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With an Evanston City Council committee scheduled tonight to review the multi-million dollar plan for expanding Piven Theatre’s footprint at the city-owned Noyes Center, some new details have emerged about the proposal.

A draft agreement prepared for the Human Services Committee meeting projects a lease term of roughly 53 years, rather than the 50 years in a previously issued term sheet.

It also calls for Piven’s rent on about 11,000 square feet of space in the building to rise from $1 a year to $75,000 a year for the final 20 years of the agreement.

Until it recently stopped paying rent, Piven paid over $59,000 a year in rent for 4,224 square feet of space at Noyes.

Costs

With those changes, it appear the costs to city taxpayers over the term of the proposed new Piven agreement will include:

  • $12.7 million in lost rental income on the space, based on current rent rates being charged tenants who would be displaced by the Piven expansion and assuming a 2 percent annual increase in rents over the term of the deal. That’s after subtracting $1.5 million in rent Piven would pay in the final 20 years of the agreement after enjoying rent of $1 a year for the first 33 years.
  • Perhaps as much as $1 million to $2 million in foregone investment income from the $2.2 million city loan to Piven when the 2 percent interest rate proposed for Piven is compared with mortage rates now hovering around 4 percent or the 7 percent return the city anticipates on its pension investments.

Piven Executive Director Leslie Brown estimates that the expanded 200-seat theater will be used 200 nights a year with an average of 75 percent of seats filled for each performance and a total of 30,000 theater-goer visits per year.

In the current 70-seat theater, Brown says, Pivin now stages about six shows a year with attendance averaging about 65 percent of capacity.

She was unable to immediately provide an estimate of how many performance nights the current schedule adds up to. But the theater website indicates Piven’s most recent production, in March, ran for six performances.

Benefits

Assuming the target of 30,000 in total attendance is reached immediately, Evanston Now’s analysis of the proposed deal indicates the city should receive the following benefits over the 53-year term:

  • $782,280 in estimated sales tax revenue on ancillary spending by theater audiences. This is based on the $24.60 etimated average nonprofit arts attendee ancillary spending from an Americans for the Arts survey and the 2 percent city share of sales tax.
  • $376,067 in estimated liquor tax revenue, based on an estimated $13.14 average meals spending per visitor from the Americans for the Arts survey and a city estimate that 30 percent of restaurant sales is subject to the city’s 6 percent liquor tax.
  • $2 million in increased value of the Noyes building after the rehab work is completed, based on Piven’s estimate.

The analysis excludes possible benefits from increased enrollment in Piven classes or possible additions of new Evanston-based jobs as a result of the expansion — since no estimates have been provided for those impacts.

Bottom line

While further analysis may change the results, from what’s known at the moment, it appears that, assuming the attendance goals are met, the Piven deal will yield only about one quarter as much in benefits to taxpayers as it will cost them.

The Human Services Committee meeting is scheduled for 7 p.m. tonight at the Civic Center.

Other theater deals

The City Council is scheduled to act later this month on a proposal to provide a forgivable 10-year, $165,000 loan to the Music Institute of Chicago.

The Music Institute is making much more conservative projections for usage of its planned 150-seat black-box theater downtown — estimating between 2,000 and 6,000 in annual attendance.

An analysis of that deal suggests the city might — in a very optimistic scenario — come close to breaking even on the arrangement — which was recommended for approval by the Economic Development Committee last month.

The city also is still trying to work out an agreement for Chicago’s City Lit Theatre to take over a city-owned storefront on Howard Street. That project stalled after construction cost estimates tripled to $1.7 million.

Related stories

Piven makes its case for Noyes project

Piven deal would cost taxpayers millions

City considers $165K gift to Music Institute

Howard theater cost estimate nearly triples

Related documents

Human Services Committee packet (with Piven proposal)

Noyes project page on city website

Arts and Economic Prosperity IV, Americans for the Arts, 2012

Bill Smith is the editor and publisher of Evanston Now.

Join the Conversation

4 Comments

  1. Realistic projections ?

    Has a structural enginner estimated the life of the building without repairs that would subtract from the quoted revenue?

    Promising higher rent 33 years in the future is like Congress always asking for more taxes now and cuts will be made later—never happens.

    Who in their right mind believes this group will still exist in 10 let along 33-53 years ?

    Regarding additional revenue to the community.  How many who attend performances are from far enough out of town to before/after go to an Evanston restaurant or bar instead of going home ? Or if far enough away maybe eat/drink on their way home.

    Projecting going from 6 to 200 performances seems a projection Washingrton could only come up with !!  Do they have comparison with other theaters that increased their theater size and performance [with as many or proportional ramping-up of attendees] as this projection calls for ?  Do even NU productions get these kinds of levels ? what was the longest run of an NU performance ? maybe a week ?

    Have prior Priven projections of attendence, length of run, revenue, etc. proved accurate ?

     

  2. In a perfect world projections

    Only theaters such as Steppenwolf, Goodman, and Looking Glass could make projections even close to those that Piven and it's supporters expect us to believe. This is a bad deal for the City and people of Evanston.

     

  3. What percentage of Piven’s

    What percentage of Piven's offerings have been extended due to ticket-buyer interest?  How many have folded after their scheduled runs?  How is Piven's stage work reviewed in the press?  Those could indicate whether we're proposing to buy a pig in a poke.  Yes, the family has a longtime relationship with Evanston, and the family has famous children.  But does that justify taxpayer support?

  4. Turn the estimates around

    I quote from EvanstonNow post:

    Piven Executive Director Leslie Brown estimates that the expanded 200-seat theater will be used 200 nights a year with an average of 75 percent of seats filled for each performance and a total of 30,000 theater-goer visits per year.
    Assuming the target of 30,000 in total attendance is reached immediately, Evanston Now's analysis of the proposed deal indicates the city should receive the following benefits over the 53-year term:
    • $782,280 in estimated sales tax revenue on ancillary spending by theater audiences. This is based on the $24.60 etimated average nonprofit arts attendee ancillary spending from an Americans for the Arts survey and the 2 percent city share of sales tax.
    • $376,067 in estimated liquor tax revenue, based on an estimated $13.14 average meals spending per visitor from the Americans for the Arts survey and a city estimate that 30 percent of restaurant sales is subject to the city's 6 percent liquor tax.
    • $2 million in increased value of the Noyes building after the rehab work is completed, based on Piven's estimate.

    ==========================

    If the Council goes ahead and bankrolls Piven—esp. with the easy terms that have been mentioned—-perhaps the rent and maintenance should be based on Piven's [if they standby estimates listed above].  For example if they estimate 30,000 attendance and revenue for the city of $X per year, then if their rent+payments are $Y per year, then actual rent+payments should increase by 80% (30000-actual)* $X *(1/ 30,000-1/-actual)

    i.e. if Revenue for the city is $1 million and actual attendance is 20,000 then stated rent should increase by

    10,000 [the shortfall] * $1 million *(1/30000-1/20000) or $166, 000.  If you only charge 80% of that then rent would increse by $133,000.

    Will they thus now stand behind their estimates or want to revise them ? 

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