Former board member, Orlando mayor discuss Dr. Phillips Center drama

ORLANDO, Fla. — Today, for the first time since sending a scathing resignation letter to the Dr. Phillips Center Board of Directors, the CEO of Dr. Phillips Charities is speaking only to 9 Investigates.

Ken Robinson says the Board of Directors, a board on which he served for 5 years, needs to be more than just cheerleaders for management at the center.  He says the Board should be providing more guidance and oversight, particularly with the way money is spent, donor relationships, and making sure Phase II of the project serves the arts organizations it was always meant to.

Though the performing arts center will always bear the Dr. Phillips name, only time will tell whether the relationship between leadership at the Dr. Phillips Center and the $35-million donor will ever be repaired.

“It's really systemic of what the issues are today.  They still continue with the inability to work with other organizations, to work with the resident art groups, to work with the major donors,” Robinson said.

Robinson’s 3-page resignation letter detailed a dispute over naming rights at the Center, which was resolved after Dr. Phillips Center leadership granted the charity expanded naming rights.  Robinson says the agreement simply reiterated what his organization believed were their rights to start with.

Now, he says the focus should be on repairing relationships with the local arts organizations that expect to use Steinmetz Hall.  The Orlando Ballet and Orlando Philharmonic, who are expected to receive resident rates, are at a standstill in negotiations with Center leaders.  Opera Orlando is also fighting for rates they feel they were promised as apparent successors to Orlando Opera.

“It's disappointing, as a major donor to the organization, it's disappointing when you look at the original agreement that says who they are and that they needed to be treated certain ways,” Robinson said.

With so much public money wrapped up in the project, more than $400-million and counting, we asked Robinson whether he felt his former Board should have more public oversight.  His letter also revealed concerns about plans for the front plaza, potentially needing another $70-million in tourism development tax dollars.

“It is a private nonprofit but there is a lot of public money that has gone into this project,” Robinson said.  “That's really for some other elected officials to decide what needs to take place.”

So we took that question to Orlando Mayor Buddy Dyer.  With Dr. Phillips Center construction taking place right across the street from City Hall, Mayor Dyer has overseen every step of its progress both literally and figuratively.

“They’ve actually operated at a profit, and we thought they were going to operate as a loss,” Dyer said.  “They're a very well-run organization.”

Operations at the Dr. Phillips Center have received a lot of scrutiny, over high turnover rates, personality conflicts, and now the dispute over rate negotiations and Robinson’s resignation.  With more than $400-million in public dollars invested, we asked whether the Board should have more public oversight.

“I don't think it's our role to micromanage the staff, that's the Board's role,” Dyer said.

Dyer explained the city’s agreement with the Dr. Phillips Center is specific to the financial oversight of the construction.  Back when the project was first discussed, the decision was made to limit government oversight over operations to avoid conflicts of interest when it comes to what performances are presented at the center.

Dyer is a Board member at the center, but he doesn’t regularly attend meetings or vote; instead, another city representative votes on issues facing the Board.

Mayor Dyer has, at times,  used his power beyond financial oversight.  Most recently, he says he was asked to mediate the naming rights dispute between Dr. Phillips Charities and the Dr. Phillips Center.  We asked whether he would also step in to help settle the rate negotiations at Steinmetz.

“I'm not as familiar with the ins and outs of what the lease agreement should be for the arts groups,” Dyer said.  When asked if he’ll look into the issue, he said, “We’ll see.”

Dr. Phillips Center officials referred us to the series of responses they released on Monday, which you can read here.

The Dr. Phillips Center provided Channel 9 with the following statement:

"On negotiations with arts groups

We have a long history of working with the Orlando Ballet and Orlando Philharmonic Orchestra, as well as dozens of other arts groups. Since 2005, we have worked with their leadership to plan for their performances in our theaters, leading to their inaugural seasons in the one-of-a-kind, world-class Steinmetz Hall. The plan we’ve consistently laid out has always been to gradually reach an average rental rate; in fact, prior to our 2014 opening, the gradual rental rate increase schedule was presented to both resident contract organizations, as well as the City and County.

Keep in mind our rates to date, and the rates offered to the Ballet and OPO for their first two seasons in Steinmetz Hall, are the lowest of any similar venue in Florida. In fact, the rates are about a third of the daily cost to operate the center.

A few other facts to keep in mind:

• We've provided the Ballet and OPO (our resident contracted companies) with more than $2 million in rent value and other support, and we've helped with past fundraising and marketing. 
• We've raised funds to cover costs for the Ballet to engage a strategic arts management consultant (Michael Kaiser) to assist with their 2015-2016 season.
• We've hired the OPO for more than $650,000 to perform in our self-presented shows.
• We've supported the Opera and 100+ other local nonprofit arts groups with more than $1 million in rent value and other support.
• We cover between $4.5 and $5 million in annual facility costs for upkeep on the City-owned asset (building and grounds) to ensure it is fully operational and performance-ready.

The business model for the arts center, vetted and approved over several years by Orange County, the City of Orlando, our board of directors and arts groups, is specifically designed to operate without receiving public funds for operations. It’s a non-profit, risk-based model that has an independent mission to embrace all of the arts. Just as the arts center is expected to run a fiscally responsible business, the resident contracted arts groups are asked to do the same to be able to perform in such a world-class venue.

We value what these groups do and bring to the community. We want them to perform here, and we want them to succeed. We’ve been both considerate of the groups’ positions and transparent about the center’s operations throughout the entire process. Our team is doing all we can to work cooperatively with the Ballet, OPO and Opera, while maintaining a programming schedule that advances our mission and generates revenue for ongoing operations.

On naming rights

As the arts center’s namesake and largest donor to date, Dr. Phillips Charities contributions are greatly appreciated.

Recently, we’ve been working through an issue with Dr. Phillips Charities President/CEO Ken Robinson on whether or not the arts center had the ability to offer naming rights for parcels and property outside the building itself.

We secured two independent legal opinions on the matter attesting to our position; however, at the request of the city and to avoid threatened litigation, we agreed to grant Dr. Phillips Charities expanded naming rights to the campus at no additional investment. 
Those agreements have now been finalized and executed.

On Ken Robinson’s resignation

We received notification from Ken that he would be transitioning off the executive committee and board, and appointing another Dr. Phillips Charities representative to serve. Ken has been a member of our executive committee and board for five years, helping lead the direction and success of the organization. We are grateful for his service.

We have a longstanding partnership with Dr. Phillips Charities and have enjoyed an overall positive working relationship with the organization’s representatives, including Ken’s two predecessors. We look forward to working with the organization's next representative.

On fundraising

To date, the arts center team has raised $184 million in private philanthropy, including $7.5 million this past fiscal year. We’ve received an average of 1,500 new gifts (at multiple giving levels) each year since we’ve opened, reaching well over 8,500 total new donors.

And we have about $5.7 million to go for the completion of the capital project.

Our operations are strong, and we've exceeded expectations every year, achieving a modest net profit over our five-year operating period. That net profit allows us to put resources back into our operations and help us carry out our mission-based work. Since opening, we've been able to provide $11 million in value for community support, including: 
•    scholarships for underserved kids
•    free performances
•    educational opportunities for participants of all ages
•    a nationally recognized clinical arts research initiative in partnership with AdventHealth
•    a seven-county, 50 high-school musical theater competition
•    an eight-month "Disney Musicals in Schools" program in five Title 1 schools
•    rental offset for theater and event space
•    student and veteran rush tickets
•    150 annual silent auction items for non-profit organizations
Finally, we've also raised $4 million for an endowment, with our goal to reach $25 million within five years of the opening of Steinmetz Hall.

On Steinmetz Hall cost and timing

Construction of Steinmetz Hall is currently on budget and on track to open in fall 2020 as planned. We are monitoring two items impacting the budget – concrete and electrical costs – and will continue to do so as construction progresses.

Prior to construction, our Building and Executive Committees, along with our Board of Directors and the City, agreed to move forward with two adjustments:

• Expanding the lobby infrastructure to provide a seamless connection between the front- and back-of-house areas. This adjustment will increase access to all performance spaces, enhance facility operations and maximize the use of The Green Room for public use. These building components will be included in the project if the funding is available. We have committed to raise an additional $4 million to cover the costs of these adjustments.

• Joyce and Judson Green, for whom The Green Room is named, have committed an additional $1 million to further enhance the room’s performance environment. Plans are currently in development and will be designed to elevate the experience of both artists and audiences. This gift is in addition to the Greens’ previous $5 million gift."

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