WeLoveMillburn reports on its findings
regarding Millburn Township's plan to authorize
purchase of the Paper Mill Playhouse June 17, 2008.

Millburn, NJ — June 5, 2008 — Following the first public hearing at Town Hall on May 27th regarding the Township's proposal to purchase the Paper Mill Playhouse, Shayne Miller, Press Manager, requested a meeting with officers of WeLoveMillburn. That meeting was held at the Paper Mill on June 2, 2008.

Attending from the Paper Mill Playhouse were — Mark Jones, Executive Director; Carolyn Ferolito, Board Co-Chair; Shayne Miller, Press Manager

Attending for WeLoveMillburn were — Mike Becker, Ralph Inglese, Al Mazzorana, Abby Kalan, Ed Moos

SUMMARY: The Paper Mill Playhouse (called PMP hereafter) is a valuable asset to our community. There is a new management team in place that appears motivated and capable. While many non-profits and cultural establishments are having financially difficult times, it is unfortunate that the PMP has nowhere else to turn at this point except the Township Committee and therefore the residents and taxpayers. WeLoveMillburn has no choice but to support the town purchase of the PMP since no other options were available according to PMP executives and the Township. WeLoveMillburn must constantly remind the Millburn Township Committee to remain vigilant from a financial point of view, not creative point of view. There are grave risks involved with this purchase and many positive things have to happen down the line for it to be ultimately successful. In supporting the purchase of the PMP, we also ask that residents be given special considerations which are outlined below in the notes.

NOTES FROM RESEARCH AND MEETING:

• Mark Jones stepped us through a 10-year history of the PMP. Poor management and a national trend towards reduced cultural attendance were cited as the reasons for PMP's financial problems. However, their leave-behind written piece shows subscription renewal rate, subscription dollars and contributed income up 2008 over 2007.


• They seem capable and motivated about the situation. We asked for, and they gave us, a copy of their financials. Jones reminded us that it is all public record. We did notice that in the financials of 2006 and 2007 they only requested (note 15) $8 million from Millburn for purchase of the land and building. The loan's ordinance, if passed, pays them $9.1 million.


• We want to point out that the town is borrowing money that has an interest expense of about $360,000/yr ($9mm @ 4%) and only receives on average $100,000/yr in lease income over the first 10 years. Even if you believe the property is worth $9mm, it is still costing residents money to make the purchase. Effectively, we're subsidizing the PMP by $260,000/yr.


• Ten years ago the PMP was able to survive basically on ticket sales alone. Today, even with a plus 35% increase in ticket prices recently (first one in seven years), they cannot survive on ticket sales alone.


• Their plan for survival is to procure income from three sources: ticket sales, grants/donations (companies and individuals) and endowment income (they plan to build a $10–15 million endowment).


• The actors and stagehand's unions have been cooperative. The Executive Director says he cut out $400,000 in consultants, hired new staff, and sold their scene shop, which saves them $600,000 per year.


• According to Jones: they lose money on every production. Without the grants and endowment, they will fail. That was made very clear. We asked about their liquor license which could be worth $750,000 but they said it was special for the PMP and also not for sale. They added they are having the downtown restaurants bid on catering a PMP restaurant and said they want to reopen again soon.


• Paying off the bank loan is critical to their survival plan because many patrons, they believe, are holding off or simply will not donate monies if they believe the funds will be used to pay off debt. Hence, the Township's purchase of the property relieves them of the negative bank connotation and donations should begin to flow (Their opinion). It is also possible that public support from the Township could appear a desperation move and actually result in reduced private donations.


• We did a quick approximation of what the PMP brings to the downtown, it does not even come close to what they say it does. The PMP, says they provide $25 million in business to the community. We are hard pressed to figure out how it could be much higher than $5–7 million.


• Also the town got an appraisal for $10 million and the PMP got one for $15 million. Since it is only a little more than 4 acres (worth maybe $4 million) plus a building, the value, zoned for cultural currently, can't be that high.


• WeLoveMillburn believes that at the June 17th Township Committee public hearing and vote, they will vote 4 to 1 or even 5 to 0 to approve the purchase regardless of what residents have to say during this final public hearing on the subject. Both the Township Commmittee residents and the PMP executives feel they have no other options. No other organization came forward to purchase the PMP and bail them out of their financial situation. While we support the purchase we must point out there are future risks.


• In conjunction with going along with the plan, WeLoveMillburn requests:


• That the PMP assign a financial overseer designated by the Millburn Township Committee to be included on their Board's Finance Committee and the overall Board of Directors (both the town and PMP have stated this will happen).


• PMP should institute a 'cultural educational' program with the Millburn school system. Director Jones stated that they had approached Dr. Brodow several times but that he had no interest. While there is no drama department within Millburn school system, many surrounding systems do have one and use the PMP as a resource. We advised the PMP to go to the Board of Education not the Superintendent.


• Millburn has to capitalize on its purchase — i.e., Township gets accolades for pulling out its troubled theater and that sends the message to all that Millburn Township is alive and healthy and a great place to live.


• Millburn residents should be offered a discount on tickets and affairs. Both Ferolito and Jones said they had this in the works. When we asked what was the per centage of Millburn residents to all other surrounding towns they did not have figures but did say "Livingston" and "Springfield" etc. ahead of Millburn.


• Require that the town's representation make a formal presentation to the TC quarterly to review some financial info (like how actual income compares to the budget) and a few other highlights. We want to make sure the TC is publicly monitoring the situation during the turn-around.


• PMP executives say the playhouse is only used 45 weeks per year. All times that the playhouse is empty and not used or needed it should be offered to other non profits, educational groups or civic groups in the township.


• PMP should use our website (welovemillburn.com) and all other free marketing and advertising sources to promote the PMP. This should include the township website and other civic groups like The Junior League, The League of Women Voters and others.


• In other words — the Millburn taxpayer/residents must be offered special benefits since they are buying the PMP land and building.

WeLoveMillburn, Inc. is a non-profit, grassroots, informational organization made up of involved residents. This mission, as we have stated on our website, is to help all residents to be better informed about the issues that affect our community. We do this in a positive spirit of informing one another about what is happening, what is not happening and what is possible. We are all neighbors and this is our town. WeLoveMillburn.com

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