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Arts Groups Reeling From Downturn After Attack

November 18, 2001

By ROBIN POGREBIN




Confronted by the plunge in tourism, a decline in
charitable contributions and anticipated cuts in the city's
cultural budget that are expected to be announced this
week, New York City's 2,000 arts institutions are facing
the gravest economic period since the fiscal crisis of the
1970's.

The effects, large and small, are already being felt across
the city. The Guggenheim Museum and the Joseph Papp Public
Theater have each announced layoffs of 20 percent of their
staffs: about 80 people at the Guggenheim and 20 at the
Papp. The American Museum of the Moving Image in Queens
raised $50,000 less than expected at its recent fall fund-
raiser. A donor rescinded a $500,000 commitment to the
Staten Island Botanical Garden, citing the economic effects
of the Sept. 11 attacks.

"You have a combination of too many factors too fast," said
Norma P. Munn, chairwoman of the New York City Arts
Coalition, a citywide arts advocacy group. "It is that
sequence of events that is becoming crippling."

The city's cultural landscape has certainly been bleak
before; the recession of the early 1990's brought harsh
budget cuts that forced some institutions to cut back on
hours or programs. But now, the fallout from the terrorist
attacks, combined with an already faltering economy, has
left the city's $13 billion culture industry with a
trepidation that has been unleavened by a few bright spots,
like the rebound on Broadway over the last month that many
producers fear will be hard to sustain.

A survey of more than 150 of the city's arts organizations,
which is to be released tomorrow, offers confirmation of
the industry's worst fears.

The study, conducted over the last two months by the Center
for an Urban Future, a nonpartisan policy institute that
focuses on economic issues, concluded that "nonprofit arts
organizations are entering their rockiest period in over 30
years." It urged Mayor-elect Michael R. Bloomberg to make
the arts a focus of the city's rebuilding effort.

Of the cultural groups surveyed, every one had suffered or
expected substantial economic losses, and most had raised
significantly less money than anticipated since Sept. 11.
Half reported that they had seen major donations withdrawn
or postponed. Also, the study said, about 2,000 school
trips to arts organizations have been canceled since Sept.
11, significantly reducing revenue.

The study estimated that the average arts organization
could expect a 15 percent loss in revenue this year and
warned that worse might come. Even organizations that get
substantial government funds still rely on private
contributions for 30 to 70 percent of their budgets. And
while the groups have continued to receive their foundation
grants and corporate gifts this year, the study says, the
value of stock portfolios is down at many foundations.
Darcy Hector, program officer of the Robert Sterling Clark
Foundation, is quoted in the report as predicting that his
and other foundations "are looking at reduced payouts next
year."

Every arts organization surveyed that had a budget of more
than $5 million reported donations canceled or postponed
because of Sept. 11.

In addition, every arts organization that has held a
fund-raising event since the terrorist attacks has brought
in significantly less money than anticipated. Most groups
that plan to hold such an event before the end of the year
have reduced their expectations, the report says.

Campaigns for new or refurbished buildings, which were
proliferating just last year, "have all but ground to a
halt," the study reports.

Among the largest plans that are doggedly moving ahead are
the proposed redevelopment of Lincoln Center, at a cost of
more than $1 billion, and the $650 million expansion of the
Museum of Modern Art.

There is some encouraging news. While the New York Hall of
Science in Queens at first expected to earn $55,000 less
than the originally estimated $500,000 at its annual
benefit on Nov. 29, it is now predicting proceeds of at
least $25,000 more than its goal. "I think people are
realizing contributions mean more now than they did in
normal times," said Alan J. Friedman, the hall's director.

Still, while Broadway ticket sales have rebounded
somewhat, only 15 percent of theatergoers this fall have
bought their tickets at least one month in advance,
according to the League of American Theaters and Producers,
compared with 45 percent last fall. And producers are
bracing for the winter, which is a tough season even in
good times.

"I think it's going to be hard for a lot of long-running
shows like `Cabaret' or `Phantom of the Opera' or `Beauty
and the Beast' to make it through, and it's scary," said
Todd Haimes, artistic director of the Roundabout Theater
Company, which produced "Cabaret." "If you take 20 percent
away from that period," Mr. Haimes added, "you're talking
about considerable losses."

There have already been considerable losses. Ms. Munn, the
arts coalition's chairwoman, estimated that the city's arts
groups lost $23 million between Sept. 11 and Sept. 30
alone. NYC & Company, the convention and visitors bureau,
estimates that the city lost $357 million in tourism and
$66 million in tax revenue from Sept. 11 to Nov. 4.

Arts organizations are somewhat prepared for cuts to the
city's cultural budget. In October, Mayor Rudolph W.
Giuliani asked almost every city agency to look for cuts of
15 percent and imposed a hiring freeze.

The city's Department of Cultural Affairs, which has a
budget of $137 million, has submitted to the Office of
Management and Budget its proposals for apportioning those
cuts, which amount to slightly more than $20 million. The
budget office is expected to make recommendations on the
cuts this week.

Sounding glum, Schuyler G. Chapin, the city's commissioner
of cultural affairs, said he was unsure how the cuts would
be made. "The only thing we do vaguely know is probably
before Thanksgiving, we will have our instructions about
what to do," he said. "At the moment, we're sitting on our
hands and crossing our fingers like everybody else."

But Peter F. Vallone, the City Council speaker, was not
hopeful. He said the budget office had long treated "the
culturals" as a drain on the economy rather than a boon to
it. Culture "is not an expense, as the Office of Management
and Budget has made it out to be," he said.

For several large institutions, the losses will probably be
in the millions. At the Metropolitan Museum of Art, where
visitors are down 25 to 30 percent, a 15 percent cut from
the city would mean a loss of $3.5 million in expected
funds. The museum is already losing $100,000 to $200,000 a
week in revenue from admissions, restaurant and shop sales
and garage use. (The museum's garage has been closed for
security reasons, a significant budget hit in itself.)

Because half of the Met's visitors are tourists, the
financial blow has been devastating. "More than just an
economic downturn like we saw in the early 90's is the
combination of that on top of reduced tourism," said Emily
K. Rafferty, the museum's senior vice president for
external affairs. "What we don't know is how long term this
is going to be."

Arts groups downtown are still suffering the most, and many
of them have lost crucial income from canceled rental
agreements. The Flea Theater in TriBeCa, for example, which
typically operates at 90 percent capacity, was operating at
5 percent in the first few weeks after Sept. 11 and has
only recently begun to climb back to 20 percent.

Theaters are offering discounts and conducting e-mail
marketing campaigns. Several downtown theaters and
businesses have organized as Downtown NYC! to try to
promote themselves jointly. "We're saying downtown is not
dangerous," said Barbara Ligeti, an independent producer
who is part of the effort. "We're saying: `It's hip and
happening. It may smell bad some days, but it's not hard to
get to.' "

Ms. Ligeti is a producer of "Havana Is Waiting," which
opened on Oct. 27 at the Cherry Lane Theater in the West
Village and is already planning to close despite strong
reviews because it cannot survive in the current climate.

The New York Foundation for the Arts, which offers grants
and services to artists and organizations, has raised about
$800,000 for local arts groups and artists by using grants
pooled from local and national foundations through an
effort it is calling the New York Arts Recovery Fund.

The convention and visitors bureau has started a discount
package called Paint the Town Red, White and Blue, which
includes a hotel stay, a Broadway show and dining, cultural
and sightseeing options and parking discounts.

But "if we see a further diminution of income," Ms. Munn
predicted, referring to groups that have experienced
extreme difficulties and laid off staff, "then January,
February, March, we will see closures."

An additional problem is that many of the groups have
already spent funds that they anticipated receiving from
the city but that will probably never arrive. The
Shakespeare Project, for example, which performs
Shakespeare free across the city, mostly during the summer,
expected to get $38,000 from the city treasury this year
and now wonders if it will see any of it, even though it
has already spent the money.

Arts groups have also had to contend with a 10 percent cut
in the state cultural budget in August and the elimination
of state line-item grants that State Assembly members and
senators make to groups in their districts. The Staten
Island Children's Museum, for example, will lose a
line-item grant worth $90,000 this year - a lot for an
institution with a $1.5 million budget.

Of the arts groups surveyed by the Center for an Urban
Future, every one had instituted a hiring freeze and
prepared a contingency plan for work reductions, salary
reductions or layoffs. Arnold L. Lehman, the director of
the Brooklyn Museum of Art, where attendance is down 30
percent and which expects to see its revenues drop $1.5
million over the fiscal year that began in July, said his
institution had reduced the salaries of its higher-paid
employees retroactive to July 1 in anticipation of the 15
percent cut from the city.

If there is any cause for hope, it is that New York's
cultural institutions are being rescued largely by New
Yorkers. According to the theater league, Broadway ticket
buyers are increasingly local residents; for the last two
weeks, 52 percent were from the city and its suburbs, up
from 39 percent a year ago.

And some organizations that do not rely heavily on
tourists, like the Jamaica Center for Arts and Learning in
Queens, the Queens Zoo, the Staten Island Botanical Garden
and the borough libraries, have actually seen increases in
attendance, possibly because New Yorkers themselves are
staying closer to home.

http://www.nytimes.com/2001/11/18/nyregion/18MUSE.html?ex=1007108802&ei=1&en=557a36ef60d9f20a



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