The city of Boston joined forces with seven local banks to provide $7 million in financing for the Theatre Pavilion, a joint project of the Huntington Theatre Co. and the Boston Center for the Arts.
What is currently known as Boston’s Theatre District is soon to be overshadowed by the building of another theater project in Boston’s South End, thanks to the financing of seven Boston-based banks.
The city of Boston and seven Boston banks joined together to ensure the financing for the first two new theaters to be built in Boston in more than 75 years.
Citizens Bank, which is serving as the lead agent for the project, Boston Private Bank & Trust, Cambridge Trust Co., Eastern Bank, Fleet Bank, Sovereign Bank, Wainwright Bank & Trust and the city are providing a loan to the Huntington Theatre Co. totaling $7 million to help fund the project.
The Theatre Pavilion, a joint project of the Huntington Theatre Co. and the Boston Center for the Arts, is expected to open this fall.
Citizens Bank, Fleet Bank and Sovereign Bank each loaned $1.5 million. Boston Private Bank & Trust, Cambridge Trust Co., Eastern Bank and Wainwright Bank & Trust Co. each loaned $500,000. The Boston Redevelopment Authority and the city’s Department of Neighborhood Development each loaned $250,000. The total Huntington loan of $7 million – called a “bridge loan” – will be repaid with 5 percent interest by the year 2009. That arrangement allows the Huntington to cover construction expenses.
“We have campaigned pledges that will take a number of months to collect, but the cash is needed right away to get construction going,” said Dina Croce, spokeswoman at the Huntington Theatre, in explaining the bridge loan. “We will repay the loans by 2009 as our pledges come in.”
‘A Wonderful Draw’
In the fall of 2000, the Boston Center for the Arts and the Huntington Theatre Co. entered into a partnership to build two new theaters in Boston’s South End, adjacent to the BCA at 539 Tremont St.
In the subsequent gathering of the Boston-based financial entities, Citizens took the lead role for the group of banks, handling the administrative work of the collaboration.
“[Citizens is] leading the group of banks to provide $6.5 million in construction financing for the theater. As the lead agent, we handle all the administration work, meeting-organizing and setting up the communication of the players,” said Ann Thruelsen, senior vice president in the Healthcare Nonprofit Group at Citizens Bank. “We are pulling the deal together and making sure that all the parties involved have all the financial information they need to make a decision and finalize the project. Each of the banks is playing the part of making their own structured deal and working out their own financing.”
Last spring, the Huntington announced its “Setting the Stage” campaign, a $19.7 million, two-phase effort aimed to raise $16.5 million in Phase I ($12.7 million for the new theaters and $3.8 million for endowment) and $3.2 million in Phase II for an additional endowment.
According to Thruelsen, Huntington Co. had approached many banks individually but given the unique nature of the financing, “it was difficult for one bank to structure the deal on its own,” said Thruelsen. “We felt we could galvanize the project by being an agent … it’s been a wonderful collaborative effort in getting us all involved. It’s been inspiring to see that we can all work together toward a community goal.”
The city of Boston and the BRA pledged a total investment of $3 million to the Theatre Pavilion project to cover costs of site preparation, utility infrastructure, new streetscaping and sidewalks. As part of the agreement, the Druker Co. agreed to build the “shell and core” of the theater spaces – exterior walls and connections to major systems – a value of more than $9.3 million.
“It happened for the arts community and the people of Boston – it’s inspiring to see people be idealistic about things. These theaters are going to be a great addition to the culture of the South End and they will serve as a wonderful draw to that area,” said Thruelsen.
Boston Mayor Thomas Menino has described the collaboration as a “perfect example of public and private sectors working together to support the arts.”
“We have been involved with this project for many years, since [Menino] had done a study about what the arts community needed and it showed there needed to be new facilities for medium-sized art communities,” said Susan Elsbree, spokeswoman for the BRA. “The Boston Redevelopment Authority loaned $250,000 to the project – the key to this project to keep construction going and not have to re-bid if there was a gap in financing.”
The Huntington is responsible for raising the funds to build the theaters and will manage the new facilities. The Theatre Pavilion will serve as a theater hub and a cultural landmark for the city of Boston, according to Menino.
While the theater collaboration is the first time seven banks have joined together on one project to ensure financing, Thruelsen said the joint effort could start a trend for more bank-group projects.
“This could be the beginning of many collaborations like this … we have all developed a camaraderie and it’s a testament to the leadership of Huntington and the community,” she said.
Elsbree said the bank participation is not only reflective of a good investment, but also an indication that a competitive industry does not have to hinder a community investment.
“It is a testament to the project that these seven banks literally sat at the same table,” said Elsbree. “It’s a competitive industry, but it’s a good investment and it’s the right thing to do.”
Melanie Nayer may be reached at mnayer@thewarrengroup.com.
