The Historic Theatre Dream on Broadway

By Eric Richardson
Published: Monday, August 23, 2010, at 09:24AM

Theatre Foundation (LAHTF) have a dream for Broadway’s old movie palaces. Right now the group is trying to find a buyer to purchase the Spanish gothic-styled United Artists Theatre and lease it to the nonprofit. We asked Wright about the challenge for the August 12th issue of blogdowntown Weekly.
The UA has been on the open market for eight months now. Why hasn’t it sold?
In the best of real estate markets, a 12-story office building and 1600-seat movie palace combo is a highly specialized property. Pastor Scott places a high priority on finding a buyer who will respect the historical integrity and take care of the building and theatre and make a positive contribution to the revitalization of Broadway. Some adjustments from the original pricing have been made recently to better reflect the current Downtown market.
What’s the upside for a buyer to come in and lease to you? Could they still turn a profit?
There are many owner/developers with strong track records in profitably restoring and rehabbing historic office buildings. On the other hand, the list of accomplished, successful private owner/operators of for-profit historic theatres is very short. If a benefactor to purchase the entire United Artists parcel for the LAHTF (and/or another non-profit operator) does not materialize, we’d be very interested in working out a deal with a partner to buy the property and set up a lease-purchase deal for the theatre. The developer could potentially make money on the office building piece and recoup some of the purchase price by splitting the theatre from the parcel.
So, yes, it is feasible that a private investor could buy the building, lease or sell the theatre to the LAHTF, and make a profit.
How would a revived United Artists compete with a theater like the Orpheum? Are enough shows interested in coming to Broadway to keep multiple screens and stages busy?
A revived United Artists Theatre would serve more to complement the Orpheum than to compete with it.
The Orpheum has about 400 more seats than the UA, which will always be a solid advantage to a for-profit promoter. The Orpheum operates strictly as a rental house - it does not produce and present shows. It rents the theatre to promoters, producers and film locations, who bear the expense of producing/promoting the event and they collect the profits or suffer the losses from the event presented.
This model works for the Orpheum, but means that often the theatre is not booked for days/weeks at a time.
The goal of non-profit operation of the UA (and other Broadway theatres) would be to keep the theatre overhead very low and to activate the theatre by keeping it lit and busy as much as possible. A combination of rental users, shows we produce (i.e. film series, premieres and special events), and shows the LAHTF would present or co-present with promoters, sponsors and underwriters. This fare could include a popular priced Broadway subscription series, dance - fine arts series, major speakers and all manner of music and concerts. Profitable show would subsidize shows that lose money.
The key to keeping the UA overhead low is to raise money from public and private sources to fund the purchase, restoration and rehabilitation, so the theatre is brought up to modern production requirements and is bought and paid for. There’s a huge body of experience around the country that proves this concept. If freed of the debt service for purchase, restoration and re-hab, the theatre can operate on a breakeven or better basis. There are 10 more theatres to fully activate on the street.
When successful at the United Artists, the LAHTF could take on the management and operation of several other theatres on the street using this model and the economies of scale that central management and operation would afford. If all 12 theatres on the street are privately operated, who will ensure that all 12 are not dark at the same time for days or weeks?
Finally, Broadway producers and promotors will go wherever they think they can make money. Thanks to Steve Needleman and the Orpheum, it has been proved that there is money to be made on Broadway’s historic stages and screens.

link to article...

http://blogdowntown.com/2010/08/5605-the-historic-theatre-dream-on-broadway