Orchestra, in bankruptcy petition, seeks lower rent

In its bankruptcy petition, the Philadelphia Orchestra seeks to reach a new contract with its own musicians and to sever ties with Peter Nero and the Philly Pops. But the bankruptcy also sweeps into court a renegotiation of the orchestra's lease agreement with its landlord, the Kimmel Center.

Talks are ongoing, and a solution is expected to be filed with the court, subject to the approval of Judge Eric L. Frank, as part of the Philadelphia Orchestra Association's anticipated exit from bankruptcy by the end of the year.

What does the orchestra want?

Lower rent in Verizon Hall, it says, even though the current lease agreement, set to run through 2026, was the result of a lengthy negotiation lauded by both sides as fair and mutually beneficial upon its completion a decade ago.

Potentially back on the agenda is a merger of the orchestra and Kimmel. Both partial and complete consolidation have been researched and discussed periodically - and some departments were in fact blended - but merger conversations aren't the only option in current talks, orchestra leaders say.

"Can they be avoided? I don't know," said orchestra president Allison B. Vulgamore soon after the orchestra's April 16 bankruptcy filing. "We haven't started those conversations with the Kimmel, and they'll have to be what we continue to talk about. But they're fundamental. . . ."

"As I think about it, it's not about merger, but about what we need to accomplish," said orchestra board chairman Richard B. Worley. "We need to accomplish a better experience for the patron, whether it's in the lobby or the ticketing process."

Neither Kimmel leaders nor the lawyers they have retained in response to the orchestra's legal overture would comment on the status of talks.

For decades, a new concert hall was sought by the Philadelphia Orchestra as an acoustical antidote to the dry Academy of Music. When the orchestra's most recent fund-raising effort faltered in the 1990s, the project was reconfigured as a separate organization, headed by developer Willard G. Rouse 3d.

In the resulting deal, the orchestra became tenant rather than owner of the new venue. It retained title to the Academy of Music, but - in consideration of what Kimmel leaders say is a good deal on rent - the Academy was turned over to the Kimmel for lucrative Broadway shows and continued use by the Opera Company of Philadelphia and the Pennsylvania Ballet.

The Kimmel books those shows and keeps the revenue.

Now, a decade later, orchestra leaders contend that Verizon rent should be lower, and that loss of control over the performing venues undermines relationships with ticket buyers and patrons. Specifically, the orchestra would like to return to the Academy of Music for at least three weeks each year at a time in the season when demand by Broadway shows and resident companies is high.

The orchestra's strategic plan does nothing less than call into question the Kimmel's raison d'etre, which, as articulated in raising the $275 million to build it, was to be Philadelphia's answer to Lincoln Center.

"All of these questions come back to a central tension," the plan states. "The Kimmel Center, like other performing arts centers, needs to find the balance between its role as a business-to-business (b2b) and as a business-to-consumer (b2c). These two models often have competing interests. We see ourselves and the other resident companies as KCI's primary clients, which implies that KCI's operations ought to be oriented first and foremost around helping the resident companies achieve their goals. However, if KCI is seen as a performing arts center that exists primarily to serve the general public, there are a different set of expectations. We need to work closely with KCI to come to mutual agreement about the balance of the roles."

The plan notes a recent shift in governance. Representatives of the resident companies were put on the Kimmel board after it opened, but now, the plan says, the structure has been amended; resident companies and the Academy of Music serve only on the Kimmel's facilities and operations board committee.

The orchestra is also seeking to become a voice in negotiations with unions for ushers and stagehands.

In short, the orchestra wants to create a bigger presence for itself at the Kimmel - at every point of human contact; in graphics and promotional materials; and by creating spaces for the public to interact with musicians. Often, from the outside, there is nothing to signal to passersby that the Kimmel is home to the Philadelphia Orchestra.

In terms of relating to visitors, Vulgamore says the ticketing experience is tilted to generate as many transactions as possible in a given time frame rather than cultivate long-term relationships.

"Let me give you one example - Broadway. Broadway is a fast sell," Vulgamore says. "People want the day they want, the price they want, and get it done. So a firm for selling tickets, TicketPhiladelphia in this case, they're able to churn through Broadway."

What she'd like to see is a "ticketing system that is a little bit more [about a] patron-centric conversation."

TicketPhiladelphia is operated jointly by the orchestra and Kimmel, so it's not clear what has prevented those kinds of changes in the past.

Another important point of contact is with ushers, Vulgamore says - "ushers being happy about tonight's event, knowing more about what's happening."

Any renegotiation between the orchestra and Kimmel will involve both groups' relationship with the Academy of Music. The orchestra's strategic plan asks how to reduce competition for audience and donors among the three groups and how Academy renovations are to be decided.

Notes the plan: "As KCI and the resident companies began to place a higher premium on flexibility to serve a changing audience, all parties began to feel more as if they were enmeshed in a complex set of agreements, relationships and obligations rather than members of the smoothly functioning ecosystem intended by the founders."