Study Predicts 5 Years of Deficits for Simi Valley Cultural Arts Center : Government: City officials say they had always expected the converted church project would require municipal subsidies at first.

A Simi Valley church that the city plans to convert into a cultural arts center would lose about $100,000 in its first year and continue operating at a deficit for at least four more years, according to a consultant’s study that the City Council will review Monday.

City officials who have supported the $3.5-million church acquisition and renovation said Friday they had always expected the center would require city subsidies in its first few years of operation.

“That’s pretty standard as far as these things go,” Councilwoman Judy Mikels said. “I’m not uncomfortable with that.”

But Councilwoman Sandi Webb, who has been a frequent critic of spending money on a cultural center in such tight economic times, said the report only confirms her fears. “That’s why I don’t support it,” she said. “It’s nice, but not at these kinds of costs.”

According to the study, the facility would require a $75,000 subsidy from the city in its first year of operation. It also states that another $35,000 could be raised by grants or corporate sponsorships. The remainder of operating expenses would come from funds generated by performances and other revenues.

The cost of operating the center would increase over time, the study said. By the center’s fifth year of operation, Simi Valley’s contribution would climb to $95,000, assuming $45,000 could be raised privately.

Simi Valley Mayor Greg Stratton said the city always expected it would have to make a financial commitment to providing local cultural activities.

“If you’re going to spend $3.5 million on a building, it’s not such a big deal to spend $100,000 a year to operate it,” Stratton said.

“We realized that this was going to have to be subsidized and I look at it as another facility, like a swimming pool or a park, that you recognize as something that has to have some government support,” Stratton said.

Stratton said he hoped the city could make some of its money back through leasing out a multipurpose room planned for the center’s roughly 3,000-square-foot basement.

“I think the banquet hall could make some money,” Stratton said. “Weddings, birthday parties can be very expensive if you have to go rent a room at a hotel. So our hope is that we can recover some of the costs through that.”

The city in 1991 paid $821,000 for the building at 3050 Los Angeles Ave. The building opened in 1924 as the Simi Valley Community Methodist Episcopal Church, and later the stately gray structure served as a mortuary, a Jewish temple and--most recently--a haunted house during a Halloween fund-raiser sponsored by local service clubs.

Council members in March voted to spend $317,000 to hire Valencia-based Combs & Miguel Architecture to prepare structural studies and design work aimed at turning the church into an arts center.

The report the council will review Monday represents the first phase of the company’s work on the project, which will eventually lead to detailed blueprints and bid specifications. The report was prepared for Combs & Miguel by JB Research Co. of Ojai.

Deputy City Manager Bob Heitzman said the council will be asked to review suggestions for meeting the center’s anticipated budget gap, including creating a nonprofit foundation that would be charged with raising funds and soliciting grants.

The council will also consider a proposal to build a small restaurant or a combined gallery and bookstore next to the center as an ongoing source of revenue, Heitzman said.