By Matthew Green
Capital Playhouse can make a convincing case for being the best known and most beloved theater company in Olympia over the past 25 years.
In that time, more than 3,000 kids have performed in nearly 100 musicals, to the enjoyment of more than 250,000 audience members. In addition, the playhouse has presented dozens of shows by professional actors at the playhouse’s own theater, and yet more shows by students in many schools across Thurston County.
The founder and Artistic Director of Capital Playhouse, Jeff Kingsbury, has been equally beloved by the hordes of kids – and by their adoring parents who happily paid the tuition for their kids to be in those shows. Kingsbury, who directed and starred in many shows himself, was indisputably the best known actor in town. His fame even likely helped in his election to the Olympia City Council.
But just over one year ago, Capital Playhouse nearly collapsed. It was hundreds of thousands of dollars in debt, and insiders feared bankruptcy. Kingsbury took a leave and never returned, eventually cutting all formal ties with the playhouse earlier this year. Since then, a new managing director appointed by a mostly new board of directors has slashed the playhouse’s budget and changed its operations, even while maintaining and even expanding the performance schedule.
Earlier this summer, for the first time, board members opened up about exactly what happened, and where they hope Capital Playhouse will go from here.
This month, apparently in response, Kingsbury posted a 61-point chronicle of events at Capital Playhouse on his Facebook page, saying he wrote it because “So many people have asked what happened at the Playhouse. Many students have been kept in the dark and are unaware that I was fired.” [All statements from Kingsbury in this article are from this Facebook post. OP&L sent messages to Kingsbury via email and Facebook requesting an interview, but received no response.]
The story of Capital Playhouse both highlights the ability of Olympia to rally around a favorite institution, and illustrates important lessons for local theaters as well as other nonprofits in our community.
Capital Playhouse (originally called “Capital Playhouse Circa 24”) began in 1986. Kingsbury had been doing theater elsewhere, but returned to Olympia, where he grew up, to do a show and decided to stay. He raised enough money to buy out a struggling theater company, and established it as a nonprofit, with his mother and grandparents, among others, on the board.
That first year, they did a four-show season at the Capitol Theater, sharing space with the Olympia Film Society. Movies were shown on Monday nights, so the theater sets had to accommodate lowering the movie screen.
The first Kids At Play production, also in 1986, was Guys & Dolls, and the guiding principles for the program were set from the beginning: any kid could sign up, no auditions, no training required. “A kid can show up and be in a show,” says Ned Hayes, a boardmember and the board Secretary of Capital Playhouse. “The embrace of everybody, regardless of ability and regardless of training, is our hallmark. We try to draw out their best.”
Troy Fisher joined Capital Playhouse in 1988, later became the Musical Director, and is now the Acting Artist Director. “A lot of genius starts to come out” when kids start performing, he says.
“And some of them didn’t realize they had the talent,” adds Hayes.
“It’s kids theater, sure,” says Fisher, “but it’s quality theater for any age.”
In 1990, the playhouse stopped putting on regular shows and moved out of the Capitol Theater, but Kids At Play continued. “I think we performed in every high school auditorium in Thurston County,” says Fisher. They also added voice and dancing classes.
A few years later, they moved into their current space on 4th Avenue in downtown Olympia (across from the new city hall), and began growing even faster. They revived their non-kid productions, added a choir (Kids In Koncert) and other programs, and bought the building in 2003.
The good times would not last. As Hayes describes it, the playhouse’s expenses gradually outpaced its revenues. “Capital Playhouse rode the [financial] wave of the 1980s and 1990s” when there was lots of money, he says. But after the 1990s, “things got skinny.” Into the 2000s, the playhouse kept spending money to do more productions and add more staff, even as revenue – including ticket sales, tuition, donations, and grants – all dropped off. To make up the difference, Capital Playhouse took on debt.
“Most nonprofits ride a fine line to stay in the black,” says Fisher. However, the playhouse was consistently running deficits for a decade.
In its most recent newsletter to supporters, the playhouse presents a chart of its debt accumulation. Starting at about $35,000 in 2000, the annual deficit hit about $60,000 in 2004, and exceeded $20,000 every year until the total debt hit $350,000. In the 2010 fiscal year, loan servicing cost over $66,000, or about 8% of the $800,000 annual budget.
This debt was borrowed mainly from supporters of the playhouse, including relatives of Kingsbury. Kingsbury says his “immediate family… had [$]150,000.00 in loans to the Playhouse”.
The crisis hit in the summer of 2010. As Kingsbury describes it, after some unexpectedly poor fundraising events, “I call an emergency meeting of the board. We are going to have significant cash flow problems through the summer. I’m anticipating a loan from one or more board members to tide us over.”
One of those boardmembers was David Reynolds, the longest serving current boardmember (at five years) and now the board President. His own kids were in the program 20 years ago, and now his grandkids are in it.
Kingsbury says the board had approved a plan involving $250,000 in debt in 2009, and Reynolds acknowledges that. However, Reynolds says the board didn’t know the full extent of the playhouse’s debt until that emergency meeting. In their newsletter, the board says it was “misinformed about the Playhouse’s financial situation”.
First, there was about $90,000 owed to the IRS (this amount combined with the $250,000 above accounts for the “long-term” debt of $350,000 described in the newsletter). Reynolds says, “the IRS [debt] was a total surprise to the board… It was quite upsetting to the board members.”
Also, there was about $70,000 in “short-term” debt owed for rent, supplies, and other day-to-day operations. The landlord was demanding the back rent or else threatening eviction within 30 days. (A few years ago, to help offset some of their debt, the playhouse had re-sold the theater building; hence they were again paying rent.)
In addition, there was negative $45,000 in the checking account.
“That was a dark moment, finding that out,” says Reynolds. Hayes adds that, right then, the board thought they were going to go bankrupt.
In fact, they say they didn’t really learned the whole truth about the debt even then. “Just last Thursday, we discovered another vendor debt that hadn’t been paid,” says Reynolds.
At that emergency meeting, Kingsbury says, “The board panics (my assessment) and decides to do a nightly ‘ask’ from the stage. I discourage this, but they are resolved. … I cut the summer budget, while in progress, by nearly 40%. We need nearly [$]100,000.00 just to keep us even through the summer. … The ask raises about [$]57,000.00.” Along with funds from an emergency fundraising letters to supporters, “we are able to pay our bills for the summer and button up the season.”
Shortly thereafter, Kingsbury requested a medical leave from the playhouse. “I am exhausted, and owing to political issues in the community, feel paranoid and panic stricken when I am in public,” he says. (Kingsbury had been known in the community for much more than theater. He had served four years on the Olympia City Council, but lost a campaign for re-election in 2009. Then, also in the summer of 2010, he had been revealed as the wired informant who bought marijuana from Joe Hyer, leading to Hyer’s resignation from the city council. Hayes says that Kingsbury’s political activities never affected the playhouse.)
The board granted Kingsbury paid leave. After finishing a final production, he took a directing job in Iowa.
In his place, the board appointed a managing director, Joseph Vansyckle, a business consultant with experience at Microsoft and Amazon.com, who was also part of the cast in the first Kids At Play production in 1986. He was paid a bit, but mostly volunteered his time.
Capital Playhouse had never before had a managing director. Kingsbury, as Artistic Director, oversaw both the performances and the business operations. There was a business manager, who reported to Kingsbury.
Vansyckle’s task, as described in the newsletter, was “to restructure our operations and stop the financial bleeding.” He laid off four playhouse employees: the office manager, grant writer, costume designer, and choreographer. With the board, he started recruiting more board members who, said Hayes, “started wrapping our arms around” the fiscal problems.
The board is now managing operations directly during the summer, and aims to hire a managing director to oversee the 2011-12 season starting in September.
After the crisis, in Kingsbury’s words, the board “also want[ed] to go public in the press, which I am able to get them not to do. No one wants to be involved with a sinking ship, I tell them.”
Nonetheless, by that fall (still in Kingsbury’s words), “The board sends a press release to the Olympian, against my advice and wishes, and the paper ties the ill health of the Playhouse to my political choices…precisely what I told them would happen.”
Since then, boardmembers say, their emphasis has been on transparency. They met with the local media. Their Summer 2011 newsletter revealed their internal budget numbers for the first time. “Our patronage had never seen” the financial information before, says Hayes.
And a few weeks ago, they held an open session where any community member could come ask questions about the board. About 20 people attended and “we had some pointed questions that we were happy to field,” says Hayes. “We’re confident in addressing any questions from anyone in the community. We’re trying to shine the light of day on everything – shine the spotlight, so to speak.”
Hayes says Kingsbury was invited to attend that meeting, but declined.
Ultimately, Kingsbury never returned. He and the board negotiated his future role with the playhouse for several months. In a statement to theatergoers, the board wrote “We have offered Jeff the title of ‘Founder and Artistic Director Emeritus.’ This allows him to consult and advise us, direct shows in the summer for Kids At Play, and direct/perform shows here at Capital Playhouse and at other theaters.”
Kingsbury calls this “an advisory only position, with no one in charge.” He continues, “They [the board] encourage me to write a letter for inclusion in the program of The Secret Garden. I write a note for inclusion that outlines my transition and praises the new team.”
That note from Kingsbury reads, in part: “I have been thrilled and excited with the level of commitment that the Board of Directors has exhibited during the past 6 months. There are substantive changes that have been implemented, new initiatives are being explored, and great energy is in the building. The tide has turned financially, ensuring a legacy of exciting and quality theatre for our community for generations of students and patrons. … The Board has granted me the title of Founder and Artistic Director Emeritus, and I have accepted.”
Shortly thereafter, however, Kingsbury was out anyway. The boardmembers say he reneged on his acceptance. “Basically, he just stopped negotiating with us, and that’s why we parted ways with him,” says Reynolds. Kingsbury says, “I was fired. … The board president [sent] me a 2 line dismissal letter.”
The board of the Capital Playhouse also changed. In the summer of 2010, there were five boardmembers. Shortly after Kingsbury left, two resigned (Rhenda Strub and Craig Ottavelli, who also served with Kingsbury on the Olympia City Council). Seven new boardmembers have since joined; five of them are parents of current or past kids in Kids At Play productions, and one is the first Kids At Play alumni to serve on the board.
For the 2011 fiscal year, which ends September 30, Capital Playhouse has a budget of $652,000, down from $803,000 last year. Most of the reduction is in payroll (owing to the four layoffs) and production costs. Hayes says, for example, that the props master used to have assistants, but no longer does. The newsletter says “many staff made extraordinary sacrifices… including delaying or deferring many paychecks.” Also, loan servicing costs are down, a result of restructuring the playhouse’s debt. In addition to cutting the budget, the board and managing director instituted new accounting practices and controls.
The budget calls for raising $166,000 in donations from the community. So far, the playhouse have raised $144,000, with about one month left in the fiscal year. Hayes said they have also paid down much of the short term debt, including back rent, and some of the long term debt.
One big piece of potential debt remains unclear: the debt, if any, owed to Kingsbury. Kingsbury claims the playhouse owes him $115,000 for several loans he gave it over the years. (This amount is not included in any of debt amounts described above.)
The board acknowledges owing Kingsbury a couple of paychecks and owing money on loans from some of his relatives. But, Hayes says, “We have no documentation of any loan” from Kingsbury. Adds Reynolds, “If he thinks we owe him money, I’d like to see the receipts.”
“The art side of this place never faltered,” says Hayes. “The difficulty that the business side got into…” – he trails off – “…the two sides never connected. … We did not have a professional business manager to be the managing director. Jeff is an amazingly talented artist. He has given us great service. He is not a businessman.”
“It was quite a bit to ask” of Kingsbury to manage both the artistic and business sides of the playhouse, says Reynolds. “Jeff had too much to do. It eventually caught up with him and the theater.” Now they are “trying to separate out some of these functions” among several staff.
Meanwhile, the theater has actually increased the number of shows it performs. The 2011-12 season will include two non-musical productions, the first non-musicals by the playhouse in many years. “We’ve produced an entire season with new staff, and the level of quality hasn’t slipped one iota,” says Hayes. “We could have cut back. Instead we added.”
Some of the artistic decisions made by Kingsbury before his departure were changed, and he expresses his disagreement. Two of the 2010 shows were replaced, with Kingsbury calling each of the changes “a mistake”. Hayes points out that both were financially successful, completely or nearly selling out. Also, Kingsbury says “the new [Season in a Box] season includes non musicals…not part of the Playhouse mission.”
The boardmembers sharply disagree with the latter statement. The playhouse’s mission statement reads “Capital Playhouse uses music, theatre and dance to build self confidence, maturity, self discipline, responsibility and leadership for the arts in our community.” They point out that the mission makes performance the means toward an end, not an end in itself. Hayes proudly says, “It’s pretty obvious we’re fulfilling our mission if our graduates are running our program.”
“We have lots of people who go on to the performing arts,” says Fisher, the acting artistic director, but that’s not the whole point.
Hayes adds, “We have a lot of people who’ve been through our program who credit their success in business or in life to their experience here.”
The new Capital Playhouse board is pleased with how far they’ve come, and are now making plans for where to go. A majority of season ticket holders renewed, they incurred no new debt this year, and they started paying down their existing debt. “We’ve done more with less,” says Hayes. “We’ve cut back staff and added programs. We’ve cut back staff and added shows. We’ve cut back staff and raised the level of the art.”
The board especially wants to expand their Students on Stage program in local schools. With cutbacks in school funding for the arts, they hope to fill some of that gap. “This is our future,” Reynolds says. “We’re not sure how many schools we’re going to next year, but we determined to get in there” and get students involved in theater for the first time.
They also recently added “Cab 612,” by redecorating the lobby and turning it into a cabaret. Local performers sing cabaret songs, and the playhouse serves wine. It’s a way to bring life to the theater on an otherwise dark night, says Hayes, and the small cost was recouped in the first show.
Looking longer term, the board has big ideas. They want to increase their endowment, make Olympia a theater destination (“the Ashland of the north”), build a new shared community theater space, and take Capital Playhouse productions on the road regionally.
Reynolds, the board president, lays out their operational priorities. “Number 1, we’ll have financial sanity. We’re going to be much more business-like generally. We’re going to start to get along with other theaters better. We’re going to be more transparent. We’re going to look ahead to the next 25 years.”
Hayes says Capital Playhouse “has been sustained by a community that supports it,” including donors and patrons, as well as local theater professionals who have come back to help. “We’ve drawn on the community and they’ve come through.”
In particular, a lot of former kid actors have returned to help out. As an example, Hayes points to Heidi Fredericks, a Kids At Play alumnus who went on to study at the Royal Academy of Dramatic Art and do professional theater elsewhere. After returning to Olympia a few years ago, she had directed an occasional show for Capital Playhouse, but now is directing six shows this year.
In addition, three of the current staff are former students, and several other former students have served as musical directors over the summer.
When asked about lessons learned from the experience of Capital Playhouse, Hayes says, “The reason the community supports us is that we were fulfilling our mission. Don’t take your eyes off the ball. Fulfill your mission” and a community that supports that mission will be there when you hit difficulties. Also, “arts can’t thrive without a solid business plan supporting it. Turn to the people that you have, and ask their thoughts and wisdom. Tell people what’s happening; transparency will win you friends.”
The board members acknowledge that the last year has been difficult and unpleasant at times. However, seeing the audience reaction to a recent production of Grease, says Reynolds, “made everything I’ve ever done (at Capital Playhouse) worth it.”
watch a slide show prepared by the Capital Playhouse as part of their commitment to transparency
read the entirety of Jeff Kingsbury’s Facebook post
visit the Capital Playhouse website