Tanglewood COO: Difficult to make PILOT
STOCKBRIDGE >> Challenging finances over the past two years have made it difficult for Tanglewood to consider a payment in lieu of taxes to the town, a top Boston Symphony Orchestra official has told the Select Board.
"We've felt like we've contributed a substantial amount to the town from educational programs to free tickets, along with the fact that we spend so much in town and generate so much income," said Kim Noltemy, chief operating and communications officer for the BSO.
Noltemy was responding to a request to present a report on Tanglewood's economic impact on the town.
During a recent board meeting, Chairman Charles Gillett cited concerns voiced by some residents in recent years that several of the town's nonprofits have made substantial or token payments, while others have not.
But Noltemy said the organization already is weighing possible budget cuts, considering potential additional fundraising and expanding its summer Popular Artists lineup in an effort to boost revenue.
"If the BSO were in a better financial position, it would be easier for us to do a token donation," she said. "I don't want to say we're not open to the idea at all, we just happen to be in a two-year period of quite a difficult situation."
She noted that the management is "trying to decide if we're going to be making budget cuts or if we try to do additional fundraising for the institution to try to overcome this structural deficit we have."
Among the financial challenges are $18 million in post-retirement liabilities for musicians in the orchestra's collective bargaining unit, according to the BSO's most recent annual report. Treasurer Theresa Stone cited the impact of new mortality tables that project longer lives for American retirees.
According to Noltemy, the financial challenges are among the reasons the orchestra has expanded the Popular Artists series at Tanglewood this summer in an effort to generate "a little bit more revenue for the town and for us, which hopefully will pan out. But it's kind of a high-risk challenge for us with the weather and not knowing which artists will sell and which won't. Sometimes the crystal ball works and other times it doesn't."
In addition to perennial favorite James Taylor, performing on July 3 and 4, the BSO has booked a wide range of non-classical shows featuring Dolly Parton, Bob Dylan with Mavis Staples, Brian Wilson, Earth Wind & Fire, Jackson Browne, Train, The B-52s and others -- a dozen in all, plus five Boston Pops appearances. The 11-week season begins June 17, the earliest opening on record, and continues through Sept. 3.
After Noltemy concluded her presentation, Gillett, the Select Board chairman, and Selectman Stephen Shatz agreed with a resident's comment that nonprofits in town should not be "villainized" if they are not in a position to make payments in lieu of taxes.
"This board understands that," said Shatz, noting that while there are "different models" for some nonprofits, others like Tanglewood are "deficit-financed. That makes it very, very hard." He described Tanglewood, the Norman Rockwell Museum, the Berkshire Theatre Festival and others as "our lifeblood; we wouldn't be here but for them."
"Tanglewood is a major part of Stockbridge and without it, I don't know what this town would be, given what you bring in to the town, people, money, tourists," said Selectman Ernest "Chuckie" Cardillo. "It's a great asset to the town and without it, I don't think we would be very well off."
On a light-hearted note, resident John Hart asked Noltemy why public radio broadcasts from Tanglewood are announced as originating in Lenox, since the vast majority of the property is in Stockbridge.
Amid laughter, she responded: "That's a really good point since we never actually listen to the radio broadcasts because we're at the concerts." Tanglewood is willing to work with the radio producers to get Stockbridge incorporated into the weekend broadcasts, according to Noltemy.
The BSO notched a minimal $110,000 surplus for the year ending last Aug. 31, according to the annual report. Operating expenses totaled $87 million. The nonprofit's net worth declined by 7 percent, while endowment investments totaled just over $450 million down from $475 million.
Year-round ticket sales revenue grew by 2 percent compared to 2014, while the Tanglewood season met its revenue targets overall, the report stated. Multi-year cost containment efforts, including steps to reduce health insurance premiums, held the annual increase in fixed costs to 2 percent.
Contact Clarence Fanto at 413-637-2551.
Total spending: $60 million ($24 million by tourists)
Annual BSO spending on Tanglewood: $21 million
Additional staff hired for Tanglewood: 350
Annual maintenance on facility's 80 buildings: $2 million
Seasonal spending on Stockbridge police traffic details: $34,500
Marketing budget: $1.4 million ($100,000 on local media)
Donation to Stockbridge Bowl Association: $10,000
Annual attendance: 325,000-350,000
Audience sources: 42 percent metro Boston, 26 percent metro New York, 25 percent other U.S., 7 percent international
Source: BSO Inc. Economic Impact Study (2008, updated)