Statement Regarding Virginia Rep’s Financial Crisis

ATLAS Partnership is deeply concerned over the financial crisis Virginia Repertory Theatre is currently facing. Like all Richmonders, we have a vested interest in the company’s continued viability as a cultural and economic asset to our region and Commonwealth.

Protecting the legacy assets of professional theatre in Central Virginia is our mission, and we have been in communication with the leadership of Virginia Rep regarding this situation.

Due to our team’s long-standing roles at Virginia Rep, we have been fielding questions from the community. However, we do not represent, nor speak on behalf of Virginia Rep. We see our role as providing historical context, transparency, and clarification for specific inquiries, particularly regarding the period leading up to the leadership transition in August 2023 when Phil Whiteway departed Virginia Rep as Managing Director.

The two most frequently raised questions relate to the state of Virginia Rep’s finances at the time of Phil’s departure and the decision to purchase the Scottish Rite Temple as a new venue for Virginia Rep’s children, families, and schools programming. Our responses are below.

What was the financial situation when Phil left?

Virginia Rep’s FY2022-23 audit conducted by Keiter for the period ending June 30, 2023, indicated $10.1 million in total assets, $6.6 million in net assets, and a cash surplus of $750,000, in addition to $1.26 million in restricted gifts to the campaign and specific programs.

Operationally, however, Virginia Rep faced a significant budgeting challenge for the 2023-24 year. Cash reserve funds were significantly diminished, audiences still had not returned to pre-Covid levels, and the Board mandated that Virginia Rep pass a balanced budget for FY2023-24. Tough decisions were on the table, including potential pay cuts and layoffs.

Yet, all three Artistic Directors, the Managing Director, department heads, the Board, and finance committee worked together to create and approve a balanced budget plan for FY2023-24 that kept all positions intact with no pay cuts. It was an aggressive budget that hinged on exponentially increasing educational and children’s offerings at the newly acquired Virginia Rep Center for Arts and Education, as well as generating additional contributed revenue, and simultaneously reducing expenses.

The organization was coming off a hugely successful capital campaign for the new building and was buoyed by the promise it held to expand youth- and family-centered offerings and the associated revenue they would generate, particularly since the building was scheduled to be paid off by Dec. 2023.

Why would Virginia Rep purchase the Scottish Rite Temple if it was in in dire financial straits?

At the time of purchase, October 11, 2022, Virginia Rep was not in dire financial straits. Like many theatres, federal Covid relief funds allowed Virginia Rep to stay afloat during the pandemic and fundraise to create a cash reserve, which enabled the organization to build back its full operations. The 2021-22 season was the first full season of programming since before the pandemic.

While the pandemic was in full swing and all theatres and venues were shut across Richmond, Virginia Rep was notified that the rent at their leased theatre space at Willow Lawn, where all children’s productions and educational camps had been taking place for nearly a decade, was going to increase by approximately 300%. Virginia Rep was able to negotiate out of that lease, but it meant that it no longer had a home for its children’s programming. In the meantime, the Scottish Rite Temple had entered the real estate market, with the price steadily dropping over a period of time from $6 million down to $3.5 million. It was the perfect opportunity to establish a nationally prominent permanent new home for Virginia Rep’s youth-centered programming .

Virginia Rep’s purchase of the Scottish Rite Temple came about as the result of a year and a half of due diligence (all of 2021 through spring 2022) conducted by the Board, facilities committee, finance committee, and staff, engaging multiple consultants, architects, contractors, and subject matter experts, including the previous owners. The finance committee and accounting department ran a series of financial scenarios and models. An external fundraising consulting firm conducted a feasibility study to determine an appropriate level of community support. All results pointed to viability and profitability with the opportunity to exponentially increase educational and children’s programming, and the board voted to move forward with the purchase. (For reference, the Willow Lawn theatre held 200 seats; the Scottish Rite Temple holds 650 seats.)

The needs of the building were known, documented, and triaged, and accordingly, a capital campaign was to take place in three phases. Phase I was completed in 15 months to raise $5.2 million from the philanthropic community (including $1 million from the Board and $1 million from the Bogese family) to pay off the loan on the building by Dec. 2023, begin initial improvements, including remediating environmental concerns, and create a reserve fund for the aging HVAC. No government funds were issued to support Phase I. Phases II and III were to raise funds for additional improvements (lights, sound, fly system, other structural enhancements) and an endowment to establish the long-term sustainability of the facility.

The building is the original home of the Children’s Theatre of Richmond. It was the stage where Bruce Miller and Phil Whiteway mounted their first children’s theatre production together before they launched Theatre IV. Countless dance recitals, concerts, and other performances have been held on its stage over the decades. The building has a long history of being a significant contributor to the performing arts and Greater Richmond’s cultural landscape.

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If you have additional questions regarding this situation, please visit Virginia Rep's FAQ on their Facebook page.

If you have questions for ATLAS Partnership, please contact Managing Director Emily Cole-Jones.