Tag Archive for dpac

Creative Financing to Build a Theater a City Demands

Durham Performing Arts Center Stage

Durham Performing Arts Center Stage

Garfield Traub Theater Development Case Study

The Need: A high-quality downtown performing arts center had been a goal of the City of Durham for many years when Garfield Traub and its team were selected by the City to develop the center. Independent studies identified substantial market demand for touring Broadway musicals, concerts and other entertainment.  Downtown momentum was already building with the redevelopment of the American Tobacco Historic District, The Durham Bulls Athletic Park and other signature projects.  Duke University had an older arts facility it wanted to demolish for building new campus facilities, and Duke and the city wanted to preserve Durham as the headquarters for the American Dance Theater which needed new facilities.

The Challenge: Durham’s downtown development activities were very enterprising, but the City was insisting that the private sector invest in and share risk and responsibilities with the City.  Furthermore, the historic 1,000-seat Carolina Theatre of Durham and its Board of Directors and community supporters were very concerned what a new theater would do to this beloved local institution and its future.

The Risk:  While recognizing that the ownership and capital financing of a new performing arts center would fall primarily to the City, the City did not have the desire or the resources to operate or accept the associated risks of operating and promoting a performing arts center.

Durham Performing Arts Center Walkways

Durham Performing Arts Center Walkways

The Opportunity: With both the City and Duke and some influential civic leaders seemingly ready to contribute and move forward, and the city having engaged two theater specialists to assess the marketplace, the missing piece was to add a development and finance leader to the effort.  Garfield Traub in concert with a local design firm, Szostak Design Inc., was selected to lead the team that would deliver the DPAC.

The Solutions:

  1. Financing – The DPAC was funded primarily by low-cost City financing that did not require a voter referendum.  Sources of funding included taxable Certificates of Participation repaid by a portion of Citywide Hotel Occupancy Tax, facility naming rights, a Duke University grant, an operator loan and philanthropic sponsors.    Furthermore, Garfield Traub led a selection effort that resulted in the City negotiation of a public/private partnership between the City as facility owner and Nederlander Organization and Professional Facilities Management to be the operator and promoter of the Durham Performing Arts Center (DPAC).  The operator submitted a proposal to operate the DPAC, assume the risk of operating losses, and guarantee theater activity to ensure that City economic impact goals would be met.  Those goals included (1) Pedestrian activity and downtown vitality, (2) Construction and permanent job creation, (3) Increased property valuation and taxes in the vicinity of the theater, (4) Increased city visitation, including hotel room nights, dining, retail and transportation spending, and (5) Inducement of adjacent, private investment and business activity.
  2. Delivery – With Design-Build not being allowed as a form of delivery within North Carolina at the time, the team recommended and the City agreed to use a Construction Manager At Risk (CMAR) contract to ensure a predictability of on time and on budget success.  The DPAC was completed ahead of schedule and under budget.
Durham Performing Arts Center (DPAC)

Durham Performing Arts Center (DPAC)

The Result:  The ambitious initiative led to the opening of the DPAC.  It is owned by the City and The DPAC has exceeded the original projections of attendance, surplus cash flow and economic impacts by multiples of original projections, and has contributed greatly to the development of many new restaurants, retail, office, and other related mixed-use developments, in spite of the recession in full force upon the opening of the theater in 2009.  Five new downtown restaurants opened in the first two years of DPAC operations, despite the national recession. The DPAC produces $28 million in annual economic impact according to the Durham Convention & Visitors Bureau, and was rated #1 by trade publication Pollstar as the top-selling theater in the U.S. and #2 in the world for the first half of 2012.  Projections for surplus cash flow after operations were originally conservatively estimated at $400,000 per year, with approximately $160,000 (40%) going to the City. The actual results have exceeded the original, purposefully conservative projections by a factor of ten! This year the DPAC reported a net income of more than $4.5 million in fiscal 2011-12, with $1.8 million of these funds going to the City of Durham.

Co-promotion and joint marketing activities have proven that “a rising tide raises all ships” for a properly planned arts venue.  As evidence, in spite of early concerns that the DPAC would be competitive with the historic 1,000-seat Carolina Theatre of Durham, less than three years after the grand opening of  DPAC, it was announced that the Carolina Theatre was ranked among the top 100 theaters in the world in attendance for the first time in its history.   This Garfield Traub-led venture proves what smart partnering of the public and private sectors can accomplish.

To find out how your City can successfully build a performing arts center or any other public development to meet your City’s needs contact Garfield Traub.

DPAC Impresses Yet Again With $1.8 Million Annual Net Profit

Durham Performing Arts Center Stage

Durham Performing Arts Center Stage

The Durham Performing Arts Center (DPAC), a public/private development led by Garfield Traub Development of Dallas in partnership with Szostak Design of Chapel Hill, reported recently a net income of more than $4.5 million in fiscal 2011-12, with $1.8 million of these funds going to the City of Durham. Under its operating contract with PFM/Nederlander, the City receives 40% of the annual net income from the theater to use for amortizing debt and maintaining and paying other costs related to the City-owned Theater.

DPAC director Bob Klaus reported attendance to be over 417,000, with 25% of attendees being first-time patrons.  Over one-third of the performances were sold out, and the SunTrust Broadway series has already counted almost 11,000 subscribers for the 2012-13 season.

DPAC’s largest attendance for the past season was the return performance of “Wicked”.  82,000 people attended 32 performances, just two years after a successful first run at the DPAC.

Projections for surplus cash flow after operations were originally conservatively estimated at  $400,000 per year, with approximately $160,000 (40%) going to the City.  Fortunately for the DPAC and the City of Durham, the actual results have exceeded the original, purposefully conservative projections by a factor of ten!

Bob Klaus, General Manager of the DPAC, commenting on the performance of the theater, said “the expectations were high, but we beat all expectations”.

Just last month, Pollstar ranked DPAC as #2 among the top 100 best-selling theaters in the world, second only to the Auditorio Nacional in Mexico City, and the #1 top-selling theater in the US, beating out widely-known theater markets like Los Angeles and New York City.

The reputation and performance of the DPAC continues to validate the vision and leadership of the City and its development team which worked so collaboratively throughout the development process.  Public/private partnerships are now being aggressively promoted across the nation, and the Durham Performing Arts Center stands as a paradigm of success of public/private collaboration.

Contact Garfield Traub Development if you would like to see how they can help create your City a successful performing arts center like the DPAC.

Garfield Traub Development DPAC Rated #1 Top-Selling Theater in U.S.

DPAC also rated #2 top-selling theater in the world

DPAC

Durham Performing Arts Center - Durham, NC

The Durham Performing Arts Center (DPAC), developed by Garfield Traub in partnership with Chapel Hill architect Szostak Design in Durham, North Carolina, has proven itself yet again against the best of the best and is now rated #1 by trade publication Pollstar as the top-selling theater in the U.S. for the first half of 2012.

If that were not impressive enough, DPAC scored the #2 position in the top 100 selling theaters in the world, second only to Mexico City’s Auditorio Nacional.  And since the rationale for the development of the DPAC was doubted by many prior to its opening in 2008, this is a very special achievement for all those involved in the DPAC from development to delivery.

“It all starts with great shows, and for us to have two big multi-week blockbusters in the same season really tipped the attendance scales”, said Bob Klaus, DPAC’s General Manager in the Durham News Service. “It’s a credit to Nederlander and PFM and the great shows they bring us, this will truly be a season to remember.”

Today the attendance statistics have been released for DPAC’s 2011-2012 season, which includes 200 performances bringing in a total of 417,180 guests and 67 total sellouts. The highest attended shows were Radio City Christmas Spectacular with 38 performances and Wicked with 32 performances.

“We at Garfield Traub are extremely proud of what the DPAC has accomplished,” said Garfield Traub Principal Greg Garfield. “It is an honor to be able to say we participated in the development of the project, and we could not be happier for all those involved.”

Since the opening of the DPAC in 2008, the theater has consistently ranked on the top of Pollstar’s top-selling theater rankings, but has also won other awards such as:

  • Numerous local Reader’s Choice Awards
  • The Independent Weekly’s “Best of” winner for Best Theater Venue – 4th Consecutive Year
  • The Herald Sun’s Reader’s Choice Award for Best Live Entertainment – 4th Consecutive Year
  • Raleigh’s Metro Magazine’s Standing Ovation for Best Theater – 3rd Consecutive Year
  • Durham Magazine – Best Place for Live Music and Best Place for Live Theater – 2nd Consecutive Year
  • And #3 in gross ticket sales among venues with a capacity of 5,000 or under in the soon to be published July 28th mid-year charts for Billboard Magazine.

Since the DPAC’s opening in 2008, 520 ticketed events have been presented drawing in more than one million attendees.  For more information about the DPAC and how it was successfully developed, visit the Garfield Traub website.

Durham Performing Arts Center (DPAC) Proves Big City Benefits Once Again

Durham Performing Arts Center (DPAC)

Durham Performing Arts Center - Durham, NC

If you were reading the Garfield Traub Public Private Partnerships blog recently you would have seen our last article titled, “Dallas Convention Center Hotel Development Brings Big Benefits to City.” There we explained how convention center hotel developments are boosting city revenue and bringing in new visitors and business in large numbers. Additionally, you may have read towards the end of the article about performing arts centers allowing cities to reap similar benefits. A press release from the Durham Performing Arts Center (DPAC) was released yesterday titled, “DPAC Gets Ready to Celebrate 3 Monumental Years,” reinforcing our point even more.

The DPAC press release cited that the Durham Performing Arts Center is celebrating multiple achievements in the month of November, including being named once again in the top 10 theater venues in attendance in America, the New York Times Travel section recognizing the DPAC as “an integral part of the city of Durham’s continuing success,” and the celebration of the DPAC’s 3rd Anniversary on November 30, 2011.

In a previous article titled, “Garfield Traub Development DPAC Proves Skeptics Wrong” we noted that trade publication Pollstar named DPAC #2 in the U.S. for attendance, and #4 internationally in 2011 Pollstar’s Top 100 Theater Venues for ticket sales. The DPAC has stated that, “In the U.S., DPAC is on the heels of the Coliseum at Caesars Palace in Las Vegas- a theater often referred to as the home of the greatest entertainers of the world, and the legendary Fox Theatre in Atlanta. Trailing DPAC is #4) Nokia Theatre L.A. Live , LA, CA #5) Beacon Theatre, NY, NY #6) Broward Ctr. Au-Rene Theater, Fort Lauderdale, FL, #7) Radio City Music Hall NY, NY, #8) Verizon Theatre at Grand Prairie, Grand Prairie, TX, #9) Orpheum Theater, Omaha, NE and #10) Dreyfoos Theater, West Palm Beach, FL.”

With a new theater development like the Durham Performing Arts Center being built in a down economy, like the Dallas Convention Center development, taxpayers and some city officials were skeptical. However, as time has proven again and again, it is these developments that, if planned well, can make the difference how a city weathers and how quickly a city recovers from a down economy.

Durham Performing Arts Center Representative Reginald James Johnson was recently asked by KCPW radio station, Utah’s first and only 24-hour commercial-free news and information radio station, if there was an economic benefit to building the DPAC. Mr. Johnson replied by saying, “The Durham Performing Arts Center opened in bad economy in 2008, and when the DPAC first opened they sold out and restaurants surrounding it were thriving despite others in most other cities plummeting in sales.” And Schuster Center Representative

Schuster Center

Schuster Center Dayton, OH

Ken Neufeld answered that same KCPW question by saying, “Dayton, Ohio was behind the scene and needed to be put in a favorable position to recruit businesses and people. Statistically, arts amenities are one of the top three things people are looking for when moving or coming there. Over half of ticket sales for the Lion King Broadway show were made up of those who had never been to theater before, thus bringing in new customers for all businesses located around the Center. Performing arts centers are an infrastructure that smart cities have to have, and it has paid off for Dayton a lot.”

If you would like to know how you might be able to get a Performing Arts Center like the DPAC developed in your city contact Garfield Traub.

Garfield Traub Development DPAC Proves Skeptics Wrong

Durham Performing Arts Center (DPAC)

Durham Performing Arts Center - Durham, NC

The Durham Performing Arts Center (DPAC), developed by Garfield Traub, is getting a lot of media attention lately with its key role in the transformation of downtown Durham into a thriving destination with an array of restaurants, entertainment and shopping. Although some openly doubted the project in the past, many of those same people are now retracting their criticism and praising the development instead.

“We are proud of what DPAC has accomplished for the redevelopment of Durham,” said Garfield Traub Principal Greg Garfield. “Durham’s downtown dining and shopping experience has been greatly enhanced by the DPAC, and we at Garfield Traub are glad that we had the opportunity to lead the development.”

In a July article entitled “DPAC: Proof is in the profit,” one local correspondent admitted he wrongly thought in 2007 that the Durham City Council was “digging itself into yet another financial hole” with the project. Now that same reporter has gone on to say, “bully for all the people who gave life to DPAC. You have a big, brassy hit on your hands. It couldn’t have happened to a more deserving burg.”

Additionally, a recent article in The New York Times Travel section attributed a big part of Durham’s success to the development of the Durham Performing Arts Center.  And if that were not enough, trade publication Pollstar announced DPAC as ranking second nationally in theater attendance for the first quarter.  This is a huge honor for Durham, which is competing against other widely-known theater markets like Los Angeles and New York City.

The Durham Performing Arts Center operator confirms that the design of the DPAC ensures there isn’t a bad seat in the house. It is this design that keeps popular performances such as Broadway favorites Wicked, Billy Elliot and RENT, comedians and actors Bill Cosby and Al Pacino, and musical acts such as Leonard Cohen and B.B. King coming and attendance so high. And with a highly-attended theater comes many businesses that have flocked to the area to reap the benefits from the many concert-goers the theater brings.

“Garfield Traub was instrumental in the planning for the DPAC,” said Alan DeLisle, Assistant City Manager for Economic and Workforce Development (2002 – 2009). “The City of Durham has benefited greatly from their leadership and expertise in this process.”

Read more about the development details of the Durham Performing Arts Center. To learn how you can get your public infrastructure financed and developed contact Garfield Traub.

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