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http://www.heraldsun.com/durham/4-500941.html

City trims back plans for 4,000-seat downtown theater 

By BEN EVANS : The Herald-Sun
bevans AT heraldsun.com

Jul 14, 2004 : 10:57 pm ET 

DURHAM -- The city of Durham has scaled back plans for a 4,000-seat downtown
theater after realizing it can't find the money to make the project work and
running into opposition from the local arts community. 

Instead of a $42 million project, the city is now looking at spending $25
million to $30 million, said Alan DeLisle, the city's economic development
director. What that will buy is up in the air. 

"It means smaller and simpler," DeLisle said. 

City Manager Marcia Conner suggested that the city might need to start from
scratch and hold a public design "charette" where people could trade ideas.
Phil Szostak, a Chapel Hill architect leading a development team that the
city is working with, said the project could shrink to a few thousand seats.
He even raised the possibility that it could become a 1,000-seater dedicated
only to the American Dance Festival. 

"But can we pay for it? That's the key issue ... we need for this thing to
pay for itself," he said. "We're just trying to come up with a definition, a
scale of what this thing should be ... We're designing anew." 

DeLisle clarified that a 1,000-seat theater is very unlikely because it
would be roughly the same size as Fletcher Hall at the downtown Carolina
Theatre, although he said various options are still on the table. 

DeLisle also said the city could begin looking soon to other management
companies if it can't reach an agreement with Clear Channel Entertainment,
which initially was tapped to run the theater but has encountered heavy
criticism. 

"We have to make progress with Clear Channel or we have to move on," he
said. 

The comments came during a Wednesday night public hearing at which the
proposal once again was widely panned by a group of vocal opponents composed
largely of local artists. The opponents have argued that a 4,000-seat
theater is not what Durham needs, and they said they were happy to hear the
news Wednesday but remained skeptical of the city's plans. 

"We'll see. My ears are open," said Alex Kostelnik, a founder of the Durham
Arts & Business Coalition who has helped organize the opposition. 

The city initially began discussing the theater idea several years ago as
part of an effort to develop an entertainment district near the Durham Bulls
Athletic Park and to provide a new home for the nationally acclaimed
American Dance Festival, whose main performances now are held at an outdated
theater at Duke University. 

In 2001, the city won approval from the state Legislature to increase the
local occupancy tax from 5 percent to 6 percent, with most of the estimated
proceeds dedicated to the theater's construction. With an estimated $42
million price tag, however, the city still needed to find some $18 million,
and City Council members made it clear that they would not support spending
any more public money on the project. 

Last fall, the city entered into an exclusive negotiating agreement with
Szostak's development team, which includes Clear Channel as well as
developers from around the country, to come up with a proposal. Ideas
included raising money from Duke, which indicated it would help support a
new home for ADF, and selling corporate naming rights. 

In deciding to scale back the project, the city and the development team
have acknowledged that raising $18 million isn't realistic, but they also
said they were listening to criticism from the community. 
That criticism continued at Wednesday's meeting, which had an overwhelmingly
anti-theater crowd of about 40 people. 

They argued that Durham needs to invest more in its homegrown arts groups
and facilities before sinking millions into a theater that would draw what
they said were commercially driven performances. Some said Durham is on the
verge of a cultural Renaissance and joked that it doesn't need a venue for
acts like New Age musician Yanni or overblown touring Broadway shows. 

"We're not looking for the supersize model. We're looking for the quality
versus quantity," said Katherine Gill, a local landscape architect. 

City officials, however, emphasized the economic development prospects for
the project, countering that it was meant for a broad audience and that a
fundamental necessity was for the project to financially sustain itself. 
"The biggest fear I have is that we would build this theater, and that on an
annual basis it [wouldn't] make what it's supposed to make," leaving
taxpayers with the bill, Conner said. 


***

http://www.newsobserver.com/news/story/1432057p-7555789c.html

Durham officials downsize theater
Plans for venue reach an impasse

By MARGIE FISHMAN, Staff Writer (News & Observer)

DURHAM -- With time running out on the city's proposed downtown theater,
major details of the project, such as how big it would be and who would run
it, are up in the air. 

Unable to secure enough private dollars, the city is downsizing the theater
by 1,000 or more seats and slashing its price tag by at least $12 million.
Negotiations between the city and its proposed theater operator, Clear
Channel Entertainment, are stalled. 

"We have not made the progress we were hoping for," Alan DeLisle, the city's
economic development director, said Thursday. "It's becoming more apparent
to us that it might be in the city's best interest to open this up to other
operators."

Clear Channel officials did not respond to a request for comment Thursday.
The San Antonio-based company has encountered opposition from the local arts
community. Critics say the nation's largest broadcaster and concert promoter
kills homegrown diversity.  

"I definitely think they're upset by the bad publicity," said Phil Szostak,
a Chapel Hill developer working with Clear Channel. The company is reeling
from a slump in summer ticket sales, he said. 

Officials insist that these latest snags don't spell the project's curtain
call. "We're not at the point yet where we're going to throw out what we
already have," City Manager Marcia Conner said.

As recently as last month, the city was moving forward with a $42 million,
4,000-seat venue, which would be the largest theater in the state, after
extending exclusive negotiations for four months with Clear Channel and its
development team. 

The theater would provide a permanent home for the American Dance Festival
and join the redeveloped American Tobacco complex and the Durham Bulls
Athletic Park in sparking an entertainment district south of downtown,
according to downtown boosters.

A preliminary budget showed that the city would own the theater and
contribute $24 million from hotel tax revenues, with $18 million coming from
private donations. 

But the city came up $7 million short, after Duke University offered to pay
about $3 million, the university's estimated cost for a custom stage for the
ADF. So far, the development team has not landed other private donors for
corporate sponsorships and naming rights, said DeLisle, who could not name
potential contributors. ADF has made verbal commitments to use the space,
but nothing is in writing.

To limit its financial risk, the city has scaled back to a $25 million to
$30 million venue that would be larger than 1,000 seats so as not to
directly compete with the city-owned Carolina Theatre. The city may soon
host its first design forum for community members since starting work on the
theater in 1999. 

"These are things that should've been asked years ago," said Caleb Southern,
who thinks the city first needs to take care of the arts groups in its back
yard. "We wouldn't have spent all this time working on a proposal that had
serious flaws in it."

DeLisle would not list specific sticking points in the management agreement
with Clear Channel, only saying that the structure of the agreement and the
company's fee had not been addressed to the city's satisfaction. Clear
Channel has not produced a proposal as requested by the city, he said.

Meanwhile, two deadlines loom. Under a development agreement with Capitol
Broadcasting Co., the developer of American Tobacco, the city must
demonstrate its commitment by approving a preliminary development agreement
for the theater by October or Capitol can exercise its option to purchase
the land for an office building. DeLisle said those deal points can be
approved without a committed theater operator. 

Construction must begin by September 2005, the deadline imposed by the
General Assembly when it approved increasing the county hotel tax to help
pay for the theater. 

Mayor Bill Bell questioned whether there would be a niche for a smaller
theater. 

Last year, a city-hired consultant concluded that Durham could sustain a
4,000-seat theater downtown that could convert to smaller spaces. Duncan
Webb, who charged the city $87,000 to gauge whether the theater was
feasible, also recommended a 700-seat theater for local performing arts
groups.

In earlier interviews, Szostak said the city needed to align with a dominant
player in the industry like Clear Channel to realize the most profit. The
city would still make money on a smaller venue operated by another company,
he said Thursday.

City officials view the theater as a product "you can go down and buy at
Wal-mart," while local artists see it as "the efforts of people's souls,"
said Kate Dobbs Ariail, who attended a meeting Wednesday where city
officials unveiled the new theater strategy. 

"We're probably going to end up with something so much better than what is
bulldozed along," she said.

Clear Channel's involvement in the project should be resolved within a few
weeks, city officials said. 

"If it looks like we can't get another operator, then there's a possibility
we might not do the project," Bell said.

Staff writer Margie Fishman can be reached at 956-2405 or
mfishman AT newsobserver.com.