O Overture, my Overture

I have been known to make less than complimentary statements about the Overture Center. I have been taken to task over that fact several times. But I will admit that my opinion of the place has softened quite a bit over the years, moving from the frustration and annoyance I felt when several great local businesses were ousted to make room for the Jello-mould-and-white-walls structure, to a somewhat grudging appreciation for the efforts being made to better reach out to the community and bring in a wider variety of events.

I still don't like the aesthetic design of the exterior, but that's neither here nor there when it comes to the long-term financial stability of what has the potential to either be a strong centerpiece of the downtown, or a sucking black hole of city dollars.

According to an article posted today on Channel3000, in a bid to restructure and give the OC a brighter future, a consultant has been hired to explore various public/private models of operation. That's a good move, and it's bolstered by the fact that "Overture publicist Rob Chappell said that the private 201 State Foundation, the Overture's fundraising arm, paid for the study -- not taxpayer dollars." Right now, the OC needs to do its damnedest to project fiscal responsibility to a public weary of taxpayer funded bailouts.

Further:

AMS Planning and Research, the consultant doing the study, said private-public or totally private arts centers have the greatest fundraising opportunities. The consultant also said Overture was about average when compared to six other similar arts facilities in the U.S. However, the consultant said the facility fell below average in a number of areas including marketing, fundraising and ticket prices and higher than average in cleaning/maintenance costs.

So there are areas that they're doing all right in, and several others that need work. Having the latter called out publicly is a good first step toward making sure that real, meaningful changes are made to create a more stable environment at the center.

There have been several major missteps made in the past with regards to how things are run over there, but I've been encouraged by the changes I've seen recently. There appears to be a greater effort at community outreach and publicity. Several local theatre and music groups enjoy the OC as their base of operations. The presentation of the headlining act of this year's Forward Music Fest at Overture Hall was an encouraging sign, too. I know there are people working for the center that really care about the community and about making the center an important part of it, so I'm willing to concede that I have perhaps been a little too prone to harsh generalizations in the past. That's not to say that certain criticisms weren't extremely warranted, but I will also do my best to give credit where credit is due.

But they will still need to work hard at finding ways to attract more people in these tough times, which means offering more events with lower ticket prices. And they'll need to do some serious cost cutting, all without negatively impacting the quality and quantity of events offered. It'll be a tricky balance, to be sure, but one that won't be struck without first coming to terms with some hard truths. I'm hopeful that the consultant's reports will help them go down that path.


(photo by MandaRose on Flickr)

The good news for Feb. 6, 2009

Frankly, I'm too brain fried today to type up a proper post. I think all this Koschnick nonsense did it to me. Whatever the cause, though, I'll be bopping over to Der Rothskeller tonight for some hot Los Campesinos! and Titus Andronicus (the band, not the play) action, so that's likely to help the situation a bit. My new band is also doing some work on our new rehearsal space tomorrow, which I'm excited about. It'll be quite nice to have a proper, private room in which to make our music without too much bother to neighbors and the like. And soon we may actually have a name! Imagine that. In the meantime, here are some interesting bits of news for you to digest:

• [Capital Times] The Charter Street power plant here in Madison will burn bio-mass fuels and not coal, according to Gov. Doyle. The station had been one of the worst pollution offenders in the state until legal action was taken to force it into compliance. This is great news, as bio-mass puts far fewer particulates into the air and is generally far, far less disruptive to harvest. The creation of a bio-mass industry could also lead to significant job creation. It's damn nice to get some good news here and there.
• [Badger Herald] The three banks that loaned the Overture Center money for its construction are threatening to foreclose if the debt isn't repaid soon. Things just keep getting worse for the beleaguered center, don't they? Seems like the majority of those involved in decision making, both on the OC and bank sides of things, have been fucking up left and right. I have no desire to see the place closed and hope some equitable solution is worked out, but things sure don't look too hot right now.
• [Wisconsin State Journal] The Dist. 2 alderman debate was last night. I can still only detect minor policy differences between the candidates. Ultimately, it seems to boil down to dissatisfaction with the style and communication techniques of the incumbent.
• [Fat Cyclist] Fat Cyclist is one of my favorite bloggers. He's currently promoting Twin Six, an awesome cycling apparel company, as they're donating 50% of every cent spent on their goods today to the Lance Armstrong Foundation to help fight cancer. Go check it out and buy something already!

Liquid Overture

News came on Friday that Madison's ivory tower of the arts, the Overture Center, was being forced to liquidate its trust fund in the name of paying off some substantial debt. Given the current state of the markets, and the 2005 refinancing deal that basically relied on them never ever going bad, I can't say that this comes as much of a surprise--to me, or to anyone else, I suspect.

It's a shame, because while I have disagreed with much of the center's business plan since its inception, I've never wished to see it fail. Which isn't to say that it will, but this new development doesn't exactly paint a pretty picture.

The lowdown:

"The liquidation of the trust fund will have no noticeable effect on the Overture Center whatsoever in the short term," said Ald. Mike Verveer, who is a member of the Madison Cultural Arts District board that runs the Overture Center. "It's not as if there will be any theaters going dark, performances being canceled, wedding receptions and other parties needing to scramble to find new spaces."

That's good to hear, but we're talking short term. The longer-term looks a little sketchier:

The liquidated fund will pay off approximately $87 million of the Overture Center's $115 million of debt, leaving W. Jerome Frautschi, the major donor for the Overture Center, the city, and the Center itself in charge of the remaining $28 million. Due to built-in firewalls that were in the city's controversial refinancing in 2005, Frautschi will pay the $2.5 million annual debt service for the next two years and the Center will use its reserve fund for the third year, but Mayor Dave Cieslewicz said the worst-case scenario for the city would be having to cover the third-year costs if the reserve fund runs dry before 2011. After 2011, the refinancing deal expires and all the parties will have to look at the remaining debt again, Cieslewicz said.

Thankfully, the city and the center have until 2011 to get their ducks in a row, and I'm hopeful that, as Mayor Dave himself says, this whole liquidation thing will spur people into serious action to make sure it doesn't come to a big taxpayer bailout (hmm, that sounds familiar). But we'll see.

My favorite part of the article, though, comes courtesy of Ald. Brenda Konkel, who makes this astute observation regarding the function of the center:

"I'm not even sure a lot of our community even particularly wanted [the Center], to tell you the truth," she said. "I think our community appreciates the arts, but we're more into local arts, and I don't think this venue that really promotes that very much."

And that's the rub. There was a lot of grumbling and protest over how the center was to be designed and used by much of the Madison community, most of which went relatively unheeded. The place payed a lot of lip service to local artists when it had its grand opening--I was even part of some of the theatre companies that were given time and space in which to perform there during the festivities*--but since then, the majority of what goes through the center seems to be national touring acts. Most of the people who attend functions there, too, seem to be coming from out of town. There's nothing inherently bad about either of those things, but Madisonians, it would appear, are more interested in local arts in more welcoming, local venues. I suspect the sterile white walls of the Overture Center are less-than appealing to many folks.

Perhaps if the center was more accommodating of local bands, artists, and functions, that would held to bring in more attendees and more cash. Perhaps not. It would, at least, make it more of a community space and not just an incongruous behemoth in the midst of otherwise homey State Street.

None of that will matter, of course, if the people who run the place can't get their financials in order. I wish them the best, honestly, because it would be nice to have the chance to transform the place into something the whole community can enjoy, and not have it become a stone around the city's neck.

*whole other story I could bitch about, but suffice to say that it wasn't the greatest experience ever.

(photo by Phil Ejercito, All Rights Reserved.)

Making overtures to better management

Who's running the show over at the Overture Center, anyhow? The way they've been handling their trust fund for keeping the place afloat, you'd think it was a bunch of English majors. Actually, strike that--I was an English major and I think I would have had better sense than these folks. That is, I would have hired people who knew what they were doing, knew not to trust everything to our country's extremely volatile stock market, and knew not to blow whatever cash they blew on architect Cesar Pelli's soulless design (don't even get me started on that damn Jello mold of a dome).

After a poor performance in 2005, the arts district and a seperate trust fund board opted to undertake a refinancing plan, one which many people, including Mayor Dave, were opposed to. Apparently the opposition was for good reason, as the fund continues to do badly.

According to the WSJ:

The trust, which must be at least $104 million to meet all commitments, sank from $105.83 million on July 13 to $100.86 million on Aug. 15, doubling any prior decline and nearly forcing the district to tap other sources to meet debt payments.

The fund recovered to $103.31 million -- still below the $104 million mark -- by Sept. 28, according to the latest report by Madison comptroller Dean Brasser. The trust has since added another $400,000, the Overture Foundation said.

Overture Center was built with a $205 million gift from philanthropist W. Jerome Frautschi. About half the gift was put in a trust fund for operations and maintenance, while the rest was coupled with a $115 million loan to build the Cesar Pelli-designed facility on State Street.

But the original financing plan, which didn 't involve the city, failed in a weak investment market. In late 2005, the council approved a controversial refinancing deal, with the city providing a financial backstop on some debt for six years.

Under the deal, the trust covers about $7.45 million in annual debt payments and pays another $1.4 million every year to Overture 's operations and maintenance reserve. To do so, the trust must earn a 8.25 percent rate of return over the long term.

The trust, which stood at $109.3 million in late 2005, has fluctuated with the market and as it makes required payments.

After months of effort, the trust fund board earlier this year began a new investment strategy designed to get a strong return but better protect against market volatility.

But in the third quarter, due mainly to poor investment performance, the trust declined to a point where it couldn 't meet all commitments, said Chabot, who also sits on the trust fund board.

The trust 's performance came close to partial default, Chabot confirmed. If the trust drops between $100 million and $97 million -- as it nearly did -- Frautschi would cover the first $5 million in debt payments, then the arts district, and finally the city. No payment would be made to the reserve.

If the trust falls below $97 million, creditors would enter discussions with the trust fund board to evaluate the need for change.

I'm not sure what's going on, but I can't help but feel like better planning and more knowledgeable people running the show would have helped. And they may want to seriously consider making changes now, instead of waiting until the whole thing drops into default and everyone else has to help bail them out.

Between this mess and other little signs like Overture boosting their facility fees from 2 to 3 dollars last year, something just doesn't smell right. They're charging us extra to see shows, extra money that the performer's don't see, by the by--and they're charging those performers just to have merchandise tables out in the lobby in front of their shows, too.

The Overture Center was supposed to be a community arts space--welcoming to both national touring acts and local troupes. They put forth a token olive branch to the local arts community when they first opened, but, outside of the galleries, I haven't seen much local content since (and I mean really local--not just the Wisconsin Chamber Orchestra and the occasional jazz band in the Rotunda). That might have something to do with the high rental fees charged for the various spaces (and they charge extra for tables and chairs).

Perhaps if they were able to get their act together with the financing/trust fund, they wouldn't feel the need to charge unreasonable fees for their rentals and their patrons. And that might increase use and attendance, which would in turn increase their revenues. Now there's an idea.