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DRAFT – NOT FOR DISTRIBUTION [BusinessPlan20090911a.docx]

Troy Proctor’s Theater Business Plan

Managing Partners:

For-Profit Partner: Troy Proctor’s Development Corporation (Property Owner) Non-Profit Partner: Troy Proctor’s, Inc. (Theater Operations)


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PROJECT OVERVIEW MYTH REALITY Cost to renovate is $30 Million Cost to restore is $12-14 Million.

(the $30M reflected considerable structural changes for adaptive re-use as something other than a movie and performing arts venue)

Operations as a theater will fail.

Our plan shows operations will be solvent by its fourth year.

There’s not enough parking for patrons.

Fifth and Broadway municipal garage (~300 spaces) was built with the renovation of Proctor’s Theater in mind. Uncle Sam’s municipal garage (~800 spaces) is within walking distance. After hours parking is available in the Troy Record parking lot (~80 spaces).

OPERATIONS Troy Proctor’s Theater has sat empty and unused for over thirty-five years, leaving blight on Troy’s major northbound artery 4th Street. Based on conservative estimates, this plan proposes that once operations start up post renovation, the Theater will be generating a profit within four years, will be an active employer both through the restoration process and in operations, and will bring more than $700,000 to downtown business each year.

ORGANIZATIONAL STRUCTURE A high-level overview of how various aspects of the project will interact.


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Table of Contents 1. Executive Summary ................................................................................................................................. 4

2. Company Overview ................................................................................................................................. 5

2.1 Introduction ........................................................................................................................................ 5

2.2 Mission Statement .............................................................................................................................. 5

2.3 History................................................................................................................................................ 6

2.4 Objectives........................................................................................................................................... 6

3. Product and Services Description............................................................................................................. 7

3.1 Introduction ........................................................................................................................................ 7

3.2 Description ......................................................................................................................................... 7

3.3 Market Comparison............................................................................................................................ 8

4. Industry and Marketplace Analysis ........................................................................................................ 10

4.1 Industry Analysis ............................................................................................................................. 10

4.2 Marketplace Analysis ....................................................................................................................... 12

4.3 Marketplace Buyer Analysis ............................................................................................................ 13

4.4 Marketplace Competitor Analysis .................................................................................................... 14

5. Marketing Plan ....................................................................................................................................... 16

5.1 Target Market................................................................................................................................... 16

5.2 Service Strategy ............................................................................................................................... 16

5.3 Pricing Strategy ................................................................................................................................ 17

5.4 Distribution Strategy ........................................................................................................................ 17

5.5 Advertising and Promotion Strategy ................................................................................................ 17

5.6 Strategic Partners ............................................................................................................................. 18

6. Operations Plan ...................................................................................................................................... 20

6.1 Operations Summary........................................................................................................................ 20

6.2 Scope of Operations ......................................................................................................................... 21

7. Development Plan .................................................................................................................................. 23

7.1 Development Strategy/Timeline....................................................................................................... 23

8. Management Plan................................................................................................................................... 25


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8.1 Management Summary .....................................................................................................................25

8.2 Personnel Plan and Organizational Structure ...................................................................................25

8.3 Management Team Gaps ..................................................................................................................26

8.4 Major Operational Expenses.............................................................................................................26

8.5 Legal Considerations ........................................................................................................................26

9. Financial Analysis ..................................................................................................................................28

9.1 Financial Comparables .....................................................................................................................28

9.2 Income Statement .............................................................................................................................29

9.3 Balance Sheet ...................................................................................................................................30

9.4 Cash Flow Statement ........................................................................................................................31

9.4.1 Annual Cash Flows....................................................................................................................31

9.4.2 Monthly Cash flow – Years 1 & 2 .............................................................................................32

9.6 Financial Assumptions .....................................................................................................................33

9.7 Funding Requirements......................................................................................................................35

Appendix 1: Regional Movie Theaters and Performing Arts Venues ....................................................38


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1. Executive Summary

Troy Proctor’s Development Corporation and Troy Proctor’s, Inc. together present a business plan for a multi-phase, adaptive re-use business plan for the property at 82-90 4th Street, Troy, New York 12180 presently known as Troy Proctor’s Theater. Together these entities present a service offering of convenient and unique office and retail spaces, and the operation of the 2300 seat Troy Proctor’s Theater, a thriving performing arts and movie palace once again.

The United States Nonprofit Arts and Culture industry has historically shown significant growth: 24 percent between 2000 and 2005, to $166 billion. Despite recent economic downturns through the nation, the Capital District of New York, which encompasses Albany, Schenectady, Rensselaer, and Saratoga Counties, has experienced growth in tourism and interest in arts and entertainment in recent years. This is supported by a May 2009 study that reported that tourism within this region had increased in 2008, despite the economic instability and increasing gas prices seen across the country.1

The total combined annual attendees to similar sized area performing arts venues (Proctor’s Schenectady, Palace Theatre, Troy Savings Bank Music Hall and The Egg) are approximately 300,0002. Through an evaluation of the local competitive performing arts offerings within the Capital Region, an opportunity to provide reasonably priced comedy shows and movies to local attendees, along with a general mix of larger off-Broadway and dance performances to supplement revenues from audiences drawn from further away, exists within the city of Troy. The Troy Proctor’s Theater performance line-up will be strategically scheduled and provide targeted offerings for the entire family and also individuals with varying levels of disposable income. With a potential market at almost 1.2 million – the entire regional population – and a target market subset of 135,000, it is estimated that Troy Proctor’s Theater will achieve an annual first year operating attendance of 40,000 total attendees achieved through a direct and online marketing approach.

The operation of Troy Proctor’s Theater is expected to generate additional out-of-venue revenue for the city of Troy of $720,000 annually for its first full operating year, assuming 40,000 attendees spending $18 each at local establishments. These additional funds would quickly and generously contribute to Troy’s economic growth supporting bars, restaurants, retail outlets, and hotels.

1 http://catskillmountainkeeper.org/node/893 2 Regional Indicators Report. (2003). Regional Cultural Assets.


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2. Company Overview

2.1 Introduction

Troy Proctor’s, Inc. is a non-profit organization formed to develop and run the Proctor’s Theatre as a multi-use venue, and adjacent office building with street front retail space in Troy, New York. In this business plan Troy Proctor’s, Inc. presents a multi-phase business and operations plan for the property at 82-90 4th Street, Troy, New York 12180, presently known as Proctor’s Theater.

Opportunity

The proposed restoration plan, currently under consideration, is a multi-phase plan, which incorporates the following:

1. Restoration of the 2300 seat Troy Proctor’s Theatre for use as a performance venue, movie space and rental space.

2. Conversion of current vacant space into rental office space. 3. Updating and including a retail space for additional revenue generation.

Additional options for the restoration may be available and include:

• A rooftop lounge and bar operated separately from the management of the theatre. • Two smaller modern movie theaters, distinct from the main performance theater, used to

show first run films and independent movies.

“… Only in the last decade or so has [economic] decline begun to abate, as Troy’s population has begun to level off slightly below fifty thousand, and as the rise of the “New Urbanism” movement has contributed to the revival of cities like Troy in many quarters of the country. An ideal candidate for such revival, with its charming architecture, unspoiled waterfront, attractive walk ability, and alluring heritage, Troy is proving to be something of a poster child for this new chapter in the history of American cities.’’3

2.2 Mission Statement

Troy Proctor’s Theater is a forward-thinking venue devoted to developing attractive local and Capital District theater and venue offerings. Our mission is to assemble the highest quality live performance and venue offerings in Troy, New York that will build the venue’s revenue base as well as stimulate the local community and downtown district. The focus on both performing arts and venue rental separates Troy Proctor’s Theater from other local entertainment options since it combines many aspects of their offerings in a new way in a new location. The goal of Troy Proctor’s Theater is to grow consistently, utilizing retained earnings to support and continuously 3 Thomas Carroll; http://www.visittroyny.com/aboutTroy/history/anewrevival.aspx


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improve its theatrical and venue offerings, as well as to develop innovative new offerings that will continue to meet the demands of the ever-changing Troy and Capital District markets.

2.3 History

Proctor's Fourth Street Theatre, as it was originally called when it opened in 1914, is one of only seven surviving works of classic movie theaters that were designed by Arland W. Johnson, although only two of his works, the Garde Arts Center in New London, Connecticut and the Palladium Theatre in Worchester, Massachusetts are in use currently4. The theater in Troy was built with the capacity to seat 2,300 in its auditorium. Troy Proctor’s, as the theatre is now called, is one of three surviving National Register listed movie palaces in the Capitol Region of New York. The theater shares its façade with a five-story office building, which also has street front retail space available on the ground floor. Although initially a vaudeville house, Troy Proctor’s hosted many A–list Hollywood entertainers, such as Jack Benny, Jimmy Durante and Bob Hope, during its golden age, from the 1920s to the 1940s, and later was home to movie showings. Usage of the theater ceased in the 1970s.

Supporting the operation of the historic Proctor’s Theater and its associated properties located at 82-90 4th Street in Troy, New York presents an opportunity for the city of Troy and community at large to positively impact the growth of the area while maintaining the city’s historical charm and attraction. In recent years the city of Troy has begun to experience a new wave of growth including the establishment of new businesses, restaurants and nightlife venues making Troy into a destination and keeping business ‘on this side of the bridge’.

2.4 Objectives

Through quality offerings and a great location, Troy Proctor’s Theater will become a prominent event location in the Capital Region. By utilizing initial grant funds, selling tax credits, and assuming a moderate amount of long-term debt, the Troy Proctor’s Development Corporation will remodel the facility back to its original grandeur and better, and will begin operations. Any earnings generated from operations of Troy Proctor’s Theater will then continually be reinvested, not only in itself, but into other desirable local businesses that will develop it and its surrounding area into a destination that will reinvigorate downtown Troy. It is anticipated that once the Troy Proctor’s Theater is renovated and operational that Troy Proctor’s Inc. will manage it for the near future.

4 Cinema Treasures, Classic movie theaters designed by Arland W. Johnson, http://cinematreasures.org/architect/57/


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3. Product and Services Description

3.1 Introduction

The property will be separated into three entities: retail space, office space and a performance venue known as Troy Proctor’s Theatre. The retail and office spaces will be managed under Troy Proctor’s Development Corporation with a property management group in charge of property rental. Tenant(s) for the retail space will be required to prove that they will be an asset to the local area, offering goods or services that compliment the goals of the Troy Proctor’s, Inc. for community and business growth.

By targeting three separate areas, Troy Proctor’s Development Corporation’s offering will significantly contribute to the elements essential to reviving the 4th street area. This area’s potential is further bolstered by its proximity to Monument Square, which has recently attracted investment. As this area steadily transforms, it will further emerge as a destination and attract greater amounts of patrons. In addition to this the service-offering model was specifically created to diversify revenue sources, which contribute to its general robustness.

3.2 Description

Street Level Retail Storefronts The retail portion of the Troy Proctor’s offering will be made up of storefront space with a usable total of approximately 3750 ft2, with access to basement storage. Examples of the desired tenants include Wine and Cheese Cafés with outdoor sidewalk seating as weather permits, Specialty Tea and Spice Shops, Florists, Antique Shops, and “Made in NY” Gift Shops and Galleries.

Rent will be offered at approximately $8-10 ft2 to future retail tenants. This is a 25-33% discount from prevailing downtown rental rates which will entice business owners to open a new shop, or move an existing shop into Troy Proctor’s retail space, which will enable Troy Proctor’s to reach 100% occupancy in the retail space and will create daytime vibrancy on 4th Street that is not present today. With most of Troy Proctor’s storefronts occupied by businesses with daytime business hours, and perhaps early evening business hours, this leaves the space in front of each retail storefront as space into which a café operation can expand their evening and late evening sidewalk seating and service. This creates a nighttime vibrancy on 4th Street that is presently far below standard.

Office Space There will be approximately 15,000 ft2 of usable space, from the second to the fifth floor, which will be converted and rented as office space. This space will be rented at approximately $13 per


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ft2. This space is attractive because of the beauty of the recently renovated historic structure and space, with its great downtown location and nearby parking.

Theater Troy Proctor’s Theater will be leased from the Troy Proctor’s Development Corporation, and managed by the non-profit Troy Proctor’s Inc. It will be used as a venue for live performing arts and as a stadium for community events such as political debates and community forums. Below is a list of events or models that will utilize the Troy Proctor’s Theater space:

• Performing Arts Venue: National theater touring groups, regional and local dance companies, community theater groups, music, stand-up comedy, opera, vaudeville, burlesque, magic shows, local theater groups.

• Movie Palace: The main theater (the box, mezzanine, and parquet) will be used to show first run movies, art films, and documentaries.

• Conference Venue: With numerous quality restaurant choices nearby, conferences of up to 2,000 can be attracted to the downtown Troy area. Rensselaer Polytechnic Institute, Sage Colleges, Emma Willard, Good Samaritan Hospital, Albany Medical, Law Schools and Alumni groups are all potential renters with histories of organizing meetings and conferences locally.

• Concessions: Kiosks selling beer, wine, soda, bottled water, chips, popcorn, candy, and soft pretzels will be placed at strategic locations on each level.

• Troy Proctor’s Theater Gift Kiosks: Kiosks selling T-shirts, sweatshirts, shopping bags, pens, hats, banner flag, etc., will be placed at strategic locations on each level.

There are a number of additional uses for Troy Proctor’s Theater that are not considered in this plan, but should be considered as viable options:

• Festival Venue: Film and music festivals • Fundraiser Venue: Televised fundraising events, school variety shows • Political Debate Venue • Beauty Pageant Venue • Academic Competition Venue: Spelling bees, debates, math bowls

3.3 Market Comparison

Current venues cater to a variety of customers in the region and when combined, provide similar services as the ones offered by Troy Proctor’s Theater (please see the appendix for list of movie theater and performing arts venues, as well as Section 4.4: Market Competitor Analysis). These venues house Broadway touring shows, movies, local productions, bands, comedies, conferences, sporting events, and more. The venues vary greatly from historic locations such as Schenectady Proctor’s Theater to modern mega facilities like the Times Union Arena. Prices for events vary widely, anywhere from a few dollars to over one hundred dollars.


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Troy Proctor’s Theater will bring many of the crowd-drawing events listed above to a completely revamped historical facility in a location that will be new to Capital District theatergoers. With restaurants and parking close by, Troy Proctor’s Theater will give patrons a fresh, high quality, complete show experience in an unrivalled venue. Troy Proctor’s Theater will also provide a new, and unmatched, destination for the local Troy community. With shows that cater specifically to Troy natives during the week and available weekends, the community will be able to experience the magnificent facility frequently at prices they can afford.


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4. Industry and Marketplace Analysis

4.1 Industry Analysis

Arts Industry The United States Nonprofit Arts and Culture industry grew 24 percent between 2000 and 2005, to $166 billion. Generating an annual $29 billion in government revenue and supporting 5.7 million jobs nationwide, the American nonprofit arts and culture industry is responsible for a substantial amount of economic activity: $63 billion is spent annually by organizations and an additional $103 billion is spent by audiences on event-related activities. These organizations are key players within a community’s business infrastructure by acting as employers, producers, consumers and top promoters of their region. In addition, as has been demonstrated locally in Schenectady, many businesses beyond that of the art or cultural venue, such as restaurants, hotels, and retail shops, show direct gain. A national survey taken in 2005 revealed that, on average, spending in the community outside the entertainment venue was almost $28 per attendee, per event.5

The Arts Industry in New York State as of 2005 had a combined economic impact of approximately $25 billion to the state, with approximately $7.5 billion contributed by the nonprofit culture. In addition, over 190,000 jobs were generated for a total of $9.8 billion in wages and providing a total of $1.2 billion in taxes to New York State.6

The Capital District of New York, which encompasses Albany County, Schenectady County, Rensselaer County, and Saratoga County, has experienced growth in tourism and interest in arts and entertainment in recent years. This is supported by a recent May 2009 study that reported that tourism within the Capital Region had increased in 2008, despite the economic instability and increasing gas prices seen across the country. The report also cited that most people visiting the area travel from 15 to 100 miles away.

Visitors to the Capital Region spent over $1.6 billion in 2008, representing a 3.1% increase over 2007.7 In addition, in 2008, a 6-day run of the Broadway musical Spamalot brought in 28,000 visitors to the city of Schenectady to watch the production at Schenectady Proctor’s. In addition to attending the show, these individuals were expected to frequent the local bars and restaurants, attend conferences, and watch movies.8 National recognition has also come to the area with Schenectady Proctor’s being awarded the 2009 Outstanding Historic Theatre Award by the

5 Arts & Economic Prosperity III study, Highlights Brochure, Pages 5‐6 6 Arts as an Industry, Their economic impact on New York City and New York State, 2006, page 60 7 May 5, 2009, Schenectady Gazette: Tourism in region increases despite economy, http://catskillmountainkeeper.org/node/893, 8 http://cms.dailygazette.com/news/2008/jan/08/0108_Spamalot/, last accessed August 14, 2009


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League of Historic American Theatres. The major criteria for winning such an honor include the theater’s impact on its community and quality of its programs and services.9

Retail Industry The national Retail Industry encompasses more than one million establishments employing fifteen million workers.10 Throughout the United States many industries are being affected by the current economic situation and the Retail Industry is not an exception. Demand for goods and services that were once considered commonplace are now considered luxuries for many average Americans. Larger retailers, those with many outlets who are forced to compete largely on price, are expected to be hit the hardest when faced with maintaining inventory and consumers who no longer have extra income (e.g. Circuit City).11

The Retail Industry of New York State, with annual retail sales of over $107 billion and employing more than 890,000 workers in more than 72,000 establishments, has an overall positive impact on the economy of the state. Tax revenue is generated at over $24 billion annually and communities are enhanced through cash donations, goods, and facilities.12

While the national economics are a concern going forward, in the Capital Region the retail industry is experiencing visible growth. In Clifton Park an old department store is under demolition and the development group will bring in ten to fifteen smaller shops in its place, including a Chipotle Grill eating establishment.13 In Latham The Fresh Market, a North Carolina-based gourmet store is making plans to open its first retail outlet in the area.14 The city of Troy itself has begun to see a rejuvenation of local business with the improvement of its Little Italy area, Antique District, and addition of boutique shops that draw crowds during the monthly Troy Night Out and annual Victorian Stroll events. The success of Chef Larry Schepici’s restaurants also indicates that the “upscaling” of downtown Troy is a true possibility.

Business Climate A 2009 survey by Forbes magazine reported Albany, New York as ranking number 88 in a list of the top 100 Best Places For Business and Careers in the United States.15 The Capital Region has always been a place with reasonable cost of living expenditures and it has a central location to major cities such as Boston, New York, and Montreal. Recent business influx has included the establishment of the new headquarters of International SEMATECH, formerly located in Austin, Texas, and the upcoming Global Foundries semiconductor manufacturing facility in Malta, New York. It is recognized that office space in downtown Troy is readily available today, however with the expected growth of Tech Valley and the university incubator programs in the region, 9 http://myvanwy.tripod.com/releases/lhat.html, last accessed August 14, 2009 10 http://www.retailcouncilnys.com/resources_facts.html 11 http://money.aol.com/investing/companies‐hit‐hardest 12 Retail Council of New York State, http://www.retailcouncilnys.com/resources_facts.html 13 Times Union, http://blog.timesunion.com/business/category/retail/ 14 http://blog.timesunion.com/business/gourmet‐grocery‐gets‐final‐town‐approval/13913/ 15 http://www.forbes.com/lists/2009/1/bizplaces09_Albany‐NY_2738.html


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coupled with the growing attractiveness and incentives of establishing businesses in the Capital Region, additional office space will become necessary.

4.2 Marketplace Analysis

The Capital District market for performing arts/multi-use venues includes the majority of the 1,166,29016 local residents due to its diverse offerings. Capital District performing arts centers, multi-use venues and arenas attract approximately 2.3 million visitors per year.17 The Troy performing arts venue Troy Savings Bank Music Hall has an attendance of 70,000 annually, which represents only approximately 3% of the 2.3 million Capital District attendees while Troy’s population represents approximately 4.3% of the Capital District’s population. This suggests the Troy market is under represented in the performing arts/multi-use venue market.

The offerings provided by the various venues focus primarily on performing arts, but also include sporting events (Times Union Center) – giving rise to the term “multiuse”. The current players in the market collectively focus on almost every market segment in some way. However, their target patrons may differ, for example, by age, income, race, educational attainment, or geographic location. Major movie theaters have a similar approach by offering a variety of movies in order to reach a broad demographic. The chart below shows the breakdown of one dimension (age) that exemplifies their ability to reach a variety of customers.

Figure 1: Percent of Moviegoers by Age Group18

As seen above each age group makes up a significant part of the market, as it would be for a diverse multiuse venue like the one proposed in this plan. This wide scope targeting influences venue loyalty and the flow of various demographics between the various regional facilities.

16 http://en.wikipedia.org/wiki/Capital_District 17 Regional Indicators Report. (2003). Regional Cultural Assets. 18 Motion Picture Association of America. (2007). Movie Attendance Study.


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The multiuse venue market is unique in its revenue generation capabilities as well. According to the New Jersey Performing Art Center (NJPAC), one of the 10 largest performing arts companies in the United States, ticket sales and other earned revenue represent only 55% of total revenue while donations represent 45% of total revenue!

4.3 Marketplace Buyer Analysis

As mentioned in the previous section, the “buyer” is an extremely diverse population that flows between venues depending on the content. If a patron decides they would like to see a comedy show, it is likely that they will travel to the location that is having a comedy show versus waiting and hoping their favorite venue will have one soon. This behavior likens this market to the “current desire” model of restaurants and/or bars, versus the “trusted product” model which aims at acquired loyal repeated use. Instead of being at the “one” location for “happening” events, patrons rotate through multiple venues.

Even though this is the case, it is still possible to achieve a better understanding of the people that attend the various events and venues through market segmentation. One model, generated from approximately 10,000 ticket purchasing survey respondents at 14 US performing arts centers, breaks performing arts ticket buyers into 10 segments, accompanied by a name that describes their behavior or “type”.19

Figure 2: Performing Arts Ticket Buyer Segmentation Model14 19 Brown, A. S. (2007). A Segmentation Model for Performing Arts Ticket Buyers. WolfBrown.


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This chart shows the extremely diverse nature of attendees and the somewhat equal representation of each group (all groups represent approximately 10%). This suggests that the buyer type depends on the show, and that performance diversity is essential to satisfying the varied market. While this data was generated from performing arts venues, it acts as a valid proxy for a multi-use venue since the other activities, such as movies, also have a broad market appeal.

In short, the buyer analysis creates a picture of incredible diversity. Troy Proctor’s Theater will target and be attractive to virtually all market participants through its various offerings that include performing arts, movies, comedy acts, seminars/lectures, and more. Troy Proctor’s Theater will differentiate itself in two ways: 1) by bringing a new geographic destination into the performing arts rotation (Capital District target), and 2) by focusing on events that specifically develop/cultivate the local Troy market.

4.4 Marketplace Competitor Analysis

Competitors specifically selected for closer analysis and comparison to Troy Proctor’s Theater are: the Palace Theatre in Albany and Proctor’s Theatre in Schenectady, which were selected due to their similarity of venue and potential performances, as well as the local Troy Savings Bank Music Hall and Schacht Fine Arts Center at The Sage Colleges due to their close proximity. Other identified competitors include The Egg at the Empire State Plaza, the Capital Repertory Theater in Albany, as well as the mega-venues of the Times Union Center in Albany, and the Saratoga Performing Arts Center in Saratoga Springs.

Annual attendance at these venues ranges from approximately 50,000 visitors a year at the Capital Repertory Theater, to over one million attendees a year at the Times Union Center.

Figure 3: Product Offerings of Local Competitor Venues


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From this brief analysis of Troy Proctor’s Theater’s marketplace competitors, it can be seen that Troy does not have a true multi-purpose venue at the moment, nor does it have a regular source of either live comedy acts or movies. Comedy acts, small or large, as well as movies can be used to capture local attendees and introduce them to the new Troy Proctor’s, supplementing revenues from larger performances that draw audiences from further away.

Another competing venue whose long-term impact must be tracked is Rensselaer’s new Experimental Media & Performing Arts Center (EMPAC). EMPAC currently offers free performances in a modern environment, yet it boasts a significantly smaller maximum capacity and currently reaches out to a different target market than Troy Proctor’s Theater will, located as it is in downtown Troy.


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5. Marketing Plan

5.1 Target Market

As a multi-use venue, the offerings of Troy Proctor’s Theater will be strategically scheduled and targeted to offer something for the whole family and individuals with varying levels of disposable income. As stated above, the current potential market for these services within the Capital Region is almost at 1.2 million individuals – the entire regional population. The target market is then identified as a subset that is most likely to attend (i.e. previous theater goers, concert goers and conference attendees). Considering the combined total of annual attendees to similar sized area performing arts venues (Proctor’s Schenectady, Palace Theatre, Troy Savings Bank Music Hall, and The Egg) is approximately 300,00020, the percentage of those assumed to be coming from beyond the Capital Region (10%) and the assumed percentage of repeat/returning attendees to similar events (50%) it can be estimated that the initial target market will be 135,000 unique customers with characteristics equally divided among the 10 Performing Arts Ticket Buyer Segments mentioned in Section 4.3: Marketplace Buyer Analysis of this plan. In addition, Troy Proctor’s Theater will seek to carve out a local niche in attracting first time attendees through a wider variety of comedic acts offered at reasonable ticket prices and also through weekly movie showings. Over time the target market will grow and expand geographically, and be served with new product offerings, as venue capabilities and marketing reach grows.

Based on the current marketing mix discussed in Section 5.5: Advertising and Promotion Strategy below for the Phase One marketing plan and anticipated available budget, Troy Proctor’s Theater anticipates an annual attendance of 40,000 for its first year in operation. These are total attendees and are not unique visitors.

5.2 Service Strategy

Troy Proctor’s Development Corporation along with a Property Management company will enhance the downtown area of Troy by offering affordable and attractive retail and office rental space. The rental spaces will offer a safe and unique location for businesses to establish their operations or operate satellite locations with plenty of easily accessible parking, high-end and late night restaurant options allowing businesses to operate 24 hours a day.

Troy Proctor’s Theater will offer the city of Troy and the community at large an opportunity to experience live theatre, music and arts productions in a timeless, inviting and convenient fashion. Troy Proctor’s Theater will provide an opportunity for those that have not yet been able to experience a live arts act of any kind (including comedy) to do so close to home and at a decent

20 Regional Indicators Report. (2003). Regional Cultural Assets.


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price. This will be accomplished through the hiring of a Talent Promoter and Marketing Manager working together as part of Troy Proctor’s, Inc.

A great opportunity is presented for the city of Troy itself, with the out-of-venue expenditures of attendees reported to be an average approximately $28 per person21 at neighboring establishments. Based on actual estimates of attendance for the first year of operations and a one third reduction in spending attributed to cost of living adjustments in Troy ($18 per person) the potential annual additional revenue for the city of Troy is calculated to be approximately $720,000 ($18 per person extra spent X 40,000 annual attendance during the first operating year). These additional funds would quickly and generously contribute to Troy’s economic growth.

5.3 Pricing Strategy

Performance pricing will vary depending on the style and type of performance and current market data. Breaking down the three main performance types into large theatre productions, concerts and comedy shows, Troy Proctor’s Theater will assume an average ticket price of $25. Additional revenue will be generated through the rental of this space at a price of approximately $2500 per day. Liquor and concessions will be priced based on their market value plus in order to achieve a 90% gross margin.

5.4 Distribution Strategy

Troy Proctor’s Theater will partner with a leading ticket distributor such as Ticketmaster for online sales in addition to an onsite box office in which tickets can be purchased during business hours and 2 hours prior to show time, and a robust Troy Proctor’s Theater website to sell tickets online for events not sponsored by Ticketmaster. Depending on the type of performance, tickets may also be available through local vendors and via street vendors to promote weekend events. For example, comedy show tickets may be sold via local bars and restaurants and admission to political events or community events may be sold through schools, universities, community centers, city offices, etc. In addition, Amtrak, Greyhound, and tour operators may be approached to sell destination package tickets for special events encouraging visitors from outside of the Capital Region.

Consideration must also be given to the sales of concession and merchandise associated with a performance. Alcohol, soft drinks, and limited food (eg. candy, chips and popcorn) will be available for sale at a concession stand in the theatre lobby. Comedy performances may also create a demand for concessions between comedy acts and therefore extra personnel could be used within the theater itself to act as wait staff during the show.

5.5 Advertising and Promotion Strategy 21 Arts & Economic Prosperity III study, Highlights Brochure, Pages 5‐6


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Troy Proctor’s Development Corporation Chief Executive Officer and Financial Director will provide oversight to its partnered Property Management group in completing promotion for Troy Proctor’s retail and office rental spaces.

Troy Proctor’s, Inc. will manage the advertising and promotional efforts of the Troy Proctor’s Theater arts venue. A Marketing Manager and Sales & Promotion team member will work together with the Chief Executive Officer and House Manager to establish both first phase and second phase marketing efforts.

First phase marketing efforts are those for the six months prior to the venue opening as well as those after opening necessary to fully establish Troy Proctor’s Theater as a recognizable brand. These first phase activities include the following:

Internet – The Internet will be utilized as a main source to support both the operations of Troy Proctor’s Theater and aid in promotion of events. Web 2.0 technologies such as wikis, blogs and networking sites (i.e. Facebook, Twitter, LinkedIn) will be incorporated to promote high touch and easily directed advertising.

Television & Radio – As a non-profit, Troy Proctor’s, Inc. will use the free services available for promotion of community events on calendars with local television and radio stations. In addition, they will promote through local television news segments as possible.

Print – Standard posters, flyers, newsletters and direct marketing materials will be included for general promotion of events.

Second phase marketing efforts incorporate all of the above, adjusting as necessary based on current market data and trends. In addition, long-term marketing efforts will focus on standing partnerships such as described below:

Tourism and Touring Partnerships – Advertisement with strategic tourism partners, state wide chamber of commerce groups and travel companies will be possible once the theatre is established and schedules are known well enough in advance.

5.6 Strategic Partners

The Organization has identified five strategic partners it will need during its operations:

Ticket Distributor: In an effort to help manage ticket sales, accommodate high sales volume and allow for far reach ticket distribution, an online and phone sales ticket distributor such as Ticketmaster will be vital in the availability and distribution for most events.

Government Entities: Financial and political support from the city of Troy and Rensselaer County, as well as neighboring local municipalities will become vital in the promotion and sustainability of the Theater. It is crucial that Troy Proctor’s, Inc. and Troy Proctor’s


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Development Corporation both consider and understand the needs of these stakeholders and create relationships that will result in promotion and betterment of the Capital Region.

Community: Non-profit theater venues rely heavily on community support, which includes volunteers of various talents for general operations assistance, monetary donations to assist in operations, and corporate partners of the community for sponsorships and further donations.

Local Media: Troy Proctor’s, Inc. will look to build ongoing relationships with local news media (Times Union, Troy Record, Metroland, WRGB, WMHT, B95.5, etc.) for promotional purposes and talent acquisition.

Tourist and Travel Companies: Once established, approximately after the first two years of operation, Troy Proctor’s, Inc. will work with tourist and travel companies to create ‘play and stay’ type of packages or ‘daytripper’ travel packages that would incorporate transportation (Greyhound, Amtrak) or dinner with a show at Troy Proctor’s Theater, appealing to both Capital Region and non-Capital Region residents.


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6. Operations Plan

6.1 Operations Summary

Save Troy Proctor’s started as a true grass-roots organization, with approximately twelve members, who formed out of interested community members to save the Troy Proctor’s Theater from demolition. As the group expanded, a core group of leaders emerged to spearhead the efforts and take on the work of creating a viable restoration and operations plan.

The group believes that renovating Troy Proctor’s will provide significantly more benefit to downtown Troy than the proposed alternative of additional office space. By providing more options for evening and weekend activity in downtown Troy, many more people will be drawn into the downtown Troy area. Studies have shown that the average visitor to a theatre performance or comedy show will spend a significant amount of additional revenue outside the entertainment venue at local restaurants, stores, and bars. This influx of additional foot traffic and revenue into the downtown Troy area will help lengthen the effective retail day of the city, making an “18-hour city”, and contribute significantly to downtown revitalization efforts.

Troy Proctor’s Inc. is a registered non-profit corporation. Leading the organization is Erica Veil, who has significant business and project management experience and is deeply devoted to local arts and culture. A theater design and restoration consultant to be determined will provide initial operational advisory services. To date, the following advisory experts have participated in assessing restoration alternatives, demonstrating Troy Proctor’s Development Corporation. is committed to engaging a competent team of experts for advice and consultation to ensure that the project stays on track and is ultimately successful: Keith Holmes of Centurion Realty Group, LLC, local developer putting together the restoration plans; Greg Gosselin of G & R Construction, façade and plaster restoration; Peter Poulin of Poulin and Sons, plaster restoration; Scott Renzi of Certified Mold Solutions, mold abatement; Al Hall of H2H Environmental, environmental clean up; Bill Massman of Spectrum Environmental, mold abatement; John Finelli of Finelli Construction, electric design and stage reconstruction; Dave Holmes of Holmes Engineering, HVAC / MEFP; Douglas G. Bucher and William Brandow of John G. Waite Associates, PLLC, restoration architects; William Collins of Innercept Management, promotions and theater restoration; Rodney Wilshire of Empire Solar Store, solar energy; David Fleming, Executive Director of The Colonial Theater and former President of the League of Historic American Theaters, consultant for operational viability.

Through extensive community presence leading up to the present state of development for Troy Proctor’s, many individuals, as exemplified by signatories of the official Save Troy Proctor’s Petition, have also stepped forward to volunteer time and ideas and advice to the effort. Troy Proctor’s Inc., as part of an operations plan after opening, will engage these community members, potentially as both volunteers and as those who are compensated.


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As renovation commences, the members of Save Troy Proctor’s will flow into two organizations: Troy Proctor’s Development Corporation and Troy Proctor’s, Inc. Troy Proctor’s, Inc. will be responsible for preserving vital business and societal community connections as well as providing volunteer services. Troy Proctor’s Development Corporation will be responsible for ensuring the actual efforts to renovate Troy Proctor’s Theater and the connected office and retail space, as well as for making arrangements for the development and management of actual business operations once renovations are complete.

6.2 Scope of Operations

Troy Proctor’s Development Corporation plans to regularly operate more than one type of business at its location of 82-90 4th St, Troy, New York. First, it will lease the theater to Troy Proctor’s, Inc., who will in turn manage the ongoing theater operations that occur in the historic Troy Proctor’s Theater itself. For the short-term, Troy Proctor’s Development Corporation will also act as landlord and collect rent for street-level retail space (approx. 3750 ft2 usable) and office space (approx. 15,000 ft2 usable) in the associated office building.

It is envisioned that some operations for these businesses will be shared (electric, HVAC, etc.), but otherwise they will have distinct and non-conflicting operations. All business shall confirm to the Space And Occupancy Requirements et seq. (§ 176-20 — § 176-25) of the City of Troy Code (http://www.ecode360.com/?custId=TR1767), Ch. 176, Article IV and V and related Chapters and Articles.

The provisional summary of each follows:

Troy Proctor’s Theater: Will operate during identified hours according to Section 3: Products and Services Description. Troy Proctor’s Theater will be publicly open and staffed up to two hours before and after all events. It is envisioned that during weekdays operations would commence as early as 11:00 am (9:00 am opening) and conclude no later than midnight. Special events may extend the opening hours. With the proposed three venues within the Theater, start and end times for each venue will be coordinated to minimize congestion of entry and exit access, both in the foyer, and access doors, stairs, and hallways in conformance with City Code. The Theater foyer will be open 9:00 am to 10:00 pm for information services, ticket, and merchandise and concession sales. Depending on the event, additional operating hours for pre-event setup and post-event tear down may be required. It is envisioned that all such activities and operations will be conducted within the Theater and setup and tear down to be accessed via the alley. The venue will be cleaned after each event. In addition to the site/operations manager and maintenance staff (expected one or two full time depending on the scheduled events), there will be additional staff on site: foyer one to eight part time, covering box office, merchandise, and concessions; two to sixteen part time ushers for ticket and door/seating assistance.


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Retail Space: Will permit operations in accordance with the B-4 zoning uses. Regular hours of business are expected to be 10am-6pm up to seven days a week, with longer hours on Friday and Saturday, or during special events. Some business may feature earlier opening times (e.g. 7am for breakfast/ coffee/ tea) or later closing (e.g. 10pm for souvenirs and post-Theater activities). The details of each operation would be included in leasing arrangements with each tenant. Patrons of the retail space would not require special parking arrangements. Expected staff per business is 1-4 with occupancy limits determined by the business type.

Office Space: Initially, and for immediacy sake, the top four floors of the associated office building will be used as general office space, with Troy Proctor’s Development Corporation taking on a Landlord role. This will be a typical landlord/lessee relationship, and Troy Proctor’s Development Corporation will ensure that tenant businesses conform to all applicable zoning and legal requirements. As office space in Troy is underutilized, renting these floors as office space is only a temporary objective, until other operational areas of the Troy Proctor’s project stabilize. More studies need to be made to determine the best usage of the upper floors of this building, although several possibilities exist such as a boutique hotel, a rooftop lounge, and converting some of it into movie theatre space.

The scope of operations within Troy Proctor’s Theater is further addressed in Section 3: Products and Services Description of this document. The entertainment, cultural and community use of the Theater venues provide a highly varied scope of activities. However, the operations for all considered products and services are commensurate with comparable retail and entertainment facilities (see Industry and Marketplace Analysis) in the region. The executive director, house manager, and respective board of directors will regularly consider the scope of operation of the Theater as well as the scope of operations of the associated office building. The latter will include regular re-evaluation the available alternative-use options for the building such as a boutique hotel, rooftop lounge, or movie theatres. The regular review will be performed in full consultation with relevant officials of the City of Troy and other identified stakeholders (community, cultural, and economic).


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7. Development Plan

7.1 Development Strategy/Timeline

Troy Proctor’s Development Corporation plans to utilize a multi-phase development divided into: the first two to three years, the following four to seven years, and the longer term: beyond seven years. The goal of the first period is to demonstrate early adopters of the new Troy Proctor’s Theater with success in several special mixed-use markets outlined in Section 3: Product and Services Description. Also within the first period is a strong public relations and outreach campaign to engage the community: financially, economically, culturally and as patrons.

The general policies defined around development of Troy Proctor’s Theater will originate from the Executive Council, as chosen by a Board of Directors. The Executive Council will be informed by three sub-committees addressing; Finance, Culture, and Community. The theme of development will be “Sustained participation of, and presence in Troy”.

Each of the three committees will be directly responsible to the Executive Council and seek direction from the Council as well as drawing upon autonomous actions within the scope and mission of Troy Proctor’s, Inc. The three committees and their likely activities are:

Financial and economic: Work with all local business to inform them of all events, expected hours of operation, size of crowds. Consider economic aspects of future growth and the nature of businesses in the 4th Street block between State and Broadway. Consider future growth into the current adjacent buildings. Develop a capital improvement fund. Explore rooftop deck and inner courtyard (related to noise abatement) facilities to expand Troy Proctor’s Theater offerings. Consider the development of Troy Proctor’s Theater merchandise. It is expected that considerable economic benefit may be derived from a boutique hotel or other alternative use of the office building, and such facilities would require ongoing development to become viable and innovative.

Artistic/ cultural: Troy Proctor’s, Inc. will need to develop relations and collaborative arrangements with all organizations and institutions in the capital district that relate to arts and culture. The overall goal is to provide a stimulating environment for artists and performers, one they will enjoy, remember and wish to return to. Troy Proctor’s, Inc. will also seek funding and support from organizations such as the NEA and the NEH.

Community: Troy Proctor’s Theater is, and aims to remain, an icon in the Troy community. As such, its community development is vital to a sustainable economic and cultural future. Troy Proctor’s, Inc. must address common urban development issues such as - transport; parking for cars, access for tour and private buses, as well as current and future public transport. Troy Proctor’s, Inc. will take seriously all aspects of natural resources used and consumed on the premises (reduce, reuse and recycle), as well as make contributions to downtown improvements


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(beautification, refuse mitigation, sidewalks, alleys) in line with current and future city planning. Troy Proctor’s Theater, via the ground floor retail space, will also be in ideal incubator location for small and new businesses with its attractive rental rates. Troy Proctor’s Development Corporation and Troy Proctor’s, Inc. envision that they will be seen a partner for local entrepreneurial cultural and entertainment activities for the betterment of life in Troy. This will include collaborating with public agencies, non-governmental and non-profit organizations that are involved with the provision of events and potential audiences. As a good neighbor, Troy Proctor’s, Inc. will develop policies and procedures for noise abatement, valet parking, broad and equitable access to all demographic groups, age, gender, socio-economic, race, and life-styles.

Of specific note are two development activities that have a direct impact on Troy. To distinguish itself as a Troy landmark, the training and provision of the highest quality staff to ensure that the quality of a patron’s experience is high and repeatable. In turn this provides more skilled and proficient workers for Troy. It is expected that a future augmentation to vehicle accommodation will be required. This is in addition to the current 300 car, parking lot at 5th and Broadway, and the 534 Uncle Sam parking garage at River/ Fulton/ 4th Street, which will feature a free circulating shuttle to Troy Proctor’s Theater, via Third St. or River Street to State St.


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8. Management Plan

8.1 Management Summary

Troy Proctor’s Development Corporation, a for-profit corporation, will own the theater building and front office building and retail space. The same corporation will manage and operate the retail space and the office building. The theater building will be leased to Troy Proctor’s, Inc. The relationship between the for-profit and non-profit entities will be discussed with more detail in Section 8.5: Legal Considerations as the intricacies specific to the larger project are understood.

Troy Proctor’s, Inc., a 501(c)(3) corporation, will rent, manage and operate the theater.

8.2 Personnel Plan and Organizational Structure

A board of directors (five to seven members) for each entity will guide the respective organizations. A single Chief Executive Officer will provide direct leadership of both organizations. The Troy Proctor’s Development Corporation’s day-to-day management of the office and theater buildings will be performed by a Facilities Manager. Troy Proctor’s, Inc. day-to-day management of theater events will be performed by a House Manager, with several administrative personnel and staff in supporting roles.

*The CEO will manage both the for-profit and non-profit entities. The duties and payment for

both the Financial Director and Facilities Manager will be considered cross-organizational.

Figure 4: Proposed Organizational Chart


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8.3 Management Team Gaps

Troy Proctor’s, Inc. recognizes that several individuals with specific skill-sets and experience will need to be added to the management team in order to achieve long-term success. These roles include House Manager, Facilities Manager, Financial Director/Accountant, and Sales & Promotion Director.

8.4 Major Operational Expenses

Major operational expenses that Troy Proctor's, Inc. will incur include salaries, utilities, property taxes, and interest expense.

The salaries needed to staff Troy Proctor's Theater as depicted in Section 8.2: Personnel Plan and Organizational Structure will amount to approximately $345,000 in the first year. The largest components of this are $60,000 for a Chief Executive Officer, $50,000 for a Marketing Director, as well as $50,000 for a House Manager. Other salaried positions are Talent Coordinator, Sales & Promotion, and a part-time Financial/Accounting Director who will collectively be compensated approximately $100,000 in the first year. Hourly wages summing to approximately $150,000 will be paid in the first year to a Facilities Directory (Maintenance), a Technical Director, and a small staff of general employees. The estimated total employee compensation of $345,000 includes a "Cost of Employment" premium of approximately 30%, which is anticipated for related taxes and employee benefits.

Utilities are also a significant operational expense. Although tenants of the retail and office space will responsible for their own utility expenses it is estimated that Troy Proctor’s, Inc. will be responsible for approximately $185,000 in utilities a year relating to just the theater building.

Property Taxes (property, school, and Business Improvement District) are estimated to be approximately $50,000 a year, once renovation is complete and the property is reassessed.

Finally, and significantly, estimated loans of $4 Million (for renovation and start-up costs) will require principal and interest payments of approximately $600,000 a year, if structured as 10-year loans at 8% interest.

8.5 Legal Considerations

A tax credit advisor will be retained to provide tax credit advising. This includes advisement on legal structure and operations of and between the for-profit entity Troy Proctor’s Development Corporation and the non-profit entity Troy Proctor’s, Inc. Following is strictly an example of corporate structure and flow of tax credits:


27

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9. Financial Analysis

9.1 Financial Comparables

Figure 5: Financial Statistics – Entertainment (Promoters of Performing Arts, Sports, and Similar Events with Facilities)22

Note: Highlighted comparables represent theaters in similar revenue bracket.

22 Risk Management Association, 2008 RMA Financial Ratios and Benchmarks, NAICS Code 711310, pg. 1466


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9.2 Income Statement


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9.3 Balance Sheet


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9.4 Cash Flow Statement

9.4.1 Annual Cash Flows

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