Cultural center lost twice as much as it grossed its first
year
by Erin Meyer and Kalari Girtley
At its inception, both 3rd Ward Ald.
Dorothy Tillman and local legend Lou Rawls took credit for
what later became the Harold Washington Cultural Center (HWCC),
which sits today at an economic and organizational
crossroads.
The most recent financial reports
filed with state and federal officials by the non-profit
organization Tobacco Road Inc., which manages the center,
show it lost nearly twice as much money as it grossed in
its first full year of operations. In recent months, the
HWCC’s events calendar shows the state-of-the-art,
1,000-seat theater has been dark. Top-tier entertainment
at the venue is rare, according to the center’s Web site.
And events that help burnish Tillman’s legacy are
routinely scheduled.
Private donations for the center,
which totaled $2 million during the construction and
fund-raising portions of the project, have all but dried
up. A small but steady stream of public money continues to
augment the HWCC’s operating budget, but the uncertain
political future of the 3rd Ward could further jeopardize
the center’s operational stability.
An examination of the HWCC’s
organizational, operational and financial reports further
suggests:
• The financial outlook for the
HWCC is shaky. In 2004, a cash crunch forced Tobacco Road
to refinance one of its three mortgages to raise an
additional $881,958 for operating and construction costs.
• There are instances of apparent
conflicts of interest involving current and former board
members and management from the non-profit organization
that oversees the HWCC.
• Appearances of possible self
dealing conduct by key management at the HWCC, which the
Internal Revenue Service defines as financial transactions
between a non-profit and virtually all persons closely
related to the organization.
Dorothy’s dream
Surrounded by friends, family and
political supporters, Tillman beamed as she spoke above
the strains from a brass band at the Aug. 17, 2004 opening
of the HWCC. It was Tillman who lobbied for and won an
unprecedented stream of city, state and federal money that
paid for 90 percent of the building’s cost.
“This is something that will live
on for our children,” Tillman said at the opening.
But whose children are benefiting
from the $19.5 million concrete and glass building?
Since its inception in 1993,
Tillman has staffed the board of Tobacco Road Inc. with
her family, friends and political allies.
Consider the following:
• Jimalita Tillman, one of three
daughters of Dorothy Tillman, is Tobacco Road’s executive
director. State and IRS records obtained by the Lakefront
Outlook show Jimalita Tillman is paid $45,000 annually for
30 hours of weekly work for the organization.
• Current and former members of
the Tobacco Road board — the body that is supposed to
oversee Jimalita Tillman’s work — include her brother
Bemaji Tillman; Otis Clay, a Chicago musician and long
time friend of Dorothy Tillman; Robin Brown, Dorothy
Tillman’s former chief of staff; Brenda Ramsey, a campaign
contributor to Tillman’s 3rd Ward Democratic Organization;
and Terrence Bell, a financial contributor to Tillman’s
campaigns.
Ald. Tillman did not respond to
repeated requests by the Lakefront Outlook to discuss
Tobacco Road’s board and management composition. Jimalita
Tillman did not respond to requests for an interview or to
written questions about the HWCC and Tobacco Road
delivered to the cultural center.
Tim Walter, president of the
Washington, D.C.-based Association of Small Foundations,
said empanelling a non-profit entity’s oversight board
with persons who share family ties and have friend-based
loyalties can be problematic to the effective leadership
and management of a non-profit entity.
“You want to avoid situations
where a non-profit’s actions could trigger even the
appearance of a conflict of interest,” Walter said. “I
think that’s one of the keys in running a small and
successful non-profit.”
Potential for inner-city success
The cultural center is named
after Chicago’s first black mayor, who died in 1987. Few
would dispute its potential to return Chicago’s storied
Black Belt to its glory days as an entertainment and
cultural Mecca. The 40,000-square-foot, $19.5 million
building boasts a digital media resource center — staffed
by Illinois Institute of Technology faculty — and a joint
radio and broadcast center.
University of Chicago professor
Diane Grams, from the Harris School of Public Policy, has
taken a close look at Bronzeville in her upcoming book
“Producing Local Color.” Grams said she found no other
local institution as promising a cultural and economic
engine as HWCC.
“As a state-of-the-art facility,
it seems to have the potential to substantially increase
its earned income through more extensive programming,
specifically theatrical and musical performances in the
1,000-seat theater,” Grams said. “Can you imagine 1,000
people coming to the corner three to four times a week? It
is possible.”
But residents and tourists are
not flocking to the HWCC. Its scheduling calendar is thin;
in November, the theater was used for only 10 performances
of the play “Choices.” The only publicized event in
December for the HWCC’s theater is a Dec. 31 tribute to
Motown.
Tobacco Road’s financial reports
obtained by the Lakefront Outlook via the Illinois Freedom
of Information Act show that the organization is
struggling financially. Between Aug. 17, 2004 and June 30,
2005 — the organization’s first year of operation — the
HWCC fell into the red. The organization’s federal tax
returns for that year show revenues of $678,688, including
government grants of $25,000. The organization’s expenses
totaled $1,269,514.
Look at New Jersey
Grams said a comparable example
of a similar facility maximizing its potential to the
community is the New Jersey Center for the Performing Arts
(NJCPA), in Newark, N.J., which turned a $1.1 million
profit during its first year in operation in 1999. “They
were programming and earning $10 million in ticket sales
in the first year they opened and have maintained that
level since then,” Grams said. “This was done in part
through building networks of advisory committees in both
corporate and religious sectors of Newark.”
Like the HWCC, the NJCPA was also
built almost entirely with public funds, and like the HWCC,
it is also run as a non-profit organization. Both
organizations are overseen by a board of directors. And
the concept of using public money to fund both of these
privately run non-profit groups is also similar.
Mayor Richard M. Daley said at
the HWCC’s 2004 opening that the facility would “showcase
what Chicago’s all about” and that residents from “all
walks of life will now be able to understand how important
education is in arts and culture — not only to the
African-American community but to our city, our nation and
the world.”
Like Bronzeville, Newark’s
population is predominately African-American. The city has
been burdened, like Bronzeville, by urban decay and
disinvestment. And, as is the hope in the heart of
Bronzeville, revitalization characterizes Newark’s more
recent history.
One of the goals in building the
NJCPA was to help repair the city’s social fabric, ravaged
by some of the worst 1960s race riots, said Lawrence
Goldman, the NJCPA president. Creating a diverse
programming schedule that appealed not only to Newark
residents but also to the metropolitan area’s diverse
population has been key in the center’s success.
“NJCPA’s commitment to bringing
diverse communities together is in our DNA,” said Goldman.
“There is scarcely a major decision that impacts the arts
center that is not looked at without understanding its
effect on our diversity mission.”
The Newark center’s December
programming calendar reflects this commitment to
diversity. NJCPA has scheduled events for 26 of December’s
31 days — its artists performing gospel, soul, baroque,
hip-hop, doo wop, classical music and a touring production
of the Broadway play “The Producers.”
Some of the HWCC events,
Tillman’s political opponents allege, were staged to help
boost the alderman’s popularity. The alderman, who was
appointed by Mayor Washington in 1983, is up for
re-election in February 2007.
Recent examples of events at the
HWCC where Ald. Tillman played a role include:
• The Chicago Black United Fund’s
Sept. 20 gala, where Ald. Tillman and her daughters
Jimalita, Ebony and Gimel were honored as the group’s new
“living legends.”
• In August, the HWCC hosted the
40th anniversary celebration of the Chicago Freedom
Movement, where Ald. Tillman was a featured speaker.
Some of the events held since the
opening of the HWCC may also have violated federal
non-profit tax law, said senior partner at Chicago-based
Quarles & Brady LLP Janice Rodgers, a nationally-known
charitable organization attorney.
In order for an organization to
maintain a non-profit tax status, the IRS prohibits
persons affiliated with a non-profit group — and their
relatives — from conducting financial or in-kind
transactions that profit a non-profit group’s senior
management or members of its board of directors.
In addition to her duties at the
HWCC, Jimalita Tillman also owns and operates the Spoken
Word CafÈ, located directly north of the HWCC. Promotional
material for the HWCC obtained by the Lakefront Outlook
indicated that Spoken Word provides catering for HWCC
events. That is potentially a violation of federal tax
law, said Rodgers.
“That is something that could
trigger some scrutiny by the IRS,” Rodgers said.
Ald. Tillman declined to respond
to messages left at her office seeking comment on her
involvement in these and other events hosted at the HWCC.
Jimalita Tillman did not respond to several verbal and
written requests to comment on her dual roles at Spoken
Word and HWCC.
When HWCC opened in 2004,
Jimalita Tillman said the facility was meant to be “an
education center first, an entertainment center second.”
Jimalita Tillman did not respond
to written requests seeking documentation about the youth
educational programming at the facility. However, she said
in 2004 that the HWCC would host an economics to music
program to allow students to record and produce their own
music and also learn about copyright laws and publishing.
In contrast, the NJCPA provided
the lists of dozens of ongoing educational programs at the
facility. More than 200,000 children have visited the
center since its opening. The programs offered to area
youth include jazz for teens, youth orchestra festivals
and workshops, summer music programs and two different
performing arts scholarship programs.
Daniel J. Yovich contributed to
this report. |
