VANCOUVER – The City of Vancouver has quietly come to the rescue of the Vancouver Playhouse Theatre Company in a complex bailout involving nearly $1 million in financial support as well as significant changes to how the company operates.
The Playhouse, one of the oldest of Canada’s 15 large regional theatre companies, has been struggling for years despite periodically posting operating surpluses. This summer it was in danger of going bankrupt with more than $826,000 in debt, half of which was owed to the city.
That loss would have triggered a ripple effect within Vancouver’s fragile arts community, whose members use the Playhouse’s set construction and design programs, extensive wardrobe and facilities to put on their own performances, city manager Penny Ballem said Thursday.
“The clear message we got is that it is a vital part and if it goes under we will have an unravelling of that part of our arts and culture community,” she said.
The Playhouse’s dire situation was kept quiet while council sought a solution. The plan became public after The Vancouver Sun received from an anonymous source a copy of a document discussing the in-camera council deliberations.
In that closed-door meeting in June, council unanimously agreed to forgive the city debt of $426,000 and provide up to another $400,000 to help the society pay off non-city-related bills. In a previous in-camera meeting in April, council had given the Playhouse another $100,000 to pay bills.
The city has also offered assistance in finding new offices and workshops, including rent-free facilities in city-owned buildings. Vancouver Community College has also offered space for the company’s wardrobe.
Ballem described the restructuring negotiations as extremely sensitive and worried that publicity might hurt the rescue plan if patrons and subscribers believe the Playhouse is going to fold.
“I can verify that the city has taken what I call a multi-pronged approach to bridge an organization that is a vital piece of our cultural fabric in the city,” she said.
Council is also considering restructuring the lease the company has for the city-owned 650-seat Playhouse Theatre, which is part of the Queen Elizabeth Theatre complex. The restructuring would likely involve giving the theatre company a substantial continuing subsidy as well as permanent residency rights that would further stabilize the organization, Ballem said.
The $400,000 will only be provided after city staff have vetted the bills, she said.
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Ballem said the secrecy around the negotiations was critical but the city always intended to make the results public.
“It will become public whether they make it or don’t make it, but in the restructuring transitional period it is vitally important that if there is any chance of creating a stable organization that can be successful that we not compromise that,” she said. “Anything publicly that would have indicated the Playhouse was on the verge would have seriously compromised their ability to make a decision.”
Max Reimer, the theatre company’s managing artistic director, said the city has helped to save an important Canadian institution that also helps nearly 100 small and medium theatre companies.
“The city has been working very hard to assist us, and they’ve been very careful to make sure there is a fairness when it comes to other theatre, companies,” he said. “But there is also an urgency here. We’ve been hemorrhaging money and we couldn’t continue. This effort will put us over the hump and I am confident we’re on the road to recovery.”
Ballem was more circumspect. “I am not fully 100-per-cent confident that they are over the hump. We still have work to do with their board,” she said. “I would say it is absolutely not out of the woods yet.”
But she said the city’s assistance will give the Playhouse its best shot yet at solvency and she hopes the public and corporate donors also show confidence.
Ballem said the city confidentially consulted with a number of other theatre companies to determine if the Playhouse was worth saving, and if Reimer was capable of leading the company’s renewal.
“We got a very clear story from them that the Playhouse is a critical part of the performing arts fabric in this city,” she said. “In terms of the leadership of Max Reimer, people told us that if there is anyone in the country that can actually get the Playhouse out of the trouble it has been in for the last 15 years, he’s the guy.” The rescue plan comes as the Playhouse begins its critical fall subscription and donor campaign, which is responsible for more than half of its annual $5-million operating budget. Reimer said ticket sales and corporate donations “are now returning to a decent level.”
He noted ticket sales to recent productions, including The Drowsy Chaperone and Death of a Salesman, had exceeded initial budget projections.
In addition to the funds, the city gives the company a “grant” of $501,000 to pay for rent on the civic theatre. Reimer said that money is a bookkeeping exercise that allows the city to charge back to itself rent it would otherwise charge tenants. “We don’t see a dollar of that money,” he said
Of the Playhouse’s operating budget, roughly $2 million comes from ticket sales and $1 million each from corporate donations and government support, including arts council grants. The rest comes from a variety of fundraising programs and foundation endowments, Reimer said.
The $426,000 debt to the city consisted of overtime for two technicians, GST and HST implications and a number of what Reimer called “incremental” costs not covered by the Playhouse’s lease of the civic theatre.
Reimer came to the Playhouse in 2008 after successfully eliminating a $5.5 million debt at the Theatre Aquarius in Hamilton and retrofitting the historic Huron Country Playhouse in Ontario at a cost of $2.2 million.
The Playhouse has been given access to a new 200-seat studio theatre being built in Wall Financial’s new residential tower near the Olympic Village, where smaller more intimate productions could be shown. The Playhouse averages five shows a year in the civic facility, while its main competitor, the Arts Club, has three stages and produces up to 30 events a year, Reimer said.
The False Creek theatre facilities are part of Wall Financial Group’s community amenity contributions to the city. In 2005, the city devoted the space to the Playhouse Theatre company for a second venue.
The Wall building, which is also supposed to house the Playhouse’s head offices and construction shops, has been delayed for years because it was inside the security zone for the 2010 Winter Olympics. In the meantime, the Playhouse leased commercial space for a theatre and fabrication shop on West Second Ave. at a cost of $250,000 a year.
Reimer said that additional cost, which he said the company was forced to endure because of the seven-year Olympic delay, seriously hammered the Playhouse’s books, which were already under strain from the recession and government cuts to funding.
Under the city’s restructuring plan, most of the company’s offices and services will move out of its commercial lease on West Second. Only the set production facility will remain, Reimer said.
The head offices will move into Playhouse Theatre facilities rent-free – at a value of $20,000 a year – and the call centre and the promotional and marketing arm running the successful Playhouse Wine Festival will move into a city office building at Broadway and Cambie. They will all be relocated to the Wall building when it is complete in 2014, Reimer said.
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