The Durham Performing Arts Center earned $1.3 million for the city in fiscal 2013, according to a preliminary financial statement.
DPAC’s net income for the year was a bit more than $3.3 million. Under the current operating contract, DPAC operator PFM/Nederlander gets 60 percent of the net and the city gets the remaining 40 percent.
The city’s share goes into a dedicated fund for the theater’s debt service, maintenance, building improvements and covering income shortfalls.
PFM/Nederlander’s contract expires June 30. Under a new profit-sharing arrangement taking effect July 1, the city share of a $3.3 million net would be $1.23 million.
The future sharing arrangement will work like this:
• Of the first $2 million, the city gets 40 percent, PFM/Nederlander 60 percent;
• Of the next $300,000 the city gets 30 percent, PFM/Nederlander 70 percent;
• Of the next $700,000 the city gets 40 percent, PFM/Nederlander 60 percent;
• Of any profit above $3 million, the city gets 20 percent, PFM/Nederlander 80 percent.
City Manager Tom Bonfield said the deal is meant to “incentivize” DPAC’s operator to make high profits, by giving what are, in essence, bonuses for going beyond the $2 million and $3 million levels; while assuring the city enough revenue to maintain the building.
PFM/Nederlander has operated DPAC since the theater opened in late 2008. In the 41/2 fiscal years since then, its net revenue has totaled more than $11 million. DPAC’s best year was 2011-12, which produced a net of $4,575,367 with a season highlighted by “Wicked” and the Rockettes’ Christmas show, each of which drew more than 77,000.
Renewal options give the contract starting next year the potential to extend through 2039-40.
“It’s very important this partnership continue,” Mayor Bill Bell said before the City Council voted to approve the new contract last May.
PFM/Nederlander also gets a separate management fee, $152,081 this year, which increases annually by 4 percent or the Consumer Price Index, whichever is larger.