The beleaguered Parkway Theatre, which ceased operations and laid off staff 16 months ago in an effort to stem its financial drain, will reopen later this year with a new plan aimed at restoring the 1915 movie palace to economic health.
Advocates say the revised business model holds the promise of a shining tomorrow for a cornerstone Baltimore institution.
“The Parkway’s future is bright,” said Scot Spencer, chairman of the Parkway’s board of directors. “I am pretty jazzed about our prospects.”
But an analysis by The Baltimore Sun of six years of the nonprofit’s tax returns (known as 990 forms) and audited financial statements provided by the Parkway raises questions about whether the organization has resolved the underlying problems that caused it to flail.
Those documents reveal that from practically the day the theater reopened May 3, 2017, following an ambitious $18.2 million renovation, it was buoyed by little more than good wishes and hope.
The reborn Parkway Theatre didn’t embark on a five-year strategic plan — a road map for achieving an organization’s goals — until it had already been up and running for 20 months.
Audience projections proved unrealistic, and by 2022, paid attendance for the year was less than 15% of the original estimates. In the past seven years, the theater has been closed to the public (32 months) nearly as often as it has been open (52 months).
“Honestly, having an empty building in our neighborhood hasn’t been ideal,” said Kathleen Lyon, who operates the nearby Charles Theatre.
“After COVID, the neighborhood really, really suffered. It was noticeable and it was tough. For that reason alone, we’d like to see the Parkway thrive and put more bodies on the street.”
After the Parkway Theatre shut down in January 2023, the board of directors brought in the Washington-based DeVos Institute of Arts Management and convened an advisory committee to devise a path forward.
The group recommended that the Parkway stop showing movies full time and instead become a multipurpose venue for small musical performances, college graduations, and some film screenings.
Details of the new plan will be unveiled Tuesday during a meeting at the historic venue. Ellen Janes, executive director of the Central Baltimore Partnership, is excited about what she’s hearing.
“Art houses around the world struggled through COVID,” she said. “Many didn’t make it. But those who survived, this is how they did it — by offering diverse programming.”
‘A major blow’
Because the Parkway is an anchor institution for the North Avenue corridor, a great deal is riding on the new plan’s success.
“Station North is still in recovery from the pandemic,” Janes said. “When the Parkway shut down, it was a major blow.”
The outcome of the new venture also will matter to taxpayers, who have already picked up more than a third of the tab for an underused building, with possibly more to come; last month, the City of Baltimore pledged $250,000 in ARPA money to Parkway programs, including the Maryland Film Festival.
But perhaps no one has more at stake than the Johns Hopkins University, which has invested millions propping up an ailing organization.
Hopkins President Ronald Daniels personally negotiated the $5 million lead gift in 2014 for the theater’s renovation with Andreas Dracopoulos, co-president of the Stavros Niarchos Foundation and a longtime Hopkins trustee. Hopkins owns 5% of the Parkway, and ever since the theater began slipping into the red, the university has played a critical role in keeping it afloat.
In 2016, the university extended the theater a $4 million line of credit, according to the audits. The balance now is $1.7 million, and the terms stipulate that any portion not repaid when the loan matures June 30 will be converted into equity in the building. Students at JHU and the Maryland Institute College of Art use the Parkway to study filmmaking. But does Hopkins really want to own a movie theater?
Daniels didn’t respond to a request for an interview. But Mitch Bonanno, the university’s vice president and chief real estate officer, said in an emailed statement to The Sun that the university remains hopeful for a turnaround.
“The combination of the pandemic and shifts in film viewing habits have presented challenges for many small theaters around the country,” Bonanno said. “We remain optimistic that the Parkway, with the support of its multiple stakeholders and partners, can emerge stronger and stand out as a cultural icon for our city.”
A movie theater without an audience
While there’s little doubt that the pandemic exacerbated the Parkway’s problems, it didn’t cause them.
The analysis by The Sun reveals that because the Parkway wasn’t making as much money as it had expected from ticket sales and concessions, it became unusually dependent on public grants and private donations to pay its bills. As the Parkway’s financial straits worsened, administrators seemed unable to curb spending. Then philanthropic giving fell off a cliff during the pandemic — as it did nationwide — throwing the movie house into a financial tailspin from which it could not recover.
According to tax documents:
- In the three years before the COVID-19 pandemic, public and private donations accounted for 84%, 79% and 85% of the organization’s revenues. That’s double the national average of 40% for nonprofit cultural groups pre-pandemic, according to a 2021 report by the Washington-based advocacy group Americans for the Arts.
- In 2019, the Parkway brought in a record $2.8 million from individual, foundation and corporate gifts. By 2022, the first full year that the theater reopened following the pandemic, donations had plummeted 78.8% to just under $602,000.
- Between 2017 and 2022, taxpayers footed the bill for 39.6% of the organization’s total revenues, or $6.2 million. The largest chunk was a $4.3 million tax credit given to organizations that operate in distressed neighborhoods, another dollop came from federal pandemic aid and the remaining $1.7 million was provided by state, county and city governments.
- Despite declining revenues, the Parkway’s expenses increased 18.2% from 2018 to 2022, to $2.5 million. The theater was on track to run a $1.7 million deficit the year before it shut down, but was saved by its one-time, $4.3 million windfall.
The Parkway’s plight is in stark contrast to the outpouring of civic jubilation that greeted the 2014 announcement that the old theater was about to embark on a new life. Boosters predicted the project would help revitalize the area near Charles Street and North Avenue.
Then-Mayor Catherine E. Pugh predicted at the grand reopening that the Parkway would become “an economic engine … for this part of the city” while Dracopoulos described the rehab as “a beacon of hope for the city of Baltimore and beyond.”
The purchase of the Parkway and its subsequent renovation were spearheaded by Jed Dietz, the charismatic lifelong movie buff who founded the film festival in 1999. At its peak in 2018, the event brought about 12,000 visitors to the Station North neighborhood.
“Our idea was that once the Parkway was renovated, we would do the Maryland Film Festival year-round,” Dietz said. Theater officials projected that they would sell 65,500 movie tickets the first year, and go up from there.
“That didn’t happen,” Dietz said. “The Parkway never exploded the way we thought it would.”
Instead, paid attendance was around 27,000 in 2018, peaked at 34,000 in 2019, and then plunged to 9,800 in 2022. In other words, fewer people bought movie tickets at the Parkway for all of 2022 than attended the five-day film festival in its heyday.
Pandemic, parking and public safety
Reasons given for the theater’s failure to thrive vary depending on whom you ask.
Board chairman Spencer thinks that once the pandemic hit, the theater simply ran out of time; the board always expected, he said, that it would take five or six years to build name recognition and achieve sustainability.
Other observers blame the lack of parking, or point to competition from the Charles, a well-established movie theater with a loyal clientele in the same neighborhood.
Some believe the Parkway isn’t a very good place to watch movies. Audience members sitting in the first 10 rows of the main floor must crane their necks to see the screen, while a metal safety railing obstructs the view from bottom row of the balcony.
And some people have said they felt unsafe walking in the neighborhood near the theater, especially at night. Those fears soared after a Hopkins student was assaulted at around 6 p.m. Sept. 2, 2021, just outside the theater.
According to a Baltimore Police Department report, a student was attacked in the 1800 block of North Charles Street by a mentally ill woman who shouted anti-Asian slurs and told her, “Go back to your country. Why are you still here?” She shoved the student to the ground — and perilously close to oncoming traffic. The young woman wasn’t seriously hurt, coming away with minor cuts and bruises. But the university was sufficiently concerned to issue a public warning.
“The neighborhood is a real problem,” said Dietz, who recommended that the Parkway board implement valet parking. “We know there is a sense of fear about visiting the city in general from people living in surrounding communities.”
And yet, just two blocks away the Charles Theatre is flourishing.
“Progress hasn’t been a straight line since the pandemic,” Lyon said, “But the Charles is healthy and continuing in an upward trajectory.”
While the Charles has solved the neighborhood parking problem — there’s a garage directly across the street — it seems unlikely that the lot is the sole reason Lyon’s theater survived pandemic shutdowns while the Parkway did not.
The Parkway, unlike the Charles and its sister organization, the Senator Theatre, is a nonprofit, a corporate structure that Lyon said can be a double-edged sword.
On the one hand, the Parkway can receive donations and grants for which her for-profit movie houses are ineligible. On the other hand, Lyon doesn’t have to hire fundraising and marketing staffs. Her two theaters have just four full-time employees, including Lyon and her husband, while the Parkway has had up to 28 full and part-time workers on its payroll.
“We do everything ourselves,” she said.
“We don’t have a bloated structure with layers of management. We pop our own popcorn, plan our own events, show our own movies. When you keep overhead low, you have a greater chance of surviving tough times. When you have a much larger payroll, it is very difficult to make ends meet.”
Despite the obstacles, Janes sees signs that make her think that the Parkway’s new business model and promised rebirth may be more than just a pipe dream.
Previously, the theater wasn’t always willing to work with neighboring businesses and community groups, she said. In the past year, that has started to change — and it could tip the scales toward success.
“We’re seeing a new focus towards being collaborative,” she said. “The Parkway is making a really concerted effort to be part of a team. That is a very different vibe than we’ve gotten in the past.”