With the announcement Oct. 22 that the school will sell its historic home in Lincoln Park, one of Chicago's most important cultural and educational institutions has hit rock bottom.
The School's board and leadership team would have people believe that the 909 W. Armitage building -- where classes have been held for 50 years! -- is being sold to create an endowment. What they don't want to admit is that it is their mismanagement that has jeopardized the School's future.
In 2009, in the midst of the worst recession since the 1930s, the School’s board of directors committed millions of dollars to put up a second building in Lincoln Square, thinking that expansion there would increase student enrollment. Lo and behold, enrollment did not increase. Instead, this foolish decision saddled the School with enormous debt and with increased operating costs -- which led the leadership to increase the price of classes dramatically, which further reduced enrollment, creating the death spiral the school now confronts.
The Armitage building is being sold because the School can't afford to operate three buildings at current class enrollment levels. But by selling the building, the School will see student enrollment decline even further, which means the death spiral will continue. It's sad, especially for the teaching staff, because when enrollment drops, they lose their livelihoods. We need new leadership -- board members who care about the students and faculty first, and professional managers who know something about how to run a multimillion-dollar business and cultural institution.
Despite the lack of enrollment growth, and the School's financial difficulties, the school has substantially increased compensation for its executive director, Bau Graves. Graves' total compensation rose 52 percent from 2009 to 2016 (from $166,593 to $254,871), according to the school's IRS Form 990s.
How can the board justify paying the executive director a quarter of a million dollars a year when the School's finances have gotten steadily worse during his tenure? And when he and his team have demonstrated through their actions that they would rather diminish the student experience -- by raising class prices and cutting programs -- than learn 21st century marketing techniques?
We believe it is absolutely possible for the School to grow its student enrollment. It should own an amazing database of members and students who – by enrolling in classes and attending concerts – have told the School a lot about their musical interests. This information can be used to create targeted marketing initiatives for classes and programs. A modest investment in analyzing the School’s customer database and building digital marketing programs will do far more to address the School’s long-term financial problems than the cost-cutting measures the current leadership prefers.
It is time to recommit to the School's core mission -- to be a SCHOOL. A place where students learn and become part of a musical community, and where amazing musicians support their ability to make music by sharing their gifts and talent
We, the most loyal students and friends of the Old Town School, call on board chairman Kish Khemani, other board members and their administration to serve their community better by taking the following actions:
1. Hire professional managers who understand how to operate a nonprofit business in the 21st century.
2. Find new board members who believe it is possible to *grow* student enrollment with the right marketing strategies -- and will insist on hiring a staff who will do just that.
3. Provide more transparency about the decision to sell the Armitage building – give us evidence that the sale is part of a coherent plan to restore the School's financial health, not just a desperate short-term fix. Questions we would like answered:
What is the projected annual income that will come from the endowment created by the sale of the building?
What guarantee is there that this endowment will be protected – and grown – rather than raiding it annually to close budget deficits?
How much revenue will be lost by canceling classes at Armitage, and how does that amount compare to the annual income from the endowment?
What will closing the Armitage building mean for the income of faculty?
How many staff positions, full- and part-time, will be lost as a result of the closure?