Income slips at Alex Theatre
The Alex Theatre ended the third quarter with a 16% drop in income to $235,545 compared to the same quarter a year ago, with venue operators attributing the decline to closures associated with the theater’s 6,600-square-foot expansion, according to a financial report reviewed by the City Council on Tuesday.
The theater was closed for a month during the third quarter, between Jan. 1 and March 31, due to the roughly $6-million construction of new dressing rooms, storage, a loading deck and two elevators, paid for by the former Glendale Redevelopment Agency. The cost includes construction and project-management expenditures.
It was also closed for two months in the second quarter, between Oct. 1 and Dec. 31, which played a role in the 32% income drop during that time.
The venue ended the third quarter with a net deficit of $127,864. Glendale Arts, the nonprofit that runs the theater, relied on its reserves, which are capped at $100,000, dropping the safety net to 66% of its required amount, according to the city report.
The organization also leaned on its annual government subsidy of $415,000, the report states.
Despite the deficit and 33% decrease in rental revenue — which was a main driver of the income decline — Glendale Arts officials were cheery about the venue’s financial standing after the third quarter.
“Overall, Glendale Arts is pleased with the second- and third-quarter results,” Glendale Arts Chair Harry Hull and Executive Director Elissa Glickman wrote in the report presented to council. Glendale Arts “anticipated these losses… and developed a budget that balanced revenue and expenses.”
The nonprofit cut expenses during the second and third quarters, according to the report.
With the massive expansion project complete, nonprofit and city officials expect the theater’s finances to improve because it can now accommodate bigger productions, such as musical theater and contemporary artists.
“This will really start to sell it,” Councilman Dave Weaver said during the city meeting.
To celebrate the expansion’s debut, a grand reopening show featuring Martin Short will be presented on June 21. An “Alex Theatre Expo” is also planned in July to show off the improved venue to location scouts and the general public.
The expansion project was meant to get Glendale Arts ready to go it alone as its annual government subsidy, called a “management fee,” is set to end next year.
Glendale Arts will be responsible for future theater maintenance after Glendale leaders cut off government funding, Glickman said, adding that the organization is set to complete a strategic plan through 2020 by the end of the summer.
As council members reviewed the financial reports on Tuesday, they also approved spending about $46,000 to paint the façade of the theater. Now that the indoor expansion is complete, Glendale Arts officials want to spruce up the theater’s entryway to accommodate more red-carpet events.
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