O.C. center might look to bonds to finance concert hall

Leaders of the Orange County Performing Arts Center are mulling large-scale borrowing, in the form of a bond issue, as a way to ensure completion of a $200-million concert hall in time for its scheduled opening in the fall of 2006.

Fund-raising has been stalled at about $100 million for more than a year, but center President Jerry E. Mandel said Tuesday that borrowing should not be seen as a desperation move in the face of a down economy. Instead, he said, bond issues often have been used by other nonprofit arts organizations, and incurring debt has been in OCPAC’s playbook of potential financing maneuvers since its capital campaign began in 1999.

By raising $150 million to $200 million in the bond market, Mandel said, the center would ensure that construction goes forward on time. The bonds would be paid off over 30 years with money raised from donors; Mandel said the center would not consider floating bonds until it had about $150 million in pledges to back them up.

The Woodruff Arts Center in Atlanta last year issued $73 million in variable-interest bonds to help finance an expansion. With interest rates fluctuating between 1% and 2%, borrowing costs are expected to total $750,000 to $1.5 million for the year, according to Woodruff President Shelton g. Stanfill.

Mandel said the next public update on the Orange County center’s fund-raising progress will come at a ceremonial groundbreaking Feb. 6. The project includes adding a 2,000-seat concert hall and a 500-seat theater to the complex. Although the capital campaign has been difficult, Mandel said the center’s operating budget is in good shape, with ticket sales better than projected and donations on pace to reach the $7.3 million in private gifts needed to balance the $37-million budget for 2003-04.