The Detroit Symphony Orchestra announced Thursday that it has resolved $54 million in loans owed to five banks on a real estate deal for the Max M. Fisher Music Center, allowing the 125-year-old orchestra to more confidently move ahead in its financial recovery.
The settlement was announced Wednesday before the orchestra’s executive committee and released publicly Thursday morning. Details of the deal were not disclosed.
“The settlement had a very tight confidentiality agreement,” orchestra executive vice president Paul Hogle told The Associated Press Wednesday afternoon.
Resolving the loans enables the orchestra to move forward with its strategic recovery plan and follows several years of financial troubles, including a contentious 6-month strike by musicians who in April 2011 agreed to major contract concessions.
The loan settlement took two to three years to complete, orchestra treasurer Arthur Weiss said. Weiss negotiated with the five banks and their counsels to broker the deal.
“We settled it,” Weiss said. “We have a lot of work ahead of us. We have to create a strong foundation for this cultural institution and increase annual fundraising. We have to make sure we meet the annual giving and we will continue to do whatever we can to put the institution on a sound financial base.
The orchestra still faces an expected $3 million operating deficit heading into the start of its new fiscal year in August, and could spend another three to five years with a negative balance.
“We will definitely still be in the red,” Hogle said.
In 2009, 39 staff positions were eliminated, while pay cuts of 5 percent and 10 percent were instituted. Music Director Leonard Slatkin agreed in 2010 to a 3-year contract extension and a pay cut.