Committee Mulls Whether Town Should Continue As Owner of Playhouse

Does it make sense for the town to continue to own the New Canaan Playhouse building downtown, especially considering that it needs more than $2 million in repairs?

That’s a topic that members of the Town Building Evaluation & Use Committee broached during their most recent meeting at Town Hall.

The town acquired the building at 89 Elm St.—which also includes street-level retail space and second-floor offices—in August 2007 for about $2.2 million.

However, officials have been mulling in recent years whether it makes sense for the town to continue to lease the facility to BowTie Cinemas and have it operate as a private movie theater, considering the major capital investment needed to make it safe, structurally sound and ADA-compliant. The figure three years ago was pegged at $2.1 million (major line items at the 1923 building include partial roof and brick exterior replacement, elevator and ADA-compliant wheelchair access, new gutters and drainage system and new layout for its sprinkler system).

Committee members including Ben Bilus acknowledged that at the time of the town’s purchase, residents stepped up to preserve New Canaan’s only movie theater going. And residents since then have spoken out in favor of the Playhouse’s continued operation as a venue for entertainment.

The committee, however, feels now is a good time for the town to take another look at the costs associated with the facility.

Officials from BowTie recently told the town that the company is very happy with the theater and has no plan to exit its lease before it expires in 2027. The company even raised the possibility of acquiring it.

During the Nov. 2 meeting, committee co-chair Amy Murphy Carroll presented a spreadsheet showing the declining attendance at the theater. The committee has figures for what BowTie Cinemas pays in rent and what ticket sales are—but members agreed that they needed more information about the estimated costs of repairing the building before coming up with its formal recommendation.

“We all know what’s going on with the movie industry in general,” Carroll said, adding that the numbers show movie theater attendance declining on an almost weekly basis.

Doing some rough math, Carroll said “if the renovation costs are in the $3 million range—as estimated—then $3 million at 3 percent and 20-year amortization, the debt service on this is around $200,000.”

She said the town currently gets about $100,000 in revenue from BowTie via its special lease, which terminates in 2027.

“[But] we never got over the 10 percent threshold, getting the other revenue from their gross receipts,” she said of the arrangement with the theater operator. “So that just reflects what BowTie pays us—plus the rent from the two rental properties.”

Carroll added that the estimated property taxes on the building—if it were privately owned—would be about $23,000 per year.

“So, the cost to the town of keeping the Playhouse going, conservatively, on an annual basis – after your expenses, your foregone tax revenues and assuming revenue coming in – would be about $125,000 today,” she said.

The Town Building Evaluation and Use Committee’s work—studying the physical plant, uses and future capital needs of 40-plus municipally owned structures in New Canaan (not include district buildings)—follows that of a volunteer Playhouse Committee. That committee, now disbanded, had put together an RFP for a prospective new owner of the Playhouse, but the group then discovered BowTie’s extensive lease.

Committee member Martin Skrelunas said the big question that continues to face the town is: “Are we OK with subsidizing this and knowing it is going to cost us money every year just to have a Playhouse?”

Bilus agreed that it’s up to the town to decide.

“Do we want to own a movie theater?” he asked. “We don’t have an answer to that. My answer is ‘Yes.’ But do we want to spend $3 million to keep a playhouse? My answer is ‘No.’ It’s a dead art form. Going to the movies is something that people no longer do. But then there’s the character of our buildings [downtown] and that whole thing.”

Committee member Neil Budnick said he was not comfortable with the $3 million estimate, mainly because the committee had no breakdown of all the various improvements needed.

Committee co-chair Penny Young said the $3 million estimate is based on the work of the previous Playhouse Committee.

Budnick said he went up on the roof of the Playhouse recently and saw no problems with it.

“We really need to be cautious when we see numbers like this,” he said. Budnick acknowledged, however, that the facility does need a new boiler and new sprinkler system.

“The question is, if we make all these improvements… can we make more money from anyone?” Budnick asked. “And if we displace the two nonprofits that are [renting] there, are we going to have to subsidize them?”

According to the committee members, the leases held by the two nonprofits, New Canaan Cares and the New Canaan Chamber of Commerce, state that if either lease is terminated, the town must find a new home for the displaced.

Bilus pointed out that one of the dangers of investing $3 million into the facility is that “it is not a very popular theater, due to the fact that it only has two screens.”

“We know that the [theater] we would be investing in would not be a very popular one on the market,” he said.

Carroll has said that 20 percent of the space in town-owned buildings is unused. The committee is expected in a soon-to-be-released report to make recommendations on what buildings New Canaan should offload, including whether there are more efficient uses of space in those it keeps.

The committee members agreed that more information is needed in order to arrive at a recommendation for the Playhouse. Carroll said the committee is going to create a cost matrix for the facility that will be incorporated into its report that it will be furnishing to the Board of Selectmen later this month.

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