City Council approves letter to pursue funding for Plaza Theater restoration

During the Palm Springs City Council meeting on May 28, 2025, a significant discussion centered around the potential funding for the restoration of the historic Plaza Theater. The council considered approving a letter of interest that would enable city staff, financial consultants, and the city attorney's office to pursue federal historic tax credit financing. This funding opportunity is crucial as it could provide over $5 million in investment equity for the theater's restoration, which has already garnered more than $9.5 million in fundraising from the Plaza Theater Foundation.

The foundation, a 501(c)(3) nonprofit, has committed to raising a total of $24 million for the project, with an additional $10 million to be repaid to the city over time. The proposed financing would involve a private investor who would receive tax credits in exchange for their investment, facilitated by the National Trust Community Investment Corporation (NTCIC). This arrangement aims to generate a net benefit of approximately $2.8 million for the city.

City officials emphasized the importance of this financing strategy, noting that while the letter of interest does not legally bind the city to any financing agreement, it allows for further exploration of funding options. The council discussed the complexities of tax credit financing, with assurances that any finalized deal would return for public review and approval.

Additional discussions highlighted the need for transparency and clarity regarding the legal structures involved in the financing process. Council members expressed a desire for more detailed information on the roles of various entities involved, including the master tenant and landlord, to ensure community understanding and support.

The meeting underscored the city's commitment to preserving its cultural heritage through the Plaza Theater restoration, which is seen as a vital component of downtown Palm Springs' future. As the council moves forward, the anticipated next steps include further negotiations and the potential for additional public meetings to discuss the financing structure in greater detail.