Opening night, winter 2013: Spectators pour into the lobby, enjoying complimentary champagne as they engage in animated conversations about the play they just saw. They cluster around the buffet, helping themselves to shrimp and sandwiches, cheese and chocolates, as members of the cast, now out of costume, join them. Directors Carla Milarch and David Wolber, dressed to the nines, mingle.

In back rooms, angry allegations abound. Money is short, tempers are shorter. But out in the lobby it appears the Performance Network Theatre is thriving. “We all failed in the background,” Wolber reflects. ‘We were surviving by using our theatrical expertise to make shoestrings look like gold.”

Wolber became involved with the theater in 1992, right out of college. “There was never a time that I was aware of when this theater wasn’t in some kind of financial struggle,” he says. “Like any business, there would always be ebbs and flow … There were periods when it felt like we’d found stability, but I don’t remember those lasting for any considerable amount of time.”

When Money Didn’t Matter

In 1981, David Bernstein needed a place to rehearse the agitprop play he and some friends planned to present in union halls and community centers. He remembered an old factory on W. Washington. The space had a pole blocking sight lines, cinder-block walls, and cement floors, and it wasn’t zoned for entertainment. But it would do, and it was dirt cheap. “I had no illusions that we could pay rent [at a more expensive venue]. I could hardly pay my own rent,” Bernstein recalls.

When they decided to perform the play there as well, they got a zoning permit and covered the windows with plastic to keep the heat in and the light out. Just after Bernstein had returned the rented seats, folk musician Jay Stielstra asked to stage a musical revue he had written there. Why not? The group cast Cheryl Dawdy and Connie Huber, who would later become two of the three Chenille Sisters, in the show. Soon after, they incorporated as a nonprofit. Volunteers helped paint the walls black, put up pipe to hang lights, and install resilient flooring.

Reflecting the varied interests of the six founders, they did socially conscious, original, and experimental work that included film screenings and video installations as well as plays. They rented the space to outside artists too.

They had talented people. They had ideas. They even had a space. All they didn’t have was money.

“We didn’t need money,” says co-founder Jim Moran. “Everyone was giving us time. We created this place where people could come together, an environment where money was not the first thing.”

Moran says they argued about the name early on, agreeing on Performance Network at the last moment to meet an Observer deadline. “We never thought of it as a theater but [as] a place where a number of arts in Ann Arbor could come together. We weren’t looking for a standard experience in management any more than we were in the program. We tried to keep it a democratic place.”

The initial board, mainly artists, functioned as an advisory group, not a fundraising unit. Bernstein didn’t want to become beholden to donors who might not like what they were doing.

Fear No Art

In 1983, Johanna Broughton, a U-M student, started designing shows. In 1986, when Bernstein left town, she and two others took over the theater, which by then had an annual budget of $60,000 and was about $30,000 in debt. “On my wall, I’d have this six-by-six-foot spreadsheet of what I needed in every category so I could meet the cash flow needs. It was always a dance.”

Broughton wanted to do plays that people would talk about, and when she selected lighter works she gave them a new twist. She made good use of the flexible space, turning the theater into a ship for one production, with the pole serving as masthead. They gambled on some productions that might have left them in a deeper hole. “When you’re trying to grow something, you push the boundaries. We were always right on the edge,” she says.

Linda Kendall-Knox, who first volunteered because of an interest in Samuel Beckett’s plays, helped Bernstein with accounting tasks and eventually became executive director. New talent came on board and continued doing experimental and socially relevant work. In the next years, Becky Zarna Fox, a children’s theater director, and Kaysie Dannemiller, who had done some corporate development work, were among those who became involved. “For many years, the right people walked in the door at the right time, or it wouldn’t have happened,” says Broughton. “The most creative minds were always collecting at the Network.”

The Michigan Council for Arts and Cultural Affairs (MCACA) began funding the theater, requiring it to program seasons in advance and market its shows. “We’d been this chill organization that had enough money to get by,” Dannemiller said, but that had to change to get the state grant money.

Around that time, the AIDS virus struck hard in the artistic community. “Many in our creative workforce were gravely ill or caring for loved ones. Afterward, there were simply many fewer of us,” says Linda Kendall-Knox.

In the 1990-91 season, political plays paid tribute to the AIDS struggle; these included the American premiere of Lorca’s 1930 play The Public, a call for homosexual freedom. Kendall-Knox helped the Performance Network join a national protest against censorship of the Cincinnati exhibit of Robert Mapplethorpe’s sensual photographs. She curated Fear No Art, a lobby installation of visual art and poetry that had been censored. A Christian organization from Canton came to protest, attracting the attention of CNN. The Network made the national news.

In 1991, Daniel Walker joined. He knew how to construct a set inexpensively and served in assorted capacities. Walker and Broughton married–they were one of many couples who met at the Network.

In 1996, the Network hired Wolber as marketing director, charged with promoting all productions and differentiating Network shows from those of independent producers who used the space. Shows changed frequently, each running from one to three weekends, so there was a lot to do.

Wolber ran the theater’s first subscription campaign in 1997. “When we went professional, we had ninety-eight subscribers. I was thrilled and devastated. I wanted at least 500.”

That year, the Network joined the Actors Equity Association, committing to paying actors what the union required, not what the theater could afford. The theater was moving from a free artistic collective to a structure with leaders, as well as from doing mostly experimental and political work to doing more conventional productions. A more active board could fire top management and make financial decisions.

“The biggest challenge I faced when I first joined was a divided board,” longtime board member Barbara Bach recalls. “There were many who wanted a new leadership in the management team. And the theater needed a new space.”

Playwright Joseph Zettelmaier recalls when flooding made everything in the basement storage area stink. The space wasn’t equipped for professional shows.

In 1997, Broughton and Walker had a child. Walker assumed extensive responsibilities as the Network kicked off a $750,000 capital campaign. “We launched our campaign between contractions,” recalls Broughton.

A Big Move

People were doing drugs on the corner of Fourth and Huron, where the vacant Ann Arbor Inn building stood. The city hoped a theater would transform the neighborhood, so the Downtown Development Authority worked out a tax abatement scheme with the landlord that allowed the Network to lease the ground floor for just $3 per square foot. The total rent was $2,500 a month, with tax credits guaranteed until 2019.

But renovating the space into a theater was costly. In 1999, MCACA gave the Performance Network a $150,000 grant toward the renovation, and another $100,000 came from the governor’s office. But as the total cost rose toward $1.5 million, the theater still had to borrow more than $420,000 from the Bank of Ann Arbor.

Forty Networkers carried the pole from the W. Washington space to the new theater, where it stood in the lobby until the end. People chipped in $10 to sign it in silver, $20 in gold. “Everything became a fundraiser,” Milarch recalls, noting that around that time, the state cut MCACA’s funding, and subsequent legislatures made more cuts.

“We didn’t have a certificate of occupancy until the day before we opened,” adds Milarch, who raised funds and appeared in the first show. The staff stayed up through the night, moving theater seats from the old space to the new. Then they opened.

Visibility skyrocketed in the new space, but so did the overhead. Heating and cooling costs were enormous, and there were ten phone lines. The audiences were bigger–927 subscribers and growing–but so were the productions.

By the time Broughton and Walker left the theater to Milarch and Wolber three years after the move, the budget had grown to $750,000. Now it was essential that shows were successful, that audiences kept coming and donors kept contributing.

Shoestrings of Gold

Rebranded as the Performance Network Theatre (PNT) in 2004, the theater relegated guest productions to the summer then dropped them entirely to do only professional Equity shows.

Much of the work at PNT was glitzier than the old Network’s, as art for art’s sake gave way to commercial realities. But occasional productions harkened back to more daring times. Some spectators were upset with Stop Kiss, in which two women are attacked after they kiss in public; others by 9 Parts of Desire, which explored the toll of war on Iraqi women.

“I take pride in those,” Wolber says. “Before my time, Fear No Art was part of the identity of the theater.” He is also proud of the eclecticism of the theater that mounted intimate shows and large-scale musicals, deep works and crowd pleasers, classics and original plays.

Audiences flocked to see favorite actors, including Sarab Kamoo, who’s worked frequently in films; Naz Edwards, who performed on Broadway; and John Seibert, who would stay with the Network until the end. Malcolm Tulip, a U-M theater professor who brought guest productions to the early Network, came back to act and direct, and Joseph Zettelmaier continued to develop new plays.

Still, checks began to bounce under a new manager, and the board considered closing the theater in 2007. Instead, they agreed that Milarch could try a management role. “I started trying to learn how to read a spreadsheet,” she recalls.

Some board members worried. Could actors and directors run a theater? A small theater “can’t hire a financial wizard for the money you have,” says Becky Zarna Fox.

The financial picture continued to deteriorate, and in 2009 the board again considered closing the theater. Milarch led an emergency campaign to raise $40,000 in two weeks. PNT raised about twice that, and the extra money saw them through the next season.

Milarch remained executive director until 2011, when she didn’t tell the board that payroll taxes had gone unpaid. Some on the board insisted Milarch had to go.

“The board was evenly and deeply divided about whether to fire Milarch,” says board member Jessica Litman, who felt Milarch was responsible for excellent productions and cultivating large individual donors.

Popular productions continued to draw big audiences. Milarch said the theater exceeded $300,000 in single-ticket sales that year, the highest in PNT history. But ticket sales never cover costs in not-for-profit arts organizations.

The deadlocked board finally agreed to demote Milarch from executive director to associate artistic director, and some board members and donors agreed to guarantee a $100,000 bank loan. “The loan was supposed to be emergency money, but the theater spent it quickly and had no money for emergencies,” says Litman.

When the financial picture didn’t improve under Wolber’s leadership, the board hired Erin Sabo as managing director; Wolber remained artistic director. The additional salary increased costs at a time when cuts to the MCACA continued. Pfizer dropped its $25,000 annual donation when it left Ann Arbor. And the heating system needed repair.

What was bad became worse, and nobody agrees on the reason. Milarch says she tried to help Sabo learn the ropes and was ignored, with “pretty disastrous consequences.”

Board treasurer Tom Dezure blames Milarch. “Carla’s resentment and uncooperative behavior toward the new managing director contributed significantly to the level of management dysfunction that existed,” he says.

“Internally the atmosphere was toxic,” says board member Mary Avrakotos, adding that artistic decisions didn’t take financial realities into account.

Ron Maurer, the board’s president, concurs, saying, “I firmly believe the theater would be alive today if the board had made the correct decision to sever ties with Carla [in 2011].”

Litman, though, believes “that the board micromanaged the theater’s operations much more than it should have, insisting on approving season selection, marketing, and other decisions.”

Wolber and Milarch, in her new capacity as acting artistic director, planned a season of plays with fewer actors and minimal sets, cutting $200,000 from the budget. Sabo’s budget cut another $100,000.

Still, in late 2013, there was talk again of firing Milarch. “We were staff heavy and needed to eliminate a position or two,” says board member Barbara Bach.

Wolber, who planned to move to California, resigned, cutting a salary. But sales dropped in the harsh winter of 2013-14, and in mid-season the board discovered taxes still weren’t being paid. Members feared legal action and penalties. “A number of board members began to worry that if the theater could not … pay the unpaid federal and state taxes and associated penalties, the IRS might pursue criminal actions against board members,” says Litman.

In May 2014, board officers proposed suspending operations immediately. Some board members wanted to finish the season and engage in a last-ditch fundraising effort, but the motion carried and the theater shut down.

If a change in management had been made without closing the theater, would a new administration have had a chance? With the closing, the favorable lease on the space was voided. The rent tripled. “There was no money to pay the rent, so this is a moot point,” says Avrakotos.

There were other losses. Subscription money was on the way, and so were grants from four private and public foundations–but that money was earmarked for the future. And even if it hadn’t been, says Avrakotos, the revenue “would not begin to address the accumulated debt.”

Milarch joined with Walker to create a proposal to reopen PNT. When the board turned them down, they started Theatre Nova, a non-Equity theater based in the Yellow Barn on Huron. It continues the PNT aesthetic–a mix of commercial and non-commercial plays–on a budget similar to the original Network’s.

Milarch was furious at the closing and at the board’s rejection of her proposal. “Even before I came along, PNT seemed like it was always coming up with a plan to deal with a crisis,” she says.

“The board kept looking for one transformational thing. ‘We’ll hire this development director. We’ll get rid of Carla,’ and everyone was surprised when the one big fix never worked.”

The Last Big Fix

Nobody expected the theater to open again, but when the board received a proposal from John Manfredi and Suzi Regan, they unanimously decided to give them a shot.

As executive director, Manfredi worked closely with the board to tighten fiduciary oversight, but when new member Heather Bell reached out to donors, old and new, she says she found “there was a significant amount of mistrust and misgiving. Some reengaged, but nobody wanted to take on the debt to the IRS and state.” Fewer subscribers renewed, having been burned after purchasing subscriptions for plays that weren’t presented.

“John and Suzi created a healthy work environment for all of us,” says Bach. “Three staff members and two dedicated interns ran a tight organization, in contrast to the previous management that employed five staff members and four interns.”

Manfredi and Regan, as artistic director, produced fine work under trying circumstances. “They made herculean efforts to save the theater,” says board member Gene Dickirson. “I was amazed at the energy and excitement they put into it.”

The new Network produced professional work on a tiny budget, and even paid down some of the old debts. An emergency fundraising appeal last fall brought in more than $40,000, but that was just enough to carry the theater through the end of the year. In December 2015, the Performance Network closed for good.

“The damage was so extensive, the condition of the theater was terminal, but we didn’t know it until we were all in,” Regan says. Although she was hopeful throughout, loving the work they did and energized by the way artists pitched in as they had in the first days of the Network, she was frustrated, too. “We had so many ideas but not enough staff, time, advertising, money–and, we found out the hard way, not enough community interest.”

“I was always surprised when people came up to me and said, ‘This was just as good or better than what I saw in New York,'” says actor-director John Seibert. “Well, yeah. This was a professional theater.”