On Billboard's 2014 Boxscore charts, four of the top 10 grossing theaters with fewer than 5,000 seats are on the National Register of Historic Places: the Fox Theatre in Atlanta, the Beacon Theatre in New York, the Orpheum Theatre in Minneapolis and the Chicago Theatre in Chicago. The top-grossing theater in the 5,000-plus-seat category, Radio City Music Hall, also has National Register status. With renovations, ticket sales have soared.
What's more, local communities see economic benefits when historic structures are preserved or restored, according to a 2013 study by Place Economics for the Advisory Council on Historic Preservation.
The investment in the Kings has topped $95 million, mostly from city and state sources. Those funds seek to boost Flatbush, a working-class area distinct from Brooklyn's gentrified districts.
The New York City Economic Development Corporation partnered with the Kings Theatre Redevelopment Company -- a consortium of the ACE Theatrical Group, Goldman Sachs Urban Investment Group and the National Development Council, a nonprofit that looks out for the community's interests.
The principals in ACE Theatrical have plenty of experience in historic venue restorations -- including the Majestic Theatre in San Antonio and the Saenger Theatre in New Orleans -- and also have deep roots in the live entertainment business. ACE president David Anderson began his career in the 1970s at the Warner Theater in Washington, D.C., working with Jack Boyle and the late Sam L'Hommedieu, Jr. of Cellar Door Concerts. ACE chairman Allen Becker in the 1970s was a partner in PACE Concerts with Louis Messina, who today promotes Taylor Swift and Kenny Chesney.
But theaters, not arena concerts, gave Anderson and Becker their niche. They built the theatrical road-show business known today, under its current ownership, as Broadway Across America. Becker describes the experience of entering an historic theater "from a spiritual point of view [like] a wonderful adventure."
The emotional appeal of historic theaters is clear. But what makes these restoration projects work as a business?
"That's the $64,000 question," replies Anderson, describing the complex, multi-layered financing involved in the Kings Theatre. "You've got to build this public-private partnership to make it work."
Investors like Goldman Sachs benefit from federal new-market tax credits, designed to spur investment in low-income neighborhoods like Flatbush, and federal and state historic rehabilitation tax credits, designed to encourage historic preservation. Goldman also made a $56 million construction loan that will be repaid with city and state funds. It also has invested in the Kings' long-term success.
The federal historic tax credit has a long history of success of driving economic development, according to Stephanie K. Meeks, president and CEO of the National Trust for Historic Preservation. "Since it was permanently written into the tax code more than 30 years ago, it has leveraged nearly $109 billion in private investment, created 2.41 million jobs and adapted more than 39,600 buildings for productive uses," wrote Meeks in an introduction to a 2014 study of the program's impact.
In its bid to run the Kings Theatre, Anderson believes ACE had an edge because of its plans for an open house, welcoming all promoters and event organizers. With 3,250 seats, the Kings will be the third largest theater in New York City, among those focused primarily on concerts, ranking behind Radio City and the Theater at Madison Square Garden.
Announced bookings include a diverse array of concerts (Crosby, Stills & Nash; Sarah McLachlan; Frankie Valli; New Jack Swing 2015, with Blackstreet, Guy and El Debarge; Widespread Panic; Gladys Knight; Jamaican dancehall stars Mavado and Capleton; Sufjan Stevens, The O'Jays, Spoon), family shows (Disney Live!), the Moscow Ballet and a holiday run for the musical Annie.
As audiences return, the payoff for public investment comes through jobs and growth in the neighborhood. Already, across the street, a seven-story hotel is under construction.
Rising development and property values surrounding the restored Kings are "an advantage of doing this," says Becker. "But the drive that makes you want to do it is just to see this beautiful place reinvented."
This article first appeared in the Feb. 21 issue of Billboard.