The HTFA Phenomenon Strikes Again

I think we can just start calling this the HTFA Phenomenon which is, essentially, when theaters announce big new building projects that end up destroying them either artistically, spiritually or practically.

It seems in Pasadena Playhouse's version of the HTFA Phenomenon, it did all three:

Stephen Eich, the executive director hired last June to run the theater, said 37 employees learned at a staff meeting Thursday that they would be out of work. The playhouse is essentially out of cash to continue running, he said, and faces more than $500,000 in immediate bills, plus more than $1.5 million owed on bank loans and other debts that have dogged the nonprofit company since the mid-1990s.

Founded in 1917, the Playhouse was designated in 1937 as the state theater of California.

Eich said that tapping into about $6 million donated for a capital campaign to refurbish the playhouse was not an option. "It just would not be any way for us to solve the problems of the place. Those monies are restricted for the building."

Wait.... so they decided to build a new building when they were already carrying over a decade old debts? And they can't fix it because the millions of dollars they've raised have to go to the new building? You've got to be fucking kidding me. Who let this happen?

It only gets worse as you keep reading... they were banking on a Naming Rights Donor to cough up $5 Million Dollars. Ugh. RTWT here.

Comments

[Adam]

Wow. That's a tremendous sequence of dumb ass decisions that leads to 37 people out of work.

And let's be real, they could ask people to unrestrict the funds earmarked for the building. Sure some of they would say no, and some may ask for their money back. But there is no law against asking people to change to conditions of their gift.

[Adam]

And seriously, 5 million for naming rights to a *theatre*?

I'm pretty sure that 5 million could get someone a pretty nice corporate sponsorship deal with the L.A. Lakers. They could get Kobe to come by their offices and everything. I'm shocked that they were shocked that getting that sort of money for a theatre would be a bit difficult.

[Mike Daisey]

It is probably an appropriate name for the phenomenon, but that is a depressing fucking story indeed.

[Tony Adams]

Yeah, I think some theatres folding is not that much of a loss. It's a case by case thing. I would hope those employees are able to work and grow other more sustainable places to replace it.

And if memory serves me right, it's not the first time that one has folded either.

[Jump]

You also run into a major issue with restricted funds like this: if you want to "un-restrict" them and your donors don't go for it, you are totally stuck. You can't just return their money without losing your tax-exempt status -- it still counts as a "donation" to an individual, which 501(c)3s cannot make. So raising money for a big project when you need those funds to keep up the smaller operation is, um, quite a few kinds of moronic.