Subject:
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Recommendation to fund the revised request from The Dali Museum for an increased total amount of $25 million in support of the Museum’s expansion project.
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Recommended Action:
Recommended Action
Approve funding $25,160,000.00 of the revised request from The Dali Museum (Dali) in support of the Museum’s Capital Project Funding Program (CPFP) expansion project.
• Staff analysis of the museum’s request determined that a $25,160,000.00 grant would be equivalent to the incremental Tourism Development Tax generated by the expanded museum over a ten year period.
• On May 17, 2023, the TDC approved a total of $34 million in funding for the Dali’s revised expansion request - a $16.5 million increase over the previously approved amount.
• The updated project includes additional education and conference space, increased interactive art galleries, and increased destination exposure through the attraction of broader audiences.
• The Board of County Commissioners (Board) approved the Dali’s original expansion request of $17.5 million in CPFP funding on April 19, 2019.
• After Board approval, an agreement with the Dali was never reached.
• Neither the Fiscal Year (FY) 2023 Adopted nor FY24 Budget Request includes funding for this project. Should this recommendation be approved, and an agreement reached, a budget amendment would be brought forth from Tourist Development Tax reserves in the amount of the agreement.
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Strategic Plan:
Foster Continual Economic Growth and Vitality
4.6 Support a vibrant community with recreation, arts, and culture to attract residents and visitors
Summary:
Summary
The Dali Museum is seeking additional CPFP funding from Tourist Development Tax (TDT) proceeds to support the construction of the Museum’s updated expansion project. The revised plans include elimination of the new parking garage from the original expansion plan, the addition of meeting space for up to 400 people that can be used for educational or conference purposes, and additional interactive, immersive art galleries that will attract a broader audience and increase attendance and hotel room nights associated with the Museum.
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Background Information:
On April 19, 2019, after going through the CPFP process, the Board approved $17.5 million in CPFP funding to support the Dali Museum expansion project which included community and education spaces, a new parking garage, and 30,000 square feet (sf) of exhibition space. The total estimated cost for the project was $35 million. An agreement with the Museum which included full payment upon project completion was never finalized.
On October 26, 2022, the Dali presented an updated expansion plan to the TDC requesting $34 million in County funding support. The updated plan included elimination of the new parking garage from the original plan and the inclusion of 60,000 sf of programmatic/exhibition and convention space. The project presentation called for a quarterly payout of County funding over a period of three years and nine months. The Board had decided after the first CPFP funding cycle to only provide full reimbursement upon project completion. However, the Board could waive that Guideline provision and allow for reimbursement as construction occurs. The estimated total project cost for the updated expansion project is $68 million which the Dali attributed to the modified project scope and rising prices of materials and labor.
On February 28, 2023, during a joint meeting of the Board and TDC, the Director of the Convention and Visitors Bureau presented information regarding the Dali’s revised expansion plans and the next steps in the process.
On May 17, 2023, the Dali presented the updated project to the TDC again, this time the presentation included revised projections based on an updated analysis performed in November 2022 by Research Data Services, Inc. (RDS). According to the RDS report, the ten-year estimated total impact from the Museum’s expansion project would produce 4.9 million attendees of which 75% are from out of the area, 1.3 million room nights and $1.9 billion in total economic impact. After the presentation and discussion, the TDC unanimously approved the Dali’s funding request of $34 million.
The County hired Crossroads Consulting Services LLC (Crossroads) in 2021 to assist in reviewing and evaluating Capital Project Funding Program applications in accordance with the CPFP Guidelines. Following the Dali’s presentation, Crossroads provided an analysis of the updated expansion project including the methodology and impacts provided by RDS. According to Crossroads, the RDS estimates appear reasonable. In addition to the above, Crossroads also presented three methods the County might use to gauge the level of funding support for capital projects. The consultant concluded by applying the three methodologies to the Dali’s request which resulted in a funding amount ranging between $24,048,617.00 - $27,650,000.00. After receiving Crossroad’s report, the TDC did not amend their support of the Dali’s funding request.
If approved, the Board will 1) be waiving reimbursement upon completion and allow negotiation of a payment schedule and 2) have the opportunity to consider the final negotiated agreement for approval.
Fiscal Impact:
Should this recommendation be approved and an agreement reached, a budget amendment would be brought forth from Tourist Development Tax reserves in the amount of the agreement.
Staff Member Responsible:
Brian Lowack, Interim Director, Convention and Visitors Bureau
Partners:
Tourist Development Council
The Dali Museum
Attachments:
The Dali Museum Expansion Funding Request dated May 17, 2023
The Dali Museum Expansion Funding Request dated October 26, 2022
Evaluation of Current Capital Projects Funding Request dated May 12, 2023
Research Data Services Economic Impact Report
Capital Projects Funding Program Guidelines