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Study: Downtown Salt Lake City theater would attract 123K new visitors to Utah

Broadway Theater Rendering in Salt Lake

A cutaway view, looking north, of a plan for a Broadway-style theater along Main Street in downtown Salt Lake City.

By Jared Page, Deseret News

SALT LAKE CITY — A theater capable of hosting first-run touring Broadway shows would attract more than 123,000 new visitors to Salt Lake City each year and serve as an economic catalyst on Main Street, according to a study released Tuesday.

The yearlong study commissioned by the Redevelopment Agency of Salt Lake City identifies a bevy of cultural and economic benefits the proposed Utah Performing Arts Center would bring to the capital city.

The study was conducted by Garfield Traub Swisher, the Utah-based company selected by the RDA in October 2009 to develop the theater.

The developers say the Utah Performing Arts Center would meet the pent-up demand for first-run touring Broadway productions in Utah. Currently, space and scheduling limitations prevent Salt Lake City from attracting such shows until their seventh, eighth or ninth runs.

“The Lion King,” for example, came to Utah 13 years after it opened on Broadway, according to the study. The show was a huge hit, running for seven weeks and grossing $8 million in sales. It also generated more than $500,000 in sales-tax revenue, $500,000 in stagehand job wages, $200,000 in local musician job wages and another $500,000 in facility rental income.

Garfield Traub Swisher estimates a $200 million to $500 million one-time economic boost during construction of the 148,000-square foot performing arts center. The developers also estimate $9.4 million a year in ongoing economic output from the theater.

In October 2008, Salt Lake City Mayor Ralph Becker announced plans to build the Utah Performing Arts Center at approximately 135 S. Main. The project, which will feature a 2,500-seat theater, is estimated to cost between $88 million and $98 million.

The complete report can be downloaded at www.slcrda.com.

New Broadway-Style Theater to be in Downtown Salt Lake City

It wasn’t a standing ovation or a glowing review in The New Yorker, but the reaction of the Salt Lake City Council to a proposed $100 million Broadway-style theater was the next best thing: None of the purse-string-clutching members objected.

And for an encore Tuesday, Salt Lake County Mayor Peter Corroon and his deputy said they would be receptive to managing the proposed playhouse.

“It’s what we do best is managing arts and cultural facilities downtown,” Deputy County Mayor Nichole Dunn said. “It would be a natural fit.”

A newly released city-commissioned report by Garfield Traub Swisher (GTS) strongly endorses a new theater at 135 S. Main St. The consultants also urge that the county manage it, saying that such expertise could result in an annual profit of $2.4 million after the first five years.

The City Council will be asked in June to pass a resolution formally endorsing the theater. Such a vote would also direct the Redevelopment Agency of Salt Lake City to pursue a funding strategy, which the GTS report envisions as a combination of sales-tax bonding, federal tax credits and cash from naming rights.

“As long as I’ve been on the council, this section of Main Street has always been a challenge,” said four-term Councilman Carlton Christensen. “I see this as a real changing element for downtown, and I’m pretty excited.”

If Broadway’s “Book of Mormon” ever tours, Councilman J.T. Martin quipped, “maybe we could get the first booking.”

Such a road show seems likely, given that the unexpected hit has been nominated for 14 Tony awards.

No council member voiced reservations about the theater’s price tag or whether the project could siphon dollars and devoted patrons from other arts venues.

For his part, Corroon said he has “some concerns” about how a Broadway-class theater might affect downtown’s Capitol Theatre. County estimates suggest the Capitol could lose as much as $600,000 a year if the new theater comes to town.

Is a new facility something that is nice to have? Yes,” Corroon said. “It would be great for Salt Lake to have a large, Broadway-style theater that allows shows to come here that otherwise wouldn’t come, or would wait for 10 years to come.

As for the county running the theater, Corroon said, “It makes absolute sense.”

The yearlong study, which cost $741,000, argues that Utah audiences only see the seventh to ninth run of touring Broadway shows because of the dearth of a first-rate facility. It notes a major playhouse was recommended by the Salt Lake Chamber as early as 1962 as part of the so-called Second Century Plan. And the report, which outlines the economic benefit theaters have brought similar-size markets, projects a Main Street theater would boost Salt Lake City’s coffers by $9.4 million a year.

What’s more, an adjacent 20- to 25-story office tower, proposed by Hamilton Partners’ Bruce Bingham, would increase the city’s annual take to $14.8 million, the report says.

But a question remains on whether the theater should be located midblock, at 135 S. Main St., or on the southeast corner of 100 South and Main Street. Bingham, city officials and the consultants would have to decide soon whether to design the project with the tower on the corner and the theater midblock or vice versa.

“The juxtaposition with City Creek [Center] is interesting,” Bingham told the council. “You want to be close, but not too close.”

Councilman Luke Garrott noted that a theater on the corner could maximize its exposure with multiple street fronts. Even so, the consultants stress that a midblock theater would also engage multiple sides, with a planned midblock walkway and an entrance fronting Regent Street immediately east of Main Street.

Helen Langan, senior adviser to Salt Lake City Mayor Ralph Becker, said either building arrangement could work, noting that the city will continue to work with the consultants and architects before making a decision.

“We want to create the most successful project for the city,” Langan said. “We’re going to do it right.”

Arts groups are mostly skeptical of — if not outright opposed to — the project. They argue Utah still gets most Broadway runs — if a little later — and insist a mega-playhouse would squeeze their audiences and bottom lines.

Others say the benefits, particularly as the city sees a downtown renaissance, far outweigh the risks.

“It is important that Salt Lake City remain the cultural core of the region. … No matter how or when the theater comes into existence,” said Salt Lake County Councilman Arlyn Bradshaw. “I am definitely a supporter of it.”

It it wins approval, the theater would take three years to design and build. The office tower, though it may not be built simultaneously, would also take three years.

Tribune reporter Jeremiah Stettler contributed to this story.

Top Factors in Choosing an Event Location – Garfield Traub

Part of excerpt taken from Jim Butler of the Global Hospitality Group® Hospitality Lawyers | Authors of www.HotelLawBlog.com

Founder of Garfield Traub Development provided a wealth of information as one of the “top experts in public-private financing for hotel developments” on a panel for JMBM’s Global Hospitality Group®. The panel was for hotel developers, governmental entities and educational institutions about the feasibility and economics of building a hotel using a variety of public and private financing.

To view Ray Garfield’s presentation, see the easy download link at the end of his summary.

Ray GarfieldRay Garfield
Principal
Garfield Traub Developments LLC
972-716-3838
rgarfield@garfieldtraub.com
Ray Garfield and his company, Garfield Traub Developments, specialize in turn-key development of hotels, conference centers and entertainment venues for municipalities, airports, college campuses and hospitals. These developments can bring hundreds of thousands of people into the communities in which they are located to spend money and generate sales tax, without burdening schools or other public resources.

Ray points out that the number one factor for group meeting planners in selecting a location for a conference is the number of suitable hotel rooms nearby the meeting facility. So, if a city is in the convention center business, it has to be in the hotel business in one form or another.

Ray noted that with loan underwriting much more conservative today than it has been in the past, there is a significant gap between the equity that private developers are willing to invest and the debt that private developers are able to raise to develop a new hotel. Public-private financing is often the only way to fill the gap – without it, a hotel development will very difficult to build in today’s financial environment.

Ray has developed some innovative ideas for piecing together a variety of sources of financing for his projects. For example, Garfield Traub recently completed a $67 million, 303 room, independent hotel in Lubbock, Texas across from Texas Tech University, using a combination of two-thirds private funds and one third public funds. In collaboration with the University’s Restaurant-Hotel-Institutional Management school at Texas Tech, Garfield Traub designed a classroom in the city’s conference facility, and raised $11 million in grants to the city to help with the financing for the facility. The city also sold $11.4 million in bonds for the project. The combination of grants and bonds helped to fill the gap between the total cost of the project and the private equity and first mortgage loan.

See below to view or download Ray’s presentation at Meet the Money® 2010, where he shared with some of the information he provides to cities considering hotel development.

Top Factors in Choosing an Event Location

 

JMBM’s Global Hospitality Group® Perspective


Jim Butler

Our Perspective. We represent hotel lenders, owners and investors. We have helped our clients find business and legal solutions for more than $60 billion of hotel transactions, involving more than 1,000 properties all over the world. For more information, please contact Jim Butler at jbutler@jmbm.com or 310.201.3526.

Jim Butler is a founding partner of JMBM and Chairman of its Global Hospitality Group®. Jim is one of the top hospitality attorneys in the world. GOOGLE “hotel lawyer” and you will see why.

JMBM’s troubled asset team has handled more than 1,000 receiverships and many complex insolvency issues. But Jim and his team are more than “just” great hotel lawyers. They are also hospitality consultants and business advisors. For example, they have developed some unique proprietary approaches to unlock value in underwater hotels that can benefit lenders, borrowers and investors. (GOOGLE “JMBM SAVE program”.)

Whether it is a troubled investment or new transaction, JMBM’s Global Hospitality Group® creates legal and business solutions for hotel owners and lenders. They are deal makers. They can help find the right operator or capital provider. They know who to call and how to reach them.

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