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SALT LAKE CITY — COVID-19 delivered a blow to thousands of theaters across the country, including Eccles Theater, which was near the end of a run of "Dear Evan Hansen" as the initial pandemic shutdowns began in March 2020.
What started as a blackout of a few weeks ultimately lasted much, much longer. The theater didn't return to full capacity performances until August 2021, leaving Salt Lake County and Salt Lake City officials worried about what that would mean for the financial stability of the facility that turns six years old this month.
"In 2020, there were a lot of questions about exactly how long it would take us to recover," said Matt Castillo, the director of Salt Lake County Arts and Culture, a county division that operates the venue and similar theaters in and around downtown Salt Lake City.
However, Castillo reported to Salt Lake City officials Tuesday that the theater is already back on track largely thanks to a federal grant and "creative solutions" that are helping the theater produce earnings again.
"It's a huge relief given the possible scenarios we were looking at early on (in 2021)," he added.
Tuesday's presentation was the first Eccles Theater financial and programming update in "a few years," according to Danny Walz, the chief operating officer of the Salt Lake City Redevelopment Agency. The county and city originally planned for annual updates before the pandemic made that difficult, as the theater is owned by a mixture of Salt Lake City, the Redevelopment Agency of Salt Lake City and Salt Lake County.
Eccles Theater's recovery
Eccles Theater has three key budgets that account for the theater itself, surrounding facilities and programming, its executives say. The Eccles Theater building hauled in nearly $4.4 million in net income after receiving a $4.1 million Shuttered Venue Operating Grant from the Small Business Administration.
Staff also got creative without the benefit of a maximum audience for live performances, hosting regional presentations, television show filmings, and turning the theater lobby into its own music venue during Salt Lake City's Open Streets program in the summer. Angela Vanderwell, the general manager of Eccles Theater, sought after "new and emerging artists" to play at the theater or its surrounding venues when plays weren't touring.
One of these programs was "Salt Lake Speaks and Beats," which brought local poets and musicians to the venue.
"This was a huge success both in 2021 and 2022, especially our Salt Lake Speaks poetry slam which was just a real hit with the community," she said.
All of these tactics helped propel the theater's revenue up to almost $7.7 million, well ahead of the $3.3 million in expenses last year. Most of this excess money went toward refilling a pair of reserve spending accounts used in 2020, the only year so far that the theater hasn't produced a profit to date, Castillo explained.
A little more than $1.6 million was left over to be distributed to the three owners. In other words, it helped stabilize the financial future of the theater within two years of the pandemic shutdowns.
This year appears to be strong even without a federal grant. The county division reports it had almost a $1.6 million surplus by the end of August, which is ahead of where it expected to be. Of that total, $745,000 would be distributed to the theater's three owners. Castillo is also optimistic about the theater's fall schedule, highlighted by "The Lion King" which wraps up later this month.
"(We) expect to end the year strong with revenue ... so we anticipate to have a healthy net income by the end of the year to distribute to the owners," he said, adding that another "strong year" is expected with the 2023 budget, which currently forecasts a profit of over a half million dollars.
Other facilities around the theater weren't as lucky. The surrounding venues like the Regent Street Black Box Theater or McCarthy Plaza, which are included in the second major budget, ended up with a $440,000 deficit in 2021 and are on pace for a $265,000 deficit this year, according to the division.
While these venues receive financial support from the owners of the Eccles Theater, these deficits weren't severe enough to require any additional funding, Castillo noted.
The programming budget — the last of the three key financial documents — wound up with a surplus of about $46,000 last year and remains on track for a gain of $18,000 this year. Vanderwell, touting the success of Salt Lake Speaks and Beats, said she hopes to expand programming opportunities in 2023.
She adds that the theater will continue to provide "broad and diverse" programming in the future to fans of Broadway and to those who haven't stepped into a performance theater before. The division will also look to add more local artist events while offering programs to help educate students that want a career in the performing arts.
A tweak in an original agreement
Meanwhile, Salt Lake City is looking to approve small amendments to its agreements with Salt Lake County and the Utah Performing Arts Center Agency. One measure would amend "property, casualty and general liability insurance, risk management and claims administration obtained through the County" and "treat all associated costs and claims as an operating expense."
The other will make Salt Lake County's risk management team the "sole provider" for any operations and property damage claims.
While neither sound as thrilling as any of the theater programming, the measure has the potential to "generate significant savings for the parties," according to a memo written by Walz and Salt Lake City attorney Allison Parks.
Walz explained that the Utah Performing Arts Center Agency had held its own insurance policy after the first agreement was made in 2013. But the switch would save money by essentially keeping all of the risk work in-house, which makes sense because the county and city hold all the bond and debt service liabilities tied to the venue.
"It makes more sense since we have a vested interested as the entities to then also provide the insurance for the asset," he said, adding that the original agreement was made before the theater was built and this adjustment streamlines the process now that it's in use.
The memo notes that the Utah Performing Arts Center Agency board of directors already approved the change in July. The Salt Lake City Council is tentatively slated to vote on the measure next week. It will then be up to the Salt Lake County Council to sign off on the measure before the amendment is ratified.