Economic driver or liability? Council to examine Colonial Theatre management contract, set to expire this summer

LACONIA — The contract governing the operation of the Colonial Theatre downtown is set to expire this summer, and city councilors and members of the public on Monday pondered what a future arrangement for its management could look like. 

The Colonial Theatre is owned by the City of Laconia and operated by Spectacle Live, a theater management company responsible for operating various venues in New England. The revitalization of the theater, which occurred in large part under the leadership of the late former Mayor Edward Engler, for who the auditorium is named, has spurred both development and controversy downtown. 

It’s a former Vaudeville theater and was restored, finding its reopening in 2021. The theater seats 761 and hosts various community and traveling performances. Some say the space is underutilized given the expense undertaken by the city. 

The contract with Spectacle Live for its stewardship is set to expire at the end of June. The city published a request for proposals, the most recent on Nov. 24. That solicitation for applications expired on Dec. 11, and City Manager Kirk Beattie told councilors city staff received only one legal response. 

“The contract expires at the end of June, we put out for an RFP, had one response back, we put out an RFP again, we only had one legal response back,” Beattie said on Monday night. “That’s new as of about a month ago. Knowing that we have a new mayor and council seated, I have sat on it a little bit. I think it’s something we need to move on, whatever direction we go. It was a little bit delayed for that reason, so a new mayor and council could see.”

Councilors approved an agreement with Spectacle Live in November 2020,  a 5.5-year contract. According to the terms, Spectacle would provide year-round marketing, ticketing, booking, food and beverage services, calendar management, technical services and facility management services. It would also provide a full-time operations manager and develop a group of volunteer ushers.  

“We need to move on it, no matter what we’re going to do, but that’s why we stand where we stand right now,” Beattie said. 

What's drawn lots of discussion and disagreement is the bond associated with the restoration of the theater. Debt service on the original 2020 $6.7-million theater renovation bond cost the city $268,202 in fiscal year 2025-26, according to the city budget passed by councilors last year. It’s a 25-year bond. 

“The contractor we’ve been working with, as of today, was one that was put together prior to any of us here being on the board,” Ward 2 Councilor Bob Soucy said. “Mark was on the city council, but it was a contract that was very favorable in one direction, let’s put it that way. I’ve made it known, I believe most of the city council here has made it known, we’ve got to take another new direction with that.

“I think it’s a gem, I think it’s an awesome diamond or a piece of coal in the rough — it could be a lot better, no doubt about it, OK. It was brought to the city and voted on to be an investment into the city, and help draw people into the downtown area, which I think it can do and has done,” Soucy said. “But do we need to go and try to do something different? Maybe we do.” 

Gregg Hough, resident of Ward 2, told councilors Monday night he’d like to see the city explore options to make the theater profitable, and increase its overall utilization.

“I was looking at some of the idea of the debt that Laconia is carrying, specifically in the bonds and everything, and it occurred to me, one of them, with the Colonial Theatre, doesn’t necessarily act like the others,” Hough said. “By that I mean, the others, like you did the middle school — that’s just what it is, there’s nothing that can be done about it. That’s an outlay, that’s something that we wanted to pay for. The Colonial Theatre has a unique opportunity to actually make money and, as far as I’m aware of, it doesn’t.”

Hough suggested the theater should be run more like a municipal airport, a parking garage or a ski area, “meaning it must generate cash flow that reduces taxes or pays off its own debt.”

“Right now, the Colonial Theatre does neither,” he said. 

“It’s true, there has been a lot of concerns about the utilization of the Colonial, and I think we need to do whatever we can to increase its utilization. I think anything we can do to decrease the tax burden of the Colonial, or to increase or create profitability, is certainly worth looking at,” Ward 3 Councilor Eric Hoffman said. “But I think looking at the Colonial as an expense is a narrow view of it, I think if you look at how much the tax base of downtown has changed — and I've mentioned this before, I don’t have the figures in front of me this time — but it is quite a bit of money that is generated downtown that didn’t exist before the Colonial opened."

Hoffman said this discussion can be framed multiple ways. 

“We’re not the only city that’s used a theater to anchor a revitalization of its downtown area, it’s been successful other places and I think it’s been very successful here,” Hoffman said. “When you really look at the big picture of downtown, I think you could make the argument the Colonial has actually increased our tax base and reduced the tax burden for taxpayers, and not created a liability.”