MORE

Culture Clash

William Taylor

When schoolchildren visit the Museo de las Américas, one of the first pieces Jacquelynn McDaniel shows them is a contemporary painting titled "Pensamiento," Spanish for "thought." The first thing the kids notice is a large skull peering out from the dark background, she says, and they usually hate the piece because they think it's ugly. But then McDaniel, who is the museum's education coordinator, shows them that there's more to it.

"I tell them to close their eyes for a few seconds, and when they open them, I point out the fire in the painting," she says. Then she shows them other skulls that they missed at first glance; she also encourages the students to discuss the painting's possible meanings. "A lot of them end up liking it afterward. But I tell them it's okay if they don't like a piece. I just want them to leave with a more critical way of looking at art."

As the only museum in the Rocky Mountain region to showcase the artistic contributions of all Latin American cultures (as opposed to just one or two) the Museo de las Américas was incorporated in 1991 and has been teaching people how to understand art since 1994. In addition to contemporary works like "Pensamiento," its permanent collection includes Spanish colonial paintings as well as masks, textiles, ceramics and baskets from Mexico and Central and South America. The museum has featured 38 temporary exhibits in its history; this summer it will display its 39th, with some of the works of famous Mexican muralist Diego Rivera -- a major showing for the small arts center at 861 Santa Fe Drive.

This month, the museum will honor its decade-long existence with various festivities, including a free day, a fiesta and several receptions. It has a lot to celebrate. In 1994, the first year that it was open to the public, the Museo de las Américas attracted 7,500 visitors and took in $75,000 in revenue. In 2000, more than 48,000 people visited, and by the end of this fiscal year, the museum will report more than $800,000 in revenue.

That number, a measure of the museum's remarkable growth, means the Museo may qualify for a significant increase in the funding it receives from the Scientific and Cultural Facilities District.

The SCFD was created in 1988, when voters in the six-county metro area agreed to tax themselves 0.1 percent on every retail purchase, or one penny on every $10, to help the region's cultural institutions. For the purposes of distributing the tax dollars, local organizations were divided into three tiers.

The "Big Four" -- the Denver Museum of Nature and Science, the Denver Zoo, the Denver Art Museum and the Denver Botanic Gardens -- make up Tier I and together receive 59 percent of the cash, which amounted to $21.8 million last year.

The Denver Center for the Performing Arts, the Children's Museum, the Colorado Symphony Orchestra, Opera Colorado and fourteen other nonprofits are part of Tier II, which gets 28 percent of SCFD funding, or $10.4 million.

Tier III, which is made up of more than 300 smaller, community-based organizations, such as the Museo de las Américas, the Adams County Historical Society, the Boulder Bach Festival and the Art Students League of Denver, splits 13 percent of the money, or $4.8 million.

Although Tier I is closed to new members, an organization can move up to Tier II from Tier III if it has been open for two years and meets a certain income requirement that fluctuates yearly depending on the economy; this year, Tier II organizations need to show $858,000 in revenue to qualify. Making the jump is big news. If the Museo, which gets about $32,000 a year from the SCFD, moves into Tier II, it would qualify for anywhere from $100,000 to $150,000.

The Museo's founders are elated at the prospect of collecting more than three times as much money as they do now, but they are also one of a growing number of organizations in tiers II and III who believe that the SCFD's funding structure is unfair and outdated.

When the sales-tax measure passed in 1988, Colorado was emerging from an economic bust. No one could have predicted then how quickly things would take off. The state grew by a million people over the next decade, and with those people came more tax revenue: $14 million was collected during the SCFD's first year; $37 million was collected last year. But while Tier I is a closed group, meaning the Big Four have been able to reap the rewards of a good economy without having to share their revenue percentage with anyone else, the number of organizations in Tier II has jumped from seven to eighteen, and Tier III's membership has grown from 180 to about 300.

 

Since funding is determined by an organization's revenue and its number of paid visitors, new entrants into the lower two tiers, especially large entrants, shrink the pot for everyone else.

Add to that the high-profile bond initiatives that voters approved recently for the Denver Art Museum and the Denver Zoo and the corporate money that has poured into all four Tier I organizations, and some of the smaller groups are beginning to wonder why the rich are allowed to get richer while the struggling groups suffer.

"It's important not to bite off our nose to spite our face. The meager amount Tier III groups get is better than nothing," says Everett Chavez, president of the Museo's board of trustees. "But some Tier I organizations have passed bonds, and they all have the clout to get big donations from private foundations. They're really in the catbird's seat."

In February, Colorado's Ocean Journey, one of the state's biggest and richest nonprofit cultural attractions, announced that it might apply to Tier II this summer -- a move that would mean even less money for Tier II groups.

Although voters won't be asked to extend the sales tax until 2004, Ocean Journey's pending request has many organizations thinking now about how the SCFD could be changed. The process could be a long and bitter one, and depending on how it's handled, it could threaten the future of the SCFD altogether.

"I get the sense in talking to Tier I organizations that they have more money than they know what to do with, with this tax," says Museo executive director Jose Aguayo. "They're all expanding and hiring more staff. They wouldn't admit that, but they have more than enough. At this stage in SCFD, they should restructure the whole thing and split the money three ways. That would still give Tier I plenty of money, and it would probably be more consistent with their needs."

"We need a dialogue with other groups to get greater equity," Chavez adds. "Is there such a thing as fairness in power struggles of this nature? Probably not. But is it in the best interest of Tier I to support the other tiers? You bet."


The SCFD was originally intended to benefit only the Denver Art Museum, the Denver Zoo, the Denver Museum of Nature and Science (then called the Denver Museum of Natural History) and the Denver Botanic Gardens. These institutions had historically been partially funded by the state. But in 1982, in response to Colorado's failing economy, the state legislature eliminated the approximately $2 million it had been distributing among the four.

Desperate to replace the lost revenue, some of the organizations, which had previously been free, started charging admission, while others raised their fees. But that didn't go over well with the public. The zoo, for instance, which raised its admission price from $1.50 to $3, lost approximately 338,000 visitors in one year.

That's when the late Rex Morgan, then a trustee at the Denver Art Museum, suggested replacing the lost state funding with sales-tax revenue. The other three institutions supported the idea, but they first had to ask the legislature if they could go to the voters. They quickly learned that permission would not be automatic.

When officials from smaller groups heard about the proposal, they raised a stink. "Soon they were calling the proposal exclusionary and referring to the four large institutions as the 'greedy Gang of Four,'" reads a 1992 account of the SCFD in the Chronicle of Philanthropy. "Led by Gully Stanford, director of public affairs at the Denver Center for the Performing Arts, they demanded a share of the revenue. Mr. Morgan and other trustees from the four institutions realized that adding other organizations was necessary to maintain the support of local legislators, who typically shy away from controversial proposals or charges of exclusion and unfairness."

In 1986, the Big Four finally convinced lawmakers to sponsor a bill allowing an election on the sales tax. Having learned from their mistakes, Morgan and friends included a small percentage of the tax for other organizations, but groups such as the DCPA continued to oppose it, and the bill failed. "You'll never get people to vote for something that has organized opposition, especially if it involves new taxes," Morgan was quoted as saying in the Chronicle.

The Big Four tried again the following year. This time they gave Tier II a bigger share of the sales tax; they also created a third tier to include smaller organizations. But they also agreed not to allow any other organizations to join them in Tier I. The legislature approved the bill in May 1987, allowing the measure to go to the voters in November 1988. In the meantime, the ten biggest institutions pooled almost $700,000 to campaign for the tax. Part of the campaign included surveying voters to help decide on a symbol for the SCFD; people were asked to indicate their favorite zoo animal, and the majority chose the polar bear, which now graces the SCFD's signs. When the measure finally hit the ballot, the results surprised everyone: The tax passed by a margin of almost three to one.

 

But not everyone was happy.

"They indulged us as an afterthought," says Tony Garcia, executive artistic director of El Centro Su Teatro, a Tier III cultural arts center. "They were just covering their political asses. This is archaic. It's a pot of gold for the Tier I groups who set it up for themselves. The tax passed at a time when the economy was sluggish. No one expected 0.1 percent to amount to so damn much. And now that [the Big Four] have tasted it, they like it."

Garcia recalls a meeting that took place in 1994, when the SCFD was up for reauthorization the first time. "It was nasty," he says. "Representatives from the Big Four were rude, and I was rude, too. I cussed up a storm."

Garcia says that when Aguayo, of the Museo de las Américas, suggested changing the funding percentages to give Tier II and III groups a greater share of the tax dollars, Harry Lewis, a trustee at the Museum of Nature and Science, said something like, "You're not going to touch any of our money."

"I told him he can't talk to us that way, and I called him a motherfucker," Garcia adds. "It was pretty antagonistic after that."

Aguayo remembers that exchange, too, and says Lewis also told him that Tier III organizations should be grateful to be included in the SCFD at all.

Lewis insists he never said those things. "I don't control the SCFD," he says.

During the successful 1994 campaign, which extended the tax through 2006, Garcia would not allow any TV commercials to be filmed in El Centro Su Teatro, nor would he post any of the SCFD's polar bear signs.

"I didn't tell people to vote against it, but I couldn't endorse it, either. I couldn't go out into my community and say, 'You need to support this; it's a good thing for you.' It's a good thing for a few people," he says.

"Yes, we benefit from it," admits Garcia, whose organization gets about 15 percent of its $215,000 yearly budget from the sales tax. "But we get the crumbs that fall off the table."


The fight for more crumbs is likely to intensify in the coming years. Although the current sales tax doesn't expire until 2006, the organizations will probably seek authorization to extend it again in 2004. When they do, some Tier II and III members are hoping the funding formula will be altered to spread the money more evenly.

Leading the charge against the Big Four, as he did during the SCFD's creation, is Gully Stanford, public affairs director for the Denver Center for the Performing Arts. The DCPA is in Tier II, but it has grown so big over the last decade that it's currently larger than some of the Big Four. So not only would Stanford like his organization to move into Tier I and share some of that money, he would also like it to get out of Tier II, where its size gives it claim to a huge amount of that level's money -- about 33 percent, or $2.9 million last year -- something he doesn't think is fair to the other Tier II groups.

"Tier II is caught in an onion-squeezer," Stanford says. "We're growing like topsy, but our funding isn't keeping up with the growth."

Since Ocean Journey startled Denver's cultural community by announcing its intent to seek SCFD money, Stanford has researched the situation, and his office in the old Denver Tramway building is cluttered with information. He has spreadsheets showing what each Tier II organization gets from the SCFD and spreadsheets showing the impact that Ocean Journey would have if it enters the tax district in September (when Tier II gets its next installment of tax dollars).

"This brings to a head what has been talked about informally since the SCFD came about," he says. "Should Tier I be a closed tier, or should it be possible for other institutions to qualify? One option is to open Tier I to Ocean Journey and the DCPA since we're the behemoths of Tier II."

 

Ocean Journey has had more than two million visitors since it opened in June 1999, and this year it has an $18.2 million budget, which puts it on par with the Big Four. The DCPA, with its $40 million budget and 1.3 million annual attendees, boasts more visitors and money than both the art museum and the botanic gardens.

"The DCPA outdraws the art museum and the botanic gardens combined, and yet they got a total of $7.3 million from the SCFD in 1999 while the DCPA got $2.8 million," he says.

If Ocean Journey is admitted into Tier II, it would qualify for 26 percent of the funding, or $2.3 million, he says. That would only decrease the DCPA's take by $89,000, but other organizations, many of which rely on the SCFD for more than 10 percent of their income, will lose a third to a half of their SCFD funding. According to Stanford's spreadsheets, if Ocean Journey joins Tier II, the Colorado Symphony Orchestra, which currently receives $935,000 from the SCFD, will get only $578,000; the Colorado Ballet, which now gets $441,000, will get $273,000; the Arvada Center for the Arts and Humanities, which gets $884,000, will receive $555,000; Opera Colorado's $248,000 will drop to $150,000; and the Cherry Creek Arts Festival, which now gets $100,000, will get just $59,000.

Most Tier II institutions weren't planning on sharing the tier with another large organization when they balanced their budgets for next year, especially not Ocean Journey. As a condition of receiving million-dollar grants from both the Gates Family Foundation and the Boettcher Foundation, the aquarium agreed not to apply for SCFD funding until 2004, so as not to hurt the existing Tier II organizations -- many of which the two foundations also support.

But Ocean Journey CEO Doug Townsend says the grants contained provisions allowing the aquarium to apply to the SCFD before 2004 as long as it returns some of the money to Gates and Boettcher. He says Ocean Journey wants to apply to the SCFD because the steady income stream would help the organization refinance the high-interest bonds that were issued to build the aquarium. Ocean Journey spends about $5 million a year repaying its $63 million debt; Townsend estimates he could save up to $1.5 million annually if it refinances at the current interest rate.

"We have mixed feelings about Ocean Journey coming in," says Terry Adams, executive director of the Cherry Creek Arts Festival, a Tier II organization. "Because when we came into the SCFD, we were welcomed with open arms, so we sort of feel it's our responsibility to look at Ocean Journey the same way. They have as much a right to be part of the SCFD as we do." Still, he says, the structure of the SCFD needs to be examined. "We need to be able to anticipate future additional members so that this is not something we're dealing with every year."

"If we had all been prescient when the SCFD was reauthorized the last time, maybe we could have changed the structure so that we wouldn't have this problem now," says Steve Seifert, executive director of Opera Colorado, who came up with the calculations in Stanford's spreadsheets. As it is, however, "Ocean Journey's entering now is creating a problem of greater magnitude than the SCFD has had to deal with in the past."

Mary Ellen Williams, district administrator for the SCFD, says that it's too early to speculate about Ocean Journey and that her staff won't review the aquarium's finances until it officially applies -- probably sometime before June. "The SCFD hasn't done any calculations yet because we haven't seen Ocean Journey's audited figures for 2000," she says.

But Stanford is already preparing. To keep Tier II afloat, he is proposing that Tiers I and II pool their discretionary funds -- the 10 percent of their SCFD money that they can use however they choose. If all of the groups would agree to set aside that income, they could cover Ocean Journey's portion of the SCFD funding without hurting any other organizations, he says. Discretionary funds have been used in the past to help organizations get through difficult financial times. When the Colorado Symphony Orchestra was $150,000 short of a balanced budget several years ago, the other Tier II organizations combined their money to keep it in the black. One year, the Arvada Center for the Arts and Humanities needed $25,000, and when the Colorado Ballet couldn't afford an orchestra for its production of the Nutcracker, Tier II groups ponied up another $25,000, Stanford says. "We agreed it was one for all and all for one."

Another possibility is for the SCFD to phase in the amount of funding that Ocean Journey receives by giving the aquarium 25 percent of what it qualifies for the first year, 50 percent the year after that, and so on.

 

Townsend says he's considering that option and that he's talking to the Gates and Boettcher foundations about whether a portion of the grants would need to be returned if he agrees to that phased proposal. "We're still having conversations with the other Tier IIs about how we can be sensitive to the impact we might have on them," he says. "The size of Ocean Journey certainly highlights some of the things that need to change in the SCFD, but whether it's a restructuring of the tiers or a reallocation of the money, it's too early for me to have an opinion."


These proposals are just Band-Aids, though, Stanford says, because with or without Ocean Journey, Tier II will continue to grow. The Denver Film Society, for instance, is applying to Tier II this year, and the Swallow Hill Music Association expects to apply next year. More moderately sized organizations such as these won't have as big an impact as Ocean Journey, Stanford says, but "it's still money away from the opera and the symphony and the ballet.

"There will be other Ocean Journeys in the future," he warns. "Arapahoe, Douglas and Broomfield counties and Aurora have all expressed interest in opening big arts centers. We have to change the qualifying process if we want to absorb them without destabilizing the district."

To really fix the problem, Stanford would like Tier I to be eliminated entirely; if tiers I and II were combined, he says, all of the organizations would have to compete for funding based on their number of visitors. He thinks Tier III should remain intact, however, saying, "It's appropriate for local organizations to be funded through a competitive grant process. They earn their stability as they grow to qualify for Tier II." (Cultural councils were set up in each of the six counties to distribute Tier III money, and the small nonprofits have to apply to the councils each year to receive the tax dollars; Denver County caps the amount a Tier III group can receive at $35,000.)

Such changes may not be considered for another three years, though; SCFD administrator Williams says she doesn't think the funding formula can be altered before 2004. "We'd have to consult legal counsel to find out," she says.

Furthermore, the Big Four themselves aren't likely to go along with a system that gives less money to them, especially since they already agreed to a percentage change in 1994. Prior to that year, Tier I got 65 percent of SCFD money, as opposed to the 59 percent it gets now; Tier II got 25 percent, and Tier III got 10 percent.

"To keep the peace, Tier I organizations didn't object too much when the percentages changed," says Brian Klepinger, executive vice president and chief operating officer at the Denver Zoo. But he notes that any more changes to the SCFD's structure might be a problem. "Were it to be suggested that Tier I be reduced further, it could be a serious concern. And opening Tier I to other organizations would have the same effect as cutting the pie into smaller pieces.

"We are very much mindful of the original purpose behind why the SCFD was created," he adds, "which was to ensure the continued viability of the four major cultural organizations. We hope that the original purpose will be kept in mind.

"People hear about bond money and big donations, which may give the impression that we're flush, but all of that money goes toward capital improvements and has no impact on our operating costs. Actually, it gives us added expenses, because we have to keep those buildings running. Although we're very appreciative of donations, many large donors want to see their names associated with a permanent structure. It's a lot sexier than paying for food for the animals. We have to pinch pennies every year to remain viable. Our admissions and concessions are really our bread and butter."

Brinsley Burbidge, executive director of the Denver Botanic Gardens, agrees, saying, "Obviously, I feel the structure is fair because we are, in the moment, in Tier I. My idea for the future would be to look at the whole of SCFD and at how to take this to the next level of support without reducing the money any organization gets."

Raylene Decatur, president and CEO of the Denver Museum of Nature and Science, says her organization is committed to supporting the funding formula since it's what voters approved. "It's about what people in the region want. It's not about us, as individual institutions, having opinions on the structure," she explains.

 

Gully Stanford's most extreme proposal is to ask those voters not only to extend the tax in 2004, but to increase it. "If we ask the voters for $55 million instead of $37 million, that would solve all of our problems," he says.

"That is a greedy solution, but it's justifiable. People contribute an average of three pennies a day to the tax now, so if it increased to four or five pennies a day, it wouldn't be that noticeable. But voters may not be willing to give more, and if that fails, we'd be without SCFD money entirely."

Burbidge says it's premature to comment on Stanford's ideas, but he suggests that one way to boost SCFD funding without increasing the tax would be to include other counties, such as Douglas, in the district. "If we extend the funding base, we could increase the overall funding," he says.

Right now, only the northern portion of Douglas County, which includes Highlands Ranch and Parker, is in the SCFD. In 1999 the county's cultural council asked voters in other communities, like Castle Rock and Castle Pines, to pitch in, but voters rejected it, saying the sales tax would have benefited Denver institutions far more than it would have helped those in Douglas County. If those voters could be convinced to fully join the SCFD in the future, however, it would be a windfall for the SCFD: Douglas County is one of the fastest-growing counties in the nation and is home to the gigantic Park Meadows mall and the Prime Factory Outlets in Castle Rock.

Any changes to the SCFD should be made with caution, says Denver Art Museum director Lewis Sharp. "We are probably the luckiest community in the country to have the SCFD. It was put together with a great deal of thought. It's like our Constitution: It needs to change with time, but we're working with something fragile. Whatever we do, we need to do it very thoughtfully."

The SCFD is, in fact, unique, and its success has baffled people in major cities such as Detroit, as well as in some smaller Colorado locales like Grand Junction, Pueblo and Colorado Springs, where similar measures have failed. It is also looked to as a model by cities such as Tampa, which is currently trying to establish a similar sales tax, and Salt Lake City, which has a tax benefiting arts and recreation groups. (Denver's SCFD was modeled after a property-tax district that had been created in St. Louis to fund its cultural institutions.)

"I would be remiss if I didn't say how valuable the SCFD is," Opera Colorado's Seifert says. "The tax money allows organizations to offer free days, lower admission fees and provide educational and outreach programs. Despite the friction we feel around reauthorization and Ocean Journey, I hope we all really keep our eye on the ball, and that is the enormous good the organizations are able to do because of this taxpayer support."


It will be up to the SCFD's nine-member board of directors -- six of whom are chosen by the commissioners in each of the counties in the SCFD and three of whom are appointed by the governor -- to decide if and how to amend the current legislation. Changes would be driven by feedback from member organizations, and a bill would have to be drafted and sent to the state legislature.

But there may not be a consensus among the members of the SCFD, the legislature may not approve the bill, and "there's no telling if someone will present a competing bill," says the district's Williams. If an amended version of the sales-tax initiative does make it onto the ballot, there's still one last hurdle: the voters.

That last obstacle may be impossible to overcome if the scientific and cultural organizations succumb to infighting. In Fresno, California, an almost identical initiative called Arts to Zoo went before the voters several years ago; the city's arts and science organizations proposed a 0.1 percent sales tax, of which half of the revenue was to go to Fresno's own Big Four -- the Fresno Metropolitan Museum, the Fresno Philharmonic Orchestra, the Fresno Art Museum and the Chaffee Zoological Gardens. Representatives of some of Fresno's Hispanic cultural organizations spoke out against the funding formula, however, saying groups such as Arte Americas and Radio Bilingue deserved more money.

Although the initiative was approved in March 1993 by 57.6 percent of the voters, a taxpayers' association challenged its passage in court, alleging that the tax was unconstitutional since special taxes need to be approved by a two-thirds majority. In 1996, the tax was ruled unlawful by the California Supreme Court, and retailers had to stop collecting it. Arts to Zoo supporters placed the sales-tax initiative on the ballot again last fall, but accusations of elitism resurfaced, and the measure failed.

 

Some leaders of Hispanic cultural organizations in Denver also feel disenfranchised. Even though Hispanics constitute a huge number of taxpayers, some people feel the cultural organizations that cater to them aren't getting their fair share of SCFD revenue.

El Centro Su Teatro's Garcia says he'd like to see the money distributed according to the racial makeup of the taxpayers, with Hispanic cultural organizations -- of which there are only a few -- getting a percentage comparable to that of the Hispanic population. But he knows the Big Four would never agree to give up much of their sales-tax dollars to culturally specific groups without a lot of pressure. And he's not sure Hispanics will band together to apply that pressure. "I don't think there's awareness in the Latino community," he says. "Arts are a very low priority for Latino politicians."

Stanford believes that any division within the SCFD -- no matter how small -- could hurt its chances of passing again and that the long-term survival of the SCFD should be incentive enough for Tier I members to cooperate with the other organizations. "Any short-term selfishness will, in the end, be divisive to a point where it will destabilize the district, and when it's destabilized, it will fail," he says.

In the past, he points out, these groups have managed to come together. "Denver's SCFD is viewed from coast to coast as a miracle," he says. "Very few measures have succeeded in other cities. We've succeeded because of our internal stability -- because we've gone to the voters with a unified front."

But people should be prepared for some lively debate as 2004 approaches, he adds. "It's not going to be easy. We have to make sure no one organization feels entitled to more than its fair share. We have to be prepared to make the hard choices so that whatever redesign we come up with can last another ten years."


Sponsor Content