Come October 1, Carhenge may be owned by the City of Alliance.
Alliance Visitor’s Bureau director Kevin Howard and city manager J.D. Cox presented a due diligence report to the City Council Thursday morning which recommended acquisition of the 26-year-old Stonehenge replica. The report stemmed from a December, 2012, Friends of Carhenge request to have the city accept ownership of the property. The City Council expressed interest in the acquisition and directed city staff to investigate the matter.
Friends of Carhenge board members Marcia Buck, Dave Pearse, and Kendra Schott provided a variety of reasons for offering the city the quirky tourist attraction, including the fact that the Nebraska Tax Equalization and Revenue Commission has ruled that Carhenge is no longer tax exempt, and will be subject to property taxes beginning this year.
The Alliance Chamber of Commerce board of directors approved a resolution Thursday afternoon, endorsing the city’s acquisition of the property, noting its positive impact on Alliance in the form of tourism dollars and community notoriety.
City Manager J.D. Cox says the council will probably act on the matter later this month or in July. If the acquisition takes place, it would be effective October 1, the beginning date for the city’s next fiscal year.
Posted below is the city staff due diligence report as presented to the city council.
CONSIDERATIONS
Financial
Cost Payment of City: $ 0
Value of Assets $113,000 (Bank Note: $ 5,340)
– Profit & Loss –
2012 Revenues: $ 39,000
2012 Expenses: $ 39,000 (includes advertising, payroll, insurance, utilities and other fees).
In addition, when managed with the full wherewithal of the City and its staff, the attraction offers the opportunity to be able to further profits, for example expanded hours of operation, reasonable (and initially limited) landscaping.
Insurance –
– City has obtained an opinion from insurance (Traveler’s);
– The City may incur possibly up to an additional $1000 in annual premiums above what Friends of Carhenge have paid;
– At the time of assumption, Traveler’s will then determine if an additional engineer’s evaluation will be required by underwriting;
Handicap Accessibility –
– According to City Engineer (Baker & Associates) and the City Attorney (Simmons-Olsen), handicap accessibility is not an issue.
City Standards-
– Pathways
Staff has calculated that materials for pathway to be approximately $14,000.
-Security –
A security system exists already, and Police would swing by occasionally. Alliance Police Department officers are deputized agents of Box Butte County Sheriff.
Utilities-
– Electric – PREMA
– Water – Confirmed … Operational Approximately $1500 per year for testing and mtg. Small sprinkler could be added.
– Sewer –Confirmed … Operational $0 to $300 per year for mtc.
– Refuse Pickup – Could add
– Gas Service – Not utilized
– Air/Heat – Confirmed & Operational
Displays-
– Friends of Carhenge are planning summer projects to paint cars and place rock inside of the circle
Parking Lot-
– Operational and Functional. Could be dragged …little to no out of pocket.
Gift Shop-
– Operational and Function. Would need to hire seasonal/part-time (just as Friends have been doing)
Maintenance/Upkeep/ Clean Up-
– Hire part-time seasonal staff
– Set up a new storage shed and mower
– Relocate “backup” existing mower to the attraction site
Marketing/Education-
Continue with billboards – current agreement with Westco and landowners, update website; print/distribute brochures when current supply runs out
Interpretive displays will come at a later date
Legalities-
– A city can own property outside of its corporate limits.
– The City can receive gifts of land. Neb Rev St 16-201.
– The acceptance of the gift is consistent with our gifting policy.
– City can pass ordinances to protect the property and provide for its operation.
Risk
– The maximum risk, as mitigated through the City’s insurance seems limited with the annual operational costs.
– If the City were to decide it wished to abandon the project in the future, the property and inventory could be sold either with the cars or without.
Benefits
– Expertise of Departments
– Ability to easily hire either seasonal/fulltime and share with another department
– Knowledge of Visitors’ Bureau to manage and to consider as a part of the greater marketing effort of City
Public Acceptance
Issues with public opposition to the attraction seem to no longer be strong. The City Manager’s office, after having talked extensively on the project and heavy newspaper received not one complaint or even concerned and/or neutral interaction with neighbors in the community. All interactions were positive.
MAJOR CON’S
- It will require an investment from the City to clean up the 10 acre area, put in safe pathways, and for future upgrades to the attraction
- There should be an initial, visible improvement as soon as the City takes over to garner neighbor support and start to build the attraction to its potential
- Not all the benefits of Carhenge are visible (the attraction draws visitors to Alliance who spend money in the town)
- Carhenge is a quirky roadside attraction that brings world-wide attention and visitors to the City of Alliance
MAJOR PRO’S
- Very little risk (value of land and of attraction far exceeds the size of the bank note)
- No out of pocket cost of acquisition
- Many positive responses and very little opposition to the City accepting the gift of Carhenge
- After initial clean-up, the area is very low maintenance
- Carhenge is an Economic Engine for Alliance
- Investments will be returned to the city in sales from the Pit Stop, and in increased tax revenue from other businesses as the attraction grows to reach its full potential
- The opportunity to “sell” the other attractions in Alliance to increase the economic impact
- The potential to grow the attraction and produce more income is a reasonable assumption
- Friends of Carhenge plan to:
- Put new rock in the circle this summer
- Paint all cars and displays this summer
- Friends of Carhenge will remain
- The fund-raising arm of Carhenge
- To standby and lend their expertise in the interim
- The City does have the option to sell Carhenge in the future (to a developer, etc)
- Possible new supplemental office for Visitors’ Bureau
RECOMMENDATION
Based upon the due diligence performed on this matter and the information presented above, it is the recommendation of Staff to accept the gift of Carhenge effective October 1, 2013. Our plan is to bring documents for the City Council to formally consider the matter at an upcoming Council meeting.
Background/Other Information
Carhenge was built by Jim Reinders during a family reunion in 1987 as a memorial to his father, Herman Reinders.
Thirty-eight automobiles were placed to assume the same proportions as Stonehenge with the circle measuring approximately 96 feet in diameter. Some autos are held upright in pits five feet deep, trunk end down, while those cars which are placed to form the arches have been welded in place. All are covered with gray spray paint. The honor of depicting the heel stone goes to a 1962 caddy.
Friends of Carhenge (Friends) began in 1988 as a crusade to save the popular tourist attraction from the wrecking ball when the sheriff’s department was called to a property north of Alliance because “someone” was planting cars in a field there.
Soon the city council got involved as it was within the jurisdictional boundary of the city and ordered the car art torn down. Councilman Paul Phaneuf was instrumental in the fight to Carhenge alive. In September 1989, the Friends of Carhenge began the preservation projects for what is now known worldwide as Carhenge.
Reinders donated the 10 acres of land where Carhenge is located to Friends of Carhenge in 1994, who now owns and maintains it. They have added a paved parking lot, picnic tables, an educational display board, and a gift shop. Additional sculptures have been erected at the site, known as the car art reserve. One of the first sculptures to be added to the car art reserve is a sculpture of a spawning salmon. Since then many other sculptures have been added including Reinders’ “Fourd seasons,” “Dino, the Carnastoga,” as well as many other smaller sculptures make up the car art preserve.
The attraction’s uniqueness, novelty and unusual components continue to draw the attention of film and television production crews. Enthusiasts estimate Carhenge to attract 80,000 tourists from all over the world.
Past action taken
October 5, 1989 – Alliance City Council passed a proclamation urging citizens to contact Friends of Carhenge to offer assistance in their endeavors.
February 15, 1990 – Alliance Planning Commission voted to remove Carhenge from the jurisdiction of the city
June 7, 1990 – Alliance City Council adopted resolution 90-20 declaring Amesbury, England (home of Stonehenge) the twin city of Alliance, Nebraska (home of Carhenge)
Recent Developments
In October of 2011, Friends of Carhenge announced that Carhenge was for sale.
In May 2012, Friends first approach Kevin Howard and J. D. Cox inquiring if the city might ever consider assuming Carhenge. Board members reported that their volunteers were “tired” but wished to ensure that the attraction endures.
On July 17, 2012, at a hearing before the Nebraska Tax Equalization and Review Commission and subsequent determination on August 17,2012, the Commission determined that the Friends of Carhenge is not an educational organization, Carhenge is not being used for an education purpose, and Carhenge is not a museum nor historical society. Furthermore, the Commission determined that the gift shop is not used for any kind of educational purpose.
Due to the Commission’s findings, they recommended the Box Butte County Board determine the taxable value of the entire property to be in excess of $70,973 ascribed to the gift shop and land.
Also in August 2012, the Department of Revenue issued an opinion to the State Tax Equalization Committee that Carhenge would not be exempt from taxes and therefore owed $1155.
The Friends of Carhenge felt they could not bear the additional costs of paying taxes on the property.
One offer to purchase Carhenge was rejected by the Friends as the buyer was wishing to relocate the cars to another town. To our knowledge, there were no other offers.
On October 30, 2012, a followup meeting between Kevin Howard, J. D. Cox and Friends Board Members to further followup and to discuss possibly approaching Council.
On December 20, 2012, Friends of Carhenge Board Members Marcia Buck, Dave Pearse and Kendra Schott approached the Alliance City Council on the possibility of the City accepting Carhenge as a gift. The City Manager was tasked with project of studying the proposal.
On June 13, 2013, City Staff presents conclusions from due diligence to City Council.