The Madison Cultural Arts District Board announced Tuesday night ways to continue bringing in revenue through the Play Circle at the Overture Center.
After the 2009 spring season, the curtain will close on the Madison Repertory Theater’s contract with the center for the seasonal use of the Play Circle. Recently the Rep closed its doors due to insurmountable debt.
According to Dana Chabot, treasurer of MCAD, the loss of the Rep’s contract with the Play Circle will reduce the Center’s revenue, especially from resident companies. Although MCAD is working to replace the Rep, Chabot said the situation is more dire than MCAD anticipated.
Tom Carto, president and CEO of the Overture Center, said the Rep also owes money to the Center.
“We’re actually doing better than most peers in the same budget area,” Carto said. “I don’t see programming options as the panacea to solve the income problem. I think we’re on the right track from last year to maintain or slightly improve this kind of problem, but I think we’re going to feel the impact of the economy if the economy continues to flounder.”
However, Carto said the upside to the Rep indefinitely suspending their run in the Play Circle is new acts will be able to make use of the space. The Children’s Theatre of Madison as well as the Madison Opera are both interested in using the Circle. He added he is looking for professional equity theatre groups to perform in the space as well.
Carto did admit admission revenue for the Center is down approximately 4 percent.
Regarding the current financial situation with the Center, Linda Baldwin, chair of MCAD, said the next step to be taken is for the three banks — JP Morgan Chase, US Bank and M&I Bank — that liquidated the center’s trust fund to come to an understanding with the Overture Development Center and Support Organization for the Madison Cultural Arts District.
Philanthropist W. Jerome Frautschi gave a $205 million grant to fun the construction of the Center in 1998. With the intention to earn enough interest to pay back the construction debt of the Center, $105 million of the grant was placed into a trust fund and is overseen by SOMCAD.
When the value of the fund fell below $93 million in October, the stocks, bonds, securities and mutual funds of the Center were liquidated by the three banks.
However, the liquidation of the Overture Center’s assets is in question because during process, several millions of dollars apparently went missing.
Baldwin added a forbearance agreement indemnifying the banks also needs to be signed for the Center to move forward.
Recently, there was an initial meeting between the banks and MCAD, according to Baldwin who added the classified liquidated loans are now being dealt with by a New York investment advisor.
“It’s true that banks would have claim on everything we have in order to satisfy the debt, but they haven’t foreclosed and made a formal demand that we repay the debt. … We’re still paying our bill and we plan to continue doing that,” Chabot said.
