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Helmut Schmidt, Published May 11 2012

How the stage was set: Journey from Trollwood to Bluestem paved way for $5M debt

FARGO - Who knew that a facility built for summer musicals could generate so much winter and spring drama?

The Bluestem Center for the Arts in south Moorhead has been more a source of headaches than high art since December, as debt problems have led to a standoff between the Fargo School Board and Bluestem fundraisers who appear ready to walk away from nearly $5 million in unpaid debt.

It’s hard to remember, but what unhappy taxpayers are calling a boondoggle was once seen as the cure for the chronic flooding at the old home of Trollwood Performing Arts School in north Fargo.

It’s also hard to remember that putting a Fargo School District program in Moorhead wasn’t such a far-fetched idea a decade ago as the communities began to cooperate more and more across the border.

But those are a couple of factors that led to the creation of the $15 million facility on the Red River – and in a roundabout way, the $5 million debt the district may now be forced to swallow.

Vicki Chepulis spent more than 30 years of her life at Trollwood, many as its executive director.

From the start of the theater program in 1978, up until 1993, she said it grew and prospered in Trollwood Park. Then a summer flood in 1993 threatened the main stage.

At first, TPAS tried to make the Trollwood site work, but the flood of 1997 made it clear that constant erosion and river threats made the site untenable for the long term, she said. In 1998, FutureBuilders was developed to be a professional fundraising arm for Trollwood.

In the following years, Chepulis said at least 14 sites in Cass and Clay counties were vetted.

It was in 2000 that Moorhead began to seriously court TPAS, seeing it as a gem that could be sited in one of the city’s parks, such as M.B. Johnson Park.

“We tried really, really, really hard to find a site in Cass County and Fargo in particular,” Chepulis said, but there was no funding available from the city of Fargo, Cass County or the state of North Dakota.

A Moorhead site made more sense as leaders considered the increasing number of children on both sides of the river who were taking part in Trollwood’s programs.

In June 2003, Minnesota Gov. Tim Pawlenty approved the $5.5 million in bonding for the arts facility in a bonding bill.

But the site was still up in the air, until 2004, when 174 acres, including Town and Country Golf Course, came up for sale. By August of that year, the deal was sealed, Chepulis said.

FutureBuilders eventually started its capital campaign, and ground was broken in 2007 on the new Trollwood site.

Chepulis praised the Fargo School District’s assistant superintendent for business services at the time, Dan Huffman.

“Dan was masterful,” she said, handling all aspects of the project. “Dan Huffman’s expertise in construction and in understanding finances … was definitely a plus.”

It was a deadline for collecting the $5.5 million in Minnesota bonds that was the deciding factor in two financial decisions by the Fargo School Board that now loom large.

In both cases, the board was told by Huffman that the money was needed as a form of bridge financing.

Construction had started in 2007, and if the facility wasn’t done by Dec. 31, 2008, the Minnesota bonds would be lost, he said.

The school board voted 9-0 in January 2008 to approve a $3 million interest-free loan. Members Laura Carley, Don Faulkner, Dinah Goldenberg, Paul Meyers, Rick Steen, Robin Nelson, Dan Fremling, Meg Spielman Peldo and Jim Johnson agreed to front the money, with the promise FutureBuilders would continue fundraising and the district would be paid back in three to five years.

Meyers said after years of successful fundraising by FutureBuilders, the board was confident of payback.

“Really, there was not a huge negative concern,” Meyers said.

The school district had a sufficient cushion in its ending fund balance to meet any foreseeable commitments and to back the construction, Meyers said.

In late September, the school board was then asked to guarantee a

$3.5 million bond issue by Clay County to provide the final funds to finish the Bluestem Center.

Again, they were assured FutureBuilders would pay bond payments to the bank. That request passed on an 8-0 vote, with Carley, Faulkner, Fremling, Goldenberg, Johnson, Nelson, Steen and John Strand supporting the issue. Meyers was absent, district records show.

“There wasn’t a question of not doing it. We needed to finish the project,” Meyers said.

The one-time assistant superintendent for business services, Huffman, who works in a Twin Cities-area school district, could not be reached for comment.

It was also 2008, and as construction was underway, the U.S. economy began to nosedive. Chepulis said FutureBuilders also decided to take on fundraising itself, and she was no longer involved.

The financial wheels finally fell off the train at the end of December of last year, when FutureBuilders, which had taken on the same name as the new facility, Bluestem, failed to make a $286,000 bond payment.

The Fargo School District has since been picking up operational costs, hoping to help Bluestem get back to fundraising.

Recently, the school district took over operational and scheduling decisions.

With the revelation Tuesday that Bluestem fundraisers want the district to forgive the $2.7 million used from the original $3 million loan, and pay off and forgive the $2.1 million in remaining bond payments, the future of a relationship between Bluestem and the school district has been questioned.

Meyers said he believes Bluestem can still get the fundraising job done if it sticks to encouraging support of Trollwood.

“There has been some mission creep with Bluestem to the point where they feel the facility’s strengths lie in concerts, weddings and other events,” Meyers said.

Chepulis said the change in leadership for Bluestem may have led to a loss of vision.

“The sense of two separate organizations, that almost end up being competitive, doesn’t bode well for either organization’s success,” Chepulis said.

“What’s needed now is one leader, one team, working on one plan that has incorporated in it a vision that is shared by everybody. And that vision is bottom line community service,” Chepulis said.

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Readers can reach Forum reporter Helmut Schmidt at (701) 241-5583