9.
City Council Work Session - AMENDED
- Meeting Date:
- 06/24/2025
- From:
- David McIntire, Community Investment Director
- Department:
- Economic Vitality
Co-Submitter:
Joanne Keene
TITLE:
Discussion of opportunities and considerations of potential City involvement in preserving the Orpheum Theater as a historic community asset for public benefit.
DESIRED OUTCOME:
Council will be informed about, and provide feedback on, the City's opportunity to participate in the preservation of the Orpheum Theater as a community asset and for the benefit of arts and culture in Flagstaff.
Executive Summary:
The Orpheum Theater has been an important part of the Flagstaff community, and the Downtown specifically, for more than 100 years. The owner of the building and the business operation have discussed the potential change of ownership and contacted the City first with an opportunity to participate in its preservation and future use. This would make the Orpehum Theater available as a part of efforts to support art and culture in the community. The conversation has involved discussion of numerous potential ways for the City to participate, but has focused recently on the City as a potential direct purchaser of the building. This would require a significant investment, and potentially long-term engagement, but would also assist in addressing a key finding of the recent City-sponsored study, Art, Culture, Science and the Future in Flagstaff, which was that the community had a significant lack of affordable and available venue space. Action by the city could also preserve the historically significant building and ensure the space can continue to be used for community, non-profits and public agencies.
Information:
The Orpheum was first constructed in 1916 by John Weatherford (of the hotel) after the Majestic Theater collapsed. It was reopened under its current ownership after an interior remodel in 2002 and has been serving in that capacity since then. There will be additional history provided as part of the presentation. It is located within the Downtown Historic Overlay Zone, but is not individually listed in the National Register of Historic Places. Its zoning, CB (Central Business), would allow for a number of uses which could lead to a change in use and potential demolition if sold on the open market.
The Orpheum was previously provided City support, because of its acknowledged critical role in the vitality of the downtown, through a development agreement using the Government Property Lease Excise Tax incentive tool which provided tax benefits in exchange for improvements to building health, safety, accessibility and historic preservation. They completed their responsibilities and are in good standing with the City.
As mentioned above, the owners have approached the City to offer the opportunity to either purchase the building directly or work with alternative options to preserve it. After some discussion, the concept of the City as purchasing agent is being brought to the Council for discussion. The Orpheum is currently operating as a venue for music, film and other cultural offerings. There is a bar, a balcony, and a restaurant; the Aspen Deli, leases a separate space in the building. Per the owner, the structure is approximately 12,000 square feet including the deli, and could seat nearly 700 people with a full capacity of 1180 for a standing event. There has not been a current appraisal performed at this time, but that would be a necessary part of due diligence should the City proceed with investigating this opportunity.
Potential Models and Benefits
There are numerous situations in Arizona and throughout the country where municipal governments own theaters, some historic, as a way to:
1) Provide artistic and cultural venue space for the community - Municipal-owned cultural facilities can be used to enrich the community culturally through providing event space, theater/dance space, educational space and for other uses as appropriate.
2) Create economic impact in commercial/historic areas - These types of uses are often beneficial to the Downtown core and assist in providing a draw for local and visiting audiences as well as activating commercial areas.
3) Preserve community heritage and historic buildings - The preservation of historic buildings is never guaranteed after a sale on the open market. City ownership would allow and require preservation and care of the theater.
Some examples of similar situations include Tucson, Scottsdale, Phoenix and many others. City staff met with leaders from Scottsdale and Tucson to discuss successful models and learn about the benefits and challenges of this type of strategy. In some instances, the City partners with a non-profit, or for-profit, entity to manage, operate and activate the venue. This allows the City to protect the civic assets while not needing to staff and manage the operations themselves.
The City's Beautification, Arts and Science Program recently completed, with support from a consultant, a study assessing the City's investment in the arts, culture and science sectors and seeking input on the current and potential future status of those sectors. One consistent theme from the public was the lack of, and need for, more affordable and available venues for community use. The Orpheum could be a part of filling that gap. Additionally, Creative Flagstaff commissioned an assessment of venue spaces in 2018, and it also determined that there was a lack of appropriate venue space for a community our size. The purchase of the Orpheum would not solve that challenge, but would be a step forward.
Challenges
The purchase would be a significant investment of City resources and would require upkeep over time to maintain the historic property in appropriate condition for use and preservation. It is believed the purchase would require voter approval per the City Charter. Managing any partner contracts or operations would require ongoing effort as well. It would be important to maintain the facility as an asset to the prosperity of the Downtown while avoiding competition with downtown businesses.
Summary
The City has a rare opportunity to acquire property in the Downtown core that is a part of the community's history and a potential benefit to the identified need for additional venues in this creative community. There are examples of other cities successfully owning theaters for community benefit in Arizona and other parts of the nation. Once that opportunity passes, there is no guarantee the Orpheum will still exist or be made available in the future. Other City investment needs will also be discussed during the presentation to provide the Council with an opportunity to provide direction on further exploring this opportunity.
The Orpheum was previously provided City support, because of its acknowledged critical role in the vitality of the downtown, through a development agreement using the Government Property Lease Excise Tax incentive tool which provided tax benefits in exchange for improvements to building health, safety, accessibility and historic preservation. They completed their responsibilities and are in good standing with the City.
As mentioned above, the owners have approached the City to offer the opportunity to either purchase the building directly or work with alternative options to preserve it. After some discussion, the concept of the City as purchasing agent is being brought to the Council for discussion. The Orpheum is currently operating as a venue for music, film and other cultural offerings. There is a bar, a balcony, and a restaurant; the Aspen Deli, leases a separate space in the building. Per the owner, the structure is approximately 12,000 square feet including the deli, and could seat nearly 700 people with a full capacity of 1180 for a standing event. There has not been a current appraisal performed at this time, but that would be a necessary part of due diligence should the City proceed with investigating this opportunity.
Potential Models and Benefits
There are numerous situations in Arizona and throughout the country where municipal governments own theaters, some historic, as a way to:
1) Provide artistic and cultural venue space for the community - Municipal-owned cultural facilities can be used to enrich the community culturally through providing event space, theater/dance space, educational space and for other uses as appropriate.
2) Create economic impact in commercial/historic areas - These types of uses are often beneficial to the Downtown core and assist in providing a draw for local and visiting audiences as well as activating commercial areas.
3) Preserve community heritage and historic buildings - The preservation of historic buildings is never guaranteed after a sale on the open market. City ownership would allow and require preservation and care of the theater.
Some examples of similar situations include Tucson, Scottsdale, Phoenix and many others. City staff met with leaders from Scottsdale and Tucson to discuss successful models and learn about the benefits and challenges of this type of strategy. In some instances, the City partners with a non-profit, or for-profit, entity to manage, operate and activate the venue. This allows the City to protect the civic assets while not needing to staff and manage the operations themselves.
The City's Beautification, Arts and Science Program recently completed, with support from a consultant, a study assessing the City's investment in the arts, culture and science sectors and seeking input on the current and potential future status of those sectors. One consistent theme from the public was the lack of, and need for, more affordable and available venues for community use. The Orpheum could be a part of filling that gap. Additionally, Creative Flagstaff commissioned an assessment of venue spaces in 2018, and it also determined that there was a lack of appropriate venue space for a community our size. The purchase of the Orpheum would not solve that challenge, but would be a step forward.
Challenges
The purchase would be a significant investment of City resources and would require upkeep over time to maintain the historic property in appropriate condition for use and preservation. It is believed the purchase would require voter approval per the City Charter. Managing any partner contracts or operations would require ongoing effort as well. It would be important to maintain the facility as an asset to the prosperity of the Downtown while avoiding competition with downtown businesses.
Summary
The City has a rare opportunity to acquire property in the Downtown core that is a part of the community's history and a potential benefit to the identified need for additional venues in this creative community. There are examples of other cities successfully owning theaters for community benefit in Arizona and other parts of the nation. Once that opportunity passes, there is no guarantee the Orpheum will still exist or be made available in the future. Other City investment needs will also be discussed during the presentation to provide the Council with an opportunity to provide direction on further exploring this opportunity.