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$2 million San Jose Rep loan can be canceled at any time

By Monica Heger

The show will go on at the San Jose Repertory Theatre.

The San Jose City Council on Oct. 17 unanimously approved a $2 million loan to the Rep to help dig the theater out of its financial woes.

The $2 million will be paid out over five years, and the loan will be paid back in full after 10 years. Conditions of the loan require the Rep to submit a business plan to the city by the end of this year and to bring in approximately $1.5 million in income during the current fiscal year. Should the Rep fail to meet any of the outlined conditions, the city can cancel the loan at any time.

To further safeguard the agreement, the city will have significant oversight of the Rep's financial operations, including having a city official sit on the Rep's board of directors as a non-voting member, and a city official on the Rep's audit and finance committees. The Rep also is looking at the possibility of partnering with the American Musical Theatre of San Jose to merge similar office functions. Such a merger is projected to save between $200,000 to $300,000 annually for each group.

The American Musical Theatre is also in financial trouble and has asked the city for a $1 million loan.

City auditor Gerald Silva said $2 million would enable the Rep to have a chance at solvency.

The loan will come from the newly created $4 million arts stabilization fund formed from the city's $34 million end-of-year budget surplus.

City manager Les White said all monies paid out of the arts stabilization fund would go back into that fund as it was repaid.