Detroit: Orchestra Place to Help Revive City

[Allan]

A GRAND REVIVAL FOR DSO: Symphony helps renew city, remakes itself for new audience

September 22, 2003

BY MARK STRYKER

FREE PRESS STAFF WRITER

The Max M. Fisher Music Center will showcase populist entertainment and feature a 450-seat venue when it opens Oct. 11.

The Detroit Symphony Orchestra was so close to going out of business in 1991 that even some of its best friends privately wished for a mercy killing. The DSO carried a $9-million deficit on a $17-million budget. Meeting payroll was a daily cliff-hanger.

The DSO still played at Orchestra Hall, an acoustic miracle on Woodward Avenue, and new music director Neeme Jarvi was charisma in tails. But the orchestra remained destitute and isolated in a decaying urban neighborhood. Worse, few cared beyond a band of classical-music loyalists. The DSO had become irrelevant to the lives of most Detroiters.

Times change.

The $60-million Max M. Fisher Music Center, which opens Oct. 11, puts an exclamation point on what experts say is one of the most improbable turnarounds in the history of U.S. orchestras. The DSO pulled itself up by its financial bootstraps, rebuilt its neighborhood, forged innovative civic partnerships and reinvented itself as a model 21st-Century arts institution. The DSO has woven itself deep enough into the fabric of the city that nearly everyone has a stake in its future.

With the Max, as the DSO has dubbed the building, the DSO becomes a populist entertainment and educational hub that was once unimaginable. The DSO can now play Mahler at Orchestra Hall, while a second audience simultaneously snaps its fingers to bebop in a new 450-seat music box. Musicians can give master classes for students who will walk to the Max from a new performing arts high school next door.

"Orchestras are realizing that just sitting there and playing good concerts -- while that is the core of what you do -- is not enough," said Henry Fogel, president and chief executive officer of the American Symphony Orchestra League. "We have to find ways to relate to a broader community. The Detroit Symphony figured that out earlier than almost anyone."

The centerpiece

The key has been Orchestra Place, a sweeping, nearly $220-million urban renewal project that has created an arts, educational and commercial campus around Orchestra Hall. The DSO began buying land adjacent to its home in the mid-'90s, amassing 8 acres and erecting a $32-million office building and parking deck. The Detroit Medical Center signed on as the major tenant.

The DSO donated land to the city to build the $122.5-million Detroit High School for the Fine, Performing and Communication Arts. When the school opens in 2005, it will cement the most extensive relationship between a symphony and public high school anywhere in the country.

Then there is the Max, a 135,000-square-foot expansion of Orchestra Hall that includes the music box, education wing, four-story atrium lobby and new amenities -- roomy lobbies, elevators, coat checks, more rest rooms, concession areas, kitchen facilities, musician dressing rooms and lockers and two retail spaces for DSO merchandise.

Orchestra Hall has been outfitted with new seats and a new heating and cooling system. Nothing has been done to tamper with the legendary acoustics, but the creature comforts that symphony audiences -- and musicians -- in other cities take for granted finally become standard in Detroit.

"Our audiences have been incredibly loyal considering how we treat them," said DSO President Emil Kang. "Imagine what it means for us that we can now offer them a proper experience."

Other orchestras have created education, business and real estate alliances, but never on the scale of Orchestra Place. The scope of the project has galvanized donors, sparking 37 gifts of $1 million or more. Much of the money, including a critical $10-million donation from influential philanthropist Max Fisher, has come from parties less interested in classical music than in education or rebuilding Detroit.

With Orchestra Place as the hook, the DSO has raised $110.5 million of its $125-million goal. The money has paid construction costs, boosted the endowment fund to $56 million and, in 1999, allowed the DSO to finally eliminate its crippling deficit.

Goals revisited

The DSO's transformation transcends bricks and mortar and fund-raising success. External changes prompted a reassessment of artistic goals. Since launching Orchestra Place, outreach has become less a buzzword than a way of life.

This means, for example, that the DSO has greatly expanded its education programs, increasing the number of student orchestras from one to four, introducing a summer training institute and carving out space in the Max for the Pincus Education Center.

With the Max, the drive to diversify programs and attract new audiences shifts into a higher gear. The music box is the linchpin. Outfitted with removable seats, the space can be configured for chamber music, jazz in a cabaret setting, poetry slams, world music, hip-hop, dances and corporate events. The music box becomes a second front door, an entry for those uninterested in classical music or uncomfortable in a European-style concert hall.

While Orchestra Place has reversed the DSO's fortunes, the risks remain enormous. The DSO is mortgaged up to its piccolos, carrying about $76 million in long-term debt and bond commitments on the Max and the office building. Annual interest charges are expected to be about $3 million.

Being a landlord has its headaches. The Detroit Medical Center's ongoing financial troubles could put its lease at risk, forcing the DSO to find another tenant.

Managing the range of activities at the Max will be more complicated than running a traditional symphony. The pressure to keep the budget balanced will be enormous; the margin for error has been reduced to almost nothing. Future downturns in the economy could be devastating, because the DSO is counting on income from endowment investments to pay for the $54-million bond that financed the Max.

"For an organization like ours, this is one heck of a bet in real estate," said Pam Ruthven, senior vice president for finance and development.

A turning point

By 1991, the DSO was drowning in red ink, the legacy of inept management, labor problems and sour economy. On the plus side, a new leadership team of Executive Director Mark Volpe and board chairman Al Glancy had regained the confidence of the business community and the musicians, and Jarvi was a hit with everybody.

The 20-year grassroots drive to save Orchestra Hall enabled the DSO to return to its historic home in 1989. Management launched a $40-million endowment campaign to stabilize finances, but it stalled at $20 million.

The people, ideas and circumstances that would lead to Orchestra Place coalesced in 1993. Volpe said he knew the best shot to re-energize the endowment campaign was to tie it to the renaissance of Detroit. Meanwhile, Peter Cummings, a real estate developer, joined the board. Cummings had moved to Detroit to work for his father-in-law, Max Fisher, one of the wealthiest men in America.

Urbane, savvy and a recent convert to classical music, Cummings became the primary architect of Orchestra Place. Cummings said he knew the DSO was interested in exploiting his connection to Fisher; that's the way the game is played. But when he was asked to approach Fisher for a gift, he remembers saying, "I don't think that's a good idea. Max doesn't like music."

But Cummings had also become smitten with Orchestra Hall and the DSO, and he began to apply his passion and imagination to the problems.

"One characteristic about developers is that they can dream," said Volpe, now managing director of the Boston Symphony.

Cummings made a map of the DSO's assets and saw that it already owned a large chunk of land around Orchestra Hall, including the vacant Winkelman's warehouse. He also saw that the DSO's future was tied to the viability of its neighborhood. And he saw an opportunity to create an oasis of culture.

Cummings and Volpe put together a modest proposal to spruce up Orchestra Hall with interior renovations, backstage facilities and landscaping. In June 1994, with then-Mayor Dennis Archer in tow for support, they met with Fisher to convince him the plan would be a boon for the city.

Fisher all but yawned.

"You're not thinking big enough," he told them.

"Max knew intuitively that to have an impact in Detroit, which was so devastated, the project needed a much larger critical mass," said Cummings. "It was really a result of his prodding, probing and pushing that we made it a larger undertaking."

The ideas came quickly: Why not tear down the Winkelman's warehouse and build an office building? Maybe the Detroit Medical Center needs office space? What if we donate land to the schools on the condition they build a performing arts high school?

Negotiations began. Volpe started attending school board meetings. Sam Frankel -- the Somerset Mall developer, who had given millions to save Orchestra Hall -- helped Cummings, still an outsider, get approval from the DSO board. Glancy, who was then chairman of the DSO and DMC boards, brokered a deal between the two.

The DMC was profitable and there was a legitimate need to consolidate offices, said Glancy. He also notes that the conflict-of-interest concerns that shadow the DMC today did not exist. "These were nonprofits and nobody was paid and it was all aboveboard," said Glancy. "But it could not have happened today."

A government oversight committee now bans the DMC from from entering into business relationships with companies affiliated with board members.

With deals in place with the DMC and Detroit schools, the DSO still needed to acquire at least nine mostly empty parcels of land -- an expensive proposition in most cities. The Chicago Symphony, for example, paid about $25 million for a tiny sliver in downtown Chicago in the 1990s. But Detroit's depressed real estate market enabled the DSO to pay $1.5 million for 13 plots, totalingabout 3 acres. The city sold the DSO the plot the Max stands on for $1.

Cummings kept Fisher in the loop, and in fall 1997, Fisher agreed to donate $5 million. (He has since doubled his contribution to $10 million.) DSO leaders say the support of the famously hard-to-impress Fisher was key to persuading other wealthy Detroiters to step up. "This is just part of the whole rebuilding of the city," a 91-year-old Fisher told the Free Press in 2000, when the building was named in his honor.

The benefits of the project became more pronounced after the office building opened in 1997 and tenants began paying rent. By borrowing $25 million to finance construction, the DSO reaped the same income this year -- $1 million after paying its mortgage -- as it would have by raising $20 million in endowment funds. (A 5-percent return is standard.) Real estate pros think this way every day; orchestras don't.

While the basic outline of Orchestra Place has remained constant, specifics changed to meet new priorities. DSO leaders also sweated out tense moments when the management crisis in the Detroit schools put the high school project on hold in the late '90s.

Outreach became the orchestra's mantra during the brief but influential tenure of Lou Spisto, who succeeded Volpe in 1998. Spisto spearheaded the blueprint specifics for the Max. Kang, who took over in 2000, has sharpened the artistic vision.

Given the sorry state the DSO found itself in a decade ago, the future looks remarkably bright.

"We were in a situation where some bold moves needed to be made, and even though we're doing things that are unconventional for an orchestra, we have momentum," said Cummings. "We're in that group of the 10 most viable orchestras in the country in one of the tougher cities to be viable in."

Contact MARK STRYKER at 313-222-6459 or [email protected].