03.15.05 NOTES: Director of Cleveland Playhouse

The 01.15.05 Tuesday@REI featured Cleveland Play House Managing Director
Dean Gladden speaking about the economic importance and vulnerability of his
esteemed organization. The Cleveland Play House is the oldest resident theater
in America, with a long history of financial sustainability and artistic success.
Yet, like so many important arts organizations in NEO, they are struggling to remain
viable in a changing competitive economic landscape, and MTV-nation.

One important realization is Northeast Ohio was so prosperous around the
turn of the 19th Century that wealthy philanthropists established
and funded some of the world’s great cultural institutions, like the Cleveland Museum
of Art, the Orchestra, and the Play House, without the expectations the public
would share in the expense – consider the Cleveland Museum has in its charter
it will always be free to the public, and primary funding comes from their
endowment, foundations and private gifts. Unlike in every other major city,
where local, regional and state governments subsidize the arts, NEO cultural
organizations have typically survived throughout their histories with little
public subsidy. But now that the old money is less centralized in the Cleveland
area, and most major corporations have left the region, the funding base for
local arts and culture is disappearing, and other means of support must be
found. As Play House Director Dean Gladden points out, local arts organizations
now suffer for their past successes.

The economic dilemma Dean faces is how do you have a diverse and relevant
repertoire and education and arts center that all are fiscally sub-optimal.
They have 300,000 square feet - 1st resident theater in country - $7 million
operating budget - $14 million economic impact in the region - and how to pay
cost of utilities per day $1,200 - they subsidize - everyone wants to rent at
subrate rents (like MOCA paying $2.40 rent) - worked deal with Clinic to rent
50K square feet - and parking lots during day - rent to other theater groups to
use facility - have private restaurant club - partner with CWRU on MFA in
Theater for additional benefits and revenues - take real estate to subsidize
the institution (brings in $1.1 million). This has been their way of dealing
with the economy.

Most organizations like this are subsidized by the community - Playhouse
Square gets over $1 million per year from County - Cleveland Playhouse
subsidizes the Cleveland Browns through taxes on their parking.

Cleveland had great philanthropy around the turn of the century so we
developed great arts without expectation of subsidy - every other urban area
has city and state subsidy - paying for facilities - this unique history
allowed development of attitude here that arts don't require subsidy - now
suffer as result of historic success and overall decline of regional economy.
This has affected Playhouse - 10 years ago they got $400k/year from corporate
gifts - now $0.

Seeing change, the arts organizations went to the public seeking tax, which
was narrowly rejected last year. Largely, East side of city and Cuyahoga County
support arts, and supported the tax levy - West side does/did not - also places
which do not support own schools - example Parma, where only about 30% of
population supported tax.

Earned ticket revenue is 34% of total revenues - down from 50% (hence need
for renting facilities and generating other revenues) - urban sprawl has hurt them
as people are less inclined to come in for arts and entertainment. Corporate
giving trends are loss of companies and so giving - if not "home"
company they don't care - 10 years from now our only company may be
Progressive. Arts organizations need to build up endowments and be creative in
finding and developing value.

Playhouse is fortunate they have assets to leverage - real estate and
facilities to rent out. Clinic already rents out 50K square feet and parking
from Play House - have 12 acres of land, of which some can be better developed,
which they may do with the Clinic. Also looking to the future, they are putting
together a revised master plan for their facilities. E.g. - parking lot with
Clinic deal came from risk of CVS store coming to property.

Challenge in the art form - changing world - we spend hours a day on the
internet - city has transformed approach to entertainment - people don't want
to think any more - play over 2 hours is suicide - how do you make theater
relevant to all people and especially younger generations? Subscription
audience has been declining across marketplace across country - very
challenging business. They are focusing on creating events around theater.

Any benefit from $20 million in housing development around Play House
neighborhood? Not significant.

Cleveland Public Theater is a very different entity - small theaters are
great too.

Doesn't expect much impact from Euclid Corridor transit plan. Expects more
loft/housing space on Euclid Avenue, which is important.

Suggestion what if Play House offered "play bites" around community