City to ink deal for addition to DPAC

Sep. 05, 2013 @ 08:02 PM

City Council members appear likely to approve a deal with Capitol Broadcasting Co. that would lead to an expansion of the Durham Performing Arts Center.

The project would include a 134-room hotel, retail space, a new President’s Club Lounge for the center’s most lucrative customers and 15 more toilets for women. All told, the project will add about 102,000 square feet of floor space to the downtown facility.

Officials are expecting Capitol, via a subsidiary, to plow at least $10 million into the project. It could be complete late in 2014 or early in 2015, General Services Director Joel Reitzer said.

The addition is to hug the Blackwell Street side of the theater. The hotel will be part of the Aloft chain, which already has North Carolina branches in Chapel Hill, Raleigh, Charlotte and Asheville.

Reitzer briefed the council on Thursday, and members signaled that they expect no controversy. Approval is scheduled for Sept. 16.

“I think it’s a great addition and is really going to enhance, not only the DPAC, but the whole issue of hotel rooms in the downtown area,” Mayor Bill Bell said.

The hotel is the fourth such project to gain traction in the past year or so.

The council pledged business incentives to the other three, which involve the conversions of the former SunTrust tower, the former Mutual Community Savings Bank building and the former McPherson Hospital.

Bell’s comment alluded to the belief of local-government and business leaders that downtown is short of the number of hotel rooms it needs to support the Durham Convention Center.

All told, developers are poised to build 456 rooms in or near downtown.

Capitol isn’t receiving incentives, but the city will agree to spend $641,338 from DPAC’s $3.4 million maintenance fund to buy the future restroom space.

The company also will receive a monthly rental payment from the city for the use of the new lounge. Officials expect increased sales of VIP memberships for DPAC to more than cover the expense.

DPAC General Manager Bob Klaus voiced confidence that the additional sales will come through.

The President’s Club based on existing space constraints is “currently sold out,” Klaus said, adding that theater operator PFM/Nederlander will “be able to ramp up additional sales” once the new space comes on line.

President’s Club members receive choice seats, reserved parking, pre-show hospitality and other perks in return for paying mark-ups on Broadway series season tickets of between 100 and 400 percent.

City officials agreed to buy the restroom space from Capitol because it’s otherwise “of no value” to the new portion of the building, Bonfield said.

The club space, on the other hand, seems better suited as a rental because Capitol can convert it to another use should the city and PFM/Nederlander someday decide to give it up, Bonfield said.

The rental would have a first-year cost of $108,648, with the price to rise by 3 percent a year. The city will lease the space for at least seven years.