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DeKalb seeks sustainable business model for Egyptian Theatre

DeKALB – City Council members appear open to installing air conditioning at the Egyptian Theatre, but not before determining a more profitable business model for the venue.

For fiscal 2016, $330,000 in tax increment financing funds have been allocated to the historic Egyptian, which is located in DeKalb’s central area TIF district. Those funds will be put toward three main projects, including $100,000 in prioritized capital projects, such as aisle lighting, a $50,000 operations feasibility study and $180,000 to update air conditioning design and engineering plans from 2012. 

Aldermen voted Monday to approve TIF funding for the Egyptian on the condition they have a chance to review the business model study before money is spent toward the air conditioning study.

Bob Snow, Ward 4, said he didn’t think the city should be so focused on profits and losses when it came to organizations like the theater. 

“We invest a lot in community projects,” Snow said. “We invest in the schools. … We invest in the streets. … The park district puts up parks. We have the Ellwood House, the Gurler House, the Glidden Homestead. All those are community assets. … We’re investing in the culture of DeKalb.” 

The business model study would help determine the most prosperous structure for the theater, determine operations and revenue potential and help provide an implementation plan, according to Economic Development coordinator Jennifer Diedrich.

“It has become very evident that the current operations model of the theater isn’t practical nor is it sustainable,” Diedrich said.

The Egyptian had a net loss of about $2,000 in fiscal 2014, offset by a cash balance from the previous year. The theater is unable to operate year-round because of the lack of air conditioning, according to city documents.

Different business models could be a private-public partnership, maintenance as a nonprofit or a city-owned facility. City staff have also looked at theater structure such as the Paramount Theatre in Aurora or the Arcada Theatre in St. Charles, City Manager Anne Marie Gaura said. 

Over the past 20 years, the city has invested about $2 million into the Egyptian Theatre, which is one of six remaining Egyptian Theatres in the United States and one of the five places in DeKalb listed on the National Registry of Historic Places. City officials and local business owners have all said the organization is both a community treasure and an economic draw. 

An intergovernmental agreement with DeKalb County also could allocate $25,000 from the city’s general fund to theater operations, which would be matched by the county. This agreement would need to come back to City Council for action and approval, according to Gaura. 

Alex Nerad, executive director of the Egyptian, said although air conditioning remained top priority for the theater, the price tag just hadn’t been realistic thus far. The $100,000 would be spent on other identified needs like replacing lighting in the aisles and stage rigging improvements. 

“We’re pretty fortunate if we can hit two to four projects on the list,” he said. “We do our due diligence to get projects as cost-effectively as possible. … We try to truly be good stewards of these dollars from the community and stretch them as far as we can,” 

Some aldermen, including David Jacobson of Ward 1 and Monica O’Leary of Ward 7, aren’t convinced the city should provide funding for the organization. But many others said DeKalb was better off with the Egyptian in the community.

The request for proposal process for the operations study will start quickly. The study would take at least six months, Gaura said. This would include drafting the proposal and submitting it to City Council and various companies as part of the bidding process, authorizing an eventual contract and then actually completing the study. 

Ward 6 Alderman Dave Baker said he thought the theater is important to the city’s future.

“It’s a quality of life issue,” he said. “There should be support for the community and arts.”  

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