Symphony’s Bold Move Caps a Transformation

San Diego Symphony, SYMPHONY HALL.

In 1984, the San Diego Symphony Orchestra was practically bankrupt. But on Saturday, the symphony will celebrate the opening of its new multimillion-dollar home and the kickoff of an exciting new season. This week, the people and events that came together to save the symphony will be profiled in articles in Part II, View and Calendar.

The San Diego Symphony Orchestra was wading, if not swimming, in red ink in 1984 when it pulled off a seemingly impossible feat. The symphony boldly purchased an entire city block.

“It was the symphony’s version of an onside kick,” said former Symphony Assn. President Lou Cumming. “No one expected us to do that.”

Within a year and a half, Blaine Quick, a real estate development consultant and symphony board member who masterminded the deal, and a small group of board members pushed, negotiated and worked out the arrangements by which the symphony is gaining ownership of the entire 56-year-old Fox Theatre. Renovation of Symphony Hall will cost about $4.75 million, and although the purchase prices is still being negotiated, the entire cost is expected to come within the orchestra’s $6.5 million capital budget, considered a bargain price. The symphony will become one of only 10 major symphony orchestras in the country to own its own hall.

That sort of bold, unabashed move has characterized the symphony’s steady comeback from the dark days four years ago when it looked as though the symphony might soon be flat on its back.

These are fast times at Symphony Hall. Since the arrival of music director David Atherton four years ago, San Diego’s numero uno music-making machine has been on one long, elegant roll.

Besides the orchestra’s universally acclaimed artistic strides, the symphonic organization has other things to whistle about. Ticket sales have skyrocketed, as have donations from private, public and corporate contributors, while empty seats are at record lows for the coming season. The San Diego Pops, the symphony’s light summertime incarnation once scuttled as a money loser, has just completed its most successful season in terms of revenue and audiences generated.

On Saturday, the San Diego Symphony will christen the newly refurbished and restored theater with a ceremonial of stardust and glitz. A gala dinner dance and reception will accompany the festive, fund-raising opening concert, which will feature entertainment luminaries Hal Linden, Diahann Carrol, Joel Gray, Toni Tennille, Ben Vereen, jazz pianist Oscar Peterson and flutist James Galway. Following the extensive remodeling, accomplished in a seven-month sprint, the majestic jazz-age movie palace will get a new career and a new, dignified name--Symphony Hall.

Furthermore, by 1988 the whole block will be transformed into an elegant high-rise complex. The Charlton Raynd Development Co., which purchased the block from the symphony, will incorporate the former Fox Theatre into Symphony Towers, a ritzy $150-million project, rising above and around the auditorium. Symphony Towers will include a 33-story office tower--the tallest building in San Diego--fronting on B Street, and an upscale, 450-room, 18-story hotel along A Street between 7th and 8th avenues. All three buildings will be linked by an elegant “sky lobby,” perched high above Symphony Hall, which will include restaurants and a ballroom. The sky lobby will be similar in concept to the Ritz Carlton Hotel’s lobby in Chicago.

The symphony’s move to acquire its own hall after playing for 20 years in the city-owned Civic Theatre is one of several events credited with halting the orchestra association’s slide toward bankruptcy four years ago. The other key factors include a new board of directors’ mind set, that is, the idea of running the symphony like a business; financial sacrifices made by orchestra members, and the hiring and retention of acclaimed English conductor David Atherton as music director.

With the impending opening of Symphony Hall, the symphony’s fortunes look much rosier than they did only four years ago. The symphony staff works in an air of revitalization. The feeling is that, while preparations surrounding the inaugural concert have created a hectic, almost frantic mood, the trend is upward.

“I think this is probably the single most underrated orchestra in the country,” said Det Merryman, the Symphony Assn.’s current president, as the symphony prepared to open its winter season. Atherton “has taken us from a middle-of-the road regional orchestra to the middle of the pack, in terms of the 33 major orchestras in the country.”

While the orchestra has made remarkable musical strides under Atherton, Merryman, his predecessor Cumming, and the symphony board have made a frontal attack on the orchestra’s one-time financial woes. Today, Merryman sees nothing but good for the future. Although the symphony bears a record $1.2-million carry-over indebtedness, the situation does look hopeful. The debt is structured, and a major hunk of it may be retired with the proceeds of the inaugural concert and gala.

That is a marked contrast to 1981, when the symphony’s demise seemed in sight. Financial problems that had plagued the orchestra for years came to a head, and the symphony began missing payroll payments to its nearly 80 orchestra members.

But it was only a false cadence, financially speaking. The music played on, though the orchestra had come very close, indeed, to death.

“The symphony was in fact bankrupt in the technical sense of the word,” said former symphony board member Barry McComic. “It was not able to meet its obligations. For years, the symphony had been spending beyond its means. It had fallen almost a year behind.”

McComic, a real estate developer, was appointed to chair a four-man committee of board members including banker Louis Cumming, Bullock’s manager Jack Larson and attorney Ben Borevitz that took over the day-to-day administration of the symphony.

McComic and others believed that a board’s purpose was to raise money and see that the symphony was administered and controlled from a business point of view. They pushed through a resolution requiring that board members either “give or get” $5,000 a year. That philosophical change began the symphony’s turnaround.

The complexion of the board changed dramatically. There was a shake-up. Some members left, but the remainder had a new perspective of why they were there, McComic said.

Cumming, who had just joined the board, proved to be invaluable, McComic and Merryman said. He proved to be a master diplomat in smoothing the ragged relations with the musicians, who felt that the board had not met its contractual obligations. One of the symphony’s largest debts was the musicians’ pension fund. Regular payments, required by contract with the musicians’ union, had been withheld. Plus, from fall 1981 to the following spring, the symphony failed to meet several bimonthly payrolls.

Cumming twice saved the symphony by lining up credit, ultimately arranging a half-million-dollar revolving line of credit with a consortium of seven banks.

An important issue in the turnaround was getting the musicians and their union to understand the situation, according to Borevitz. “The musicians were very disappointed but were really supportive,” Borevitz said. Once the musicians understood the seriousness of the problem, they began to play a decisive role in resolving the crisis, Cumming said.

After the disastrous 1981 summer pops season, which saw the symphony lose $530,000, the board dropped the pops season in 1982. The following year it was restored in a drastically revised cabaret format. The change involved reducing costs by performing the subscription season at one location. The idea was to create a popular entertainment, reduce costs and maximize revenue by pushing--albeit elegantly--food and beverages. High-priced guest artists were dumped. Instead, that money was spent on fireworks displays for the finale of each concert.

Champagne, wine by the glass and beer, hot dogs and fancy hors d’oeuvres were pushed by a brigade of young waiters and waitresses. The first year the pops resumed, it recorded a $2,500 surplus.

“Had the pops not worked, we would not have had a symphony today,” Merryman said.

But the symphony’s biggest coup was acquiring its own hall. The symphony had to make a move, Merryman said, because the number of dates that the Civic Theatre was available for concerts was shrinking while the number of weeks of symphony concerts was expanding. In 1972, the symphony was contracted for 22 weeks. This season, the orchestra will play 45 weeks.

Additionally, Cumming said, the acoustics of the Civic were less than satisfactory for an orchestra. It was designed “for many kinds of users, not to show off a symphony to best advantage,” Cumming said. Smaller and acoustically “brighter,” the Fox Theatre was more suited to symphonic music, said orchestra officials, including maestro Atherton.

Compared to the costs of other recently built orchestra halls around the country, the San Diego Symphony is getting the bargain of the century. Recently built symphony halls range from a $23-million hall in Baltimore (1982) to the $75-million Morton H. Meyerson Symphony Center in Dallas (1988). Recent renovations range from the $3-million Orpheum Theatre in New Orleans (1982) to a $6.9-million renovation in Indianapolis (1984).

On the fiscal side, symphony officials gladly accept the added cost of insurance and utilities that go with ownership. Part of the trade-off is that there won’t be any Civic Theatre rent, and by owning its own hall the symphony can produce additional revenue by renting to others and by presenting symphony-related concerts and recitals.

Merryman points with pride to the continued expansion that began in the mid 1970s, when the board made the decision to achieve major orchestra status. By 1981, when the cash crunch hit, the symphony’s budget was just under $4 million. The projected budget for 1985-86 is twice that--$7.9 million. The budget anticipates a jump in contributions and ticket sales that will accompany the opening of Symphony Hall.

Former symphony development director Jerry Kleinman, who is now development director of the New York Philharmonic, said that the growth in the budget could be expected, given the acquisition of Symphony Hall. “The jump to $8 million may be identifiable just within the hall,” he said. “If you can rent out the hall six months of the year--and you don’t have to pay rent for the Civic, and there’s an extended season,” then the symphony may be able to meet the expenditures of the expanded season.

“The state of orchestras is still one of fighting to stay in the black,” Kleinman said. Other orchestras, such as those in Kansas City, Miami, Buffalo and New Jersey, have had serious fiscal problems in recent years. Ten years ago the Dallas Symphony Orchestra was bankrupt. Now it is building a $75-million symphony hall.

“It’s the past that keeps haunting the San Diego Symphony,” Kleinman said. “The current keeps getting better and better.”

Alongside the growth in musical quality, the symphony over the past three years has put its financial house in order. More recently, under general manager Richard Bass, the symphony purchased its first computer system, a central, data-based system that is “technically obsolete, but functionally fabulous,” according to Merryman. “It isn’t state of the art, but for a system that cost $1.5 million, I paid $10,000.”

The system will enable the symphony to computerize and consolidate critical information, ranging from word processing to information on contributors and subscribers that in the past was maintained and processed manually.

There are other money-saving moves. According to Merryman, the symphony had not made efficient use of its orchestra, based on its contract. “We took a very hard-line look at the performance/rehearsal and non-used service ratio,” Merryman said.

Orchestra members are paid for 45 weeks, which in the contract consists of participating in as many as eight “services” a week; a service is either a performances or a rehearsal. “What we found in looking back was there were a lot of weeks in which we did two performances, three rehearsals, and didn’t use three services,” Merryman said. In restructuring the pops concerts, the number of performances was increased and the number of rehearsals was cut.

“You don’t need three rehearsals to do Gershwin,” Merryman said. “So you do one rehearsal and play five nights--four nights at the site and a fifth night someplace else. That’s six. You use the seventh and eighth to do pickup things. We do little stuff all over the place.”

The symphony still is not out of the woods financially. It is carrying a $1.2-million accumulated debt that must be reduced. There has been a big turnover in top management--16 general managers in the last 33 years. Key lower-level management positions also seem to operate on the same revolving door policy. Since 1980, there have been three development directors and the job currently is vacant.

“There has been much too much turnover,” Kleinman said. “There’s no continuity. There’s a lack of faith in the professional management staff. You find board members stepping in and getting burned out when they’re volunteering. That’s not pleasant. It’s a vicious cycle.”

“Getting and keeping good staff is always a problem,” Merryman responded. “You get what you hope is a good person. I’ve always been of the philosophy that you cut your losses and not hesitate in replacing people.”

He denied that the symphony had a turnover problem. “In the last 10 years our conditions have changed totally,” he said. “I think if we had the right general manager in that period of time, we would be in better shape as far as continuity goes, but I don’t think our record over the last five years in terms of continuity is so bad.”

Robert Boyd, he said, was general manager from 1982 to 1984 but had been hired by the symphony a year earlier, the general manager’s job being a promotion. “What’s important is not where we’ve been, but where we’re going,” Merryman said.

He said that while the symphony’s carry-over debt is at an all-time high, it is better-managed. The debt owed the musicians’ pension fund is being serviced. According to Borevitz, chairman of the pension trust board, that fund is solvent. The principal and interest have been paid. The accrued interest will be paid off, he said, in about a year.

“There’s nothing wrong with debt,” Cumming said, “as long as it is properly structured . . . . It’s when it grows like Topsy that it can get difficult.”

The symphony expects to break even this season, Merryman said, adding that by 1989 the carry-over debt will be history. The proceeds from the Symphony Hall grand-opening fund-raiser will be applied to the carry-over debt. Theoretically, if enough of the $1,000-per-person tickets are sold, the gala revenue could wipe out the debt entirely.

Merryman believes that after years of fiscal woes, the orchestra is coming into its own.

“Everything is on a pendulum,” Merryman said. “Each year it gets better. I think we’re coming into what is the symphony’s time. And Symphony Hall is the key.”

MONDAY IN VIEW: Two movers and shakers on the symphony scene.