Many Chautauquans have noted with pleasure and relief the absence of major divisive issues this summer. To the contrary, this has been a special season of new beginnings. A new Amphitheater is the community’s new center. A new president and many new senior staff have reinvigorated programs, activities and community members across the grounds. There is no labor strife this year.
Sharing in the satisfaction and pleasure in such a bounty of new developments is the chairman of the Chautauqua Institution Board of Trustees. Jim Pardo is this year completing four years at the helm of Chautauqua’s governing board, and 13 years of service in various capacities overall on the board. Relaxed and reflective on his own central Chautauqua porch, he commented on the past year, and offered a look ahead at what may come.
This has been quite a year. I’d like to start with the search for a new president.
The presidential search is a great story to tell. First of all, I want to acknowledge the chair of our search committee, George Snyder. As always, he was steady and wise and true to our process. And as always, he put Chautauqua first. We had great support from the search firm Russell Reynolds, both with the process and in identifying candidates. It was a remarkable experience for me. We had a great number of well-qualified candidates, some nominated, some generated through the search firm.
In terms of what we expected, we thought we might get top people from maybe some lesser-known organizations, but from top organizations, we were anticipating second- or third-tier level executives. But we actually got top people from top organizations. That was a pleasant surprise.
It can come as no surprise, however, that we are delighted with our new president. He hit so many pillars, so many marks on our checklists. He was a Chautauquan in his younger days and has family in western New York. He has a proven track record in philanthropy and has demonstrated prowess in raising money. He has CEO experience already, despite only being in his early 40s. He has worked for an arts organization. His time at St. Bonaventure University and the National Cathedral in Washington, D.C., has certainly given him a firm grounding in religion. He has excelled at and worked in higher education.
In terms of the overall course of our search, we set out mileposts with the overall objective of having our new president in place and ready to take over at the beginning of this year. Backing up from that, we needed to have a decision made at the November 2016 board of trustees meeting. Over the search process, we were ahead at some points and fell behind at others. But we got there.
As I said, it’s no secret that we’re delighted with Michael E. Hill. We are so happy he agreed to accept our offer to lead Chautauqua to the next level and beyond. He has had to make more staff changes than we originally anticipated. We knew Sherra Babcock was going to retire at the end of the season. We did not know that Robert Franklin was going to leave this early due to the pressure on his schedule from Emory University and other commitments. We did not know that the management opportunities for George Murphy (former vice president and chief marketing officer) in private equity would lead him to leave earlier than we had initially expected.
In addition to reacting to those key losses, Michael has reorganized some staff elements to put even greater emphasis on the literary arts and youth education. He has brought the 10:45 a.m. Amp lecture program into his own office, along with his new chief of staff, Matt Ewalt, effective next month.
“It can come as no surprise, however, that we are delighted with our new president,” Pardo said. “He hit so many pillars, so many marks on our checklists.”
Overall, I believe the search process ran well. There was a full vetting of people. There was never a ranking of candidates until the very end. We tried, I think successfully, to respect and keep confidential the search process. Michael, for example, was identified only as Candidate 1-A in our internal communications. We never got to 1-B and beyond because he emerged as the clear choice.
Some search committees choose someone like themselves.
I think in many cases a committee might have a comfort level with candidates from a similar demographic background, or age group, or even a set of experiences. Our committee was fairly diverse. The common thread was that we had all been in some form of leadership at the Institution. We had seen it on the inside, and I think we had a read on what set of qualities might make a good leader.
We made a leap in dropping down, really, a whole generation from the median age of our committee. I’m pleased about that, and I feel that we as a board have made a leap before. Tom Becker and the board of trustees kind of doubled down on the new Amphitheater as our new programming center and hub for the Chautauqua Assembly. And I see us doubling down again, into the next generation, for our new leader. Michael has spoken frankly to our NOW Generation members: It is now their time to become involved here, to emerge as the next set of leaders.
It’s one thing for me to attend NOW Generation meetings and find I am speaking with adults in their 30s whom I knew as children on the grounds. It is an entirely different thing for someone of Michael’s age to engage with them. He’s the president of Chautauqua, but chronologically he is, roughly speaking, a peer.
You have said how pleased you were with the overall quality of the candidates.
We had people who had excelled and risen to the top of their respective organizations. These are organizations from liberal arts universities, law schools, Silicon Valley tech and intellectual property companies, public policy people, both on the substantive side and on the media side. I thought we had attracted a remarkable group of interested candidates. The common thread was that they had all risen to an impressive level where they were. There were probably four or five others who could have been tapped for our job. But none had the bandwidth that Michael Hill brought. And his relative youth was an added plus.
And there’s something else I’d like to note. After Michael said yes to our offer, the board at his former employer, Youth for Understanding in Washington, D.C., asked him to join their board. In the world I come from, if someone raided your CEO, your board wouldn’t be likely to add that person after he or she was hired away. I thought that was a validation of our selection.
When Michael Hill took office at Chautauqua, he didn’t inherit a labor dispute.
The symphony dispute with the Institution was settled within a couple of weeks of Michael’s arrival, thanks in part to an effort led by Sebby Baggiano (vice president, treasurer and chief operating officer). Our new president didn’t need to get involved in that. We were able to take that off the table for him.
The Amp project was in full flow when he arrived.
It was. But though I guess you could say that Michael inherited the project, he dove right in. He worked very hard to understand it, to get on top of the details he needed to master. The board had a special committee on the Amp, and we met regularly. Sebby and (Director of Operations) John Shedd carried the load for the administration. And the LPCiminelli executives and supervisors were engaged and driving to the finish along with us.
The process was not without hiccups, and we had some animated conversations about the project. I think we were pretty clear and unambiguous when necessary. To their credit, company president Frank Ciminelli, vice president Steve Dechert or project manager Mark Ceppaglia explained the problem when it arose, but didn’t try to shift responsibility to any of the subcontractors. It was a pleasure to work with them.
The Amp project spanned the end of the Becker era at Chautauqua and the beginning of the Hill adminstration. Did that fact almost compel a greater board of trustees role?
We had had a special board committee for the Amp project for several years. Our executive committee is too large for such a focused effort, so we tapped seven members of the board for the Amp. But we had that group in place prior to the final board approval of the Amp project on Dec. 30, 2015. And then Tom Becker announced his intention to retire in a year’s time. At first, it seemed that he was leaving in mid-project and that was an uncomfortable feeling. But Tom explained to me that the time was right: He was able to look ahead to the beginning of this season and said our assembly and our community would be convening in the new Amp and with a new president, and everyone would be looking forward. It certainly looks as if he was prescient.
I would say that our board committee probably was able to inject an element of continuity into the process at a decision-making level. This could have diminished somewhat the burden borne by Sebby and John, to the extent that we were able to share it with them. At times, when change orders were contemplated, we could introduce feedback and reaction from the community to the decision process.
I’m pleased to tell you that we will have our last special Amp committee meeting this week, and after that, I expect we will hand over the keys to the administration to manage the facility from this point forward.
The remaining issue for us is completing the process of raising the endowment for the new Amp, and we will be collaborating with the Foundation on that.
With the Amp basically complete, what’s next? Is it the Athenaeum Hotel and Bellinger Hall?
We’re now operating under a strategic plan that extends through the 2018 season. The Promise Campaign would fund key elements of that plan, including the new Amp, Hagen-Wensley House and Bellinger Hall. The first two are done. Philanthropy did not cover Bellinger. Foundation Chair Cathy Bonner has spoken in the Daily about Bellinger and the need to perform necessary improvements there, and we certainly agree and we will work together on that.
The board of trustees has been routinely setting aside at least a half million dollars every year for capital expenditures at the Athenaeum Hotel. Sometimes that has led to the renovation of rooms. Sometimes that has involved improvements, such as the installation of a new sprinkler system and water pumps at the hotel. I imagine the hotel will figure prominently in Chautauqua’s new strategic plan. Typically, that plan is followed by a capital campaign to fund its goals. Our next strategic plan might culminate in the year 2024, which just happens to be the Institution’s sesquicentennial year. For our 150th birthday, following a $103.5 million Promise Campaign success, perhaps an ambitious new financial target goal will suggest itself.
It is reasonable to expect that the Athenaeum Hotel and Bellinger Hall would be part of that. But that would likely be in the context of addressing our pressing need for more accommodations on the grounds. Both buildings are critical to such an effort, but do not define its entirety. We’ll be looking at our 100-building inventory and assess what needs arise there.
I will say again that we do want to raise the Amphitheater endowment before any new campaign begins.
To ensure the success of the new Amp project, the Foundation stepped in and performed a kind of intermediary banking function for the board and the Institution. Is that a one-time event?
Former Foundation Board Chair Steve Percy committed the Foundation to such a role, but the implementation was accomplished under the leadership of current Foundation Board Chair Cathy Bonner. We had committed to use the Institution’s cash reserves to minimize the draw on the line of credit worked out with a commercial lender. All that is really happening is the monetizing of deferred pledges until those pledges are duly collected. We expect to repay in full what amounts to a swing, or bridge, loan to the commercial lender by the end of 2018. Typically, in a project of this size, pledges are at least partially deferred for three to five years.
Was this a one-time event? We certainly don’t want to become accustomed to negotiating bridge loans for capital projects. Hagen-Wensley, we discovered when we got into the building, needed more funding than the Hagens had pledged. They stepped up and provided the extra funding themselves, solving that problem magnificently. To avoid a bridge loan for a major capital project, you have to basically raise the funding in the form of current pledges. I would expect that in the future, any project of less than $10 million would be funded by philanthropy delivered during the construction period.
The board of trustees has held a number of public Q-and-A sessions with the community this summer, providing personal access to you and to President Hill. In addition, there have been the more traditional staff-led porch chats at Hultquist Center and three special issue presentations to the community by board members. How has it gone?
I think they have been well received. Scheduling of some of our events last year proved to be problematic, and we have fixed that. From my personal point of view, my joint sessions with Michael Hill have been terrific. Most of the questions are directed to the Institution’s new president, and I function as much as a facilitator as a participant. That’s been nice for me. It’s been a good year.
