Did You Know?
In its 96 year history, the Empress Theatre has never had an air conditioning system until this newly completed renovation. The Empress now features a state of the art air conditioning, heating and ventilation system that has been designed to keep audiences in comfort all year round.
Empress Restoration Federal Tax Credits Proposed
Triad to contribute over $1 million to project
Vallejo, CA, June 12, 2007 –Empress Theatre Associates LLC, the wholly-owned subsidiary created by Triad Communities to renovate the Empress Theatre, has received approval for federal tax credits for the project. In light of this new source of funding, tonight Triad will ask the City of Vallejo to modify its agreements with the developer to be consistent with the federal requirements for the credits.
The New Market Tax Credits (NMTC) obtained through the National Development Council will partially offset the escalating restoration and improvement costs for the 96-year-old landmark. When approved, the credits will leave Triad with a net contribution of about $1.1 million in the project.
The public/private venture to restore the historically significant building is a partnership between the City of Vallejo, Empress Theatre Associates LLC and the Vallejo Community Arts Foundation (VCAF).
Regarded as an anchor and integral element of downtown Vallejo’s revitalization campaign, the theater renovation was originally budgeted at about $4.7 million, but has subsequently grown to approximately $6.7 million. At the time construction commenced in January 2006, Triad had committed to contribute about $1 million out of its own pocket. Upgrades requested by the City and VCAF and other unforeseen building rehabilitation costs continued to drive up the project’s price tag.
“This is a labor of love for Triad,” said Fred Grimm, Triad’s CEO. “We entered into it with no expectation of profit, nor will we make any. In fact, we will make a significant contribution to the renovation of the Empress. Cost overruns are relatively normal for restoration projects of this nature--the Empress project is no exception,” he added. “But to date, all of the cost increases beyond the city-approved budget have been borne entirely by Triad. The tax credits being sought would allow Triad to be reimbursed for about half of its additional contributions and would not cost the city or VCAF anything.”
In fact, the proposal actually would leave all parties better off financially, since in return for modifying the agreements necessary to qualify for the credits, Triad’s Empress Theater Associates is providing a financial guarantee backing VCAF’s required annual rent payments for the seven-year holding period. Previously, there had been no guarantee to the city for those payments. Another benefit is that Triad will make an additional $250,000 contribution to the city’s “Grow Vallejo” business development fund.
City staff is recommending approval of the complicated tax credit proposal. The staff report says, “Participation in the New Markets Tax Credit program provides measurable benefits to the City, Empress Theatre Associates, and to the Vallejo Community Arts Foundation.”
The most notable change that would occur with city adoption of the recommended new agreements is a seven-year postponement of the date at which transfer of ownership from Triad to the City of Vallejo would occur—as a direct result of the NMTC program requirements. Because the NMTC program requires the benefits to be taken over a seven year period, Empress Theatre Associates would maintain ownership of the Empress during that period. However, the agreement would specify that the transfer occur immediately after the required holding period.
During the seven years, the city would receive some financial benefits from not being the building’s owner—such as property tax revenue it otherwise wouldn’t be entitled to. Exclusive of the credits themselves, Triad gets no income and no benefits from owning the building during that period.
“This agreement allows the City of Vallejo to leverage local funds to capture federal dollars for a project of enormous benefit to the future of the downtown,” said Grimm. “It’s a win-win-win for everyone concerned. We have always intended our contribution to the theater renovation to be a gift to the city. With more than a million dollars still on the table after the tax credits, it will be a major contribution—one we are delighted to make.”
The Empress Theatre fills the existing need for a performing arts venue in Vallejo, providing a potential home for the Vallejo Symphony and attracting other talented performers. It complements Triad’s planned downtown mixed use projects designed to infuse the area with new residents and businesses and help rejuvenate the downtown into a social, cultural, recreational and entertainment hub for the region, which, in turn, will grow the creative and cultural side of Vallejo.
The Vallejo Community Arts Foundation (VCAF) will operate and manage the restored Empress Theatre as a performance venue supporting live music, dance, film and other arts programs. The VCAF Board of Trustees and management have played a key role in developing the design, artistic and funding plans and guidelines for the Empress Theatre.
The 471 seat Empress Theatre is located at 330 Virginia Street. Opened in 1912, it remained open until the 1980’s, then sat empty. It was designated Vallejo Landmark #17 in 1990, but it wasn’t until Triad stepped in during 2004 that the last remaining historic theater in Vallejo’s Downtown was given a new lease on life.
The Empress Theatre Associates LLC’s restoration effort included a comprehensive seismic retrofit of the building and a detailed preservation of its historic character. The project also includes upgrades to the theater’s stage design as well as heating, ventilation and air conditioning systems. In addition, the Empress’ lobby area and restrooms have undergone extensive facelifts, and all the seats were replaced.
About Triad Development
Triad Development, a leader in mixed-use development for over 20 years, was formed in 1984 by three individuals associated with Pinnacle Realty Management. Starting as a developer of rental properties in Seattle, the company has taken on increasingly complex and innovative projects, including, among others, developing a former oil tank farm into a desirable condominium community, collaborating with a small liberal arts college to create an ecovillage that will be a showcase for sustainable development, transforming an aging munitions factory into a mixed-use of retail, day spa, climbing gym and self storage, and rehabilitating a troubled waterfront pier into an award-winning development featuring an upscale restaurant and some of the most unique and stunning office spaces in the Pacific Northwest.
Triad has grown into a diversified development company with a portfolio stretching across the U.S., although its primary focus is still the West Coast. The company has had a presence in Northern California for nearly a decade, since it took over the stalled and financially-troubled Hiddenbrooke residential project from a Japanese developer. The master-planned community, which features an Arnold Palmer-designed golf course and approximately 700 acres of open space and a K-5 school approved by the local school district and scheduled to open next year, had languished in litigation and had failed to fulfill developer obligations to the city. Since 1999, when Triad turned the project around and sold the first homes, land values at Hiddenbrooke compared to Vallejo’s median prices have appreciated faster than most other communities in the Bay Area.
Triad operates in Vallejo through its affiliate, Triad Communities. Triad Communities, LP
Hatti Hamlin - Triad Communities LLC