Bushnell Faces $9.2 Million Debt Deadline
David Fay arrived as the new president and CEO of Hartford’s The Bushnell Performing Arts Center in June 2001, just five months before the theater completed a $45-million renovation and expansion.
But Fay also inherited something else from that project: $20 million in debt.
That financial overhang, when mixed with other economic factors over the last two decades such as the tech-bubble burst, shock of Sept. 11, Great Recession and some sizable annual deficits, has bedeviled the institution’s fiscal health ever since.
However, Fay, 67, finally sees a spotlight at the end of the tunnel. If fiscal projections hold up, The Bushnell could retire its debt by March 2022, which would mark a major financial turning point for the 89-year-old theater.
And it’s taken a special fundraising campaign, some surpluses, a stable economy, endowment funds and a musical called “Hamilton” to make it happen.
“Thank god for ‘Hamilton,’ ” Fay says of the musical’s financial impact on the theater.
The Bushnell took on debt early this century because its capital campaign for the renovation — which included construction of the 900-seat Belding Theater and numerous other amenity upgrades — came up $20-million short, Fay said.
Of that amount, $5 million was covered by a short-term loan from Webster Bank, which was paid off in eight years. But the other $15 million in debt, financed by the Connecticut Health and Educational Facilities Authority (CHEFA), has been more of a challenge to manage, says Fay, as the economy starting in late 2008 turned into “meltdown” mode.
At its peak, The Bushnell was making $1.2 million in annual debt payments (by comparison, the theater’s total expenses in recent years averaged around $20 million). When the short-term debt was paid off, annual borrowing costs dropped to $700,000, which was still a millstone for the arts center.
Debt payments contributed to The Bushnell running myriad deficits throughout the last two decades. It also restricted the theater’s financial flexibility.
As of this year, The Bushnell still carries $9.2 million in debt, which comes due in 2022, at which point the theater would either have to refinance or pay it off.
Fay said he is confident The Bushnell will be free and clear of its legacy of debt before the deadline, with plans to pay it off with a mix of further fundraising and budget surpluses.