MIAMI HERALD – MAY 2009
BY DANIEL CHANG
Inside a conference room on the third floor of the Adrienne Arsht Center for the Performing Arts, chief executive John Richard recently added a homey touch.
He covered a once-bare white wall with a montage of color pictures of audiences, artists and civic leaders — each involved in a performance or other activity at the center.
Together the photos project a theme of community, hosted within the publicly owned Arsht Center. Or, as Richard likes to call it, “The New Town Square.”
”It felt like a hospital,” Richard recalls of the center’s labyrinth of offices, dressing rooms and hallways, many of which were unadorned when he arrived in December as the third CEO since the center opened in 2006.
Now these backstage areas are covered with posters of performers, photos and inspirational quotes about the power of creativity and teamwork.
”It needs to feel like it’s up and running,” Richard explains, “so you will know immediately that you’ve arrived at a great performing arts center.”
When Richard, 56, took over as chief executive, he inherited an institution on the mend.
Larry Wilker, the immediate past president, had begun the difficult work of turning around the center’s dismal inaugural season — during which it failed to attract sufficient audiences or donors and amassed a $2 million deficit and a reputation as a money pit.
And while much of the center’s turnaround can be attributed to a $30 million naming gift from Miami philanthropist and retired bank chairman Adrienne Arsht, Wilker’s programming and community outreach also went a long way toward making more South Floridians feel welcome.
Now comes the hard part: sustaining the recent success by continuing to attract ticket buyers, raise donations and persuade a once-skeptical community.
For Richard, the central theme that will tie together those goals is community, a topic he speaks about almost obsessively.
”It becomes a home to people,” Richard says of the center. “It becomes a place where you meet new people, and that is my sort of 21st century description of the new town square.
“My feeling is it’s the secular pew.”
Financially, the center has overcome unexpected challenges without swinging into crisis. For example, programmers had expected to present 122 performances from October through February, but only staged 102.
That meant lower ticket revenues but also lower show expenses. And the shows that were presented sold better than expected, an average of 69 percent of available tickets vs. a budgeted 60 percent.
Since the center has continued to lower maintenance, utility and other operating costs, the bottom line so far has been a budget surplus of $1.3 million.
To be sure, the financial picture can change fast. But a stable budget means Richard can spend more time executing ideas.
So far, he has exceeded the expectations of the center’s dual boards of trustees.
Ricky Arriola, chairman of the independent Performing Arts Center Trust, which manages the Arsht Center, says Richard is driven by a mission to use the arts to bring people together.
”He’s a difference maker,” Arriola says. “Right now, I tell people I think we’re doing well to very well. But our best days are ahead of us.”
As chairman of the Performing Arts Center Foundation, which raises donations for operations, Arsht helps set the tone.
”The tone,” she says, “is accessibility, inclusiveness — a performing arts center for everyone.”
One prominent opportunity to open the center occurred on Inauguration Day.
Richard saw that on Jan. 20, the 2,200-seat John S. and James L. Knight Concert Hall and the 2,400-seat Sanford and Dolores Ziff Ballet Opera House were free of events. He decided to open them to the public for a simulcast of President Barack Obama as he took the oath of office.
More than 4,500 people reserved free seats to watch the historic swearing-in.
”It was the right idea at the right time, and it seemingly had a magical feel to it,” Richard says. ”We raised, in a couple of weeks, $30,000 to $35,000” to pay for the event.
Richard has continued to open the center for free programs, but he has also contained unexpected crises.
The first big challenge occurred in February, when the Concert Association of Florida — one of the center’s four resident companies and a major presenter of classical music and dance — filed for bankruptcy liquidation.
HOLE IN CALENDAR
The association’s demise threatened to create a hole in the center’s calendar. Audiences were anticipating performances by the New York Philharmonic, the Dallas Symphony Orchestra, the tenor José Carreras and other artists.
If those performances were to continue, Richard quickly needed to negotiate new financial terms with the artist managers. He also needed to raise donations to help cover the artist fees, continue to market the performances and reassure Concert Association subscribers that they would not lose their money.
Foremost among Richard’s responsibilities, though, was the financial performance of the center. He could not risk upsetting its recent turnaround by taking on all the financial risk.
The commitment meant persuading the artists to adjust their fees and share the risk of ticket sales.
”They worked dramatically with us on the fee structure and the take on the box office,” Richard says. “That was the way in which we were able to see our way clear of incredible risk at such short notice.”
Not only did Richard ensure that the Concert Association presentations would continue, he also brought in the venerable Alvin Ailey American Dance Theater, which had been scheduled to play in Miami Beach.
For Arriola, saving those programs was key.
”If you don’t have quality programming, you’re going to have a very tough time getting the financial support you need,” he says.
The Arsht Center certainly will face challenges in the future as Miami-Dade, which owns the $483 million facility, continues to commit resources to other large projects, such as the newly approved Marlins baseball stadium.
The stadium’s $634 million construction will be financed, in part, by the same hotel bed taxes once dedicated to build the Arsht Center. Miami-Dade also subsidizes the center’s operations with about $7 million a year using that source of funds.
Miami-Dade Commissioner Carlos Gimenez says Richard may feel pressure from the county’s increasing financial obligations.
”I would hope there would be sufficient funds to keep the subsidy,” Gimenez says. “There could be pressure in the future if tourism doesn’t rebound, . . . especially now that we’re going to incur a large amount of debt for our contribution to the Marlins.
“How that affects our contribution to the operations of the Arsht Center, that’s to be seen.”
Arriola, the PAC Trust chairman, disagrees with that outlook.
”I don’t think baseball will hurt us,” he says. “Besides, at the end of the day we have to compete. We have to put on a good product. We have to put on a good show.”
Still, everyone recognizes that successful fundraising is imperative.
Richard, who signed a five-year contract at an annual salary of $275,000 plus incentives, showed a knack for fundraising during his 20-year career with the New Jersey Performing Arts Center in Newark.
There, he helped raise $51 million to pay for construction of the center, which opened in 1997.
In 2008, while Richard was chief operating officer, the New Jersey center raised about $12 million in private donations and operated on an annual budget of about $30 million.
The Arsht Center, which has a budget of about $28 million, raised about $17.5 million in donations last year, led by a $13 million chunk of Arsht’s naming gift.
This month, the center launched its first membership drive, mailing brochures to 55,000 households in South Florida. Memberships start at $65 and offer benefits such as first notice on ticket sales and invitations to special events.
”We need support,” Richard says. “Now we’re sitting here with baited breath waiting for checks to arrive.”
He’s only partially kidding. Richard has sober expectations for the response rate.
”I’d take 10 percent,” he says, “but if we get a one to two percent response, that would be fantastic on a first mailing. We won’t get that. This is a start.”
The goal is to have 3,000 to 3,500 members by December, he says, starting with maybe 700 members recruited from the first mailing.
”At the end of the fifth season [in 2011] . . . we should have 5,000 members,” he says.
Membership drives won’t be the only fundraising tool, though Richard has yet to unveil a major donations campaign and still needs to hire a fundraising director.
”The tactics we will use will be comprehensive,” he says. “It will be about investing in an institution. . . . I like to win people over, not hit them over the head with a mallet.”
Richard’s future priorities also will include launching a comprehensive arts-education program with local schools and opening a restaurant in the opera house.
In his first three months, Richard has won over some important former skeptics.
Miami-Dade Commissioner Javier Souto, who excoriated the center’s leadership in 2006 and 2007 for poor financial performance, says he hardly has reason to complain anymore.
”A lot of the bad stuff that we used to listen to has been disappearing,” he says. “I believe that the people are a lot happier than they used to be.”