Plans for a revamped Overture Center for the Arts are being made. They include city ownership of the building and privatization of administration. It sounds great, and work could begin soon, but one question remains: what to do with Overture's union-represented city employees?
"I think in the long run we would much rather have this situation and have Overture survive and prosper with new governance, than having the alternative, which is Overture not succeeding," says Tom Carto, Overture president and CEO. "Then those people wouldn't have jobs at all."
He promises opportunities for current employees, over a lengthy transition. Any change will take time, but it could at least begin quickly, once the center's $23.6 million in debt is settled.
"I think that progress with discussions on the debt is encouraging," says Carto. "I don't know when it will break. I think that when it occurs, a lot of things will happen quickly. I think that the city and the mayor are anxious to move ahead once that's taken care of.
"Now, if the debt isn't taken care of in the next month or two, I don't think much will happen. But if it happens in the next week or two months -- who knows?"
Meanwhile, he's encouraged by Mayor Dave Cieslewicz' public backing.
"I'm optimistic that he will support the idea of the city owning the building, provide for its maintenance, capital needs and so on, and lease it to a private entity -- a private foundation -- to operate," says Carto. "That's what we're aspiring to accomplish over the next many months, if we can get all the dominoes to fall in the right direction."
The Overture Foundation was created to receive Jerome Frautschi's $205 million gift. The Madison Cultural Arts District, an appointed board, manages the facility; it has no taxing authority. (Isthmus associate publisher Linda Baldwin is chair of MCAD.) The City of Madison employs most Overture administration and operations staff, not counting stagehands.
The "debt" is better described as debt-service owed by the Overture Development Corporation, which owns but does not operate the facility. It comes from a leveraged, refinanced construction loan that was placed in an investment fund. Following the 2008 crash, as earlier agreed, the corporation's lenders liquidated the fund. Who now makes the payments is the problem.
One thing Carto doesn't want is for debt service to come out of his side of Overture's house, operations. Season-end financials have yet to come in, but that part of the facility seems solidly on budget, thanks to deep cuts and changes to programming and financial management. Fundraising is way up, and subscriptions for the 2010-11 season are double what they were at this time last year.
"It's an astonishing increase," says Carto.
Still, the city won't move until the debt is taken care of. Carto earlier thought that refinancing was an option, something like a debt-consolidation loan.
"That's less of an option now," he says. "I think if it's going to be solved, it has to be done in one fell swoop, and we say we're settled and we're done. That's going to take some stepping-up from a number of sources," for example donors with some mighty deep pockets.
"It's got to come partly from private sources, I'm sure, and those discussions are continuing in earnest now," he says. "I'm not privy to those conversations, but I do understand that progress is being made."
Once that happens, "I thank that what would happen then is the city would say 'Okay, we said we would help once that's behind you, so let's start working on it.'"
"Compassionate to the idea of employment"
That part could start fast. The rest of a transition could take years, while administrative and business models are worked out. Mixes of public and private models have already been considered and set aside.
A single private corporation is now envisioned. It would be nonprofit and tax-exempt: a 501(c)3, in arts administration language, named after the enabling portion of the federal tax code.
"It would be very much like any nonprofits board, like a symphony or an opera," he says. "There are plenty of performing arts centers in the country that are operated by a 501(c)3 with a community board, and that's what we're looking at. A successor [to the current administration] would most likely be our 201 State Foundation, which is the fundraising entity." (It's recently changed its name to the Overture Center Foundation.)
But what to do, then, with the current Overture operations staff, almost all of whom are City of Madison employees?
"They'll have options," says Carto. "Our goal is to give them enough options and enough time to make sure that everything's being done to give them future employment."
Whatever form Overture eventually takes, it's "going to have to be palatable to the city, to the unions, and be negotiated," he says. "Hopefully, when we get to the end of this, people will still have a job somewhere, whether it's with the new entity or the city.
"We will have a transition plan as we go through that is understanding and definitely compassionate to the idea of employment. It's very high on our list -- it's very high on the mayor's list -- that we do this right and we do this fairly.
"I think that when you bring that into the conversation and say, 'Look, we're trying to make Overture sustainable and serve the community, and really this is the only way this is going to work,' [then] let's make that work and let's make sure that those who are working here still have jobs, whether with the new entity or with the city."