L.A. Festival Struggles to Reduce a Deficit : Arts: A $300,000 grant from a Taiwan shipping company brings the festival’s debt down to ‘a manageable’ $200,000.

With only a few months to go before a major announcement is scheduled on the 1993 Los Angeles Festival, The Times has learned that last fall’s three-week event ran up a $500,000 deficit that was only recently reduced to a “manageable” $200,000.

The apparent turning point in the deficit reduction was a $300,000 grant from a Taiwan-based shipping company, announced in March, which was heralded as “seed money” for the 1993 festival.

Lauded at a press conference in Mayor Tom Bradley’s office, the $300,000 grant was awarded by Evergreen International. Bob Kleist, adviser of Los Angeles-based Evergreen, said that the festival initially approached the company’s Taiwan-based chairman, Yung Fa Chang, “to create a foundation for 1993.” But he said his company is “perfectly satisfied” with the festival’s current use of the grant.

Organizers of the 1990 Los Angeles Festival--a Sept. 1-17 arts event billed as a $5-million multicultural extravaganza when it was held last September--declined to discuss finances with The Times.

But Adolfo Nodal, general manager of the Los Angeles Cultural Affairs Department, said festival officials told him the debt was recently reduced to only $200,000.

“The word I have is that they’ve got it pretty well under control,” said Nodal, whose department has played a key role in funding the festival. “Their deficit was considerable . . . but they’ve really hung in there, a big grant came through, and now they’ve got it down to only about $200,000. It looks like they’re going to be all right.”

Maureen Kindel, festival board chairwoman, said that officials would not discuss finances until they were ready with an announcement about plans for the 1993 festival, which will focus on the arts of Africa and the Mideast.

“Peter (Sellars, the festival director) feels that we should not say anything about the festival until the end of the summer, when we’ll be ready with a story about the next festival,” Kindel said.

Kindel added that the festival’s exact finances are not yet known, pending an audit by the Los Angeles accounting firm, Deloitte & Touche.

“I think we have done unusually well given the climate and the situation in the arts today,” she said.

Nodal, however, said festival officials had acknowledged a deficit of at least $500,000 that lingered months after the event, which was well-received for its international presentation of arts and artists from the Pacific region as well as those from closer locales.

Nodal’s department has in recent years awarded annual grants to the festival ($100,000 in 1989-90 and $75,000 in 1990-91).

In previous years for which figures are available, the festival had positive cash balances. According to copies of 1987, ’88 and ’89 audits filed with the city, the organization finished in the black with $166,449 at the end of 1987 (the previous festival to the 1990 event), $209,138 in 1988 and $342,915 at the end of 1989.

Unlike San Francisco’s ill-fated Festival 2000--a similar multicultural arts event held in October that went bankrupt and left many artists and others unpaid--the Los Angeles Festival appears to have paid all its local artists. Those contacted by The Times say that they received prompt and full payment.

But some business accounts remain open. Nanci Spear, account executive for the Rod Dyer Group, the design firm that produced the festival’s 34-page color brochure, said the festival had slowly been lowering its debt with her company, and has now paid off about 85% of the account. Spear declined to provide figures, but a preliminary 1990 L.A. Festival budget filed with the city shows expenses for the brochure had been estimated at $238,500.

“It’s been a struggle for them,” Spear said of festival organizers. “But we know they’re being honest with us. They have sent us letters indicating that they have grants expected to come in and they will make us payments when they receive them. So we’re just putting everything on hold with that account.”

NEXT STEP

Festival organizers are forging ahead with plans for the next L.A. Festival--scheduled for 1993--with an emphasis on Africa and the Mideast. Festival organizers say that it is too early to release details, but a proposed 1991-92 festival budget obtained by The Times indicates the extent of the year’s planning activity--and a budget of $874,000. Included are salaries ($643,000); office supplies, equipment and promotional packets ($24,000); production and public relations consultants ($39,000); external fund-raising consultants ($18,000), and curatorial travel fees and consultants ($150,000). The budget indicates these costs will be paid from grants in hand and now in the application process.