DPAC operations net $3.3 million
Preliminary figures show the Durham Performing Arts Center netted $3.3 million in operations income in fiscal 2012-13, Community Development Director Reginald Johnson told the City Council on Thursday.
The city will receive $1.3 million of that under a revenue-sharing deal with the theater’s operator, PFM/Nederlander, and put it in a special account it maintains to cover the building’s expenses.
The projected return to the city is $424,495 ahead of what the council had budgeted for fiscal 2012-12.
DPAC General Manager Bob Klaus said about 371,000 people attended plays, musicals, concerts and other events at the building during the year.
“One can argue that we’re the No. 1 theater in America of those with 3,000 seats or less,” he said, presenting figures that show DPAC draws about as well as larger facilities in Las Vegas and Atlanta.
Council members made it clear they’re happy with how DPAC has performed in the five years since its opening.
“There’s no question in my mind that that facility has made a great, positive impact in this community,” Mayor Bill Bell told Klaus, Johnson and other officials who attended Thursday’s council work session to deliver the report.
The center netted $1 million from operations in its first year, 2008-09, and quickly bettered that.
It booked $3 million in net income in fiscal 2009-10, $2.5 million in fiscal 2010-11 and $4.6 million in fiscal 2011-12.
The income numbers reflect only the day-to-day operations of the center and don’t count the $2.5 million in debt service the city pays each year on the loans it took out for the building’s construction. Officials account for that separately.
Money to cover the debt payments comes mostly from hotel occupancy taxes, ticket fees and the sale of the naming rights to various portions of the theater.
Those all told are bringing in about $2.3 million, according to a report the council received last month from the city’s budget and finance departments.
The city also pays $390,099 in miscellaneous expenses.
In the end, after covering those and its debt obligations, the city will bank about $789,004 off the theater for fiscal 2012-13, according to September’s budget and finance report.
The city and PFM/Nederlander have been splitting the theater’s operational income 60/40. A new operating agreement, approved in May, changes that going forward.
It includes a formula that’s designed to give PFM/Nederlander an incentive to continue delivering $3 million-plus annual returns, by giving it a bigger share of any annual net that tops that mark.
Broadway shows are the backbone of the theater’s business and in fiscal 2012-13 accounted for nearly half of its 187-night performance schedule.
Klaus said DPAC managers are in the midst of nailing down the theater’s 2014-15 Broadway season and are hoping to land a run of “Motown: The Musical,” a new show that premiered in New York City this spring.
“We’re holding dates for that show,” Klaus said in answer to a question from Councilwoman Cora Cole-McFadden. “Fingers crossed.”