Palace Theater

Gary’s fortunes began a steep decline in the late 1960s, as layoffs at United States Steel mounted amid growing competition from overseas steel production. ¹² Crime rose steadily throughout the city, downtown businesses and hotels began closing, and the Palace struggled to draw evening audiences. Two violent incidents further damaged its reputation: the murder of a teenager in the theater’s lobby on April 14, 1968, and the attack of a young woman in the lobby’s ladies’ restroom in 1972. ^{7 14}

After a year of financial losses, the Palace closed on January 3, 1972. ^{6 8} It later sold for approximately $13,000. ⁹

In 1987, a group of doctors led by Dr. William Washington purchased the theater, planning to convert it into a combined office, theater, and restaurant complex. ¹⁰ The group opened a restaurant in an attached storefront, but it failed, and the investors abandoned the project entirely.

In February 2001, the city struck an agreement with Donald Trump to bring the Miss U.S.A. pageant to the Genesis Convention Center. ¹⁴ As part of the effort, Chicago’s Neighborhood Service Company was hired to paint murals on boarded-up buildings along Broadway, including the Palace, and Trump ordered a new marquee installed reading “Jackson Five Tonite.”

Bids to demolish the Palace were accepted in September 2004, though no funding was allocated for the work. ¹¹ Preservationists pushed the city to stabilize the building instead, and the city agreed, on the condition that preservationists find a developer willing to purchase and restore the theater. Two firms, Bauer Laterzo Studio of Gary and Thornton-Tomasetti of Chicago, expressed interest, but neither was able to secure financing for the project.