The Newberry Opera House, considered the catalyst that opened the door to a revived downtown with new fine dining, industry and lodging has suffered like other businesses because of a sluggish economy.

But the Newberry mecca that many thank for the city’s revitalization, has many supporters. Those supporters, including an adjustment to a payment from the Opera House on a city loan, are rallying around the arts center:

PATRONS

After slow ticket sales from the end of October though the new year, Opera House patrons appear ready to spend again.

“The sales have been coming up,” said Deborah Smith, the Opera House’s Executive Director. “After the bottom fell out of the market...people didn’t spend money.”

In December, the Opera House only “broke even,” she says.

December was suppose to be a big-selling “cushion” month for the Opera House that supported the other slower 11 months. But in 2008, that was not the case.

September and early October sales were big sellers, but following the economic downturn, October through December were weak.

But, Smith says, “people are back.”

Still, the Opera House faces a budget deficit because of slower year-end sales.

But within its partnership with the City of Newberry, the entertainment operation can and does rely on some financial payback from the city it helps support.

THE CITY

In 1999, with borrowed money, the Opera House was rehabilitated.

The Opera House would pay off the resulting debt with the Tax Increment Finance (TIF) revenue, or money from the tax increment finance system that the city built.

In a circle-of-life type funding, the Opera House entertainment promoted new business that garnered more tax dollars for the city.

The roughly 200 annual Opera House shows draw tourists who also often choose to eat and sleep in Newberry, hence the opening and success of places like Steven W’s Bistro, Delamater’s and the Hampton Inn.

Smith says the Hampton Inn reports a 90 percent occupancy rate and is by all measures a successful hotel.

From new businesses, tax dollars flow into the city revenue. And within the downtown TIF district, an area that runs from Boundary Street to Chapman Street and from Drayton Street to Calhoun Street, the tax structure allows the city to earmark existing tax payments into a new TIF bank that helps support the Opera House.

At first, the plan was to have TIF tax from new business pay off the roughly $400,000 in annual Opera House debt. But the tax money was slow at first when TIF was applied in 2000.

The Opera House needed help from the city for that first year, so the city lent it $225,000 on what it couldn’t pay.

Then in 2001, the city established a local hospitality and accommodations tax, garnering 2 percent of local sales on prepared meals and beverages and 3 percent from hotel sales.

The city then decided to annually allot $40,000 of its yearly hospitality and accommodations tax collection back to the Opera House to pay down the $255,000 it owes the city.

But with a slower season, the Opera House asked that the $40,000 instead go to its operating expenses this year.

“The only negative aspect of this request is that (city) staff had planned on the loan balance being paid off in fiscal year 2009-2010...” states a city memo. The City Council would have had flexibility to use the hospitality and accommodations tax revenue for other eligible purposes.

There is a current $57,787 loan balance.

Then council also approved another allotment to the Opera House, this time from the state’s accommodations tax to the city.

Locally, only the city’s Parks, Recreation and Tourism Department put in for the state’s annual divvy to municipalities.

The city’s Accommodations Tax Advisory Committee then sought fit to amend the Parks, Recreation and Tourism Department’s request, giving a portion to the Opera House as well.

The Parks, Recreation and Tourism Department is set to receive $5,000 and $26,800 is allocated to the Opera House Foundation.

ITS OWN

At the core of the Newberry Opera House, are a host of loyal volunteers and financially supportive board members who give to the operation from their own pockets.

With slow sales, one board member promised $10,000 if the others raised $50,000. In less than three weeks, the group pulled together more than $60,000 from its own money.

Then, there is the Opera House Guild, a decided group of women volunteers who annually raise around $50,000 through special events.

And there are more than 300 volunteers who give roughly 18,000 hours of work yearly.

Many help because they know how important the Opera House is to support Newberry economically, says Smith.

“They love their home,” says Smith.

Since the Opera House opened, there has been more than $20 million of new capital investment in the downtown area, says Smith.

The Opera House has also helped pull in new industry.

Besides having the infrastructure support, Smith says “the most important thing in industrial recruitment is showing (CEO’s) that their top workers will be happy” in Newberry.

Komatsu said deciding factors for picking Newberry were the “livability of downtown and the Opera House,” Smith quotes.

“Our city was going to hell in a handbasket,” said Jim Wiseman, chairman of Newberry Opera House and City Council member when downtown neared dilapidation.

“We just couldn’t afford to do anything about it, so the council then took a very proactive approach. It was a tremendous success that we implemented (the tax increment finance system),” Wiseman said.