It could be curtains for Bluewater Summer Playhouse after this season

Unless the Bluewater Summer Playhouse board can come up with the money to pay its rent arrears, this could be its final season.

Jennifer Webb and Marilyn Clarke of the professional theatre board came to Kincardine council May 17, asking for loan forgiveness of $10,000, and a three-year payment plan for the remaining $5,000 in rent arrears. That would make the organization eligible for a Community Investment Grant to pay its yearly rent of $3,069 for use of the auditorium and an office at the Kincardine Arts Centre.

The Bluewater Playhouse began in the 1990s and performed in the Kincardine Pavilion for the first two seasons. This year is its 24^th season.

While it draws people to the area and is a tourist attraction, revenue hasn't met the rising cost of putting on professional theatre, said Webb. Ticket sales average about $70,000 per summer, there is a $6,000 grant for the summer student, the administrator volunteers during the year and takes a small salary during the busy summer months, and membership drives and sponsorships bring in about $26,000.

Meanwhile, it costs about $160,000 per season for the salaries for the artistic director, technical director, stage managers, actors, lighting director, and royalties for plays, as well as additional production costs.

At that meeting, council called for a staff report which was presented last night (June 14), in committee-of-the-whole, by treasurer Roxana Baumann.

She explained that the Bluewater Summer Playhouse is one of five tenants in the arts centre, with each paying an annual rent:
 

• Bluewater Playhouse, $3,069
• Victoria Park Gallery, $3,598
• Kincardine Theatre Guild, $6,716
• Kincardine Scottish Festival, $3,598
• Grey-Bruce Woodturners' Guild, $720

Baumann said the revenue comes to $15,665 which helps off-set the annual operating costs of $84,000 to run the arts centre.

As of May 31, 2017, the outstanding rent for Bluewater Playhouse is $15,472, said Baumann, with the last payment of $1,000 made in March. Prior to that, the last payment was $1,500 in May, 2013. With outstanding rent arrears, the organization is not eligible for a community grant.

“If standard municipal policies were applied in this case, the account for the Bluewater Summer Playhouse would have been transferred to a collection agency years ago, and the agreement would have been terminated,” said Baumann. “Instead, staff has been sending regular monthly statements to Bluewater Playhouse to make it aware of the balance owing.”

With no action being taken on the account, staff approached the mayor to see how this could be resolved. Bluewater Playhouse then made its presentation May 17.

Baumann offered five options to deal with the rent arrears:
 

• Forgiveness of accounts receivable which was not recommended by staff because all other tenants have been regularly paying rent to the municipality.
• Run the theatre as a municipal corporation through the tourism budget which means all revenue and expenses would have to flow through the municipality directly and become part of the budget process.
• Sustainable funding similar to the three festivals – Kincardine Scottish Festival, Lighthouse Blues Festival, and Kincardine Summer Music Festival - which receive $3,000 each annually. Staff did not recommend this option as it undermines the community grants policy and processes.
• Payment Plan of $750/month over three years, or $550/month over five years.
• Terminate the lease agreement.

The Kincardine arts, culture and heritage committee urged the municipality to request five years of financial statements from Bluewater Playhouse to see if there are opportunities to ensure the theatre can continue to operate.

The staff recommendation was a payment plan for Bluewater Summer Playhouse to repay all its rent arrears including future and past-due amounts.

Deputy mayor Jacqueline Faubert said the municipality has two roles, as a supporter of arts, culture and heritage, and as the landlord of the arts centre. She said council should consider the professional theatre as a good tenant that has fallen on tough times.

“I hoped we could come up with something easier for them to pay,” she said, “and then find a way to move forward and make them sustainable. After that, if they can't make it, then fine.”

“This isn't their first time as good tenants who have fallen into arrears,” replied councillor Laura Haight. “Did we not deal with an arrears problem before?”

“Yes,” said Baumann.

Haight said that the discussion at the arts, culture and heritage committee meeting, was that even if the municipality waived the arrears and charged no rent, the Bluewater Playhouse still has expenses exceeding revenue. “Have we seen their financial statements? Can we even consider sustainability?”

Baumann said she received statements for the past five years, and there is a negative cash balance.

Haight said that in 2010, in order to cover some of the debt, the municipality purchased theatre tickets, to the tune of about 200 for the season.

Faubert suggested a gentler repayment plan, perhaps over 10 years.

“The interest is still accumulating at five-per-cent per year,” said Baumann.

“I would not agree to any plan longer than five years,” said councillor Maureen Couture, “but I would agree to no interest on the debt for the rest of this year.”

“I want to remind council that the space used by the Bluewater Playhouse, and the relationship with the other tenants, we won't be able to rent it out the same way as we do now,” said Faubert.

“So, what if we go with a gentler repayment solution, but they go into arrears again?” asked Haight. “I'm telling you that if we waived the $15,000 and the rent was at zero, it's not going to make any difference. The rent is the last bill that gets paid.”

Councillor Linda McKee said the arts, culture and heritage committee would like to have seen what the present expenses and revenue are.

“The hard decisions have to be made,” she said, “If taxpayers want to see the theatre continue, then they have to buy tickets to the shows.”

Mayor Anne Eadie said if council goes with the five-year plan and no rent is paid, what is the cut-off date?

“We should allow them to get through this season, so to the end of August or September,” said McKee.

“There are other options to consider, such as do they need to rent it all year or just for the summer?” said Eadie.

Committee-of-the-whole agreed to go with the five-year payment plan, with no interest to the end of 2017, and the first monthly payment due Sept. 1.

That recommendation will come to council at its meeting June 21.

“And after Sept. 1, what if they default?” asked Baumann.

“Businesses can budget,” said councillor Andrew White. “Even if they bring in all the money during the summer, they can budget for monthly payments. If they are behind after two months, we can terminate the agreement.”

The treasurer will draw up new rental agreements for all the tenants of the arts centre.