Arlington Heights will loan the Metropolis Performing Arts Centre $75,000 interest free for six months, under a measure expected to win board approval Monday night.
Metropolis officials indicated they need the loan to maintain cash flow at a time when they're facing several financial setbacks largely attributed to the struggling economy. Among them:
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• Donations, which ideally would make up 40 percent of theater revenues, account for just 19 percent of income, said Metropolis Board President Phil Collins.
• The organization lost $30,000 with a play called "The Boys Next Door," which Jim Jarvis, outgoing executive director, said was the "best show we've ever done." The theater's audiences do not like dramas, he said.
• The annual fundraising gala in May fell $5,000 or more short of expectations, and changes will be made next year, said Jarvis.
• The theater's thrust stage had to be rebuilt.
The village bought the theater building in 2004 with tax increment financing money. Metropolis receives a $150,000 annual subsidy from the village through its ¼ of 1 percent arts and entertainment tax on restaurant customers.
When the group signed the 10-year lease with the village in 2004, the subsidy was $250,000.
Besides Metropolis, the arts and entertainment tax supports village activities like the Mane Event, Sounds of Summer and Promenade of Art. In 2009, it provided $300,000 to the village's general fund.
The theater's other sources of revenue are ticket sales, tuition for classes it holds and fundraising.
Besides cutting costs, Metropolis officials plan more fundraising, including a two-day off-site rock concert in March.
Village Trustee John Scaletta said it is important the theater stays open, as its closing would lead to negative impacts such as lost sales at downtown restaurants.
A study showed that 70 percent of Metropolis ticket purchasers come from outside Arlington Heights, and that in addition to tickets each spends $25 while in town, said Jarvis.
Village staff had suggested the board consider a grant or increased subsidy rather than a loan to the theater, but trustees found the loan more palatable.