Early in the recreation of Colonial Williamsburg, merchants in the town were relocated to Merchants Square, an area outside the historic district that was created to reflect the original colonial character of the town. One part of the Square was a motion picture theatre. Like most such venues, it had a very small stage that was intended to house only the projection screen and a large speaker array. As is the case with many such older movie houses, audience interest had waned in favor of more modern forms of entertainment. However, there was a need for a live performance venue to present a variety of attractions.

In order to support these, the existing building was cut off at the proscenium arch and a new building was erected to replace the small stage area. This includes a large wing on one side of the stage, dressing rooms for performers, stage rigging and drapery, and a high quality projection screen for those times when films may still be shown. An extended apron gives an 18th century feel to the place when period plays are performed.

The rest of the building was extensively remodeled. Seating was re-arranged, air conditioning and heating were upgraded. Modern stage lighting and sound systems were added. Perhaps the most interesting challenge was to make major acoustical modifications to the space without changing the appearance of the audience chamber. These acoustical changes were made through the use of carefully selected materials that were applied to closely resemble the original finishes. The new acoustic was complimented with a carefully designed sound system that is completely concealed from view, but is highly effective nonetheless.

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