Garbeau's Under Threat

Over the last day, people have been digesting news that Garbeau's Dinner Theater is being threatened with shutdown:

Garbeau's Dinner Theatre in Rancho Cordova is facing possible closure next month. Mark Ferreira, CEO and co-owner of Garbeau's since June 2007, says he needs to raise $100,000 by the end of this month to satisfy his landlord, Lakha Investment Group.

Ferreira's for-profit theater had strong revenues the first nine months of his ownership and artistic direction of the theater business. But he ties his theater's problems to last year's crumbling economy - specifically gasoline prices.

"The last six months have been tough. Once gas hit $3.50 in just about a week we saw our averages drop in half," Ferreira says. "We were getting about 145 people a night and when gas spiked that dropped to about 60 to 70 patrons per show.

More news comes from Garbeau's Newsletter:

To: Our Patrons and Friends
From: Garbeau's Dinner Theatre

It is with a combination of sadness and optimism that we are writing to you. As of today, we are launching a campaign to keep Garbeau's from closing. We did not anticipate being in this position, but a conversation this past Wednesday with our landlord went far differently than we had ever expected.

To explain, I will write chronologically from the start.

We bought Garbeau's in June of 2007. For nine months, we were enjoying wonderfully sized audiences and healthy revenues. In March of 2008, gas prices broke $3.50 for the first time and-practically overnight-our attendance dropped in half. Apart from getting fewer calls, the huge and sudden energy cost spike that happened last spring resulted in a record number of cancellations from people who had existing reservations. We literally received many calls from guests who said they were looking forward to coming, but the murky outlook (that we months later found out was a full-scale recession) prompted people to cancel their reservations due to uncertainty of what might be in store.

Changes were made to meet the lower attendance-our operating costs were smartly diminished to "skeleton crew" proportions without sacrificing our effort to provide quality customer service. The decreased revenue set us on a path in which we were able to cover most of our costs, with the primary shortfall being rent. We tried to negotiate with our landlord for a temporary rent reduction considering the economy. Our effort was to have a rent based on a percentage of our sale until the economy recovered; upon having stronger numbers, we would happily return to the regular rent cost.

We thought the negotiation would end favorably. If so, we would be like other companies who were struggling in this market, but who would manage to survive. This past Wednesday, our landlord flatly refused any negotiation whatsoever. His demands were that we come completely current (we have not been capable of paying full rent) AND supply financial proof that we are well capitalized enough to manage full rent going forward. He stated that if we did not satisfy his demands, he would terminate our lease, an act that would force us to close Garbeau's forever. To meet his demands, we are launching an effort to raise one hundred thousand dollars. On one hand, that number is depressing and we face the reality that not raising enough will leave us with no choice but to close. On the other hand, we are optimistic that this goal can indeed be met. For perspective, if the number of people who saw our production of I Love You, You're Perfect, Now Change (which ran for only seven weeks-20 performances total) bought a $26 gift card, we would overshoot our goal by over a thousand dollars. It is due to that context that we are hopeful.

What Do We Need?
We are asking for help from everyone who wants to see Garbeau's stay in business. Here's how:

The newsletter then describes actions that Garbeau's supporters can do - listed here.

Most of all, to their supporters, the Garbeau's crew urges speed - delay will not help them in the least.

Other Sacramento theater groups are also feeling pinched.

It's not surprising that the rapid economic downturn is affecting the professional theater companies first - they have greater overhead and are more vulnerable to trouble.

It's interesting to me that Mark Ferreira blames the rapid increase in gas prices last year for Garbeau's current crisis. It may be the housing crisis bears a share of the responsibility as well - Garbeau's is in a suburban location where the housing market may well have tanked (and which makes me wonder how that other nearby theatrical venue - Centerfolds - is doing).

Economic volatility may next come for the community theaters. As DMTC Treasurer, it worries me.

In the typical annual cycle at DMTC, February is usually the weakest month, and this year is no exception. So far, this year looks no different than last year did at this time, however - I'm not seeing the economic shock as of yet. Mid-2008 was worse than mid-2007, of course, but we also had fewer fundraisers, so I can't blame the runup in gas prices alone for the trouble. The acid test will come when 2009-10 Season Tickets go on sale, starting later this month. By April, we will know how bad the punch will be. Nevertheless, because the community theaters generally have less overhead than the professional theaters, we might suffer less, at least initially (and the housing crisis may not be as severe in Davis as elsewhere).

Abrupt economic changes, like a spike in gas prices, can pull the rug out from all kinds of businesses, theaters included. Donations to DMTC peaked in 2004 - in support of construction of the New Theater - then abruptly dropped after the December 2004 tsunami in South Asia (if it isn't one thing competing for charity dollars, it's another). We survived that transition to a leaner environment. Since then, DMTC has adjusted to reality by slowly cutting expenses (the hardest thing to effectively do in a crisis). So far, we've been spared an abrupt crisis, and I pray we may continue to be so spared.

Please give generously to help Garbeau's Dinner Theater. Then, kick a few more dollars to other theater groups of your choosing (like DMTC). Because we all depend on one another and we are all wounded if one of us suffers.

DMTC has joined the list of organizations that will honor Garbeau's Season Tickets should the theater be forced to close. So, buy Garbeau's Season Tickets with confidence that they will be honored by someone, one way or the other.