Home > PUM Exclusive: My Perspective on the August Wilson Center for African American Culture: Aaron A. Walton Former Chairman of the Board

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My Perspective on the August Wilson Center for African American Culture

by Aaron A. Walton-Former Chairman of the Board, August Wilson Center, April 22, 2014

PUM Exclusive 

The August Wilson Center for African American Culture (AWC) has been at the forefront of numerous discussions, opinions and controversies from its contemplated inception in 1997 to its physical reality in 2009. My initial perspective of AWC grew out of my role as the co-chair of the National NAACP Convention held in Pittsburgh in 1997.  

As a condition for choosing Pittsburgh for its venue, a commitment was made to the NAACP at its national level by city leadership at that time to build a facility that would recognize the contributions of African Americans to the cultural fabric of the City of Pittsburgh. After that commitment, my personal involvement with AWC was limited to that of a financial supporter along with many others.  That persisted until I was asked to assume the role of Board Chair and Director in July of 2010.

I soon learned that, after raising 36 million dollars, the original projected cost of the facility, the August Wilson Center opened with a debt of 11 million dollars.  That debt was a result of costly overruns at the end of the project’s construction phase, as well as a need to borrow funds to initiate day-to-day operations.  Considering those challenging economic circumstances, the financial success of AWC was only a hope.  One might even question the wisdom of opening the Center before that debt had been eliminated.

Optimistically, and perhaps even unrealistically, the Board of Directors of AWC in 2009 set out to do the impossible: make the center self-sustaining. The board soon learned that the business model previously adopted, was unsustainable, regardless of the competency of the leadership. Even through the generosity of the R. K. Mellon and Kresge Foundations, which enabled the Board to refinance the original $11 million dollar debt down to $7 Million dollars, the challenge was still too great.

A huge thank you goes to the patience of Dollar Bank and many other creditors who did their individual and collective best to help; however, the mountain of debt was just too high. In a last ditch effort to preserve the mission of the Center, and salvage the efforts of so many over time, the Board voted to pursue other options. One such option was the identification of an entity that would loan and/or give the Center sufficient capital to satisfy all outstanding creditors, establish an operating reserve, and allow the Center to re-tool and implement a new business model. The incentive to the perspective investors was granting the right of first refusal for the air rights needed to potentially build a hotel above the Center. Unfortunately, the board was within 30 days of finalizing that opportunity (under a non-disclosure agreement) when the Dollar Bank had no further recourse, given banking regulations, but to petition for foreclosure.

Among the AWC Board’s final acts through its attorney was to request a conservator be appointed by the courts.  The conservator would give primary consideration to solutions in the best interests of the banks, the community, the AWC Mission, and other interested stakeholders. This request was graciously grated by Judge Lawrence O’Toole.

The court appointed conservator, former bankruptcy court Judge Judith Fitzgerald, supported by her legal and financial team also tried to do the impossible: garner support and resources to restructure the Center and present a plan that would allow its continuation as a valuable cultural asset. Unfortunately, similar challenges of time, support, and resources were faced by the Conservator and her team.

The Conservator, in executing her duties as prescribed by the courts, is making a report on Monday, April 21, 2014 before Judge O’Toole. Her recommendation must be one that preserves the interest of all parties, as her charge requires.  

My perspective is that she is left with little choice other than to recommend the offer that yields the highest capital return while meeting her charge. I view the 9. 5 million dollar offer is more closely aligned with the best interest of all stakeholders, especially those of the African American Community.  Approval of the 9.5 million dollar offer would:

·         Essentially eliminate the debt of approximately 7-8 million dollars owed Dollar Bank and the banks in the consortium

·         Eliminate the .5 million dollar debt owed  the Urban Redevelopment Authority of Pittsburgh

·         Pay something toward the  $1 million dollar debt owed various vendors and individual  supporters( many of which are small businesses)

·         Preserve the name and mission and of the AWC by allowing it to continue as its own governing organization without the burden of ongoing debt

·         Provide the opportunity for an economic development enterprise that would create at least 100 jobs in the case of a proposed hotel

·         Leave a legacy of which the African American Community could  continue to be proud

 

Aaron A. Walton

Former Chairman of the Board, August Wilson Center 

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