Hilton Head Island officials lose credibility when they talk about loaning the Arts Center of Coastal Carolina $1 million before they even hire a consultant to give them advice on future funding of island arts groups.
And to describe the $1 million as a loan strains credulity even more. The arts center already owes nearly $2.6 million, according to its fiscal year 2012 financial report, and center officials have indicated those loans are a financial strain. Collateral for one of those loans is the arts center itself. The group's endowment fund secures another.
Center officials have asked the town to buy its building -- valued at about $6.5 million after depreciation -- and take on $400,000 in annual upkeep and about $2.5 million in needed improvements.
The $1 million apparently would be used for the most critical repairs, which include a new heating and cooling system, a new sound system and repairs to the stage and an outdoor awning.
Never miss a local story.
If the town commits to this, it could box itself into taking over the building just to watch out for its $1 million investment -- more than that, in fact, when you take into account the several hundred thousand dollars a year in accommodations tax money the center has received since it opened. And why give $1 million to a group that didn't come up with a common-sense business plan that adequately addressed maintenance of its facility?
No terms for this transaction have been discussed, but the loan could be authorized as part of the town's budget for the next fiscal year, which must be approved by the end of the month.
Nothing should be done before the town gets a report back from the consultant it now expects to hire in July. The point of hiring a consultant was to get solid information on which to make arts spending decisions, as well as what should be done with the arts center.
Two council members made astute observations at Monday's council workshop.
Bill Harkins warned that the town would likely not see the $1 million again: "I view the loan in the same way as giving one of your kids a loan -- you're never going to get it back."
Kim Likins pointed out that other arts groups could want the same kind of help: "How can you differentiate? How can you say the one is more important than the others?"
Less compelling was Mayor Drew Laughlin's statement that a Hilton Head without the arts center is "not a future that is very attractive to me."
Hilton Head prospered before the arts center opened in 1996, and its future is not bound up with the arts center's success or failure. If it is, we're in more trouble than we know.