State tries to entice some traveling theater shows
Published 2:43 pm Friday, August 19, 2011
To boost the local economy, state government officials have set their sights on an unlikely industry: theater. And the ongoing effort to develop the local theater industry takes a big step forward when “The Addams Family” kicks off its national tour Sept. 15 at Mahalia Jackson Theater in New Orleans.
The production will be the first national Broadway tour to take advantage of Louisiana’s Live Performance Tax Credit, which rewards traveling shows for beginning their tours in the state.
New Orleans is already a stop for many traveling shows, which tour the country spending a few nights or weeks in various markets. But the economic benefit of having a traveling show make its premiere in the city is even greater, because crews arrive weeks before the tour begins to tweak sets and rehearse. In the process, the crew spends money locally, patronizes Louisiana vendors and sometimes hires local workers.
“This is the kind of thing New Orleans needs,” said David Skinner, general manager of Arts Center Enterprises, which operates The Mahalia Jackson Theater. “We’ve never had a Broadway show start here before, and we never would have if it weren’t for this tax credit. It has made us financially competitive.”
The performance tax credit — which applies to productions of all types, from Shakespeare plays to Madonna concerts — pays up to 35 percent of a show’s in-state expenses above $100,000 and covers 10 percent of any Louisiana worker’s salary.
“The Addams Family’s” 100 crew members will arrive in New Orleans on Aug. 24 to begin rehearsing for the tour, and in the month they are here they will spend about $4 million, staying in hotels downtown, eating at restaurants and hiring locals.
Once in New Orleans, “The Addams Family” producers plan to employ about 75 locals: 50 stagehands, 15 wardrobe personnel, and 10 musicians. The show’s local presenting partner Arts Center Enterprises will also be employing 70 local personnel to operate the theatre, box office, concession stand, and provide security.
An economic ripple
That kind of spending causes a broad economic ripple effect, generating $7.41 from every dollar cut in taxes, according to a report by Baxstarr Consulting Group, which was contracted by Louisiana Entertainment, a subdivision of Louisiana Economic Development. The Live Performance Tax Credit was modeled off the success of the state’s motion picture tax credit, which has increased movies’ expenditures in Louisiana from $10 million in 2002 to more than $674 million in 2010.
With that growth potential in mind, Louisiana officials are hopeful that the tax incentives will help New Orleans to eventually become a hot theater destination.
To that end, Louisiana Entertainment also offers a tax credit toward infrastructure costs. This program aims to encourage private developers to rebuild theaters damaged during Hurricane Katrina, such as the Joy and Saenger theaters. The Saenger, set to open in 2012, cost $47.7 million to rehabilitate and employed 125 Louisiana workers during its renovation, making its developers eligible for $10 million in tax credits. The Joy Theater renovation is projected to cost $11.6 million and employ 48 Louisiana residents, saving its developers an estimated $2.9 million in taxes.
Although the Live Performance Tax Credit was passed in 2007, nothing happened with it until 2009, when Louisiana Entertainment hired Philip Mann, a former Broadway tour booking agent, to oversee the tax credit’s implementation. When Mann set out to lure productions to originate tours in New Orleans, however, he met resistance. It took until now for a Broadway musical to get on board.
A tough sell
“It was a tough sell, frankly, because nothing like this has ever been done before,” said Mann, now the director of Live Performance and Music Industry Development within Louisiana Entertainment. “This is an entirely new financing model for the theater industry.”
In addition to cheaper production costs, Mann was able to entice “The Addams Family” to New Orleans with something equally valuable to touring productions: a large, enthusiastic customer base. The city’s season ticket holders have tripled since pre-Katrina levels, numbering about 9,000 now. The Broadway show “Wicked” sold out for three weeks in New Orleans last year, which caught the industry’s eye.
“Although the tax incentive was an important consideration, the single biggest factor in the decision to mount the show in New Orleans was the local audience’s strong interest in Broadway, as demonstrated by the Broadway In New Orleans series’ high level of subscriptions,” Stuart Oken, lead producer of “The Addams Family,” said in an email.