By Howard Pousner
Even before economists officially acknowledged the recession with the “r” word, Theatre in the Square was feeling acute pain from corporate backers backing away.
So, after nearly three years of funding declines and mounting debt, now just under $300,000, the Marietta troupe took this week’s news of a $75,000 grant from the Metropolitan Atlanta Arts Fund as a show of moral support to go along with the much-needed financial support.
“We really feel we’ve turned a significant corner,” said Raye Varney, managing director of the 27-year-old company. “And the arts fund support, for the second year in a row, has been critical.”
Theatre in the Square, Theatrical Outfit and True Colors Theatre Company received top grants of $75,000 each from the fund, which announced awards of $500,000 to 10 groups as part of its Atlanta Arts Recovery initiative. The initiative was launched last year when the fund added a second round of annual grants, doubling its annual giving to $1 million, to help small and midsize nonprofit arts organizations survive the recession.
One of the metro area’s longest-running troupes, Theatre in the Square has been reeling since a $1.5 million capital campaign to renovate its front facade and lobby, a project it started planning in 2006, slammed into the recession. “We went in to it knowing to some degree that whenever you raise capital money it’s going to cannibalize operating [expenses], and it just became a worse and worse time to be cannibalizing operating,” Varney said.
The company had long enjoyed significant support from the development community, but that disappeared in fall 2007 when the home-building bubble burst. That made for a “very rocky” fiscal 2008, Varney said, and the beginning of debt accumulation. The theater trimmed staff from 15 to 10 employees and cut expenses going into fiscal 2009, but then donations from banks dropped.
“So when you get into this [fiscal 2010], a third year, we’re really hamstrung,” Varney said. “We’d already made our cuts, and the cash flow is just eviscerated carrying debt like this.”
Varney and theater co-founder Palmer Wells took pay cuts this year, and the entire staff has taken furlough days. The theater’s budget has been trimmed to $1.6 million annually, down from $2 million three years ago. Less than 5 percent comes from governmental sources.
Yet there are some signs of hope beyond this week’s $75,000 grant. The company, which managed to retain 3,300 season subscribers, expects to finish this year in the black and to be able to retire at least 10 percent of its debt. It has negotiated a multiyear pay down with its bank, allowing the troupe, which has no endowment, to put aside half the new grant as insurance against further misfortune. It’s also had some success pitching smaller sponsorship opportunities.
Meanwhile, what ended up being a $1.3 million facade and lobby renovation is nearing completion. The exterior scaffolding came down in February, and the new furniture arrived on Thursday.
Varney said the fix-up was motivated more by the bottom-line than aesthetics. The 220-seat theater for years has had only a 90-capacity lobby. By adding two storefront spaces, the lobby space has more than doubled, the better to sell theatergoers drinks from the new coffee bar or beer and wine instead of pouring them soft drinks out of 2-liter bottles.
The new facade unites the two new lobby spaces with the original one, improves lighting, and adds an electronic marquee and a much bigger sign. The overall look is more contemporary, in keeping with the stagings of a company that has mounted 24 world premieres and countless regional premieres since 1982, and where the musical “His Eye Is on the Sparrow” continues through May 30. There’s talk of a “We’ve done it” party soon.
“It’s tough to turn the proverbial ship of state,” Varney said. “Now we’re starting to come out of the turn and go full steam ahead.”