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Wednesday, May 4, 2011

How PlayhouseSquare Became Economically Viable

Posted By on Wed, May 4, 2011 at 11:51 AM

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As the Wall Street Journal points out in a lengthy piece today on how PlayhouseSquare remains economically viable, "'Arts and culture is losing its market share of philanthropy,' according to the latest National Arts Index."

In a struggling city with dwindling resources and fewer patrons spending what little dough they have left on the arts, PlayhouseSquare nevertheless remains on solid financial footing, largely due to investments that have little to do with theater. At least on the surface.

While it would be easier to stuff the arts coffers through "creative" advertising — "West Side Story, with special guest Justin Bieber," "The Phantom of the Opera, with special guest Justin Bieber," "Hair, strangely without Justin Bieber" — PlayhouseSquare has built a solid budget and wrangled much-needed dollars through real estate and other ventures.

What makes PlayhouseSquare unique is that it not only renovated and manages the performance spaces—including the five historic theaters (the Ohio, the Palace, the State, the Allen and the Hanna) that otherwise would have been bulldozed for parking lots—but it also created a local development corporation that owns more than 1.6 million square feet of office and retail space inhabited by more than 3,000 workers in five buildings; developed the 205-room Wyndham Cleveland Hotel; and manages an additional million square feet of real estate throughout the Cleveland metropolitan area.

Its budget of more than $60 million puts it ahead of the better-endowed Cleveland Orchestra and Cleveland Museum of Art. Two-thirds of PlayhouseSquare's annual budget supports the performing arts. One-third is reinvested in its real-estate ventures.

"The real-estate business is a working endowment for the theaters," said Gina Vernaci, vice president of theatricals for PlayhouseSquare. "The stages feed the neighborhood's excitement and vice-versa," she added. "People who work down here now think about PlayhouseSquare as a campus."

The real-estate arm now manages "more than a million square feet of other owners' properties throughout the Cleveland area." Other areas of lucrative expansion: the Wyndham hotel, and a broadcast media branch. Next on the list: "We want to build 58 stories of housing in the next few years," according to Playhouse Square.

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