Glendale Fights for Survival of Alex Theater After Deal Sours : Entertainment: The city must pay $600,000 to keep Art Deco palace open after manager pleads poverty, cancels shows.

The deal Glendale struck for the Alex Theatre, an Art Deco palace lovingly restored by the city and reopened this past New Year’s Eve as a performing arts center, seemed too good to be true.

In its first year, the Alex was to bring downtown Glendale six splashy, professional musicals plus a variety of other music, dance and theatrical offerings. City officials hoped that along with the cultural boost would come a surge in night life bringing increased business to local restaurants and other establishments in downtown Glendale.

Best of all, the operation of the Alex was not to cost taxpayers a dime--Glendale was striving to become the first community in the nation to operate a major municipal performing arts center without a city subsidy.

The five-year deal the city had made with a theatrical management company stipulated that in exchange for the right to produce or book all events at the Alex, the company would also provide everything needed to operate the theater, including all maintenance and box office staffing.

It took only eight months for the dream deal to go sour.

Last week the Glendale City Council voted to spend $600,000 just to keep the Alex alive for the rest of the year. The management company was gone, taking with it the money collected from 11,000 subscription ticket holders who had two more shows left in their series.

Worst of all for city officials is the bad will caused by this disaster, especially among ticket buyers who were promised big shows but probably will have to settle for less-extravagant touring productions.

“We just hope people will understand,” said a visibly weary Jeanne Armstrong, director of the Glendale Redevelopment Agency, which oversaw the restoration of the building and is one of the city groups now working to rescue it.

“We still have a beautiful building, it can still be a wonderful asset to the community.”

When it comes to municipal involvement in the arts, Glendale has learned the hard way: Any deal that promises a free ride is probably not only too good to be true, but will also end up costing the city a lot of money.

The Alex, which opened as The Alexander in 1925 for live shows and films, had fallen into disrepair by 1991 when the Glendale Redevelopment Agency completed its purchase of the building for about $837,000.

Before the theater’s renovation, which cost an additional $6.5 million in Glendale Redevelopment Agency funds, a 25-person volunteer citizens group was formed to study how the building should be used. The group concluded that an annual city subsidy of about $450,000 would be needed to operate the Alex as a performing arts center.

“We dealt with several consultants,” said Laurence Clarke, a lawyer who chaired the group. “I think they all told us that every city performing arts theater required a subsidy and usually a substantial subsidy to keep it in operation.”

In a nationwide search of management for the Alex, the city sent requests for proposals to numerous theatrical firms--including major Broadway theater owners such as the Shuberts.

Only one company responded, and it was right next door to Glendale.

The Theatrical Corporation of America, headed by David Houk, is based in Pasadena, where it operates the venerable Pasadena Playhouse. Houk had received widespread praise for revitalizing the 700-seat Playhouse, which he had operated since 1980.

The Alex presented a far greater challenge, however. At 1,400 seats, its operational costs would be higher and the large-scale musicals Houk wanted to produce there would require hefty budgets.

To make ends meet, Houk proposed that productions mounted at the Alex would then move on to theaters in San Diego and Fresno. The home for that operation would be the Alex, where the Theatrical Corporation of America, also known as TCA, would be able to book other events between musicals.

“It was a seductive deal,” Clarke said.

The deal even called for Glendale to get a piece of the Alex’s revenue if the theater was a hit. After the first $5 million in gross income during a year, the city would receive 1% of the gross. And the city’s percentages would get higher as revenue increased.

Profits were not the primary consideration for the Alex’s board, however. “The big incentive for the city was to have a viable theater,” Clarke said.

Repeated requests for interviews with Houk and other TCA company officials for this article received no response. But the deal clearly offered TCA a shot at becoming a far more prominent theatrical producer.

Clarke said the board had not forgotten the consultants’ warnings about the need for subsidies, but he said TCA’s “novel approach” won them over.

“We knew this was a big step up for them from the Pasadena Playhouse, that it was a different category of show financially, but their plan to build a solid subscription base here and in the other cities made sense.”

After the New Year’s Eve opening bash at the Alex, which was produced as a benefit for the theater, TCA took over.

For several months, the operation appeared successful. With an aggressive telemarketing campaign, TCA signed up 14,000 subscribers for its first series of three musicals: “Sayonara,” “Mame” (with Juliet Prowse) and a stage adaptation of the film “Fame.”

While these productions broke no artistic ground, the audiences responded well and by spring, TCA officials were telling reporters that business at the theater had exceeded expectations. Nearby restaurant owners were delighted with the considerable additional business on performance nights.

The Alex seemed to be everything the board had hoped.

The first hint of trouble, Clarke said, came at the start of the second three-show subscription series, which was to start off with “Sophisticated Ladies.”

TCA officials came to them, he said, to explain that because of some budgeting problems they would instead present “Fashion,” an obscure musical that had once played off-Broadway. It would cost far less to produce, but Clarke said the board was assured it was a quality musical.

Then, only a week before “Fashion” was go into rehearsal, Clarke said, the bombshell was dropped.

TCA was broke, the board was told, even though it had just sold 11,000 subscriptions for the series, and did not have enough money to get “Fashion” up and running, let alone the other two scheduled shows.

“It’s hard to describe what it was like to hear that,” Clarke said.

What had happened, board members demanded, to the subscription money? TCA, Clarke said, told the board those funds had been used to pay off cost overruns incurred during the first season.

It was the first time, Clarke said, the board had been apprised of cost overruns. “Up until then it was just ‘rah, rah, rah, everything is great,’ ” he said.

The board loaned TCA about $100,000 out of its fund-raising kitty to get “Fashion” produced. But even with the additional funds, it was clear the show was a cut-rate production.

After the first preview, the performers were so distressed that they threatened to quit. That night, the mayor and several other city officials went backstage to “beg” them to stay on, according to Glendale Redevelopment Agency Director Armstrong.

The reviews were terrible and at many performances, audience members left before the final curtain.

At the end of the “Fashion” run, the board and TCA parted company, and the board took back control of the theater.

Season subscribers who called TCA offices were told they would not be getting refunds for the two remaining shows, Armstrong said. Instead, subscribers were offered tickets to Pasadena Playhouse plays or to a local group’s outdoor performances of Shakespeare.

Of course, that was not what buyers had in mind when they bought tickets for the series of musicals.

The Alex board felt it had to act, even though Clarke maintains the board is not technically liable because TCA sold the tickets.

“We felt a moral obligation to these people,” he said. “The reputation of the theater was besmirched, no doubt about it, by what happened, but we felt we had to do something, anything, to make it up to people and get back on track.”

The board has booked a touring production of “Dreamgirls” to fill the second slot in the series. The production is by a non-Equity company, which means that the performers will probably not be seasoned. But Clarke said reviews in other cities have been good.

“Given the time constraints that we had to put this together, we hope people will understand we are doing the absolutely best we can,” he said. The board is now searching for a production to fill the third slot.

The $600,000 given to the board as a loan by the City Council will pay production costs for the two shows and keep the theater open until the end of the year.

As for the future, board members have not had the luxury of leisure time to do extensive planning. But they know what they don’t want.

“I would tend to doubt we would ever get into the situation of turning over the theater, again, to anyone unless we had absolute direct control over the finances,” Clarke said.

It’s also not likely the Alex would again get into the speculative business of producing its own musicals. And for next year, the board plans to ask the city for a subsidy.

Clarke said the board is looking for an experienced manager to run the theater, probably mostly as a booking house for local and touring events. That manager, who would be an employee answering directly to the board, would have to be comfortable with a lot of supervision, to say the least.

“Anyone who can’t deal with micro-management for the next year or two is not the right person for the job,” Clarke said. “We were burned once and it was a bitter lesson. But it was a lesson nonetheless.

“Someday, we hope this will be looked upon as just an unfortunate chapter in the history of this theater.”