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The curtain may rise to a shortfall

As fundraising for Costa Mesa's new concert hall lags, a question arises: Is $70 million a big deal?

April 09, 2006|Mike Boehm | Times Staff Writer

FIVE months from opening night, fundraising for the new Orange County Performing Arts Center symphony hall that architect Cesar Pelli has clad in waves of glass is $70 million short of its goal. Center leaders no longer expect to raise the money in time for the Sept. 15 debut, saying the anticipatory buildup and the hoopla of the celebration should boost a lagging campaign toward a happy conclusion.

Borrowing $180 million through a bond issue has ensured completion of the Renee and Henry Segerstrom Concert Hall, which backers predict will carry the Costa Mesa center toward its goal of being recognized nationally as a peer of such cultural fulcrums as New York's Lincoln Center and the Kennedy Center for the Performing Arts in Washington, D.C. But unless fresh donations pile up in time, leaders of the Orange County center face having to explain why the new jewel comes with a big mortgage attached -- and why an organization proud of never having run a deficit in its 20-year history could have to confront unprecedented financial challenges.

As things now stand, OCPAC will need to keep searching for huge sums to complete funding for the hall while also ramping up its annual fundraising from $8 million to $11 million to pay for operations. A consequence of expansion is higher ongoing costs, including interest payments on the construction bonds that would total $4.7 million a year at recent rates of about 2.6%.

"With a $70-million goal in six months, you're going to need people to come in with some pretty large gifts," said Vaughn Welty, head of the Southern California office of Brakeley Briscoe, a national fundraising consultant. "It's a pretty big chunk to me."

A long downswing in the $200-million campaign's fortunes began in 2002, after a blowup on the center's board led to the resignation of two leading donors, both high-tech billionaires. At that point, a funding drive begun with overwhelming optimism during 1999 had raised nearly half the money -- $96 million in donations and pledges. Only about $37 million has come in since, according to center officials. Two cases of embezzlement also have struck discordant notes in what OCPAC's leaders initially expected would be a triumphal march toward funding and building the hall. The second theft, uncovered last September, involved the disappearance of $1.85 million from bank deposits over five years -- the largest embezzlement in memory from an Orange County nonprofit.

Fundraising experts say shattered harmony on a board and insider thefts that jeopardize public confidence in an institution's financial stewardship are among the most serious blows a capital campaign can absorb. It could soon become apparent how well OCPAC has weathered those tests.

Center officials say they have done what's necessary to prevent more theft and maintain donors' confidence. They feel the repercussions from the board upheaval have faded -- and Henry Samueli, one of the major donors who resigned, says he has continued to support the campaign all along, occasionally helping to court new donors. The center's leadership remains confident that OCPAC, the leading arts organization in a county with a legendarily wealthy business upper crust, will raise the money in due time. They expect fundraising momentum to surge as prospective million-dollar donors leap to share in the excitement of O.C.'s biggest cultural happening since the 1986 opening of the center's existing venue, Segerstrom Hall. That original $73.3-million campaign reached its target by raising the equivalent of $16 million in today's currency in the five months before opening -- a closing kick that, if duplicated, would leave the current project about $55 million short.

"Orange County, in my experience, doesn't do very well in accepting anything but success," said John Forsyte, president of the Pacific Symphony, the new hall's leading tenant. He said he detects "a sense of movement, a closing rush, with some very large donors considering multimillion-dollar gifts, the kind that really begin to move the campaign. I remain very optimistic we're going to stride home in good shape."

While the center -- with an annual budget of about $40 million, well more than double that of any other arts organization in Orange County -- has struggled to land big donations, many other major arts-funding campaigns around the country have recovered from a post-Sept. 11 chill to ring up impressive totals. More than $1.5 billion has been raised for art museum and performing arts expansion in New York City alone since 1998. Initiatives for a new museum wing and a new performing arts center in Kansas City together have gleaned $334 million since 2003, two theater companies and two art museums in Minneapolis have aggregated nearly $345 million in donations since 2000, and the Nashville Symphony is within an eyelash of finishing a $140-million campaign, launched shortly after the Sept. 11 disaster, to fund a concert hall that will open six days before OCPAC's.

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