News Column

Perez Art Museum seeks sharp boost in county funding

July 6, 2014

By Douglas Hanks, The Miami Herald

July 06--The Perez Art Museum Miami wants a $2.5 million boost in government support, with taxpayers set to cover a third of the museum's budget next year.

Housed in a new $130 million waterfront headquarters built largely with government money, PAMM's celebrated debut late last year also tripled the non-profit's annual operating expenses, to $14 million from $5 million. Private dollars have not kept pace with the higher costs, leaving a gap that PAMM wants Miami-Dade to help close with a 60 percent increase in the museum's operating subsidy from hotel taxes, according to interviews and budget documents.

"I consider that to be an asset for the county," Mayor Carlos Gimenez said of PAMM. "We've known for a long time they were going to need to grow their operating subsidies. They're open, and that's why they need a little bit more."

PAMM currently receives $2.5 million from Miami-Dade, but the 2015 county budget Gimenez plans to unveil Tuesday earmarks $4 million for the museum, according to several top Gimenez aides. The museum also wants $1 million in property taxes from Miami'sOmni Community Redevelopment Agency, a special taxing district aimed at improving a neighborhood that stretches from Museum Park north to 23rd Street, the CRA's director, Pieter Bockweg, confirmed this week.

The push for more public funding by the former Miami Art Museum comes as other non-profits supported by Miami-Dade face a 10 percent cut, and as Gimenez is warning of police layoffs and service reductions. PAMM receives its subsidy from hotel taxes, a funding source Gimenez used this year to narrow the county's budget gap.

Gimenez' plan to beef up PAMM's subsidy is already drawing criticism as county commissioners face another budget process with job cuts on the table. Miami-Dade's library system is poised to cut 90 full-time positions under Gimenez's funding scenario, and the overall county budget contemplates a loss of 700 payroll slots without union concessions.

Commissioner Juan C. Zapata said he wants Miami-Dade to consider other uses for the hotel taxes that PAMM is seeking.

"We have a lot of flexibility with these dollars,'' said Zapata, who represents West Kendall in a district that brushes up against the Everglades. "We've gotten on this path where we're all-in supporting these cultural institutions that are all downtown and are already benefiting from public dollars for construction."

For PAMM advocates, the extra dollars represent an increased investment in a high-profile cultural institution that's taken on the added expense of operating in the heart of Miami's revived waterfront. In 2004, voters endorsed Miami-Dade borrowing $100 million to move the former Miami Art Museum from an under-used county building to a new headquarters that has won raves from critics.

Leann Standish, the museum's deputy director for external affairs, said the extra county funds would be used for the museum's subsidized offerings.

"The support from the county really helps us to fund the programs we have found to be in great demand right now. We have free admission for all students. We have two free-admission days," she said. "It's those free programs that we've found to be very successful."

PAMM bears the name of Jorge Perez, the Miami condo developer now enjoying a second high-rise boom across South Florida. In late 2011, he donated $15 million in art and pledged $20 million in cash, payable through 2022.

Budget documents show the museum expects to generate about $8 million next year from private sources, including $4 million from concessions, ticket sales and events, and about $4 million in donations and endowment revenue. That leaves a gap of more than $5 million that would be closed by government dollars.

Museum officials say attendance and membership sales are on track or even ahead of projections after PAMM's Dec. 4 debut during the annual Art Basel week. Almost all of the museum's corporate sponsors renewed for 2015, PAMM said.

"The demand has been way more than we projected, across the board,'' Standish said.

The museum's endowment hit $14 million for the fiscal year that ended Sept. 30, a figure well below PAMM's long-term target of $70 million, according to the 2013 financial statement. The museum's budget shows the endowment currently generates about $500,000 a year for operations -- roughly 3 percent of the year's $14 million budget.

Including the new building, PAMM listed assets of $167 million in 2013. The museum's balance sheet listed about $10 million in cash and $14 million in investments, with an additional $31 million in pledges, receivable grants and holdings in trusts slated to provide cash in future years.

PAMM's financial needs complicated the Miami Dolphins' pursuit of hotel-tax dollars for a $350 million renovation of Sun Life Stadium. The team won approval June 17 of a new subsidy program that will send the Dolphins a maximum of $5 million in yearly bonus payments for hosting Super Bowls and other large sporting events, provided Miami-Dade can first cover its existing hotel-tax obligations.

Though not binding on commissioners, a county list of about $30 million in hotel-tax obligations written forecasts paying PAMM $4 million annually through the life of the Dolphins' 20-year deal.

Hotel taxes continue to hit record levels, and are up 8 percent this year. But the revenue source is also under strain, largely thanks to a portfolio of debt tied to the Adrienne Arsht Center for the Performing Arts, the Miami Beach Convention Center and Marlins Park.

While state law limits hotel-tax exependitures, during the past two years Gimenez used $50 million in surplus hotel taxes to replace general-fund dollars subsidizing the county's parks department. The shift, endorsed by county commissioners, freed up general-fund money to be spent on core services, including police, jails and homeless animals.

With the reserves drained, Gimenez said he won't be using hotel taxes to ease pressure on the general fund for the 2015 budget. If Gimenez could repeat this year's strategy of shifting $25 million in hotel taxes to parks, it would eliminate more than a third of the $65 million budget gap facing Miami-Dade.

The gap is driving Gimenez's austerity plan, which forecasts about 200 job cuts in the county's police department and other spending reductions. Leaders of social-service agencies and other charities funded by Miami-Dade packed a budget hearing last week to protest Gimenez's plan to cut nearly $2 million out of the county's $20 millionCommunity Based Organization program. The CBO program funds homeless shelters, pantry programs, battered-women advocates and other groups.

Michael Spring, Gimenez's cultural chief, said Miami-Dade always intended to give PAMM $4 million this year, but that the current budget strain forced the $2.5 million allotment. He called the $4 million contribution for 2015 reasonable support for a new county asset.

"We don't make a $100 million investment in a beautiful new building and say we don't care about your operating budget," he said.

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(c)2014 The Miami Herald

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Source: Miami Herald (FL)


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