Sept. 10–A Capitol Broadcasting subsidiary plans a 143-room hotel adjoining the Durham Performing Arts Center and the Diamond View parking deck, along with retail space and expanded DPAC amenities in a 102,000-square foot “Wrapper Building.”
The city-owned DPAC would get a 4,000-square foot addition to its President’s Club lounge, which the city proposes to lease for $9,054 a month; and 942 square feet for a new women’s restroom, which the city proposes to buy for $641,388. The City Council has scheduled a vote on the deal at its meeting next Monday.
“This is an involved transaction,” said Joel Reitzer, the city’s General Services director. But the Wrapper proposal has “caused a confluence of opportunity, if you will, between the city, the DPAC and the developer.”
Enlarging the President’s Club will allow DPAC to sell more premium seating, Reitzer said, meaning more income for the city. Five years’ operating experience has shown that the theater needs more ladies’ rooms.
The hotel, combined with approximately 179 rooms in the in-progress 21c and Holland hotels, would give Durham 322 additional rooms toward meeting downtown’s estimated need of 800. A private investment of at least $10 million is a condition of the city’s arrangement with Blackwell Street Management Co., the Capitol subsidiary developing the project.
City Manager Tom Bonfield said the lease-buy arrangement came about through negotiations with the developer, one of several Capitol Broadcasting subsidiaries that own the American Tobacco and Diamond View complexes and the Durham Bulls Baseball Club.
“The restroom facilities are really of no value to the building operator; they’re really of value only to the DPAC. For that reason, that is the purchase component,” Bonfield said. “As long as we have DPAC we’re going to need the bathrooms.
“The President’s Club, that space is going to be upfitted to serve DPAC purposes but if for whatever reason in the future there was a decision made to no longer need that space, the developer of the property could use or repurpose that space.”
Besides lounging space for members, the President’s Club can be rented out to private groups that want to host events there. Cost estimates for buying the restroom space, as a condominium, and furnishing it and the President’s Club are $900,000, to be paid out of the DPAC’s facility fund. That fund has a current balance of $3.4 million, according to Reitzer.
The President’s Club lease has an initial seven-year term, with the rent going up 3 percent each year, and options to renew in five-year increments through 2045. The city is projected to net $39,352 additional revenue in the first year the enlarged President’s Club is open, rising to $95,477 in the fourth year of the lease.
“All these projections were provided by the (DPAC) operator,” said Bonfield, who also said he thinks they are “conservative.”
“We’ve been working on these projections and this concept for probably over two years now,” said DPAC General Manager Bob Klaus. “Adding this VIP space, we’ll be able to pretty quickly ramp up sales of President’s Club memberships.”
Capitol’s construction timeline has the DPAC additions ready for the 2014-15 Broadway season, and the entire project done by the end of 2014.
“Time is of the essence,” Reitzer said.
Wise: 919-641-5895
