Future funding for arts, tourism in Richardson will take a sizeable hit due to COVID-19

The Eisemann Center, which hosts performances, such as "The Wizard of Oz," will host a limited number of performances in fiscal year 2020-21. (Courtesy Eisemann Center for Performing Arts)
The Eisemann Center, which hosts performances, such as "The Wizard of Oz," will host a limited number of performances in fiscal year 2020-21. (Courtesy Eisemann Center for Performing Arts)

The Eisemann Center, which hosts performances, such as "The Wizard of Oz," will host a limited number of performances in fiscal year 2020-21. (Courtesy Eisemann Center for Performing Arts)

City officials in Richardson are planning short- and long-term recovery strategies to offset the $2.4 million revenue loss incurred by a drop-off in tourism.

The hotel industry was “immediately impacted” by the virus, Deputy City Manager Shanna Sims-Bradish said during a July 14 City Council briefing. Full-service hotels reported occupancy rates of 2.7% in April and 5.8% in May, she said.

“We started acting pretty much on March 13 trying to find ways that we could save some money in this fund,” she said. “It was a challenging environment, but we were able to make some quick decisions that put us in a better position.”

One of the immediate ways the city made up for lost revenue was by dipping into a $1 million reserve that had been set aside to repair the roof at the Eisemann Center for Performing Arts and Corporate Presentations.

“What really helped us survive is we were going into this year with a healthy fund balance,” Sims-Bradish said. "We had about $1 million in cash that we were able to put toward what we needed done this year.”


Full-service properties make up about 29% of the city’s hotel stock but bring in more than 55% of occupancy tax revenue, Sims-Bradish said. This is because they are larger and can accommodate business travel, which makes up the bulk of hotel stays in Richardson.

There were 360 events canceled between March 1 and June 30, which resulted in more than 50,000 lost bookings. Hotel occupancy tax revenue in fiscal year 2019-20 is projected to land at $2.3 million, which is $1.8 million, or 44%, below budget, Sims-Bradish said.

Some hotels have closed and many have laid off or furloughed employees, Sims-Bradish said. As of June 30, there were 223 hotel employees in Richardson.

“Some of our hotels are very minimally staffed at this point,” she said.

The performing arts industry has also been hit hard by the virus. Revenue from the city-run Eisemann Center, which feeds the city’s hotel-motel tax fund, is expected to come in $1.2 million under budget.

To soften the blow, the city has reduced expenses by $1.3 million to bring the fund’s bottom line to $5.1 million.

The city will have to make short- and long-term adjustments to restore the hotel-motel fund to pre-COVID-19 levels, Sims-Bradish said.

“There are a lot of unknowns,” she said. “We aren’t sure how the hotels are going to recover in Richardson specifically, but we feel we have a good plan on that.”

The governor’s latest order restricts performance venue occupancy to 50%, which will affect the number of tickets sold for Eisemann Center events.

“What you used to think of [as] a 1,600-seat Hill Performance Hall is now in the 300-400 seat venue under some of these requirements,” she said.

The first event held under these guidelines is scheduled for Aug. 1. Eisemann Center staff have met with clients to ensure the safety of performers, staff and guests, Sims-Bradish said.

The city is conservatively revenue in light of these restrictions, she said. Preliminary estimates project that Eisemann Center revenue will come in at $153,524 in fiscal year 2020-21, which is about $2 million less than the city was banking on before the pandemic.

“We honestly see that there probably not going to be a lot of activity until we have a safe environment for performing arts to happen,” she said.

Overall, revenue in the hotel-motel tax fund is projected to land at $1.7 million in FY 2020-21, which is $4.8 million below budget. Expenses have been reduced by $3.5 million to offset the loss.

One of the ways the city will offset the loss in Eisemann Center revenue is by suspending next year’s Eisemann Center Presents season. Only a handful of events that have a strong following will be held, Sims-Bradish said.

“It did not seem to make sense to release a new season under this situation,” she said.

The city will also reduce grant funding for arts groups, Sims-Bradish said. Arts funding is capped by the state at 15% of a municipality’s hotel-occupancy tax. The loss of revenue from hotels hamstrings the city’s ability to contribute to arts organizations, she said.

Nearly $400,000 were doled out to 25 regional arts groups in FY 2019-20, according to previous reporting by Community Impact Newspaper.

“The Cultural Arts Commission is now only accepting applications from their current groups; they are not considering new groups for next year,” Sims-Bradish said.

City officials hope that the budget projections are wrong and that they can incrementally restore funding to its local hotels and the Eisemann Center, Sims-Bradish said. Staff will continue to monitor hotel-motel tax fund revenue and expenditures and to make adjustments as needed.

“We look at hotel fund revenue weekly, daily, to see how things are moving forward and what adjustments we need to do, and we will keep doing that,” she said.
By Olivia Lueckemeyer
Olivia Lueckemeyer graduated in 2013 from Loyola University New Orleans with a degree in journalism. She joined Community Impact Newspaper in October 2016 as reporter for the Southwest Austin edition before her promotion to editor in March 2017. In July 2018 she returned home to the Dallas area and became editor of the Richardson edition.


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