Officials: Theater has a big impact
By Matt Caulder
Published in News on December 9, 2013 2:30 PM
It has been five years since the city reopened the Paramount Theatre following a fire that gutted the interior of the building in 2005.
And after a $4.5 million renovation to get the theater on its feet, is the city is getting a return on its investment?
City officials say yes -- in exposure and collateral business downtown, which benefits the community's efforts to build a new downtown and the small businesses that operate there.
And if the service on the theater's debt is not considered as part of the equation, the theater is coming closer to covering a customary portion of its expenses, they say.
Last year, the Paramount pulled in almost $140,000, nearly doubling its revenue from 2008 when the theater reopened, but falling short of the city's 2008 goal of $146,000.
While the theater doesn't make money for the city, Paramount Director Sherry Archibald said it does act as an economic engine pulling people into not only downtown, but Goldsboro itself.
"We are getting a lot of patronage from Eastern North Carolina, Kinston and New Bern," she said. "I'll have a good bit from Little Washington. People will come by and say 'I'm a little early but do you know where a good place to grab a bite is?'"
Ms. Archibald said that when people leave shows at the Paramount, they often visit the city's downtown restaurants for dinner.
Downtown Goldsboro Development Corp. Director Julie Metz said that the city does not track the economic impact of the theater, but she is optimistic.
"People are getting accustomed to expecting activity there," Ms. Metz said. "It's a great sign. It's supporting our efforts downtown. It creates a downtown energy supporting restaurants and having people downtown."
Last year the theater's expenses totaled almost $330,000, not including the debt service payment of $453,225.
Taking into account the theater's revenue of nearly $140,000, the theater lost about $643,500 last year alone.
Revenue made by the theater only covered about 18 percent of its expenses last year.
The city approved $334,334 in estimated expenses for the current budget along with a $439,605 debt service payment.
The expected revenue for the upcoming year is $120,000, meaning the theater is budgeted to run at 15.5 percent efficiency taking into account the debt service payment.
The city's long-term-goal for the theater would be to have it cover its operating expenses without counting the debt service payments, Ms. Metz said.
"I'm not in the theater business so I don't know how realistic that is," she said. "My background is in transportation and I know all bus services are subsidized. There is not one public transportation system making money. My gut feeling is there is an indirect benefit."
Ms. Archibald said that theaters run by municipalities tend to operate at between 40 and 48 percent efficiency.
"A theater that has loyal patrons and has built up its series would be running at about 48 percent," she said.
Not counting the debt service payment, the Paramount would have covered 42 percent of its operating costs last year.
The City Council discussed the Goldsboro Municipal Golf Course's operating deficiency during budget discussions earlier this year but discussions were sparse on the revenue drawn in by the theater.
"It's more customary to subsidize cultural arts in a community than a golf course," Ms. Metz said.
The course is having a record year and is on track to cover 88 percent of its operating expenses at the end of the first quarter of the fiscal year.
The city's goal for the course has been to cover 70 percent of its operating costs.
The increase is attributed to reduced labor and chemical costs from new Bermuda grass greens installed on the course.
The Paramount renovation debt is paid from the Occupancy Tax Fund and will be paid off in 2024.