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U.S. House of Representatives,

Subcommittee on Public Buildings and Economic Development,

Committee on Transportation and Infrastructure,

Washington, DC.

    The subcommittee met, pursuant to call, at 9:00 a.m., in Room 2253, Rayburn House Office Building, Hon. Jay Kim (chairman of the subcommittee) presiding.

    Mr. KIM. The subcommittee will come to order.

    I wish to welcome all of the members this morning. The subcommittee is meeting this morning to receive testimony on H.R. 1747, a bill to authorize the design and construction of additions to the parking garage, site improvement, and certain improvements to the theater at the John F. Kennedy Center for the Performing Arts.

    This bill is unique in that the language prohibits the use of appropriated funds for the garage expansion and purchase of large screen format equipment and production of an interpretive film, both of which will be paid for by industrial revenue bonds. Proceeds from the garage and the film will be used to repay the bonds.
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    Following the testimony, the subcommittee will then proceed to mark up House Resolution 1747.

    Now I call on our distinguished Ranking Member, Mr. Oberstar, for his brief opening statement.

    Mr. OBERSTAR. Thank you very much, Mr. Chairman. I appreciate you holding this hearing and to begin the process of providing the authorization necessary for the Kennedy Center to undertake the infrastructure investments that are necessary to operate the Center as efficiently as possible.

    Few people realize the vast extent of private sector investment in the Kennedy Center, and it is very much to Mr. Wilker's credit and to Chairman Jim Johnson's credit that they have generated so much private sector support.

    You cannot accommodate the visitation that is necessary to support the kind of activities the Kennedy Center has attracted, premier presentations, without adequate parking. The Kennedy Center has worked vigorously to expand its facilities and to provide better access to the Kennedy Center.

    I anticipate this morning President Wilker will show us the plans that have already been developed for changing the access to the Kennedy Center, which I have already seen, and Chairman Shuster is already familiar with. I can say they are very, very exciting plans. I look forward to this morning's hearing and markup. It is a matter that I think should be resolved very expeditiously by the Chairman.
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    Thank you, Mr. Chairman, and I thank Mr. Traficant for his splendid support and attention to these matters.

    Mr. KIM. I would like to call on Ranking Member, Mr. Traficant, for his opening statement.

    Mr. TRAFICANT. I would like to commend Mr. Wilker. I also would like to say that it is now understandable that the Board of Trustees has decided to issue industrial revenue bonds to finance this construction. Rather than going through the Federal pocketbook for construction monies, the trustees have created a bonding approach to pay for the garage. I think that makes sense. It is the way to do it, and I am just pleased to be a part of support of this.

    So I think the creativeness is very commendable. I applaud your efforts and I will support your efforts and continue to support the Kennedy Center.

    Mr. KIM. Mr. Traficant, thank you.

    Do any other Members wish to make a statement this morning?

    Mr. DUNCAN. Mr. Chairman, I don't have a formal statement, but let me just say that I appreciate very much the work that goes on at the Kennedy Center. I think it is a tremendous national asset. I worked very closely a few years ago with Chairman Wolfensohn on legislation to allow the Kennedy Center to become independent, and I am familiar, very familiar, with the work that President Wilker performs, and he has been doing just a great job.
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    As some people know, I question some of these things a lot of times very closely. But as is pointed out in the background briefing, the visitation to the Kennedy Center, 4 million annually, has far exceeded original expectations, and I just want to say that I think that, as I say, I really appreciate what is going on there, and I just wanted to put that on the record.

    Thank you very much.

    Mr. KIM. Thank you.

    Now, I would like to welcome our witness this morning, Mr. Wilker, the President of the John F. Kennedy Center for the Performing Arts. I look forward to your presentation this morning.


    Mr. WILKER. Thank you, Mr. Chairman.

    Mr. Chairman and members of the subcommittee, I am Larry Wilker, President of the John F. Kennedy Center for the Performing Arts. I am very happy to appear before you today with the Center's Project Executive, James Kirkman; Assistant General Counsel, Debby Buchholz; and Legislative Associate, Jared Barlage.

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    I am submitting to the committee a complete written statement. In my remarks, I want to summarize the work of the Center and what it has done in preparation for H.R. 1747, the John F. Kennedy Center Parking Improvement Act of 1997, and describe for the subcommittee the need for timely enactment of this legislation.

    Let me begin by saying that we have worked diligently with the staff of this subcommittee in putting together this legislation, and we thank the staff for all of the help and time that they have devoted to this bill.

    The bill before the subcommittee will enable the Kennedy Center to proceed with the construction of a parking garage addition with the proceeds of an industrial revenue bond issue and without the use of appropriated funds.

    This legislation will also enable the Kennedy Center to proceed with site modifications, principally the relocation of the entrance driveway to the building using anti-terrorism supplemental funds already appropriated to the board.

    The roadway relocation will solve some of the most critical security problems at the site by moving vehicles away from the front of the structure. Under the present configuration, traffic is routed all along the front East Plaza of the building within 12 feet of the exterior wall of the building. Relocation will also significantly reduce congestion in the neighborhood around the site.

    I have brought with me a model, which is to my right, and a map showing the proposed garage expansion and driveway relocation.
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    Mr. Chairman, the Center has been working for a number of years on plans for these changes, conducting studies, analyses, and making presentations to the appropriate entities in preparation for the introduction of this legislation. In 1995, the Center undertook an extensive study of the site and long recognized concerns about traffic congestion and the lack of adequate parking facilities. Then earlier this year, Peter Hart Research & Associates conducted a survey that confirmed that the number one concern of Kennedy Center patrons and visitors is the inadequate parking and traffic congestion at the Center.

    More than 4 million people visit the Center each year, including 7,000 patrons on most evenings. There are only 1,400 parking spaces currently available, which is grossly inadequate. This same study revealed that the Center's new initiative, offering free shuttle service to and from Foggy Bottom Metro Station, does not sufficiently address the parking problem.

    Regarding site modifications, which are described in full detail as an attachment to the written statement, the roadway relocation proposal is clearly the most important issue. The relocation is critical from a security standpoint. The Center engaged Connelly & Associates, a security consulting firm, to conduct a security survey of the Center. In a report we have attached with the written statement, the study concluded that the most important measure that should be taken as soon as possible to reduce the risk to the building and its visitors is to move the roadway away from the front of the Center.

    Engineering cost estimates show that this project can be accomplished with the $3.4 million that were appropriated to the Center in the anti-terrorism security supplemental legislation passed last year.
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    Early in the conceptual phase, the Center presented concepts for a garage addition at the north and south ends of the building and for site modifications to the Commission of Fine Arts and the National Capital Planning Commission. The Commission of Fine Arts found the concept feasibl0ne and a enhancement to the architecture of the structure. In fact, at a subsequent presentation before the Commission of Fine Arts just 10 days ago, the commission gave its verbal approval of the project.

    We have been working with the National Park Service which has helped develop this plan and has since approved the conceptual plan for the access, circulation, parking and landscaping of the site.

    Having obtained approval from the Secretary of the Interior through the Park Service, the Center will consult further with the Park Service and the Fine Arts Commission before proceeding with the projects.

    The Kennedy Center will also assure that the standards established by the National Environmental Policy Act are met. In fact, an environmental assessment of the proposal is currently under way. After completion of that assessment, the projects will be submitted to the National Capital Planning Commission to secure that agency's views and note its recommendations.

    In addition to funding the garage expansion with the proceeds of an industrial revenue bond, and without appropriated funds, the Center has also developed plans similarly to finance the production of a large-screen format film about the performing arts in America and for equipping the interpretive theater with large-screen format film equipment. I have attached a study by W. Michael Sullivan Consulting Services with a written statement that shows the feasibility of such a film.
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    The Kennedy Center contemplates that the source of funds for the garage expansion and for the large-screen format film production and equipment will be the proceeds of a tax-exempt industrial revenue bond which will be issued with one or more series to coincide with project requirements and market conditions. We project that the IRB obligations for these projects will be repaid from revenues generated by the Center's garage and from the presentation and distribution of the large-screen format film.

    Neither the Federal Government nor the Kennedy Center trustees individually will be liable for repayment of the IRB indebtedness. The Center has been assisted by appropriate experts in this field by both the law firm of Arent Fox and the investment banking firm, Morgan Stanley. The estimated cost of the garage addition is $25 million, and the film and equipment is $7 to $10 million.

    Mr. Chairman, as you know, the Kennedy Center's total operating budget is $100 million, only $20 million of which are Federal dollars. The Center's Board of Trustees is responsible for the remaining 80 percent of the budget.

    In initiating the 1994 amendments to the John F. Kennedy Center Act, this committee enhanced the unique private-public partnership that is represented by the Kennedy Center. H.R. 1747 takes this concept to its next stage. It would permit the Kennedy Center board to make a necessary addition to the building without the use of appropriated funds, using the revenues generated by the garage expansion to repay the financing.

    This method of self-financing also can be applied to the Kennedy Center's production of a large-screen format film, and equipment for a large-screen format film theater, if H.R. 1747 is modified as we suggest. H.R. 1747 would permit the board to proceed with site modifications that have been developed carefully in consultation with the National Park Service to assure that the Kennedy Center building and site are maintained in a manner that is consistent with surrounding park lands.
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    The recent Connelly study indicates that the initial stage of site modifications relocating the entrance roadway will alleviate a very serious security problem which can be accomplished with the anti-terrorism appropriations already available to the board.

    We appreciate this subcommittee's continued oversight and attention to the Kennedy Center's plans and programs, and I thank you for your time this morning.

    Mr. KIM. Thank you for that fine presentation.

    Are there any questions from the Members? Mr. Traficant?

    Mr. TRAFICANT. I have a list of questions I would like submitted. If you could answer in writing for the record, I would appreciate it.

    I appreciate your testimony and the written report that you have given. I think if everybody did this, this subcommittee would have very little problem trying to decide what to do. So I want to commend you on your testimony. I have a number of questions, you touched on some of them, and I ask you to submit answers in writing for conclusion in the record.

    Mr. WILKER. We would be pleased to do so.

    [The information received follows:]

    [Insert here.]
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    Mr. KIM. Any other questions from the Members?

    Mr. OBERSTAR. Thank you, Mr. Chairman.

    Thank you, Mr. Wilker, for your presentation, for so clearly articulating the need for these structural changes and benefits that will accrue to the Kennedy Center, to its patrons, and the security improvements that will result. It is a matter that may be taken lightly in this town because the Kennedy Center, like so many of our other national monuments, is taken for granted. But when you see the security surrounding the White House, the trial just concluded over the Oklahoma City Federal building bombing, the security needs of the Kennedy Center are evident. I know from my work on the Pan Am 103 tragedy, we cannot be too cautious and too careful.

    How many parking spaces does the Kennedy Center now have?

    Mr. WILKER. We have 1,400 spaces in the current garage.

    Mr. OBERSTAR. That is down from what it was prior to the resent reconfiguring; isn't it?

    Mr. WILKER. No, that is what it was designed for. Unfortunately, it was designed with an inadequate number of spaces given the number of patrons who visit the Center. With as many as 7,000 people per evening, and an equal number during the day, the Kennedy Center is one of the most visited sites in Washington and has grossly inadequate accommodations for people who drive and who wish to park at the center.
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    Mr. OBERSTAR. Have the surveys that the Kennedy Center commissioned attempted to ascertain how many parking spaces would be necessary if everybody who came to the evening performances needed one?

    Mr. WILKER. Well, an adequate number of parking for a facility of that magnitude would be in the range of around 3,500 spaces. Given the configuration of the site and the limited space available, what we are proposing to construct is probably—not probably—is the maximum size expansion of the site and the garage, which will give us about another 900 to 1,000 spaces.

    Mr. OBERSTAR. What does the Center do with tour bus traffic?

    Mr. WILKER. Currently, the tour buses clog the roadways and the areas around the Watergate. Actually, by relocating the entrance roadway, it removes that congestion and all of the fumes which now permeate the area, and also the way the air intakes are constructed for the Kennedy Center, some of those fumes are taken into the HVAC system. This will relocate the tour buses and provide adequate parking for them off to the south of the Center.

    Mr. OBERSTAR. What would be the cost for construction of a new garage?

    Mr. WILKER. The new garage will cost about $25 million.

    Mr. OBERSTAR. Do you have financial performance projections for that project?
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    Mr. WILKER. Yes, they have been developed with Morgan Stanley.

    Mr. OBERSTAR. Could you just show for the committee members the current circulation problem, for example, those just stopping to get tickets, and how this new arrangement will make it more convenient for people who are just making a brief stop, that won't cause congestion on the plaza, how that is all going to be rerouted?

    Mr. WILKER. Certainly. If you will permit me, I will go up to the chart.

    There is so much on here, it may be difficult to see. Here is the East Plaza of the Kennedy Center, and what happens is that you have all of the cars and all of the buses coming right in this one area, right up against the side of the building. So not only is it a horrendous security problem, because you can have 50 to 60 cars and buses lined up against the side of the building, but everybody is backed up against one another.

    Under the proposed plan, we would push the roadway out more towards the edge of the existing highway and bring the traffic around the far side of the Saudi Embassy, this way. The traffic going to the garages would stay on the outside, and then there would be a drop-off created in front of each of the main entrances, which are more easily controlled by the security forces and keeps the traffic moving away from the building. It does not permit anyone to park along here.

    Right now, there is such an expanse that cars are constantly stopped or left alone at the front of the plaza. It is almost impossible to enforce.
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    Mr. OBERSTAR. That is really the big security problem, cars stopping there, people leaving cars, going in, or even buses, and potentially a bomb situation.

    Mr. WILKER. The buses would have to drop people off, and would be relocated and parked behind shrubbery and landscaped areas back here out of sight to the south of the building.

    Mr. OBERSTAR. Thank you very much.

    Mr. KIM. Are there any Members who have questions? Yes, the gentlelady from D.C.

    Ms. NORTON. Thank you, Mr. Chairman.

    Mr. Wilker, first let me express my appreciation for the work that the Kennedy Center has been doing in Washington, particularly with youngsters. Much of this began under your predecessor. I hope it continues. It has been important and much appreciated to see the Kennedy Center brought closer to hometown Washington.

    I certainly want to commend you for the way you have dealt with this problem of parking and security at no cost to the government, either for construction or for borrowing. As well, let me say that I think the way you have chosen to deal with the security problem is something that I hope others under the jurisdiction of this committee will observe. We are not here dealing with roadblocks or closing off the world to the world. We have a deplorable situation in front of the White House. It really makes you wonder whether or not in this country we have lost our creative imagination, to think of ways to do what we have to do without becoming a garrison state. Of course, it would have been particularly outrageous if this great performance and artistic institution were to have in light of the security needs been able to find no better way than we have found around the White House. The President and Chief of Staff agreed to sit down with me so we can see what we can begin to do about Pennsylvania Avenue. The Speaker has come up with a very common sense suggestion, I must say, because the Secret Service will tell you on Pennsylvania Avenue that somebody could bring a truck and so we said, why don't you just keep the trucks moving. They said somebody could bring a car and stop. The Speaker said, you know, why don't you have some people stationed out there to keep traffic moving, taking us back, I must say, to basics.
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    What you have done not only deals with the security problem, but I think you have enhanced the attractiveness of the area. It probably is more appropriate for it to be done this way, rather than for these cars and buses to be a constant parade in front of the building. I think you have managed to both improve the security and to further beautify this important institution.

    May I say, Mr. Chairman, that the GSA now has before it the important problem of how to secure other agencies in the Nation's capital, and it is going about it in the right way. It is going to the community, to businesses, to residents, to agencies to get as much participation and input as possible. But we really do face the specter, if we are not as creative as the Kennedy Center has been in approaching its problems, of saying, hey, the Nation's capital is closed to the public. If you wanted to come in here, you can get on a bus hired by—a bus run by the State or you can walk, but there is no way to have normal commerce and normal traffic downtown.

    GSA is trying to deal with this in part by grading buildings according to their vulnerability. But I believe that what the Kennedy Center has done in moving forward on its own, without the government, is to indicate to the government that if you think hard and use your brains, you may be able to keep this an open democracy while protecting our government institutions.

    I thank you, Mr. Wilker, and I thank you, Mr. Chairman.

    Mr. KIM. Are there any other Members who wish to ask questions at this time?
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    Mr. DUNCAN. Mr. Chairman, I will just say I agree with Ms. Norton on several things, reopening Pennsylvania Avenue is one. But I also, like her, appreciate the fact that the Kennedy Center has opened itself to having performances by groups from all over the country, including even groups of young people from my State of Tennessee.

    But let me just, Mr. Wilker, just ask you this. I have already stated that I support this, if you say this is what you need. But this is a total cost of $25 million, when your annual budget is $100 million; this is a significant expenditure. So I am assuming that you would consider this the number one priority, the number one thing that is needed by the Kennedy Center, or are you and the staff unified that this is a really important project to the Center?

    Mr. WILKER. Mr. Duncan, it is one of the highest priorities that the Center has. The accommodation of visitors and patrons to the Presidential memorial and the national Center for the Performing Arts, which allows them to have a hassle-free and successful visit, is very important to us. What we have tried to do is to do it in a way that will not be a burden to the Federal Government, knowing the kinds of pressures that there are on the budget.

    Mr. DUNCAN. Well, I might say on the earlier legislation when I have worked with the Kennedy Center, I have always appreciated the fact that you raise so many of your funds privately. I think you really set an example for the rest of the Federal Government in that regard.

    Thank you very much.
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    Mr. WILKER. Thank you.

    Mr. KIM. At this time, I would like to recognize Mr. Tom Davis, the gentleman from Virginia, for 5 minutes.

    Mr. DAVIS. I apologize for being late. Can you just walk me through the route access into 66 coming out of the Kennedy Center? It will not be affected?

    Mr. WILKER. If I understand your question, Mr. Davis, it is getting from the Kennedy Center on to 66?

    Mr. DAVIS. Right now it is a pretty easy loop coming out.

    Mr. WILKER. The way it exists now, you would come out of the plaza and have to go up to Virginia Avenue and make that loop around the Howard Johnson Hotel. That will remain. This plan also contemplates a cut, opening a cut that was there years ago, apparently, before my time at the Kennedy Center, that will have a second egress that will allow you to go after the performances to reverse this route, this new road, and enter right on to the access road that blends right into 66 this way. So it will improve actually the egress.

    Mr. DAVIS. Good. Thank you. That is my only question.

    Mr. KIM. Are there any other Members who wish to ask any questions at this time?
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    I would like to ask a couple of questions myself. I understand it is going to cost $25 million for the garage addition, and $7 to $10 million to build this giant screen device.

    Mr. WILKER. That is correct.

    Mr. KIM. Lumping together, you propose to issue this industrial revenue bond; is that true?

    Mr. WILKER. Yes.

    Mr. KIM. Now, my first question is, who is liable for this bond?

    Mr. WILKER. The Kennedy Center as an institution is liable. Not the Federal Government.

    Mr. KIM. All right. How many years will this bond mature?

    Mr. WILKER. I believe, and I will have to check on this and get back to you for the written record, but I believe it is in excess of 20 years.

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    [The information follows:]

Maturity of the Industrial Revenue Bonds
    The maturity date or dates of the industrial revenue bonds issued for the benefit of the Kennedy Center will be determined at the time of issuance, with due consideration of market conditions and the projected renenue streams from the parking garage addition and large screen format film. The determination will be made in consultation with the underwriting investment bankers and financial advisers. Whether the interest rate will be fixed or float, the use of hedging in the event of the use of a floating rate, the use of credit enhancement, and other terms of the issuance will be determined at the same time and in a similar manner.

    Mr. KIM. And do you have any idea of what parking fee will be necessary to take care of this cost?

    Mr. WILKER. We are projecting a rate equal to the rate we charge today with some escalations for normal inflation. But not any dramatic rise in rate.

    Mr. KIM. How much is that?

    Mr. WILKER. Currently it is $8 in the evening and $3 during the day.

    Mr. KIM. Have you had a chance to review this proposed change to the bill we are about to undertake today?

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    Mr. WILKER. Yes, we have.

    Mr. KIM. Do you have any problem with the change that is proposed?

    Mr. WILKER. No, sir.

    Mr. KIM. Okay. Well, I don't want to be nitpicking, but looking at the design, you have got the buses coming in, unloading the groups. Do they have a walkway there? How are they going to get to the building?

    Mr. WILKER. Yes, actually there are two circular drop-off drives that peel off the traffic, particularly the buses that drop people off. They will stop in here while the other traffic goes across the front and then people walk directly into the building.

    Mr. KIM. That is the bus drop-off. I see.

    Mr. WILKER. They will depart right in front of the doors, yes.

    Mr. KIM. They can make a U-turn and go back, I suppose?

    Mr. WILKER. Yes. What we would do is have them park down in here. This is all bus parking to the south of the building, near the Roosevelt Bridge, right up against the abutment of the Roosevelt Bridge. They will then come back at the appropriate time and pick up the passengers.
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    Mr. KIM. Do you have any other changes in to make in the near future? Are you going to come back to Congress asking for more appropriations or any other bond that you wish to undertake in the future?

    Mr. WILKER. At some point in the life of the Kennedy Center we hope to find a way to open the river terrace down to the Potomac River, but we haven't developed those plans yet, so we don't have any timetable for it. But hopefully some time in the next decade we would be able to figure out a way to make that happen and really connect the Center, not only to the Potomac, but in the other direction to the monumental corridor, so that a visitor to Washington could enjoy all of the wonderful monuments and institutions in Washington and virtually walk from the Capitol, down the mall, across to the Kennedy Center, and down to the Potomac.

    Mr. KIM. Thank you. Thank you, Mr. Wilker.

    Mr. WILKER. Thank you, Mr. Chairman, very much.

    [Whereupon, at 9:25 a.m., the subcommittee proceeded to other business.]

    [Insert here.]