Joe Klein

The Rep first offered A Christmas Carol in 1977; now it is now the show people pay to experience year after year. Pictured is 1995 production.

“Our job is to create art,” said Sam Woodhouse, cofounder and codirector, with Doug Jacobs, of the San Diego Repertory Theatre. What started out as two scruffy performers calling themselves Indian Magique has, after two decades, evolved into the source of nationally recognized productions and earned more than 100 Critics’ Circle and Drama-Logue awards. The harder part of that job, though, is creating art that sells tickets, attracts donors, and complies with foundations’ grant demands.

Sam Woodhouse and Doug Jacobs. At the moment, Jacobs carries the title of artistic director and Woodhouse is producing director.

The Rep’s annual budget hovers around the $2 million mark, a respectable number for regional theater, supporting six to eight productions a year. However, the Rep has remained a $2 million operation for the last nine years — almost half its existence — and needs to move up to the next rung. The hundreds of San Diegans who have sat on the Rep’s board of directors or volunteered their services or otherwise advised the group have wrestled with this need, as have the founders.

Lyceum Theater, c. 1982. Woodhouse and Jacobs worked out a deal with the Centre City Development Corp. to use the creaky 400-seat theater until the city was ready to demolish it.

“Once we got through the beginning, we knew we knew how to do plays. But building and maintaining a theater company is a far greater challenge,” reflected Woodhouse. “Always, always, we’ve had dreams that exceeded resources, but I guess that’s what happens when dreams ... are far enough ahead of reality.”

“We’ve spent a long time learning how to operate within a stable budget,” agreed Jacobs. “We need to grow beyond that. Whether that means we grow and take in more hard dollars or whether it’s a change in the sophistication of how we use those dollars, it’s hard to say.

“It’s a complicated process,” Jacobs explained. “You’re creating something new every couple of months, hiring new 1 teams of workers each time, hoping, but not really knowing,that they can work together; marketing this product extensively. From creation to marketing, your window of opportunity is two or three months, so timing is critical.”

A few months ago, Woodhouse and Jacobs distributed their “Rep 2001” talking paper to the theater’s board members and staff. Among the suggestions to explore are the commissioning of new plays, rebuilding and reinvesting in a resident acting company, as well as expanding the organization to the $30 million-plus level.

The business strategy for any enterprise will have known and unknown elements, but theater exists in a world of its own. Few businesses do as much new-product development every year, then market it, then watch it expire, like crafting an ice sculpture or sandcastle. Here is what it has taken to get the Rep to the 20-year mark.

THE PRODUCT

Selecting a season’s worth of productions is part art, part craft, part basic accounting. Starting 9 to 18 months before opening night, the codirectors and staff read new playwrights, attend a lot of theater, keep their eyes and ears open for new artists or new products, and immerse themselves in the work of old friends.

Then, play by play, the staff has to pencil out the costs — two-actor plays versus full-blown musicals with an ensemble of actors plus musicians are at opposite ends of the financial scale. Expected costs in hand, they move to the balancing act. A lesser-known writer and play won’t bring in the all-important single-ticket sales unless the word-of-mouth excitement, the “buzz," is right. But if it’s a risky production the staff feels especially committed to doing, then it needs the counterweight of a sure-fire revenue raiser.

“The standing joke [whenever the board of directors questioned the revenue-generating ability of a particular production] was to sidle up to Sam or Doug during these play-selection sessions and ask, ‘So, when are we going to do some Neil Simon?’ ” recalled long-time marketing entrepreneur Jack Berkman, who sat on the Rep’s board for more than a decade. “As board members, we’d ask questions about costs and what kind of revenues we could hope for from each of the play selections, but Sam and Doug made the decisions.”

The current 1995-96 season is a good case study of the balancing act of choosing an artistic calendar. Because it is the Rep’s 20th anniversary season, productions had to have pizzazz and showcase the theater’s achievements; but at the same time, they had to accommodate the realities of 1990s theater economics. But after 20 years, there is at least one constant in the Rep’s programming: Charles Dickens’s A Christmas Carol (as adapted by Jacobs) in its blessedly predictable day-after-Thanksgiving-through-Christmas Eve slot.

The Rep first offered A Christmas Carol in 1977, when Jacobs decided the Rep should be the catalyst for a return to tradition in the city’s downtown core. So he reached for a traditional vehicle. A Christmas Carol is now the show people pay to experience year after year. It is a solid moneymaker near the midpoint of the Rep’s calendar every season. In 1994 it brought in a record quarter of a million dollars; 1995’s production net was closer to $225,000.

The tougher part was deciding what to package around it. The codirectors, staff, and board elected to resurrect the Rep’s 1987 hit Suds: The Rocking ’60s Musical Soap Opera to kick off the season in September, a perfect blend of sure-fire box-office revenue, a sentimental sense of history, manageable overhead with a four-person cast, and a showcase for homegrown talent. Suds had been created at the Rep, with subsequent stops at the Old Globe (when a Gershwin musical dropped out), off-Broadway, and throughout the U.S. and Canada.

The staff also scheduled the West Coast premiere of The True Story of Coca-Cola in Mexico, a high-energy political satire. (Happily, the production generated strong word-of-mouth in November, enabling the Rep to extend the two-man comedy.) A Streetcar Named Desire filled the role of Pulitzer Prize-winning, passionate drama that is familiar to audiences, yet ripe for adaptation, and took its place on the calendar through February.

In a seemingly prescient move, and long before popular media went nuts over the Beatles this winter, the Rep selected Lennon to be staged in March 1996. It was billed as “a cheeky portrait of the most famous Beatle,” featuring 40 classic rock masterpieces. Lennon was added to the schedule before it was completely locked down. While the rights to the play and some of the music were contracted, a number of critical songs were solely the property of John Lennon’s widow, Yoko Ono.

Rep emissaries reported that she had seen the original production of Lennon in London and liked it, so there shouldn’t be a problem garnering her permission. But weeks of communiques came up empty; she wouldn’t say yes, and she wouldn’t say no. Speculation about her reticence ran the gamut from “Beatles overload,” with three nights of prime-time television to hype the “new” music anthology, to being just too polite to say no. Finally, the Rep’s legal counsel, John Wertz, advised the board to pull the plug. “Without her explicit permission, it ran too much of a risk for the board and for the theater,” he said. “And that’s not only legal risk, but also public relations ramifications.”

Luckily, a replacement musical was waiting in the wings. “Over the years, we had been requested, urged, nudged, begged, and otherwise pleaded with to stage a revival of Six Women with Brain Death, or Expiring Minds Want to Know,” said Woodhouse. “The fact that it was our 20th-anniversary season, it was the longest-running musical in San Diego history, we felt committed to [and had budgeted for] a musical, and most of the original cast was willing and able, made it a very easy and happy decision.”

The musical had run for more than two and a half years in various Rep venues and more than once provided revenues in otherwise lean years. While he wouldn’t, and couldn’t, predict a repeat of that phenomenon, Woodhouse had a contingency plan to allow a multiweek extension, should the play once again take off. As it happens, Six Women has again proved to be a winner and has been extended this month.

The final play of the shorter-than-average season is The Whole World Is Watching, a world premiere effort of Jacobs and Sledgehammer Theatre’s artistic director Scott Feldsher. Their collaboration is a multimedia adaptation of Sophocles’ Oedipus trilogy, reinterpreting this myth as a TV talk show, complete with video monitors, a warm-up comedian, and celebrity guests. It’s slated to open in July, when the larger 550-seat venue is available. According to Jacobs, “This also happens to coincide with the lead-in to the Republican National Convention, when a lot of media will be in town.”

Hundreds of hours went into this and every season’s planning, but in the “fundamental gamble that is the theater, no one can count on automatic revenues,” said Woodhouse. “It’s like a Geiger counter going wacko.”

The Rep is committed to bringing to San Diegans theater they wouldn’t get otherwise, but that often means taking calculated risks. Twice in its history, the Rep pushed the envelope too far. For example, the 1988-89 season lives on today in an economic sense, in that the Rep is still paying off a deficit caused by small houses and had to rebuild its subscriber base when audiences bailed.

Board president Whitney Skala perhaps sums it up best. “Theater evokes an emotional response that museum audiences or even symphony audiences don’t have. I didn’t see Albanian Softshoe in 1989, but I still hear about that one play. It’s sort of like Bobby Thompson’s home run [in the legendary Giants-Dodgers World Series in the 1950s]. There are more people who claim they walked out on that play than could have possibly been in the theater.”

Part of the Rep’s mission, reflected in its product, is its commitment to cultural diversity in the plays and musicals it puts onstage, the playwrights and directors who create them, and the actors who perform them. Also, the Rep leans toward living playwrights, foreign writers, and writers of color.

Advising and partnering the Rep are Teatro Sin Fronteras (Theater without Boundaries) and the African-American Councils. With Teatro Sin Fronteras, the Rep has presented main-stage bilingual productions including Luis Valdez’s I Don’t Have to Show You No Stinking Badges, a big-profit Real Women Have Curves, and the recently concluded True Story of Coca-Cola in Mexico. Pearl Cleage’s Flying West and Tom Jones’s Bessie’s Blues are among the Rep’s productions by African-American writers and directors.

In surveys conducted two years ago, the Rep found its audiences were 30 percent playgoers of color; two-thirds of them were women; 90 percent had college or postgraduate education; half of the total were between 35 and 54 years of age, with incomes in the $30,000 to $79,000 range.

“Diversity...it’s not experimental theater, only truthful,” said Woodhouse. “For anyone to think that the theater does anything but reflect real life, you only need look as far as your local 7-Eleven.”

The Revenues

Ticket sales do not pay all the bills at not-for-profit theaters. That is where grants, donations, fundraising, and in-kind services are necessary. A well-run theater will bring in 60 percent of its budgeted revenues through the box office, concessions, and fees. That percentage has been an admired Rep standard for years.

Subscribers are the backbone of the box office. They plunk down their money in advance, need no further cajoling or marketing to fill the seats, and are a sure bet. If the word-of-mouth turns sour on the production, the faithful subscriber has already paid the freight. In 1986 the Rep enjoyed a comfortable 9200 subscribers; but after the 1989 season, many of the faithful departed, and it’s been a struggle to pull them back. The 1995-96 season opened with 3200 subscribers, and the numbers have grown to more than 4500, according to Eric Bernhard, the Rep’s seemingly unflappable director of development.

After three years of subscription revenues averaging $250,000, the board and staff took a leap with an optimistic subscription revenue budget for ’95-’96 of $420,000. What’s more, they felt so strongly about the season’s ability to attract audiences that single-ticket sales estimates jumped to a budgeted goal of $593,500 from the previous year’s $386,500. All told, that means the 1995-96 box-office budget is just over $1 million, a 33 percent increase from last year’s $673,295.

“This [budget] is definitely attainable,” Christmas Carol said Bernhard. “The season has been very strong so far.” And with Six Women inserted, it looks to be a record year.

The remainder of earned monies come from the Rep’s responsibilities as manager of the city-owned Lyceum Theater. They assist arts groups from around the county to stage their productions at the Lyceum, for which the Rep collects $ 180,000 from the city and another $200,000 to $250,000 from the groups themselves.

Even before the fiscal year began last July, the Rep staff was looking at a $250,000 hole in non-eamed (contributed) revenues. They had already received the final installment of their $750,000 grant from the Lila Wallace Foundation, the largest arts funder in the U.S. today. And the foundation’s policy is to rest at least one year between grant cycles. Government funding — from National Endowment for the Arts, the California Arts Council, the City of San Diego Commission for Arts and Culture — wasn’t moving much from its $220,000-a-year average.

“So we looked around at things we could do to make up for that foundation money,” said Bernhard. “Corporate gifts was an area we identified,” and the goal was to double that line item, from $16,600 to $35,000. The Rep rebuilt corporate representation on its board of directors and scheduled a series of preview nights for those types of audiences. “We have a party in the lobby for them and use them more as friend-raisers than solicitations.”

The word “party” arose, unsolicited, from nearly everyone who talked about the Rep’s history. Whether it was the cachet of hobnobbing with actors, the noshing and networking, the antics of the theater crew or the events themselves, most Rep supporters raved about its parties. While not admitting they had raised the party to an art form, Bernhard agreed that the spring Party with a Point of View and the fall masquerade gala “are well attended and bring in a good amount.”

Mervyn’s, Target, SDG&E, AT&T, Barona Casino, Stanley E. Foster/Industrial Main, and Hang Ten are among those corporations that agreed to underwrite part of the production schedule, making them “Producing Partners.” The Rep budgeted this program to grow from $30,000 to $45,000 in 1995-96.

“In the olden days, when corporate spending was greater, that was the easiest money to find,” said Bernhard. “Now, because there are fewer of them with fewer dollars and more demands, corporations tend to look for educational pegs or community involvement reasons to donate. We can give them both.” Skala added that he hopes the hallmark of his two-year term as board president will be “convincing the corporate and business community to join us in advancing the downtown theater and its mission.” “A fundamental tension in the economics of not-for-profit regional theater is that small, individual gifts, ticket sales, and corporate giving are attracted by work that is familiar or easier to follow,” Woodhouse explained. “However, foundations and endowments, which give the bigger money, are attracted by groundbreaking, challenging, unpredictable, and at times less accessible work.”

A couple of years ago, he recalled, the theater was faced with a need to reduce expenses and had two productions from which to choose to plug into the calendar. “The sentiment in the organization was to go with the less expensive, more popular work, but we had already banked a grant that was to support the other play. That’s part of the balancing act we do, play after play.”

While agreeing that foundation grants are manna for regional theaters, Jacobs finds a philosophical irony attached to that funding. “In the 1950s, when the Rockefeller and Ford Foundations decided to give money to the arts, the only way they knew how to do it was with the same structure they used for their charitable, educational, and other nonprofit gifts. Unwittingly, this new and powerful funding source ended up equating the arts with the sick, the infirm, the helpless and the hopeless.

“So instead of looking at the arts like the Japanese do, as a cherished part of the culture which deserves to be treasured and supported, the arts in America are lumped in with the charities who need to be supported.”

THE EXPENSES

Woodhouse looked wrung out but jubilant. “I have just sat through probably one of the five most incredible audition moments of my life,” he boomed by way of greeting in his big, basso voice. “I was in tears, I was so moved.” It was December, and he had just returned from Los Angeles, where he was on the prowl for A Streetcar Named Desire actors, casting for the right mix of talent for the Rep’s next production. By January, the actor was signed.

Actors must be established enough to be able to afford to play at the Rep ($441 per week is the Actors’ Equity rate as well as the top Rep dollar), but not so established that a gig at a regional theater no longer interests them. The top five leads must make that rate, and the scale slides downward from there.

“When we first started dealing with union contracts ten years ago,” Jacobs recalled, “both the union and the theater were stronger. Now we’re both in trouble, we both need people, so I think we’re both more flexible and willing to experiment.”

Artistic labor is the single biggest expense in any given year. When a season includes musicals, another layer of expense is added with musicians, some of whom chafe at the bare-bones pay scales at the Rep. This year $464,000 has been budgeted for artistic labor, almost 20 percent more than last year. Total labor expenses are expected to come in at $1.3 million for the year, or 68 percent of the total budget.

The roof — or to be more specific, the concrete — over the Rep’s head, its maintenance, insurance, equipment are not expense items, since the Rep leases its facility from the City of San Diego for $ 1 a year. The city maintains the property and performs refurbishing (18 months ago the lobby areas were redone, for example) and equipment upgrades. After labor, the largest bill is for utilities, between $ 150,000 and $200,000 a year. Added to this are expenses related to sets, props, costumes, lighting, and sound. Nonlabor expenses in artistic, production, administrative and marketing will be about $700,000.

No one who works for the Rep makes big bucks. After the last fiscal crunch, a nasty bloodletting cut staff and froze salaries to the point that no one in the organization, including the codirectors, is paid a salary of more than $31,000 a year. Full-time pay scales range from $12,000 to $31,000, a labor of love.

“We need to pay people better,” said Giles Bateman, chairman of the board of CompUSA and president of the Rep board for the past four years. “The Rep has survived by not paying its employees.”

It was during Bateman’s watch that the Rep’s board of directors forced the issue of regular, updated cash-flow reports. “The staff is very fiscally responsible. I’m amazed, actually, at what they can do on a shoestring,” Bateman said. “But nonprofit organizations run on cash-flow basis, not a GAAP [generally accepted accounting principles]. The staff didn’t know from month to month what kind of cash they had to work with, and we as a board needed to see the problems on a monthly basis.” And fiscal screws were tightened even further when the number of productions was reduced to six from as many as ten a season.

Since these steps have been taken, he said, “we’ve had three years of operational surplus—small, but surplus nonetheless.” For this fiscal year, the budgeted surplus is $28,000, up from $5400 last year, but a far cry from 1992-93, which threw off $ 158,000 in profit, thanks to Whoopi Goldberg’s special fundraising event for the theatrical equivalent of her alma mater. “When we hit those dark times, the red ink was gut wrenching, and the staff started turning over, we’d plead with Sam to call Whoopi,” recalled Berkman. “He finally did. And it saved us.”

THE DONORS

“One of the great things about California,” investment adviser John Messner is fond of saying, “is that you can step up and pay your money and support your cause without having to have a name or a track record.” Messner is a long-time supporter and former president of the Rep board of directors. “While we don’t have the old money of a San Francisco to lean on, we’ve benefited from the more freewheeling lifestyle here. People who have come here from other cities, . who are accustomed to sophistication in their theater and their downtown, are drawn to the Rep.”

Locally, Joan Kroc, Price Charities, Irwin Jacobs Trust, Don and Darlene Shiley, and recently Mandell Weiss Charitable Trust have been among the well-known supporters of the Rep. But by and large, donors are people whose names are not recognizable on the arts scene. The very first donor was Mary Ellen Muncton, “an avid student and fan of musical theater who has been extraordinarily supportive.” Muncton is Sam Woodhouse’s mother.

“We got a lot of medium and smaller donors with a lot of work,” recalled Messner. “In the early days, each board member would do parties at home, invite some friends and have a poetry reading or just a casual event. There is such energy and, what’s the word...charisma...associated with the theater in general, and the Rep in particular. They all became subscribers, and many became donors.” Director of development Bernhard says a good number of his individual donors fit a particular profile. “They’re fairly young, professional, and they’re fairly new to San Diego from a bigger city. At first they’re in love with the weather and the attractions but then find they don’t have the intellectual climate they once enjoyed. We find those people are the ones attracted to contemporary issues onstage and can and will attend provocative work that is well done.”

Over the years, the board of directors has been a net for gathering in donors. The president of the board usually adds his or her friends and acquaintances to the group for what they can bring to the table both monetarily and managerially. In the last five years, the board and other trustees have averaged more than $25,000 in annual donations. Old friends also contribute or bring contributions their way, like former board member and early advisor Michael Addison, who recently steered the Flintridge Foundation to the Rep with a $15,000 grant for Jacobs’s The Whole World Is Watching.

The Parker Foundation provided the Rep’s first foundation grant in 1976 and has donated off and on through the years, most recently during the year of need in 1990. “The Rep plays an important role here, and those guys are experimenters,” said Judy McDonald, who works with Parker and other foundations. “We’ve got a wide spectrum of theater here, and the Rep makes it all that much more challenging.”

Past president Giles Bateman became involved after his wife, Dona Adler, attended a production that invited the audience to discuss the work after the curtain. Soon she was on the Rep’s board, and, in Bateman’s words, “hauled me along” with her. “It started out as a ‘Yes, dear,’ but it’s been fun, and I admire the group tremendously.”

Jack Berkman recalled his tenure on the board as “one of the most exciting times of my life. We had 20 to 25 guys there who were energized with a downtown theater that was coming into being just as the downtown was taking off. We had enthusiasm, we had passion. Hell, that’s when we all had hair.”

“Everyone gets recruited,” either to the board or as a donor, observed board president Whitney Skala, “but then gets tremendously surprised by how exciting this group is. Neither my wife or I are deep theater people, but we have found ourselves attracted to the Rep and wanting to support something that is having an effect across the community. It puts material on the stage that tends to test the audience and is actively doing it in a downtown setting.” “People give to the Old Globe, for example, for what it is,” explained one donor. “People give to the Rep for what it does.”

THE INDUSTRY

Not-for-profit theaters across the country have struggled for the last five years. Unable to recover from the prolonged effects of the 1990 recession, theaters failed to balance budgets in 1994, suffered lower attendance at fewer performances, cut touring activity and, in some instances, were forced to close their doors. Established entities like the Ohio Players Theater in Columbus and Santa Fe’s New Mexico Repertory are among the most recent casualties. In its annual economic analysis, the New York-based Theater Communication Group (TCG) found that a byproduct of these woes was institutional stress and active turnover among top theater leadership.

The Rep, like cross-town rival La Jolla Playhouse, is a member of the TCG and has participated in these lengthy economic reviews every year, which helps to benchmark its own fiscal performance. While the Rep faces the same dispiriting challenges as the rest of the industry, in some ways, it has performed somewhat better than its peers. While it is running a deficit, that $110,000 is a number that is closer to 5 percent of budget than the nprm of 10 percent. And that deficit has been reined in, contained in two packages — one loan that gets bought down a bit each month, as does a note to a patient rehearsal-space landlord.

The Rep differs from its peers in a couple of interesting areas. For one thing, 75 percent of its expenses are paid with earned (not contributed) income; the TCG sample groups showed earnings covered just 58.6 percent of expenses, the smallest proportion in the five years of the study. (To be fair, 14 percent of that earned income comes from the Rep’s theater management fees, where it aids other arts groups using the Rep venue. Few regional theaters have access to that income nor shoulder that responsibility.)

Too, the Rep’s single-ticket sales are stronger, percentagewise, than its subscription base, in direct opposition to the TCG findings. In fiscal 1995, ended July 1, the Rep box office totaled $673,295, down about 5 percent from fiscal 1994, but single tickets made up 57 percent of the total. TCG’s sample group’s average was 37 percent for single tickets.

Recent studies from the National Endowment for the Arts and others have found that recession, increasing costs, and a decrease in government support is only the prelude to a more insidious threat to arts organizations: the aging of their audience and donors. Despite higher incomes, younger Americans are unlikely ever to attend classical music, opera, or musical or dramatic theater. And those who do attend and donate are giving 11 percent less than their graying predecessors.

Organizations nationally are scrambling to pull in youngsters, hoping to hook their interest after they leave school. And those who do attend, studies have found, consider theater “something that’s good for you” rather than entertainment. Only those arts organizations with deep community involvement and identification show signs of bucking that trend.

The Rep staff takes these findings calmly. Its surveys show its audiences are younger, by an average of 6 to 12 years, than the regional norm, which doesn’t include its Project Discovery program that has hosted more than 10,000 school-aged children at Rep performances. Because of its own multicultural offerings as well as the productions of other companies that use the Rep’s house, approximately 30 percent of its audiences are persons of color, a heretofore tapped, but undeveloped, market. “Sitting where we are, we think we are ahead of that curve,” said Bernhard.

THE LANDLORD

For the first ten years, the San Diego Rep led a seminomadic existence. For a short time, through a good word put in by an admirer, the underused theater facilities at San Diego City College were made available to the small troupe. Then, a former mortuary was converted into the Rep’s 200-seat playhouse on Sixth Avenue, where a patient landlord worked with the small troupe through artistic and monetary highs and lows.

“I loved working in that space,” Jacobs reminisced. “When we first landed there, we felt whole. Small companies usually have problems with bad leases, but Mrs. Robertson was wonderful to us. Periodically, when we were tight on money, we at least knew that we wouldn’t be on the street, because she’d let us work it out. And we were very religious about paying her.”

The old Lyceum Theater on F Street, downtown, was home to burlesque queens, bad comics, a few traveling shows, and, for a few years, a soft-porn movie theater, with the venerable Bob Johnston’s Sports Palace bar next door. That dilapidated block was within the footprint for the Horton Plaza shopping center and therefore was to be razed in 1982. After walking past the semishuttered theater one day, Woodhouse and Jacobs worked out a deal with the Centre City Development Corp. to use the creaky 400-seat theater until the city was ready to demolish it. As recalled by the CCDC’s David Allsbrook, “We said, okay, go ahead. But we don’t want to hear from you. Take care of it yourself.”

Two venues — at Sixth Avenue and the Lyceum — opened up all sorts of possibilities for the Rep. The hit show Working was moved to the larger theater, and despite its south-of-Broadway location, it brought in thousands of playgoers. What’s more, they ate and drank before and after the theater. “Our credibility started to go up then and there,” said Jacobs. “We proved that a midsized house could work downtown.” It also proved that the theater company had to turn its fires up, and its budget doubled to $800,000.

The Rep’s success on the site increased the political pressure for a theater within Horton Plaza itself. This was at a time when the city was batting away a protest a week from preservationists and other interest groups. In order to move the behemoth retail center along—and with the staunch support of then-Councilman Mike Gotch — developer Hahn Co. agreed to provide theater space within Horton Plaza. And a “space” it was — simply a hole, four walls, some columns, and steps would be the (estimated) $ 1 million contribution. Anything more would have to come from other sources.

The Centre City Development Corp., overseer of Horton Plaza and redeveloping environs, spent about $8 million inside that hole with four walls, building two performance spaces, setting up computer and office systems, equipping it with lighting and sound systems, and furnishing it.

“It was a very difficult construction project,” said Allsbrook. Because of the configuration of the space — completely underground,, with a drugstore already built above it—the project took on a ship-in-the-bottle feel. Steel girders had to be cut outside, wedged into the service elevator, then welded back into longer pieces underground. With no appreciable height to work with, the theater couldn’t accommodate a flyloft, a virtual necessity for handling scenery and lighting. Dressing rooms and other actors’ areas are cramped. But two separate theaters emerged — the 550-fixed-seat main stage and a space that could manage 250 movable seats.

While the CCDC could build a theater, it wouldn’t manage one. “We had no staff and no expertise to book events and run a theater,” said Allsbrook. So the nonprofit Horton Plaza Theatre Foundation was created to oversee and manage the city’s cultural newcomer. It entertained bids for master lessee from many quarters, and newspaper accounts at the time stated that the proposals were highly competitive. As Allsbrook recalls it, “Only the Rep’s proposal really stood out.” The CCDC and the Rep entered lease negotiations in 1984.

For 13 months, city bureaucrats and theater staff tried to hammer out a lease agreement. “It was so frustrating,” recalls Messner, who helped Jacobs and Woodhouse. “For every one step forward, we’d take two steps back.”

Allsbrook had a similar recollection. “Here we are, city bureaucrats trying to understand how theater people think and work. We had to negotiate the gamut, from how to value management services, who maintains what, the question of union or nonunion shop, the ability to pay rent over income....”

In desperation, the negotiators locked themselves into the conference room of then-downtown law firm of Jenkins and Perry. After three days, they emerged exhausted and bloody but successful. The rent would be $1 a year under seven-year, renewable leases, and the Rep would collect a management fee to help arts organizations from around the city to mount productions there. The huge utility bill ultimately would be the Rep’s responsibility, but the city would underwrite it in decreasing amounts for four years.

Finally, on May 31,1986, the Rep opened Quilters on the Lyceum main stage in Horton Plaza. For the past decade, dozens of other arts organizations have also used the two city stages.

As long as the Rep maintains the letter of the one-inch-thick agreement, relations between theater and landlord are cordial. However, these days, the Horton Plaza Theater Foundation is watching its sole charge fairly closely.

Following the disastrous ’88-’89 season, recalled Allsbrook, “We became acutely aware that the Rep’s financial position was precarious. We heard from vendors who weren’t being paid and saw problems with payroll. The Rep came to us for an advance [on its management fee], but the board took a very tough stand, saying that it did not exist to solve the Rep’s problems.”

Since then, the board has met every two months and looks over financial statements. An audited statement of condition is demanded annually. It watches that bills are being paid, especially the utilities, for which the city is the customer of record, ultimately liable for the bill. The Rep’s lease was renewed, as scheduled, in 1993. While the board refused to increase the management fee, it did allow more flexibility in other areas.

"The Rep has always exceeded the letter of the agreement as far as number of days the theater is open [at least 240 of 365] and its commitment to helping arts organizations within the city stage their productions. They’ve done wonderful things there,” said Allsbrook.

That said, he maintains that the Lyceum is the city’s one and only theater fling. “We will never, as far as I can see, put ourselves in the position of funding a nonprofit theater group again. We don’t have the assets for capital needs or operations. And it takes a lot of handholding with the Rep. That is not a criticism, but a fact of theater life. At this point, our job is to make sure we preserve the city’s asset.”

That reslove may be tested since interest in the 72-year-old Balboa Theatre has heated up recently. Corporate interest - everyone from Sega Corporation to Disney has been mentioned - evolves from the condemned theater’s Fourth Avenue site and the natural entertainment tie-in. The Rep, just yards away from the Balboa, has also expressed an interest in the theatre as additional live-performance space.

Allsbrook, who has met with Jacobs on the idea, stands firm. “We don't have the money for capital improvements [estimates range from $6 million to $12 million, a large portion of which would be spent on seismic retrofitting] nor can we subsidize operations.” The only way that seeming miserliness would change is if "the city council finds the money and directs us to make the Balboa a priority....” In this age of multi-million-dollar libraries and aging city infrastructure, it seems unlikely.

MANAGEMENT

Sam Woodhouse and Doug Jacobs are codirectors of the Rep; at the moment, Jacobs carries the title of artistic director and Woodhouse is producing director. “I do the tasks of the managing director now. During the time when we were facing economic challenges, it was decided to return management to the founders,” Woodhouse said, speaking in a strange, third-person way. “We discuss, on a regular basis, whether we need a managing director, whether we should go there again, and have decided not.”

Three times in 20 years, the founders turned over the day-to-day management and finances to others as they worked on other writing, directing, teaching, or strategic projects for the theater. One such position was forced by the board of directors, which collectively agreed that the theater needed consistency in management from a full-time staffer. For personal and organizational reasons, the experience wasn’t a successful one.

“The artistic choices and business decisions are intimately married,” said Woodhouse. “At this point, we will leave them with the founders.”

Jacobs, who admits to having to wean himself from micro-management, likens their management style to “getting in there and finding the Indian trails. Training, 1 would say, is not our strong point. We tend to hire a person for a job and let them figure it out. We give people a high level of responsibility, and at some point, because no one is standing over them, telling them what to do, they figure it out and prosper.”

Through the years, the Rep lost some of its staff to bigger organizations and, notably, better-paying jobs. Jacobs is encouraged by a recent reversal of that trend. “We’re actually hiring out of larger organizations now,” he says. One case in point is Eric Bernhard, who returned to the Rep after a stint in San Francisco. And general manager John Redman is arranging new internship programs, to foster management talent from within.

And after 20 years of planning, managing, coordinating the juggling act that is a regional theater, says Sam Woodhouse, “The next step for us? I’m not sure, but it will involve exploring whether growth can occur through a sharing of resources and partnerships. Ideally, we’d be producing 12 productions a year, providing even more work for theater people and with a true, diverse palette to be presented to the degree we’d like.”