March 09, 2006
Theater Conference Recap
Contributing Writer, John Clifford, recently attended a conference on how to finance the rehabilitation of historic theaters. Here is what he had to report about the experience:
The League of Historic American Theaters (LHAT) held a conference on “Financing Historic Theater Rehabilitation Projects,” February 8-9 at the Wilshire Grand Hotel in downtown Los Angeles. Attending the seminars were theater owner/operators from around the country, including Oregon, Nevada, Alaska, Massachusetts, South Dakota, Utah, Washington, Wyoming, Michigan, and Texas. From California, there were representatives from Fontana, Fresno, Pomona, Riverside, Fullerton, Santa Cruz, and the Wilshire Theater and Los Angeles Theaters in Los Angeles. Each had a historic theater that was in some stage of restoration and/or operation as a theater.
Prior to the start of the seminar, attendees were given a personalized tour of the historic Los Angeles Theater on Broadway in downtown Los Angeles. Theater manager Cary Upton, explained the current condition of the Los Angeles Theater, its operations, and the future plans for the 12-theater Broadway Theater District proposal.
The two-day seminar series featured first day speakers: Killis Almond, theater project architect and Dennis Sankovich, executive director of the Riley Education and Performing Arts center at Mississippi State University, each of whom have been involved is several theater restoration/operations. They discussed the challenges in financing a historic theater from the point of view of the operator. Subjects included working with boards of directors, what kinds of consultants are necessary, fundraising, marketing, and construction. Real life examples were sited throughout of successful theaters, both production and presentation houses, and how they’ve dealt with and overcome these challenges.
The second day of the seminar was a more nuts and bolts discussion of utilizing historic preservation tax credits and new market tax credits. Speakers for this session were: Chris Fedukowski and Kirk Carrison of the National Trust Community Investment Corporation, who package tax credit funding and have funded theater projects with tax credits, Ralph Megna from Empire Development Solutions in Riverside, and Herb Stratford, executive director of the recently opened Fox Tucson Theater, and Craig McPike of Snell & Wilmer L.L.P.
Tax credit financing for up to 20% of actual construction costs has been a boon to many historic restoration projects. However, the process is not for the faint of heart. A project must be at least a $10 million project in order to make the financing worthwhile, both to the project and the funding organization, and requires complex partnership agreements between the theater owner and the organization providing the tax credit funding. Since the tax credits are available for corporations with a tax liability and most historic theater projects are non-profit, and thus have no use for the tax credits, a mutually beneficial partnership must be arranged between the non-profit and the funding organization. In the discussed case of the Fox Tucson, this was a very complex arrangement that included a city redevelopment agency, the Fox non-profit, the tax credit funding organization, and three different for-profit partnerships created for the project. This project took advantage of both Historic Preservation tax credits and New Market tax credits available for projects in designated economic development areas. However, with the tax credits providing up to 97 cents on the dollar of upfront funding, this arrangement ended up providing the capital necessary to complete the much heralded project, which opened on New Year’s Eve, 2005.
The conference was capped with a reception/tour of the Pantages Theater in Hollywood. Expanding beyond the attendees of the conference seminars, the reception included other theater owner/operators including the El Capitan, Music Box, El Rey, Orpheum, and other LHAT members. The reception also served as a “preview” of the upcoming League of Historic American Theaters Annual Conference and Theater tour which will be held in Hollywood, July 19-22. The annual conference includes workshops on professional development in such areas as fundraising, presenting and programming, technical aspects of theater restoration and operation, and board and staff development, among other topics. Additional information on LHAT and their programs is available on their website at: http://www.lhat.org.
Article by John Clifford. Mr. Clifford has served as a board member and officer of Hollywood Heritage, Pomona Heritage, and the Pomona Fox Corporation. A long-time preservationist, he lives in Pomona with his wife Deborah and daughter Ariel.
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