For 40 years, the ArtsCenter in Carrboro has been a hub for performance and education. Over the next weeks, it may have to prove it will be around for another 40 to land an unprecedented deal with the town for a new downtown home.

On Jan. 20, the Carrboro Board of Aldermen will hold a public hearing to consider partnering with the ArtsCenter and Chapel Hill children’s museum KidZu for a new $12.1 million center. Additional informational meetings are scheduled for this week. (See box, this page.)

Under the proposal, Carrboro would fund more than a third of the cost$4.5 millionfor a 55,000-square-foot building tentatively called the Carrboro Arts and Innovation Center at East Main and Roberson streets. The nonprofits would be responsible for the remaining $7.6 million.

The decision has major implications for both the town and the local nonprofits. Carrboro’s share of the cost, which would presumably be drawn from new revenue sources, amounts to more than 20 percent of its annual operating budget.

If state lawmakers would allow the town to collect 100 percent of hotel occupancy taxes, Carrboro would have more than enough funding to pay for the new center, according to representatives of KidZu and the ArtsCenter.

“Not one citizen of Carrboro would see their property taxes go up,” says Pam Wall, KidZu’s executive director.

Construction on the four-story building would begin in summer 2016 and finish in late 2017. The land, owned by local real estate investors Main Street Properties of Chapel Hill LLC, includes a town-leased public parking lot today. Under the nonprofits’ proposal, Main Street Properties would donate the land to Carrboro and the town would lease the structure to the arts groups.

Main Street Properties also owns the site of the current ArtsCenter at 300 E. Main St., which would be replaced by a hotel, although the town has yet to receive any formal application to build a hotel on the property. If built, it would be the second new hotel on the block. A Hampton Inn opened next to the ArtsCenter in 2013.

The extra space is necessary, the nonprofits say. The ArtsCenter, which includes art studios and performing arts space, is “busting at the seams,” says Jay Miller, chairman of the ArtsCenter board of directors.

KidZu is opening a new space next month in University Mall in Chapel Hill but Wall said the group is prepared to move permanently into the proposed new building in Carrboro if it is approved.

But first, the nonprofits will need the support of the Board of Aldermen. This week, that seemed unlikely.

Many town officials are questioning the use of public funds on the project. They’re also skeptical that Carrboro leaders can convince state lawmakers to reconsider the local hotel occupancy tax allotment.

“It doesn’t fit into what we see as our role,” said Alderman Damon Seils. “It hasn’t much felt like a partnership.”

Alderwoman Bethany Chaney said the nonprofits are asking the town to finance a “high-risk plan” with little assurance that the new center is financially sustainable, pointing out that the ArtsCenter has struggled with its finances in recent years. The tax-exempt nonprofit has reported budget shortfalls in recent years. KidZu, which has no debt and has operated without shortfalls throughout its eight years, is in a relatively strong financial position, said Wall.

Chaney said the nonprofits must prove such a partnership would include substantial benefits for the town in order to justify the risk.

“This doesn’t feel like partnership,” said Chaney. “It feels like manipulation.”

Renderings for the building, prepared by Philip Szostak, a Chapel Hill architect and a member of the ArtsCenter board, show a four-story, glass-paneled building similar in design to the Durham Performing Arts Center, which Szostak’s company also designed.

However, Carrboro’s center would be less than half the size of DPAC. It would also cost less than a third of the price for DPAC, which was funded through public and private sources.

Once completed, ArtsCenter and KidZu leaders say the new building would generate millions in revenues for Carrboro businesses in the way of walk-in traffic.

Seils, however, says ArtsCenter and KidZu have much to prove first. “We would need a pretty compelling case to be made,” Seils said. “And I don’t believe that case has been made.”

CHIME IN

WHAT: Public information meeting

WHEN: Wednesday, Jan. 14, 5:30–7 p.m.

WHERE: ArtsCenter, 300-G E. Main St., Carrboro

WHY: Learn about the proposed center

WHAT: Public hearing on proposed center

WHEN: Tuesday, Jan. 20, 7:30 p.m.

WHERE: Carrboro Town Hall, 301 W. Main St.

WHY: Carrboro Aldermen will get input from residents, business and property owners

This article appeared in print with the headline “A deal far from done”