Kimmel Center's change in focus is paying off

In a series of incremental steps over the past few years, the Kimmel Center has changed its physical campus to reflect a revamping of its original mission.

Instead of a broad goal of importing the best in a wide spectrum of musical styles from around the world, the Kimmel has walked away from certain genres and carved out smaller performance areas to present others.

And rather than developing its prime public spaces - at a time when beer gardens, pop-up parks, and cafes are proliferating elsewhere in the city - the Kimmel has turned them over to paying patrons, rendering them considerably more exclusive.

The Hamilton Garden perch atop the Perelman Theater has been enclosed, no longer an informal stop for visitors, and is doing a brisk business in weddings and corporate events. The ground-floor gift shop is now Volvér, Jose Garces' restaurant-as-performance-art, where dinner can cost up to $175 (plus tax, wine, and compulsory 20 percent tip), and Champagne tops out at $925 (Dom Pérignon Rosé, 2000).

The Garces restaurant puts in motion an important gear in the Kimmel's larger revenue machine. To get Garces into the space, the arts center needed to renovate it, raising $3.5 million for construction - half of which came from the taxpayers of Pennsylvania through the Redevelopment Capital Assistance Program. Garces is also handling the catering for the Hamilton Garden, and, although the Kimmel gets only a small cut of the restaurant receipts, his presence attracts rental business, which in turn brings in more revenue for the Kimmel.

"One thing feeds the other," said Kimmel president Anne Ewers. "We get more rentals, they get more catering, and more activity in the building means more parking" in the Kimmel garage.

If the Kimmel is beefing up its revenue streams, it's all for a good cause, leaders say. Various changes have allowed it to adjust the ratio of money it earns to money it raises. At a time when competition for arts donations is fierce, the Kimmel is now earning 90 percent of its annual budget (from about 75 percent, which is where most arts centers are), leaving only 10 percent to raise from philanthropists.

This change comes as the result of reorganizations in 2010 and 2012. "Basically, that process led us to shifting out of everything with which we were losing money - things that we could not find enough interest for in terms of ticket revenue or direct funding," Ewers said. "We said 'Whatever we program has got to break even and ideally have a bit of a net return so we can direct that toward the needs of the resident companies.' "

Eliminated were visits from orchestras such as the Vienna Philharmonic and New York Philharmonic and recitalists such as Hilary Hahn and Renée Fleming - all costly to book - along with the innovative Fresh Ink series. "Anything from which we had no identified funding or ticket sales, we had to jettison," Ewers said.

At the same time these presentations were being dropped, rentals were boosted. In fiscal year 2014, rentals in spaces such as the roof-top Hamilton Garden (which, despite its name, has few plants anymore) increased 92 percent over 2012, before the space was outfitted with climate-control equipment and glass that can darken to block out sun. In addition, the Kimmel has developed joint ventures with commercial presenters, who book pop acts and non-arts events such as Buddy Valastro of the reality-TV show Cake Boss.

The more money it earns, the lower the rent for the Kimmel's resident companies, Ewers said.

She sees the elimination of classical imports from the Kimmel Center Presents series as benefitting the city's indigenous arts groups, and in particular the Kimmel's eight resident companies (which include the Philadelphia Orchestra, the Philadelphia Chamber Music Society, Opera Philadelphia, and Philadanco).

"We were losing $850,000 a year on Kimmel Center Presents, so it allows us to complement our resident companies, six of eight of which are classically focused. So it's so much better for us to do things that do not compete with them."

But the Kimmel has not dropped its presenting or curatorial function, Ewers said. Its 90-percent-earned figure applies only to money raised for annual operating expenses, and it continues to fund-raise for special projects such as the acoustical corrections in Verizon Hall, the Verizon organ series (which has just been refunded for another three years by the Wyncote Foundation and Frederick R. Haas), and renovations such as the $1.5 million remake that created a glassy new Spruce Street entrance to the downstairs Innovation Studio, where there is jazz, cabaret, flamenco, and smaller workshopped shows. Film has been added in the Perelman.

The Kimmel also flexes its own artistic muscle with the biennial Philadelphia International Festival of the Arts, happening next in 2015. Ewers says much of the support for that event comes from corporate marketing money that would not likely end up with any of the resident companies.

Also increasing, she said, are co-presentations with groups like the Philadelphia Chamber Music Society, which make it possible for PCMS to hold more of its concerts in the pricey Perelman Theater than would otherwise be possible.

While all of these changes have been occurring, the Kimmel has faced some unanticipated financial challenges. It now gets $1 million a year less from its main tenant, the Philadelphia Orchestra, as a result of negotiations that occurred during the orchestra's bankruptcy, Ewers said. At the same time, a stagehand strike resulted in "changes in work rules and increased rates" for those workers. That labor contract is up again this fall.

Still, she said, the Kimmel expects to balance its budget again this year.

The Kimmel's portfolio of spaces is actually larger than most people realize, including not just the 650-seat Perelman, 2,500-seat Verizon Hall, and smaller spaces in the main building, but also the 2,900-seat Academy of Music, the Academy Ballroom, and management responsibilities for the 1,688-seat Merriam Theater.

With the Philadelphia Theatre Company's Suzanne Roberts Theatre in foreclosure and up for sale, and the Prince Music Theater casting about for new leadership, would the Kimmel be interested in expanding its empire?

It might make sense for some smaller-draw shows, and their plight "breaks my heart" Ewers said. But for this, like all else, Ewers applies the Kimmel's prevailing criterion. "I just think from our standpoint the dollars don't make sense," she said.

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