Council hears $79.4 million design and operations plan for proposed Flower Mound Arts Center; staff outlines funding options

Design and business‑plan consultants told the Flower Mound Town Council during a work session that the proposed Flower Mound Arts Center would prioritize a 650‑seat main theater while expanding gallery space and adding a flexible second performance/studio area. Michael Tingley of Bora presented program changes that enlarge the gallery to about 1,500 square feet, simplify a second performance room to a 120‑seat flexible studio and retain back‑of‑house support and an orchestra pit to attract higher‑level performers.

Duncan Webb, the operations consultant, presented a conservative five‑year pro forma that anticipates year‑one operating costs of about $2.5 million, roughly $1.3 million in earned revenue and an initial contributed income target of about $520,000, leaving an estimated town subsidy gap of approximately $600,000 in year one that declines toward about $500,000 by year five. Webb said the plan assumes a mix of ticket sales, rentals, food and beverage and private fundraising, and recommended operating the venue through the town’s Parks & Recreation department with a private partner (the Flower Mound Arts League) supporting fundraising and volunteer programs.

Tingley provided an early construction cost estimate of $79,400,000 and said the design team believes scope‑management could reduce that by about 5 percent to reach the town’s $75,000,000 target; the estimate includes roughly $6,000,000 for site development. He described features meant to increase rental flexibility and revenue — removable and raiseable platforms on the main stage, full technical systems, and a catering kitchen — and said the smaller flexible space will include natural light, blackout options and the ability to subdivide for multiple uses.

Council members questioned the benchmarks and requested additional fiscal detail. Several members asked whether hotel occupancy (hot) tax could be used to cover operating subsidy and what compliance steps would be required to show a direct 'heads and beds' benefit; staff said some municipalities use hot tax for arts facilities but that allocations must meet state requirements and would require evidence of outside visitors and hotel stays tied to programming. The consultant estimated a conservative annual operating impact for the town and region of about $3.6 million in new economic activity, $830,000 in new earnings and about 15 new jobs tied to regular operation (separate from construction impacts).

Town Manager James Childers told the council the project has completed Phase 2 (pre‑design and programming) and outlined four paths the council could direct staff to pursue: pause the project for further study, place a financing measure before voters (which would permit general obligation financing), stop the project and reallocate TIR/TIRS funds, or proceed now using a tax anticipation note tied to TIR/TIRS funding. Childers warned the council that pausing could risk construction‑price escalation and that legislative changes could affect debt vehicles used for financing.

Council directed staff to return with additional financial scenarios, including refined hot‑tax estimates, fiscal impact (sales‑tax) projections tied to visitor spending, and models that show what service reductions would be necessary to avoid adding the center’s operating subsidy to the general fund. No formal decisions were made on funding or scheduling; staff said it will bring requested analyses to a future meeting.