Attendance has fallen 54.3 percent since the gala celebration on Feb. 10, 2004, and subscriptions have declined by 37.5 percent. Revenues far short of projections have forced the state to absorb a deficit of nearly $2 million. And the center's financial struggles have diminished the quality of the shows that audiences see on stage.
A plan that would shift $250,000 a year in heating, cooling and electrical costs to the state is scheduled to be presented to the Board of Public Works in September. The plan has received the blessing of the Maryland Stadium Authority, the state agency that arranged financing for and oversaw construction of the theater's $63.3 million renovation. Advocates say that winning final approval is necessary to reverse the Hippodrome's slide.
"This is the tipping point," said Jeff Daniel, a vice president of Broadway Across America, which operates the France-Merrick Performing Arts Center, where the Hippodrome is located. "If the financial structure of the performing arts center doesn't change, I'd be concerned for the long-term viability of this theater. If the financial structure does change, we'll be on track to becoming a wildly successful performing arts center that's important not just in Baltimore, but regionally."
A center of promise
When the renovation of the Hippodrome began in 2002, the project was widely perceived as the antidote to a variety of urban ills. The arts center would singlehandedly bring about the renaissance of the once-bustling west-side neighborhood. With the Hippodrome reopened, Baltimore would no longer lose business from touring Broadway shows that bypassed the city because they were too big to fit into the 1,600-seat Mechanic Theatre. The Baltimore Sun ran an editorial headlined "Hope restored."
The night the new theater was unveiled, Marks Chowning, the Hippodrome's former executive director, said: "We want to establish the Hippodrome as a regional performing arts facility on the same level as the Kennedy Center."
And for subscribers such as Linda and Scott Murphy of Ruxton, the arts center has more than fulfilled its promise. The Murphys have purchased season tickets since the theater reopened. During intermissions, they love to walk up and down the lobby, looking at the historic pictures chronicling visits from such stars as Frank Sinatra, Benny Goodman, Glenn Miller and Ronald Reagan.
"Going from the Mechanic to the Hippodrome was like night and day," said Linda Murphy, 52. "When I would go into the Mechanic, I felt like I was walking into a prison. The Hippodrome has so much warmth and character. My favorite thing is looking at the ornate ceiling in the orchestra and the beautiful boxes on either side. And the productions we've seen have been excellent."
But all that gilt paint came at a steep price.
Shortcut to funding woes
Daniel, who was brought in to run the arts center in 2009, blames its financial problems on a shortcut taken during the renovations.
In 2003, there wasn't enough money to build a central plant that would provide heating and cooling for the facility. Rather than delay the project, the Hippodrome was connected to city steam and chilled water loops. The utility companies — originally Trigen and Comfort Link, since bought out by Veolia Energy — agreed to tack the $4 million cost onto the arts center's monthly utility bills.
"Instead of paying the capital costs up front, the debt was put onto the equivalent of a credit card at 101/2 percent interest," Daniel said. "And the balance increases with the Consumer Price Index. It seemed like a good idea at the time, but it has prevented us from being as successful as we should be."
The Hippodrome now pays about $1 million a year for utility services. That compares with an average annual utility bill of $180,000 for performing arts centers in the United States, Daniel said, and is nearly twice the $550,000 paid by the largest venue on Broadway.
To pay its bills, Broadway Across America raised the rent at the 2,286-seat theater. As a result, the Hippodrome has become so expensive that some of the touring Broadway musicals with the biggest box office appeal bypass Baltimore. And companies that do visit perform fewer shows. In the past, musicals stayed at the Hippodrome for an average of two weeks. Now, most shows stay no longer than seven days.
"People don't always make the connection between a theater's finances and its artistic programming," said Michael J. Frenz, the Stadium Authority's executive director. "But the one has a direct effect on the other."
Daniel said rock legends and such nationally prominent dance troupes as the San Francisco Ballet have inquired about performing at the Hippodrome, only to be deterred by the high cost of breaking even.