In a day when the city council spent over $200 million (including the recently “discovered” $34.1 million surplus) on airport construction, cleaning up Watson Park and other items, they also threw the Rep Theater a lifeline that may save it from certain death, just in the nick of time. Because of the way the deal is structured, it remains to be seen whether the theater will be financially fit enough to survive, but I believe that it is a good start.
The council has agreed to extend a revolving line of credit in the amount of $2 million to the Rep for a period of ten years at an interest rate of 4 percent, provided that all of several conditions are met. These include the Rep’s raising of an additional $1.5 million in capital through donations and completing a new business plan by the end of the year. The theater must submit monthly financial reports to the city, undergo regular audits, and establish a $50,000 contingency fund. A city official will also serve on the audit and finance committee of the board in a nonvoting capacity. The line of credit will be financed by a new $4 million arts stabilization fund at the suggestion of city manager Les White.
This seems a reasonable solution to me, although I still see a bumpy road ahead. The line of credit does not have the same risk attached to it as a term loan or grant, and if the outstanding amount on the line has to be called in due to unmet conditions or a continued downward trajectory, there will be a loss to the city. Still, it provides a staged bailout with some security for the city, the theater and those who will be called upon to donate the $1.5 million.
However, there is more to saving the theater than retooling the financials and house management and getting some new brainpower on the board. The company needs a new artistic vision too. This will show that the theater is serious about renewing itself, and it will provide the theatergoers of our city with something to get excited about in the future. There is no doubt that the reputation of the institution was built by Timothy Near who has been crucial to the development of the company for nearly 20 years, and the people of San Jose owe her a huge debt of gratitude. However, 20 years is a long time for one person to control the creative direction of any arts institution—too long—and it’s time for some new blood. The best option would be for the board to immediately begin the search for someone who can bring a bold, new, sharply etched vision to the Rep’s productions in the 2007-8 season, staying within the bounds of the new business plan of course, and that Ms. Near would return to direct one or two plays every season. There are lots of “guerilla” theater directors out there who would fit the bill—someone who knows how to make a dime look like a dollar in a first-class production. But, the vision is the thing and it’s time for a new one.
I’ve never understood the allocation of tax dollars to entertainment venues.
It seems the community has clearly indicated, over and over again, that the “arts” groups are not wanted (at least the current product is not wanted at the current price). Obviously a majority of our community does not attend, donate or even support these endeavors. Why then do certain people (politicians, those vested in the endeavor, or the small groups that do support) have the influence and/or power to take money from the very community that has spoken and fund the institution?
Do they think they are doing something positive for our community? Do they do it to feel good about themselves? Is it because their vision of our community trumps other people’s vision? Do they think our community is stupid? Is it because somewhere down the line they receive benefit from the allocation?
There has to be an answer…
Jack: I don’t get it. Why are we advocating giving a 2 million loan to an arts organization—or any organization, for that matter—that we acknowledge has a flawed artistic vision. If we’re feeling so generous why not spread the 2 million across 100 small theaters and see what we get? We seem stuck in this ‘bigger is better’ sensibility that creates sinkholes for taxpayer dollars.
Jack says: “The line of credit will be financed by a new $4 million arts stabilization fund at the suggestion of city manager Les White.” And that money comes from where, Jack? What gets cut to make room for it?
“Still, it provides a staged bailout with some security for the city, the theater and those who will be called upon to donate the $1.5 million.” What is the security, Jack, a second on the building? Who owns that ugly monstrosity of a building, anyway, and the land underneath it?
#1—try pride and competition with San Francisco
I feel the same way about the never ending pursuit of a baseball stadium for SJ that keeps coming up.
Voters have turned this down over and over, but city hall keeps pushing for it.
Likewise the McEnery convention center that the public could care less about, but paid for anyway.
#1
I think our city leaders see that all great cities in the world support the arts. They must feel that if San Jose aspires to one day be a great city, we too must support the arts.
I don’t feel that supporting the Arts is a bad thing, I just think we need to make sure we get the best bang for our buck.
#6
So it is that their (the city leaders you speak of) vision of a city/community is more important than the rest of us. I figured that was it.
Supporting the arts or any other institution, organization or event you hold dear is certainly a worthy pursuit, and persuading others to do so is noble in every sense. Forcing people to support your personal preference of entertainment is a concept I’m having trouble understanding. I hope its just misguided heartstrings and not a multi-million dollar deal/scandal about to unfold.
I agree w/Jack on this. I support the arts but think that perhaps the creative director needs to go. Seems like she’s out of touch. And there is a difference between wanting to try new things and being condescending and thinking you know what the unwashed masses need to see.
JM O’C (my hero), the money came from a surplus, nothing cut. As to how to allocate that surplus, you and I may disagree.
What I like about the structure of the line of credit is the city’s requirement of strict financial oversight.
From all accounts the Rep’s problems have been of it’s own making. It’s board, while populated with competent people, seems to have fallen into the same trap as many nonprofit boards: it has been too accepting of rosy financial predictions and flawed analysis. How many times have we seen this with nonprofit boards?
The city’s external watchdog role should be good for the Rep. It could help to keep it on the straight and narrow because the city wants to get repaid.
I wish the Rep well. I also hope they will stage a few more popular productions that sell tickets and get people into the habit of buying season subscriptions.
I have to agree with #4 and #6. Arts provide a reason for people to come downtown and help make it (downtown) vibrant. As a side note, when Money Magazine (not that Money Magazine is the final arbitrar of this stuff, it’s just an interesting perspective) rates their best places to live, leisure and culture is one of their criteria. here’s what they say about how they determine the level of leisure and culture in a city,
“Number of arts and leisure activities (including museums, restaurants, hiking and camping spots, golf courses and professional sports teams) within proximity of each city is calculated by OnBoard. Data sources: InfoUSA, MRI and InSource marketing survey data, Trails.com, American Public Gardens Association, American Hiking Society, American Association of Museums, Symphony.org, Reserve America, Ticketmaster, American Zoo and Aquarium Assocation, GoSki.com.
“
Interesting list of organizations they use (Ticketmaster?)…
Mal # 9 says:“What I like about the structure of the line of credit is the city’s requirement of strict financial oversight.”
Mal, have you taken leave of your senses? A “strict financial oversight” by a bunch of public employees? How strict can that be?
Mal goes on to say, naively: “The city’s external watchdog role should be good for the Rep. It could help to keep it on the straight and narrow because the city wants to get repaid.”
RIGHT, Mal, like the city got repaid by the GI Forum for the costs of police to break up the post-Cinco de Mayo riots over several years???!!! Ain’t got repaid yet, Mal.
Putting “The City” in charge of any repayment policy is like loaning money to your drug addict relatives—just consider it a gift that you’ll never see again.
Jeez, Mal, and I thought you were bright. Gotta rethink that.
Or, maybe you’re really Timothy Near.
#12. JMOC. Thanks. It’s consoling to know that once I “was” bright. Lo, how the mighty have fallen!
I take your point regarding the GI Forum although I have a bit more faith in our public employees. Numerous nonprofits receive city grants for which they submit performance and compliance reviews. We only hear about the agencies that crash and burn, like the GI Forum. An external reporting structure could only be good for the Rep. Or as the masochist said to the sadist: “It couldn’t hurt.”
By the way if I were Timothy Near I’d get some plays into the Rep that would hold the audience through the damn intermission!
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1) Rep is a city owned downtown building that was constructed as a city public works – labor construction, theater and city admin jobs
2) Chamber and Downtown Business Assocaition alway support any downtown tax subsidy – like Grand Prix even if questionable – it is not their money
3) Labor always supports tax spending for more union jobs (construction, transit, city and Rep employees ) and prevailing wages
4) Labor Cindy always supports more tax money for her downtown district and supporting the downtown arts group gives her political support for her Mayor election
Does any insider know what is the City – Rep deal – Do City Council members get free Box seat tickets and regular event tickets, meals etc like they do at Grand Prix and San Jose Arena that are worth hundreds of thousands per year to give to as freebees to political supporters, friends, and family?
How can anyone say Rep Board is populated with competent people – If So why did they mismanged millions years after year?
I doubt many will read this as I read this section well after it was first posted but…
There is a lot of wildly misguiding thinking goning on here and I feel obliged to throw my thoughts into the mix.
First, the nomenclature “nonprofits” thrown about here is a misguided shorthand for the true nature of this sector of the economy. Yes, the economy for this term is about the legal standing of the public benefit sector of the economy. These are organizations whose prime purpose is to serve a public benefit where a for profit venture might not see the point. I often make this point by noting that most corporations are decidedly not-for-public-benefit entities, but that is another story.
The public benefit sector is a major part of the American and local economy, providing jobs and services that would otherwise go unmet. These employees particiapte in the local economy like everyone else and help improve the lot of everyone with their investment.
When it comes to the rationale for supporting the arts in civic terms there are many topics, but the one selected in this blog seems to be about highest and best use of resources. For that the arts rank near the top of all possible public investments. Why is that you ask? Becuase the arts take the limited dollars invested by government in their support and leverage that to a greater extent than any other portion of the public benefit sector.
An example: say you wish an afterschool program to thrive and you put 80% of its support from the City coffers and seek 20% in contributed value added dolars. That extra 20% would be seen as a boon to the local citizenry and praised to the heavens. But if you reverse that analogy and take the City support for most arts groups, you’ll find that the arts provide something in excess of $130 million in annual local economic activity with a City contribution level of about $2 million a year. In that vein the support of local arts groups is good for business and good for the local economy. Were an 8.25% sales tax placed on all $130 million it would return five fold in direct taxes for the $2 million investment. Show me another public benefit sector that can match that operating performance.
If this all seems unreal and false to you, ask any downtown restuarant owner what happens to their business when the theatres are closed and what happens where they are open?
As for the specific case of the Rep and the emergency loan package, remember that $130 million comes from a lot of places and if the Rep is one of the major players then an occassional extraordinary gesture might be called for once in a while. I am not here to defend or attack the loan deal. I am here to point out that every day we make civic investments and we hope our elected officials use some criteria for determining where to invest. If the funds are never returned but we get 10 more years of the Rep producing in downtown, then you can do the math and you will find the City will have gotten its money back several times over anyway.
This blog began with a statment that the Council spent $200 million that day. I wonder if the other $198 million will return as much in pure economic terms.
#15 – “This blog began with a statment that the Council spent $200 million that day. I wonder if the other $198 million will return as much in pure economic terms.”
All that will result from giving the Rep $2M is that there will be $2M of additional potholes that don’t get filled, or $2M of sidewalks that do not get fixed, or $2M of salaried public safety positions that do not get filled. Etc., Etc., Etc.
That the Rep would have someone from the COSJ looking over its shoulder to make sure the finances are in order is some of the best irony I’ve ever read here.
In fact, when I first read it, I had to check the byline to make sure it wasn’t of John McEnery’s famous parody pieces. Alas, it was Jack, bless his bleedin’ heart.
There is a nice little drama department at SJSU, with a theater very conviently located on the campus (next door to the King Library on San Fernando). How much energy could be generated if SJRep were able to be merged somewhat with the SJS drama folks, and how much more bang would we get for the buck?
The Rep is guilty of the same type of financing that sunk the Symphony after a city bailout. All of the money paid in advance for Symphony season tickets was spent as it came in – therefore, when it went bankrupt, subscribers did not see the performances they had paid for nor they did not get their money back! In fact the Symphony board suggested that the lost money be “donated” so that an individual could take a tax deduction! At the very least, the city should require that money designated for a specific purpose i.e. season tickets not be spent on other operating costs.
Jack,
I don’t know your history other than your posts on SJI. However, from what I’ve read, you sound like a well rounded individual who knows a good play form a mediocre production. Have you considered applying for the director’s chair? Or, maybe sit on the board of directors to press for quality productions?
Yo, Mal # 12, I think it’s the sadist that says to the masochist: “It couldn’t hurt”, not the other way around as you stated.
Andrew # 15—so we should subsidize the Rep for $2 mil. in order to keep restaurants near the Rep. open?
We know that the Rep Board failed in its primary duty—raising lots of money. I have heard many complaints about Ms. Near’s play selection; i.e that she’ll educate us rubes down here in San Ohaze because she knows better than we do what is good theatre. Is she talented? Unquestionably. Is she out of touch with her audience? Probably.
Should there be public support (tax money) for the arts? Yup. Should that continue with the same Board that has failed and the same artistic director who has alienated long-time season ticket holders? I don’t think so.
Is oversight of the public outlay by some minion in The Taj Gonzal, who doesn’y know Ionesco from Sartre or Inge or Albee the answer? I don’t think so.
A housecleaning is in order as a prerequisite for continued taxpayer support. Thereafter, the marketplace will tell us whether the Rep returns to success.
JD #16 stated (which I didn’t read before I posted above): “All that will result from giving the Rep $2M is that there will be $2M of additional potholes that don’t get filled, or $2M of sidewalks that do not get fixed, or $2M of salaried public safety positions that do not get filled. Etc., Etc., Etc.
That the Rep would have someone from the COSJ looking over its shoulder to make sure the finances are in order is some of the best irony I’ve ever read here.
In fact, when I first read it, I had to check the byline to make sure it wasn’t of John McEnery’s famous parody pieces. Alas, it was Jack, bless his bleedin’ heart.”
I agree with all she/he says, but am willing to fork over the taxpayers’ money if we get some concessions as I have outlined above.