BUZZ Blog: Past stories detail Eric Ringsred's management of the NorShor
Peter Passi and Brandon Stahl cover issues related to the city of Duluth. Follow BUZZ on Twitter.
More in NorShor history
Found a couple of other very interesting old articles on the management history of Eric Ringsred and the NorShor, both by former DNT A&E reporter Sarah Henning:
MISSED CHANCES - THE AGING ART DECO THEATER IS IN DIRE NEED OF EXTENSIVE-AND EXPENSIVE-REPAIRS. OWNER ERIC RINGSRED DOESN'T HAVE SUCH A PLAN, AND HAS TURNED AWAY SOME WHO DO.
The future of the NorShor Theatre is in Eric Ringsred 's hands, but he has let opportunity after opportunity slide through his fingers.
In 2005, the Duluth-based A.H. Zeppa Family Foundation was considering the NorShor as a home for Renegade Comedy Theatre. In negotiations, Ringsred said he inflated the sale price to "several million dollars." He and his wife didn't like how the foundation planned to use the building so chose to "make them pay," he said.
In the past two years, Ringsred and NorShor lienholder Arno Kahn have ignored offers of grant assistance, including a potential $500,000 restoration grant from the National Trust for Historic Preservation.
The NorShor wouldn't have qualified for such grants because the nonprofit that Ringsred and Kahn have claimed owned the building was dissolved by the state in 1998.
Instead of designing a rehabilitation plan for the NorShor and drumming up money, Ringsred has opted to lease the building to a series of managers, including George Munch Jr., a convicted criminal from California who conducted business with Ringsred in 1986 from a Los Angeles County jail.
The outcome? Ten unprofitable management teams and half a dozen closures in the 24 years Ringsred has controlled the building.
After an eight-month closure for fire code violations, the NorShor re-opened Thursday for a Homegrown Music Festival concert. Now it will open only for what Ringsred describes as "special occasions."
Ringsred said he has given up on the building as a cultural hub -- or even a venue for alternative art and music.
Meanwhile, the NorShor's condition continues to deteriorate. Chunks of carpet are duct-taped to the main theater's floor. A rusty hole in the theater's false ceiling drips red water, which is eating away at the seats below. The Zeppa Foundation's feasibility study found it would cost $2.2 million just to catch up on basic deferred maintenance.
"I think Eric does need to take responsibility for the success of that building," City Councilor Don Ness said. "He needs to be willing to make the difficult decisions necessary to ensure success."
TRACK RECORD OF INACTION
For decades, locals have waxed poetic about preserving the historic theater at 211 E. Superior St., which was redesigned in 1940 by celebrated Art Deco architect Jack Liebenberg.
There is no question the theater's features are rare and beautiful. A bas-relief depicting Duluth industry. Botticelli-esque paintings. Every detail speaks to Art Deco's streamlined elegance.
The building's worth goes beyond local sentiment. Architecture historians such as Glensheen Mansion Director Wade Lawrence see the NorShor as "a historic gold mine."
Richard Moe, the president of the National Trust for Historic Preservation, has said the NorShor must be saved. In the city's 2004 preservation study, the theater was singled out as a potential cornerstone of heritage tourism. Many of Liebenberg's other theaters are on the National Register of Historic Places.
Similar refurbished historic theaters in the Midwest have relied heavily on grants and foundation money. But NorShor owners haven't pursued grants.
In 2004, Moe, the nation's most powerful preservationist toured the NorShor with a group of residents that included Kahn. Moe said he wanted to provide $500,000 for restoration if the community could match it. Nothing ever happened.
On another occasion, Rob Link at A & L Development offered a connection he had at the McKnight Foundation. "I'm not sure why it never went anywhere," Ringsred said. "I think we were all supposed to do some homework and I don't think we did."
In 2005, the Zeppa Foundation hired Wagner Zaun Architecture and Scalzo Architects, both Duluth firms, to assess the building and draft a feasibility study.
Keir Johnson, the foundation's executive director, and Ness said they spent hours negotiating with Ringsred . Both concluded Ringsred wasn't putting in much effort.
Ringsred said he and his wife, Deborah, didn't like the Zeppa's vision of breaking the theater up into smaller bars and theaters. "She said if they're going to buy it and divide it up, there's going to be a high price on it, because saving this place the way it is has been so much of our lives," Ringsred said.
Johnson said the foundation never made an offer. "He ( Ringsred ) wanted several million dollars for the purchase price," Johnson said. "I could tell he didn't really want to do it. That was OK. It wasn't the right fit for what we wanted to do."
Instead, the foundation bought the former St. Louis County Health Department building just down the block at 222 E. Superior St.
Ness characterized the failed deal as a missed opportunity.
"The foundation's plan for the building was to retain a focus on local theater, art and music. I doubt there will ever be another buyer interested in investing significant resources into that building who will have that commitment," Ness said. "In my mind, the foundation was the ideal buyer, at the ideal time, with the ideal vision and values for the facility."
Ringsred said he would sell the NorShor, if the buyer agreed to a covenant for historic preservation.
NOT A NONPROFIT
Ringsred bought the NorShor in 1982 as a tax shelter, with the idea he might inspire a downtown renaissance. "I had big ideas at the time," he said. "I wanted to preserve something, and at the time it was endangered."
The 55-year-old emergency room physician has acquired several downtown buildings over the years, including the Wabasha Book building on First Street and the Temple Opera Building next to the NorShor.
Ringsred was honored in 1998 by the Preservation Alliance of Minnesota for his "consistent, timely and indefatigable work on the behalf of historic preservation in Duluth for over 15 years." Accomplishments cited by the alliance included his investment in downtown real estate, efforts to keep the city's foghorn and a lost court battle to prohibit demolition on the Technology Village site.
Ringsred never operated the NorShor himself, opting instead to hire a string of managers to lease the building. One of those managers, a book publisher named Harlin Quist, created a nonprofit organization called Theatre in the State in 1989. Quist and Ringsred were on the board of directors.
A year later, Theatre in the State agreed to purchase the NorShor for $98,000. Ringsred said the money never materialized. However, the nonprofit was listed as owner on the deed from 1992 to March.
In 1994, Quist moved away. The NorShor closed for 1 1/2 years. After a tussle for ownership, Ringsred assumed control of Theatre in the State in 1995. According to St. Louis County records, $102,000 in construction bills were left unpaid. The debtor? Builders Commonwealth, which Kahn co-owns. With a lien on the building, Kahn began to be referred to as the NorShor's co-owner.
A former Duluth city councilor, Kahn helped create Builders Commonwealth, an architectural and construction co-op. He received a Minnesota Preservation Society Award for his restoration of the former Riverside School.
Since 1995, Ringsred and Kahn have presented themselves to the media, city employees and their own managers as the nonprofit Theatre in the State. But documents from the Minnesota Secretary of State's Office show the state sent a notice of involuntary dissolution to the nonprofit in 1998 for failure to submit required paperwork. Those documents show the notice was sent to the nonprofit's registered address.
When asked about the nonprofit being dissolved, Ringsred laughed and said: "That's funny. When?"
Ringsred said he didn't know the nonprofit had been dissolved: "That's Arno's department, all the mail went to him on that."
Kahn did not return phone calls for comment.
In an April 18 interview, Ringsred said the status of the nonprofit didn't matter because he had filed papers with an attorney to transfer ownership of the NorShor to his own for-profit Temple Corp.
But according to county records, Temple Corp. already owned the NorShor. The deed to property at 201-213 E. Superior St. was transferred in March. The only property Theater in the State owns is at 8-12 N. Second Ave., an abandoned Duluth Transit Authority shelter being used for storage.
This means a nonentity owned the NorShor for nine years.
No one applied for a property tax exemption on the NorShor, but the building owners have had some advantages from the appearance of nonprofit status. Over the years, community members have volunteered to work on the building, donated supplies and attended fundraisers in good faith that they were helping a nonprofit.
In the decade after Quist left, four management teams have tried and failed to operate the NorShor as a successful business. All struggled to book entertainment while also performing triage on the building's aging electrical, heating and plumbing systems.
J.P. Rennquist, the most recent manager, came in as the owner of Wild Goose DJ Entertainment and Speedy Wienie concessions. During his tenure, 13 years of violation-filled building inspections caught up with the NorShor. Duluth Fire Marshal Erik Simonson closed the building in August. Simonson wrote that several extensions had been granted on many different code violations, including poorly functioning panic bars on doors.
"It was so simple it would make you cry," Ringsred said.
Ringsred complained that Simonson decided the building needed a fire alarm system only after the building had been closed. But Simonson said his department has asked for fire alarms since 1989, and the request was also included in the August order of closure.
Ringsred said he was upset with Rennquist because he was not kept "in the loop on this fire stuff." According to both Simonson and copies of fire department correspondence, letters were often addressed to the NorShor manager and always copied to Ringsred , Kahn or both.
Rennquist said he regularly spoke with Ringsred and Kahn about the violations, asking for help because he couldn't afford all the fixes. Rennquist said some violations could have been remedied easily by Kahn's construction business.
"Arno and Eric's solution was to take a wait-and-see attitude," Rennquist said.
FUTURE IN FLUX
In the short-term, Ringsred said he will open the building for special occasions until he finds a long-term lessee. He downplayed the building's poor condition saying: "It functions pretty well as it is."
But the Zeppa Foundation feasibility study shows it will cost $2.2 million for the building's basic functionality, a price tag that doesn't include historic restoration, furniture or theatrical systems.
Estimates on necessary upgrades and repairs to the plumbing, heating, ventilation and electrical systems add up to $770,000. Those are all areas the building's tenants have been responsible for in the past. The study also anticipates a $139,600 roof repair.
When asked who should plan and pay for the building's rehabilitation, Ringsred said he considers the landlord/tenant relationship to be a partnership. "It should be both our roles," he said. "If we make money, we share in the success. If not, we share in the failure."
Many NorShor advocates who have experience with historic preservation say it's difficult to run historic theaters as for-profit ventures. Those advocates include Duluthian Carolyn Sundquist, who is on the board of advisers for the National Trust for Historic Preservation.
There doesn't appear to be any viable nonprofit candidates. The city has a long history with the building, including a loan that wasn't paid on time, so Ness said there would be "widespread apprehension" about a municipal buy out.
Ness believes the NorShor should not be the city's responsibility, but there are ways some sort of quasi-governmental arts authority could play a role in the building's long-term sustainability.
A common solution for down-and-out historic theaters is having nonprofit and for-profit components, said Chris Morris, Minnesota program officer for the National Trust for Historic Preservation.
Morris said the nonprofit component could accept grants and foundation help, while the for-profit component could take advantage of a federal rehabilitation tax credit, which offers up to 20 percent off qualifying expenses.
As someone who has experience with historic rehabilitation grants at Glensheen, Lawrence said any project must involve restoration experts to gain the confidence of grant-makers and donors. "You don't get those $2 million grants to restore a building unless you've also done the appropriate evaluation phase and planning phase," he said.
Ness agrees the building needs people who can design and fulfill a larger vision.
Ringsred , meanwhile, has no plans to veer from his current management structure, except to stay away from the alternative music and arts scene. He said he's talking with several parties interested in taking over the lease, including a church and someone who would operate the building as a multi-level bar.
"Remember that article in the New York Times last year?" Ringsred asked. "They called the NorShor an 'oasis of culture.' I don't think those days will come again."
"It will be something fairly prosaic ... but at least the theater is preserved, the structure is preserved."
RINGSRED 'S OPERATING STRUCTURE SET TO FAIL, FORMER MANAGERS SAY
Duluth News-Tribune (MN) - Sunday, May 7, 2006
Author: Sarah Henning News Tribune Staff Writer
The NorShor Theatre's owner has set up a management structure that's primed for failure, say two former managers.
In the 24 years Eric Ringsred has owned the building, he has defined his tenant/landlord relationships as an equal partnership. Ten of Ringsred 's management teams have tried to squeeze a profit out of the place. At least two have declared bankruptcy.
As managers slid in and out of the NorShor's revolving door, the grand theater that once hosted Charlie Chaplin and the Marx Brothers became a deteriorating haven for rock bands, young artists and hipsters -- when it was open.
Many of the mangers Ringsred hired lacked business experience, and in the media Ringsred and NorShor lienholder Arno Kahn regularly blamed the managers for the NorShor's problems.
Knowing that, Chip Stewart and Craig Samborski thought their experience in the entertainment industry set them apart. Samborski is a national concert promoter and former entertainment manager at the Duluth Entertainment Convention Center. Stewart owns Amazing Grace Bakery and Cafe, which hosts regional music acts. The Duluth businessmen leased the NorShor for six months in 2004.
'We thought we had a leg up ... until we got in there,' Samborski said. 'We killed ourselves with the hours. We spent thousands of hours trying to make this work.'
Samborski and the latest NorShor manager, J.P. Rennquist, attribute the building's decline to its owners not accepting basic landlord responsibilities. 'The ownership structure is extremely disorganized,' Rennquist said. 'These guys have great hearts, have done great things for the community, but they have limitations.'
Rennquist said he was never presented a management contract. Samborski and Stewart were shown a contract they refused to sign.
'Chip and I wouldn't sign a written agreement because they expected us to make all the capital improvements,' Samborski said. 'It needed so many capital improvements -- the heating system, wheelchair access to the bathrooms, etc., etc. It would have just been dumb to sign something like that.'
Samborski said their verbal agreement included the manager paying rent, acquiring and paying for the liquor license, and paying for heat, electricity, phones, cleaning staff and accounting services.
Rennquist summed up his verbal agreement as 'vague.'
'I said I'll do what I can and you'll have to pay the rest,' he said.
Both managers said they continually ran into situations where they were held accountable for other people's mistakes. For example, Samborski said previous managers left a $5,000 bill at a liquor vendor. He told Kahn they wouldn't absorb the previous manager's debt. 'I kept hearing 'yup, yup, yup,' ' Samborski said.
A week before the 2004 Bayfront Blues Festival, the liquor company put a lien against the NorShor's liquor license because the debt had not been paid. 'We got stuck paying half of it,' Samborski said.
Kahn did not return phone calls for comment.
Samborski and Rennquist said there were months they couldn't pay rent because all their money was going back into the building.
'The problem with somebody like J.P. Rennquist trying to stay above water is he's got pipes busting and inefficient heating space, and so all his focus is turned toward operations and it should be focused on programming,' Duluth City Councilor Don Ness said.
The company Stewart and Samborski started for their venture, Norshor Entertainment LLC, filed bankruptcy. Rick Boo's Crossroads Flux, which operated the NorShor from 1997-2003, also filed for bankruptcy. Boo didn't respond to requests for an interview.
Rennquist anticipates bankruptcy as well. 'My character has been slandered, I've had a profound experience of failure, it's caused family problems and I'm dangerously close to bankruptcy,' he said.
Ness said he will support whomever tries to make a go of it. 'However, through the experience we've had supporting these sole proprietors,' he said. 'it's clear to me that the NorShor needs a larger vision about what happens in that space and how it can be sustained long term.'
Caption: Photo by: Clint Austin/News Tribune
A look at the main theater illustrates fromer manager Craig Samborski's assessment that whoever wants to revive the NorShor would require a "war chest." "Otherwise it's just making excuses to patrons who say things like, 'It's cold in here,'" he said. "All you can say is, 'Yup, it's cold in here.'"