Jonesborough — Is the ISC too big to fail? (Johnson City: lease, mortgage)

[jabogitlu]

Board OKs storytelling center purchase

The Jonesborough Board of Mayor and Aldermen on Monday voted to proceed with negotiations to finalize an agreement that will allow the town to buy the International Storytelling Center building in its downtown historic district. The town will then lease the building back to the nonprofit ISC organization for a sum that will cover the town’s debt service on the building from the USDA Office of Rural Development.

Citing the financial condition of ISC, which only last month emerged from Chapter 11 bankruptcy initiated by its default on the building, Chuck Vest, who made the motion for the resolutions’ approval, and Mary Gearhart, who seconded the motion, both said they were initially opposed to the agreement but had reversed positions.

[jchometeam]

I by nature generally oppose to using government money to help groups such as this. However in this case if indeed it does not cost the city any money and it can help keep the group in the building, keeping the festival alive, I can understand it. I have less of a problem with this, for example, than the cities loaning money to these types of groups. I believe I read that Jonesborough and even maybe Johnson City had originally taken a hit on the bankruptcy as they had made loans to the center.

I do not have much faith in the long term viability in the storytelling festival. The prices are far too high. I have a relative that does storytelling nationwide, lives within 3 hours of Jonesborough, but skips the festival because of the price. Instead she goes to smaller festivals and events.

Hopefully the city pays a price for the property so that if the center gets into further financial trouble and ends up failing, the city can sell the property for what they have in it and do not lose anything.

[Ted Bear]

You can be sure that the town will never make a dime on this investment. That is the nature of these things, but they should be lauded for buying the facility rather than just lending more money on top of already sunk loans.

One can argue that the story telling festival brings a good deal of economic activity to the community, and so in the long run, even though the building itself will lose money, the overall benefit to the community is positive.

Consider it a sunk cost...like lending money to a friend or family member. Those monies promised on the lease back arrangment will probably never materialize.....just the same as the debt service payments on the original mortgage could not be afforded. Consider it like lending money to a friend or family member.....it is gone. Overall it probably creates jobs, brings tourist dollars into the community, and deals with an assets which might otherwise lay fallow for years to come while a new tennant is located.

Hate to see gubment involved in private enterprise, but this is probably the best outcome for a bad situation. Just don't go telling everyone it will make money, or the town will get their investmnet back. These things rarely, if ever, work out that way. I know it is hard for government, but just be honest with the people that this is lost money for the greater good of the community and move along.

Here's to a well attended festival...and the hopes that the agreement provides for a variety of revenue sources from parking, concessions, tickets, etc. in addition to the 'promised' lease payments.