When a theater has a long and rich history the likes of the venerable 85-year old Loew’s Theatre in Jersey City, it holds a nostalgic place in the hearts and minds of its patrons. Billed as one of the most lavish movie palaces of its day and architecturally appointed in a Baroque/Rococo style, it’s hard to believe that in 1986 it faced potential demolition by the City. And while that might have brought the curtain down for the last time, it was actually the commencement of a long love affair between the theater and its preservationists, a small group of activists known as the Friends of the Loew’s (FOL).
To Profit or Not to Profit. . . is That the Question?
After a brief and contentious ownership by developers Hartz Mountain who proposed the ‘wrecking ball’ option, the Loew’s has been owned by the City and operated by the FOL for the last three decades. And it’s at that crossroads of interests, that opposing views emerged between the grassroots’ volunteers and the government’s city officials.
This is not a new dynamic. The push-pull struggle between non-profit and for-profit operators in the Arts is one that’s been played out in thousands of cities across the country for hundreds of years. For the Loew’s, it’s evolved over the course of a half-dozen mayoral contests, from Anthony Cucci to Steve Fulop. On one end of the perspective, there’s a passionate belief by the volunteers that the theater needs to be a venue that balances local talent, educational workshops, after-school arts programs and community events with traveling regional and national tour groups.
From the other camp, the City administration feels this venue needs to be restored and managed by one of the world’s well-known concert promoters. This newer approach would transition the Loew’s from a regional to a national house featuring top world touring and headlining entertainment.
FOL’s executive director, Colin Egan and FOL president Patricia Giordan in a recent posting to the FOL’s website, has rebuffed this approach indicating, “this will not give Jersey City the kind of rounded, cultural institution that cities like Red Bank, Cleveland, Atlanta, and Schenectady, all have, and which Jersey City deserves.”
It is Egan’s fear that with a for-profit company take-over, the Loew’s will be converted into a “pop-concert palace,” as opposed to a multidimensional, nonprofit arts center.”
RFP Process Sets the Stage for Heightened Drama
From Egan’s perspective, his fears were justified when Mayor Steven Fulop and the Jersey City Redevelopment Agency issued an Request for Proposal (RFP) and accepted four bids from music venue and theatrical companies to assume the responsibilities of restoring and managing the Loews.
If the rationale behind the Mayor’s RFP rollout is to elevate the Loew’s to another level of professionalism, certainly reaching out to world-class firms such as AEG Live and Live Nation makes sense, since they are two of the largest music venue management companies in existence today.
As far as the other two bids, Catch Holdings LLC and its “Catch A Rising Star Comedy Clubs” has a impressive roster of alumni including Robin Williams, Billy Crystal and Jerry Seinfeld, while ACE Theatrical Group has had previous restoration experience in restoring the Loew’s Kings Theatre in Brooklyn.
All four bids appear to exhibit merits on both the performance and restoration side of the equation – and there’s no doubt, they will be able to drive additional and much-needed revenues to the operation.
FOL, on the other hand is a non-profit and operates with a different set of business guidelines. “By definition, non-profits are created to pursue goals that are not measured simply by profit and loss,” states Egan.
Having said this, Egan did address the issue of managing the operation as a business generator: “FOL’s operation over the years has averaged a net income surplus to the point where we have a reserve of over $100,000.”
He was also transparent when pushed for specific profit and loss numbers and admitted the theater incurred a loss in 2012. That year, revenues ended up at $214,000, with $250,000 in expenses. In clarifying the loss, Egan noted this deficit was not really a cash loss, but ‘depreciation,’ an accounting factor that has to be taken considering the declining value of the theatre’s antiquated equipment.
Nonetheless, these results are not a glowing recommendation to keep FOL at the helm, versus contracting with firms who have proven track records of bringing in millions at similar type venues.
Speaking on behalf of the mayor, Jennifer Morrill, press secretary to the Mayor differs in opinion from Egan and states that the “FOL has not demonstrated an ability to maintain financial independence, which is a strict requirement of the future facility manager.” To substantiate her point, she contends that Egan’s and Giordan’s salaries affected the Theatre’s bottom line adversely. “FOL increased total salaries from $50,192 in 2011 to $90,000 in 2012 (79% increase), resulting in a net operating loss,” says Morrill.
While it might have appeared like a sizable increase in wages, in actuality, Giordan didn’t start taking a salary until 2007, and Egan took his first paycheck in December, 2012. “We had both volunteered for years before that – but Patty and I simply ran out of personal reserves that had allowed us to work full time without pay,” noted Egan. “Our salaries have always been $45,000, no benefits,” he added.
Steven Fulop at Rock for the Park Fundraiser in 2013 at the Loew’s Theater
The Lease of Their Problems
At first blush, the City’s RFP approach might appear to be the best fiscal decision. However, this is not a simple black-and-white issue that justifies a case for the money-makers versus the community-shakers. It’s more of a Catch 22 of cross-purposes, as it comes to what’s best for the City and the theater’s loyal patrons.
At the crux of these divergent points of view sits a lease. Originally signed in 2004, this ten-year old legal document is a bone of contention between the two parties, partially based on one mayor signing it (Jeremiah Healy) and another (Steve Fulop) needing to abide (or not) by it. “Mayor Healy was one of the authors of the lease… yet, after he became mayor, when some members of his administration tried to say the lease was not valid because the City didn’t have a record of the final version… Healy did not intervene,” says Egan.
From there, the administration’s avoidance behavior subsequently unfolded like a ‘Rube Goldberg’ chain reaction. While the historic landmark was in dire need of a renovation, more crucial was its obligation to address the critical safety and building code repairs desperately needed for the physical building to be brought up to standard. “Yet during that time, the City failed to apply to the State to allocate money from the City’s Urban Enterprise Zone account (earmarked for these repairs),” noted Egan, which led to Healy admitting in a 2011 meeting, “that the City lost $12 million in un-allocated UEZ funding.”
Morill responds to this delay accusation that the state program had ended: “The NJ UEZ reimbursement program was terminated in 2011. Businesses in UEZ zones can still qualify for 3.5% sales tax, but the state is no longer providing reimbursements of UEZ zone sales tax revenue to the municipalities.”
Lawyering Up
So heated has this debate become, the feud has resorted to litigation. The FOL filed a lawsuit earlier this year claiming the Mayor’s decision to seek a third-party management firm to run the legendary Journal Square theater was in violation of the lease. In a 13-page lawsuit, FOL accuses the City of breaking its promise to assist the FOL in finding funding and specifically stood in the way when FOL sought grant monies to repair the aging theater’s air conditioning system.
As far as how that’s affected future business, Egan states, “it’s actually already had a negative impact on FOL’s ability to get certain customers into the theater.”
When questioning Morrill on the suit, while she responded that the “city does not comment on pending litigation,” she did indicate the future of the FOL was a question mark at this point in time. “We are still in the evaluation period for the responses to the RFP, and as a result we do not know exactly what the future involvement of FOL will be,” says Morrill.
Who’s on First?
This cause-and-effect unfolding of events did not stop there.
When Mayor Fulop assumed office, he essentially inherited this bureaucracy-laden issue. However, in his efforts to right some of the wrongs of the past, his decisions only seemed to create it’s own boondoggle.
For instance, when the FOL abided by a lease stipulation they were responsible for securing additional funding, they were successful in winning a $600K grant from the Hudson County Open Space Trust Fund. Earmarked for air conditioning, this major improvement would have allowed the FOL to pursue and book performance groups during the summer months, a period of time when the facility traditionally had lost revenue due to its inability to cool the venue adequately.
In the summer of 2013, because this work was still in a stalled position, the FOL had to ask the County for a grant extension. Fulop while at first delegating the initiative to his Division of Architecture, later, according to Egan reversed this position and informed the FOL, “He was refusing to allow the City’s Division of Architecture to proceed.”
Morrill indicates the Division of Architecture is not in a stalled position, and that “the City and FOL have been awarded two separate HCOSTF grants totaling $780K (and that) both grants have already received extensions prior to 2013 and no penalties have been issued to FOL or the City.”
She goes on further to justify the RFP process. “In order to maximize the potential for success with this project and to secure the largest amount of funding possible, the City is engaging in a fair, public, and open RFP process to solicit external groups to manage and restore the facility.”
In looking beyond the work accomplished by the FOL over the course of the last three decades, she reinforces the City’s current objective to obtain an equitable return on investment: “With this much money at stake we cannot play favorites to any particular group, especially if this project will be even partially taxpayer funded.”
By seeking outside bids to restore and manage the Loew’s, the FOL and others believe Fulop is forcing the FOL out of their oversight role. “Mayor Fulop gives FOL a back-handed compliment for our early work to save the Loew’s… but he goes on to spin a narrative that depicts FOL as an inept operation, having failed to do what we are supposed to do in running the Loew’s… he even says FOL is being selfish and acting against the public good,” asserts Egan.
According to Egan, “He [Mayor Fulop] should be asking how much FOL could accomplish with cooperation from the City – instead, he’s trying to use the limitations that the City’s has imposed in an attempt to justify abandoning the goal of creating a fully functional multi-faceted arts center … that’s ironic and wrong,” adds Egan.
The City responds to these allegations according to Morill by indicating they “owe FOL a debt of gratitude for valiantly saving the Loew’s Theatre from demolition and providing countless volunteer hours to its current state.”
Friends of Loew’s Volunteer Staff with Colin Egan (second from left) and Patricia Giordan (center)
Countless Volunteer Hours
Since Egan and Giordan are the only paid FOL members, the FOL has needed to maintain and manage a voluntary staff that ‘s helped with daily operations, maintenance and repairs. Over the course of the last 19 years, Egan notes that these folks contributed over a 122K man-hours. According to US Labor Bureau wage standards, had this staff been paid employees, it would have cost the theater over $2.2 million in pay – an expense the operation would never have been able to absorb and stay open for business.
Egan also underscores the additional value these volunteers brought to the table over the years. In place of financial ROI, he talks in terms of emotional ROI: “There is also a social value to all this volunteering — it helps keep the Loew’s connected more closely and directly to our community.”
In response to Morill pointing the finger at his and Patricia’s salaries affecting the bottom line adversely, Egan uses that point to support their volunteerism: “we do also debate whether the hours we put in, in excess of the typical 40-hours could be considered volunteer, since we’re technically not paid for them – and putting in at least 60-65 hours per week.”
Patrons Weigh in From Stage-Right and Stage-Left
Taking the temperature from New Jersey & New York theater goers, it appears that ‘Team Fulop’ and ‘Team FOL’ have their advocates and detractors.
Jersey City resident Tim Heck echoed this sentiment from one who supported Mr. Fulop’s runs for mayor: “I have seen them [FOL] build up the theater over the last 10+ years and have even volunteered myself a time or two. Mayor Fulop should know many of the people who supported him did so in the faith that JC would have more support for its local community and the people that live here, rather then fat cat developers and promoters.”
John Wierzbicki from Kendall Park, NJ thinks: “The Mayor’s plan to make the Loew’s Theatre a for-profit entity will make this venue an unaffordable and unrealistic outlet. You already have the Newark Performing Arts Center a PATH ride from Journal Square.”
Margret Cirone from Jersey City says, “I cannot begin to say what wonderful, amazing and selfless things the Friends of the Loew’s have done to this super old movie theater. You cannot put a price tag on their love, dedication and passion in reviving this building.”
From a financial perspective, Brooklyn resident Maria Mogavero was disheartened to learn of “Mayor Fulop’s unwillingness to trust the organization that worked with a bare-bones budget for so many years, yet has accomplished so much.”
Eliza Bennet commented on the WiredJC forum that she was more concerned about the process of the RFP and its goals, as was presented by the Mayor: “Why does the renovation have to be tied to the business side? She queries. “Shouldn’t the hiring out be done in two separate steps? Being able to run and book entertainment doesn’t mean you can successfully renovate and restore an old, beautiful movie palace.”
From the same forum, another poster with the handle, “Dark Moment” sees the FOL’s assertions that the Loew’s will be turned into a “pop-concert palace” as inaccurate. “Egan’s arguments are both a false dichotomy and straw-man’s arguments. There’s no exclusion from ANY type of programming, especially that which FOL has not been able to produce in the past.”
Frank M. almost sounding a bit like Donald Trump looked at the issue strictly from a business perspective posting: “Profitability, media exposure, career building, and the ability to defer responsibility to private corporations appear to weigh very heavily in these decision-making processes. And it’s not so much Mr. Fulop – it’s just the unstoppable reality of modern government. ‘It’s nothing personal, it’s just business,’ as they say.”
Curtain Up
The tensions and subsequent conflict that arise between the old and new can often be a frustrating one to witness and try to discern where our sympathies should lie. Nonetheless, that debate can be a healthy one if it steers the ship into calmer waters.
Assuming a more modern business approach doesn’t mean it’s necessarily the best option, particularly if you’re considering throwing the baby out with the bath water. Things survive in our theatre culture for a reason – generally because they have stood the test of time. The grass roots initiative that saved this theatre also provided the Mayor and the City with an opportunity to look at a landmark with fresh eyes.
With lawsuits pending, it does look however like the train has left the station and the RFPs will determine the fate of this beloved theatre. Hopefully, Fulop and the FOL will eventually see BOTH the merits and error of their ways and come to a collaborative and conciliatory meeting of the minds.
Perhaps instead of litigation, a mediation group could be initiated to allow for an airing of differences and a subsequent determination that might generate common ground. At minimum, while there’s been transparency in the issuing of the RFPs, hopefully the public will also be privy as to the actual decision-making pertaining the winning bid.
It’s incumbent upon the Mayor to be just as open and forthright regarding how the city will rate each proposal in determining the best outcome for one of Jersey City’s finest landmark treasures, while addressing the needs of all those passionate souls that put their blood, sweat and tears into striving for the best entertainment venue possible.
Photo of Steven Fulop by Mickey Mathis other photos courtesy Colin Egan
Additional Coverage:
Landmark Loew’s Theatre Faces Uncertain Future
Neighborhood Spotlight: Journal Square
Golden Door Film Festival Promises Glitz, Glamour, and Great Flicks
STAGEfest 2013 Delights Audiences
PHOTOS: Rock for the Park Concert at Loew’s
Wine Tasting Benefit and Sally Kellerman of ‘MASH’ at Loew’s Theatre
Volunteer Expo at Loew’s Theatre Matching Nonprofits with Helpers
