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Illustration by Robert Meganck
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The 179,000-square-foot Richmond CenterStage opened four years ago this month. Photo courtesy CenterStage
When supporters of a downtown performing arts center floated the idea more than a decade ago, Richmond Shakespeare was among the first theater groups recruited as a resident producing company. It seemed a natural fit for an arts complex that promised to showcase the region's cultural talents.
Next month, though, theatergoers who attend the company's production of The Taming of the Shrew won't be visiting the Gottwald Playhouse, a 200-seat black-box theater built as part of the $74 million Richmond CenterStage.
Instead, Shrew will be performed at The Steward School, a private coed institution on Gayton Road, about 16 miles from downtown. It's not as ready-made as the Gottwald, but the performance space suits the troupe's needs for now, says Jan Powell, artistic director for Richmond Shakespeare.
"Our intention at Richmond Shakespeare was to be a full-time resident company — but that is not financially feasible," Powell says. Despite its status as a resident company of CenterStage, she added in a later conversation, many considerations go into the planning of which venue suits which production.
This year marks the second season in a row that the Shakespeare troupe will perform at other venues, including the stage at Richmond Triangle Players. Richmond Shakespeare and Henley Street Theatre merged operations earlier this year and are co-producing several shows in the 2013-14 season. The two companies will return to the Gottwald Playhouse in February for a production of Death and the Maiden by Ariel Dorfman.
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"We want our shows [at CenterStage] to be accessible to different ranges of people, including students and people of every income level. That has been almost impossible at that facility," says Jacquie O'Connor, the managing director of Henley Street Theatre — also a resident company of CenterStage. Powell and O'Connor hope that a recently revised rent structure will allow their theater groups to schedule more performances at CenterStage, a complex that encompasses the refurbished Carpenter Theatre and the adjacent Dorothy Pauley Square, which includes the Gottwald Playhouse and Rhythm Hall. CenterStage also includes the Landmark Theater venue one mile away. CenterStage management says it is trying to turn the tide. Richmond Performing Arts Center, or RPAC, a limited-liability partnership that operates the properties, worked with venue-management firm SMG to reduce rental rates for resident companies this year. "We listened and responded," says Richard Parison, executive director of the CenterStage Foundation. "Our goal is to see that the facility is used as much as possible." How much is the new rent at CenterStage? Parison and O'Connor declined to get into specifics. Likewise, Dolly Vogt, a regional manager with SMG in Richmond, would not divulge details, saying only that SMG was working to address concerns of local theater groups. "The rental rates we offer at Richmond CenterStage are actually very competitive and at times lower than like venues" in similar markets, Vogt says via e-mail. She declined to offer average theater-rental rates in comparative markets. A much-anticipated endowment by the CenterStage Foundation may further reduce costs for local arts groups. Planned as part of the original proposal for the downtown performing arts center, the endowment never materialized, largely because the now-defunct Virginia Performing Arts Foundation missed fundraising goals and battled criticism of profligate spending, well before Parison's arrival in 2011. Rather than discuss past missteps, Parison says he's focused on the future, particularly the foundation's quest to raise $10 million to help local groups cover the costs of performing at CenterStage — part of its planned $70 million Landmark and Legacies campaign. The foundation has deposited about $2 million into the endowment thus far. Other observers say the gleaming, state-of-the-art performing arts center isn't living up to the hype that trumpeted its arrival. Hailed by supporters as a way to revive the moribund corridor of East Broad and East Grace streets, the sprawling 179,000-square-foot complex seems to be searching for a script with a happy ending. Limited Engagements The management of CenterStage is broken down into two main groups: RPAC and the CenterStage Foundation. Headed by Parison, who is paid $140,000 a year, the nonprofit foundation handles fundraising, marketing and promotions, and development of educational programs. Operating largely in the background, yet wielding great influence over the project, is RPAC, which executes construction contracts and hires vendors related to CenterStage, such as SMG. Whether the arts complex is currently breaking even, turning a profit or losing money is not publicly disclosed. That's largely due to its two-headed management structure. In a nutshell, here's how the byzantine arrangement works. The nonprofit foundation solicits money from donors and pays an undisclosed sum each year to RPAC, which pays for construction projects related to the theaters and hires vendors like SMG to manage day-to-day operations. SMG runs and books acts at the ensemble of theaters and answers to RPAC, adding another layer of complexity to the mix. Although the two organizations are effectively joined at the hip, the CenterStage Foundation and RPAC maintain separate financial records. As a nonprofit, the foundation is required to publicly report its finances to the IRS, while privately held RPAC is under no such obligation. In the world of performing-arts centers, CenterStage's management structure and lack of transparency appear atypical, says Halsey North, who has worked with such organizations for 42 years. His company, North Group Inc., offers consulting services to performing arts centers across the country. "I've never seen a structure that quite works like this, and I'm not sure what the advantages are," he says. "It's unusual." North points to most other regional performing arts centers, run entirely as nonprofits, where all financial details are "totally transparent" through tax filings and even on their websites. "If you're having trouble getting a rental-rate schedule, something's not usual," he says. Referring to CenterStage, North says, "I would encourage them to think about being transparent so the community has the confidence to make donations." For all the public money and energy that already have gone to CenterStage, some downtown business owners say they have yet to see an economic benefit. Local restaurant owners, expecting business to pick up greatly as a result of the activities at the center, say too many dates on the events calendar remain blank. Throngs of theatergoers were supposed to come flocking downtown for dinner before or after performances, but the crowds haven't materialized, leading some restaurateurs to wonder why. The business owners have reason to be interested: To help pay for CenterStage, Richmond City Council in 2003 hiked the city's tax on sales of prepared-food items — the so-called "meals tax" — from 5 percent to 6 percent, an increase that was supposed to automatically revert back to 5 percent in 2006. But newly elected Mayor L. Douglas Wilder campaigned to extend it indefinitely, and City Council appeased. That was seven years ago. "And that really pisses me off," says Johnny Giavos, whose seven local restaurants employ 250 people. "Why doesn't anyone in city government stand up and be accountable for this?" Meanwhile, Jake Crocker, a one-time ardent backer of the project, says his four restaurants in The Fan "have not benefited one iota" from CenterStage. "Man, I rarely hear of anything going on there. Take a look at the schedule; it's dead," he says. A glance at the events calendar shows a handful of performances scheduled through the remainder of 2013 at the Carpenter Theatre, mostly by the Richmond Symphony, the biggest user of the venue. (Events at the Landmark have been curtailed due to ongoing renovations.) Sources in Richmond's theater community say that most of the so-called resident companies at CenterStage perform there only sporadically, if at all. Calls and emails seeking comment from other CenterStage resident companies — Virginia Repertory Theatre and African-American Repertory Theatre — were not returned. Janine Bell, director of the Elegba Folklore Society, says the resident group's association with CenterStage is largely geared toward outreach through educational programs at schools, rather than performing in the arts center's venues. Looking at the venues' online calendar of events fails to tell the whole story, Parison says, noting that CenterStage hosts a slew of private affairs and educational workshops. Plus, CenterStage provides a performance hall and much-need rehearsal space for the symphony. "Just because the place looks dark doesn't mean it's not being used," he contends. During the past fiscal year, Parison adds, more than 135,000 patrons attended events at Carpenter Theatre and Pauley Square. "That's a 12-percent increase in attendance in one year, so we're headed in the right direction," he says. No doubt, CenterStage has had some positive effects on downtown. The most notable is the long-overdue facelift given to the venerable Carpenter Theatre. The $25 million makeover enables larger sets to be moved in much more easily than in the past, says Brett Bonda, managing director of the Richmond Ballet. The ballet company began staging its interpretation of The Nutcracker, a Richmond tradition, at the 1,800-seat Carpenter Theater four years ago, after years of performing at the Landmark. "The Carpenter is so much better to perform in now. We love the fact that it's large enough to accommodate our audiences yet still very intimate," says Bonda, who estimates the company books CenterStage about 30 days a year. SMG, the company that books acts for all CenterStage venues, has brought some Broadway-caliber shows to Richmond recently. Performances of Wicked in 2011 and The Lion King in 2012 each played to sellout crowds at Landmark, generating $1 million in admissions taxes for city coffers. There were 406 revenue-generating activities at CenterStage venues between July 2012 and June 2013, says Jay Smith of Capital Results, a public-relations firm that represents CenterStage. That includes performances and rehearsals, business and corporate events, meetings by local organizations, and private affairs such as wedding receptions. Not included in the total are non-revenue-generating activities such as art classes and workshops, Smith says. More than 8,000 area students have participated in arts education through CenterStage's BrightLights Education Initiative since 2009. Smith could not provide a breakdown of how many ticketed performances took place at the individual venues that make up CenterStage, referring the question to officials at SMG. After posting a deficit of $518,000 for fiscal year 2011, the foundation reported an expenses-to-revenue gap of $1.33 million for the 2012 fiscal year. It posted revenue of $1.65 million and expenses of $2.98 million for the period that ended June 30, 2012. Officials with CenterStage are quick to point out that the IRS filing doesn't necessarily reflect the overall financial picture. The missing puzzle piece is RPAC's financial dealings. RPAC is exempt from disclosure under an ordinance adopted by City Council in September 2007 — despite receiving an annual $500,000 operating subsidy from the city. The city ordinance was authorized under an obscure section of Virginia's state code. The CenterStage Foundation generated $231,417 in program revenue, according to its most recent IRS filing. The sum includes $83,000 from its "Life Is a Cabaret" series, $76,000 from ticket sales and $72,000 from parking fees. That's an increase from $184,000 the prior year, but represents a fraction of its $1.65 million in total revenue. What return on investment does Richmond receive from the RPAC-SMG contract? The question is difficult to answer with certainty, because Philadelphia-based SMG is also a private company exempt from the requirement to publicly disclose information about its finances. SMG is a fixture in the city, having managed the Richmond Coliseum for the past 25 years under a contract with the Richmond Economic Development Authority. In 2008, RPAC awarded SMG a contract to book acts and provide direct management of CenterStage properties. Terms and conditions of that contract have not been disclosed. Appearances at Carpenter Theatre by national headliners have been limited, with comedian Bill Maher, who performed in August, and pop group Chicago, scheduled this month, among the last major names on the venue's calendar. CenterStage usually avoids presenting its own shows and the associated financial risks, SMG's Vogt says. "We prefer to book the acts and let promoters take the risk. If you bring in name acts, then you're obligated to pay the performers, whether or not the show makes money." Who's in Charge Here? When first proposed, the downtown arts center carried a price tag of nearly $120 million. After a series of delays, false starts and public wrangling between the Virginia Performing Arts Foundation and Wilder's administration over the project's size and cost, City Council voted in 2007 to help finance a scaled-down facility on the site of the long-vacant Thalhimers' department store building. To underwrite its share of the quasi-public, quasi-private construction project, City Council agreed to provide $25 million in direct funding and floated a 20-year general-obligation revenue bond. Councilors tacked an extra penny on the meals tax to cover debt service on the bond. VPAF, meanwhile, was required to raise at least $20 million from private donors. The balance of the funding included $17 million from RPAC's sale of historic tax credits to private financiers — the number and identity of investors has never been disclosed — along with approximately $6 million in state funding and financing from assorted other sources, including a federal grant worth more than $1 million. RPAC's 16-member board is appointed by the mayor and approved by City Council. Its directors include many of Richmond's moneyed and influential executives and philanthropists: Dominion Resources CEO Thomas Farrell III serves as chairman of the board. Under a comprehensive agreement negotiated in 2007, Richmond City Council approved a measure to convey operation of the Carpenter Theatre to RPAC for a term of 40 years — a move city officials said was necessary to encourage construction and renovation. Technically, the city is the landlord of the Carpenter Theatre and Dorothy Pauley Square, with RPAC paying $1 a year in rent for each facility. A similar arrangement was adopted last year to convey the Landmark to RPAC. City officials are permitted to audit RPAC's books, but audit results are not released to the public. Council President Charles Samuels says he is unsure if City Council has the authority to review RPAC's finances, referring the question to City Attorney Allen L. Jackson. A call to Jackson's office was not returned. Thomas Farrell, the CEO of Dominion who serves as chairman of RPAC, says the board has not considered voluntarily opening the organization's books. He declined to speculate whether the public would interpret such an action favorably. RPAC's $500,000 operating subsidy from the city hinges on the CenterStage Foundation providing an equivalent amount of matching funds, says Michael Wallace, a spokesman for Mayor Dwight C. Jones. "The appropriation amount is governed by ordinance, and the city sends quarterly allotments once the CenterStage Foundation deposits its matching share," Wallace says via e-mail. The bureaucracy at CenterStage can be dizzying, even for people affiliated with the organization. "The management structure is … complex," Powell says. Afflicted With ‘Cost Disease' The biggest slice of the foundation's 2012 revenue — $1.14 million — came from contributions and donations. In addition to the $231,417 in program revenue, CenterStage registered $238,974 worth of "investment income," a grouping that includes more than $47,000 in gross rents. The two largest expenses: nearly $685,000 for salaries, compensation and employee benefits and $631,000 for depreciation of assets and amortization. The deficit reflects the usual course of events for a start-up organization, says J. Robert Mooney, chairman of the CenterStage Foundation board of directors and a partner in the New Richmond Ventures firm with fellow board member Jim Ukrop. In reality, the CenterStage Foundation's financial deficit is similar to virtually all performing-arts facilities, particularly those that depend heavily on public financing. It's a dynamic that was first identified by professors William J. Baumol and William G. Bowen, in their seminal 1968 book, Performing Arts: The Economic Dilemma. The authors describe how performing-arts centers suffer from "cost disease," characterized by a continual need for more and more funding in the face of inexorably rising costs. Still, focusing on the bottom line shouldn't distract people from the real purpose of CenterStage, says Bruce Tyler, a former city councilman who at first opposed CenterStage, before voting to fund its construction. "CenterStage wasn't designed to generate revenue. It was designed to be a cultural and educational center that benefits our community, and in that sense, it's been a success," Tyler says. Regardless of whether the performing arts center is operating at a profit or loss overall — an answer obscured by RPAC's closed books — the show goes on, for now. RPAC is working toward a milestone: completing an overhaul of the 3,500-seat Landmark, at which time it will assume the moniker Altria Theater. That's in exchange for the Richmond-based conglomerate's $10 million naming-rights gift, made last year. The $10 million from Altria is helping to fund a $60 million restoration of the 87-year-old Moroccan-themed performance hall, which CenterStage officials say should be completed sometime in 2014. According to a copy of the agreement obtained by Richmond magazine, the city is kicking in $14 million and RPAC will market the sale of state and federal historic tax credits worth an estimated $26 million. Another $20 million in philanthropic gifts is being sought, Parison says, including $10 million for endowment funds. The newly spruced-up Altria Theater is expected to generate an estimated economic impact of $6.1 million annually, according to a city-commissioned report by Chmura Economics and Analytics, a Richmond-based econometrics firm. Restaurant owners, still stinging from the stepped-up meals tax enacted nearly a decade ago, are wary of such claims. "We've heard these promises before," Crocker says.
