Signature Theater Goes from 160 to 696 seats
October 24, 2008 § Leave a comment
Looks like the Signature Theater in New York finally has chosen a new home – the bottom floor of a 58-story hotel/residential building under construction near Theater Row. The new space has about 5 times as many seats: their previous space was a 160-space theater and the new space has three theaters, one 299-seater and two 199-seaters. All three theaters will be designed by the monumentally famous Frank Gehry.
For some reason, the whole situation reminded me of all the case studies we did in Alan’s class with all the various groups moving to overly expensive theatres and completely destroying their financial viability in the process. However, the Signature has done some thinking, in that it passed up two opportunities, one at a cost of $700 million and another at $350 million, before choosing this space, which is expected to cost only $60 million. However, the Department of Cultural Affairs has committed less than $10 million and the board has raised $6 million. The developer has offered a loan on the basis that he expects the operating budget of the organization to more than double when it moves into the new space.
Now, I don’t have any financials in front of me, but I would love to see what they have planned to finance this major undertaking or if they will simply end up as another Arts Administration case study of what not to do when dealing with capital campaigns and new real estate. As Alan would probably tell us, you should have all or most of the money raised before you build or buy. Also, you have to seriously contemplate the impact of 5x the seating on your organization! On the outside, this looks like a bad idea on the part of Signature, but I don’t know their strategy or their fundraising history. Can they pull it off?