Frequently Asked Questions
PPAC understands that a major, transformational vision such as ours can be a cause for questions among local residents, the media and city officials. We embrace those questions, and wish to provide transparent details about our vision and its impacts as this process unfolds. Here are some details on a few of the questions we have been asked since our announcement of this vision in July...
Q: How Much Will This Cost and How Will it be Paid For?
A: The proposed vision, in its entirety, is estimated to cost $65 Million. It is possible that the project may be done in phases. For now, announcing our vision for the future is the first step in bringing this transformational project to life, and additional details will unfold over time. In terms of how this vision would be paid for, a number of funding sources are being considered and vetted. It is likely that the funding for the vision will include a mixture of historic tax credits, state, federal and foundation grant funding and individual donations from local and regional philanthropists. A formal capital campaign will be announced in the future.
Q: Who Owns The Palace Theatre?
A: The City of Albany has owned the Palace Theatre since the early 1970’s. For over 30 years the City has leased the building to the Palace Performing Arts Center, Inc., the non-profit that runs the theatre. This relationship continues today, with PPAC, Inc. paying a nominal fee to the City each year. PPAC is responsible for the maintenance and repairs of the building, as well as the event programming. Under the current lease, the City of Albany is responsible for major structural repairs to the building. Outstanding major repairs are currently estimated between $3 million and $5 million.
Q: Would Ownership Change Hands Based on the Proposed Vision?
A: That is our intention, yes. PPAC Inc. has been working diligently with the City of Albany, including the Mayor's Office and the Common Council, to propose a transfer of ownership of the building and property for a reasonable fee.
Q: Why is a Transfer of Ownership Important?
A: To qualify for many of the funding sources currently being vetted, it is in PPAC, Inc's best interests to own the Palace Theatre.
Q: Does a Transfer of Ownership Make Sense for Albany's Tax-Payers?
A: It is our opinion that a transfer of ownership for a reasonable fee makes sense on a number of levels. First, while it may seem to some like the City would be giving away an asset without gaining anything in return, the economic development made possible by this vision would have a tremendously positive impact on Albany and its businesses. Development in the area spurred by this vision would enhance and expand Albany's tax base and drive sales tax revenue through increased traffic to local businesses. Ultimately, this would be a good thing for Albany's tax payers. In this way, we believe the transfer of the Palace to PPAC Inc. represents an INVESTMENT in Albany's future, and one that makes sense. Furthermore, by transferring ownership, the City is also freeing itself of the obligation to perform major repairs on the Palace building and transferring that responsibility to PPAC. Based on feedback from City officials, the Palace had two independent appraisals of the building performed, paid for by our organization. These appraisals came back with valuations of $650,000 and $1.2 million respectively. Additionally, a structural engineering study, again paid for by PPAC Inc., identified $4.2 million in soon-to-be-needed repairs. As it stands currently, these repairs are the responsibility of the City of Albany. In this way, it is fair to say that the building actually holds negative value to the City in its current state. The transfer of ownership and resulting expansion project would relieve our taxpayers of the burden of repairs, and unlock the potential of the Palace venue to have a far greater and more positive impact on our City's businesses and residents.
Q: What are the details of the proposal PPAC Inc. has made to the City for the transfer?
A: Palace Performing Arts Center Inc. has presented a proposal to the Mayor and City Council that would result in PPAC taking on the significant liability of the needed repairs to the building. This presents a major liability being relieved from our City's taxpayers. In addition, in consideration of the transfer, PPAC has proposed a payment of $25,000 annually for thirty years to the City of Albany. This would provide an on-going revenue stream to the City for a significant period of time, without breaking the budget of our nonprofit entity (or negatively affecting our ability to bring great events and community programs to our venue). It is important to remember, of course, that our expansion will also result in growth across the residential and business sectors of our downtown neighborhoods, which will greatly expand our tax base and have a positive impact on our city's finances and development in the long term.
Q: Couldn't the City Sell the Palace to a Commercial Entity?
A: Theoretically, the City could explore commercial interest in a venue such as the Palace. However, the market for aging theatres is limited, particularly given the repairs that will be needed to keep the building operational going forward. Moreover, though, such a step would neglect to consider the significant investments that PPAC, Inc. has made in the theatre's upkeep and technology over the years. Just as important to consider is whether a commercial operator would maintain the same dedication to community that PPAC does as a nonprofit entity. Currently, PPAC provides both the Albany Symphony and Park Playhouse with administrative space and access to the theatre for cultural events at no cost to these local arts organizations. It is unlikely that a commercial vendor would continue this practice, creating a detrimental situation for these vital Albany arts producers. PPAC also makes the theatre available and provides discounted services to countless community organizations such as dance studios, The African American Cultural Center, the Downtown BID, the Music Studio and many others. It is unlikely that a commercial operator would maintain this level of commitment to community.
Q: How Long Would the Construction Period Take to Bring This Vision to Life?
A: It is estimated that the construction period would last about three years. However, much work must be done before an accurate timeline can be announced. Step one is to transfer ownership of the building so that the plans for financing that are being developed can be realized.
More details about this vision and its impact are being developed daily. As additional questions come to light and are ready to be answered, PPAC will maintain a commitment to transparency through sharing information on this site and in the local media.