Supporters of the Holly Theatre restoration in downtown Medford said Gov. Kate Brown's planned veto of $1 million in state funding will slow but not stop the project.

Led by TV and film star Jim Belushi, they gathered in front of the historic movie theater Thursday to honor almost a dozen major donors who each gave $50,000 or more toward the project. The donors unveiled tiles memorializing their gifts.

Brown gave notice late Tuesday that she plans to veto funding for four projects in Oregon — three of them in the Medford area. The Oregon Constitution requires five business days' notice of a pending veto.

In addition to cutting the Holly Theatre funding, she says she'll veto $750,000 earmarked for Harry & David baseball stadium improvements and $1.8 million for a Rogue River Valley Irrigation District piping project that would benefit fish, farmers and the environment. The cuts total $3.55 million.

Rep. Sal Esquivel, R-Medford, said the vetoes are political retribution for his opposition to Brown's health care agenda.

Medford Mayor Gary Wheeler said local elected representatives need to act quickly if they want to reach out to the governor.

"I understand her motive," Wheeler said as he stood in front of the Holly Theatre. "It's political retribution against Sal. But the reality is, it really hurts the city. This is a good project, as was the Harry & David field. I'm very disappointed."

State money could have helped pay for roofing above stadium seats to protect baseball fans from the sun. The roofing project was still in the concept stage, without an official price estimate.

Holly Theatre Restoration Committee Co-Chair Ron McUne said the loss of state funding won't stop the restoration project. The overall project cost was estimated at $4.3 million in 2011, but is likely closer to $5 million in today's environment. The project is currently out to bid.

With more than 2,400 donors involved, the community has raised more than $3.8 million, McUne said.

Recent major contributors include Asante Health System, Belushi, the Blum Family Foundation, James Collier, Robert and Suzi Given, the Harry and Yvonne Lenart Charitable Foundation, the M.J. Murdock Charitable Trust, the Joe and Frances Naumes Family Foundation and the Oregon Community Foundation.

McUne said project supporters hadn't been depending on the $1 million approved during the Oregon legislative session and now under veto threat, but the loss of the money adds a hurdle to the restoration efforts.

"It's maybe going to set back our construction by a few months, but we're confident that the community is still going to come forward and support this project," he said. "So I'd characterize it as a setback, but not a huge loss."

Although significant work already has been done to shore up the theater and restore its exterior, McUne said it will take another 12 to 14 months to complete the entire project. That construction could start early next year.

Donors who give during current fundraising efforts will have their money doubled. The M.J. Murdock Charitable Trust is offering a $300,000 matching donation. The match plus donations could total $600,000 for the restoration project, McUne said.

"We'll get there. We have to. We need it," he said.

To make a donation, visit www.hollytheatre.org. For more information about donating, email info@jeffersonlive.org or call 541-772-3797 ext. 512.

Belushi — an actor, comedian and musician who has long supported the project — said the opening of the theater will help revitalize downtown Medford when plays, concerts and other events can be staged there.

"The relationship between the performers and the audience is one of magic," he said.

Once restored, the 1,003-seat theater will become the largest indoor venue in Southern Oregon, generating a $3 million economic impact each year, backers said.

As for the irrigation piping, the $1.8 million the governor plans to cut represents key funding for the $5.9 million project, said Rogue River Valley Irrigation District Board President Bryan Baumgartner.

"We were definitely counting on it," he said.

Baumgartner said the project has so many benefits, he believes the governor will change her mind when she reviews its merits.

Piping a 3.3-mile stretch of irrigation canal in the Little Butte Creek watershed would stop substantial leakage. The water conservation would allow the irrigation district to leave more water flowing in the creek — benefiting coho salmon that spawn and migrate there, Baumgartner said.

With piped, gravity-pressurized water, farmers could switch from flood to sprinkler irrigation. Agricultural run-off from flood irrigation would no longer flow back into streams, according to the irrigation district.

Known as the Bradshaw Drop Piping Project, it would serve as a model for how piping all local irrigation canals would conserve water, protect habitat, improve water quality and boost the economy, according to the irrigation district.

Baumgartner said the project has widespread support from the agricultural, environmental and business communities, as well as from elected officials.

"It's a collaborative effort. We've got a good base of folks who support this activity," he said.

Meanwhile, Esquivel is calling on people concerned about the Medford area funding cuts to call and email the governor's office.

The governor’s office can be reached at 503-378-4582 or via email at www.oregon.gov/gov/Pages/contact.aspx.

The veto apparently grew out of Esquivel's decision to flip his support for a health care tax. In June, Esquivel voted for the tax bill in the House of Representatives, which ensured passage of a $550 million health care tax plan the governor supported. The tax bill was key to closing a gaping budget hole and preventing cuts to the state's Medicaid health insurance program for low-income Oregonians.

In return for his vote, Esquivel said, he was promised funding for projects that included the Holly Theater, baseball stadium and irrigation piping.

He was the lone Republican to join Democrats on the tax bill — pushing the vote count to the three-fifths supermajority needed to raise taxes. Esquivel is not running for reelection.

Less than a month later, Esquivel and two other Republicans filed paperwork with the state to launch a voter referendum on the bill. Referendum backers need to gather 59,000 signatures to get the issue on the ballot, potentially during a special January 2018 election.

Awaiting the outcome of the vote could delay the tax bill's implementation, jeopardizing tax revenue. Voters could decide to overturn the bill, which closes more than one-third of the state's $1.4 billion deficit, the Associated Press reported.

Esquivel said he made no promises to continue supporting the governor's health care agenda beyond his vote in the House. He said he grew concerned about funding for abortion as well as health insurance coverage for children who entered the country illegally.

Brown issued a statement about her veto of the three Medford area projects.

“The cornerstone of all negotiations whether they occur in a public or private arena, is the implied covenant of good faith and fair dealing,” she said. “I believe each of these projects should be considered during the 2018 session to be evaluated on their merits.”

Chris Pair, communications director for Brown, said Wednesday that she would make no additional comment about the three projects.

He did not respond to a Thursday request for comment about whether Brown is reconsidering the vetoes and whether her office is getting many calls and emails from Southern Oregon residents and officials.

Rep. Pam Marsh, D-Ashland, said she is going to stay out of the dispute between the governor and Esquivel.

"This is an issue between the governor and Rep. Esquivel," she said. "My intention is to focus on the projects that were de-funded, work with the constituents and go to bat for them in the next funding cycle."

She noted there is still an opportunity for Brown to change her mind during the five-business-day notification period.

"It's not final until Tuesday," Marsh said.

— Reach staff reporter Vickie Aldous at 541-776-4486 or valdous@mailtribune.com. Follow her at www.twitter.com/VickieAldous.