It could be the final curtain for Minneapolis’ Southern Theater, if the company can’t raise $400,000 in the next week.
“We come to you with heavy hearts, filled with hope,” reads an open letter posted on the theater’s website Thursday, asking for donations large and small to help raise the money by April 30. The plea followed a similar, if less urgent, note Wednesday and weeks of behind-the-scenes drama that includes the loss of a major McKnight Foundation grant and a shakeup on the Southern’s board of directors.
“The networks have canceled the soap operas, but they forgot to cancel this one,” said executive director Gary Peterson, who came on board in January 2010. “The theater has been operating at a deficit for many years. I’m not sure how many years, but it’s been considerable.”
At issue is McKnight Fellowship money for dance and choreography that the Southern was charged with dispersing to artists. The problem is that, at some point before Peterson’s arrival, some of that money was directed toward general operating expenses. Once word got out the Southern hadn’t fully paid several fellowship winners, McKnight pulled the funding and asked for more than $300,000 back from the theater.
“Basically, the practice of borrowing funds from McKnight to meet (the Southern’s) deficits should not have happened,” Peterson said. “What has happened now is that the foundation has removed those programs from the Southern, and we’re in the process of tidying up our mess.”
No one is saying publicly who made the decision to divert the McKnight funds, although six members of its board of directors resigned after the theater learned it had been turned down for a $90,000 bridge loan that would have helped get the Southern back on its feet. Peterson said the theater also has seen a shortfall in budgeted ticket sales over the past six months, all of which led to what he called “a perfect storm.”
But didn’t the Southern steer itself straight into that storm?
“I can’t answer why it went on for so many years,” Peterson said. “But when we had two days of emergency board meetings (and voted in) a new slate of officers, the board reached the unanimous consensus that it was time to draw a line in the sand. Whatever had gone on before, for whatever reasons, all of those practices had to stop. We felt it was necessary to come clean with the foundation and the community and take whatever steps we needed to deal with the fallout.”
Housed in a former vaudeville house that dates back to 1910, the 210-seat theater presents cutting-edge dance, theater and music while sponsoring larger events such as this month’s String Theory Music Festival, which expanded onto numerous stages in Minneapolis and St. Paul.
The $400,000 will pay off the McKnight Foundation and, according to the open letter, “help bring the Southern out of the financial mire in which it has been sinking for the past decade. It will give the new board of directors, collaborating with staff, the time needed to put a sustainable operating model in place.” Among other things, that model will include funding for development, “a position sorely lacking in the last few years.”
The April 30 deadline coincides with the Southern’s seventh annual benefit gala. As of now, none of the theater’s future events — which are booked through August — has been canceled. If the theater is able to raise enough money to stay open, Peterson said he wants the way the Southern is run to change.
“The Southern has never been properly capitalized, nor has it ever had a workable business model that makes financial sense,” he said. “What needs to happen for the Southern to keep going is that we’ve got to pay off our payables and (secure) a source of reliable resources. We know what will happen if we don’t make the effort. We are in this to win it, and we’re giving it everything we’ve got.”
Ross Raihala can be reached at 651-228-5553.
