Curtain call

In 1972, four of the opulent grand old theaters in downtown Cleveland were closed, and two of those were in the shadow of the wrecking ball.

A grassroots movement led by the nonprofit Playhouse Square Association continued to stave off demolition and raised $40 million for renovation of the theaters. By the end of the 1980s, the Ohio, State and Palace theaters had been restored, and the Allen followed in 1997. The Hanna was added to the roster in 1999.

The Playhouse Square Center is now the country’s largest performing arts complex outside of New York City and draws more than 1 million people a year.

Going from forgotten remnants of a glorious past to a center of civic pride took hard work, a vision and innovative ideas.

This original script for success is something Art Falco, president and CEO of the Playhouse Square Foundation, has followed since taking the position in late 1991.

“I’d like to think that everything we do is a little innovative,” says Falco. “One of the innovative things is our business model, whereby we certainly have the performing arts, but have, in fact, stretched ourselves into other areas, such as district developments that provide us with other income. These income streams through our real estate holdings have helped reduce our unearned income need.

“It has allowed our earned income to be 92 to 95 percent of our budget. That is very, very unusual in a nonprofit organization. The national average is about 70 percent of earned income.”

Falco knows the money side of the foundation well. He joined as CFO in 1985 before being promoted to vice president for finance and administration in 1988. He also serves as president of the Playhouse Square Development Corp., which was the co-developer of the Wyndham Cleveland Hotel.

Other real estate moves include the construction of a 750-car parking garage, the acquisition of the Hanna and Bulkley buildings and the current development of One Playhouse Square in conjunction with ideastream, Cleveland’s National Public Radio affiliate.

“We have taken a leadership role in developing the theater district,” says Falco. “Our original vision was based on the fact that we felt the theaters would be an anchor. By attracting people to the theaters on a regular basis, the surrounding real estate would develop on its own. We have had to take a much more active role in developing real estate than we planned. It’s been an evolving process. We thought we would be the catalyst, but in some cases, we had to become the developer.

“It’s worked well for us. We’re thought of as a type of development authority in the area. Our intent is to not continue to be the developer, but just seed development and let the market forces take over. We’re starting to see this now.”

Each real estate venture is incorporated into a separate limited liability corporation so that if one fails, it won’t ruin the entire organization.

Falco credits the long-term success of the district to sticking with the original vision.

“Overall, our master plan has stayed right on track,” says Falco. “What changed was our taking a greater leadership role over the years. But in terms of having a hotel in the district and an outdoor performance space (Star Plaza), those were all part of the master plan.”

The track record of success has helped keep the positive momentum going.

“I think it was harder to originally develop the Playhouse Square Center,” says Falco. “Now there is a confidence that if we introduce a project, it will be well-received and well-thought-out. There is never a guarantee of success, but what we’ve accomplished in the past makes it much easier to move forward.

“I think having a plan is important. The goal was to create an economic development project using the theaters as a vehicle to attract people and a critical mass. The only way the center would be successful in the long term was if we created a friendly theatrical environment around the theaters. That’s always been our premise.” How to reach: (216) 771-4444