A $5,000 monthly operating deficit and a protracted dispute with the Missouri Department of Economic Development over historic tax credits has the Gillioz Theatre board of directors concerned about the venue's financial future.
Operating revenues from the recently restored theater in downtown Springfield haven't met expectations this year, and three of the four full-time Gillioz staff positions have been reduced to part time, said board President Elise Crain. Business Manager Ryan Rust is now the theater's only full-time employee.
Crain, a full-time volunteer who essentially functions as the theater's CEO and chief financial officer, said the Gillioz has played host to a wide range of events since reopening in October 2006. The board has leased the theater, 325 Park Central East, for weddings, corporate events and - more recently - a large memorial service as well as sporadic theatrical and musical performances.
Blues guitarist Joe Bonamassa, who played at the Gillioz in early October, and comedian Brian Regan were among this year's most popular acts, Rust said.
The quest for expertise
In January, the theater launched a musical series entitled "Gigs at the Gillioz" that featured concerts every Tuesday at 7 p.m., but Crain said ticket sales have been disappointing. Local musicians also had the option of partnering with nonprofits to raise money through ticket sales, but Crain said attendance has remained low.
Marketing the Gillioz as an attraction for traveling shows has been tough for the board, which was largely focused on raising money for - and overseeing - the $10 million rehabilitation project.
"We restored this baby, and we did not realize the time and the energy and the expertise it took to run the place," Crain said. "That theater is not just another business. It's a special business."
To that end, the board is exploring the possibility of contracting with VenuWorks, an Iowa-based company that manages theaters, arenas and convention centers throughout North America. Crain said VenuWorks would first conduct a feasibility study for the Gillioz and then - provided the findings are favorable - step in to manage the theater and book events.
"We need somebody who has connections to the theater circuits," said board Treasurer Bill Dunton, a Springfield accountant. "We would just be a part of that, and you would have quality shows that are just running the circuit."
But bringing in VenuWorks would come at a significant cost - more than $120,000 annually - and the Gillioz board must first address more pressing expenses.
Crain said the theater still owes about $4.4 million to lender Guaranty Bank, which financed the restoration project, and another $140,000 to board members who made personal loans to cover theater-related expenses. About $20,000 in deferred maintenance work also has piled up, she added.
The board has pursued other revenue streams, such as a long-term lease with Drury University, Missouri State University or Ozarks Technical Community College, but Crain said the schools weren't interested. For now, she said, the Gillioz is subsisting primarily on rental income from leases with Wellington Place and Tonic Ultralounge.
Tax credits hung up
One potential funding source - historic tax credits awaiting DED approval - has been in limbo since June, Gillioz officials said. The exact amount of those credits has not been determined, but the board expects the state to approve at least $500,000, which Crain said would put the theater at a break-even point but wouldn't address future operating deficits. Board members, however, believe the project is entitled to as much as $1.9 million in tax credits.
DED spokesman Keener Tippin said in an e-mail that the department is reviewing expenses and costs incurred by two separate entities involved in the project: the Springfield Landmarks Preservation Trust and Gillioz Restoration Partnership LP.
Tippin said the preservation trust, a not-for-profit organization that is not eligible for historic tax credits, leased property to the for-profit partnership, which may receive the credits.
"In past applications we have received involving a lease, a for-profit incurred the costs and paid them," Tippin wrote. "In this case, most of the expenses were originally incurred by the not-for-profit, even though the property is now leased by a for-profit."
The Gillioz board has hired an attorney to handle the tax-credit dispute, Crain said, noting that the National Park Service already has approved federal historic tax credits for the project.
Local historic preservationist Nancy Brown Dornan, who served on the Gillioz board for 17 years and saw the restoration through to its end, said the tax-credit delays are costing the theater.
"Unfortunately, the state tax credits have put us in a difficult situation, because there's a high amount of money on a daily basis that goes to offset the interest," she said. "The irony of it is that the state has put money into it, the state supports the project, and yet the state is crippling the project dramatically."
Once the tax-credit issue is resolved, the board will focus on fundraising efforts to pay for the $25,000 VenuWorks feasibility study. Crain said only $2,000 has been raised so far.
Board members are hopeful more donors will step forward. Through the Take a Seat campaign, Gillioz benefactors who give between $250 and $1,500 receive a brass plaque with the name of their choice mounted on the back of a theater seat.
Crain acknowledged the sour economy is having a negative impact on fundraising, but she said the Gillioz board isn't deterred.
"It's really hard after you open, because (people) think all the bills are paid. Well, all the bills aren't paid ... but we know the money's out there," she said.
This installment of Springfield Business Journal’s Architects & Engineers Project Report showcases 26 endeavors by area design and engineering professionals.
