ArtStart charts path to stay at current building

ArtStart’s future at 68 South Stevens Street has been in question for several weeks, after the Rhinelander city council tabled the non-profit’s request for assistance in paying for a new boiler at an April 14 council meeting.

However, a solution that keeps ArtStart in the city-owned historic building may be on the horizon.

The city council agreed Monday night to pledge the building on South Stevens Street as collateral for a loan that will allow ArtStart to pay off a new boiler.

Earlier this month, the director of ArtStart requested the city help fund a new boiler for the building, which ArtStart leases from the city.

Under the current lease agreement, ArtStart is responsible for the building’s maintenance and repairs and has invested roughly $340,000 into the building to date, according to operations director Ashley McLaughlin.

The boiler system, which is original to the building, has been acting up in recent years, requiring frequent replacement of the circulation pumps.

The issue, if it lingers, could force ArtStart to no longer occupy the building, McLaughlin said.

The total for the boiler replacement, which was bid by Johnson Controls, is $185,000, McLaughlin said.

Prior to coming to the city council, ArtStart was offered assistance from Focus on Energy, a state program that helps residents and businesses select and install cost-effective energy solutions.

Focus on Energy offered the non-profit a $50,000 grant and is willing to issue ArtStart a five-year, zero-percent loan to pay for the boiler replacement.

“That grant is good until the end of the year,” ArtStart board member Craig Zarley said. “We have to install the boiler by year end and have it paid for and then we get a $50,000 grant from them, which is then used for the first annual payment on a five-year loan.”

Zarley told the city council that ArtStart has been turned down by commercial lenders because they cannot offer any collateral, as they do not own the building. In order to take advantage of the loan, ArtStart needs the city to pledge the building as collateral.

“We’re in a pickle if we don’t do that,” Zarley said.

With the city council signalling Monday night that they will pledge the building, ArtStart’s next step is to proceed with the boiler installation, which will be paid for with the zero-percent loan from Focus on Energy. The plan is for the first annual loan payment to be made at the end of the year using the $50,000 grant from Focus on Energy.

“They take that money, they take it from the right hand and put it in the left hand and that pays for the first year,” Zarley said.

Provided everything goes as planned, ArtStart won’t have to make another loan payment until December 2026.

In the meantime, the city council passed a resolution instructing city administrator Patrick Reagan and city attorney Steven Sorenson to renegotiate the lease contract with ArtStart.

It’s possible the new contract could include some financial support for paying off the boiler. At the April 14 meeting, McLaughlin said splitting the loan with the city would cost roughly $15,000 a year for both parties.

Alderperson Steven Jopek said he was worried that without city assistance, the building might sit vacant.

“Worse case scenario we’re on the hook for maintaining it and on top of that the value becomes exorbitant,” Jopek said. “…The $15,000 is concerning and that makes sense, but I don’t think it’s concerning enough to just go with all the unknowns and say let’s throw it to the wind and let something else sort it out.”

Both motions — pledging the building for the loan and entering negotiations with ArtStart — were passed by the council unanimously.

Mayor Kris Hanus said the items were split into separate motions so that the loan could move forward before negotiations are complete, in the event that the latter takes more time to sort out.

Sorenson said he expects both items to come back to the council at its next meeting.

Michael Strasburg may be reached at [email protected].