BEVERLY — The North Shore Music Theatre announced yesterday that it has closed for good due to insurmountable financial problems, marking the end for one of the area's leading cultural institutions.
The theater, which opened in 1955, is buried under $10 million in debt, considering bankruptcy and looking for a buyer, said David Fellows, chairman of the theater's board of trustees.
"It is heartbreaking," Fellows said. "But realistically, our debts are overwhelming."
The nonprofit theater's future has been in doubt since December, when officials made their financial woes public. They had hoped to reopen under a new business model that included a shorter season and partnerships with other theaters.
But Fellows said the theater secured commitments for only $500,000 in donations, well short of the $2 million it needed.
Fellows said he is hoping a "friendly buyer" will step forward and continue to operate the theater in some form. The theater and its property could be sold at a foreclosure auction, he said.
The shutdown will leave thousands of people who prepaid for 2009 tickets without a refund. Fellows said the vast majority of the estimated 4,400 subscribers are unlikely to get their money back because the theater must first pay off the banks that hold mortgages on the property and buildings.
Fellows said the theater's $10 million debt includes $5 million in mortgages owed to the banks and $5 million owed to subscribers, vendors and other creditors, including the state of Massachusetts.
The theater's assets are worth about $5 million, he said, "which means for subscribers, vendors and other people, there's very little likelihood there will be any money left at the end of the day."
People who have bought tickets since December will get their money back, he said, because that's when the theater started putting ticket money in an escrow account. That applies to about 5 percent of the 4,400 subscribers.
'Sad, really sad'
News of the closing was devastating to longtime theatergoers like Janet Guerette of Danvers. Guerette has been attending shows for 25 years, the last 17 as a season-ticket holder.
"What a shame," she said. "They were always great shows and you didn't have to drive into Boston. It's sad, really sad, how it got so deep in debt. Didn't anybody see it coming?"
Guerette said she stands to lose the $300 she paid for her 2009 season ticket in November.
"I feel bad, but a lot of people are not going to get their money back," she said. "We can't do anything about it. They're so deep in debt."
On Dunham Road in North Beverly, North Shore Music Theatre evolved from a small summer theater into one of the largest nonprofit professional theaters in New England. At its peak, the theater drew 350,000 people per year, and 100,000 children took part in its educational programs.
Former Executive Producer Jon Kimbell called yesterday's announcement "a devastating thing."
"We worked so hard, and it was such a wonderful organization for all those years," said Kimbell, who retired in 2007 after 25 years with the theater. "Things change, and certainly in the theater you look forward and not backward. That's what closing nights are all about. There's always another show."
Kimbell said the theater injected millions of dollars into the local economy every year through spending at restaurants, gas stations and other businesses.
Deepening financial losses
North Shore Music Theatre's money problems began in 2004, when the theater lost $2 million on a failed expansion plan. In 2005, a fire destroyed the interior of the theater and led to $3 million in lost ticket sales, only half of which was covered by insurance.
The theater was rebuilt, but with 420 fewer seats due to handicapped-accessibility requirements. That reduced the amount of money the theater could make on sold-out shows.
Those problems put the theater in a precarious position when the economy started to fail. The final blow came last winter when ticket sales to "High School Musical 2" fell far short of expectations. The theater had angered many longtime patrons by replacing its annual production of "A Christmas Carol" with the Disney show.
Fellows, who as a trustee does not get paid, loaned the theater $400,000 of his own money last year, money he now stands to lose in bankruptcy. He has also donated about $2 million to the theater since joining the board in 1999.
In April, theater officials announced a plan to cut costs by partnering with other theaters and running a shorter season. They revised their original fundraising goal from $4 million to $2 million.
Fellows said potential donors seemed enthused about the new business model but were reluctant to give money. He said most people will consider the theater's closing "a horrible shame, but it didn't seem to occur to them that they need to step up and help support the theater.
"Perhaps in some people's minds they were still afraid we'd get back into business and then go back out of business," he said.
North Shore Music Theatre is the third Massachusetts theater to close this year, joining Foothills Theatre in Worcester and Fiddlehead Theatre in Norwood, according to Jeffrey Poulos, executive director of StageSource, a Boston-area theater organization.
Poulos said North Shore's closing has "more of a national impact" on the theater industry because it was one of the few larger theaters that developed its own musicals.
"To lose that venue, it's a loss for the patrons and it's a loss for the artists performing, designing and directing the work," Poulos said. "It'll leave a big void."
Poulos said many other theaters in the state are thriving, however. He said many North Shore Music Theatre patrons will now go to the Stoneham Theatre. Stoneham Theatre sent out a press release yesterday offering North Shore Music Theatre subscribers one free ticket to its Friday night performances and discounts on season tickets.
North Shore Music Theatre has been operating with only three full-time employees since December. Those workers will soon lose their jobs, Fellows said. Executive Producer Barry Ivan, who has been working part time since December, will also lose his job.
"We'll have zero employees," Fellows said.
Staff writer Paul Leighton can be reached at 978-338-2675 or by e-mail at pleighton@salemnews.com.
Denver's Largest-Ever Drug Bust Nets Dozens
Marines: No Punishment for Nazi-like Flag
Vets Look to Translate Military Skills Into Jobs
Expert: Removing LA School's Staff 'Appropriate'
Raw Video: School Bus Burst Into Flames
LA School Reopens Amid Sex Abuse Scandal
$25B Settlement Reached Over Foreclosure Abuses
Pentagon: Allow Women Closer to Front Lines
Obama Gives Education Waivers to 10 States
Giffords Aide to Run for Her Seat
LA School in Sex Abuse Scandal Reopens
Winter Slamming North Asia, Parts of Europe
Syrian Forces Renew Bombardment of Homs
States, Banks Reach Foreclosure-abuse Settlement
Raw Video: Italy's Mount Etna Bursts Into Life
Greeks March; Angry Despite Debt Deal
Raw Video: U.S. Pullout Celebration
Raw Video: Annual Empire State Building Run-Up
Man Killed in Courthouse Shootout
Air Force Airlines: Leaders Get Polished Service
