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54 n e w h a v e n B I Z | J u n e / J u l y 2 0 2 0 | n e w h a v e n b i z . c o m By Frank Rizzo Do-or-Die Time for LWT COVID crisis compounds, but also clarifies, Long Wharf eatre financial crisis A R T S & C U LT U R E I n early March, New Haven's Tony Award-honored Long Wharf eater confronted the biggest crisis in the organization's 56-year history. "Basically, our survival is on the line," said the theater's artistic director, Jacob G. Padrón, at the time. Padrón began his tenure at the New Haven theater just last year. "We are in a really, really risky place," said managing director Kit Ingui. "We are at a moment where, if we don't make a shi and change something, then we are faced with the question; How much longer can the theater go on?" With a decade-long string of deficits — some in the $1 million range, $3 million in accumulated debt, declining attendance and an endowment that was about half of what it was at its high-water mark — the storied not-for- profit theater faced a do-or-die dilemma. Come up with a plan and resources to right and sustain the theater — or bring down the curtain for good. Just as the theater was about to go public with a $5.5 million "Stabilization Initiative" — in which it had already raised $2.3 million — the coronavirus pandemic put the brakes on performances, necessitated slicing the staff and scrambled its new plans for survival. "e fundraising for the stabilization plan is not in the forefront now," says Laura Pappano, LWT's board chair. "What we're doing is what many organizations across the country are doing, which is grappling with their immediate needs." e new survival strategy is two-fold: reaching out to donors and cutting costs. e theater cancelled its two final shows of the 2019-20 season. Staffing was cut from 47 full-time and 18 part-time employees to 26 full-time and four part-time positions, including seasonal staff. e permanent loss was seven full-time and one part-time employees. "We still need to kick into gear and continue the Sustainability Initiative at some point down the line but we're looking at our immediate future right now," says Ingui. "We are projecting a $750,000 change in our income potential [because of the pandemic]." Part of the loss is offset by the staffing cuts and by not producing the two spring shows. June's annual fundraising gala — now an online event — is also expected to bring in a six-figure assist. As for help beyond the local level, Ingui says it's too early to tell what emergency funding from state and federal sources will be delivered. "Assuming the gala is successful, we should be able to hit the $750,000 mark and make it to the [close of the] fiscal year June 30," she says. "We will still end with a deficit as anticipated in early March, but it would not be significantly worse than what we forecast [then]." Systemic Problems Before the pandemic, the theater had loy hopes the new stabilization plan would set it on a more secure financial footing. "We've had some real systemic operational challenges for a number of years," says Padrón. e theater's $3 million in accumulated debt was mostly covered with a line of credit. But more threatening were the seemingly never-ending deficits — including last year's $1 million in red ink, followed by another projected for this fiscal year. Long Wharf 's previous deficits were managed with withdrawals from the theater's endowment and support from donors. But the endowment piggy bank is closed. At its height five years ago the endowment stood at $17 million compared to its present total of $9 million. Now, "e majority of what is le [in the endowment] is restricted," says Ingui. Last year an outside consultant assessed the theater's financial needs and offered options to get its finances in better shape. at's when the "Sustainability Initiative" — with the goal of raising $5.5 million over two years — was born. e plan included revitalizing marketing, updating the website, strengthening audience development, stimulating artistic innovation and undertaking a number of capital improvements, such as new seating and other audience amenities for Stage II. e plan would also include building a $1.5 million working capital reserve. "at reserve would protect ourselves from having to borrow against ourselves and it would be replenished each year," explains Continued on page 56 P H O T O / T. C H A R L E S E R I C K S O N Jeremy Clapp and Calvin Leon Smith in Ricardo Pérez González's On the Grounds of Belonging, the first production of the 2019-20 LWT season that aborted its last two offerings.

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