Virginia Rep’s November Theatre on Broad Street (Photo by Mindy Kinsey)
First, the bad news about Virginia Repertory Theatre’s dire financial situation, revealed by public announcement Thursday morning.
The appeal explained that if the company doesn’t receive “an immediate infusion of more than $600,000,” during the next several days, all productions will cease.
Then, some good news.
“Misery,” the present production, continues through Sept. 29 at the November Theatre. The title is proving more relevant than theater personnel would prefer, as is the metaphor of hobbling.
Upcoming events scheduled at Virginia Rep’s Broad Street theater located in the Arts District will go on as planned. This includes the Oct. 8 mayoral forum co-sponsored by CultureWorks and the All City Art Club, with the apt subject of Richmond’s arts and culture on the docket. The Richmond Theatre Critics Circle awards, the Artsies, which recognize theater achievements in the previous season, will also go on as scheduled on Oct. 13.
Virginia Rep Managing Director Klaus Schuller (Photo courtesy Virginia Repertory Theatre)
“Neither of those events are in jeopardy,” says Virginia Rep’s freshly minted managing director, Klaus Schuller.
Schuller started the job Aug. 1 without his, or the theater’s board, fully knowing the financial circumstances. “I didn’t move my family to Richmond to shut down a theater,” Schuller says. “We at Virginia Rep are going to fight like hell to keep this place operating and viable as a major contributor to the Richmond community.”
Meanwhile, Schuller is experiencing a bit of unwelcome déjà vu. In 2005, he joined performing arts theater and comedy club The Second City in Toronto, Canada, serving as executive director and producer. “I was the next guy through the door, and the first thing I found out was that they’d filed for bankruptcy,” he recalls. “We turned it around in a year, and they started a positive cash flow, which continues to this day. So, I know it can be done — what levers need to be pulled and the very responsible actions that must be taken. This appeal is one way to publicly get the word out to donors, the wider community and Richmond’s arts-supporting corporations.”
Schuller has 25 years of experience in making theater budgets, but he observes somewhat wearily, “I’ve never seen a budget like this.” Schuller and co-leader Artistic Director Rick Hammerly are both confronting the company’s predicament.
The distress call, sent by press release, revealed that the new leadership team encountered a $1.7 million deficit from the previous fiscal year (the initial release, since amended, referred to this as a “legacy deficit”) and a further deficit of $1.6 million projected for the year ahead. The theater does not have an endowment fund to cover the present budget shortfall.
Endowments are tough to raise and even more of a challenge in the present climate of straitened resources. Scott Garka of CultureWorks, a regional arts advocacy group, says, “Among my fundraising peers it’s said that endowments are these days less attractive for that level of donor. Those donors are now more interested in specific projects.”
The Backstory
In 1975, Bruce Miller, serving as artistic director, co-founded what was then called Theatre IV with Managing Director Phil Whiteway. The company grew into one of the largest and most highly regarded performing arts organizations in Central Virginia, managing four venues and a touring arm that visits schools. (The “Hugs & Kisses” touring program educates elementary school children statewide about sexual abuse; the current season is on pause.)
In 2012, Theatre IV merged with Barksdale Theatre, formerly housed at Hanover Tavern, to form Virginia Rep. The company still produces shows at the tavern.
Miller left Virginia Rep in 2016. Nathaniel Shaw became the artistic director but left in 2020; he’s since taken the helm at Firehouse Theatre.
Whiteway, meanwhile, remained as Virginia Rep’s managing director, navigating the pandemic, disruption and uncertainty during 2020-21. The following year, the company experimented with a three-person artistic directing team, appointing Desirée Roots as artistic director for community, Todd D. Norris as artistic director for education and Hammerly as artistic director of programming.
In August 2023 came a contentious dismissal of Whiteway. He alleged age discrimination in a subsequent suit; the matter was settled in May without further statements. After Whiteway’s departure, consistent donations to Virginia Rep began to diminish.
After the Virginia Rep trio leadership model dissolved in August, Roots joined ATLAS Partnership, one of two theater-related consulting firms founded by Whiteway and Miller (the other is Whiteway Miller & Associates). Hammerly stayed on at Virginia Rep, and Schuller came on board.
Costs and Context
Miller, when reached for comment on the present circumstances, says a statement is being prepared, “as we work everything out so we’re saying exactly the right thing.”
He’s referring queries to an audit by Keiter CPAs for fiscal year June 2023, which was the last period under Whiteway’s direction and which, according to Miller, put the company on the positive side of the ledger. “Debt was being managed in the mortgages, which was $1.4 million offset by $10 million in assets. There was nothing untoward or negative regarding the financial health of the organization.”
Schuller accepted the position knowing that the finances weren’t in good shape. The magnitude of the distress, however, wasn’t immediately apparent. “I had the luxury of not knowing about the recent past before I got here,” he says. “The situation was the situation. And much of the board was unaware of it until I was able to take a forensic look at the year and year to come. That information was not available to the board. So we reported that to concerned parties and began looking for quick stabilization methods while reporting in full to the board.”
One issue, according to Schuller, is that information about payments of mortgages, which were in arrears, wasn’t going to the board.
In 2022 Virginia Rep purchased the former Scottish Rite Temple on Hermitage Road for $3.5 million. The impetus was to convert the building into the Center for Arts and Education and expand children’s programming. This is ongoing with a 600-seat theater space. However, the center has expensive issues with asbestos remediation as well as heating and air conditioning upgrades.
That said, when Schuller attended a recent Saturday performance of “Dragons Love Tacos,” he was heartened to see 400 people in attendance — families and their kids, not scheduled school groups, “which is a little bit of a bright spot amid all this,” he says.
The context in which Virginia Rep and other theaters are operating is itself concerning. Nationwide, theater audiences haven’t returned to pre-pandeimic numbers.
In a July 2023 New York Times article, Michael Paulson examined what’s causing theaters across the country to shorten seasons, suspend productions, go on hiatus or permanently close.
“Costs are up,” reported Paulson, “the government assistance that kept many theaters afloat at the height of the pandemic has mostly been spent, and audiences are smaller than they were before the pandemic, a byproduct of shifting lifestyles (less commuting, more streaming), some concern about the downtown neighborhoods in which many large nonprofit theaters are situated (worries about public safety), and broken habits (many former patrons, particularly older people, have not returned).”
In May of this year, the renowned 61-year-old Guthrie Theater of Minneapolis announced a financial loss of $3.8 million for its most recent season. While season subscriptions were up, ticket sales for various programs were soft, and operational expenses increased, as did maintenance costs for the Guthrie’s building.
“I’m very aware what these trends are,” Schuller says, “but I’ve seen year over year increases in attendance. So that’s trending in the right direction. We just have to get through this and keep going.”
Programming mainstage productions is now more risky than ever, with efforts to balance crowd-pleasers, such as jukebox musicals or comedies, with more serious offerings. All this while trying to raise funds to keep the marquee lit.
Richmond experienced a previous cultural loss with the abrupt December 2002 closing of TheatreVirginia (it operated as the Virginia Museum Theatre from 1954 to 1985). The nearly 50-year-old company was the region’s major Equity theater and belonged to the League of Resident Theatres. The complicated backstory of why that company foundered would require an additional deep dive of explanation, but some reasons behind the demise involve a campaign to develop new audiences that came along too late and division on the board about ways forward.
CultureWorks’ Garka reflects on the importance of Virginia Rep. “It’s a tremendous asset to the arts and culture fabric of Richmond. It’s absolutely vital to downtown where the November Theatre sits, in the heart of the Arts District.”
Garka broke out figures from a 2023 national study by the Americans for the Arts concerning more than 100 Richmond regional arts and cultural organizations and interviews with more than 1,000 audience members.
Virginia Rep from its operations alone put $5.7 million into the economy here, while audiences — by buying tickets, dinner before or drinks after, etc. — spent $3.05 million. In addition, besides the 135 jobs at the theater, the combination of city, state and federal tax revenue generated by the company’s operation and what’s spent by audiences totaled $2,188,665.
Letters of support are appearing on the theater’s website. Among them, Liz Kincaid — whose RVA Hospitality owns nearby restaurants Tarrant’s Downtown, And Dim Sum and Bar Solita — offers her perspective. She writes in part, “Without the presence of the Virginia Repertory Theatre on Broad Street, the ripple effect on businesses like mine would be significant. … It’s absence would undoubtedly create a financial strain on many small businesses, including my three downtown restaurants, which thrives in partnership with the cultural institutions of our community.”
Generations have shifted since what was Theatre IV moved into the former Empire auditorium almost a half-century ago. There is perhaps a general sense that because the company has thus far endured that it will always be there.
Garka offers an illustration from when Randy Cohen of the Americans for the Arts made his statistical presentation. He told of how, when the Mona Lisa disappeared with a 1911 theft from the Louvre Museum, more people came to see the empty wall during the two years it went missing than trooped through the galleries in the prior eight.
“We can’t take our arts and culture for granted,” Garka says. “Richmond is fortunate in so many ways in respect to the arts, not to mention our historic sites. The variety and quality are notable for a city of our size.”
These organizations that may seem durable can — without a combination of resilient management and community support — go dark.
Schuller reflects, “I have the utmost respect for the history of this theater and everyone who participated in making it the beloved organization that it is. But also, if we get through this difficult moment, there is a vision for this Arts District, to develop this block and be a pillar here.”
