Proctors' other acts

Despite some leaner years, its reach continues to expand

By Lauren Stanforth

Updated 8:48 pm, Saturday, December 14, 2013
  

SCHENECTADY — Since renovations were completed at Proctors in 2007, the historic performance space has been credited with almost single-handedly resurrecting the Electric City's once derelict downtown streets.

And as restaurants and other new businesses have popped up around the theater on State Street, so too has Proctors extended its reach into new ventures — from building a heating and cooling plant that serves other customers downtown, to taking over Schenectady County's three cable access channels, to running ticket sales for Capital Repertory Theater in Albany.

In many ways, it appears the nonprofit is amassing a small empire that has bought and sold buildings, and, in the past 10 years, increased its CEO's salary 89 percent while doubling its staff, which includes two elected officials.

Such growth has been supported by its healthy roster of shows, with ticket sales for events increasing 73.5 percent between 2008 and 2012 to $14.7 million, according to financial audits reviewed by the Times Union. Still, there are years in which the theater loses money.

Despite last year's surplus of $2.9 million, Proctors expects to end 2013 with about a $400,000 operating deficit, CEO Philip Morris said. In addition to the theater's independent audits, which are filed with the state, Morris also provided the Times Union a breakdown of the theater's revenues and expenses from the last three years. He said Proctors' profits ride a roller coaster that takes its cues from the economy and how the community responds to what is put on stage.

But that hasn't stopped Proctors from expanding its portfolio. In 2010, Proctors bought the former KeyBank two doors down from the theater and sold the catering rights for the venue to local restaurateur Angelo Mazzone. Proctors gets 12 percent of the revenue from any Mazzone event held at Key Hall, in what amounts to about $375,000 a year. After maintenance costs, the theater makes about $150,000 on the deal, Morris said. But Morris, whose annual salary is $198,000, said such ventures are not as much about bringing in cash as they are about spreading the "Proctors" name.

"Major performing arts facilities around the country are expensive to operate. One of the biggest concerns is that when people think about the arts, they think of the arts like 'It's not for me,'" Morris said. "Our agenda was to take the word relevance and make it real. We want to be relevant."

Despite the theater's growth in total assets from $24 million pre-renovation to $41 million last year, Proctors has had to find ways to pay off the bank loans connected to the $42 million renovation. It also has had an expanding footprint, including its acquisition and renovation of the old Carl Co. department store, which was transformed into the GE Theatre at Proctors.

Another venture involved a complicated business deal in which Proctors created an LLC called PTR Redevelopment and got an $8 million investment from Sherwin-Williams Inc. to help fund the renovation. In exchange, the paint company received a portion of the federal historic tax credits on the property. PTR eventually bought out Sherwin-Williams, and now Proctors gets the tax credits that bring in a little more than $1 million annually for the next three years. Morris said that money is earmarked to pay off loans associated with the power plant.

Proctors also uses $200,000 it gets yearly from Schenectady County's hotel/motel tax to make payments on its renovation loans.

The list of where Proctors receives other revenues is long.


In 2005, when Proctors' main stage was being renovated, the theater decided to build its own heating and cooling plant, under the name Marquee Power, next to its main building to reduce energy costs. The plant sells heating and cooling services to the nearby Hampton Inn, Center City and the new Transfinder Corp. building, netting about $150,000 in revenue a year. The state also just announced a gift of $2.9 million to expand the plant's services to seven other downtown buildings.

Time Warner pays Proctors another $120,000 a year in franchise fees to run Schenectady County's public access channels. One of the studios is in a former retail space that fronts State Street.

The theater is also the only entertainment venue out of 55 New York counties and regions that receives "I Love New York" grant money — $40,000 worth — to promote county tourism. Morris said the Time Warner and state tourism money is eaten up by the costs of running those programs.

Proctors also sold a historic building at 440 State St. to Transfinder for $600,000. The software company claimed the stone-facade building, which was previously the International Order of Odd Fellows Hall, couldn't be saved and tore it down in favor of new construction. But Proctors had to turn around and give $150,000 back to the state because it had previously received that money as a Heritage Area grant to preserve the Hall.

Doug Levine, executive director of the State Theatre of Ithaca, said his renovated historic theater is following suit by attempting to diversify finances, including renting out part of its office space to a charter school. "(Proctors) is more than just a theater. They keep acquiring buildings, which is great. They generate their own power and sell it as well which is pretty remarkable," Levine said. "The biggest challenge is getting money in from things other than the shows."

About 14 percent of Proctors' roughly $21 million yearly budget is also made up of donations, made either through corporations or by individual donors.

The theater's aggressive expansion of its business portfolio — which has been done in tandem with expanding staff about from 35 to 72 — has occurred with few critics, and been buoyed by civic and government leaders who have worked hard to see the theater succeed.

Those supporters include built-in cheerleaders in Schenectady's county and city government sectors. Former Schenectady Mayor Karen B. Johnson has worked for Proctors for 20 years and is a county legislator; Leesa Perazzo is a Proctors group sales manager and City Council member; and former city budget director Ismat Alam is now Proctors' chief financial officer.

City Councilman Vincent Riggi, the lone non-Democrat on the council, said that Proctors' growing staff has the appearance of a "Democratic patronage mill."

Morris responded: "Number one, I have never, never been called by an elected official in a partisan way," Morris said. "Number two, we don't have the room to have anyone less than competent."

Johnson, who began working at Proctors in 1993, within a year of leaving the mayor's office, is the theater's manager of gift planning and was elected to the County Legislature in 2000. She said she abstains from votes that involve money that goes to the theater, including the $200,000 from hotel taxes.

"I was a small piece of (Proctors' success) from the beginning — and so were many other people," Johnson said. "I think it's unusual for there to be so much unity around one institution."

As for what's next for Proctors, the only contiguous property the theater does not own is the Parker Inn hotel, which has had financial troubles through the years.

Morris shakes his head when asked if the theater would want to purchase it and use it to house touring groups for its shows. Morris said he's not sure the theater should be in the hotel business.


http://www.timesunion.com/default/article/Proctors-other-acts-5065268.php

Hurrah! We did it! They are waking up at last! Taxpayer money getting thrown down a black hole in a city with so many problems, it was just sinful. The party may be coming to a close. How in his right mind gave so much power to an unelected non-resident with NO qualifications, while roads weren't being plowed, sewers weren't being fixed, and people were LOSING THEIR HOMES?
BTW, an elected official abstaining from votes on money to Proctor's isn't good enough, especially with the all crony system we have.
That tourism crap, that was grabbed as a cover, a desperate excuse to keep on keepin' on. We have enough layers to handle that already. That historianguy was getting into that, before he lost his job, wasn't he?
This does not mean that we can't continue to have a theater that shows Broadway, just because the sun may be setting on this destructive empire.

I put the following up as a response to the TU article:

While Proctors and it's downtown corridor thrives, the rest of the city is falling apart...
There's Neighborhoods that look like war zones, playgrounds that serve as drug stores, swimming pools that the city can't afford to open, bridges they can't afford to repair, and the ever increasing tax burden on homeowners which causes them to flee the city. sometimes abandoning their homes. All the while, Proctors and other Metroplex business spawn pay next to nothing in taxes and are allowed to flaunt their "arts" tax exemption by selling heating and sanitation services to other businesses

The only entities that benefit from the Proctors corridor are the businesses themselves, whose owners and board members have fled residency in the city for the most part, and the mostly out-of town patrons, who go back to their safe residences miles away after visiting the corridor.

This is all under the watch of a city administration that know's all well how bad things are in the city outside of the corridor, but don't seem to care.

That sums it up.

I hear that proctors is having a hard time paying it's bills.

They don't have room for anyone less than competent... at what? That is a non-answer. How's that burglary that may- or- may- not- have- happened investigation coming along?
If you apply for grants for historic preservation, and then don't use the money for that purpose, how many times can you get away with that before someone realizes you used a grant program as a loan?

Another venture involved a complicated business deal in which Proctors created an LLC called PTR Redevelopment and got an $8 million investment from Sherwin-Williams Inc. to help fund the renovation. In exchange, the paint company received a portion of the federal historic tax credits on the property. PTR eventually bought out Sherwin-Williams, and now Proctors gets the tax credits that bring in a little more than $1 million annually for the next three years. Morris said that money is earmarked to pay off loans associated with the power plant.


I have brain fog today, can someone explain this paragraph to me.


Non profit my a**.

Quoted from bumblethru

I hear that proctors is having a hard time paying it's bills.

You would too with those salaries. If not for the power plant and the County Hotel Tax they would fold. Morris is the highest paid nonprofit CEO in Upstate NY. With "legislator" Karen Johnson and Mayor in waiting Leesa P don't look for any changes. They will bankrupt the COUNTY to keep this flim flam going.

Supporting those salaries in a money-losing NFP is the sole reason for all the flim flammery. It's hiding in plain sight.

Quoted from Madam X

Supporting those salaries in a money-losing NFP is the sole reason for all the flim flammery. It's hiding in plain sight.

It sounds more logical that there are kick backs to the council in exchange for making homeowners pay all the taxes of the wealthy.

But the city can't even do a snow emergency

Tax dollar for Proctors, NOT a necessity
No tax dollars for a snow emergency - IS a necessity

Tax dollars for fancy lighting on Erie Blvd - NOT a necessity
No tax dollars available for repaving (of Erie north of the RR bridge) - which IS a necessity

City homeowners pay higher taxes to cover the tax bills of the wealthy political cronies of the city/co/plex dem leaders
No tax dollars available to do a citywide reassessment which IS a necessity

I don't know how BS got away with that "can't afford a snow emergency" crap he pulled. It does not have to be a declared "snow emergency" to enforce the existing parking regulations posted on our streets, using personnel who are on duty anyway. BS pulled a number out of his posterior, a ridiculous cost, as an excuse for not doing his job. Guess what? The cost of towing is born by the tow company, and they have your car to see that you pay up. Also, the tickets have to be paid as well, which really should cover the cost of any extra personnel doing the ticketing. But here we have a completely imaginary number held up as the reason we don't have effective snow removal.
Notice, on another thread, the contempt shown for a city resident who dares to suggest that a highly paid city official should provide service equal to that of the county where many other highly paid city officials live.
We can have decent snow removal in the city, because snow removal is not rocket science, it is humanly possible, we just need a particular human to get off his butt and see that it gets done.