SAS on Course to Take Over Alex Theatre

First published in the Oct. 2 print issue of the Glendale News Press.

The Alex Theatre appeared poised for a leadership change after the Glendale City Council voted narrowly this week to give SAS Entertainment exclusive negotiation rights for the venue’s management.
Assuming the forthcoming negotiations are successful, SAS would dislodge Glendale Arts from a role it has held since 2008, when the nonprofit was tasked with bringing the historic theater into contemporary use. The decision Tuesday afternoon moves the city past a conversation that became contentious in June when some officials made it clear they may want to move on from partnership with Glendale Arts.
“It’s time to do something different,” Councilman Vrej Agajanian said. “We have to go in a different direction to see what’s out there.”
SAS’ framework includes no management fee, but requests that the city fund $125,000 each year to cover utilities. It also asks for $4.5 million in capital improvements to the venue, which the city would manage, but plans to offset that significantly by charging a facilities upkeep fee on event tickets. Additionally, SAS is asking for $200,000 from the city to purchase some of the equipment acquired by Glendale Arts for use in the theater.
The proposed contract estimates a total city contribution of $6.75 million that could be reduced by as much as $5 million if SAS is able to recoup that amount from the ticket fees.
In comparison, Glendale Arts proposed a yearly management fee of $250,000 (but would cover utilities on its own), plus $1.5 million in capital improvements from the city, as well as using its nonprofit status to seek grants of as much as $3 million to fund other site improvements. Its proposed net city contribution was $4.5 million.
No council members considered a third proposal, advanced by General Admissions.
Mayor Paula Devine cast the deciding vote Tuesday, joining with Agajanian and Ara Najarian to try something new. In justifying her choice, she considered how youngsters are initially taught to operate within already established parameters by coloring pre-drawn images.
“When we colored, we were supposed to stay in the lines. But as leaders, I think we have to be more creative than that,” she said, “and I think that we have to try to take things in a new direction, beyond the limits of those lines. Progress is made by people who think outside the lines.”
Najarian opined that although he believed Glendale Arts was doing a good job, he continued to be dissatisfied that its annual management fee had risen even though the city made clear it wanted the theater to be self-sustaining.
“I think they’re tone deaf,” he said. “It was made absolutely clear to them that we wanted to reduce the city’s contribution, but in this process, they almost doubled what their management fee is going to be.”
Najarian also touched on others’ observations that Alex events underperformed in terms of crowd size and that high-profile acts did not take the stage there as often as desired.
“Clearly the Alex Theatre was not an exciting venue,” he said.
Added Devine: “If we want the theater to be sustainable and stable, then we have to bring people into the theater.”
Councilman Ardy Kassakhian continued his support for Glendale Arts and emphasized that he felt a locally based organization was a better fit for the nearly 100-year-old theater than a for-profit management company that is busy with other sites.
“I think that Glendale Arts has come a long way and has helped transform itself and the theater,” he said. “I don’t want to change course now and kick them while they’re down or make some decisions based on numbers potentially impacted by the COVID crisis and harm their ability to continue to bring quality acts to Glendale.”
Councilman Dan Brotman, who cast an “absolutely no” vote regarding SAS, cited a consultant report that heaped praise on Glendale Arts’ management as the basis for his support of the nonprofit.
“Had they come back and said, ‘We see problems,’ then I would be in the same place as council members Najarian and Agajanian in thinking that maybe a change is necessary, but they didn’t,” he said. “They said to us, ‘Glendale Arts has strong operational functions that have improved in recent years.’ They have ‘solid financial competency.’ They talked about their unusually low staff turnover, their good relations between management and the board.”
To that end, Brotman also cited that report in casting blame upon the city for the woes that his peers seemed to attribute to Glendale Arts, not least of which was keeping the organization on multiple five-year contracts instead of a typical 10.
“The consulting report was very specific in saying if we want a successful theater, we need to enter into a longer-term arrangement,” Brotman said. “They also said that the city and Glendale Arts would benefit from clearer measurements of success, and they noted that we have not been clear with Glendale Arts on what we want. To put any of these disappointments that we might have on them is just misplaced.”