Performing arts center appraisal

[Vernon Martin]

I'm looking for ideas on appropriate metrics and comps for a nonprofit performing arts center in a "redevelopment area". The client is an adventurous lender.

I don't have financials yet, but this center is rumored to be unprofitable, so I see two possible directions here, either finding comps for a more profitable H&BU or else extracting gross revenue multipliers from sales of other performing arts centers, if such data exists.

Given the area the property is in, the first alternate use that comes to mind is church use.

Any suggestions?

 

[Kali the Boston Terrier]

In my burg (Rochester, MI) the DDA/Chamber of Commerce was tossing around a plan to build a performing art center for all the non profits in the area. The called it the Legacy Project, I sat on the committee and voted against it because there was no way to develop revenue. They wanted to sell the plan to investors, however no incomne stream...can't call it an investment. So then they tried to go the donor route, long story short the projected cost was through the roof, little return on investment...and given our economic woes, the legacy project was shelved.

Not sure that helps, but I may be able to get a hold of the proposed project costs.

 

[Financially Feasible]

Price per seat would be the first metric that comes to my mind.

Building these things is a dangerous proposition. Just ask the fine people in my stomping grounds...

http://abclocal.go.com/wpvi/story?section=news/entertainment&id=3676885

 

[mgalleshaw]

how'd this turn out? ready to write the book?

 

[John Hassler]

I missed this post in April but if you're still working on this assignment the Copia non-profit performing art center in Napa is for sale and had an appraisal done last year valuing the property at just under $25m.

Link

 

[Vernon Martin]

Appraisal of a performing arts center

how'd this turn out? ready to write the book?

This was not a typical performing arts center, but a white elephant built in a low income neighborhood to honor a former mayor and provide employment for an alderman's family members. I found two other performing arts centers in this city's low income neighborhoods but also considered churches as alternate uses, as the subject property had serious parking issues and would have been more amenable to neighborhood church use.

The most consistent indicator seemed to be price psf, surprisingly, but this center and the comps also had a lot of ancillary building area devoted to other uses such as classrooms and media production. The comps ranged from $47 to $73 psf.

 

[mgalleshaw]

Thanks. The church similarities hadn't struck me before, and what about old theatres. I haven't done an actual performing arts center yet, but have had requests so I wanted to see what I might be getting into. This is a case where no one with whom the prospective lender has familiarity has direct experience, so there is a threshold of knowledge to gain competancy before I would agree. Might need to see if I can find another appraiser who has worked one before, or dig through the Journal and others for articles. The historical theatres I have done before have sometimes been converted into performing arts venues, particularly in large metro areas such as Washington DC, Phil or NY.