|Loveland's Independent News
|Rialto Bridge Project:
During its first year in operation, the adjoining three story building named the Rialto Theater Bridge not only lost money but failed to
recover even 40% of the city's ongoing operating expenditures being paid from general fund monies. In 2012 the city lost a whopping
$336,000 after spending $549,960 to generate barely $200,000 in revenue from the project. The losses only account for the city's
operational and maintenance cost for the semi-private buildings and not any recapture of the $1.3 million invested last year in
construction costs by city taxpayers.
The Rialto Bridge Project is a "public-private partnership" between the City of Loveland and local developer Troy Peterson which
attempts to copy the Denver Center for the Performing Arts by combining a multi-purpose architecturally modern events center with
the city's historic Rialto Theater. Peterson is the managing partner for the Rialto Bridge LLC, a co-owner of the buildings. Peterson,
who proposed the project, owned an adjacent building but was unable to invest his own money into the project given trouble he was
having in a condominium development in Steamboat Springs and another commercial project.
The $2 million, 20,000 square foot expansion called Rialto Bridge received $1.3 million from the City of Loveland, $700,000 from the
Community Foundation of Northern Colorado. The city's contribution along with private donations funded the demolition of existing
buildings while constructing the new structure. Peterson's mostly in-kind contributions to the project included his adjacent
dilapidated property and in-kind finishes and tenant improvements on the interior of the new structure.
The modern three story building attached to Loveland's Rialto Theater houses the "Next Door" restaurant on the main floor which is
leased-out by Peterson's Rialto Bridge LLC. The second story meeting rooms and general purpose areas are owned and controlled by
the city which hoped to lease space for private events to cover its costs. Third story office space is for lease and also managed by Rialto
Bridge LLC. According to Sawyer, nobody anticipated the office space would still be vacant a year following construction contributing
to the city's ongoing financial loss in the project since the city is paying the maintenance costs. One problem that appeared to stun
councilors was Sawyer's admission the city is paying all the utilities since there is only one power and water meter for the entire
Councilman Daryle Klassen, after asking a number of questions regarding the finances, complained the report given to council was
strangely positive despite the alarming numbers in a table at the end. Klassen stated, "When I read the rest of the report I become
disturbed." Than Klassen stated, "Not meeting the numbers is being polite" to which Sawyer responded only "yes sir."
Following Councilman Klassen several other councilors voiced their disappointment with city staff in managing the project even
questioning performance bonuses and other recent pay increases to staff. City Manager Bill Cahill said it would not be appropriate for
him to provide specific salary data on certain employees as requested by Councilman Fogle.
Sawyer explained there were four reasons the city was unable to meet the projections provided to the City Council last year when
they approved the $1.3 million appropriation for the project. Below are the four reasons cited by Sawyer,
1. Sawyer explained the building contractor failed to complete the project on schedule thus reducing the number of months the
building could be rented in 2012 to only 9 months.
2. Sawyer acknowledged the city's financial projections presented to council in 2011 were based on what she called "bubble"
diagrams showing space that could be leased for weddings. Once constructed, Sawyer argued the room were indeed smaller thus
not large enough to host wedding receptions and other profitable events contemplated in the 2011 projections.
3. Sawyer stated, "nobody anticipated the offices (third story) would still be vacant by this time."
4. Lastly, Sawyer stated the "noise bleed" problem between the theater and banquet rooms next door force staff to alternate room
rentals with the theater thus making the higher occupancy projections used for the April 2011 numbers impossible to reach.
Klassen complained aloud he heard staff describe the projections over and over again as "conservative" numbers when first brought to
council. Councilman Fogle added, "I concur with Councilman Klassen the numbers are shocking." Fogle pointed out the city recovers
only 38.9% of its expenses by leasing out the new facilities and Rialto Theater.
Councilwoman Joan Shaffer cautioned her colleagues against frightening the public by throwing around "scary numbers." Councilman
Hugh McKean later responded the numbers really are scary. An angry and visibly shaken Shaffer expressed disdain for McKean while
demanding he speak to the council and public but not address her comments specifically.
Councilman Dave Clark took the high ground by suggesting a path towards solvency of the project. Addressing Loveland City Manager
Bill Cahill he Clark stated, "Give us a plan how we are going to get out of this hole."
Phil Farley, who participates in the project as head of the Northern Colorado Foundation suggested moving the city's financial goal
post to improve results, "I think it would be worthwhile...hiring Martin Shields from CSU" to study what impact Rialto has had on the
downtown sales tax revenues he argued. According to city staff, the Next Door restaurant is growing in business and could become
the highest grossing downtown eating establishment with regards to sales taxes in about a year. Any direct benefit of their success
goes to Peterson who owns the rights to the lease proceeds and not the city.
Councilman Ralph Trenary argued the proper measurement of the project's success should not be one of sales or revenue. Instead,
Trenary argued the intangible benefits of the project provide downtown more than whatever the numbers might appear to show the
city is losing in the public/private endeavor.
Mayor Cecil Gutierrez concluded the conversation by asserting the bigger loss is in the new "Bridge" portion of the project since the
Rialto was already losing money and approximately the same rate in 2011 as in 2012. Cecil directed his final comment to staff , "Jan,
hang in there, because I think you are doing a great job with the Rialto piece of it."
Loveland - May 8, 2013
The Loveland Cultural Services Department reported to Loveland's City Council
the financial results from the Rialto Bridge project for fiscal year 2012 during last
night's city council meeting. After providing an upbeat report, Rialto Theater
Manager Jan Sawyer disclosed, "so we didn't meet the numbers but we think it brings
incredible value to the community."
Sawyer than directed council to look over a financial summary added to their
package shortly before the meeting comparing FY 2012 numbers with projections
provided the council in April of 2011. Conspicuously quiet but in attendance was
Susan Ison, Director of Cultural Services, who helped compile and the faulty
financial projections she once described as "conservative numbers".