Spotlight on Gallo Center for the Arts

Ticket sales at the Gallo Center for the Arts in downtown Modesto remain strong despite a difficult economy, but the $40 million center still is in the red.

The center intends to slash about $500,000 from its nearly $9 million budget and scale back the number of performances it plans to present next season, according to an annual budget summary it's providing to the Stanislaus County Board of Supervisors.

Its main financial challenge for its next year is to ramp up fund raising to support its programs and compensate for a decline in the interest it earns on its $15 million endowment.

"It's a tough time to launch a fund-raising drive," said Dave Pier, the center's chief executive.

The center lost $2.6 million in its first season, which ran from September 2007 to June 2008. It anticipates a $2.2 million shortfall for the current season and a $1.6 million operating deficit for the program year that begins this summer.

Deficits were expected when the center opened two years ago, mostly because it carried about $14 million in construction debt. Most of that debt still is on the books, with the center making minimum payments until it breaks even on its operating expenses.

"Once we have a positive cash flow, we'd like to pay it off more quickly if we can," said Lou Friedman, the center's treasurer.

It can afford the losses because it holds about $7.2 million in reserves.

"We are working to do fund raising to make sure that number stays as robust as possible," Friedman said.

Reshaping next season

Pier said the center likely will schedule fewer events next season, a change that reflects an urgency to make shows as profitable as possible and to wean out performances that don't draw large audiences.

The center has a better idea about which performances are likely to succeed now that it has two seasons of data to review, Pier said.

"This year we've been doing some tightening up on our expenses," he said. "We're still learning what the market's really interested in. We're still getting the programming aligned."

The center has held 231 shows in its second season, which started in July and ends in June. It has 177 performances scheduled for next season, but Pier said that number likely would rise as community groups make plans to rent the center for their events.

The average number of people attending shows has decreased slightly this year, down to 601 per performance from 644 in the inaugural season.

That comparison does not account for whether shows took place in 1,250-seat Mary Stuart Rogers Theater or the 444-seat Foster Family Theater.

All together, 138,831 people have attended shows this season, up from 110,098 at this point a year ago. More than 161,000 people attended performances last season, a number Pier expects to exceed this season.

Stanislaus County and the nonprofit Central Valley Center for the Arts partnered in paying for the arts center's construction. The county owns the building and the nonprofit oversees it.

Bee staff writer Adam Ashton can be reached at aashton@modbee.com or 578-2366.