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Norway seeks alternate funding for Opera House
NORWAY — Despite Governor Paul LePage's refusal to issue bonds until 2014, the Norway Opera House project will hopefully move forward, Town Manager David Holt told selectmen at their June 5 meeting.
He said within the next week or two, the town will continue with putting the project out to bid.
Just as the town was about to advertise the project to bidders in June, he said, it learned of the governor's decision to freeze the bond.
"It was a great surprise to me. We certainly had a lot of obstacles getting this project up and running and this has been the toughest one so far," said Holt.
He said that reviewing the bids and selecting a contractor "will take some time. We won't actually need to be paying anybody for probably a couple months," he said. "We won't have to have the bond money until then."
"We are trying not to be too negative and trying to work through this, putting the project first," he said.
Because of LePage's decision, a $400,000 grant from the state Norway planned to use to pay for the first-floor renovations to the Opera House will not be available.
"Norway competed for the money that was generated by this bond issue," Holt told the selectmen.
Norway's Opera House isn't the only project in jeopardy – Holt said that 11 other towns have also been affected.
"They have talked with the governor's staff," he said, "and their reports to us is that the staff realizes that this is quite a hardship that they've placed on the towns, and they are willing to try to come up with a better solution."
He said that the town of Norway had signed a contract with the state of Maine, and based on that $400,000 Communities for Maine's Future (CMF) grant, the town created a project where it would also need to use tax credits, which Holt said would expire before 2014.
He said that in speaking with the governor's office, there is a possibility that the governor might reverse his decision, but Holt said the town shouldn't count on it.
"Just sitting and waiting, there is no guarantee it will bring a satisfactory answer," he said.
As a solution, Holt recommended the town seek out a Bond Anticipation Note (BAN) – a smaller, short-term bond – that would allow the town to move forward with the renovations and more effectively fund raise, without losing the state and federal tax credits.
"We cannot wait for 2014," Holt told selectmen. "I don't see another choice."
Holt said between legal fees and interest, it could cost the town $2,000-$3,000 to take out a BAN.
"It's better to lose $3,000 on the project than $400,000," said newly-elected Chair Russ Newcomb.
Holt said that taking out a BAN would not be an extra cost to taxpayers because the money would be extracted from the CMF grant.
He also pointed out that the Norway Opera House Corporation, which has taken over ownership of the building, is committed to raising $150,000 for the renovations and "it can't raise funds effectively on a project that is dead."
"It's really quite a dilemma," he said.
In total, he said, renovations are expected to cost $1.1 million – the $400,000 grant formed the base of the project.
"It's an awful lot of money, but if you look at the challenge of the Opera House, you can understand why it's necessary," he said.
"If you are going to save the building, it's going to take some money."
Holt said that, because it took the town a year to receive its tax credits, construction on the Opera House has already been delayed enough. "That's been new and difficult for us; it's delayed us from getting going," said Holt.
He said that a BAN is the greatest chance the town has for salvaging the project.
Selectmen voted to approve Holt to move forward and prepare the BAN application.