UPDATED: Arsht Lays Off Staff, Cuts Salaries And Slices Upcoming Season Budget In Half

THIS STORY HAS BEEN SUBSTANTIALLY UPDATED

By Bill Hirschman

The Adrienne Arsht Center in Miami, one of the most high profile performing arts venues in the state, is cutting its coming fiscal year’s budget in half and just laid off, furloughed or cut salaries for its staff in anticipation of an $11 million loss this season.

The steps are a harbinger of what other South Florida companies are weighing, steps some have already taken.

The landmark has been closed since March 15 when Miami-Dade County regulations shuttered all similar venues due to the COVID-19 virus.

The facility, which hosts or produces jazz concerts, classical recitals, Broadway tours and locally-produced theater, has penciled in less than a handful of events in September and October in a “soft opening” including the second Presidential debate, but current plans don’t predict significantly ramping up until January for its 15th season.

The venue estimates that postponements and cancellations this spring, summer and fall may have cost the facility $11 million in revenue from mid-March through the upcoming September, representing 160 events, said Johann Zietsman, Arsht CEO and president in an interview Thursday morning.

To avoid any deeper loss, the Arsht administration, Trust Board executive and finance committees have agreed to cut the usual $42 million operating budget to $21 million for the 2020-2021 fiscal year, which begins in October, he said. That reflects an effort to make up for the anticipated lost revenue for the last calendar quarter of 2020 as well as “conservative expectations for ticket revenue in 2021,” he said.

“We feel confident going into all the modelling we’ve done, but nobody has the answers, really. And so the name of the game is to be nimble.  It’s contributing to a sense of we’d better be much more conservative a lot next year and not be Pollyanna about it,” Zietsman said. “I mean, when the doors open, we’re going to be really, really happy, and I think people will have a pent up demand and we’ll do great shows. We’ve announced really good seasons, but we really don’t know what the final numbers would look like.”

Their concern echoes several local theater artistic directors who worry that even when their county governments allow theaters to reopen, the reduced seating capacity may make producing a program economically unfeasible. Further, they worry whether enough patrons will be willing to come back in the early months, even if a vaccine is available and safety measures are taken.

“We don’t know where people’s psyche would be. Would they feel safe? Would they want to go out and can they afford to go out?” Zietsman said.

Those fiscal 2021 calculations assume that the center will not lose any of the approximately $11 million given to the operation by government line items, he said. Miami-Dade County gives about $7.65 million for operational expenses such as maintenance, security and upkeep of the building. Programming expenses must be paid for by the center itself. The balance of the government money raised through taxes is earmarked for community engagement programs, education programs and some capital related programs.

The venue has not and does not plan to dip into its approximately $12 million in reserves because “our focus… has been the long term sustainability of the organization — not just getting through this financial year… but to anticipate and provide contingency for what might be a very tough 2020-2021 season and (which could) potentially linger on into 2022 with the economy hurting and therefore people’s disposable income being more of an issue potentially in the future.” Further, about $4 million of that total has been donated for specific earmarked purposes.

Luckily, outside donors’ “pledges are being honored and some pledges are even being fast tracked. So we really are in a very generous community that way, and so hopefully that stays the same,” Zietsman said.

But the key question to balancing next season’s budget is ticket sales, which represents a major percentage of the center’s income. The first quarter of its fiscal year  — this fall – won’t produce much revenue, and the fourth quarter – next summer – is traditionally a slow period, so that means relying on the winter and spring, Arsht officials said.

The venue already had made operating budget cuts, a reduction of salary and benefits and several layoffs in early May including not needing part-timers such as ushers. But the roster of remaining employees received a partial reprieve when the center received and shared the benefits of the federal Paycheck Protection Program, re-instituting salary levels for all eligible staff for the eight-week duration of the program.

But that program has expired, prompting the organization to cut payroll expenses 58 percent across its 108 full-time employees. On late Monday afternoon, Zietsman gathered the staff via Zoom to advise them of the plans. Following that, supervisors had one-on-one conversations with each staff member through Thursday.

The center confirmed that 8 percent of the staff is being laid off permanently. Fourteen percent remain on the books as employed but without pay yet still receiving benefits. Ten executives including Zietsman will deal with a slice taken out of their salary ranging from 24 to 36 percent.

A news release stated, “We are committed to maintaining health benefits for all remaining staff, including those who have been furloughed – for as long as possible. We will continue to use everything at our disposal to assist everyone affected by these measures, including help with state unemployment applications. Our intention is to bring back as many of our staff members as possible as we ramp up for re-opening. Our staff is our lifeblood, and this has been a gut-wrenching decision.”

Exactly when and how the center will reopen short-term and long-term remains a topic in development. The center is fine-tuning its already submitted preliminary application to the county government for permission to reopen for live performances, including a detailed roster of safety and health precautions that will be required. Given the fiscal and logistical requirements still evolving, the opening might have to be phased in, Zietsman said.

The sole events for the “soft opening,” which can be scrapped or postponed, are an independent tour of the musical In The Heights set for Sept. 15-16, a Flamenco Festival in October, the second Presidential debate slated for Oct. 15 and City Theatre’s one-man play Jacob Marley’s Christmas Carol in December.

Various reopening scenarios with varying but specific dates have been worked out, including rescheduling many of the 2020 spring-summer events into the 2021 season. The Arsht announced last month that it would mount a four-show Theater Up Close season of locally produced works by Zoetic Stage and City Theatre in the winter; a four-event Knight Masterworks Season Classical Music Series starting in January; its five-night Jazz Roots series in December, and a six-show Broadway in Miami series beginning in February.

The national producers of the Broadway tours have been steadfastly quiet, even to their furloughed casts, about when and how performances will resume. One problem is that unions, notably Actors Equity, refuse to allow their members to sign a contract until, first, the union develops detailed safety requirements for venues, and two, the venues agree to them, assuming they are logistically possible to comply with. But Zietsman expected that a go or no-go decision on those tours would likely have to be made sometime this month to make proper preparations, although that could change as well. A complicating factor is coordinating the Miami dates with the other ten cities in the tour.

Subscriptions are being sold for all the series with specific dates cited, but it’s being done subject to all the obvious uncertainties. “Our subscribers have shown us that they understand and they will be flexible with us and they will be patient. They keep buying subscriptions even though they understand,” Zietsman said.

The second Presidential debate was a surprise that arose about three weeks ago when the University of Michigan backed out as host, Zietsman said. Again, depending on variables related to the virus, the current plan is to hold a town hall-style meeting in the Knight Concert Hall with journalists and staffers backstage at the Ziff Ballet Opera House across the street. Arsht spokeswoman Suzette Espinoza wrote, “Any guests or audience will be strictly dependent on directives from the County and recommendations from health officials. We expect that attendance will be extremely limited for that reason.”

Zeitsman said, “This is short, short notice for them and for us. But, you know, it’s a quiet period and we were able to give them the campus. And it’s all subject to, I should say again… subject to our local conditions.”

The Arsht decisions come as the Broadway League in New York has officially closed all shows until January and most of its high profile opening nights have being postponed until the spring. Similarly, many regional companies around the country have simply cancelled summer and fall schedules and postponed traditional on-stage performance to March or April.

Quietly, some Florida theater companies have put many of their employees on part-time, furloughed them or dismissed them indefinitely. Some of those needing to earn a reliable income have resigned outright to find other permanent jobs.

Like the Arsht, most put off such measures as long as possible, but when the federal PPP loan money ran out a few days ago, those company leaders said they had no options, other than wiping out whatever reserves they have and might need to reopen later.

Across the region, some theaters are announcing dates online for their next in-person stage performances. Some are hoping to return in late October like Island City Stage with a one-actor production. But most of the proposed starting dates are in December and January, and all of them are in pencil, every artistic director said.

A few local companies, as of last week, had dipped their toe in the water or planned to.

For instance, the Wick Theatre in Boca Raton opened its costume museum for tours in late May. It has been using its large lobby as a cabaret with dinner for three-day weekends since early June, including drag performers, Italian singing tenors and this coming weekend, The Victory Dolls, a group of local songstresses performing songs from the 1940s.

As recently as early June, the Wick had been planning to open its regular season September 10. But on Tuesday, it announced it was going to open the season with Mamma Mia on Jan. 7. Then it would resume its cancelled A Chorus Line in March, then its cancelled Nunsense the following month. It would open its eighth season in October 2021.

In weekly emails to its subscribers, the Wick includes a video about the steps it is taking to keep the venue virus free now and later in the season: https://tinyurl.com/y8dvegpl

Empire Stage, the tiny venue in Fort Lauderdale, has begun comedy and music performances by Sheba Mason through July 19. It is one of the very few venues that has requested and been granted permission to reopen by the Broward County administration.

Its publicity notes “The audience will be seated safely by masked escorts and will be limited to 50% capacity with an abundance of hand sanitizer throughout the theater. Lines to the box office will be socially distanced. Masks are required. No more than 25 tickets sold for each performance to enable strict adherence to Broward County guidelines. Please arrive with face covering!”

Inside Out Theatre, a student-based program in Broward County, announced that it took its cast and staff inside the Wick on June 7 using CDC safety guidelines and protocols to record its production of Dog Sees God so that it could be live-streamed later.

In a news release, the company wrote, “When the pandemic hit, we made a decision to continue rehearsing our scheduled productions virtually, in order to offer our students some kind of stability and connection.  We are so proud of our young actors who have showed up with an exorbitant amount of discipline and commitment to these rehearsals.”

Additionally, several companies are continuing their summer camp, some of them virtual, some of them in carefully controlled onsite programs such as Actors Playhouse in Coral Gables.

Like a majority of companies, the Arsht is continuing an extensive online outreach program of events to keep its connection with the public, including having its human resources department provide one-on-one interview coaching and résumé reviews.

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