Minnesota Orchestra lockout hits six months

With no formal talks on the horizon, the remainder of the Minnesota Orchestra's 2012-13 season almost certainly will be canceled.

The opening of a renovated Orchestra Hall in July could be another victim of a bitter fight that has cost millions in economic activity and frustrated music fans.

The labor dispute that has silenced the orchestra will hit the six-month mark Monday, making it the most protracted among top 10 U.S. orchestras in decades.

While the orchestra has a 2013-14 season planned, it has, for obvious reasons, delayed making an announcement.

Nationally, orchestras and musicians are watching to see which side prevails, or what it takes to reach a compromise.

Jesse Rosen, president of the League of American Orchestras, warned Thursday that the two sides need to talk.

"There is going to be a solution," Rosen said. "Why not get to it sooner than later?"

Management says it has offered several dates for negotiations. Musicians counter that without an independent financial analysis, there is nothing to talk about.

"If they came to us and withdrew their first offer and made another, we'd talk to them," Tim Zavadil, head of the musicians' team, said Thursday.

Two months after both sides agreed to the independent analysis, they are expected to announce Monday agreement on two entities to undertake the review.

Patrons have formed organizations aimed at settling the dispute, or at least getting the orchestra playing again. Friendly legislators have taken up the musicians' cause at the State Capitol, and the $52 million Orchestra Hall project continues. In short, there's plenty of activity, but nothing that seems to be nudging the dispute to an end.

Anatomy of an impasse

"Each side is focusing on how hurt they are," said Laurie Greeno, co-chair of Orchestrate Excellence, which is trying to get the sides to talk."They're throwing conspiracy theories, outrage, blame and focusing on how awful things are."

Minneapolis Mayor R.T. Rybak, who hosted a Feb. 1 "neutral" concert to celebrate the orchestra's Grammy nomination, appears less interested in talking now. He sent a note through a representative when asked about the six-month anniversary. "This will only be resolved when both sides start talking to each other," he said in an e-mail.

Hopes that outside forces could get the negotiations off the dime are unlikely to be satisfied. A federal mediator has had no impact to date, and the National Labor Relations Board would step in only in the case of an unfair-bargaining charge.

"They can sit it out as long as they want," said Marlin Osthus, NLRB director in Minneapolis.

Michael Henson, the orchestra's president and CEO, suspects the union may be delaying negotiations to use the reopening of Orchestra Hall as leverage.

"The hall opening is a wonderful moment," Henson said, "but we need to be a sustainable orchestra for a long term."

Zavadil said musicians have been without salary and benefits for six months and want a deal as soon as possible. However, the national American Federation of Musicians has extended the period of benefits for locked-out musicians, and Zavadil said many are getting work with other orchestras.

Numbers game

The dispute hinges on a fundamental disagreement over the orchestra's financial capacity. Annual audits by the firm CliftonLarsonAllen show deficits of $6 million in fiscal 2012 and $2.9 million in 2011. The board contends that it cannot continue to make extraordinary endowment draws — as it did to balance budgets in 2008-10 — to cover losses.

Musicians point to a $110 million fundraising campaign as an available pot of money. Of the $99 million raised so far, $24 million went to endowment and $23 million has been spent on touring, commissions, guest artists, recordings and musician salaries.

That leaves $52 million for the hall. This project — which has become a whipping boy for union partisans — was proposed at $125 million in December, 2006. Similar ventures had been undertaken in Nashville, Denver, Kansas City, Cleveland and Miami, going back to 2000.

By May, 2007, the orchestra scaled back to $90 million; it was cut to $40 million in 2009, the year in which the orchestra laid off staff and negotiated concessions from musicians.

Donors, given the choice between contributing to the project or to an endowment that was being depleted to cover current expenses, chose bricks and mortar. With the help of $14 million in state bonding money, the deal was increased to its current level. Included is an expansion of the lobby and backstage areas, addition of rehearsal rooms, replacement of seats and tweaking of acoustics.

While most musicians have supported the endeavor all along, the union and its allies have made the hall an emblem of misguided priorities.

Little solace at Legislature

The musicians have been able to raise support among union allies at the Minnesota Legislature. Rep. Phyllis Kahn, chair of the House Legacy Committee, wants to redirect state funds that otherwise would go to the orchestra.

"We would put that in a fund for any organization that would be a host for concerts performed by the musicians," Kahn said. "It's an attempt to tell the musicians that someone is on their side."

The orchestra gets its state money through the State Arts Board, and executive director Sue Gens said the agency discourages calling out specific organizations, or making line-item changes in appropriations — which this would be.

"I think the orchestra musicians and the board need to resolve this," Gens said.

On March 7, about 100 DFLers asked Legislative Auditor James Nobles to investigate the orchestra's books. Nobles agreed to do so, but said last week he would limit his audit to the orchestra's use of public money. Nobles pointedly said his office would not make judgments about strategic plans or financial projections "that are in large part the basis for the management-labor dispute."

Larry Redmond, a lobbyist for Minnesota Citizens for the Arts and an advocate for artists at the Legislature for more than 30 years, is puzzled by the foray into the Capitol.

"While I understand the labor dispute, I do not understand what the end game is in bringing this issue into the Minnesota Legislature," Redmond said.

Public pressure

Community awareness has become the silver lining in this toxic cloud. Patron groups have decried the breakdown, and while most have sided with the musicians, they contend they just want the music back.

"There is a great deal of interest," said Henson. "People are debating, how do we make classical music the great art form it is?"

Donations to the orchestra are about 82 percent of last year, said Nancy Lindahl, who chairs the Guaranty Fund. Musicians contend that donors are withholding money to pressure the board. The board says donors are waiting to see if a sustainable deal is reached.

Paula DeCosse, co-chair of Orchestrate Excellence and a major donor, announced last fall that she and her husband, Cy, were withdrawing a $500,000 bequest to the orchestra. She said they would reinstate the bequest if the dispute is settled and both sides work toward a "positive future."

"My views have evolved quite a bit," said Paula DeCosse in an interview. "I can see the problem that the board has had. They've tried hard to raise more money and it's quite difficult. Yet, I think the musicians have attained such a high musical level and music lovers want that maintained."

Graydon Royce • 612-673-7299