The Madison Board of Estimates unanimously denied an Overture Center proposal last week that would pay back the art center’s construction debt. However, an official decision has yet to be made.

The Overture Development Corp., which is responsible for the $205 million Overture Center, wants the city to help pay back its $28 million construction debt.

The proposal would cost taxpayers $12 million, forcing them to pay approximately 43 percent of the debt, along with potential interest.

“City taxpayers have no liability in that regard,” Madison Mayor Dave Cieslewicz said. “This issue needs to be resolved by the owner of the facility and the banks that hold the debts.”

Under the plan, philanthropist W. Jerome Frautschi, who financed the $205 million to construct the Overture Center, would contribute $4 million of his remaining $5 million pledge.

Madison Cultural Arts District, the entity that operates the Overture Center, would also supply $4 million — all of its reserves.

Part of the $12 million asked of the city would be taken from the pilot $500,000 paid to the city by the ODC in lieu of taxes each year.

JP Morgan Chase Bank, U.S. Bank and M&I Bank, who have lent money to help finance the Overture Center, are asked to forgive $8 million in debt.

“I never saw a council more opposed,” Ald. Tim Bruer, District 14, said. “They are expecting the city to jeopardize its own financial standing.”

In 1998, when Frautschi offered the $205 million grant to the Overture Center, $105 million was placed into a trust fund controlled by MCAD with the intention of earning enough interest to pay the debt back on the building.

Along with paying the mortgage, the trust fund also supplied $1.4 million a year to pay employee salaries and operating expenses. On average, the operating income of the Overture Center is $12 million.

The trust fund ran a surplus for the past four years, not including 2008. When the trust fund value fell below $100 million, the Overture Center could no longer provide $1.4 million to MCAD each year. When the value of the trust fund fell below $93 million, the banks liquidated the fund.

“Right now, we don’t have a trust fund,” Chappell said. “We’re operating OK, but we’ve got $28 million due in three years.”

Cieslewicz said he is open to discussion on how the Overture Center may go forward, hinting at purchasing the center after the debt is funded.

City Comptroller Dean Brasser discussed the plan to repay the Overture Center construction debt at the Madison Board of Estimates meeting Jan. 12. He admitted the ODC has not spoken to the liable banks yet but spoke about them possibly offering a loan at a much lower rate.

All of the members of the Board of Estimates conceded the Overture Center is important to the arts community. However, they do not think city taxpayers should be responsible for paying the construction tab.

MCAD formally agreed to the proposal Jan. 13, after which the mayor will render his formal decision in a week.