Alex Seeks $703,000 Debt Waiver from Redevelopment Agency

The board of directors of the Alex Theatre is asking the Glendale Redevelopment Agency to write off $703,000 in outstanding loans, saying the debt hinders the nonprofit theater’s ability to raise funds and sullies its improving financial picture.

The municipally owned 1925 Art Deco vaudeville house, which reopened in 1994 after a $6.5-million renovation by the city, has been beset by financial problems. Martin Kagan, the theater’s executive director, said those problems have now passed but that the looming debt makes it hard for the Alex to build public confidence.

“As we talk to corporate and fund-raising people, they look at this debt and they question our stability based on it,” Kagan said.

“This money was used to enhance the building, which is owned by the redevelopment agency. So, by having the agency forgive the debt, we can look to our fund-raising efforts with a clean balance sheet.”

The debt stems from three loans from the city’s redevelopment agency to the Alex Regional Theatre Board, a nonprofit, volunteer citizens panel established by the city to supervise the theater. The first two, for $150,000 and $165,000, were made in 1993 for the ART board’s start-up costs and for lighting and electrical equipment for the theater.

The third loan was made for $388,000 in the summer of 1994 after Theater Corp. of America, a company initially hired to run the Alex, balked midway through the first year of a five-year contract. The money paid for a canceled musical production and for a ticket-exchange program for subscribers who lost out when TCA canceled the second half of the 1994 season, Kagan said.

Other city support for the theater has included a $250,000 subsidy for the current fiscal year.

The theater’s request has not been formally considered by the redevelopment agency, whose board of directors is made up of members of the City Council. The agency is expected to discuss the request during upcoming deliberations on its 1996-97 budget.

Officials with the agency said the debt waiver, if approved, would not affect any of the agency’s other redevelopment projects.

“The Alex is about to embark on a major fund-raising campaign, and some people are reluctant to donate if they think the money is just going to be used to pay back the city,” said Jeanne Armstrong, city director of development services.

Councilwoman Mary Ann Plumley, chairwoman of the redevelopment agency, said she may support the waiver.

“The Alex is trying to get back on its feet, and they hope to reduce our subsidy each year. I think it would be helpful if we could forgive the loan, and we have an interest in that,” she said.