L.A. Opera makes early $7-million payment on county loan
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Plácido Domingo and other leaders of Los Angeles Opera appeared before the L.A. County Board of Supervisors on Tuesday to announce that the company has paid back $7 million of the $14 million emergency loan it received in 2009.
The loan is due to be repaid in January 2013, so this partial payment comes ahead of schedule and saves L.A. Opera some of the interest it will owe. Domingo, who serves as the company’s general director, told the supervisors that the early payment was intended to show ‘our good faith to the county.’
The tenor was joined at the supervisors meeting by Marc Stern, L.A Opera board chairman, and Stephen Rountree, the company’s chief executive officer. Stern said in an interview after the meeting that L.A. Opera has raised donor pledges -- which he described as ‘commitments’ -- for the remaining $7 million of the loan.
Stern said the company wanted to ‘demonstrate to the county that we’re able to fulfill our obligations and warrant [the board’s] confidence in us.’
In 2009, L.A. Opera received a $14-million emergency loan, approved by the county, to help keep the company afloat. At the time, L.A. Opera was in dire financial condition, the result of the economic downturn and its costly production of Wagner’s ‘Ring’ cycle operas.
The loan, issued by Bank of America and backed by the county, is due in January 2013. The terms of the loan didn’t permit early payments, but L.A. Opera negotiated to pay some of the principal early in order to save money on interest and to show that it was being proactive.
L.A. Opera expects to save approximately $350,000 in interest this calendar year by paying off some of the principal. The early payment was negotiated by William Fujioka, the chief executive of the county.
Zev Yaroslavsky, the chairman of the board of supervisors, said during Tuesday’s session that the loan ‘was the right thing to do.’ He added: ‘We’re glad you made us look good.’
Rountree said in an interview that L.A. Opera continues to make progress on the road to financial recovery by keeping costs low and reducing overhead while maintaining the quality of its productions.
He said that the 2012-13 season is expected to feature six productions, the same number as the current season. ‘That seems to be what the economy will support at this moment,’ he said. The company performed a high of 10 productions in the pre-recession season of 2006-07.
For the current season, Rountree said that ticket sales ‘are a little behind’ expectations but added that the company is on course to raise $20 million in donations this year.
The board of supervisors presented Domingo with a certificate on Tuesday to honor the tenor for his years performing in L.A. as well as his upcoming birthday. The board then serenaded the tenor with a round of ‘Happy Birthday to You.’
Domingo will be back in Los Angeles next month to perform the title role in L.A. Opera’s production of Verdi’s ‘Simon Boccanegra,’ starting Feb. 11.
-- David Ng