Plymouth’s Penn Theatre Grapples with Tax Dispute and Uncertain Future

Penn Theatre in Plymouth Faces Uncertainty over Tax Dispute

The Penn Theatre, a beloved landmark in Plymouth that has provided entertainment for over 80 years, might need to close its doors due to a tax dispute. The theatre’s management is struggling against the city’s decision to withhold a property tax exemption, a decision that the organisation has found confusing and disheartening.

Having applied for a property tax exemption once it became a non-profit entity in December 2021, the bills still come up to an annual total of around $25,000. The theatre’s management argues that the cultural value they add to the city goes beyond the monetary sums they’re currently paying in property tax.

“We are perplexed by the city’s decision because essentially, we might have to shift our focus from our mission to provide art and culture to fundraising for tax payments,”, stated the executive director of the theatre.

The property maintenance, including the costly need for repainting every five years, has made the tax exemption feel even more critical for the theatre’s survival. Cash flow is a problem, with fundraising dominated by the need to either pay the property tax or risk closure.

In 2022, the theatre raised around $515,972 – primarily from contributions and grants – and reported expenses totalling at $311,950. However, its liquid savings have dropped substantially, leading to a loss of over $50,000 for the year. The management is understandably worried about this bleak financial state of affairs.

The Penn Theatre, with its 402-seater Art Deco aesthetic, has weathered closure once already between 2003 and 2006. It was revived in 2006 by a group of 10 businesspersons turning it into a limited liability company. The Friends of the Penn, formed in 2005, became part of the LLC in 2012 and soon after became its sole owner.

Now, the future of the theatre hinges on the Michigan Tax Tribunal’s decision on the tax exemption issue. Local authorities are confident that they will find a way to work in collaboration with the Penn regardless of the Tribunal’s decision.

Meanwhile, the Penn Theatre is continuing to show films at 7 p.m. from Thursday to Saturday, with a matinee at 5 p.m. on Sundays. Interestingly, the movie prices have stayed at an affordable $5 a ticket, offering the community a reasonably priced entertainment option.

Along with being a venue for film screenings, the theatre has also been used for free educational programs that align with the school curriculum. However, these services may be hit by the financial crunch, resulting in these opportunities getting ceased.

Despite these possible challenges, the Friends of the Penn remains committed to continuing their activities at the theatre. They have arranged a fundraiser featuring food, drinks, and live entertainment lined up on 15th September from 7-11 p.m.

It’s still a challenging time for the Penn Theatre. The management and community are hopeful for a positive outcome and are prepared to fight for the theatre’s survival.