Marcus Performing Arts Center steers toward financial instability. Can the county help?

The leader of Milwaukee Performing Arts Center came to county supervisors with a plea Tuesday: Extend the county's cost-sharing agreement beyond the end of next year to give the downtown performance hall time to repair its finances.

The message from Marcus Center CEO Kevin Giglinto comes as the county continues to tighten its belt and struggles to maintain financial support for a variety of cultural institutions.

"The Marcus Performing Arts Center is at a pivotal juncture," he wrote in the letter on June 18.

Having led the center for almost a year, Giglinto provided a financial update to supervisors on the parks and culture committee Tuesday, calling on them for ongoing support. The discussion of the Marcus Center's future was shared in an informational report and did not require any action from committee members.

"Despite our successes we do face critical, immediate challenges," Giglinto told supervisors. "Without significant action and continued support, we would be in a negative cash position by 2026."

Giglinto listed three major factors that have led to financial struggles in recent years: loss of revenue during the height of the COVID-19 pandemic, the departure of the Milwaukee Symphony Orchestra and the cost of a planned redevelopment of a parking structure the center leases from the City of Milwaukee

This is nothing new for Milwaukee County, which has faced dilemmas about how to sustain cultural institutions, including the Mitchell Park Domes, Milwaukee Public Museum, the Charles Allis Art Museum and Villa Terrace Decorative Arts Museum.

The county's partnership with the Marcus Center is scheduled to run through the end of 2025. Giglinto's message to supervisors is a longer beneficial arrangement is paramount to the success and survival of the Marcus Center.

"It is imperative that we establish a new agreement to ensure the continuity of our operations," Giglinto wrote in the letter. "The County’s investment in our physical infrastructure has been substantial, but the reduction in operating contributions since 2016 has been a further strain on our finances."

He added: "While we believe that the current operating agreement was signed with the best intentions of putting MPAC on a financially sustainable path, the subsequent events have undercut the original assumptions of where we would be as an organization ten years later."

The county's annual operating support for the Marcus Center has dropped from $950,000 in 2016 to $550,000 in 2024, with funding set to drop another $50,000 next year, according to the county's contribution agreement.

In last two decades, the county has invested $14 million to support critical infrastructure for the Marcus Center, while the center contributed an additional $23 million in capital improvements.

Documents show that the Marcus Center had projected a more than $2 million deficit by the end of 2024 fiscal year.

But can the Marcus Center avoid the financial chopping block?

Its importance to the community and role as an economic cultural engine would say so, according to Giglinto. On Tuesday he told supervisors the center is a cultural gem that is a "key contributor" to Milwaukee County's economic vitality.

About 300,000 people from across Wisconsin and Northern Illinois visit the center each year for about 300 events, he said.

He estimated the Marcus Center's annual economic impact at $32.4 million.

He said the numbers underscore the center's "importance to the local economy meet our efforts to bring high-quality arts and cultural programming to the region not only enhance our cultural fabric for the Milwaukee region, but also drives economic activity, making impact the vital institution both culturally and economically."

The Marcus Center started a fundraising program in 2021 that has seen a 257% increase in donors for the center that has tripled contributed revenue, according to Giglinto.

“While our new business model shows promise with fundraising growth supporting diverse programming and community activities, it will require time to transition fully,” Giglinto wrote. “During this period, we will continue to experience financial strain as we work to increase our fundraising capacity and diversify our revenue streams.”

Contact Vanessa Swales at 414-308-5881 or vswales@gannett.com. Follow her on Twitter @Vanessa_Swales.