Broadway's latest boom - bailout plans. Theater owners see city's first-ever, $5 million offer of assistance as too paltry. Though masked by a few smash hits, a continuing decline in the fortunes of Broadway theater has spurred an unprecedented flurry of rescue plans, including New York City's first-ever offer of public assistance. Today: reactions to the city plan. Tomorrow: a look at some private efforts.

By , Staff writer of The Christian Science Monitor

ON Broadway, lines are forming around the block for tickets to ``The Phantom of the Opera,'' the smash London musical that opens here next month. But behind closed doors, New York's commercial theater community is struggling with the flip side of the phenomenon of success - financial crisis.

Despite the occasional hit musical, such as ``Phantom,'' Broadway is eroding. Escalating production costs, skyrocketing real estate values, and changing cultural tastes are fundamentally altering America's theatrical center in ways that make its ``crises'' of decades past seem almost insignificant.

During the past decade, Broadway has witnessed a steady falling off in the number of productions. And although recent statistics put this season's box office ahead of last year's, the trend is one of continuous decline. Industry observers say the situation has reached crisis proportions.

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``Workweeks for actors on Broadway have dropped some 50 to 60 percent since 1981,'' says Alan Eisenberg, executive secretary of the Actors' Equity Association. ``Every year it drops some more.''

Gerald Schoenfeld, the usually ebullient chairman of the Shubert Organization, Broadway's largest producer and theater owner, says that Broadway was in great shape until a few years ago, but ``now the situation has become acute.''

Just how acute can be measured by the flurry of fresh proposals for restructuring Broadway that have surfaced here in recent weeks. The proposals include the establishment of an in-house creative team at the Jujamcyn Theater Organization, the third-largest Broadway producer, and a reduced-price subscription series similar to that offered by America's nonprofit theaters.

While both plans are considered unusual, even risky for the high-stakes Broadway arena, neither has elicited the interest - or the controversy - that a city-sponsored plan has.

A plan to involve New York City in the production of Broadway musicals and dramas was unveiled by the mayor's office this fall.

The proposal, the first official offer of public assistance for the beleaguered theater industry, which is considered New York's leading tourist attraction, calls for the creation of a $12 million New York Theatre Trust to produce plays and musicals at sharply reduced costs and with correspondingly reduced ticket prices in several of Broadway's vacant theaters.

While New York's theater community has long advocated government assistance in the form of tax abatements and a city-funded theater trust, the specifics of this proposal - particularly a $1 ticket surcharge and a lease arrangement for five endangered theaters - are angering and dividing an already troubled Broadway.

Proponents insist the measure is a major step forward on the part of the city; critics contend that the plan represents only token support while actually aggravating Broadway's fiscal woes by raising ticket prices.

``Broadway is a desert today,'' says Robert Whitehead, a veteran and well-regarded independent producer. ``For 10 years, we've been telling the city they have to give us this help.''

``The theater trust, as outlined by the city, is an outrage,'' says the Shubert's Mr. Schoenfeld. ``It is a radically different idea than the one advocated by the Theater Advisory Council in 1984. We will not support this proposal.''

Joseph Papp, producer of the New York Shakepeare Festival and author of that original theater trust proposal, resigned from the Mayor's Theater Advisory Council in protest, denouncing the city's plan as ``suspect'' and ``highhanded.''

``Broadway is going under; its economics are nonexistent,'' said Mr. Papp, who is spearheading private efforts to establish a Broadway trust fund. ``But the city's proposal is not the way to save what's left of the industry.''

The proposal, which is still being revised by the Mayor's Office of Film, Theater, and Broadcasting in conjunction with the Theater Advisory Council, calls for the establishment of a nonprofit producing group, to be run by a consortium of industry professionals - producers, theater owners, union officials, and artists - along with representatives of city agencies.

The $12 million trust, funded by an initial $5 million city grant and an additional $7 million raised from the $1 per ticket surcharge, would light five darkened Broadway houses with annual seasons of limited-run productions. Representatives of the plan say the trust would increase production of new shows, revive the audience for live theater, and help save Broadway's endangered theaters.

``Broadway is New York's leading tourist ticket,'' said Patricia Reed Scott, director of the Mayor's Office of Film, Theater, and Broadcasting, at a recent symposium. ``To lose any more of the theaters is incredibly stupid. Our first priority is how to keep those theaters lit.''

But critics charge that the city's plan offers little real financial assistance and simply shifts the problem of the endangered theaters from the private to the public domain.

The surcharge, even the incremental $1 increase, they insist, would discourage, not encourage, a flagging Broadway audience. In addition, critics maintain that the surcharge puts the burden of funding of theater trust on the consumer and not the city.

``We are trying to reduce ticket prices, not raise them,'' says Harvey Sabinson, executive director of the League of New York Theater Owners and Producers.

``The real problem remains unaddressed - that the city is not committed to helping the Broadway theater,'' says Rocco Landesman, president of the Jujamcyn organization. ``I think the theater community would go along with the current proposal, including the surcharge, if the city's contribution was more like $50 million, instead of $7 million. Unfortunately, Broadway is one industry that can't threaten to move out of state.''

The Shubert's Schoenfeld says, ``The city helps underwrite Madison Square Garden with $18 million of tax relief, helps the Yankees to the tune of $125 million.

``But they expect the theater owners to give away their theaters [to the trust],'' Schoenfeld contines. ``That amounts to a half billion dollars' worth of real estate confiscated by the city.''

Opponents of the current plan, which remains under discussion, suggest alternative means of funding the city's Broadway bailout.

These include a beefed-up municipal grant, additional tax assessments on area real estate developers, tax abatements for theater owners, even a citywide culture tax.

``There are a variety of funding menus available, other than what has been proposed,'' says Jack Goldstein, executive director of Save the Theatres Inc. ``The city's plan has made the concept of the theater trust a reality. Now we're being forced to define it.''

``The mayor's plan? Not a chance,'' says the league's Mr. Sabinson. ``But some version of a theater trust? That, we hope, will come to pass.''

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