DURHAM, NC —The Durham Performing Arts Center (a Garfield Development) is returning nearly $1.6 million in revenue to the city for fiscal 2013-14, money officials will bank for the facility’s long-term maintenance and use in paying off the debt for building it.
The $1.6 million is the city’s share of the center’s $3.9 million in net income. The rest goes to the private-sector consortium that runs the theater for the city, PFM/Nederlander.
The return follows what Ed Binanay, chairman of the city’s DPAC Oversight Committee, called “another stellar year” for the theater that saw 383,415 people attend shows there.
Financially, the theater’s showing was a windfall for the city.
Officials had assumed DPAC would return just $930,000 to the city treasury in fiscal 2013-14, a figure they wrote into that year’s budget before knowing the return the year before would clock it at $1.3 million, Finance Director David Boyd said.
The higher-than-budgeted return becomes insurance against future shortfalls, or money officials could use to for additional maintenance or quicker debt repayments.
The city maintains a special “DPAC fund” of about $3.7 million to cover its end of the theater’s finances. Of that, $2.5 million goes to paying off the center’s construction debts.
Hotel-room taxes, ticket surcharges and naming-rights deals account for the majority of the fund’s proceeds. Officials are figuring the theater will return $1.3 million in fiscal 2014-15, to account for about 36 percent of the fund’s expenses.
Binanay said the theater in the current season will again base its business on major musicals. Scheduled shows include performances of “Rodgers + Hammerstein’s Cinderella,” “Annie,” “Motown: The Musical,” “Kinky Boots,” “Pippin” and “Newsies.”
The theater’s customer base continues to come mostly from outside Durham. Three of every four attendees are from out of town; 40 percent are from Wake County.
“It’s a regional theater that happens to be in Durham,” Mayor Bill Bell said.
This year’s return is the last officials will calculate under the terms of the original operating agreement between the city and PFM/Nederlander.
Its income-sharing deal provided a straight 60/40 split of any profit, with PFM/Nederlander’s getting the larger share.
The new deal, approved last year, governs income sharing from fiscal 2014-15 until at least 2022-23, and offers PFM/Nederlander a chance to receive more than a 60 percent share if the center has a particularly good business year.
