Acquiring a building is no small feat, especially in San Francisco’s ultra-competitive real estate market. Here’s how Smuin Ballet moved mountains to buy its own building in Potrero Hill.
Soon after taking the reins of San Francisco–based Smuin Contemporary Ballet in 2007, artistic director Celia Fushille realized that if the company was going to stay afloat, it would need its own building. With rental rates for commercial spaces in the Bay Area skyrocketing over the past decade, continuing to lease grew unsustainable for the 26-year-old nonprofit troupe. “We tried to lease, but couldn’t compete with tech companies,” says Fushille. “In 2009, I said to my board that we needed a permanent home for Smuin. I didn’t see how we were going to survive otherwise.”
Thanks to a $10 million capital campaign and a fortuitous collaboration with a dancer-turned-real-estate broker, that vision has now become a reality with the purchase of a 7,200-square-foot warehouse space in Potrero Hill, San Francisco.
A Real Need
After years of being nomads, Smuin could no longer justify the ballooning rental rates in the area. A typical commercial lease for an industrial or warehouse space in San Francisco runs about $60 to $72 per square foot compared to a national average of $26. Tack on the taxes, insurance and maintenance fees, and renting gets high pretty fast.
Owning a building wasn’t going to be cheap—county and state taxes in the area are some of the highest in the country—but it would mean a more secure future. As a nonprofit arts organization, Smuin can take advantage of California’s nonprofit property tax exemption, thus reducing the overall overhead for the company and nudging the meter toward a decision to buy.
The Man Behind the Move
Finding and buying the right building ended up being facilitated by one of Smuin’s own. After dancing with the company from 2009 to 2013, John Speed Orr finished his online real estate classes while on tour with Trey McIntyre Project. He got his real estate license around the time Smuin started looking for a property. Having maintained a strong connection with the company, where his wife Terez Dean Orr still dances, Speed Orr was in an optimal position to put his real estate knowledge to use for them. “I’ve spent more time in ballet studios than I have anywhere else,” he says. “My basic instincts from having been a dancer, such as spatial recognition and general knowledge of a nonprofit organization, specifically a dance organization, were hugely beneficial. I understood the hierarchy and how the culture and community function.”
A Hunt for the Perfect Space
Fushille spoke with a number of realtors initially, but things didn’t really fall into place until Speed Orr came on board. “We started to work with John when he left dancing,” she says. “He knew exactly what we were looking for.” Speed Orr knew what the company needed from a building. “It’s really difficult to find something for a ballet company,” he says. “You have to find something that has a large square footage, high ceilings and no posts. You’re sort of looking for a diamond in the rough.” The additional complications of specific zoning ordinances in San Francisco meant that the building had to be something that had use as an arts facility, a school or a performance venue.
Speed Orr describes the building the company landed in as essentially a needle in a haystack. It was an existing dance space, previously known as the Metronome Ballroom, on 17th Street. As an old warehouse that originated as a blacksmith’s shop, it needed a lot of work but would have room for two studios once it was brought up to code.
Securing the Deal
As it turned out, as difficult as finding the building was, purchasing it was even harder. “The bidding process was one of the most competitive bidding processes I’ve ever been a part of,” says Speed Orr. “There were five interested parties. The top three parties, including us, were all cash with no or very few contingencies.” The initial asking price was $3.75 million. However, soon after entering the bidding process, Speed Orr got a call from the real estate broker with an unusual ask: Smuin’s highest and best offer. Smuin ended up beating out the others with an astounding $4.5 million bid.
Finding the Funds
Being able to pull the trigger on the right space at the right time was due in large part to Fushille’s foresight to begin a silent fundraising campaign years ago. Once the Smuin board approved the plans for a building acquisition, Fushille and the company embarked on an ambitious $10 million capital campaign for the purchase and renovation of a building, as well as start-up costs for education and outreach programs. “Prior to this capital campaign, we had never asked people for this kind of money,” says Fushille. “We didn’t know if we’d receive the support we needed, but we just started from within our donor base and went from there. People were very supportive of the idea of Smuin having a permanent home.”
Smuin has raised $9.2 million in roughly four years. However, the move was able to happen before the $10 million goal was met. Two trustees provided interest-free bridge loans for the building purchase and generously offered to make part of the loan a gift once the company paid off the balance. “That spurred us into action!” says Fushille. “We paid off $1 million.”
This March, even before the California COVID-19 stay-home order was issued, the company took action to move its annual gala, originally scheduled for March 15, to a virtual event with recorded performances. The planned silent auction of luxury items, such as a ski getaway and a wine tasting, will be postponed until travel and timing factors can be determined. Smuin patrons responded overwhelmingly to turn their gala tickets into donations totaling $267,000.
Building for a Better Future
The former Metronome Ballroom looks almost unrecognizable now. Fushille says it wasn’t a safe space to move into initially. “It ended up being more than just a simple remodel. We took it down to the studs and put on a new roof,” she says. “Everything is up to code and we have firewalls now.” Sprung floors had to be added, and the two adjacent studios needed soundproofing. Additionally, a physical therapy room, dressing rooms for the dancers and offices for the administrative staff were added.
The company held its first rehearsals in the new building in October 2019, and the only thing left to do is get the Smuin Contemporary Ballet sign up outside. The new building means expanded opportunities for the organization. The company plans to host in-house performances, converting the larger of the two studios into a black-box theater, as well as rent out studio space to local artists. Open adult class offerings for the community also generate additional income. Fushille hopes to develop a trainee program that would feed into the company, something company founder Michael Smuin, who died in 2007, would have loved. “We love this building. It has dance roots,” says Fushille. “That we were able to realize this dream, I know how thrilled Michael would be.”
Rachel Caldwell is a dance teacher and writer based in Berkeley, CA.