The Bushnell is tuning up its finances with the hope of orchestrating a growth spurt that would make the nonprofit arts organization a major force in a downtown renaissance.
Leaders envision a number of new ventures, including for-profit businesses, playing a role in real estate development and operating an outdoor venue as part of an expanded Hartford performing arts campus.
After a decade of significant economic challenges that threatened the financial viability of the 83-year old performing arts center, The Bushnell President and CEO David Fay says he sees light at the end of the tunnel.
As corporate donations and box office receipts begin to show signs of life, The Bushnell is setting its sight on ambitious growth plans.
And there are signs that the market is receptive to Fay's outlook. The Bushnell recently refinanced $12.8 million in bonded debt through a private placement deal with RBS Citizens , which will save the performing arts center nearly $400,000 a year over the next decade.
The extra cash will help The Bushnell replenish its endowment and supply it with some much needed risk capital for expansion, Fay says.
"Over the last decade, we suffered from a roller coaster of economic circumstances, but as the economy begins to recover we've been trying to put our financial house in order so we can take advantage of that," Fay said in a recent interview. "We want to get out of hunker down mode and begin to move a number of initiatives forward."
Fay said last decade was one of the most challenging 10-year stretches for the performing arts center, which took root in Hartford during the Great Depression.
The September 11th terrorist attacks, declining revenue from Broadway shows, and the 2008 financial crisis, hit The Bushnell's bottom line in three separate swoops.
In the past four years, the performing arts center's $12 million endowment lost 40 percent of its value, and red ink stained the nonprofit's financial statements for several years forcing layoffs and cutbacks.
All this happened as The Bushnell opened its new $45 million Belding Theater in 2001.
To stay afloat, the nonprofit's management had to diversify and expand into several for-profit ventures. Those initiatives have been successful, Fay says, adding nearly $1 million in revenue. But the extra dollars were offset by box office and fundraising declines.
As theater attendance and corporate donations begin to creep up, Fay says it's time to think about the future.
Plans include a campaign to double fundraising levels over the next six years, expanding their management, programmatic and entertainment business in and beyond Hartford, and getting involved in real estate development.
In many ways, Fay says The Bushnell's growth will depend in part on an economic recovery in Hartford. And he is optimistic about the city's future fortunes, particularly with the proposed iQuilt project, which he sees as a game changer, and a consensus on the need for more downtown housing.
Adding 4,000 to 5,000 residents downtown, as many state and city officials say needs to happen, will help boost box office sales. Fay says he wants some of those apartment units built next door to The Bushnell to create a performing arts campus around the theater house.
He said The Bushnell already is eyeing a state-owned building on Clinton Street, which currently houses the Department of Health Laboratories. The building is expected to be vacant in the near future as the agency moves its offices to Rocky Hill.
Robert Patricelli, chairman of The Bushnell's board of trustees, said there are preliminary plans for a mixed use residential development that could involve the state demolishing that building and donating the land to a developer, who would turn the site into a high-rise condo development.
"We had some preliminary conversations with developers," Patricelli said.
Meanwhile, across the street from The Bushnell, Fay wants the parking lot at the intersection of Capitol Avenue and Clinton Street to be transformed into green space during nights and weekends for outdoor festivals, performances, and flea markets.
The space is a key component of the iQuilt project and would be called Connecticut Square and be managed by The Bushnell.
Fay said The Bushnell is interested in getting involved in real estate development deals, and could even partner with a developer or the state to get projects done.
That doesn't mean The Bushnell will be wagering millions of dollars on speculative projects. The Bushnell doesn't have that type of cash sitting in its war chest, but the nonprofit would be willing to provide a couple hundred thousand dollars to help with planning and schematics, Fay said.
Patricelli said partnering in real estate development could also open up new revenue sources for The Bushnell.
"We are never going to put The Bushnell at risk to do real estate development," Fay said. "But would we spend some money to put a plan together and get a developer in the game? Absolutely."
Real estate development, of course, is not a core competency of The Bushnell, and the top priority is expanding their management, entertainment and programming businesses and extending The Bushnell brand outside Hartford.
The Bushnell has begun to do that with some of its for-profit subsidiary companies, which were formed in the last five years to hedge against souring economic conditions. One of those is Bushnell Management Services, which has taken over management of the SummerWind Performing Arts Center in Windsor and East Hartford's Rentschler Field.
Fay said The Bushnell is eager to expand its management expertise to other parts of the state where The Bushnell doesn't have a presence. He said the nonprofit will make a strong push to manage the XL Center once the current lease on the stadium expires in 2013.
On the entertainment side, Michael Fresher, Bushnell's chief financial officer, said one goal is to open or manage a flat-floor venue somewhere in the state that would provide more of a club atmosphere to attract a younger demographic.
The Bushnell also has become a managing member in Elephant Eye Theatrical, a for-profit development and production company that creates new musicals for Broadway and other major venues. Elephant Eye was responsible for the The Addams Family production, which played on Broadway and ranked as one of the highest-grossing shows in 2010-2011.
But while Fay is bullish on the future of The Bushnell, he also remains cautious about its current financial position. According to its annual report, The Bushnell ended its 2010-2011 season with a net unaudited operating loss of $536,000.
The $12.8 million refinance deal with RBS Citizens will free up some extra cash and help rebuild The Bushnell's $12 million endowment, which helps pay operating costs and debt service.
Fay says the nonprofit isn't rolling in cash, which has made it difficult to expand or do any "risk taking" in recent years. Several significant capital investments have been put off for some time, including an estimated $650,000 to replace a 43-year-old boiler.
Fay says increased revenue from box office receipts and corporate donations and delivering on plan to double fundraising from individual donors from $1 million to $2 million in six years should help put the performing arts center on a firmer financial footing.
Fay has also been active at the State Capitol lobbying for more government funding. The Bushnell, which had $22.5 million in revenue during fiscal 2011, receives about $30,000 from government sources. Other comparable arts centers, Fay said, receive an average of $2.6 million from governments. "As we try to prepare ourselves for growth, having some help from the state would be monumental for us," Fay said.