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Show stopper: IRS lien halts Playhouse season

Published: Wed, February 25, 2009 @ 12:00 a.m.

By Guy D’Astolfo

Season ticket holders are being notified of their options.

YOUNGSTOWN — The IRS has slapped a lien on the Youngstown Playhouse for unpaid payroll taxes and penalties that now total more than $25,000. As a result, the Playhouse has suspended its season as it tries to find a way out of its troubles.

Because of the lien, which was issued Jan. 29 and received by the Playhouse two weeks ago, the Internal Revenue Service has frozen the assets of the Playhouse, forbidding the staff and board to enter the theater off Glenwood Avenue.

It’s just the latest in a string of setbacks for the financially reeling Playhouse.

In October, the Playhouse took the unprecedented step of going dark for the winter, postponing several productions until spring. It blamed rising fuel prices, the exorbitant cost of heating the building, and a severe drop in grant money from foundations because of the tanking economy.

In January, the Playhouse board said the building would no longer be used. It discovered that a pipe had burst in the costume storage area, causing water damage to ceiling and floors. That only exacerbated the poorly insulated building’s problems; it is also in need of a new roof and furnace, and has water in its basement. The theater company also still carries tens of thousands of dollars of debt from past seasons.

The federal tax lien came as a surprise to the board, and has thrown the Playhouse into a deeper quagmire.

According to the IRS Notice of Federal Tax Lien, the Playhouse owes $25,213.25. The debt was incurred over seven consecutive quarters, beginning Dec. 31, 2006, and ending Sept. 30, 2008. John Holt was executive director and business manager of the Playhouse during that period. He resigned in October.

“We were blindsided by the situation,” said Rand Becker, president of the Playhouse board. “We don’t know where to go next. There is more that we don’t know than we do [know]. We are forced to take a hiatus until we get a handle on it.”

The board met with its tax expert Feb. 16, who outlined the lien. According to Becker, roughly $16,000 is for unpaid taxes, and the remainder is for penalties and fines. Interest on the unpaid taxes continues to accrue.

Holt withheld taxes from paid staffers but failed to forward them to the IRS. Instead, according to Becker, the money was used for royalties for play rights, set construction and even payroll.

Playhouse leaders will be summoned to meet with the IRS, but they do not know when. In the meantime, the board has no choice but to suspend operations and send every dollar of revenue it receives to the IRS, said Becker.

Season-ticket holders are being sent letters outlining their options. In addition to getting a refund, they can choose to donate the unused portion of their payment to the Playhouse and receive free tickets to productions in the next season.

Before the tax lien was filed, the Playhouse board was actually growing in optimism. A fundraiser was scheduled for March 31, and the resumption of the season was set to be announced.

Scheduled were three productions — “Barefoot in the Park” in April, “The Odd Couple” in May, and “The Wizard of Oz” in July — that were to be staged in the Boardman Middle School auditorium.

While Becker agreed that the situation appears grave, he also said there is cause for hope. “Royalty houses have given us tremendous discounts, and Boardman [school board] gave us a fabulous deal, pricewise, on the use of their building,” he said. “And there are three [charitable] foundations that are in our corner, who are awaiting a plan from us. If we have something specific and ready to go, we have a shot.”

The Playhouse also could receive funding from the federal stimulus bill. “Mayor Jay Williams is working on it,” said Becker. “He is a strong supporter of the Playhouse and wants to keep it in the city.”

Still, Becker acknowledged that a comeback would be slow. “We have to convince ticket holders that this isn’t [the end],” he said, adding the best way to do that is to remind them of the quality of its productions the last few years.

“John Holt might not be a great businessman, but he was a fabulous artistic director,” he said.

Becker said the board constantly gets calls from people asking how they can help. “There is a core out there that wants us to succeed,” he said.


1apollo(1227 comments)posted 6 years, 7 months ago

It simply is foolish to keep the playhouse in the city in the middle of a slum. Move it to Boardman and it'll flourish.

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2SunnySkies(20 comments)posted 6 years, 7 months ago

Location,location, location. I agree with Apollo.
A theater in Canfield-Boardman-Poland would be a fantastic move in the right direction.
Sell the current property, get out of debt and
start a building fund campaign.

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3aeparish(669 comments)posted 6 years, 7 months ago

I don't know what it is, but there's just something about that building that fascinates me. I would hate to just see the building sit there. There are enough abandoned buildings in Youngstown.

I understand where everyone's coming from though. Its location is a very bad area and if the Playhouse were relocated, I'm sure it would have a lot more attendants.

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4ytownsteelman(670 comments)posted 6 years, 7 months ago

Just like the government to kick you while you are down.

While one hand of government is slapping you to the ground, the mayor is trying to get the otehr hand of govt. to pick them back up off the floor.

Have the assets of the former director who didn't file the payroll taxes been seized yet? I'm sure the value in his house would pay the 25K due.

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5dand1313(20 comments)posted 6 years, 7 months ago

if 10,000 people ventured downtown, paid alot of money for tickets and parking to watch two guys beat each other up, I doubt the messiah is move it to boardman. leadership is the underlying problem...not being able to develop scenario planning...decreasing demographics both in quantity and arts minded citizenry,increasing competition, defending the status quo, on and on. more similar events are on the way and unless leadership surfaces the "cleansing" will continue. every sector of our community needs to wakeup to the new world order. consolidate, merge and partner up.

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6JeffLebowski(953 comments)posted 6 years, 7 months ago

"Just like the government to kick you while you are down."

Is it the government's fault that these taxes weren't paid for almost 2 years? Please.

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7Stan(9923 comments)posted 6 years, 7 months ago

Obama stimulus plan is now in action. Soon your taxes will go up and if you can't pay them you will be locked out of your house. Bureaucracy is a disease that affects the not so rich the most and they are the most ardent supporters.

"Playhouse leaders will be summoned to meet with the IRS, but they do not know when. In the meantime, the board has no choice but to suspend operations and send every dollar of revenue it receives to the IRS, said Becker"

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8Westsider(252 comments)posted 6 years, 7 months ago

What a mess!!! How did the board allow this to happen? Why did the board not demand financial reports from Mr. Holt during his tenure? Every member of that short-sighted, do-nothing board should be forced to chip in toward paying the lien - with the lion's share of the amount to be paid by the former managing director.

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9cityguy(109 comments)posted 6 years, 7 months ago

Seems to me the plan is to abandon the building altogether and I for one would like to see any and all monies that would be put toward productions in the suburbs used first to demolish the building they plan to leave behind. The last thing the city needs is another vacant eyesore left by another business fleeing to the burbs. I remember when the Vindy ran the story on Masters Tuxedo coming back to the area but relocating in Boardman. Meanwhile, the boarded up structure on Market stands as a monument to blight...there must be some means of making these organizations clean up their messes before they flee to the burbs.

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10babs68(58 comments)posted 6 years, 7 months ago

Wow...I remember going there back in the 70's and early 80's during Christmas time. Why is it so hard to keep something positive going in Y-Town? It's terrible. I will agree on on ething before they move, and that is if they move they (city) should definately tear the old building down. mmm...what a shame.

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11ads(109 comments)posted 6 years, 7 months ago

It truly is a shame. We do not have much left in Y-town and i enjoy the playhouse, yes the location is bad but we still go. I would hate to see it tore down because it is a landmark but if they have to move I agree with everyone else, we do not need any more abondoned buildings, we have too many eye sores in our town.

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12RonRJA(2 comments)posted 6 years, 7 months ago

Its just a "playhouse" , get over it. There's more important things happening in this city/state/country. A vast majority of MV residents could care less about it closing because it would not effect them in anyway.

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13George412(161 comments)posted 6 years, 7 months ago

Let's not make assumptions, Westsider. We don't know what information was presented by Holt to the board.

And what any of this mess, which has been years in the making, has to do with Pres. Obama, I don't know. I think some of you just like to hear yourselves type.

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14leahifft(3 comments)posted 6 years, 7 months ago

This really saddens me. I grew up at the Playhouse and owe a lot of who I am today to the time I spent there and the people I met.

We could all point fingers and say who was wrong and what needs to be done. But that would be pretty pointless.

If you want to support the arts in Youngstown, support them. Go see a show, make a donation, volunteer, purchase advertising in their programs. There are countless ways to help, criticizing isn't one of them.

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15George412(161 comments)posted 6 years, 7 months ago

Great comment, leahifft.

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16LB(19 comments)posted 6 years, 7 months ago

Once again -
The loss of the Youngstown Playhouse facility will be a huge loss to the Youngstown area arts community for many reasons. It is a facility designed specifically to handle many different types of community theatrical events: comedy, drama, musicals, dance and variety shows. The facility is designed with enough back stage space to allow multiple sets (such as are needed for musicals) to store offstage or to allow two productions to perform during the same week. (i.e. Youth Theatre and Main Stage productions) The fly loft is exactly tall enough to hide the curtains and backdrops designed to fit the proscenium opening. The stage floor is large enough to paint any backdrop needed. The lighting positions are designed for maximum coverage at a flattering angle. The orchestra pit (what other theatre has an orchestra pit – Powers? –but they rarely open it) houses as many musicians as needed for a musical. The facility’s costume and scenery shops allow the construction of period to modern sets and costumes. The dressing rooms were redesigned during the last renovation to make them larger. The facility’s storage capacity gives the Youngstown Playhouse the ability to lend set pieces, costumes and props to other community and professional theatres in the area. The facility has its own rehearsal space that can double as a performance or reception space. It has a new elevator. Its medium size seating arrangement allows for multiple performances, giving the audience a variety of performance dates to choose from and community performers a longer run to practice their craft. Having their own facility allows the Playhouse to set their own rehearsal and performance schedule. The Youngstown Playhouse facility is unparalleled in this area as a training facility for actors, directors, designers and technicians.
I can’t imagine never being able to visit this facility again. It makes me very sad that this important facility has become so damaged that the Youngstown Playhouse organization can no longer hold performances in it.
Can’t something be done?
Do we really need one more boarded up, unkempt, rotting, untenanted building in Youngstown?

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17oldone(12 comments)posted 6 years, 7 months ago

Has anyone ever thought that instead of spending your time either agreeing or disagreeing with what has happened, you send whatever you can, be it $10 or $100 or however much you can afford to the Youngstown Playhouse, and they would be well on their way to erradicating what is owed to the IRS. If everyone who has been touched by the Playhouse did that, it would be wonderful.
As to how it happened, it doesn't matter now. It has happened and there is enough blame to go around; from the general manager to the board of directors to the general public who haven't supported his wonderful institution by donations or going to the great shows that have been produced in the last 3 years.

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18rbtex(1 comment)posted 6 years, 7 months ago

I too grew up at the Playhouse around many of the old mainstays and icons of this fine community institution such as the Soller, Owsley,Tornello, Griffith,Gorman and other outstanding families and fondly recall past professional directors such as Ella Gerber,Zeke Berlin,, and so many wonderful actresses and actors who brought such magic to the main stage. Former Ex Director Bentley Lenhoff and then custodian/actor Henry Jones were like my guardians as I spent so many days and evenings under their watchful eye. My parents were patron members of the Playhouse. I know there are many others like me who gained so much experience and enjoyment from our involvement and participation at the Playhouse over the past 30-40 years. It is time for us to pull together and return something back to this Grand Lady who has given us so much! I now live out of state and use my skills, etc teaching youth in communications arts. Someone local please keep us informed about what and how we can channel contributions and other assistance to support the Playhouse and keep it going! Start a group if necessary and provide contact info please! Thank you!

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19Westsider(252 comments)posted 6 years, 7 months ago

Thank you, George - you made my point. We don't know what information was provided to the board - but I don't know that it makes anyone feel better to know that its members may have been kept in the dark. All I am saying is that if the board was not provided with financial reports - and if the board did not insist upon receiving them - then the board members should assume responsibility for the current state of affairs at the Playhouse. Too often, people do not realize what board service means when they agree to accept a position.

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20baboo(43 comments)posted 6 years, 7 months ago

I can't believe with all of the stimulus money out there that there isn't some for the Playhouse. This last bastion of civilization in a decrepit downtown needs to be saved. If Obama can dump money for a mob museum, a train from California to Vegas, billions to GM and Chrysler, and public bathrooms at national parks, I'm sure that he can send some to Y-town. C'mon Ryan, go over to the White House, hold out your cup, and show us the money.

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21Kokomo(19 comments)posted 6 years, 7 months ago

I wouldn't go down to that neighborhood at night on a bet.

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