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Capacity limitations strain arts, culture organizations even as patrons come back - Crain's Detroit Business

On typical busy summer days before COVID-19 was ever a thought, 10,000-15,000 people showed up to visit the Detroit Zoo.

These days, the zoo is hosting 3,500 people most days but an additional 400 for special hours on weekend nights through August.

Like other cultural organizations and all businesses, there are limits on how many people it can host each day. And that's putting a crunch on arts and cultural organizations — even those partially supported by an operating millage.

"We often see the daily maximum numbers reached … (but) earning at the gate less than half of what we would normally earn … pre-COVID," Communications Manager Alexandra Bahou said in an email.

Like the Detroit Institute of Arts, the zoo benefits from a tricounty millage which covers about a quarter of its operating budget.

A paycheck protection program loan, donations, reserves and earned revenue (albeit decreased) are enabling it to continue operating, Bahou said.

But it's cut its budget from $45 million to $25 million.

"We are fortunate that the community supported the millage … (and) that so many members and donors continue to support the organization," and there is about $26 million in accessible endowment funds, she said.How long the fund could carry the zoo is unknown, she said. "The future is uncertain and there are too many variables in play.

"Without large crowds, rides, tours, special events and more, we are unable to generate enough funds at the gate. We hope that we'll be able to increase capacity limits soon, and financially recover within the next couple years."

The reopening of many arts and cultural organizations in the region this summer following pandemic-induced closures in March were viewed as positive signs. And a number of visitors are coming back.

But the organizations continue to lose money as they operate under the state-imposed constraints all businesses face.

Under Executive Order 110, theaters and performance venues remain closed.

Museums, which fall under the same guidelines as retail businesses, are subject to a rough cap of 25 percent of the capacity, per Executive Order 161 signed by Gov. Gretchen Whitmer on July 29.

Organizations with less than 50,000 square feet of space can host just 25 percent of the occupancy established for their site by the state or local fire marshal. Those with larger locations are limited to four people for every 1,000 square feet.

It's a moving target on how much money it's cost the organizations so far, but the losses are deep, based on budget cuts.

The Charles H. Wright Museum has cut its budget from $7 million in 2020 to $3.2 million for fiscal 2021, which began July 1, said Edward Foxworth III , director of external affairs.

The sounds of excited children in the atrium could often be heard before the pandemic. Between field trips and others, the museum drew 350-500 people, on average, each day.

Now it's much quieter, with an average of 50 visitors per day, Foxworth said.

The museum furloughed about 15 of its 55 employees with the earlier closure and the ongoing loss of weddings and family reunions.

"One of the bright spots for us at the end of our past fiscal year 2020: We ended up in the black, due to a number of grants, PPE loans and so forth," Foxworth said.

"We don't project to have major events and activities because of the number of restrictions placed on the number of people that can come in. We know our rev projections will be extremely low as a result."

To generate revenue, the Wright has a number of efforts in the works. It launched a $250,000 online campaign on July 1, which had raised $162,000 as of last week. It's also preparing to open an online museum store, planning an art auction of works from local artists and other pieces left from its gala last year and offering Black businesses the opportunity to post an advertisement or video on its website for a small fee, in recognition of Black Business Month.

"That's one of the new flexible things we're trying to do to stay in tune with the … need we see in the general community," Foxworth said.

On Sept. 27, the museum will open "Voting Matters," a blockbuster exhibit on the struggle for voting rights for African Americans, from reconstruction to present day. It will also serve as a voter registration site.

And the Tuskegee Air Museum is set to move into space on the museum's first floor, with an opening hopefully around the time the new exhibit opens, Foxworth said.

The DIA's visitor numbers have been about 20 percent of its usual attendance since it reopened on July 10, Christine Kloostra, executive director, marketing and communications, said in an email.

It's limiting the number of visitors per half hour to 100 to control traffic in the museum and allow appropriate social distancing, she said. That's consistently brought a average of about 2,300 visitors each week since the museum reopened.

The museum made admission temporarily free for everyone when it reopened, including those from outside of Wayne, Oakland and Macomb counties where residents support the museum through the millage. It will return to paid admission for those living outside of the three counties after Labor Day, Kloostra said.

"We don't have a dollar amount to tie to the financial impact, but there is certainly some lost revenue from offering free admission to everyone temporarily, as well as the reduced capacity," she said.

The Henry Ford is seeing about 15,000 visitors per week, compared to 51,000 per week last year, President and CEO Patricia Mooradian said in an emailed statement. The weekly reduction is due to capacity constraints, the continued closures of some of its venues and elimination of large events.

It's continuing to operate at 25 percent capacity in order to follow state guidelines for the safety and well-being of staff and guests, she said. But since reopening July 2, The Henry Ford has made gradual changes in its operations.

"The Marvel: Universe of Super Heroes" exhibit has sold out every weekend since its July 16 opening, Mooradian said. The exhibition features more than 300 original artifacts, including Marvel's earliest comic book, iconic props and costumes from film favorites, rare, hand-drawn images of iconic heroes by the artists who first designed them and more.

Given its popularity, "we were able to return Henry Ford Museum of American Innovation back to its normal, seven-day operation," she said.

Greenfield Village continues to be open Thursday-Sunday only due to the high operating costs. The Ford Rouge Factory Tour, Giant Screen Experience and Benson Ford Research Center remain closed as the nonprofit continues to evaluate safe reopening protocols. Several rides, restaurants and retail operations are open; however, many remain closed, which impacts its opportunity to earn revenue, Mooradian said.

"While we are covering our incremental reopening costs, we are still operating at a loss due to the reduced venue capacities and experiences in addition to the inability to host large events," she said.

Last month, The Henry Ford launched a campaign to raise $10 million or more to fill a budget shortfall left by the four-month closure of its attractions.

Nearly two-thirds of the $77 million annual budget with which it started the year hinged on earned revenue from admission tickets, food and retail purchases, event rentals and memberships. The museum was operating on just a couple of months of cash on hand as of June. Last week , Brent Ott, vice president of business services and CFO, said it now has an appropriate amount of cash on hand to operate short term but continues to work with its board's finance committee to evaluate options for debt.

"If there were no limits to capacities, attendance would definitely be stronger, especially with the Marvel exhibit," Mooradian said.

The state mandates are only one part of the equation for arts and cultural groups to recapture visitors and earned revenue. Visitors also have to feel comfortable showing up beyond their current numbers.

CultureSource is funding periodic surveys done by WolfBrown to understand public sentiment on visiting arts and cultural organizations. The most recent study in July surveyed 7,531 arts and culture attendees in Michigan. Just 15 percent said they will resume attendance as soon as restrictions are lifted, down from 16 percent in May when the first survey was done.

Just under a third, or 29 percent, said they would not resume attendance until they receive vaccination or immunity, the same number who said they trust other visitors and audience members to follow health and safety rules.

In terms of donations, 96 percent said they'd donate as much or more as they did before the pandemic to the organizations they support, and 88 percent said they will spend as much or more than they did pre-COVID-19 on tickets, admissions and memberships.

The study concluded many respondents are still not ready to return to in-person events and report that they are not comfortable going to most cultural facilities even with social distancing. But the study noted that it did see a group of respondents return to museums last month.

Of those surveyed, 59 percent said they trust organizations to determine when it is safe for visitors and audiences to return.

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