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A year after closing, there's new hope for old landmark

Posted on Sunday, April 22, 2007

A year after closing, there's new hope for old landmark

BY DANIEL CHANG

The financial and artistic collapse of the Coconut Grove Playhouse one year ago this month resounded with the gravity of a death knell for South Florida's most historic regional theater.
	PATRICK FARRELL / MIAMI HERALD FILE
	THE MONEY PIT: The Coconut Grove Playhouse was more than $4 million in the hole when it closed its doors last year.

More than $4 million in debt and unable to pay its employees or honor its patrons' season tickets, the Playhouse closed its doors and left many to wonder when, or even if, the theater would reopen.

A year later, those questions remain unanswered. But the theater's board of directors is getting help from Miami-Dade County, which has budgeted $500,000 for management consultants and pro-bono lawyers, accountants and publicists to restructure the board and develop a programming mission and financial model for the Playhouse.

Shelly Spivack, the board chair then and now, said those plans could be ready in a few months.

''We anticipate we should be in some kind of really good shape by September,'' she said.

Before moving forward, though, the Playhouse board has been working to resolve its troubled past. To date, they have:

• Received an advance of $76,000 on future parking revenues from the Miami Off-Street Parking Authority, which operates the Playhouse lot;

• Used that advance to pay salaries and expenses owed to former employees and to pay past-due utilities and insurance bills;

• Given ticket vouchers for productions at other South Florida theaters to about 2,000 subscribers left holding worthless tickets for the 2006-07 season;

• Negotiated a repayment plan with the Florida Department of State for a $125,000 grant restricted for building improvements but misused to cover salaries and expenses.

Michael Spring, director of the county's Department of Cultural Affairs, said the Playhouse has yet to negotiate a payment plan with all its creditors -- an important precursor to bigger plans for restructuring the theater with either a new board of directors or a partnership with a local university or cultural nonprofit.

''No one, and rightly so, wants to inherit the debt,'' Spring said.

Another important step for the future will be to determine the extent and cost of repairs and changes to the former movie theater, which was built in 1926 and is in disrepair.

In November 2004, Miami-Dade voters approved about $15 million in bond monies to repair the building, which was designated a historic property by the City of Miami's preservation board. Another $5 million in Convention Development Tax -- the hotel bed tax -- also has been committed to the Playhouse for building improvements.

The Playhouse seats about 1,100 people but Spring said the prevailing wisdom is that the theater is too big.

''Most regional theaters operate in theaters that are smaller,'' he said. "That affects financial assumptions for the operation.''

Once county officials and the Playhouse board decide what can be done with the building, the next step would be to develop a cost estimate for operating and sustaining a new theater.

Then a new board could be recruited, or a partnership initiated with a university or cultural nonprofit, and ''anybody who was interested in the future of [the Playhouse] would know exactly what they're getting into,'' Spring said.

Spring and Spivack declined to name whom they've approached about possibly serving on a future Playhouse board. The theater has not begun to raise money, either.

''It's been a very tough year,'' Spivack said, adding that she is encouraged by focus group meetings that suggest "the theatergoing public is loyal to the theaters that are here.''

Even as the Playhouse struggles to settle its debts and rebuild, though, the theater is threatened by creditors eager to get a piece of the valuable land on which it stands in Coconut Grove.

Among those seeking to claim a part of the Playhouse: two former and two current board members who loaned the theater $350,000 in November 2004, accepting as collateral a storefront parcel next door to the theater, known as The Bicycle Shop.

The mortgage note, held by James F. Perry & Co. of Miami, was due on Nov. 1, 2006, with $63,359 in interest. Perry represents former Playhouse board members Joanne Mitchell and Maurice Weiner, and current members Robert Ruwitch and Paul Steinberg.

But the Playhouse board failed to repay the mortgage loan by the Nov. 1, 2006 deadline. On Dec. 11, Perry -- who says he recused himself when the board voted for the loan -- sued in Miami-Dade Circuit Court seeking repayment. He has since moved for a mortgage foreclosure on the property.

Playhouse leaders denied they are in default and said they are exercising a one-year extension option written into the mortgage contract.

Judge Ronald Friedman is scheduled to hear a motion for summary judgment against the Playhouse on May 2.

Also suing the Playhouse: Strategic Properties, a real estate development firm that paid the theater a $350,000 deposit as part of an $8 million sale and purchase agreement in April 2005.

The agreement called for Strategic to build retail shops, a 90-unit condominium, a parking garage and two small theaters on the property. That deal was thwarted in October 2005 when the City of Miami preservation board declared the Playhouse an historic property, limiting changes to the building's exterior.

Unable to collect its $350,000 from the Playhouse, Strategic filed a suit on April 4 seeking repayment. The suit has yet to be acted on.

Spring and Spivack wouldn't comment on the suits but remain upbeat about the theater's future.

''We now have as stable a platform as we can get,'' Spring said. "We're sort of pleading with people now to be patient.''

http://www.miamiherald.com/277/story/81355.html