The Orchestra’s Report to the City of Minneapolis

Wow.  I’ve been following the ongoing labor dispute with the Minnesota Orchestra and its musicians closely for some time now.  I thought I’d seen it all, but a new development today has sent me through the roof with frustration and rage.

Let me explain.

In 2010, the Minnesota Orchestral Association (MOA) applied for state bonding money to renovate Orchestra Hall.  The bonding was approved, but the money could not be given directly to the Orchestra.  So as part of the final agreement, the money was given to the city of Minneapolis, which re-granted it to the MOA.  In return, the MOA turned over ownership of Orchestra Hall to the city of Minneapolis.  The city is leasing the building back to the MOA for 50 years rent-free, but retains ownership.

This is the key element of this complicated deal—the city of Minneapolis owns Orchestra Hall.  It “leases” it back to the MOA for free, with the stipulation that it functions primarily as a performing arts venue for the greater good of the community.  Among the key elements of the agreement:

• Orchestra Hall will primarily present performing arts, with emphasis on music.
• Multiple performing arts groups will perform at Orchestra Halll.
• Half of the earned revenue will be generated by music and performance programs.

The bonding money was duly paid out, the MOA completed the planned renovations and Orchestra Hall was made ready to once again present great music.

Sadly, that hasn’t yet happened.  The MOA locked out the musicians in 2012, and Orchestra Hall has sat empty and silent ever since.

Irritated with the lockout, and responding to the complaints of downtown businesses and angry constituents, the city of Minneapolis formally demanded that the MOA report on how it was fulfilling its obligations under the lease—essentially demanding that it prove it was living up to its agreement and presenting music.  On December 1, the MOA complied and sent in a report, which became public today. (Please read them on SOS Minnesota’s website.  Here’s the report, and here’s the accompanying legal opinion.)

These documents left me speechless.

This is how you justify yourself?  This is how you attempt to assuage increasingly hostile government officers (and the public at large)?  This is how much effort you can put into a report for the agency that holds your lease and is considering revoking it?

The report, along with an accompanying legal justification for the MOA’s actions, is beyond astonishing.  It is beyond galling, and is beyond…

…well like I said, I don’t know if I have the words to do it justice.

Let me try.

“For the long term viability MOA to perform the Governmental Program we must operate in a fiscally sound fashion that does not require unsustainable draws from our endowment to achieve budgetary balance.”

I’ve lost all patience for this.  Please drop your self-serving, one-sided justifications for locking out the musicians.  Yes, we all know the organization has to be financially viable—that is the case for every organization everywhere, for-profit or non-profit.   Repeating statements like this again and again doesn’t make them true… nor does it mean they are actually backed up by your own institutional documents.  Many have commented on your questionable bookkeeping—which is the principal reason the city is forcing you to complete this report in the first place.

“We are, of course, deeply saddened by the lengthy labor dispute, have expressed multiple times our willingness to negotiate and have offered numerous contract proposals and compromises in an effort to achieve a resolution.”

Really?  In your last fundraising letter, sent to all your donors, you explicitly stated that you were not going to compromise.

“However, without two parties willing to negotiate and compromise, the timing of the resolution of the current labor dispute is outside the MOA’s control.”

Several things here.  First, I remind you again that you have publicly stated you have no intention of compromising.  Plus, you have made clear that you are not willing to negotiate your final positions, particularly the $5 million you plan to cut from musicians’ salaries.  Instead, you have stated you are only willing to negotiate how these cuts are implemented.  As I’ve said before, a clerk asking if you want to pay for your purchases with cash, check or credit card does not mean you are negotiating over an item’s price.

And may I point out again, the 11 proposals the musicians have made to try and resolve the dispute.  I’m sorry, but if there aren’t “two parties willing to negotiate,” that’s not the fault of the musicians.

But the most shocking part of this statement is that you say you have no control over the results.  Of course you do—you have unilaterally imposed a lockout on the musicians.  You are actively barring them from work.  And by doing so, you and you alone have kept Orchestra Hall from functioning as a performing arts center.  This is something you can control.  Stop trying to paint yourselves as the victim.

 “…MOA has begun to create a new series of concerts designed to keep music alive in Orchestra Hall.”

Great.  What have you actually presented?  Is there any business or organization that is judged on what it intends to do rather than what it has done?

“…Symphony Ball, and its companion event, Crash the Ball…”

I am astonished at this… on so many levels.  First, you skip over the name of the group that performed, but simply point out that the ensemble featured people who have performed with arts such as Prince, Bette Midler, Johnny Lang, and “others.”  How so, as back up players when these great musicians toured?  As subs? Local musicians contracted out?

But let’s go back.  Why no mention of the name?  Isn’t the entire purpose of this report to prove that you did actually have music groups on stage?  Is that to stop us from looking them up on the web and verifying they actually performed?  (The group, for the curious, was Belladiva.)

Plus, are you seriously going to list this one and only event as proof that you presented music to the public?  The Symphony Ball isn’t exactly a public event, and this performance hardly constitutes as a performance—or all intents and purposes, they were the hired house band of a private party.  Moreover, Symphony Ball is a fundraiser.  For you.  This wasn’t for the public good, and there was no public service given.

This is a major point—in the development world, no one gives you a grant for you to fundraise for yourself… that’s almost always an instant disqualification for funding.   The city doesn’t give money to the Humane Society to host a silent auction for itself, nor would it give the MS Society funds so it could host a gala dinner.  Why would the Symphony Ball be any different?

And… do I understand correctly that you’re counting the hyper-inflated ticket prices to attend a gala fundraiser (which includes dinner) as part of earned income?  As your ticket revenue?  Does the IRS know about this?  This gets murky fast… the IRS has specific rules regarding ticket prices for gala fundraising events.  If you spend $200 for a Symphony Ball ticket, you aren’t really buying a $200 ticket—you subtract out the fair market value for the food and the cost of seeing the show, and the remainder is considered a tax deductible donation.  Is that how you’ve accounted for this money?  Is that how the attendees accounted for this money?

But whatever the specific case may be, I can’t believe you’re honestly counting $200 tickets to see Belladiva as regular ticket revenue, as if they’re just another Orchestra-sponsored presentation going on.  These are totally different things.

“Three additional performing arts events were also arranged by the MOA…”

I can’t help but notice you didn’t list them.  Why wouldn’t you, in a formal report given not just to the city of Minneapolis, but the entity that holds your lease? Especially when this formal report requires you to prove you are functioning as a performing arts venue?  The lack of any specifics about time, character of the event, the audience, and the type of music performed makes it appear that you simply hosted a dance band for a wedding reception.

“The MOA is in discussions for…”

See my above comment.  Why should you be getting the benefit of the doubt for something you are “discussing” to do, rather than something you are actually doing?  More to the point, you have given no indication that you actually plan to put these acts on.  You haven’t announced them to the public, even provisionally.  You have chosen to cancel everything up through at least January, and have given no indication that you are doing anything to resolve the labor dispute that’s keeping the hall empty.  Board Chair Jon Campbell, for example, remarked to the press that he had no intention of resuming talks anytime soon, so there’s no sense of when the season might possibly resume.  At this point, none of these provisional acts are even… provisional.  They’re in no way linked to reality—you might as well tell us you’ve scheduled a performance by Michael Jackson. Or, as you say in your attached season schedule, “Duke” Ellington.

“MOA has prepared budgets for the fiscal years 2014 through 2017, which assume settlement of the labor dispute and the return to regular performance season consistent with its strategic business plan.”

How can you make any sort of assumptions, when you’ve a lost your music director and a significant number of musicians?  Are these revenue numbers just wild guesses?

And I can’t help but notice you use the word “strategic business plan” in this sentence.  May we assume that these performances are not consistent with any sort of strategic artistic plan?  Since the city requires you to be a performing arts venue—shouldn’t you speak to an artistic plan as well?

“We are proud to have been able to provide construction jobs in Minneapolis…”

You are not a public works project.  Sure, the additional jobs were a nice side benefit, but construction jobs were not the purpose behind the bonding money.  You were given $14 million to be a performing arts venue that would provide great music to the city and the state.  In fact, this very report is being submitted to prove that you have kept up that part of the bargain.

The fact that you can’t even remotely indicate that you have kept up your part of the bargain—in your report’s final conclusions, no less—is a good indication that you have failed to do so.

Miserably.

* * *

Even worse is the astonishing “legal opinion” that accompanies Michael Henson’s letter.   I am not a trained lawyer, so I want to keep my remarks brief, but again I’m astonished that this all the MOA could come up with.

Regarding the “Initial Reporting Period.”  The letter sets out to complain that the MOA has to do a report now, so soon after the refurbishments were completed.  The implication is two months is not enough time, either to complete the report or to generate a critical mass of arts events to satisfy the main points of the agreement.

There might be a kernel of truth here—there hasn’t been a great deal of time since the construction was completed.

But still.

Do you suppose you are the first organization that has been asked to do an interim report?  Good Heavens—this happens all the time.  In fact, the Minnesota State Arts Board requires this all the time, so I can’t believe an orchestra would be so shocked and put out.  The standard operating procedure is for the grantee to simply state what’s been done to date, and the funding agency essentially pro-rates its expectations.  You’ve only been open for a month?  That’s okay, just list the events that happened in that month.  Everything is fine.

I suspect that the reason you’re upset is that you don’t actually have anything to report.  But this is your own fault… because you unilaterally cancelled all the performances.  If you hadn’t cancelled everything, the report would be brimming with exciting concerts and arts events, and there would be nothing to complain about.

Force Majeure Clause.  My last point carries through, here.  You are essentially claiming that the lockout you have implemented and unilaterally imposed on the musicians is somehow akin to an Act of God—something completely outside of your control.  You even throw in legal reasoning to suggest that your unilaterally-imposed lockout is like a strike… something you can’t control.

So to restate: the lockout you have imposed and have defiantly maintained despite considerable pressure to lift… is somehow outside your control.

Aren’t you embarrassed to write this?

Ah, but then you go for your coup de grâce—the reason it’s outside your control is because you can’t force the musicians to engage in meaningful bargaining.

How many times do we have to go over this?  They did.  Many times.  Many surrogates tried to negotiate with you as well, and you rebuffed them all.  Including Senator Mitchell, who, again, brought peace to Northern Ireland.  He worked out a deal that the musicians agreed to, but you rejected it because it would cause you to “lose leverage.”

Please, just stop this nonsense.

One final thing, in both Michael Henson’s letter and the legal brief that accompanies it, there is a theme of hurt feelings.  That of course you’re acting in everyone’s best interest.  Of course all your statements have been clear.  You seem to be asking, with some exasperation:  “Why are you picking on us and making us do these ridiculous reports when everything is fine?”

Let me be brief.  You have no credibility.  You gained the $14 million in bonding money under very questionable circumstances, and provided financial documents and public testimony that was inaccurate at best.  As a result, you were hauled back before the state legislature, and many of its members have said publicly they no longer trust you or your creative accounting.  This is, in part, why the city of Minneapolis is demanding this report from you.

You’ve broken your word.

You have not provided for the public good.

You have behaved in a financially irresponsible manner.

You picked this fight, and you’re fighting to win at all cost, regardless of collateral damage.

Well, we’re tired of being collateral damage.  We’ve had enough.

This report documents your abject failure at fulfilling the obligations you chose to take on when you accepted the state’s bonding money.  Worse, it documents your abysmal failure as leaders of an arts organization.

It is time for you to be removed from power.