Salt Lake’s Eccles Theater shows ‘incredible’ revenue returns in debut year

Kristin Murphy, Deseret News

SALT LAKE CITY — Years ago, when downtown Salt Lake City’s future 2,500-seat theater was coming down to a vote, critics feared it would end in disaster: an unprofitable and underused stage that would dilute business for other theaters while still relying on a subsidy.

Fast forward seven years: Salt Lake City and Salt Lake County officials are thrilled — some even shocked — to see the George S. and Dolores Doré Eccles Theater’s first-year revenues are booming, more than doubling budget projections.

In 2017, the first full year of operations, the theater was projected to return about $1.3 million in revenue after expenses. But it produced more than $2.6 million.

That’s according to unaudited revenue numbers the Deseret News obtained from the Salt Lake City Mayor’s Office last week. The theater’s advisory board, the Utah Performing Arts Center board of directors, was briefed on the numbers in a meeting earlier this month.

The news comes as the George S. and Dolores Doré Eccles Theater’s box office is bustling with patrons flocking to see the Tony Award-winning Broadway phenomenon, “Hamilton: An American Musical.”

“I would say we hit it out of the ballpark,” said Holly Yocum, community services director for Salt Lake County, which operates the theater.

Yocum credited the first year of success to partners such as Broadway at the Eccles and MagicSpace Entertainment for “an amazing job of bringing in shows we normally wouldn’t get in our state.”

Broadway revenue was projected at about $630,000 for 2017, but it actually produced 180 percent of that: $1.1 million, according to the budget.

“The theater has certainly outperformed any budgets we set,” said Lia Summers, senior arts and culture adviser in the Salt Lake City Mayor’s Office. “We’re glad it’s being well-visited.”

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Darrin Casper, Salt Lake County’s deputy mayor of finance and chief financial officer, attributed the extra revenue to not only high box office sales, but also huge savings in utilities because the building was even more energy-efficient than expected.

“We were conservative when we budgeted for sure,” Casper said. “This was new to everybody, and we weren’t sure for our first full year of operations how well the shows were going to do or how patrons were going to respond, but the response from the community was overwhelming.”

Utilities were projected to cost more than $700,000 for the year, but actual expenses turned out to be much lower: about $233,000. Both building operation and theater operation costs also came in under budget.

Casper, who helped draft the theater’s financial projections when county and city leaders were debating whether to approve it, said “any fears I have had as a financial manager” for the theater’s performance have disappeared.

“I am absolutely thrilled,” he said. “It’s exceeded our expectations. It’s been remarkable and just a jewel for the community.”

In fact, there was so much extra revenue in the first year, there was enough to fill the theater’s $1 million operating reserves (in case the theater ever has a bad year) and the $850,000 reserve for long-term maintenance projects, Casper said.

Even after topping off reserve funds, there was still extra money to split for both Salt Lake City and Salt Lake County. On top of the $600,000 Salt Lake County received as part of the contract with the city to offset any impacted programs and the $350,000 back to the city’s Redevelopment Agency, both the city and the county got more than $200,000 in extra revenue.

The county’s profits will go directly into its Tourism, Recreation, Culture and Convention fund, Casper said, which can be used for capital projects like playgrounds or other programming.

As for the city’s extra cash, it’s up to city leaders to decide what to do with it. City Councilman Derek Kitchen said that’s a discussion to be had with the City Council, but he suggested it could perhaps be used to pay off the theater’s debt service sooner.

“I think this was a visionary project, and it’s obviously paying for itself so we’re thrilled about it,” Kitchen said.

The roughly $120 million theater was financed through a bond extension approved by Salt Lake City, about $28 million from Salt Lake County, and private donations.

Former Mayor Ralph Becker, who drove the project, caught heat in his 2015 failed bid for re-election. Some candidates, including former City Councilman Luke Garrott, criticized Becker for spending millions of taxpayer funds on a theater that would only cater to a portion of the city’s population. Then-candidate Jackie Biskupski, who went on to win the mayoral election, also criticized Becker for approving the extension of an old bond originally voted on for the Salt Palace to fund the theater without first asking voters.

Becker, in an interview with the Deseret News Thursday, noted there was pushback from critics who “thought it was a bad idea in a lot of different ways, but I say the proof is in the pudding.”

“We can’t project out 20 years of the life of the bond, but we can see it’s off to an incredibly strong start,” Becker said. “I don’t think there’s a reason to believe that this not only won’t adversely impact taxpayers, but in fact, it’s showing good financial returns for taxpayers and benefits the community.”

There has been “a little bit” of impact to other downtown theaters like the Capitol Theatre, Summers noted, mostly because the Broadway series moved to the Eccles. But Yocum said there has been some “backfill” with Ballet West, as well as new opportunities for other groups, so “we’re not seeing a lot of dark nights.”

Salt Lake County Councilman Max Burdick, who was on council when the theater was approved and is now serving as chairman of the theater’s advisory board, remembered it was a “really trying experience” when the theater was coming down to a vote.

“It was a rough time because there were a lot of individuals that were either strongly for or strongly against it.” But in the end, Burdick said he cast his vote “with great faith” in the financial projections.

Burdick said he knew the theater was doing well, but he was still surprised when he saw its 2017 returns, calling them “incredible.”

“Now you never know what’s going to happen tomorrow, so you’ve got to keep your finger on the pulse,” Burdick added. “But I have been so pleased, and it has turned out to be one of the most remarkable, positive experiences.”

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