Kimmel, orchestra agree on rent reduction

Posted: May 22, 2012

In further progress toward a new lease agreement, leaders of the Philadelphia Orchestra Association and Kimmel Center Inc. have signed an amendment to their existing lease that reduces the base rent, a Kimmel spokeswoman said. The new terms were not entirely clear; a copy of the amendment was not filed in U.S. Bankruptcy Court as of Monday evening. Details are expected in the orchestra’s forthcoming reorganization plan.

According to a statement released by both groups, the deal calls for a reduction in the rent the orchestra pays to the Kimmel, from about $2.5 million to $1.5 million annually. The rent will increase each year through 2017, to $1.74 million. Starting in 2018, the Kimmel will have the option of collecting an increased base rent or 16 percent of ticket revenues from orchestra concerts in Verizon Hall.

The new agreement — whose basic terms were approved by the boards of both groups in March — requires the approval of Bankruptcy Court as part of the association’s exit from Chapter 11, which it entered April 16, 2011. Judge Eric L. Frank on Monday extended the association’s exclusivity period — the time in which it has the sole right to submit a reorganization plan — to Aug. 9. It is the forth such extension in the case. — Peter Dobrin

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