continued, and we made no regular effort for that.

As corporate support has gone down, we need something that can grow.

And this is that piece.

And so this is very important part of our future.

I brought in a guy, Norm Stein, who has a very strong track record in Massachusetts in the arts and in other areas.

I worked in an organization with him, saw him at work, and he's doing this on a not pro voter but reduced fee basis and helping us develop it.

And then you can ask, is that possible?

I mean, we have a visibility that is unique among organizations and an impact as we've already talked about.

As if to demonstrate that this is real.

Three weeks ago we had fireball, and at the end of it, one of the people we've been talking about in terms of large gifts, quietly came up to the microphone and said, Well, we I hear that this is almost the 500th lighting.

And in keeping with that, I think I should pledge 500,000 for it.

And he pledged a multi-year gift for half a million dollars.

So this is just the beginning of a process.

They're not going to all be like that, but he's introduced nine of his friends who he feels could also be enticed to help.

So that is an absolute critical part.

And then the last part is addressing urban economic development in a more direct way.

We work with companies and we help with the marketing, but we can directly work to help the urban world.

And we're involved with uh Providence Foundation already.

So that's the outline at the bottom.

You have some illustrious projections of what equipment lighting is in each of these areas and what the financial impact is.

I'm not going to go through that.

And the last page is about something that uh Bob was alluding to, which is the importance of the use of the building itself.

And other lightings and the road are probably front of mind, but that also thank you very much.

Does that conclude your presentation?

Yes.

Thank you.

Very nicely done.

May I ask committee members any questions on this matter?

Uh of any of the presenters on Houseman's engines.

Thank you, thank you so much, everyone that presented.

Um, in terms of this is probably for the internet.

Um, so our debt service payment.

Um what's the breakdown?

Because I know it's this straight bond uh for the two buildings.

But what's the what's the percentage of that that's specific to this?

Or I guess you can't really break that down, right?

I can.

So we um for this year, the interest on the water fire portion of the bond will be 103,000.

That's a half a year.

Next year that interest goes up to 206,000.

So the total interest is uh 2.67 million.

The principal is uh about four million.

So in total, that's 6.2.

I'll note that our appraisal is 7.9.

So even after the 20-year period interest and principle, we will still have paid less than the current appraised value.

Thank you.

Um, and just to follow up, I guess is that and someone said in uh at the beginning of it.

So is that like the main thought process on the dollar lease?

Correct.

It's two things.

One, it's well, it's three things.

The one, like the purpose of this to be clear, is to find the way a way for the city to contribute to the shoring up and future success of the organization.

And so doing this lease and charging them money that isn't in their operating budget now isn't gonna accomplish that goal.

Two, they're paying for all of their operations and maintenance um while the city owns the building.

So we have other situations where um you know we're required to do maintenance on buildings.

If the roof collapses, water fire is responsible for it, but we still own the asset.

Um, so that's important.

And then third is like this is also an investment to us.

Um, we maintain the rights to do with this building what we think it should should happen at the end of this lease.

Um, in theory, it's going to appreciate over time.

And so we will end up having, you know, increased um the revenue to the city based on this.

Um I'll also say that you know, Joe and I were talking before, like it's important to us that we maintain this building as an art as the arts.

You know, Waterfire could have sold this building to a private developer to be turned into something else.

We're seeing the development of Director Wilson calls an arts district in that neighborhood.

We are invested in that.

And so continuing to invest in water fires future use of that building as an art center, we believe is an important economic development tool.

And we hope we'll be able to work with you all on other investments in that area that can be that.

Thank you.

Um did you guys this is for the water fire team.

Um I guess the first question is when was the current building built and what was like the main funding sources to make that building happen in the first place.

Great question, Councilman.

Some was before my time, so people might be yelling over my shoulder.

Um it was a brownfield site, and there was a lot of uh there was federal money involved, there were grant money involved.

If you look on the books of water fire, the building is listed at slightly over 10 million dollars of medical service because you have to capitalize all the costs.

You're never going to get any money back from the two plus million dollars to remediate the brown field that were on the meet, but from an accounting standpoint, you have to list that.

That will all of course go away when the transaction was completed.

Um, and they were a series of tax credits available to help make that happen.

The logical conclusion of those uh from talking to experts in the area who went through similar things with similar nonprofits, uh, mostly out of state was then you sell a bill.

Um and uh as Courtney pointed out, and certainly there were discussions at the board level.

You could sell the building for a lot more money, but then we probably couldn't stay in the building and we be a vacuum operation.

And and we could keep the main event, we could keep water fire itself, but uh because we believe that there's a great synergistic value of having the art center as an art center to this in addition to having uh the event going on.

That's why we did what we did.

Um but you know, you take advantage of uh programs that exist at the time, and that's what they did when we saw visited the building.

The downside of my outside observation of someone returning for that board is um the effort into building the building uh became their endowment.

They did not do a large donor, uh we got back.

So we did not do a large donor campaign to start to build an endowment.

They put the efforts into the building, but they got to the same place uh from an economic standpoint.

Um I would be in and I was in my prior life negotiator.

So we have a phrase called the best uh BAT now best alternative to a negotiated agreement, and this would be the negotiated agreement that we think is the best alternative uh to accept.

If something like this didn't work out, we'd probably have to sell the building to someone who might do whatever they wanted to because we can't control that.

But uh we clearly think to keep both parts of the operation going, this is the this is the best way to move forward.

Thank you.

Um I asked that because um I was curious.

So was there ever like uh like a loan on the building?

There's no there was uh another great question.

The line of credit when it was increased, does have a lien against the building.

There were funds used uh without uh a lien on the building, and certainly required it.

It's you know, this is this is where the former banker training comes in versus negotiator training.

I say, well, if you're spending money to do legal and accounting fees because you're doing a transaction like this, well, there was no loan, there were certainly funds that were expended um in addition to all the money that came in from grants and loans and programs.

So I I would say it's not a clean answer.

Well, there was no debt against the building until they um allowed the line of credit to have El Mean against it.

There were certainly uh transaction costs along the way that added to uh the you know cost that Waterfire incurred there were outside of the role of operations.

Am I gonna write gentlemen?

Thanks.

Thank you.

Um are you guys depending on the purchase of this building to pay out like that $600,000 loan or not?

Oh, yeah.

The goal is to uh we you know still have a line of credit uh available to us, but yeah, we would pay down the line of credit.

Um the uh uh we have uh got a grant from uh uh uh LISC to help fund things that we will pay back.

Um there's there was an SBA loan that came in during uh COVID that we don't have to pay back all at once, but you know, this will recapitalize uh the assets in 2003.

As Mark testified, uh they ran a very large deficit that wiped out their capital reserves.

Um the way money flows, and I've having lived in both worlds, uh we get government support, but as you know, the city and the state are on a different fiscal year than the operation.

So uh for instance, uh for the last couple of years and for the last several years, uh uh Waterfire has been supported by the Rhode Island State Council for the Arts, and that is funded on an ongoing basis.

We incur expenses, we get reimbursed for those expenses.

Um, we go through that, and it's 400,000 in the um state council for the arts budget.

That gets depleted by the end of the year.

Now, in January, you don't have water fires other than the little thing we do for uh for new years, but you still have expense expenses.

So you either start borrowing under a line of credit and then start paying that line of credit off as events start and more cash flow comes in, or you use your cash reserves to cover it.

In the old days they could use their cash reserves to cover it until the cash reserves were gone.

So there would still likely be a line of credit in place, um, but not probably for the foreseeable future, wouldn't have to be used because this transaction essentially recapitalizes the organization.

Thank you.

Um you touched on it a little bit.

What was um like the main reason for such a big loss in 2023?

Um was that a consistent like in in COVID years or I'm just curious because that's still going on?

You know, I said I'm under oath.

I wasn't on the board at the time, but I can read financial statements pretty well because when I agreed to go back in the board, I went on fully cognizant there was a loss, and they uh they did not cut expenses.

They were running a uh four million dollar expense level budget, which would have been sufficient to support the full-blown operation in both uh on the water and in the building, and uh didn't deal with it and did not get that extra level of economic support.

And you know, kind of the worst case scenario of everything coming together, not that a lot of other organizations in the arts and culture area didn't experience the same things.

And then, like in another part of my life, I'm kind of a I do a lot of boards now.

I'm on the management, uh I'm on uh the board of a company called Professional Facilities Management, which is you've never heard of maybe, but it's a management company that was feedback and events and everything else.

They had uh SVOG money, shuttered venue opportunity grant money to recapitalize so that they don't have to lay off staff.

Unfortunately, waterfire doesn't charge.

We don't have seats, we don't sell tickets, so we couldn't access the level of money that the problems were forming ours, the vets and and and PFM facilities like that throughout the country could access.

So it was kind of like we're being punished, not punished, we're not getting the same subsidies because we're a free event.

You know, we we would and kind of that gallows humor that comes in these things.

If only we had seats, then we could have said, well, the seats are unlocked anymore.

I would add, you know, in my work, I do a lot with our organizations, and and you're seeing the problems in the decline corporate giving across the board to ours organizations during the pandemic, any of that ARPA funding that that arts organizations receive would go to their bottom line because it had to, and then that would away, so that means uh a giant hole.

So the things that are happening to water, yes, some of it was paid for their own issues, and some of it was a reflection of the time.

And although picking on our very generous outside sponsors whose help we greatly appreciate, I want to emphasize that.

Sometimes it would be charitable, and sometimes it would be transaction.

If um if uh the Brown or RISD are going to support their Brown's parents weekend or RISD's graduation weekend, and COVID has made everything go away, and we can't do a water fire, then they're probably not inclined to make that donation for a year or the event uh your time or the event itself isn't going to occur.

Um, which is is why as Mark testified finally, yeah, 30 years later, we're focusing, refocusing on the large philanthropic donor community, um, which is how many characters organizations in the state.

So uh you know, I think that uh it's obvious.

I I was there at the fireball where the very general stuff stood up and said they're gonna make a signal of multi-lear commitment, and we're gonna have to work in that space.

There are fewer corporations as we walk up and downtown, downtown, um, and they all have more demands than before when it was barnaby could testify and has when we've testified at the state house.

There was a hospital trust and a fleet and the citizens, and uh, and you could just go down and name eight banks and uh the several insurance companies and everything else, all who'd like to do um uh and support a water fire.

Now there are fewer of them.

Some of those decisions are made out of state versus in-state, and the dollar amounts are generally smaller, and you've got more demands from organizations on a small pool of sponsorship money there.

So you've got to diversify your your support.

And let me emphasize again, government support along the way has been critical.

We we wouldn't be alive without uh the generosity uh of the state and city paths.

Thank you.

Uh last question, that's okay, Joe.

Okay, thank you.

Um, I have more value for them for now.

Um we can talk later again.

I'll be here on that.

Um, it is um just out of curiosity.

Uh what's like the current like rental fee structure of like a nonprofit or an org wants to use the space um currently, and is there any um plans to change that after this transaction?

I don't know the answer to the current rental structure of the both.

Mark might there are two rentals, one is for Wildberry, one is the wheeler.

Can you get closer?

So that way we can calculate.

I'm sorry.

You asked a question again.

I think I also understood.

Yeah, so say someone wants to use the water fire, like the main space uh for any type of event.

What's the fee structure on that?

Is it uh same rate for everyone or nonprofits?

Can you just it's actually fairly complex?

It has to do with the time of year, the day of the week, and we charge regularly less for nonprofit and for for-profit.

So every one is based on sometimes the venue is needed two days because there's a preparation day that's charged more.

So there's a structure to it.

They're moving parts to these uh consistently, but each one is uniquely structured based on I'm just following up on my colleague's question.

Is that posted those rates, those costs, the rental costs?

No, they're constructed in each situation, so there'd be an interaction with the person who's interested.

There's a whole discussion of what they need and want and what we can offer because there's it has to be and then as it becomes clear what they want based on those things, then a quote is put to continuum constant centres.

I'm sorry.

No, no worries, thank you.

Um is the intention to keep the like same process uh uh continuing after this type of transaction.

Yeah, that's an essential part of our revenue.

And you know, as we go forward, our challenge is we got to keep the revenue above the expense, not below.

Um, so that is something it is complex.

We have art exhibits also.

So um we do other things with the space and there's some trade-off in terms of revenue, but we have every intention to continue that uh in the near future because it's an essential part of how we operate from each.

Thank you.

Uh super last question.

Um how big is your staff?

We have 20 staff.

Thank you.

Thank you, Charles.

Thank you.

Councilman and well, thank you, Chairwoman.

Thank you for this great presentation future canal modifier.

Um, but just one quick question.

Um, maybe this is for Courtney.

What happens at the end of 20 years to be determined by the price?

Okay.

So it's not okay.

Cost woman grace.

I don't think we'll touch back on what do you ask them about about the um parsing?

And you said it's not listed.

So how do I know that if I'm going in there under the same premise as somebody else?

And whether I'm I'm paying the same law, you know.

Um, so is it yeah?

I mean, is it listed afterwards?

Is there some way I can find out while the basic thing is?

Well, you you you would get a quote based on with here are the specifications of what you're saying you need, and here would be the pricing for it.

So there is a place where the pricing is.

Well, we provide the pricing, but it's it's since it's different for each situation, depending on that, there isn't like a list like at a restaurant.

Um, but it's explicit what the charges are ahead of time, and it's worked out based on what people need.

And sometimes there are choices about it, they might say, well, if I gave up this piece, what would happen to the price?

Yeah, yeah, yeah.

And we are committed, we don't just serve nonprofits, but we see it as a resource for everyone.

And we feel very good about since we host it right or the public.

And as I say, there's a differential phenomenon.

Okay, I'm sorry.

Oh, I'm sorry.

Um, please continue.

Thank you.

Um I've had a meeting.

Um, I have my monthly meetings, and one of the biggest things that's coming up is this dollar uh rent.

And as you know, um, we raise the rents here in the city.

So the people are like, well, wait a minute, you're raising our taxes and rents that went up and all this other stuff.

Why are they getting a dollar?

Um, can they at least pay a thousand?

So can you tell me what the reasoning is, and if that's nothing to do with you, there's a both night I mean so like it a thousand would be like also arbitrary, you know.

To us, it this is about shoring up the organization, and so a dollar is symbolic, but um I you know I kind of describe the rationale.

I would also say for our constituents, I think Krista did an excellent job laying out the economic benefits.

I'll remind us that I think now two percent of our hotel tax now comes to the city and one percent of meal and beverage tax.

We need to increase those numbers.

Part of how we can reduce property taxes is by maximizing the amount of revenue coming from other sources, and so it's our assessment based on again that great data that this will help us do that.

Um, and so I hope constituents can feel like making sure that water fire is secure for the next 20 years is actually an investment in us, hopefully over time reducing property taxes and making it less expensive to live in the city because we don't have to be so rise.

From mid-water fire side, if I mean um we're struggling to cover our expensive revenue to stay in the black, right?

And that's hard.

I think we can do it, but it just isn't going to be easy.

Uh it's a very expensive thing to do, as you can imagine.

And that break-even is something we have to achieve.

If we were to pay a new rent, equal to let's say the dangerous, that would be a devastating increase in that cost and make the whole we're trying to go much much larger and make it that much more difficult to be able to test it.

So does that make sense?

Yes.

Yeah, what there are other examples, I think we know of other nonprofit lead that have agreements like this.

In some cases, we've worked.

Um the province staff is a good example of where they had a dollar lease, they were doing all the maintenance on our building.

They were like, this is crazy.

We just want to move the building.

We just want to hold the building.

So with your help, we were able to transfer it to them.

The Da Vinci Center is another different example where that organization really is in a position to own their building.

They need the partnership with the city.

So this is not something that isn't done ever.

Um, it's something that we've worked to try to understand and make sure that the arrangement is bringing value to the city, whatever we're doing.

And this is an example where we feel that and sorry, this isn't uh maybe we need to be saying something like that.

It gives this one thing gives to the whole city.

It's downtown is for everybody, it's not one side of town, west from another side of town.

You know, that is according to what we believe in this product.

Do you have counsel women if we already think about it in terms of jobs uh in the hotel community?

It takes 13 hotel rooms to be asked to be for employee.

And that's the thing we think about when we think about the economic impact.

Okay.

The economic agenda, that's important.

Okay, committee members, are you good?

Make a motionally approved number two.

Motion right to motion maybe by two seconds, you know.

Split well, we don't have other things to uh ask any questions.

Would you like to ask questions?

I didn't see any hands.

Yes, okay.

Who has hands?

You're okay.

Yeah, I'm sorry if I don't want to drive.

Okay, folks, on councilman on Hushana, you'd like to ask a question.

Thank you.

Um, just for clarification, umce it's uh uh approved and then is leased back to the organization.

Um the organization in order to have uh do you have an operating uh budget?

And if for some reason you need funding to fix that move, uh would you be seeking dollars from raising it from uh private entity or banks or um asking for the city to be able to help up?

In my mind, the deal is this is a big deal.

This is making a big difference, and we need to work from there and not see the city as the place we keep coming back to.

So no, not from the city, yeah.

So um the operating budget in a sense of a standing way map, yeah.

Once everything is is well, what is that a year?

My budget is about three million dollars.

Three million dollars.

That's the operating everything.

That's everything everything.

That's and uh lastly, Madam Uh Chair.

Um seeing that it's also a nonprofit and and so forth.

Um never mind.

That's fine.

It's okay.

You want to ask that?

Yes, anyone else?

Councilman.

Thank you, Madam Chairwoman.

I'm I just want to say thank you for your leadership and all that you're doing to stabilize the finances.

And uh, I just want to bring in a personal anecdote.

You know, I'm I'm at the Harvard Kennedy School of Government, and um over the summer I had several colleagues say, hey, we're really interested in water fire.

So we had them come down.

Yes, and there were 30 countries represented um in my program.

So people from China and Malaysia and Peru and Pakistan and Canada, and they had a ball, and they went to track 15, they spent thousands of dollars literally, and they took all of these amazing pictures by the river, and they went back to Harvard and they talked about it and sent it to their family members.

And I I just want to state that for the record because I don't I think everyone has a conception of how powerful water fire is, but to think about how to really touch these people internationally, and I'm just curious to hear more about how are you leveraging particularly the Massachusetts market?

15 they spent thousands of dollars literally and they took all of these amazing pictures by the river and they went back to Harvard and they talked about it and sent it to their family members and I I just want to state that for the record because I don't I think everyone has a conception of how powerful water fire is but to think about how to really touch these people internationally and I'm just curious to hear more about how are you leveraging particularly the Massachusetts market what do you intend to do to uh increase corporate sponsorships there are so many colleges and universities that I'm sure you guys could tap into and they're not they're not far away um so just it's I'd be curious to hear about what your strategy is there to uh entice larger donors or partnerships outside of Rhode Island that hasn't been a focus though it's come up um I'd love to have a conversation with you about your experience and your thoughts on that that group of people you're written are also future leaders at a national level and actually we we did have that is the former governor of um uh uh Mexico came down get the former prime minister they're not just people around the world they're the leaders of the coming leaders and how to reach out you know is that old problem you have Boston you have New York you have all the arrogance and the ways of each of those cities and how do we here connect and access in a way that people who in a way take us seriously to invest and I I'd love to hear your thoughts from your experience of going up there with with some of the coming elite um because I'm you know from Massachusetts I was born in New York I I both see the the potential but also the barriers because of how people think and uh but I think it's definitely worth assuming if just that's where the big money is mad water are you all set I'll set thank you have a question question funny um um with this contract will there be any general fund money expensed on um what if I have any I believe it will be our intention to continue to maintain the grant in the general fund budget in our proposed budget you know next time that grant is primarily used to pay police details um which waterfire is now current doing um but that will be for the council to consider when the mayor proposes our next budget it'll be an item negotiated in okay again for the reason that we described like our goal is to shore them up I hope in five years they're doing so well that you know maybe we decide we don't need to do that but I don't think this is the moment to our city fees are about 100,000 okay so everybody else motion but we proved limit too I already did that you already motioned and council and and second all in favor aye and opposed eyes have it motion carries the matter players finance and now heads to the full council vote I want to thank you all folks uh this was a very well done presentation you anticipated our question now you put together a nice package for us uh very neatly also made yourself available to answer questions so thanks well done we're excited to be subways with this folks uh and we're looking for great things not five thank you thank you okay next item madam please read item one recordings in the city of province approving the financing of the milestive acts by the HI of appropriation obligation F or an amount to exceed six million seven hundred thousand dollars okay all right okay so we would have the item right into the record is everybody's been sworn in correct okay well you're so efficient um I am going to ask the committee on to enter I have one letter um to the clerk on this matter uh is uh from the wise rustican um and I will members have received the all advocates on motion to make that it I'm a so rule by the end well setting my council and tailor on all right folks we've had a lot of discussion on this um and I think everybody is fully aware of what is going on uh committee members do you have any questions on on this topic or shall we just go into a vote any questions and I don't have questions for city civilizator in terms of uh procedure with the vote or was the processes if this really is denied in a previous committee and when you say previous committee previous to here yes and then it might understand it went to the full council and then referred back to the moment we just clarify the question so that we make sure that everybody understands the question everybody understands the answer.

see this we got all advocates on motion to make that I'm a so move by counseling on the end of second by council and tailor on all right folks we've had a lot of discussion on this on and I think everybody is fully aware of what is going on uh committee members do you have any questions on on this topic or shall we just go into a vote any questions and check it um thank you I don't have questions for city civilizator in terms of uh procedure with the vote or was the processes if this really is denied in uh previous committee and when you say previous committee previous to hear yes and then it my understanding it went to the full council and then refer back is that can we just clarify the question so that we make sure that everybody understands the question everybody understands the answer so this matter came before finance why it came out of finance um with a recommendation to deny it went to the council floor and if that's the council floor the council voted to send it back to committee on it came back to committee and I call for a public hearing at the request of this committee voting to call a public hearing we added more information on after the public hearing it was posted by me for another vote in committee so the question is are we able to vote on this item as a new matter appearing before this committee yes we have it's it's a separate date a separate item although it was the recommendation was to deny but to not approve i i wasn't here that night so we are here today it's a different date it's a different vote so I think can be the recommendation could be the group with a separate vote thank you committee members any other questions are we ready to call a vote on this matter more discussion council I have the question I don't have a question I am um my my my hash and stuff that that that was on but that was just basic answer because you went through these processes but my biggest point is this a privilege thing because everything else that we have voted down and finance since I've been here once it was voted down that was the end of it and then we keep going around in in circles everybody you know keeps doing this I sat at the um public hearing and I looked into a C of privilege and entitlement and it did not sit right at all I get the feeling that this the only reason we're going through this is because of where it's coming from and who it's from and I think it's a it's a it's thanks to how it was me and other people and if we're gonna be rehashing and going back to over things that we voted on before and bringing them back I think we're saying how the president one number two I I really and truly have a problem with one fifth of a group to try to get the rest of us to force with them to try and do something of something if it was voted out for the program and I mean there's 12 of us why why um three make them 12 take care of section in their area there's a problem with that and if we keep telling me oh well this is uh uh um benefit for everyone no it's not it's not a benefit for for the college is a benefit that area and that is a short suite that has sidewalks I read all this information I'm almost done I read all this information and a lot of it was oh well they're generating all this and it's a it's a win-win no it's not a win win the other thing was well we have people that can't walk over there our children we can't push our rulers down we can't we are tricking over that our seniors can't get by well that's happening in all in the other 12 areas all of us yes this is the only one that we are talking about doing something for and I I wish I could say I wish I could say like I wish I could say for Trump when he caught out the thing in and I wish I could say they know not what they did but you do know what you're doing you know exactly what you want you just don't care about the rest of us that's what I have the feeling I'm getting that's the feeling of a lot of people in the house board and I think you need to think before you jump on this voice and if we're gonna continue to do this then what are we voting for?

But you do know what to do.

You know exactly what people just don't care about the rest of us.

That's what I have to feel and I'm getting.

That's the feeling of a lot of people in the house of boys.

And I think you need to think before John Biden has voice.

And if we're gonna continue to do this, then what are we voting for?

Okay.

So that's my that's my thing.

I'm gonna thank you very much.

I called a public hearing, hold on a second, please.

I called the public hearing because everyone had a different understanding of what this matter was all about.

And I personally um enjoyed and found the public care very, very helpful.

I did that on.

I found the public hearing very, very helpful.

You say that this is not for uh the entire city, it actually is.

This is the matter of finance, it's not a matter of equity, it's a matter of economics.

We have the opportunity, it was clearly presented in the finance committee on in the finance uh public hearing that this is a general obligation bond that carries less on expensive uh interest rate, lower interest rate.

We know rates are going up on and the economics of the question, quite frankly, is if we put in sidewalks, um, the general obligation bond.

It was testified to 0.33 percent, possibly.

Um we will basically be saving more money so that we can save other sidewalks.

So it does help everyone in the city.

It is an economic question, it's been debated.

You're welcome to your opinion.

Um, it's you know, we've had an open hearing, and councilman uh sandwich you had another question.

Um, can I just share my opinion quickly?

Respectfully.

Um yeah, no, I I definitely you know share a lot of the same sentiments that that my colleagues shared.

Uh, I think it does uh create uh a dangerous precedent um with the finance committee, uh three of us out of the five at the time um voted against it.

And I didn't want to make that motion because I wanted to be a little bit open-minded.

But after hearing the presentation and hours of conversation, I I believe most of my colleagues here, I think Oscar was here too.

All share, and Pedro all shared concerns um regarding the inequalities and uh the very one-sided, in my opinion, uh, transaction that this does.

Um, at the end of the day, what I would like to see is a deal like this for all 15 wards and not one uh specific uh part of the neighborhood.

And I know some of my colleagues on the east side sometimes think that we are really uh gaining up on them at times, but I I've never seen it that way.

Infrastructure is crappy uh across the city, unfortunately.

Uh, but by moving it forward with an action like this, it creates that perception in our neighborhoods.

Um, at the time we were discussing the the budget.

Um, so I know that was one of the big concerns is we're having conversations of raising taxes, uh, but at the same time we're gonna find it in our budget to be able to pay uh a loan payment.

And then I do recognize the the small interest uh on uh this payment, and I think that's an important piece, but at this end of the day, it's still an additional cost uh at the city um at a time where families are are being kicked out, kids don't have uh food, um creating additional uh expense that only benefits physically uh a certain part of the city, and I'll say it no one in my neighborhood that I've talked to, and I talked to a lot of people has ever said, oh, let's go take uh a walk on benefits.

I just want to point that for the record so people know where I'm coming from.

Um I'm sure you know there is people that I use it, but that's something that has never really motivated me in this conversation as a tourism or attraction historical concepts, I think is important.

Uh but in a time where kids are struggling with school, uh parents are struggling with utility bills, uh investing uh in a certain part of the city to attract tourism is not at the top of the primary meeting.

Um so that's where uh I come from um kingdom as a boy for uh those conversations.

Let's open up the engagement, let's see if there's a smaller dollar amount.

Uh but what has happened is completely opposite.

The exact same thing was presented to me.

Um I feel extremely uh disrespected by certain colleagues.

Um the fact that we're voting on something that has not changed at all, and different votes are gonna be made.

Um really you know makes me lose a little bit of faith in how uh transparent and democratic uh we have been uh to this point.

Um I'm gonna be voting no.

Um what I had agreed to was a smaller dollar amount.

Let's make it ADA accessible uh while at the same time seeing how we can create uh this opportunity for the rest of the neighborhood.

Uh but that's not what's happening today, unfortunately.

Thank you, Councilwoman.

There was additional information that we received in the public hearing, and that is the general obligation borrowing rates that make it so attractive financially, which is a benefit for the entire so with that.

May I have a motion on this matter?

Motion made by council and second by council on vice uh chair tailor.

Um all in favor, aye now both day, aye.

Uh you are you have you recorded those votes?

Okay, so two nays three years and the matter passes the matter goes on before those full time uh full vote.

Thank you very much.

Thank you, folks in the back.

Make a motion we adjourn by Taylor.