Acknowledging that the Burnsville Performing Arts Center got off to a rocky start, the Burnsville City Council last week commended the current executive director for turning it around and agreed to renew the contract of his management firm, VenuWorks of Ames, Iowa, for at least two more years.

But the renewal comes with caveats: Some of VenuWorks' compensation will be tied to its continual improvement, and the city wants the right to reconsider the contract if a new executive director is appointed.

The city-owned arts center opened five years ago and operated for the first three years at a significant deficit and with many complaints from residents.

"We took heat galore in many different forms and flavors for a long time," City Council Member Dan Kealey said. The current executive director, Brian Luther, "has been a godsend to this facility and he is the reason it is doing so well," Kealey said.

Council Member Mary Sherry agreed: "Indeed, those first few years were rocky. The complaints that I would take were just overwhelming. Since Mr. Luther has been here it's been wonderful. He has done a wonderful job."

But, Kealey said, "while it's abundantly clear that we have the right executive director … the question is does he have the right company behind him."

VenuWorks is excellent at filling the center for plays and theater, but the company could do better at bringing in corporate events and concerts, Kealey said.

"We need all three maximized. The number we expect is a zero operating loss — period. Gone are the days when we are going to accept $250,000 losses," Kealey said.

"There is a belief that this can be a zero-operating-loss facility. We may not ever make money, but we sure as heck should not accept anything less than zero operating loss."

Sal Mondelli, chairman of the city's Performing Arts Center Commission, said the first year the arts center lost $540,000 and the second year $430,000. But last year the loss was about $250,000 and the latest projections estimate there will be a loss of $239,000 this year, he said.

VenuWorks had an original two-year contract with the option to renew each year for three years after that. The current contract will end in December. The city requires open competition for the contract every five years. This winter, three competitors expressed interest and two pursued the contract: VenuWorks and LHR Hospitality Management of St. Paul. After reviewing their qualifications, the commission recommended renewing VenuWorks.

Last week, the City Council approved VenuWorks with the understanding that the commission will negotiate a contract with the firm and return it to the council for review and approval by early July.

Council members said they want a contract for no longer than two years with options to renew one year at a time. And they want the option of reviewing the contract if the current executive director leaves.

This time, the city will change the contract from a flat monthly fee to a percentage paid on a monthly basis and a percentage paid for hitting improvement goals including bringing in more revenue by selling naming rights to the center and having fewer dark days in the theater.

Kealey said he regrets he and Mayor Elizabeth Kautz did not sit through the entire contract process with the commission. The council is involved now by reviewing the contract and approving the terms, which will make it accountable to voters, he said.

The arts center is a "$20 million investment by the taxpayers for the taxpayers," Kealey said. Cities typically are not in the business of running arts centers and "this is our first contract renewal. This is a milestone for this facility and for this council and for the city."