[Durham INC] Durham Renews DPAC & DBAP Agreements

[Blalock, Amy]

CITY OF DURHAM

Office of Public Affairs

101 City Hall Plaza

Durham, NC 27701

 

 

News Release

 

News Media Contact:

Beverly B. Thompson

Director

(919) 560-4123 x 11229

(919) 475-7735 (cell)

Beverly.Thompson at DurhamNC.gov

http://Facebook.com/CityofDurhamNC

http://Twitter.com/CityofDurhamNC    

 

For Immediate Release: May 7, 2013

 

 

City of Durham Renews DPAC and DBAP Agreements

 

DURHAM, N.C. - City Council has renewed operating agreements for two of
the city's most popular attractions, the Durham Performing Arts Center
(DPAC) and the Durham Bulls Athletic Park (DBAP), with the possibility
of extending the City's partnerships with both operators into the next
20 to 27 years. 

 

The agreement with the Durham Bulls, good until 2033, with two
additional five-year options for renewal, is projected to save the City
about $7.4 million over the life of the lease. It also restructures each
party's financial obligations, making operating costs and expenses the
responsibility of the Durham Bulls. Additionally, the Durham Bulls will
be responsible for maintenance and repair costs up to $200,000 as well
as all utility costs.

 

About $6 million worth of deferred maintenance remains to be done by the
City, in addition to nearly $8 million worth of improvements requested
by the Bulls.  The Durham Bulls will contribute $2 million to the
improvements and will be responsible for any cost overruns.  

 

"This new financial model will help pay for debt service and other
capital improvements, eliminate the need to use general funds to support
the ballparks' day-to-day operations, and reduce the City's obligation
for future capital repairs and upgrades," City Manager Tom Bonfield
said. The current lease agreement was scheduled to end in 2015.

 

"After 18 seasons, we love hearing our fans still refer to the DBAP as
'the new ballpark,'" said George Habel, Durham Bulls' vice president.
"The City of Durham has made a significant commitment to maintain that
caliber of experience for our patrons and players. The Bulls pledge to
be a responsible steward of this public investment as we assume
operational responsibility for the ballpark. It's gratifying to know
that the DBAP is the home of Bulls baseball for decades to come!"

 

The DPAC agreement comes after five successful years of operation with
J.N. Worldwide, LLC (Nederlander) of New York, NY and Professional
Facilities Management, (PFM) of Providence, RI.  "This has obviously
been a very successful partnership, not only for the City and
PFM/Nederlander, but also for Durham and Triangle residents," Bonfield
said. "I'm excited about the opportunity to continue this tremendous
relationship that has brought outstanding, world-class entertainment and
given an economic boost to our city."

 

"The public-private partnership with the City and PFM/Nederlander has
produced many positive results, from filled restaurants before and after
shows to record attendance numbers and first time visitors coming to
downtown Durham from throughout the region. The new agreement locks in
place this teamwork for DPAC's continued long-term success", said Nick
Scandalios, executive vice-president of the Nederlander Group.

 

The contract, which would have been up for renewal in 2014, has a
maximum 27-year term, with an initial 10-year term starting in May and
ending June 30, 2023, with an option for PFM/Nederlander to renew the
agreement for an additional seven years. Following that term,
PFM/Nederlander would have two additional five-year renewal options,
ending in 2041.

 

The agreement continues the profit-share split, currently 60/40 percent
to the City, and provides incentives for the operator to reach higher
revenue milestones. The City's share of profit would continue to be used
for capital replacement, debt service, maintenance and repair of the
facility, which is owned by the City. PFM/Nederlander will continue to
collect a management fee and other back office fees that will adjust
yearly.  DPAC also will be available for the American Dance Festival
every summer. The Durham Convention & Visitors Bureau estimates the
entire district attracts more than 1 million visitors annually, with a
combined annual economic impact of more than $75 million.

 

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