Title
Carolina Theatre Redevelopment Amendment
Action
Action:
Authorize the City Manager to negotiate and execute the following:
A. A second amendment to the Purchase and Sale Agreement with the Foundation for the Carolinas (FFTC) for the Carolina Theatre site, and
B. A Public Private Development agreement as authorized by City Charter Sec. 7.109 for the restoration of the Carolina Theatre to include a $4,500,000 City funding partnership.
Body
Committee Chair:
James Mitchell, Economic Development
Staff Resource(s):
Debra Campbell, City Manager’s Office
Ron Kimble, City Manager’s Office
Randy Harrington, Management and Financial Services
Explanation
§ On April 8, 2013, City Council approved a resolution for a purchase and sale agreement with the Foundation for the Carolinas (FFTC) for the Carolina Theatre site through a sale for $1.00, contingent upon the preservation and renovation of the theatre.
§ The purpose of the original agreement was to restore the historic Carolina Theatre as an iconic, community asset and support redevelopment on North Tryon.
§ The Theatre will be used for the arts, rentals, convention center/tourism events, and as a community civic theatre for civic engagement, debates, panels, and citizen forums.
§ In addition to the Theatre renovation, FFTC will partner with a private entity to construct a $94 million hotel above the Theatre.
§ Projected construction costs for the Carolina Theatre at $56 million are higher than originally anticipated due to construction cost inflation, delayed construction due to securing the hotel, greater abatement work (mold, lead paint, and asbestos), and unanticipated structural challenges associated with a 1927 facility.
§ Value engineering and project cutbacks have since reduced the total Theatre project cost to $51.5 million. The FFTC is assembling $47 million in funding for the project. This leaves a $4.5 million funding gap that the FFTC is requesting the City’s funding partnership to close.
§ Upon completion, the total investment at the Carolina Theatre site is estimated at $145.5 million comprised of a $94 million hotel and $51.5 million for the Theatre restoration.
- The City’s $4.5 million contribution produces a 1:31 public/private investment leverage ratio for the site redevelopment.
§ The FFTC estimates that new hospitality and tourism tax revenues from the hotel will provide a return on investment for the $4.5 million funding request within approximately four years after project completion.
§ Key terms of the revised partnership will include:
- City issuance of Certificates of Participation debt to cover the $4.5 million funding gap.
- City funding to repay the debt will come from “Tourism 1” hospitality and tourism taxes (occupancy tax and rental car tax).
- Normal financing terms and conditions including timing of when City funds are applied, default provisions, usage by the hospitality and tourism industry, and collateral.
Committee Discussion
§ The Carolina Theatre was referred to the Economic Development (ED) Committee by City Council on June 26, 2017.
§ On July 13, 2017, the ED Committee received a presentation on the status of the Theatre project and funding needs required to successfully complete the project.
§ The ED Committee voted unanimously that the full City Council authorize the City Manager to negotiate an amended the Purchase and Sale agreement with the FFTC for the inclusion of $4.5 million of City funding for the Carolina Theatre restoration project.
Fiscal Note
Funding: Tourism Fund
Attachments
Attachment(s)
April 8, 2013 City Council Action
July 13, 2017 ED Committee Presentation