$500,000 Norfolk loan keeps Virginia symphony alive

NORFOLK

Musicians and patrons were relieved Wednesday to learn that the Virginia Symphony Orchestra received a $500,000 loan from the Norfolk Economic Development Authority.

The loan will be effective once an agreement is signed by all parties, perhaps this week, said Sandy Harris, authority board chairman. Then, the symphony can draw money as needed. The terms include repayment with 6 percent interest over five years.

Blair Wimbush, symphony board chairman, said the loan should "enable us to get through the remainder of this fiscal year," which ends July 31, without declaring bankruptcy.

Jerry Robertson, authority vice chairman, is expected to join the symphony board during the loan period. He is executive director of the Virginia Applied Technology and

Professional Development Center, part of the College of Engineering and Technology at Old Dominion University.

Robertson specializes in evaluating organizations for efficiency, said Rod Woolard, director of development and executive director of the authority.

Loan funds will come from administrative fees that the authority collects from companies for which it issues industrial revenue bonds, Woolard said. The authority is a political subdivision of the state.

Carla Johnson, symphony president and executive director, said after the morning vote to approve the loan, "I'm thrilled."

Johnson spoke to the authority about her group's precarious financial state, including its $1.5 million debt. She said, "The VSO had continued to function by pulling in cash from future established pledges, some new sources" and by delaying pay to vendors.

"We are now at the end of what we can do without a large infusion of cash from new sources."

Besides reducing expenses in the current fiscal year by $500,000, the symphony plans to cut next year's operating budget by another $1.2 million, Johnson said.

This year's cuts will reduce the symphony's budget to just under $6.2 million, she said.

Since August, four employees have been laid off and a 20 percent pay cut was announced for remaining staff. Several spring concerts will be canceled.

Earlier this month, Johnson said that if the symphony did not receive a $1 million loan from the authority, the organization might miss its mid-December payroll and might have to file for Chapter 11 bankruptcy protection.

Because enough donations arrived, the group made the $180,000 payroll on Monday, symphony publicist Donna Hudgins said.

Wimbush said the group asked the authority for $500,000 rather than $1 million "because you have to adjust your expectations to reality. "

The loan stipulates that future capital campaign donations will be placed in a separate securities account. That way, if the organization closed down, the authority could get its money back, Woolard said.

On Wednesday evening, several hundred symphony supporters came to Granby Theater for a fundraiser organized by the musicians. On Granby Street, violist Jocelyn Smith called out, "Hey, you guys. Live music! No cover!"

Inside, patrons listened to the symphony's brass ensemble play Christmas carols. Musicians hawked raffle tickets and volunteers sold CDs and other items. "It's nice to know I won't get thrown out of my house," said concertmaster Vahn Amstrong, only half joking.

Teresa Annas, (757) 446-2485, teresa.annas@pilotonline.com