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Blues sale wouldn't bring down the Peabody Opera House

This article first appeared in the St. Louis Beacon, March 24, 2011 - The curtain will go up on schedule this fall at the renovated Peabody Opera House even though some of the major players orchestrating the revival intend to bow out of their commitments at adjoining Scottrade Center. So say the principals involved in the rennovation.

Blues owner David Checketts, also chairman at SCP Worldwide in New York City, announced last week that he and the other investors are trying to sell the Blues hockey team and their lease at city-owned Scottrade.

That, in turn, raised questions about the future of the opera house. Checketts and associates at SCP are part of a group that also owns the lease for the city-owned opera house. They spent years working with the city and others locally to put together public and private financing for a $78 million-plus plan to revive the 1930's Art Deco landmark with concerts, family and touring Broadway shows and other entertainment.

SCP, a sports, media and entertainment investment group with affiliates in the entertainment business, is to manage and operate the reopened opera house. It was known as Kiel Opera House until last summer, when Peabody Energy bought naming rights.

Those involved with the momentum and construction work underway at the opera house say that it will keep going. no matter what happens at Scottrade.

"The lease for the opera house will not be part of the sale," said Eric Gelfand, a SCP spokesman. "Everything is going well. Everything is on schedule, and on budget," he said. And, he added, Checketts himself is "as enthusiastic" about reopening the opera house "as when he first laid eyes on it."

Separate Leases; Financial Link

Rodney Crim, executive director at the St. Louis Development Corp., said that the leases Checketts and his associates obtained in 2006 for Scottrade and for the opera house are separate. So technically, he said, they can, with city approval, reassign the lease for Scottrade but hold onto the one for the opera house.

And that, he said, is what's in the works. Crim said the lease for the opera house is not on the sale block and that "as you can see, as we drive by the opera house, everything is moving along well."

But there is a financial link between Scottrade and the opera house. Nearly $32.6 million in bonds issued by the city to help pay for the opera house renovation is being repaid with proceeds from a 5 percent amusement tax the city collects on tickets to Blues games and other events at Scottrade.

Crim said, however, that those payments are covered as part of the lease contracts. Even if someone would buy the Blues and move them out of Scottrade before the bonds are paid off, he said, the club still would be required to pay off the bonds.

Also addressed in the lease contracts is the possibility that Checketts and his associates might, at some time in the future, decide to reassign, or sell the lease for the opera house. The lease rate is $1 a year plus certain tax and assessment payments.

"In the lease agreement for the opera house, no matter what happens with the Blues, there is a requirement for the new buyers to keep the project going," Crim said.

"We wanted to make sure that the opera house would be protected" with the lease agreement contracts, he said, "and it is protected."

'Grinch' is Coming

Meanwhile, plans for reopening the opera house, likely in October, are progressing, although many of the details about what's coming are still under wraps. The reopening would be 20 years after the opera house went dark; it was closed when Kiel Auditorium was razed and replaced with Scottrade.

Gelfand did confirm that the show, "Dr. Seuss' How the Grinch Stole Christmas! The Musical," is set to go on stage in December in the main 3,200-or-so seat theater. It was produced by Running Subway, SCP's production company.

Four smaller adjoining assembly rooms, each built with its own stage and entrance, are being renovated and will be rented for wedding receptions, business conferences, perhaps small theater and music events and the like.

Gelfand said that anyone interested in booking space in the smaller theaters can now do so. 

Meanwhile, discussions are underway to work out the parking end of things.

William Kuehling, a spokesman for the city treasurer's office, said those discussions are focusing on making use of some 6,000 existing parking spaces in garages and on lots within walking distance of the opera house, rather than building another new garage.

"The city of St. Louis and the developers have been cooperating and working together to make some improvements for the parking experience, and make sure that if there are conflicting events at Scottrade and the Peabody, everyone will be accommodated," he said.

Critics Remain

A sour note is still coming from Richard Baker, president of Fox Associates. He and the Fox Theatre owners have complained bitterly about all the public money going into what they say will be competition from a tax-supported opera house. And, they say, ticket prices for everyone will go up because the Fox, and the Peabody, will be competing to bring touring Broadway shows here, thus bidding up production costs.

The Board of Aldermen, in approving plans for the opera house, did limit the number of Broadway shows that can be staged at the opera house for the first five years in an attempt to keep the peace. That didn't work.

Baker said this week that the old concerns are still there. Plus, he said, he thinks it is odd, at best, that tax money from ticket sales at Scottrade would help pay off bonds for the opera house renovation even if the Blues and lease for Scottrade are owned by someone else. Any new owners, he said, "would be lining the pockets of the folks who own the Peabody."

Charlene Prost is a freelance journalist who has long covered development issues.