Having grown up near Seattle, I was amazed at the vastly improved quality of the Seattle Children's Theatre from the humbler stuff I remember seeing when I was a little kid.
We took in "Bunnicula" last year and I couldn't believe the quality of the sets and the acting. Although tickets aren't cheap, the overall experience is so good for kids and families that we're planning to see shows every year.
They also offer acting classes for kids. Though classes for younger kids are steep for what they get out of it, it's hard to imagine a better introduction to theater. Seattle is really lucky to have this as a resource.
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