POSTED ON SEPTEMBER 19, 2012:
Reorganizing required if the Jazz Hall is to survive
Sometimes the more you learn about something the less you wish you knew because it just gets worse and more discouraging the deeper you probe. That appears to be the case with the revelations about the current operations and future viability of the Oklahoma Jazz Hall of Fame.
First, it's important to point out what's not at issue. The Oklahoma Jazz Hall of Fame (JHF) should be and can be a great source of pride for Tulsa. The citizens did the right thing by financially supporting the preservation of the iconic and historically important train depot. What is at issue is that those responsible for its operation have put the trustees of the Tulsa Industrial Authority in a terrible situation.
Caught in the middle of this mess is the innocent victim: The Deborah Brown Community School. Ms. Brown was allowed to turn the lower level of JHF into a school (with her own money being used in part to fund about $104,000 in necessary renovations). She was assured that there would be no rent. She also during this time made a $12,000 contribution to the Jazz Hall of Fame.
[Editor's note: At press time, the county had asked the school to vacate the building, citing the lack of a certificate of occupany. It was unclear if the school would seek to stay.]
The school's moving into the Union Depot building was done without authorization from the trustees or any written agreement. Ms. Brown is reported to have said: "I feel like I'm in the middle and I don't know what they have done."
The trustees never had any intentions or desire to operate or oversee the operation of the Jazz Hall of Fame. As far as they were concerned, they were simply the landlords who expected their tenant to follow the law and comply with the terms of their lease.
However, the trustees are more than just the landlord. They have a fiduciary responsibility to see that the assets of the Tulsa Industrial Authority are only used for their intended purposes and comply with the terms of the lease. It is not the Trustees' responsibility to bailout a tenant who clearly, by their own actions and words, can't hold up their end of the lease.
When it was discovered that the JHF was at least $50,000 in arrears in paying utilities, property assessments and insurance, the trustees were assured by JHF management that these would be brought current quickly. Less than a month after that assurance, the trustees were told that the JHF barely had $5,000 in the bank.
It begs the question: How can one make such a representation without knowing that it can't keep that representation? Are their financial records in complete disarray? Is JHF management unable to keep good records or read a financial statement, or, for that matter, even a bank statement?
Where has all of the money gone that the JHF has received over the past year? It paid no rent. And yet they can't or didn't pay their utilities or property assessments.
They reported yearly revenue of more than $600,000 by the end of September 2011. Management's response, when asked by the trustees, was that the money was used to pay staff and for energy efficient improvements. But the building is owned by the county and it's up to the county to make any improvements or to approve any changes requested by the tenant. And what kind of rational mind would spend money on energy efficient improvements on a building you don't own if that expenditure would leave you without money to pay the utility bills after you've made the improvements?
It appears the revenue received by the JHF is event revenue or patron donations. By their own admission, when they have events they play "catch up" on the bills. When they don't have events or they don't make much from the events, they get behind on the bills. And when times are tough, donations start to drop.
There appears to be no financial or business plan. With the trustees having determined that numerous terms and conditions of the lease have been broken, it's more than likely too late to expect that any tenant promises will be kept in the future. History has taught the trustees a tough lesson: Giving one's word is not enough, and trusting your tenant can come back to bite you.
So what should be the future course to save the JHF and to maximize the use of the great depot?
We should diversify the uses and revenue sources of the depot and put a new organizational structure in place. Keep the depot a center for musical excellence by changing the name to the Tulsa Music Hall of Fame. In addition to the JHF, let's put the proposed OK Pop Museum in there as well.
To continue to hope the legislature will help us with the OK Pop museum is akin to waiting for water to appear in the river. We create a foundation to oversee the Tulsa Music Hall of Fame with a Board of Trustees that can see to the business and financial affairs. A new group of business and arts-minded citizens whom the Tulsa Industrial Authority Trustees would gladly welcome. The Tulsa Historical Society could be the model of best practices for doing things right.
By having a Tulsa Music Hall of Fame run by public and private community leaders, we can begin to bring financial stability, long term planning, proper capital investments, fund raising, and broaden the recognition of our musical legacy. When the taxpayers voted to improve the old depot for the JHF it was never agreed to that only the JHF would be the primary tenant or only user. We have a history of community leaders stepping up to save worthwhile community assets. A good example of this is the City's privatization of the operation of the Tulsa Zoo.
We've learned enough to know that we can't let the future of the JHF be anything like the past. There is a mess to be cleaned up and it will be. But those who fail to remember the past are condemned to repeat it. Then there's the future to look forward to.
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