According to financial documents sent to potential Chinese investors, the real estate developers renovating the Palace Theatre intend to shut it with the adjoining hotel on Saturday, September 15 to begin demolition and construction. The theater’s current tenant, SpongeBob, which won the Drama Desk Award for Outstanding Musical on Sunday, might soon be forced to find another home.
The Palace Theatre today
The real estate developers plan to lift the historic Broadway house 29-feet above street level, creating 70,000 square feet of lucrative retail space. Spread across the ground floor and three underground floors, the new area is estimated to generate about $165 million in rent each year. “To create retail space on four levels in the busiest place in New York, Times Square, is brilliant,” said Stewart F. Lane, the co-owner of the Palace Theatre with the Nederlander Organization.
Maefield Development, which is developing the site with Fortress Investment Group and L&L Holding Company, first presented the plan to Nederlander using shoeboxes. While located underneath the Doubletree Suites hotel, the Palace Theatre is encased within its own little shoebox, and it can be raised into the empty space without hitting into the hotel.
Rendering of the renovated Palace Theatre's marquee. Credit: Maefield Development
“We have the ability, using the columns that exist today, to be able to elevate this theater on jacks that go up,” explained Paul Boardman, the president of urban real estate at Maefield. “The whole box itself stays in place and intact, and it can be moved up structurally very confidently because it is such a strong box,” he said.
But, as Lane commented, “there is a lot more coming to this than just elevating the theater.”
In addition to a new entrance with a 75-foot marquee on 47th Street, the blueprints for the Palace Theatre feature a much larger lobby, twice as many bathrooms, and more wing space to accommodate larger shows. “You’re going to get a brand-new 21st century theater there with the original interior of the theater that was built in 1913,” Lane said.
With a green light from both Nederlander and the landmarks preservation commission, Maefield purchased the lease and the air rights for the Doubletree Suites hotel from Sunstone Hotel Investors for $536 million in 2015. It also bought out rights of first refusal that belonged to Hilton Hotels and several other firms, and reached an agreement where Nederlander will own the theater and Maefield will own the hotel.
The hotel will be expanded to include 663 hotel rooms, a restaurant, a night club, and a pop-out outdoor performance space. “We’re going to have the only operating stage overlooking Times Square, as well as the best signage possible,” stated Robert Lapidus, the president of L&L, referencing the 17,000 square-foot electronic screen planned to wrap around the building.
The project will cost about $2.4 billion, and the real estate developers are still in process of raising the funds. In addition to lining up a $1.3 billion construction loan, the group is hoping to receive $300 million through the EB-5 visa program, which offers foreign investors an American green card in exchange for a $500,000 investment.
But, the planned renovations could evict the cheerful residents of Bikini Bottom.
While it is possible that the original timetable could be shifted to accommodate SpongeBob, which is now selling tickets through Sunday, September 2, the resilient real estate developers might stick to their construction schedule, and make the musical find another theater, go on tour, or close. The Marquis Theatre, which Nederlander also manages, might be available to use after Escape to Margaritaville closes in July. But, Nickelodeon and the other producers of SpongeBob SquarePants declined to comment on the situation when reached by Reuters.
The Tony-award nominated SpongeBob SquarePants: The Broadway Musical is now playing at the Palace Theatre (1564 Broadway at West 47th Street). For full information, reviews and tickets, visit http://spongebobbroadway.com.
SpongeBob SquarePants - The New Musical Original Cast Recording is available to purchase today at https://spongebobmusical.lnk.to/SpongebobMusicalRecording.
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More Nick: 'SpongeBob SquarePants: The Broadway Musical' Nominated For 12 Awards In The 72nd Annual Tony Awards!
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