Hennepin Theatre Trust, after refinancing its debt, has paid off the remaining $14 million in city of Minneapolis-backed bonds the nonprofit assumed in 2005 when it took over the Orpheum, State and Pantages historic downtown theaters.
The $14 million in remaining bonds were retired 13 years early.
The refinancing through Bremer Bank gives Hennepin Theatre Trust full title to the theaters and will allow the nonprofit to accelerate its work of staging live productions, educational programs and more, including investing more to make Hennepin Avenue more vital and safer, said CEO Mark Nerenhausen.
"This is good for us, downtown and the city because we had a complicated structure," Nerenhausen said. "This eliminates the city-backstopping role and frees bonding capacity for the city. The city doesn't have to worry about the theaters. We can bring In more performances, create a more consistent customer experience and make the district better."
The nonprofit originally assumed $21 million in bonds. The city-backed bonds were at up to a 6.3% interest rate, while the Bremer debt is about 5%, Nerenhausen said.
The trust has built reserves and expanded throughout the years, except for 2020 and 2021 because of COVID-19 restrictions and effects. In 2021, it lost $1.6 million on revenue of $19.6 million. The nonprofit has yet to release results for fiscal 2022 that ended in June.
The nonprofit has acquired 900 Hennepin Av., next door to the Orpheum, as an event and performance center, as well as the Brave New Workshop building at 824 Hennepin Av.
Bremer Chief Executive Jeanne Crain said the bank is excited to help Hennepin Theatre Trust further its work.
Meet Minneapolis CEO Melvin Tennant, the city's convention and tourism agency, said the trust annually brings 600,000 people downtown and drives $120 million in economic impact, including what patrons spend at restaurants and hotels.
The Minneapolis Downtown Council and Minneapolis Regional Chamber of Commerce also hailed the development.
CEO Liz Rammer of Hospitality Minnesota said the trust's move "is further proof that great things lie ahead of our state's tourism industry" and that downtown has made great strides at coming back since COVID-19.
The trust is part of the Downtown Council's Downtown Improvement District. Property owners pay extra taxes for additional services, including security.
Downtown has seen an increase in property crime, robberies and aggravated assaults since 2020, with most occurring during late-night hours.
Business and civic leaders, who point to recent corporate relocations to downtown and a growing residential population of 50,000-plus, say the gradual rebound of commerce and arts downtown will help reduce crime. The city of Minneapolis also has recently stepped up patrols to address the issue.
The city invested millions acquiring and refurbishing the old theaters before the trust took over about 20 years ago.