Rock Steady

Stability and growth are the Rock Hall's twin priorities

It's a beacon that calls visitors to Cleveland from across the globe, and it's in the midst of sponsoring a two-week induction extravaganza that will bring the Red Hot Chili Peppers, Beastie Boys, and at least parts of Guns N' Roses to town this week.

Haters will have their quibbles — sure, only about 5,000 seats for the induction went public, which is 5,000 more than New York inductions offer — but it's hard not to be impressed with Rock Hall President and CEO Terry Stewart and the work he's done in turning the museum around. His leadership, along with a change in the board at the parent Rock and Roll Hall of Fame Foundation six years ago, helped make the extended celebration possible.

Speaking in Stewart's office at the Rock Hall's snappy lakefront digs, he is quick to note that the possibility to host the inductions here in Cleveland always existed — it just wasn't financially feasible at first. The induction ceremonies are the Foundation's only source of income. To host it here, the Foundation must have its money guaranteed, in addition to the actual cost of the festivities. That's a big responsibility for a museum built with no endowment or operating reserve.

"Taking on responsibility for a very expensive event, where you don't even have the working capital to pay for it up front, and hope you get the money back in — it's a real challenge," says Stewart. "But we feel like we need the inductions here to connect the city to the museum. I think people always felt gypped that they weren't here. I understand that emotionally, but we couldn't afford to take that on."

In 2006, Joel Peresman, a former boss at Madison Square Garden and a music-industry vet, replaced co-founder Suzan Evans as president and CEO of the Foundation. With his arrival came a more cooperative attitude between the Foundation and museum, and a loosening of the purse strings that made the museum and the inductions more of a unified effort than they ever had been before. In 2009, proceeds from the 25th anniversary show in New York helped create a $5 million endowment for the Rock Hall's operating costs. Over the past half-dozen years, the Foundation has kicked in another $12 to $15 million for Rock Hall programs and its $35 million capital-improvement campaign. That paid for recent renovations, a redesign of the Hall's ground-floor layout, and a new rock & roll archive on the Tri-C campus, which opened in January.

It's a far cry from the situation Stewart took over in 1999. He was the fifth CEO in five years, and the blush was off the Rock Hall rose. National sponsorships that accompanied the museum's launch were drying up, and attendance continued to drop. Within three years, 21 staffers — 20 percent of the full-time staff — were let go as the Rock Hall struggled to redefine its mission. It's done so by pulling back and refocusing on stabilizing attendance. And it has posted some of its best years ever since the recession, according to Stewart.

Of course, narrowing focus had its costs. Anyone who has witnessed a show at the venue — such as the English Beat's gig at last year's third-annual Chef Jam — can attest to the thrill of a performance in its unique environs. Sadly, such events are few and far between. In 2007, the Rock Hall pulled the plug on a summer music festival hosted in concert with CMJ after a two-year run. According to Stewart, rock shows simply require too much time and money to produce — time and money that distract from the core mission. (They still offer their summer concert series, which was featured on MTV for a couple years.)

"We're a nonprofit, and where the wheels come off the track is when you try to be everything to everybody," says Stewart. "Anything in music when we opened up sounded like a good idea. Our mission and resources are scarce enough to do what we're supposed to do: collect, preserve, exhibit, and educate."

Part of it comes down to the fact that they're not really marketing the museum to Cleveland so much as for Cleveland. A disproportionate share of visitors — about 95 percent, according to Stewart — come from out of town.

"When you look at institutions like this, classically they don't have huge numbers of people coming locally," he says. "They bring their relatives when they're in town, they come down for events. So yes, we have a few shows to support our educational programs and exhibits, but we're not going to become the Agora. We don't have the staff or the money to do it. It's a very difficult business, and there are already a lot of people out there trying to do it."

Going forward, Stewart hopes to build on the Hall's sustainability. It's taken years to get the library in place, build an endowment, and establish a fund for capital improvements. Now, the Rock Hall is looking for additional revenue streams to fund the inductions, such as a Walk of Fame that will place plaques of inductees on sidewalks around town. The first 17 plaques will premiere this week; future plaques will be paid for by sponsors, with the money going toward induction ceremonies. (Stewart also mentions the possibility of adding a Walk of Fame specifically for Northeast Ohio artists.)

"It's just like any festival," says Stewart. "It starts up losing money for a few years. Fortunately, we didn't lose any money, but you have to figure out how do you make it stand alone at some point, because the city shouldn't [donate money] all the time. We recognize that. We hope that by 2015, when we do it again, it will be a bit more on a stand-alone basis."

Stewart's immediate goals include a gift campaign to create an endowment for the library's operation, since it creates zero revenue. He mentions the possibility of another Rock Hall annex, like the one that closed in New York a few years ago, in another large city — possibly Las Vegas. Mostly, though, he wants to grow the museum's endowment and an operating reserve for rainy days. Modest goals, but it's Stewart's cautious hand that has turned around the museum's fortunes and helped make it one of the centerpieces of a long-hoped-for lakefront renaissance that's finally taking shape.

"Between all the things happening in Cleveland, we feel we have the potential to drive up attendance slightly, but at the same time we know that with the pressure on expenses we're going to face, we've got to do more philanthropically," he says. "As long as we stay with our mission and know who we are, we have a piece of real estate carved out that's a great franchise."

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