Playhouse Square CEO Art Falco’s Quiet Curtain Call
Art Falco admits when his phone rang in 1985 with a job offer to be Playhouse Square’s finance director it caught him off guard.
“Other than appreciating the arts, I never really thought I had the background. My background was for-profit, so I was surprised when the headhunter found me and thought I would be perfect for the job,” Falco said.
After three years as finance director, Falco became Playhouse Square’s vice president of finance and administration before becoming President and CEO in 1991. As he prepares to leave his post June 30, the soft-spoken Falco, who has shied from the limelight, reflected on his time helping to shape the vision and look of Cleveland’s theater district.
During his tenure, Falco emphasized that while the mission of Playhouse Square is to provide engaging entertainment, it couldn’t happen if the organization wasn’t financially solvent.
“At the end of the day, a non-profit business is no different than a for-profit business, other than they capital structure. I like to say for 90% of what we do every day is no different than any other business, the other 10% is seeing these wonderful performances onstage,” Falco said.
While there were a number of important events that helped drive Playhouse Square’s revival, one in particular stood out to Falco.
“When I started in 1985, our attendance was about 300,000 guests a year. It was that year that we brought in a show called ‘Do Black Patent Leather Shoes Really Reflect Up?’ That performed in the pre-renovated Palace Theatre (now the Connor Palace). We drew almost 500,000 people, so started saying we outdrew the Cleveland Browns that year. It was amazing. The light bulb started going off in people’s heads. At that moment we achieved credibility,” Falco said.
During Falco’s long run, Playhouse Square has faced several periods of economic downturn. Falco said the particularly severe recession of 2008 actually proved to be an opportunity for growth.
“As it turns out, that (the recession) proved to be a turning point. We were actually able to grow our Broadway subscription base. We did it by taking a look at our entire operation, including how we were selling tickets and the programming we were doing. Rather than see a 4% decline, we saw a 9% increase and it has grown since then. It gave an opportunity to really step back and look at what is the core of our mission and what (we) really should be doing,’ Falco said.
Playhouse Square has a deep involvement in the district as both a real estate developer and manager. Falco said that role grew out of the fact that the district’s original notion increased attendance would spur further real estate development didn’t happen.
“Our thought would be that we draw 600,000 to 800,000 guests to Playhouse Square and that the surrounding real estate would develop on its own. We found that in order for us to really make a difference, we had to step in, take a leadership role, which is what we’ve done,” Falco said.
Taking the lead in developing real estate around the theaters has provided the organization with a solid financial base that extends beyond ticket sales. This approach has made Playhouse Square stand out among theater districts.
“Attendance is certainly important to us, so ticket sales are important, but they do play a smaller part than most people think. As we started stepping forward and getting into real estate, it wasn’t to create an empire, but instead really to sustain our operation. We ended up co-developing the Wyndham Hotel, a parking garage and purchasing some of the commercial office buildings in the neighborhood, and that business mix has worked out well for us. We see real estate as a working endowment. If you have an endowment and you are investing in the stock market, that’s one way to do it and we do have part of our endowment there, but the other part is investing in real estate in our neighborhood,” Falco said.
Part of that real estate development has been residential space, including “The Lumen at Playhouse Square,” at the corner of Euclid Avenue and 17th Street. The 34-story building, with 318 apartments, is scheduled to open in 2020. Falco feels making Playhouse Square a 24-7 district is a key element in the district’s growth.
“That’s certainly one of the important components to Playhouse Square’s success. Having five or six hundred more people living across from the theaters is very important, and we’re really excited about it, “ Falco said.
Gina Vernacci, Playhouse Square’s current president and chief operating officer, will take over Falco’s duties as CEO on July 1, but Falco will remain involved in the district.
“I will become the senior advisor for special projects. I am committed to completing the Lumen project, not only the construction, but also lease up and a few other real estate initiatives we have planned, so I’ll be involved in those,” Falco said.
Falco admits that sometimes he finds it hard to believe that the revitalization of Playhouse Square, which he’s described as both a “fairy tale” and an “impossible dream,” has come true.
“Sometimes you step back and think, ‘wow, these theaters could have become parking lots,’ and very nearly did. I would say the organization is remarkable because we’ve had incredible board leadership, an incredible… ‘can-do’ attitude and a terrific staff and volunteers. I would say we took one step at a time and developed one theater at a time. We’re now at 1.1 million guests. When you step back you have a great sense of satisfaction, because it has been a great public partnership and a community success story,” Falco said.
[Playhouse Square's Art Falco, ideastream's Dan Polletta/photo: ideastream]