Edifice Complex

Building new cultural facilities is a risky business for Valley cities.

James Ballinger says the five-year program, which came shortly before the museum's expansion began in 1994, helped the museum zero in on the inevitable financial pressures of the new building.

"We knew the budget was going to jump," he says. "But we also knew that we were getting to a size and had enough varied talents, resources and abilities on our staff that we could begin looking a little bit further out on the horizon. We were outgrowing the survival mode, where things are literally so tight that you don't have time to think three, four, five moves out. You're probably just looking at this one and the next one."

Arizona Theatre Company's Jessica Andrews says that the program helped ATC develop essential methods for balancing the difficult cycles of cash drains and flows that constantly threaten to take arts organizations to the brink.

Joanie Flatt, Mesa's Woman of the Year, is a leading supporter of the city's proposed new $92 million art center.
Paolo Vescia
Joanie Flatt, Mesa's Woman of the Year, is a leading supporter of the city's proposed new $92 million art center.
Income from blockbusters like the Norman Rockwell exhibition has given Phoenix Art Museum's director, James Ballinger, plenty to smile about in recent years.
Paolo Vescia
Income from blockbusters like the Norman Rockwell exhibition has given Phoenix Art Museum's director, James Ballinger, plenty to smile about in recent years.

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"People assume, 'Oh, you've got a $6 million budget. You'll be fine.' But if you don't watch your every bottom line, you can quickly become not fine. It's easy to spend money and eat into your cash reserve if you're not careful.

"Any time we get off course, we're going to take steps to rectify that. Or we'll be back in a place where we have no reserve, we have no hopes for endowment. And we're racking up deficits and then we're done."


Most people on their way from cheap parking to the downtown baseball stadium or Suns games know the Herberger Theater, at the corner of Third Street and Monroe, as the place with all the bronze sculptures of frolicking nude dancers. But arts funders know it as the Valley's most visible lesson in how not to build an edifice.

"The dream was to build a theater and then have an endowment to pay for the cost of presenting the performing arts," says Marvin Cohen, who chaired the Herberger board for a time in the early 1990s. "It was a wonderful dream. The problem is they couldn't raise enough to build the building, let alone the endowment."

In what has become a painfully familiar sort of cultural trickle down, the Herberger, which opened in 1989, couldn't pay off the banks. In the early 1990s, the city came to the rescue, pumping $2.3 million into the facility and paying off nearly $7 million in bank loans. The banks forgave portions of other loans. And the theater, which operates as a cultural nonprofit organization, now vies with its tenants, the performing arts groups it was created to serve, for the same limited philanthropic pot of annual operating cash.

"That's called cannibalizing the donor base," says Joe Hill, a cultural specialist with AEA Consulting in New York, which advises arts institutions and philanthropies worldwide. "It goes on all the time, but it isn't a healthy kind of competition."

As the phrase suggests, it forces the theater to cut into its own supposed mission and chew on the weak financial roots of the organizations it was created to serve.

Herberger opened with the promise of offering cut-rate rents to its groups. But lacking an endowment to defray its own operations, it has had to charge near market-rate fees.

To make matters worse, the competition didn't end at money when the Herberger opened.

To fill its own nonprofit board, the theater essentially raided members from the board of Arizona Theatre Company (ATC), one of its prime tenants.

"That was not a good way to start the relationship," says Cohen, who now sits on ATC's board. "We changed the policy that kept people from serving simultaneously on both boards. But it's hard to deal with old wounds."

This scenario could easily be repeated in Mesa, where the city expects a citizens' group, the Mesa Arts and Entertainment Alliance, to raise about $2.7 million to complete two of its art center's four theaters.

As it turns out, the two theaters the city is not fully funding are, in fact, the ones local arts organizations need. The other two theaters are considerably larger and are intended to draw a mix of popular and classical performances. They are being fully funded because the city wants to build the more expensive facilities while it can.

As in Tempe, Mesa is paying for the new art center with a slice of sales tax. The alliance plans to supplement the center's city-funded operating budget by raising a $1 million endowment.

"That's never been done before at that level in Mesa," says Joanie Flatt, "but I'm not worried."

But she concedes that officials at the Mesa Symphony, which depends on the same donors the alliance will probably be chasing, are concerned about potential fund-raising conflicts.

Flatt says no one knows yet what the community's capacity to give might be, or how much will come from individuals, corporations and foundations.

What's known is that planning for the center is steaming ahead at a time when the city is considering citywide budget cuts of up to 9 percent.

Flatt and other supporters say they're not worried about that either, that the revenues for the future center are protected because they come from a dedicated portion of sales tax.

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