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Old Posted Jan 15, 2009, 8:51 PM
kaneui kaneui is offline
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The Fox Theatre, touted as the crown jewel of Downtown
revitalization, reopened New Year's Eve 2005.
(photo: James S. Wood)



City assumes operation of cash-strapped Fox Theatre
By Rob O'Dell
ARIZONA DAILY STAR
01.15.2009

The city has taken over the day-to-day operation of the Fox Theatre after its foundation board laid off all its employees this week to stave off shutting down because the theater is nearly out of money. City officials say they have not "taken over" the Fox, which has been touted as the crown jewel of the Rio Nuevo Downtown revitalization effort. Instead, the city will "loan" workers to keep the theater open, after the Fox's employees' last day, on Feb. 9. There is no timeline for how long the city will run the theater. But officials insist the Fox Theatre Foundation will resume control after it creates a better fundraising operation.

"Yesterday the executive committee (of the Fox) decided to let go all of its employees," Rich Singer, the interim director of the Fox, said Wednesday. "We're throwing some staffers over there temporarily to keep the doors open." Singer said this was a "stopgap" measure to keep the theater open so sometime in the future the foundation can run it again. He said the theater would have completely run out of money and shut down in six weeks without intervention because it was almost out of cash. The theater has two full-time and four part-time employees.

Singer said there will be little to no cost to taxpayers to pick up those positions because the Tucson Convention Center employees assigned to the Fox will still be able to do their regular jobs as well. Singer himself was already on loan from the TCC, moved there in November to replace the two theater directors who quit in the space of six months.

Fox Theatre Foundation Board President Ellie Patterson did not return phone calls Wednesday. Singer suggested three or fewer city employees could run the theater on show nights, with the city's concession company overseeing the concessions and giving the city a cut of the profits. "A good portion of those positions are salaried, so the cost is nothing," Singer said.

It's important the city not take actual possession of the theater because part of the money for the restoration came from $2.6 million in tax credits from the National Trust for Historic Preservation, which the city would have to repay immediately. Cities are not eligible to benefit from the credits. Singer said laying off the foundation employees gives the foundation a financial buffer to be able to cover its next installment toward repaying the credits. The tax credits "still exist, and all the companies involved in the tax credits still exist," he said.

Councilwoman Nina Trasoff, who chairs the council's Rio Nuevo subcommittee, emphatically denied the city is taking over. She said the Fox board is in the process of rebuilding itself and its fundraising ability. She also stressed that it was the foundation's board that made the decision to lay off the employees. But she could not answer whether the board would have laid off the employees had the city not offered to loan replacements to keep the theater open.

The move to take over the day-to-day operations of the Fox could not come at worse time for the city, said in-fill developer Richard Studwell, a longtime critic of Rio Nuevo. Studwell noted that the Legislature is poised to suspend or cancel Rio Nuevo's half-billion-dollar tax increment financing district because of a huge state budget deficit and Rio Nuevo's lack of progress. He said the city's all-but-takeover of one of Rio Nuevo's most trumpeted projects won't reflect well at the Legislature. Trasoff, however, insisted the city running the Fox's operations is not a blow to Downtown or Rio Nuevo. "The Fox will stay open. If the Fox would be closing, that would be a blow," Trasoff said.

The financial situation that forced the city's takeover of operations also raises questions about how the foundation will repay the $5.6 million loan the city gave to the Fox Theatre in 2005 to help finish renovations and get the theater open. The theater foundation board requested the loan after its fundraising efforts fell flat. Rio Nuevo also gave $3.5 million as a grant to help repair and refurbish the theater.

Bruce Ash, a local landowner who is also a Rio Nuevo critic, said the Fox never booked enough acts to be able to repay the city loan. He said it's disingenuous to tell taxpayers they aren't now footing the bills for the Fox Theatre's operation and loans. "It seems as though there was never a chance of that loan being paid back," Ash said. "What a shame."

Last edited by kaneui; Jan 16, 2009 at 7:14 AM.
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