Owner of Dolby Theatre says it will comply with city loan deal
The company that owns Hollywood's Dolby Theatre said Saturday it will comply with the obligations of the $30-million loan provided by Los Angeles city officials to lure Cirque du Soleil to the Hollywood & Highland shopping center.
One day after Cirque du Soleil announced it will close its lavish production "Iris" due to disappointing ticket sales, CIM Group spokeswoman Karen Diehl issued a statement saying payments would be made as scheduled on the city loan, which was approved by the City Council and Mayor Antonio Villaraigosa. CIM Group owns both the mall and the theater.
"The loan is current, and CIM will repay the entire obligation of the loan in full," the company's statement said. Neither CIM Group nor city officials could describe the payment terms or say when the loan is scheduled to be paid off.
"Iris" opened in September 2011 at an estimated cost of nearly $100 million in production expenses and theater renovation. When the loan was approved by the council in 2009, the production was expected to run for 10 years. Instead, the show will close in January after just 16 months.
The city's economic development officials were not available Saturday to discuss the loan. But in 2009, they promised the deal would result in the creation of at least 858 permanent jobs, with a majority being offered to low- or moderate-income workers.
Councilman Eric Garcetti, who represents part of Hollywood, also had championed the agreement, saying it would boost tourism in Hollywood.
Proceeds of the loan were used to redesign the theater so that Cirque du Soleil could stage its extravagant Hollywood-themed production. At the time of the vote, at least one council member questioned whether so much money should be provided to a single economic development project. Since then, some have argued that ticket prices were too high for a city recovering from a deep economic slump.
Renee-Claude Menard of Cirque told The Times that the company spent $50 million to $55 million producing the show. Despite overseas marketing, "nothing would tilt the needle," Menard said.
The Dolby Theatre, formerly known as the Kodak, is home to the annual Academy Awards show. It also has been used to stage finals of the television show "American Idol," the Daytime Emmy awards and BET Awards.
-- David Zahniser and David Ng
Photo: Workers break down the "Iris" set to make way for the Oscars at the Dolby Theatre in Hollywood in February. "Iris" canceled its run at the theater after 16 months. Credit: Al Seib / Los Angeles Times