How did Intiman and ACT theaters, both mired in debt for years, get out from under?

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For the past eight years, Intiman Theatre has been living with an anvil hanging over its head: millions of dollars in debt, which was discovered during a harrowing spring in 2011 and nearly imploded the theater. The board laid off its approximately 20 employees — including relatively new artistic director Kate Whoriskey.

The story drew attention across the country, from The Los Angeles Times to The New York Times: The demise of the decades-old, Tony Award-winning theater looked not just possible, but probable.

But Intiman persisted. This week, after years of fiscal austerity and negotiations with creditors, the theater announces it is finally debt-free.

“It’s not sexy, it’s not flashy,” said former Intiman artistic director Andrew Russell. “But this is a moment I’ve been dreaming of — and a moment the theater has been dreaming of since the minute we learned about the layoffs.”

Russell was originally hired as an associate producer at Intiman in 2009. By late 2011, when the theater had canceled the rest of its season and senior leadership had left, Russell stepped up to propose a reinvented, more agile version of the theater: a summer festival instead of a traditional season, a core company of artists and a focus on both newer and older works with an emphasis on sharp social critique (“Trouble in Mind” by Alice Childress, both of Tony Kushner’s “Angels in America” plays, new musical “Stu for Silverton,” about the first openly transgender mayor in the United States), co-curated by bold local artists such as Valerie Curtis-Newton and Sara Porkalob.

Russell’s gamble paid off. “Every theater struggles with debt,” he said. “But Intiman has been a wild ride.”

At the same time, ACT Theatre (another of Seattle’s most prestigious theaters that has also wrestled with financial problems for years) is entering a new, debt-free era. Since 2013, the theater has carried two private loans, which totaled $2 million in 2017. This year, managing director Becky Witmer said, ACT is finally in the clear: “Overall, 22 percent of the $2 million debt was forgiven and the remaining balance paid as a result of financial discipline and the generosity of donors who were determined to help ACT make this milestone step.”

ACT, Witmer said, also received two recent bequests from longtime patrons who’d set aside gifts for the theater in their estate plans.

Both stories are reasons to celebrate — happy news from the world of arts organizations, which often make headlines for being in financial trouble.

“It’s very powerful,” Randy Engstrom, director of Seattle’s Office of Arts and Culture, said about Intiman’s dramatic turnaround. “It’s really nice to hear a story about an arts organization being fiscally responsible and nimble. You hear so many stories about ‘financial struggle and then they collapsed under the weight of their own whatever.’ And to retire a debt of that magnitude while still producing shows? I’m just really proud of them.”

Intiman executive director Phillip Chavira (who arrived at the theater in 2017) said that since 2012, the theater has retired $1.8 million in debt, with an additional $900,000 forgiven by creditors.

The debt was acquired prior to 2012 and, by that time, the theater’s senior leadership had left the building: longtime artistic/managing director team Bartlett Sher and Laura Penn, Sher’s handpicked successor Whoriskey, and managing director Brian Colburn, who was hired in late 2008 and abruptly resigned in 2010.

“The amount of debt we’ve retired,” Chavira added, “was accrued by a company six times the financial size we have right now.” According to available filings with the IRS, Intiman claimed $6.85 million in revenue for the fiscal year ending March 2008, but only $1 million for the fiscal year ending December 2016. (In 2010, on the brink of its public crisis, Intiman moved the goal posts of its fiscal year from March to December.)

“We’re sharing this,” he said, “so other struggling organizations can look at Intiman as a beacon of hope.”

How did they do it? Tight budgets, renegotiating debt and asking for debt forgiveness? “Keep going!” Chavira said. “That and so much more.”

The four keys, he explained, were:

  1. regaining trust with rigorous transparency about the dire situation to everyone (staff, board, creditors, public);
  2. operating in the black from year to year while keeping a steady eye on the debt load;
  3. “fundraising, fundraising, fundraising”;
  4. talking with creditors early and often, offering them a range of possible settlement options.

“You have to distribute your ask and your expectations,” said Intiman artistic director Jennifer Zeyl, who had worked for the theater in the past (she was a scenic painter there in 2005), and collaborated closely with Russell as Intiman’s artistic producer for a few years before taking the wheel after he left in 2017. “If you’re thinking, ‘If only this foundation would forgive us, we’d be out of debt,’ forget it,” she said. “You have to go back to every single person you owe and offer some kind of reparations.”

Before the 2011-12 crisis, for example, the Doris Duke Foundation had given the theater hundreds of thousands of dollars for its endowment — money that was rerouted to pay off debt. “We went back to them and explained,” Chavira said, “and they came back with: ‘We support you, we want to see you succeed, but here are conditions — you’ll have to operate in the black for three years.’ ” (That’s operate in the black from season to season, not counting the debt.)

Intiman made it work. The city of Seattle and Seattle Center were among its more generous creditors (Intiman owed back rent for its Playhouse building at Seattle Center), and gave the theater “public-benefit” credits for projects like its Emerging Artists Program, which allows young theater makers to work, for free, with professionals like Porkalob.

But for-profit companies like Pacific Northwest Theatre Associates (PNTA, a clearinghouse for lighting, audio, rigging and other theater equipment) needed cash. “They’re not charitable organizations,” Zeyl said. “Vendors need to be paid, because for them, it’s just cash out the door.”

At times in 2012 and 2013, Zeyl started to hate calling theater-supply companies. “If I said, ‘I’m calling from Intiman,’ the conversation would be rerouted immediately to accounts payable. And I’d think: ‘Dammit! Again?’ ”

So Zeyl started ordering things under her own name and having them shipped to her home.

Getting out from under the debt load has been liberating. “We were tired of being in The Nether, where we had this giant tail attached to a very small theater company,” Zeyl said. “Even though I did nothing to incur this debt, there’s still cultural shame about being in debt. I felt like damaged goods.”

Now the theater can take that intellectual bandwidth, which was locked in reconciling the past, and transfer it to the future. “Instead of ‘head scratch — how are we going to make that payment to Seattle Center?’ ” Zeyl said, “It’s ‘head scratch — what we do actually want to do?’ ”

“It was messy and crunchy for a while,” Russell said. “But, in traditional Seattle fashion, folks believed in the long game.”

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Intiman will celebrate its announcement at 2 p.m. Tuesday, Jan. 22, on the main level of Seattle Center Armory, 305 Harrison St. Details are on Intiman’s Facebook page.