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April 15, 2005
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| The historic Hennepin Avenue theaters in Minneapolis -- including the Orpheum, seen here -- will soon be under new management. (MPR File Photo/Jeff Horwich) |
St. Paul, Minn. — With a 9-2 vote, the council concluded a process begun nearly two years ago. At that time, the council received a proposal for a long-term deal on its three Hennepin Avenue theaters. The team that was managing them under contract proposed to take over the theaters and responsibility for paying the debt on them, which amounts to $22 million.
The financial muscle behind the proposal came from Clear Channel Communications. The San Antonio-based company, best known for mass ownership of radio stations, is also a major producer of Broadway shows and other live entertainment.
As the months went by, the council fell into a strong and sometimes personal debate about Clear Channel's role, how the theaters should be used, and whether other bidders had a fair shot in the process. In the end, they approved a proposal that was much the same as the one they began with.
Council Member Lisa Goodman was central in moving the Clear Channel bid ahead. Goodman told council members today's vote marks "an incredible day" for the city. "I'm not the only one on the council who has incredibly strong feelings about these theaters and their importance in terms of economic development to this city," Goodman said. "And this action that we're taking today is one I know I will look back on in 15 years and probably be most proud of as one of the few things I did to move this city forward."
Council President Paul Ostrow has been a skeptic of the deal. Ostrow says the city still doesn't know whether turning over the theaters for only the value of their debt is a fair deal. He's also concerned the agreement's requirements for serving the community and keeping the theaters busy are too weak, and the penalties for missing those targets are too light.
As Ostrow raised his objections one last time, he also tried to repair some of the damage wrought by the contentious debate. "Although we won't be unanimous today, as we have on so many other issues, we have taken on the tough issues," he said. "We've had the tough conversations, and we've addressed issues, and we did that in this case."
Another opponent, Council Member Dean Zimmerman, was more pointed in his objections. "I guess it's just a little bit sad for me that now we will be seen as the group that sold these out to the multinationals, rather than preserving them as something that will be preserved by and for the city," he said.
A small nonprofit called the Hennepin Theatre Trust will actually hold the lease to the theaters, and will become the owner after 30 years. The Trust will turn over day-to-day management of the theaters to an entity controlled by Clear Channel. Right now, the man assigned to balance the community's interest in the theaters against the financial clout of Clear Channel is the president of the Hennepin Theatre Trust, Tom Hoch.
"I was prepared to hate Clear Channel and assume they were this corporate monster we needed to be fearful of, and I haven't found that to be the case at all," Hoch said after the vote. "I found them to be professional and responsive to our issues, and where we see this whole thing going."
Hoch says the Hennepin Theatre Trust has begun growing into the bigger role the Clear Channel deal demands. He has started building a staff to raise the required $10 million endowment, and to oversee educational efforts.
Hoch and his team say Clear Channel brings access to first-run touring Broadway shows, live music, and comedians.
Minneapolis advertising executive Lee Lynch has been instrumental in building Hennepin Avenue into one of the busiest theater districts in the country. At this point, he says Clear Channel needs downtown Minneapolis, and downtown needs Clear Channel.
"I feel good that Clear Channel will be committed to the Hennepin Theatre District," Lynch said. "Because if I were them, and I didn't have this deal, I'd be building out at the Mall of America -- which they won't be doing now."
Lynch and his business partner, Fred Krohn, will also benefit personally from the deal. Clear Channel is paying them an undisclosed sum for a majority stake in their theater management company. As Lynch puts it, Clear Channel's backing allows him to "get out from under" the "risky business" of booking Broadway theater.
The city council needed to consider whether what is good for Lynch, Krohn and Clear Channel can also be good for Minneapolis -- and for theater-goers. The answer they gave today is "yes."
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