Where would the renovation and seed money come from?

Renovation costs, the first year’s operating budget and the second year’s operating loss would be funded by the GSB Capital Projects and Investment accounts.

• The Capital Projects account accrues money that is unspent or misspent by student organizations.

  “Every year, GSB audits all of the organizations it funds on a line-item basis,” said Tom Danielson, GSB finance director. “At the end of the year, we reclaim all that money that is unspent.”

  Gail Ferlazzo, associate director of the Memorial Union, said that, in the past, about $100,000 has been swept into the account every year. A bill passed last semester, however, will direct half of the unspent money in future semesters — up to $50,000 — into a separate account to help fund events held by academic and pre-professional groups.

• Danielson said the capital projects account currently contains approximately $200,000.

  The Investment account was created when GSB sold its automobiles to the university, after deciding student organizations could use vehicles through Transportation Services.

  “When we sold those, we knew we were going to have a large amount of money,” Danielson said.

  The Investment account was opened in order to take advantage of a better interest rate and offer GSB a return on unspent dollars.

  In addition, the capital projects account is capped at $250,000, and once it reaches that mark, excess funds are transferred to the investment account.

  Danielson said the investment account currently contains approximately $300,000.

How has the money been spent in past years?

Capital Projects money is used primarily for physical investments that will last three years or more, according to Anthony Maly, senator for LAS and Varsity Task Force member.

Maly said that, with a two-thirds vote, Capital Projects money can be spent elsewhere, and can supplement student organizations’ regular allocations.

“It’s also been used, kind of, as an extension of the senate discretionary account,” Danielson said.

Some examples of GSB bills from the past three years that have used Capital Projects funds:

• Replacing One Hundred Fifty Years of Oak Tree Tradition — tree, labor, watering and locates, at $4,800
• The GSB Clean Water Act of 2007 — rerouted roof run-off to Lake LaVerne, at $2,000
• Funding Furniture for the MU Terrace — umbrellas and tables, at $9,900
• Funding ISU Groove Drumline Cymbals — cymbals, at $3,346.15
• Funding the Waterski Club to go to Nationals — travel expenses and the entry fee, at $4,082
• Funding the Russian-Speaking Students Association’s Samovar — Samovar, at $466.91

Where would funding to cover future operating losses come from?

After generating revenue through ticket sales, concessions and building rentals, the theater would be required to go through the regular allocations process, like any other student organization, in order to fund projected operating deficits of approximately $60,000 per year.

How would this affect other student organizations?

Some senators have voiced concerns that funding the theater through regular allocations puts it in competition with other student organizations.

“Essentially, you’re adding another competitor to the regular allocations list,” Ferlazzo said.

GSB’s regular allocations process distributes approximately $1.3 million in student activity fees. Fully funding the theater’s $60,000 annual operating loss could commit approximately 5 percent of these funds. If the project were abandoned in the middle of the 5-year lease, the GSB would still have to cover the costs of leasing the space through the end of the contract, at approximately $24,000 per year.

What is the next step?

Some senators have expressed concerns over whether the vote could be cast without knowing more of the details. Vice President of Business and Finance Warren Madden said Tuesday that GSB would need to decide — even within broad parameters — that they are interested in moving forward with the project before the university would begin formal negotiations, regarding the property’s lease.

“We normally wouldn’t move too far along in formal negotiations without some indication that the University was serious about leasing the space,” said Madden.

Where would the project fall in the University’s organizational structure?

The proposal would place the theater under the oversight of the Memorial Union.

“We are supportive of that, if that is what the GSB would like,” Ferlazzo said.

Theater needs, such as cash handling, would likely make use of existing MU services.

“We’re anticipating that would channel through the Memorial Union business office,” Ferlazzo said.

Ferlazzo also said the idea is to minimize the impact of additional work on current staff members.

“Our goal is that it really is a lot of responsibility on that grad. student,” Ferlazzo said.

Since the pool of graduate student candidates varies in skill, however, the amount of time that theater operations demand from Memorial Union staff may change from year to year.

What are the details of the graduate assistantship position — planned to help manage the theater?

The task force is proposing the assistantship to the Educational Leadership and Policy Studies program, and was scheduled to meet with program representatives Tuesday, but had to postpone the meeting till Feb. 22.

“We have learning objectives written — we have what we think we need, walking into that meeting,” said Ian Ringgenberg, task force member.

Would the theater violate Iowa code by competing with the private sector?

Maly said the task force has spoken with members of the university committee that reviews such cases, and is currently putting together a document that outlines the legality of the project.

“There are a couple sections that list exemptions in the code,” Maly said. “One of them is sponsoring or providing facilities for cultural or athletics events.”

GSB representatives spoke with Paul Tanaka, University Counsel, on Tuesday, who said he believes the proposal would be “permissible” under Iowa law. Tanaka cited various other programs across the country that engage in similar activities without consequence as precedent. Turk said the representatives were encouraged to meet with Cinemark management and franchise owners to discuss the issue further.

Would the theater qualify for property tax abatement, since it’s owned by Iowa State?

Danielson said city officials confirmed earlier this week that if the Champlin family didn’t earn a profit from the lease, the building wouldn’t be assessed property taxes.

Would the property be covered under the University’s liability insurance?

Tanaka said he isn’t sure whether the theater would even require additional liability insurance. He said he believes state law would cover building’s liability, as it does the rest of campus, but that the Champlin family might ask for additional coverage in negotiating the terms of the lease.

If the theater were to require liability insurance above and beyond what the state provides, an additional budget line item would have to be added to the proposal.

— Daily Staff