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6/19/2008

The Arts > Cover Story

THE FAT LADY SINGS?
Local arts groups may not be able to afford their posh new venue
Illustration by Steve Madden

 

Ever since the city unveiled its plans to build the Dr. P. Phillips Performing Arts Center – a triumph of acoustics, architecture and accessibility designed to secure a vision of Orlando as a “world-class city” – critics have wondered exactly how the city would pay for the $450 million structure. This is Orlando, after all; monster-truck rallies are huge, but who goes to the symphony?

Still, at last count, the performing arts center was cruising to its goal of $96 million in private donations; the current tally stands at $86 million. The rest will come from the Community Redevelopment Agency, tourist development taxes and land sales, according to the tenuous financing plan devised before the economy took a nosedive.

But financing the building isn’t the whole story. Neither is paying to keep the doors open once it’s complete. Even if both of those hurdles are jumped, there’s still a very important question to be asked: Can the local arts groups that are supposed to be the anchor tenants even afford the place?

The Orlando Opera Company, the Orlando Ballet and the Orlando Philharmonic Orchestra will be the primary residents of the new performing arts center’s secondary, 1,800-seat hall when it opens in 2012. But their transition from the relatively humble Bob Carr Performing Arts Centre won’t be as easy as it might seem on paper. Increased rental rates, production costs and expectations could make or break these niche organizations, which are supported primarily by grant money and private donations. And United Arts of Central Florida, which is struggling with governmental funding cuts and diminishing private donations, may no longer be able to shore up local arts groups.

So the arts groups themselves are facing the prospect of having to increase their income, endowments and profiles in an economy on the skids just to pay the admission to the new performing arts center. It will be an interesting show.

The Good Old Days

In recent years, the three key arts organizations have had it relatively easy. Since the 2002-2003 fiscal budget year, when former Orlando Mayor Glenda Hood earmarked budget money to give the groups free rent in the Bob Carr, the city has shouldered some of the rent costs for the groups. The subsidies were cut in half for the 2004-2005 budget, and then phased out in the 2005-2006 budget. Still, the rates for nonprofits to rent the Bob Carr remain among the lowest in the country at about $1,000 per day, with an additional $500 for load-in.

But the city is now moving toward “normalizing” rental rates for the groups, says city spokeswoman Heather Allebaugh, in an effort to prepare them for what could be a huge jump in rental rates when the new performing arts center comes online. According to Steven Wolff of AMS Planning and Research, who’s been brought on as an operations consultant to the new performing arts center, the current working range for venue rental is between $1.50 and $2.25 per seat. That could add up to a hefty $4,500 a night for the arts groups.

Several factors help determine the final cost: whether a group is charged for “dark days” – the opera, for example, cannot logistically perform on consecutive nights – the number of shows on a given day, special rates for residency and different rates for different days of the week. “It’s all way too soon to decide,” Wolff says.

Even so, the working price range does put the new performing arts center below some other venues, like West Palm Beach’s Kravis Center and the New Jersey Performing Arts Center, where Wolff says the trend is toward flat-rate rentals of between $4 and $6 per seat.

He says that in Orlando, rentals will fall within the industry standard range of 3 percent to 6 percent of the operating budgets of the arts groups, and could ostensibly “not go up at all” from Bob Carr rates if the “diverse revenue sources” the new performing arts center hopes for come through. Production expenses – which are certain to increase – will be up to the groups themselves to figure out.

“My hope is that all boats rise with the tide,” he says.

They don’t always. By the time Miami opened its $473 million Carnival Center for the Performing Arts in October of 2006 (with a cost overrun of $102 million), the Florida Philharmonic Orchestra had already declared bankruptcy, having failed to raise $2.5 million in 2003 necessary to keep it going. Miami’s house orchestra is now imported from Cleveland at an annual cost of $3.5 million. The center charges $15,000 per performance day for use of its 2,400-seat Sanford and Dolores Ziff Ballet Opera House, with an additional $11,200 for load-in or dark days.

The venue itself had to be bailed out by Miami-Dade County last year to the tune of $4.1 million, because the independent trust the county chose to govern it had failed to successfully predict startup and utility costs. Earlier this year, the center was renamed the Adrienne Arsht Center for the Performing Arts after receiving a $30 million donation from Miami businesswoman and philanthropist Arsht. Carnival withdrew $10 million of its original donation.

Today, though, Wolff says that Miami’s arts center isn’t in the financial straits it was a year ago. Just this June, he says, they were able to pay $1 million back to the county. “We’re very impressed,” he says.

Nights At The Opera

“The way that an opera company can save the most money is by closing its doors,” says Orlando Opera Company president and chief executive officer Jim Ireland.

IRELAND

Ireland isn’t here to make friends. That wasn’t what he was brought in for in July 2006 when the opera’s board of trustees created his position, eventually squeezing out longtime artistic director Robert Swedberg. Ireland came with a history of shrewd business acumen and only a small dose of charm.

“I felt like this was the chance to put pylons into real bedrock to make sure that there’s an opera company here for the future,” he says. “That has to do with making sure that seats sell and that we’re attractive and that people know that there is an opera company here. It also has to do with the quality of the level of the art.”

His reputation precedes him. As general manager of the Houston Grand Opera for two decades beginning in the early 1980s, Ireland took out an eyebrow-raising $150,000, 10-year home loan against the company. He did pay it off, but the unusual financing played into a larger deficit picture that led the Houston Press to compare the opera company to Enron. His exit was labeled by the Houston Press a “surprise resignation.”

As managing director of Hartford Stage Co. in Connecticut from 2002 to 2005, Ireland displayed his usual business savvy, but managed to ruffle the feathers of the upper crust. Another surprise resignation followed, although an unnamed source in Hartford who worked there says Ireland’s exit wasn’t voluntary.

“He was definitely disinvited to be employed,” the source says.

To his credit, since his arrival Ireland has slashed the opera’s deficit from $528,601 to $205,422, according to a 2007 audit. (Orlando Opera Company received $352,307 in grant allocations from United Arts of Central Florida last year, or 11.2 percent of their $3.1 million budget.) But he’s also stirred the pot of the local arts community, causing grumbling about missed conference calls for grants, cancelled meetings and a hot temper. He famously told gay newspaper Watermark that gays were “emotional slobs.”

In April, Ireland upset many season ticket–holders by upping the prices for performances at the Bob Carr. Last season, attendees paid $45 for balcony season tickets. Next year the cheapest seats anywhere in the hall will run $105 for the season. The goal is to increase the density of patrons at the orchestra level.

Ireland chalks up the resentment to his being a new guy in town, and to the fact that after 40-plus years in the business, he’s set in his ways.

“Yes, I would say in the healthiest sense of the word, there’s argument and there’s discussion. But there’s not animosity,” he says. “I may disagree with a policy or a procedure that a particular organization has, but that doesn’t mean that I dislike the person who’s running the organization. Now, some people fail to see that distinction. Some people fail to realize,” he says, quoting President Dwight D. Eisenhower, “dissent is not disloyalty.”

“I’m a firm believer, if I’m making a mistake or something like that, I expect the people to come in and yell and scream and bang on the desk and say, ‘You stupid son of a bitch, you’re doing this wrong!’” he adds. “I don’t want people around me like Bush has at the White House. I think if you get honest, direct opinion, the best ideas are going to survive.”

As far as the new performing arts center, he says, the opera is going to have it worse than the ballet or the orchestra. Opera singers won’t perform two nights in a row, so a crew will be required to load and unload the extravagant sets more often.

“Opera combines all of the art forms,” he says. “So it’s the most expensive of all the art forms.”

In terms of endowment campaigns, he says, there has to be a schedule of who’s out front and when. And he’s not planning to add any staff members at the moment.

“I’ll just make my staff work harder,” he says.

Orchestral Movements

Orlando Philharmonic Orchestra executive director David Schillhammer is nervous. He’s been involved in a “visioning process” with 10 other orchestras across the country – sponsored by the League of American Orchestras – and he’s seen the struggle of trying to fit an old artistic foot into a new shoe.

SCHILLHAMMER

“In fact, one of the DPAC consultants said that the biggest mistake that arts organizations make when they move into the halls is that they’re not ready, financially or organizationally,” he says. “So the [idea] that you can build it and they will come and everything will be better and the arts will be healthy and strong is simply not true.”

Schillhammer says that even though DPAC has advised him to triple his rental budget for the new venue, he will be quintupling it, from $50,000 to $250,000. That means an endowment campaign is imminent.

“We know that an endowment campaign of some significance is in the future for the Orlando Philharmonic, probably in the next 18 to 24 months. The size and the scope of the campaign has not yet been determined,” he says. “We have a $3.2 million operating budget and a $4 million endowment. That’s the largest endowment in Central Florida, but it’s simply not sufficient. Orchestras must have an endowment three to five times the size of their operating budget in order to be considered ultimately healthy. So we need an endowment of $12 million to $20 million.”

The Orlando Philharmonic received a grant allocation from United Arts of Central Florida of $278,334 last year, which covers only 9.2 percent of their budget. In order to see the kind of exponential growth in fund-raising Schillhammer predicts will be necessary – especially in the current economic downturn – the Philharmonic would need the kind of support staff that it doesn’t have now. Some creative tactics will have to be employed, most notably sharing the load with the two other organizations.

“Without a significant endowment campaign before the opening of the hall,” he adds, “we can see the danger signs coming.”

Schillhammer points to cooperative fund-raising efforts like the six-year-old New Year’s Eve ball Grand Masque – which benefits the opera and the ballet as well – as proof that the organizations can work together. But will it be enough?

Schillhammer recognizes that the public isn’t pounding down the doors to donate to the Phil. In fact, most Orlandoans probably couldn’t even find his doors to pound on, because they don’t know the orchestra exists.

“There’s nothing that raised the awareness in the community that we actually had an orchestra more than the conversation about the performing arts center,” he says. “We have been struggling for awareness for years, one person at a time.”

Dancing In The Dark

The Orlando Ballet, now in its 34th year, seems to be moving along just fine. Executive director Russell Allen has seen “marked improvement” in the company’s productions over the past few years, and with those improvements, better reviews and larger audiences. He’s looking forward to the challenges that come with a new performing arts center and doesn’t register any real threat to the ballet’s future.

“I think we’re approaching this whole situation very intelligently and trying to think through all of the challenges we’re going to face. And indeed there will be some,” he says. “I’m just hoping that this current economic slump will be long gone by the time the performing arts center opens.”

But the recession hasn’t been the ballet’s only challenge over the past few years. In late 2005, beloved artistic director Fernando Bujones succumbed to skin cancer. In 2006, the ballet brought another famed dancer, Bruce Marks, out of retirement to take over the position, although his contract runs out in July 2009. They hope to extend his stay.

“Even if Bruce’s tenure does end at the end of next season, we will be committed to getting somebody of quality and stature,” says Allen. “It will be difficult to find another Fernando Bujones or Bruce Marks who have already had so much experience, but there are certainly people out there who are well-qualified to take the ballet even the next step. That’s what we’re shooting for, because we want to come into the performing arts center in 2012 just as strong as we can possibly be, artistically and financially.”

Financially, there have been obstacles. In 2006, the ballet was kicked out of the Bob Carr in favor of The Lion King and thus unable to perform its yearly big moneymaker, The Nutcracker. There are rumblings that something similar could happen again in 2011.

“Everybody should be able to perform as much as they can,” he says. “It’s nobody’s fault. We just need to find a way to get that performing arts center open so that we don’t run into this situation again.”

ALLEN

To supplement their losses, the ballet now runs a full-time school in Tampa and is that city’s de facto ballet company. They perform The Nutcracker there each year and have also brought along performances of Swan Lake and Pirates of Penzance. The Orlando Ballet received $280,044 in grant money for 2008 from United Arts of Central Florida, or 6.2 percent of their $4.5 million budget.

“I think that we just need to make sure that we maintain the quality that we have developed here at Orlando Ballet and keep that upward motion going as far as attendance and the level of our productions,” says Allen.

Allen himself may not be here to see the DPAC transition he’s aiming for. As of May 15, he was shortlisted among five applicants slated to take the executive director position at the Jacksonville Symphony Orchestra.

On The Downturn

DPAC president Kathy Ramsberger has been working directly with the leaders of the opera, ballet and orchestra in trying to help them manage their expectations.

“We want them to look at these facilities as a new opportunity for their businesses,” she says. “This is not a new conversation. Before we even came out with our facility and our feasibility structure, we met with their boards and we said, ‘Here’s where we are today, this is how you live in Bob Carr, and when we move into this new facility, this is what the expectations are going to be.’”

She says the Bob Carr is a “you get what you pay for” facility. It doesn’t earn enough income to pay for upkeep, she says. DPAC, however, will give each group more options. If the arts groups fall on hard times, it won’t be because of the venue.

“Arts groups don’t go out of business because of rental rates,” she says. “They go out of business because of their artistic and their other business decisions.”

Meanwhile, United Arts president and CEO Margot Knight says now’s not the time to panic. Failures of arts groups in other cities can be lessons in Orlando, she says. Now’s the time for a little cohesion.

“There’s no question that when money gets tight, people behave badly,” she says. “Holding the coalition together becomes all the more difficult and all the more necessary. Anyone that thinks they can solve this problem on their own is wrong. Including me. I mean, I’m being pushed up a mountain backwards. And people gripe about us sometimes the way they might gripe about DPAC. But … a united front is always going to be better than an ‘I got mine’ approach.”

United Arts – with its 136 corporations, eight governments and 26 foundations that chip in – functions as a stabilizer for the area’s arts organizations. But that stability is eroding. Earlier this year, for example, the Orlando Sentinel announced that it would be cutting 90 percent of its contribution to United Arts, bringing its yearly giving to a slight $10,000. Local governments are pulling back, too.

“I view our success as a community of total earned income and total contributed income, independent of United Arts. That’s how I address the health of the field,” Knight says. “For the first time ever in my seven years here, I saw a drop in the aggregate budgets of the groups this year. Which is kind of funny because we’ve been on such a double-digit growth with the arts. First time ever. And I think that’s reflective of problems in all sectors: individual donors, corporate donors and governments. We are entering into a difficult period.”

And the show hasn’t even started yet.

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