Financial problems, public apathy and infighting within its top ranks threatened to plunge the Honolulu Symphony Orchestra into irrelevance last year, but now the 106-year-old institution is showing signs of recovery.

Lingering financial questions — including musicians' pay, a topic about to be reopened — are still a major concern, but orchestra leaders have staged a radical revolution in the organization's management, marketing and public relations practices that has produced promising early results.

As of Dec. 31, 2005, fundraising was up nearly 50 percent from the previous year, says interim executive director Gideon Toeplitz, who is spearheading rejuvenation efforts.

And though overall attendance is down approximately 20 percent from last year, the symphony recorded its highest ticket sales ever at the Blaisdell Concert Hall with last month's performance of Beethoven's Ninth Symphony.

Toeplitz has been working with the board of directors and staff on initiatives aimed at increasing the orchestra's presence throughout the state, including educational outreach programs and performances.

In recent months, the symphony has brought in consultants to find the best way to structure prices for tickets and other sources of revenue, and initiated a market research study. It has also rezoned the concert hall's audience seating.

The orchestra has hired public relations expert Scott Foster as a lobbyist. Foster is promoting a proposal to have the state pay for Neighbor Island performances, and a federal measure to provide music education to Native Hawaiian students, among other things.

Peter Shaindlin, CEO of Halekulani Corp. and incoming symphony board chairman, said the symphony's renewed commitment to education and community engagement will help expand its audience.

"We recognize that the need to build a loyal client base is long-term," he said. "If we can reach into (Island) communities with the resources, knowledge and talent of our musicians, and allow people to fall in love with symphonic performance, we will have that loyal base."

Key to the symphony's ongoing recovery, Toeplitz and Shaindlin agree, is identifying a new executive director and a music director (to replace outgoing maestro Samuel Wong).

Shaindlin, who chairs the search committee, said two finalists have been identified for the executive director's job. A decision should come in March.

Three or four conductors, all of whom have worked with the orchestra as guest conductors, are in the running for the musical director post. Toeplitz said a final decision probably won't be made until late this year.

TURNING THE CORNER

Toeplitz, a former executive vice president and managing director of the Pittsburgh Symphony Orchestra, arrived in Honolulu last June from the Arts Consulting Group, which the symphony hired to help in its search for an executive director.

Taking advantage of his self-described "outsider" status, Toeplitz has moved the organization toward new business and marketing practices, greater transparency and closer ties with the community — ideas many board members, staff and musicians have advocated for years.

"Our problems are the same as everywhere else," Toeplitz said. "The good news here is that there is far less resistance to change than I've found in other places. ... That gives me hope."

In fact, the Honolulu Symphony was primed for change after an ugly power struggle last year.

The row started in late 2004 when the orchestra's musicians, who had agreed to a 20 percent across-the-board pay cut the previous year, lobbied to have an outside consultant review the symphony's management practices.

The consultant, Peter Pastreich, identified the close friendship between then-board chairwoman Carolyn Berry and then-president Stephen Bloom, and Bloom's hands-off style, as a concern and recommended that a new executive director position be created.

Businesswoman and former first lady Vicky Cayetano was tapped for the position, but an ensuing clash between those who wanted to keep the status quo and those who felt the organization needed a more formal business model ultimately cost the organization several key players.

Bloom was the first to resign, last April, followed in quick succession by Cayetano and two other influential board members, former Bank of Hawai'i CEO Mike O'Neill and Honolulu Advertiser President Mike Fisch.

Berry elected not to continue as board chairwoman after her term expired on June 31. She was succeeded by Judy Perry, former managing director of the Pacific islands region for Merrill Lynch.

For Toeplitz, recovering from the conflict required that management be candid about the symphony's situation, identifying the organization's strengths without camouflaging its deficiencies. "We communicate much more than we have before and we're much more democratic," Toeplitz said. "I tell the board everything, whether they want to hear it or not."

Part of what Toeplitz has been communicating is an honest account of the symphony's improving — but still tenuous — financial situation.

The orchestra is about $370,000 in debt, down from the more than $2 million it owed two years ago. While direct contributions are up from last year, Toeplitz said the organization is still short about $275,000 in cash.

"It's not an outrageous amount, but it will take some special effort, and we need to get it pretty quickly," he said.

The symphony has not fallen behind on its payroll, as had been rumored, and Toeplitz said administrators are keenly aware of the organization's finances.

"We don't sit long on our cash," Toeplitz said. "It comes and goes, but we monitor it very closely."

Toeplitz said most orchestras are subject to cyclical cash flows, with high points in December and February, and lulls in January, June and November. Last month, the symphony asked for and received an advance payment from the state.

Part of the symphony's future stability rests on its slowly growing endowment, which now stands at about $6 million. Toeplitz said the figure should be closer to $25 million for an orchestra the size of the Honolulu Symphony.

NEW BLOOD

The symphony's recent progress has been helped along by an influx of new members on the symphony's board of directors. The board hopes to increase its membership from 30 to 40 by the end of the season.

Recent additions include Judy Drosd, chief officer, arts, film and entertainment, for the state Department of Business, Economic Development and Tourism; Honolulu managing director Jeff Coelho; Wailea Capital Group president Laurence Balter; Paul Sullivan, a regional counsel for the Navy; and former Honolulu Symphony Associates president Susan Spangler.

Within the next month, the symphony will convene a task force of community leaders to critique symphony operations and offer suggestions.

"Everything is up for grabs; nothing is protected," Toeplitz said. "We need a powerful group of people to stand behind us and over us and help reshape our thinking and direction."

Musicians representative Ken Hafner echoed Toeplitz's sentiment. "The board was weakened in every way (by the departures) — revenue, talents, morale. If we can get more influential people involved, it'll help give us a more positive state of mind."

MUSICIANS' SACRIFICE

All agree the orchestra's musicians could use encouragement following the 20 percent pay cut and reduction in benefits that they, along with management and staff, took in 2003. At the time, the highly trained musicians were making a base salary of $30,345 for a 34-week season. The sacrifice allowed the orchestra to collect on $2.1 million in pledges contingent on the agreement.

"We're in our second year of cuts, and it's not been easy for us," Hafner said.

"They're a dedicated group that does everything possible with pay that is below poverty level," he said. "Considering what they have been through the last several years, and considering the fact that they make bubkis for a living, I have a real admiration for them, artistically and as people."

Despite hardships, Hafner said, he and his fellow musicians remain committed to the orchestra.

"I'm optimistic," he said. "This orchestra has remained optimistic for years. If we were not optimistic, there would be no orchestra."

Michael Largarticha, president of the Musicians Association of Hawaii, said the union will seek a full restoration of pay plus a cost-of-living adjustment when contract talks reopen this summer.

Two years ago, the two sides reportedly discussed undertaking a drive to increase the symphony endowment by $10 million, thereby generating the $500,000 in interest needed to pay for the wage restoration. Toeplitz said such a scenario wouldn't work.

"Anyone who knows anything about fundraising knows that when you raise money for an endowment, you never get the cash the same day you ask for it," Toeplitz said. "You may raise $10 million on paper, but the money will not be in the bank for quite a while.

"I don't think the musicians can wait that long, nor are we capable at this point of going on an endowment campaign," he said.

"I think the solution right now has to come from revenue: Sell more tickets and raise more money."

Toeplitz said individual ticket and subscription prices will drop next year, with single tickets starting at $15.

The symphony will also offer ticket packages in four distinct categories: star-driven (featuring famous soloists), theme-driven, light classical, and variety performances.

"We are counting that we will make up (the drop in ticket prices) by volume," he said. "If more people buy tickets, we'll expand our audience base, and we will ultimately be ahead."

ART AND ENTERTAINMENT

Toeplitz said the symphony's capacity for success will grow as it acknowledges itself as part of the entertainment market.

"It is a controversy in our industry whether what we do is just art or for entertainment," he said. "I feel that until you admit that you are part of the entertainment market, you cannot function properly, because you do not know who your competitors are."

Taking this new perspective seriously, the symphony has hired Pittsburgh-based Prescott and Associates to study the issue. Phone and inperson surveys already have been completed, and 30,000 mail-in surveys are being sent out.

Toeplitz has done his own share of research to see what can be done about lagging attendance. He said new programming and new conductors may have scared away some potential concertgoers.

In the past few years, the best-attended shows have been the tried and true. So to re-establish a connection with ticket buyers, he plans to return to old reliables — Bach, Beethoven, Brahms, Copeland.

But even great classical music may not be enough to lure crowds.

"In today's Western culture, people demand that art be entertaining and compelling. In an era dominated by contemporary entertainment, the symphonic industry has to reinvent itself to be viewed as relevant," Shaindlin said, pointing to the symphony's well-received "Tribute and Remembrance" concert in honor of the victims of the Ehime Maru accident as an example of relevant programming.

"The music we play, the way we perform, what we wear and the way we engage the audience — we've pledged to push and develop new and dynamic ways of intensifying the experience so that it is impactful and meaningful," Shaindlin said.

For Shaindlin and others at the orchestra, the fresh approach to performing is a reflection on the behind-the-scenes changes that have transformed the organization over the last year.

"I feel we've weathered the worst, most challenging period," he said. "What is happening now is exhilarating."

Reach Michael Tsai at mtsai@honoluluadvertiser.com.