Next week's meeting will take place a week before the council decides how to manage a $7.6 million deficit and cope with a 75 percent decline in developer fees the city collects. Those fees will help finance the two projects.

The 28,000-square-foot arts center designed for 200 to 500 people at the corner of Monterey and Seventh streets has an updated construction cost of $25 million to $28 million. It was originally about $11 million in 2002. When its built, the center expects to earn $250,000 annually and spend up to $1 million, according to projections, and the council will have to decide how much of the gulf taxpayers should subsidize.

So far the Gilroy Foundation and the Gilroy Arts Alliance have raised $1.8 million - $1.5 million of which came from Don Christopher - for an arts center endowment they hope to grow to $3 million. The group then expects that money to earn about $150,000 a year in interest that will shave operating costs. Other cities with comparable theaters usually foot 30 to 40 percent of their operational costs, according to city staff. Beyond this, the council and artists have also considered the idea of a public-private partnership, or maybe even combing the library with the new arts center.

Like the current relationship, the city will own the physical library building, but the county will provide the books, computers and other funding. Among a laundry list of shortfalls, the current facility is not up to par with earthquake safety building codes and has $2 million in deferred building maintenance needs, according to city staff. Building plans for the library call for a two-story, 54,000-square-foot building to replace the tired one-story structure there now.

If voters approve a $37 million bond for a new library, scheduled for construction in 2015, then that would free up $7.2 million in city funds slated for the project. That money could then augment the $8.7 million fund for the art center, scheduled for 2012, and the two projects could merge along with privately funded retail, office and living space. The city would save money, but councilmembers have cautioned that this new idea needs fleshing out before any serious consideration.

A recent survey by a consultant showed that 64 percent of Gilroy voters support a library bond measure, but this is just shy of the required two-thirds support. The city is looking for a consultant to conduct a PR and outreach campaign to nudge residents beyond the two-thirds mark, and the council will re-consider public support for a bond measure in July to possibly get it on the November ballot. Earlier this year the council voted to bond the purchase of Gilroy Gardens for $14 million; it is also considering another $10 million bond for sidewalk repairs.

Arts Center
Cost

2002: $9 M

2008: $25-$28 M

Projected Use

2002: 240 days

2008: 240 days

Annual operating cost

2002: $723,000

2008: $750,000 - $1,000,000

Construction costs

2002: $258/sq. ft.

2008: $610/sq. ft.

Subsidy

2002: $353,000

2008: $500,000 - $750,000

Chris Bone Chris Bone covers City Hall for The Dispatch. Reach him at 847-7109 or e-mail him at cbone@gilroydispatch.com.