Theaters want tax credit

Hopeful that break would lure Broadway pre-tour production

The Shubert Theatre in New Haven opened in 1914 and became known as “the birthplace of the nation’s greatest hits,” hosting the creative development and world premieres of “Oklahoma!” and “A Streetcar Named Desire,” among others.

But over time, pre-broadway development shifted to other venues, and the Shubert — along with a handful of other performing arts centers in Connecticut — has become a destination for another kind of musical and theatrical development, known in the theater world as “teching.”

When a successful Broadway production is ready to take its show on the road, the producers need a place to ready the tour. It takes about two to four weeks. Stagehands and production designers take up residency in a theater, where they reconstruct the set, design lighting and sound, adjust costumes and work out staging before packing everything into trucks and hitting the road.

“They’ll come to our theater, bring 75-plus people if not more, stay in local hotels and live in our community while they build the show for the first time on our stage,” said Anthony Mcdonald, the Shubert’s executive director. “It’s a big production, but it also reaps a lot of benefits, not just for the theater but for the entire community.”

That’s the argument performing arts leaders are making to the state legislature this session, where they’re pushing lawmakers to approve a tax break for traveling theater productions that choose to “tech” their shows at one of Connecticut’s six large urban theaters — Hartford’s Bushnell, the Shubert in New Haven, Waterbury’s Palace Theater, the Palace Theatre in Stamford, Torrington’s Warner Theater and Garde Arts Center in New London.

The state’s major performing arts centers are still struggling to recover from the pandemic downturn. Attendance at the Bushnell, Shubert, Waterbury Palace and Stamford Palace theaters was collectively down 46% last year

compared to the 2018-19 season, amounting to millions of dollars in lost revenue, theater leaders said.

Having a Broadway touring company take up residence for several weeks, paying rent to the venue and wages to the local stagehands’ union, provides financial stability for the theaters and their employees, they said. Traveling shows only stop by for a weekend, and theater directors say it’s hard to predict attendance, as the pandemic continues to keep many patrons away.

“We can’t stop doing what we do. That’s not the answer — especially now with office buildings practically empty,” Mcdonald said. “What else brings people downtown? It is the theaters.”

The stage is set

The theater industry’s slow recovery from COVID lends urgency to passing the tax credit. But performing arts leaders also point to a growing number of states offering similar incentives — and the competition that’s created for Connecticut.

Rhode Island and New York have offered tax breaks on musical and theatrical production for several years. Producers also mentioned Illinois and Louisiana, among other locations. Last year, Maryland, which is home to Broadway touring companies Troika Entertainment and Networks, passed a 25% tax credit on theatrical production costs incurred in-state.

“There’s a lot of business heading out to Rhode Island, driving right through the state of Connecticut to take advantage of those tax credits,” said Frank Tavera, chief executive of the Waterbury Palace Theater, which hosted tech residencies for tours of “South Pacific” and “An American in Paris” last year.

If Connecticut could offer a credit, Tavera said, “it would be a boon to the state, number one, and it would also be a boon to the venues, because we’d be able to compete.”

Performing arts leaders in Massachusetts are making a similar case to their legislature, potentially creating even more competition in the region. The pilot program, proposed by Gov. Maura Healey, would be available to pre-tour and pre-broadway productions costing $100,000 or more. The incentive would be capped at $5 million a year.

“More states are coming on board, and the more the better for us,” said Angela Rowles, Troika’s chief executive officer and a vocal proponent of Maryland’s recently passed theatrical tax credit. Troika produces five to 10 touring shows a year, each of which costs somewhere between $3 million to $6 million. “Because the spend is so much, it’s of course an incentive for us to go to a state that offers a return,” she said.

Tours spend roughly half of their total cost during the teching period, Rowles said, on hotels, meals, laundry, shopping, staffing and rent. “I do feel like any sort of tax incentive pays for itself by enticing us to come,” she said. “We definitely spend that money.”

Tom Viertel, an award-winning Broadway producer and board chairman of the Eugene O’neill Theater Center in Waterford, led efforts in New York to pass a theatrical tax credit almost a decade ago. “We took our cue from Rhode Island,” he said.

But as a part-time resident of Connecticut for the last 22 years, Viertel said he’s been frustrated that this state hasn’t taken up similar efforts until now. “These are demonstrably successful programs and can benefit a lot of places that otherwise struggle for economic activity,” he said.

Both Rowles and Viertel said Connecticut’s major theaters have the advantage of location. Producers, actors, designers — even the set-building workshops, costumers and storage warehouses — are mostly within a couple of hours’ commute by train or car.

“Proximity to New York is huge,” Rowles said.

The Playbill

Connecticut lawmakers are still working out the details of the proposed pre-tour theatrical production tax credit, House Bill 6505, and have not yet held a public hearing.

In a year when Gov. Ned Lamont is urging spending control, despite a record surplus, lawmakers may have to pick their battles.

Last month, the Commerce Committee heard hours of public testimony from a wide range of arts, culture and tourism organizations lobbying lawmakers to augment state support and accountability for their sector. The Connecticut Performing Arts Center Coalition, which represents the state’s six legacy urban theaters, was among those who testified on that bill, H.B. 6692.

The pre-tour production tax incentive, by contrast, is far more targeted. And since it’s a tax credit — calculated as a percentage of a production company’s in-state spending after the fact — it’s technically not considered a state expenditure from an accounting standpoint. That matters to the governor as state expenditures are subject to

Lamont’s spending cap. Numerous programs are competing this year for limited funding under that cap.

Jim Shea, business manager for the local stagehands’ union, International Alliance of Theatrical Stage Employees Local 74, said pre-tour production would support hundreds of workers and their families.

“I hope the state really looks at this and says, ‘Why not?’ ” Shea said. “The state’s in the black. They should say, easily, ‘Yes.’ ”

Still, providing tax credits to creative industries, particularly film and television, has historically come under fire from lawmakers and advocacy groups. Mcdonald said he wants to be careful to distinguish this new proposal from the existing Film and Digital Media Production Tax Credit, which some state leaders are now seeking to phase out, cap or reduce amid questions over its true economic impact.

Film and media production can go anywhere, Mcdonald said, but Connecticut’s six legacy theaters have stuck around for close to a century or more. “We were the place Broadway came to first,” he said. “Now we’re just trying to get some of that back.”