NYC Looks to Take Greater Share of Little-Known Profit Source from Broadway Theatres

According to Crain's New York, the city is attempting to pull a greater percentage of air-rights profit from Broadway theatres and the Theatre District. Air-rights have to do with the space above Broadway theatres, which the theatres are allowed to sell to property owners in the Theatre District. The city currently takes a portion of these profits, which are added to a fund that goes towards supporting emerging artists and theatre companies.

While many theatres currently take risks on Broadway shows that often fail to recoup, theatre owners such as Jujamcyn, Shubert, and Nederlander sometimes stay afloat due to millions of dollars in profit from air-rights. As historical landmarks, the theatres cannot be repurposed and turned into more lucrative venues such as retail stores or office space. The air-rights give the theatres a greater opportunity for profit.

The city is hoping to increase their share of the profits by nearly 400% per square foot of property. The profits currently go towards The Theatre Subdistrict Fund, which has garnered $9.6 million so far. An increase in the city's share would amount to a further $20 million.

A member of the committee that allocates the Fund's money defended the increase saying "You need to have thriving, small nonprofit theaters to groom talent, from lighting technicians and stage hands to the actors. The Lin-Manuel Mirandas don't appear out of nowhere."

The same committee member says the money gained in the increase in profit shares could be used to help quell the closing of small theatres which he believes is "definitely one of the cracks in the industry right now."

Management at Jujamcyn, Shubert, and Nederlander have yet to comment on the issue.

Read Daniel Geiger's full article here.

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