How the Pasadena Playhouse Came Back Strong : Once bankrupt, the theater now is back in business

Susan Dietz, artistic director of the Pasadena Playhouse, was sitting in her tiny basement office just after a staff lunch in honor of her 42nd birthday. There was a knock on the door, and in walked two smiling men with a huge present. She jumped to her feet and ripped off the wrapping paper to find . . . a fake window.

She’d always said she wanted a window, explained David Houk and Donald Loze, the real estate developers whose theatrical affiliate manages the Playhouse. And because the Pasadena Playhouse is one of the hottest properties around, what Suzi wanted, Suzi got.

The legendary Pasadena Playhouse, which produced 76 world premieres, 24 American premieres and every one of Shakespeare’s plays between 1917 and 1943 alone, is back at it. Reopened just three years ago after two decades of neglect, the Playhouse already has 14,000 subscribers, a terrific renewal rate, and dozens of volunteers who do everything from mend costumes to serve hot meals to actors.

The Playhouse may be on its third management team in as many years, but Dietz and managing director Lars Hansen have obviously been paying attention to what worked and what didn’t work for their predecessors. Four Pasadena Playhouse shows traveled either across the country or across town since 1986, and despite reviews so bad on the Broadway production of “Mail” that they billed it as the “abused new musical,” Rupert Holmes’ hit thriller, “Accomplice”--another Playhouse world premiere--is Broadway-bound this fall.

The 700-seat Pasadena Playhouse enters its 72nd season at a trot. Ninety-five percent of this season’s $3.2-million budget came from box-office receipts, and its current show, “Stepping Out,” could well run all summer. The ‘88-89 season pulled in three Los Angeles Drama Critics Circle awards and 32 Drama-Logue awards, and an impressive 60% of the audience is on subscriptions, nearly as high as the Mark Taper Forum’s 66%.

Community spirit, entrepreneurial initiative and savvy programming have come together in Pasadena, turning the Playhouse into one of the most successful theater companies in town. “Good theater attracts audiences,” says Taper managing director Stephen Albert. “What’s good about it is that audiences that go to Pasadena will also go downtown, to the West Side or to Hollywood.”

On April 19, 1986, the Pasadena Playhouse reopened with George Bernard Shaw’s “Arms and the Man,” and Nikos Psacharopoulos directing such stars as John Rubinstein and Richard Thomas. Inside, the theater was beautifully restored to its earlier splendor, while outside, a red carpet led from the theater to the party tent across the street.

It was a long time coming. Gilmor Brown, the visionary who created a theater, a school and a legend, was less far-sighted about succession, and everything started falling apart after his death in 1960. The IRS closed the Playhouse down in 1965 over missed withholding payments. The financial situation became steadily worse until bankruptcy was declared in 1969. The Bank of America claimed the Playhouse land and buildings in 1970, and a few months later, the bankruptcy court auc tioned off everything else to pay creditors.

There were a fire, a few floods, and plenty of fizzled plans to revive the Playhouse. “The community rallied and rallied and nothing ever seemed to pull it together,” recalls then-board chairman Peggy Ebright. “There was a constant cry for help. They loved the Playhouse and wanted it to be successful but had the feeling it was a white elephant, that you were kicking a dead horse.”

Finally, in 1975, the city of Pasadena stepped in and bought the Playhouse from the bank for $325,000. Two years later, the federal Economic Development Administration came through with $1.3 million to renovate it. All that was missing was the right angel.

Enter David Houk, 43, a local real estate developer who has called theaters “good urban planning tools.” He envisioned both the Philharmonic Auditorium in downtown Los Angeles and the Playhouse as centerpieces in mixed-use projects, and enticed Stephen Rothman, who at the time was converting an old vaudeville movie house into the Paramount Arts Centre in Aurora, Ill., to come and renovate both institutions here.

The Philharmonic was later torn down--although Houk continues to develop the Pershing Square Centre that surrounds its old site--and Houk spent the next seven years negotiating with the City of Pasadena to acquire the Playhouse. Houk says he and his partners have already invested more than $5 million--$2 million in direct donations to the Playhouse, and another $3 million in refurbishment and carrying costs. Their rewards are still to come: Houk and others have been acquiring and optioning other properties on the block, with future possible plans for a hotel, office buildings, retail space and parking.

“Why I was so taken with the Playhouse now is probably so obvious, but at that point, people said it was a fool’s mission,” says Rothman, now a free-lance director. He spent most of his early days negotiating with City Hall rather than choosing plays, he says, and it wasn’t until 1980 that he opened the 52-seat Interim Theatre. He opened the 99-seat Balcony Theatre upstairs in 1982.

Before the mainstage reopened, however, Rothman, who was no longer getting funding for the smaller theaters, received a “tremendous” job offer--to run two theaters in Florida--and left. About six months before the theater reopened, Houk brought

in Jessica Myerson, formerly producer of San Francisco’s improv group the Committee, to run the theaters.

But Myerson didn’t stay long. The Times’ Sylvie Drake noted the first show felt “underrehearsed” with “acting styles (and accents) all over the map.” The rest of the season wasn’t much of a hit, either. The Playhouse ran up a $160,000 deficit and by August, Houk was searching for a new artistic director.

Houk interviewed about 40 people before hiring Myerson, he says, and about 100 after she left. Among those 100 were Rothman again, who had become tired of a strenuous, bicoastal relationship with actress Alma Martinez--then his fiancee and now his wife. Houk suggested a dual leadership, and in November, ‘86, Dietz and Rothman were announced as the new producing co-directors.

“When they first got together, I said ‘two of my best friends are going to kill each other,’ ” says the Cast Theatre’s Ted Schmitt. “They got along pretty well for a couple years, but I don’t think there’s such a thing as a co-directorship. Somebody has to be the ultimate word.”

Things were fine for a while. Rothman and Dietz divided up most of the duties, the biggest of which was getting the prospective audience excited again. “We got more than 8,400 subscribers the first season,” Rothman says, “but over 50% would not renew. People on phones would get responses like ‘drop dead.’ Suzi and I were in shock. We were back in ’79 again--we had to prove it all again.”

Their differing artistic visions became clearer their next season, says Rothman, and in their third season, Rothman and Dietz disagreed over Rothman’s direction of Garson Kanin’s “Born Yesterday.” Houk sided with Dietz and pulled Rothman off the show. Rothman immediately resigned.

“It was destined to end from the beginning,” Rothman says now. “We (Rothman and Dietz) are both strong people and we both have very strong artistic visions. I never had any delusions that we were not going to part ways.”

Nobody thinks the Playhouse would have gotten on its feet without Rothman, who still has a financial interest in Houk’s projects in both Pasadena and downtown, but it quickly became Dietz’s show.

Dietz had been waiting a long time. Her husband, Lenny Beer, a music business trade magazine publisher whom she met at an encounter group in 1971, said “ ‘it was my opportunity to achieve everything I set out to achieve in the theater. It was an established theater and I didn’t have to come in and do all the work to establish an institution.’ He was right.”

The blunt-speaking Philadelphian, who earlier started and ran the theater department at the Harvard School in North Hollywood, impressed Houk immediately. “What I really admired about her,” says Houk, “is how she’d been financing her own dreams. She raised the money herself to get shows on stage. I like entrepreneurs, people who make dreams come true. I respected her track record--she’s done some great shows. I liked her educational background because we always had a dream of bringing the school back.”

Dietz also brought to Pasadena an artistic vision honed through 10 years of producing in big houses and small in Beverly Hills and in Hollywood. Her L.A. Stage Co. brought us the long-running “Sister Mary Ignatius Explains It All for You” and “Isn’t It Romantic” and Public Stage/L.A., her partnership with Peg Yorkin, produced such hits as Dick Shawn’s “Second Greatest Entertainer in the World.”

Despite some criticism of her operating style--none of which would be made on-the-record--Dietz has not been faulted for her productions. “When the war comes, I want to be on the same side as Suzi Dietz,” says Schmitt. “She’s a real tough lady, but with an artistic sense and that’s kind of rare in this town.”

In Pasadena, as she did in Hollywood and Beverly Hills, Dietz programs essentially for the San Fernando Valley and Westside. Just one-third of their audience comes from Pasadena, and most of the rest are Valley people and Westsiders. “L.A. Stage was one of the first to recognize the importance of the San Fernando Valley theatergoing audience,” recalls agent Josh Schiowitz, former producing director of L.A. Stage. “What producers had done before is ignore the Valley.”

Given her shimmery jackets with their big shoulder pads and her reddish porcupine haircut, Dietz doesn’t look particularly suburban. But in their Sherman Oaks ranch-style house, with its vegetable garden, strawberry patch, pool and ubiquitous children’s photographs, Dietz and Beer live a life style that seems compatible with those of Dietz’s audiences.

“I operate on the principle of the three E’s--Entertain, Enrich and Enlighten,” Dietz says. “I think if it will entertain me, it will entertain my subscribers. Then I look for how it will enrich their theater-going experience. Then how it will enlighten them. Also, I try very hard to balance the season so it is not all of a piece.”

Suburban audiences generally like proven hits and so does Dietz. “Steel Magnolias” was an Off Broadway hit long before it came to Pasadena and “Stepping Out” had played Broadway. “She’ll see a play, hear about it and know it will go,” says former partner Yorkin. “She has her ear to the ground about what’s going on.”

(Dietz hedges her bets other ways as well. Before “Carnal Knowledge” opened, she sent a letter to subscribers “acknowledging that some subscribers do not believe that a play dealing explicitly with sexual relationships is suitable for the stage” and offering to exchange tickets. About 100 people did indeed send in their tickets.)

Next season’s opener, “Groucho: A Life in Revue,” has already played both New York and London. “Groucho” star Frank Ferrante is a “Pasadena boy,” says Dietz, and when she was in New York with “Mail,” he sent over a press kit reminding her she’d given “Mail” composer and star Michael Rupert, another Pasadena boy, a shot. When “Groucho” won an Olivier in London for best play, Dietz took another look at the script and called Ferrante.

Knowing what your audience will and won’t like pays off. Last season, Dietz says, it took three letters and telemarketing to get 7,400 renewals from its 10,000 subscribers. This year, after two letters, they’re running 10,000 responses from their 14,000 subscribers and are hoping for 17,000 next season.

“It’s nice to have a history,” says Bill Bushnell, artistic producing director at the Los Angeles Theatre Center, “but I don’t think it’s of interest to audiences (who) respond to what’s in front of them on a night-to-night, month-to-month, year-to-year basis. The programing niche they’re trying to carve out is very much a comic, contemporary commercial play--nothing wrong with that--and they’ve been very smart in terms of (how) they market it.”

“Accomplice” came in with Hansen, a consultant who became managing director when Rothman left. Co-founder of Pasadena’s California Music Theatre, Hansen had worked with playwright Holmes on “Drood” there last year, little knowing that Holmes was going home evenings and working on a new play. The Playhouse did a staged reading at Dietz’s house featuring such stars as David Birney and Linda Purl, then hosted its world premiere earlier this year.

The hit thriller is expected to open on Broadway in November, Dietz says, and will send home to the Playhouse a percentage of both its gross and author Holmes’ subsidiary rights. It might fare like “Mail,” a musical where a would-be novelist’s correspondence comes to life, singing and dancing, which was a staggering success here, then got terrible reviews on Broadway. But, says Dietz, “if it really hits, it can be an annuity for us. ‘A Chorus Line’ saved (New York’s) Public Theater.”

Meanwhile, the Playhouse’s 300 Friends, and particularly a core group of about 40 people, whittle away costs. Volunteers racked up 13,568 hours last season alone: They tend the garden (1,011 hours last season), usher (5,212 hours), help with costumes (2,514) and work in the gift shop (1,982).

The La Tienda gift shop, which began as a rolling cart manned by volunteers, is expected to bring in $50,000 this season and is jammed at intermissions. Besides the usual books, tapes and T-shirts, La Tienda sold mystery games during “Accomplice,” and during the run of “Carnal Knowledge” added a Carnal Corner, stocking such things as Carnal Corn and even Fortune Condoms.

Another way they’ve held down expenses is by using nonunion stage technicians, a situation that has provoked the International Alliance of Theatrical Stage Employees to have an informational picket line at the theater from time to time. Hansen confirms there were elections held by ticket-takers at the Playhouse but says employees favored not having a union. The actors are members of Actor’s Equity, he says, and they engage union musicians on musicals.

To make money, they extend shows whenever they can. “Accomplice,” for instance, was extended eight weeks and brought in an extra $200,000--it was, says Hansen, like doing two extra plays with no production costs. “Steel Magnolias” was extended two weeks and “Carnal Knowledge” one. “Stepping Out” can be extended through the entire summer and, Hansen says, could bring in as much as $400,000 if it is.

But the risk, Hansen explains, is that you go into an extension without a guaranteed house. Pasadena’s hit “Lies and Legends: The Musical Stories of Harry Chapin” played in Beverly Hills for four months, but still ended with a deficit. “With subscriptions, you may have sold half your house,” says Hansen. “If you decide to extend, you could face empty houses.”

That’s where Houk and company come in. Theatre Corp. of America, which is owned by Houk, pays Playhouse expenses out of Playhouse revenues, agreeing to cover deficits should they occur. (Houk’s five-year contract with the City of Pasadena still has two more years to run.) Theatre Corp. was created to serve as a management company for Houk’s theatrical properties, of which there is now still just the Playhouse.

Houk, however, has big plans. He envisions a theatrical circuit spinning Playhouse shows out across the land, amortizing costs and bringing home both cash and acclaim. His long-term plan is to use the Playhouse as a production facility, renovate theaters in other cities through mixed-used development projects and then move productions to a circuit of three, five or 10 theaters to amortize costs.

The problem, however, is that even his work at the Playhouse is far from done. Houk says his agreement with the city calls for them to bring the former school building’s five stories up to code, and he’d like to turn a hefty chunk of that space into a private club with elegant private dining rooms, screening rooms and lounges.

But neither the club nor an on-site restaurant is expected soon. Houk says he’s started the architectural planning, but given that all his development funds are tied up downtown in Pershing Square, he figures both are realistically as much as two years away from opening. His development of the rest of the block is also on hold, he says, as he waits to gauge effects of a new non-growth ordinance in Pasadena.

“David’s goal is for the Playhouse to be self-sufficient, but it takes some time,” Hansen says. “We’re trying to bridge the gap now with community, government and corporate support for the short term to give him time to put those plans on line.”

Such fund-raising activities have had mixed success. County and federal funding sources turned them down this year, the first year they were eligible to apply, but the California Arts Council came through with $9,000 and the City of Pasadena awarded them its top arts grant of $22,600. They’re hoping to hire someone to help with fund raising, although Dietz just moved down the hall into the newly remodeled office set aside for such a person.

Everyone’s still talking about reopening the School of the Theater--a place that groomed such stars as Sally Struthers, Robert Preston and Barbara Rush before it closed--although nobody expects it to happen soon. Former schoolteacher Dietz says she won’t consider the renovation done until there is a school, and the Playhouse opened classes for children early this year.

Houk, who says he hasn’t missed a Playhouse show yet, seems patient: “The contract we were subjected to by the city was designed for failure. Nobody believed we could get the thing to pay for itself. Ever. There was a provision if we could do two seasons back to back with 10,000 subscribers or more, the city’s right to take the Playhouse real estate away would expire. It has. My dream from the beginning was to get to where we are today.”