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UPTOWN CHICAGO COMMISSION

Uptown in the News  

April 9, 2003
Inside Online
UTCA good will short, funds shorter, as trouble erupts
by Ronald Roenigk, Publisher

Efforts to save the haggard Uptown Theatre, 4814 N. Broadway, have stalled now as supporters struggle with dwindling operating funds and discover battles within the Uptown Theatre and Center for the Arts (UTCA) Board of Directors.

Two years ago the not-for-profit UTCA was formed when Albert Goodman made a $1 million donation to the effort from the Edith Marie Appleton Foundation, named after his mother. According to financial statements, by the end of February the UTCA had less than $2,000 in cash on hand and over $160,000 in loans and accounts payable, with no clear means of meeting those obligations.

At the same time a battle within the Board of Directors broke out into the open. Now-deposed board member Paul Warshauer accused the UTCA of being "out of control" in a March 10 letter to Gov. Rod Blagojevich which calls for a formal investigation. He has since contacted several members of the media, including Inside, seeking to air his issues with UTCA management.

Also distracting the over-burdened UTCA staff is the status of a fateful fundraising idea gone bad: the raffling off of a new Jaguar automobile leased from Orloff Jaguar and now gathering dust in a garage. Nearly $30,000 worth of tickets were sold for the raffle, money which now must be refunded.

"That was a horrible mistake," said Carol Jean Carlson, CEO of UTCA, of the raffle that caused the UTCA to be fined $1,000 by the city's Department of Revenue for running a raffle without a license. "We sold about 300 tickets and now we're contacting those people and giving them several options for restitution." The status of those funds is unclear in the current financial statements.

Left in limbo are UTCA's efforts to purchase the 4,381 seat, 46,000 square foot movie house. "We'll know pretty soon if we'll be purchasing itówe're closer than ever," said Carlson. Indeed, a total of $250,000 in escrow payments has been released to the seller in two payments last June and July, funds which would presumably be lost if the deal falls apart.

"I don't think the [current] owners want us to fail. We put that money down on good faith but haven't been able to raise money as fast as possible," said Carlson. She said that the UTCA kicked off their fundraising efforts one week prior to the 9/11 attack and that timing, along with a slumping economy, are the reasons that fundraising has been weak.

Warshauer claims to have another for-profit investment group with new plans and ideas ready to take up the effort if the deal does fail. UTCA staff doubt this and claim it would be "a direct conflict of interest and violation of his non-compete clause," said Carlson. "He's just trying to stir up trouble."

"The bad part is that the building has had to wait so long," said Warshauer. "They've spent $1.3 million and have nothing to show for it. I will not keep quiet any longer. Decay and damage occur inside and out every day." Warshauer joined the UTCA board in July of 2002 and was named chairman in October; he resigned as chairman on Feb. 8 and was voted off the board on March 22.

As for the Jaguar, it was one of a number of bad fiscal decisions made by the board while Michael Morrison was UTCA's CEO. (Morrison has since left the state and is reportedly now living in Kentucky after being indicted by the Attorney General of Illinois.) The board had given him approval to lease the Jaguar for his own use using UTCA funds to pay for it. Morrison and the board also hired Mark Zipperer as an outside consultant for $2,000 a week; Zipperer took over the CEO's post on an interim basis when Morrison fled the state. It was Zipperer's idea to raffle off the car, unaware that a license was required to do so. "We're looking for someone who would like to buy the lease, if you know anyone," offered Carlson.

"Michael Morrison had no business sense," said Warshauer. "Nobody ever wrote a business plan and there were no theater professionals with any experience in the organization...There still isn't," he said. "I pleaded with them to stop spending money, regroup and ask for help. They refused, hoping against hope that a miracle would occur. No miracle is coming."

The UTCA is "insolvent in part due to [Warshauer] and we have our own lawyers working with us on him," said Carlson, who says nevertheless that their vendors, their supporters and the community still want them to succeed.


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