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Loop Holes/ Unloading a Royal Pain

Downtown's theater explosion: boom or bust?

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Loop Holes

Mayor Daley's long-cherished plan to turn the north Loop into the Great White Way of the midwest seems to be coming apart at every seam. In June the Walt Disney Company abandoned the Chicago Theatre and signed over its lease to an Ohio nonprofit, the Columbus Association for the Performing Arts (CAPA). Last week Livent Inc., owner and operator of the neighboring Ford Center for the Performing Arts/Oriental Theater, suspended founder and former CEO Garth Drabinsky in the wake of a massive accounting scandal that threatens the company's financial solvency. Magicworks Entertainment, Inc., the Cleveland-based promoter that's renovating the Bismarck Hotel's Palace Theater in partnership with Fox Theatricals, was recently acquired by a New York conglomerate whose ultimate intentions are unknown. And Jam Productions, while it's announced plans to stage a series of musicals at the Chicago, will be taking advantage of CAPA's nonprofit status to avoid paying city amusement taxes.

Christopher Hill, the mayor's commissioner of the Department of Planning, sounded mighty nervous on the phone last week when asked about the future of the Ford Center, which received $17 million from the city and is scheduled to open in October. After Drabinsky was escorted from Livent's Toronto headquarters, investigators from the Ontario Securities Commission began examining the company's financial records while furious stockholders filed lawsuits almost hourly; the U.S. Securities and Exchange Commission will launch a separate probe. An August 11 letter to Hill from Livent's current chairman and CEO, Roy Furman, stated that "all monies needed to finish construction [of the Ford Center] have been previously set aside, and the production of Ragtime continues to be scheduled to open as planned....We believe Livent has sufficient cash flows to fund our continued operations." Yet Furman's equivocal language is hard to ignore, and the Globe and Mail reported late last week that Furman and his new second-in-command, David Maisel, are "reevaluating everything about the company."

In fact cash flow appears to be a serious problem for Livent. Last month the company shut down its touring production of Ragtime in Vancouver, weeks before the announced closing date. Livent's Web site claimed the show was closing early in order to establish its "point of organization" in Chicago; because Actor's Equity demands per diem expenses for touring cast members, said Livent, it could save tens of thousands of dollars by recasting the show here as a brand-new production. Furman and Maisel are also moving quickly to shut down a London production of Show Boat, according to sources in England; the more costly of two U.S. touring productions closed in January. Livent's Fosse: A Celebration in Song and Dance opened in Toronto earlier this month to mixed reviews. Whether it will move on to Boston and Los Angeles as planned remains to be seen; Livent continues to give away "rush" tickets to the show at $25 Canadian. Hill says the city has an escrow account with sufficient funds to complete the Ford Center renovation should Livent collapse or severely curtail its operations, but he was less clear about what would happen if the city has to take control. Presumably the city would sell or lease the theater to another operator. Said Hill, "We're just taking this situation one day at a time."

Meanwhile Fox Theatricals and Magicworks Entertainment say they're moving forward with plans to reopen the 2,400-seat Palace Theater in the second or third quarter of 1999--about a year later than its projected opening of fall 1998. "We've finished all the major structural work and are beginning the rest of the renovation work now," says Fox producer Michael Leavitt. The theater has no firm bookings because until recently no one was sure when it would open. "We're seriously beginning to look at our options now," says Leavitt. But two weeks ago Magicworks was acquired by SFX Entertainment, Inc., an aggressive New York-based entertainment company that's been gobbling up promoters and presenting organizations all over the country. "They just want to buy them up so they can sell them off again," speculates Doug Kridler, president of CAPA. Leavitt denied that the Magicworks sale would have any impact on the Palace.

Perhaps the only good news coming out of the north Loop theater district is Jam Productions' recent announcement that it will present Victor/Victoria, Fame: The Musical, and a 20th-anniversary revival of Evita at the Chicago this fall. But the city could face a huge loss of tax revenues if more presenters wise up to Jam's deal at the theater. When Disney sublet the 3,400-seat venue to CAPA, it opened up the same tax loophole that Livent used to stage Show Boat at the Auditorium Theatre two years ago: by officially presenting the show under the auspices of the nonprofit Auditorium Theatre Council, Drabinsky exempted the production from onerous city and county amusement taxes that amount to a hefty 10 percent of the box office gross. Jam had previously planned to stage its shows at the Arie Crown Theatre in McCormick Place, unveiled last fall after a multimillion-dollar renovation. But Jam ditched the Arie Crown and struck a deal with CAPA after the Columbus nonprofit took over the Chicago Theatre lease. Kridler coyly denied having an arrangement with Jam that circumvented the city amusement tax, but he did say his organization is "operating within the parameters" outlined by city officials when he met with them earlier this year.

Unloading a Royal Pain

New York-based Jujamcyn Theatres, majority owner of the Royal George Theatre Center on Halsted, is expected to unload the property to New York producer Alan Schuster. Robert Perkins, who owned a minority stake, will stay on as manager, and Schuster has no plans to use the center for anything but live theater. The fate of the center's restaurant space is less certain: Diana's Opaa Restaurant closed down at the beginning of the year, and that part of the complex has been empty ever since. The Royal George main stage has been dark since November, after a revival of The Gin Game starring Julie Harris and Charles Durning closed after only two months. Since Perkins and Jujamcyn bought the Royal George property in 1994, they've failed to come up with enough winning product to sell out the center's 500-seat main stage.

Art accompanying story in printed newspaper (not available in this archive): photos/J.B. Spector (Oriental Theater); Randy Tunnell (Chicago Theatre and Bismark Palace).

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