Performing Arts

Aging Bass Hall is expensive to maintain. No one knows that better than its four resident companies

The Nancy Lee and Perry R. Bass Performance Hall opened in 1998 in downtown Fort Worth
The Nancy Lee and Perry R. Bass Performance Hall opened in 1998 in downtown Fort Worth Star-Telegram archives

Bass Hall is looking for a few more angels.

For the past few years, Performing Arts Fort Worth, which runs the downtown performance hall, has been quietly raising millions of dollars as part of an endowment campaign that will help cover the hall’s annual operating costs.

“We want to continue to ensure that the facility is world-class,” said Dione Kennedy, chief executive of Performing Arts Fort Worth. “The endowment campaign, hopefully, will take the place of what we would be raising in an annual fund campaign.”

When the nonprofit group was formed 25 years ago, PAFW pledged not to conduct annual fundraising campaigns so it wouldn’t compete with its four resident companies for donation dollars. But in order to help keep its lights on, PAFW in recent years has raised rents and changed its ticket surcharge from a smaller, flat rate to 10 percent of the resident companies’ ticket sales. For the resident companies — Fort Worth Symphony Orchestra, Fort Worth Opera, Texas Ballet Theater and The Cliburn — the increased costs hit their budgets at the same time the organizations were starting to recover from the economic recession.

“You look at Bass Hall as a performance hall; it is rated as one of the best halls in the world, but it is expensive to reside there,” said FWSO President Amy Adkins.

When the orchestra musicians went on strike for three months last fall, canceled concerts hurt the hall’s finances. Kennedy estimates the hall lost $300,000 in revenues from lost rent, ticket surcharges, bar services and gift shop sales. “It has an effect whenever a resident company can’t perform,” Kennedy said, noting that it was too late to find replacement shows for the hall when the symphony began canceling concerts during the strike.

However, the hall’s finances appear strong, as it has seen increased contributions from $1.3 million in the 2012-2013 season to $13.8 million in the 2015-2016 season, according to the latest tax filings made by PAFW. Most of that increase is for the endowment campaign, Kennedy said.

And while the resident companies would like to see their rent go down after the endowment campaign, their leaders say they realize the hall needs to be maintained to stay a world-class venue.

“At the end of the day, what is good for Bass Hall will be good for us, too,” said Texas Ballet Theater executive director Vanessa Logan. “It’s our home.”

Back in the black

Although the economic recession ended in 2009, the operating losses for Bass Hall did not.

According to its tax filings, PAFW had a deficit of $3.7 million in the 2009-2010 season and continued to report deficits between $2 and $3 million a year through the 2012-2013 season.

Starting in the 2013-2014 season, the hall was back in the black as it boosted revenues from its programs to almost $10 million that year. Revenues have continued to grow as PAFW has improved its gift shop and concessions offerings and has brought more profitable shows into the hall as part of its Broadway at the Bass series, Kennedy said. (PAFW is a presenting company that brings in touring Broadway shows and other kinds of entertainment, independent of the performances that its resident companies present.)

“If we’re not fairly confident that a show will break even, we won’t do it,” Kennedy said. “People like to see what’s coming out of New York as soon as they can see it and we’re trying to get shows here as soon as we can.”

And that includes the mega-hit “Hamilton,” which Kennedy says PAFW is still working on bringing to Fort Worth. (Dallas Summer Musicals will get it in the 2018-19 season). In the meantime, recent Broadway hits like “The Waitress,” “Finding Neverland” and “School of Rock” are slated for the PAFW’s 2017-2018 season.

Also helping to stabilize its finances were rent increases and the change to its ticket surcharge for its resident companies. In 2010, the ticket surcharge, which had been a flat $3 per ticket, was converted to a 10 percent charge on all tickets.

PAFW also raised its per-day rent for the first time in 10 years. Resident companies had paid a rate of $3,000 to use the hall Thursdays through Sundays and $1,250 for Mondays through Wednesdays. That daily rate became a flat fee of $3,250 in 2010 and has now been raised to $4,200 for the 2016-2017 season, a 30 percent jump for the resident companies.

As its revenues have grown, so have PAFW’s expenses. In the 2012-2013 season, total expenses were $13.8 million. For the 2015-2016 season, expenses have grown to $17.3 million. The nonprofit employs 38 full-time employees.

“Over the past 10 years, we’ve had some deficits and some surpluses,” Kennedy said. “We are now at a balanced position from an operating standpoint.”

A complicated relationship

For its resident companies, the rent increases and ticket charges were a hefty price to pay after years of stable costs to use Bass Hall.

“As the largest resident company, it affects us more. We have 80 days in the hall and it adds up very quickly,” Adkins said, adding that the FWSO spends about 5 percent of its budget, or about $600,000, each season to rent Bass Hall.

In addition to the rental fee, resident companies are also charged for various production items, such as sound systems or extra security that might be needed during a performance.

But even with these additional fees, Kennedy said, resident companies pay just half of what it costs to actually operate the hall on the day of a performance.

Subsidies for resident companies, whether through reduced rents or lower maintenance costs, are typical across the performing arts industry, said Steven Wolff, principal at AMS Planning and Research Corp., a firm that tracks costs in the industry.

“You can count on one hand in the U.S. where the typical performing arts hall user is paying 100 percent of the cost of using the hall,” Wolff said.

Usually, the cost of renting a hall is less than 10 percent of a resident company’s budget, Wolff said. It’s the costs associated with putting on an actual performance that can vary widely for groups, he said.

Cliburn chief executive Jacques Marquis, who is preparing for the quadrennial international piano competition at Bass Hall next month, said when the ticket surcharge changed from a flat $3 to 10 percent, it increased the competition’s fees by one-third between the 2009 and 2013 competitions.

“We always complain about a raise [in rent and ticket fees], but at some point they have to survive and we have to survive, too,” Marquis said.

This season, the Cliburn moved all but one of its regular-series concerts to smaller venues, including the 250-seat Piano Pavilion at the Kimbell Art Museum. In a story last May, Marquis told the Star-Telegram that filling Bass Hall’s 2,200 seats had become tough, but that the decision to move concerts had more to do with acoustics and intimacy. “When you think of Chopin music, it was music for a salon and small crowds. The Bass is a wonderful hall but a little bit big for us,” he said at the time.

Leaders of three of the resident companies (Fort Worth Opera officials declined requests for interviews for this story) said PAFW keeps them informed of major maintenance projects and possible budget issues in quarterly meetings. They maintain they have a great relationship with the hall operator and appreciate the excellent performance space Bass Hall provides for the local arts groups.

“If we were, for instance, to go to Will Rogers [Auditorium], it would be much less expensive, but the quality would be miniscule compared to the quality we can deliver to our audiences at Bass Hall,” Adkins said.

A necessary endowment

When Bass Hall opened in 1998, the hall had a $5 million endowment fund for capital maintenance. That fund has grown to over $10 million, but PAFW has drawn on it more than it would like for major projects such as replacing the hall’s roof and maintaining large cooling tanks for its heating and cooling systems, Kennedy said.

“We’ve been spending $1 million to $1.5 million over capital maintenance over the last few years because we had come into that 15- to 20-year time period and there were major things that needed to be done,” Kennedy said, noting that PAFW has been drawing 5 percent of its capital maintenance endowment every year for these projects.

With the new endowment fund for operating expenses, Kennedy said she hopes the hall will be able to keep costs low for resident companies while saving money to survive the next economic downturn.

It also can be used to add electronic menus to the bar areas and digital poster boxes outside of the hall. The endowment, however, will not be used to lower rental rates for the resident companies.

“Right now, it’s looking like we will hit somewhere between $35 [million] to $38 million from that campaign,” Kennedy said.

In 2015-2016, PAFW’s contributions grew to $13.8 million, up from $4.75 million the year before, as it attracted more money for the endowment campaign.

Nationally, individual philanthropy grew immediately after the recession to help arts groups replace lost funding from the government and corporate sectors, Wolff said. And in the past five years, performance halls have seen revenues from shows and donations grow annually between 3 and 5 percent.

But for resident companies, the hall’s endowment campaign has made it more challenging to raise money for their own endowments.

The FWSO delayed its endowment campaign because it knew it would be targeting the same set of donors, Adkins said. Its endowment plans were revealed last fall during contract negotiations with the musicians, and to date, the symphony has raised $4 (million) to $5 million to add to its existing endowment.

Despite competing for donations from the same pool, the resident companies say they support the hall’s efforts to create its own operating endowment. The Cliburn’s Marquis said he prefers an endowment campaign to a yearly campaign for the hall to cover its operating costs.

“It will lower the rent raise every year and it can also improve the technical aspects of the facility,” Marquis said. “At the end of the day, that will help us to put on a better performance.”

The endowment campaign also will help keep Bass Hall in shape for future Fort Worth generations to enjoy.

“Its design is like some of the great European opera houses,” Kennedy said. “It is classic and will last forever as long as it’s maintained properly. I think it will last for generations.”

Andrea Ahles: 817-390-7631, @Sky_Talk