Now You See It ...

Things couldn't get worse for the Coconut Grove Playhouse. Instead of celebrating 50 years staging plays, the historic theater is on the verge of shuttering for good. Two weeks ago, the board of directors had to suspend performances after discovering the debt had reached four million dollars.

Employees complained about bounced paychecks. Hardware stores, paint shops, and other local suppliers stopped extending credit.

Following a last-minute, desperate $150,000 fundraising effort by actress Lucie Arnaz, the playhouse made it through a truncated run of Sonia Flew, a drama about the Cuban-American exile experience starring Desi Arnaz's and Lucille Ball's daughter. The financial crisis also prompted the board to lay off five full-time staffers and 27 part-timers in the days leading up to Sonia Flew's opening this past April 21.

The cause of the crisis is unclear. But a contributing factor might be some financial stagecraft performed by producing artistic director Arnold Mittelman, according to a board trustee who asked to remain anonymous. The source claims Mittelman secured a $125,000 line of credit from Coconut Grove Bank without the board's permission and then used the money to cover administrative expenses and help pay salaries, including his own and that of his personal assistant, Anne-Marie Tristan.

"The problem is Mittelman had no legal authority to obtain the line of credit," the board member reveals. "He signed documents stating he was the playhouse president, which is not true." Indeed state incorporation records do not list Mittelman as a corporate officer.

Another board member, who also spoke on the condition of anonymity, confirmed the board did not authorize Mittelman to take out the credit line. "Let's just say Arnold is a good artistic director," she said. "But he is not a business manager."

Mittelman did not return three phone calls seeking comment.

This is not the first time Mittelman's management has come into question. In 1992 New Times reported on allegations by the producing artistic director's former colleagues and underlings that theater higherups had used playhouse funds for personal vacations and shopping sprees. Mittelman gave himself a $200 loan and purchased a massage for his wife, according to playhouse financial records from April 1989.

"It would be fair to say that [playhouse bookkeeping practices] at a certain point in time were vague, but never dishonest," Mittelman commented back then.

The playhouse, built in 1926, is a Miami landmark. It served as a movie theater that featured grainy Green Hornet episodes in the Thirties and Forties. On January 3, 1956, it transformed into South Florida's top performance theater when the American premiere of Samuel Beckett's Waiting for Godot was staged there.

Since then, the playhouse has struggled. Though taxpayers have ponied up more than three million dollars for improvements, plays like 1992's Too Short to Be a Rockette with Pia Zadora have bombed and the fan base has dwindled.

But that hasn't stopped the playhouse's wealthy board of trustees and Mittelman from trying to make the theater relevant. Problem is, even successful efforts like Jimmy Buffett's 1997 Don't Stop the Carnival couldn't stop the bleeding.

Just last year, the board and Mittelman failed in the latest attempts to revamp the theater. The board cut a deal with local developer Henry Pino, who wanted to tear down the 80-year-old structure and replace it with a new theater flanked by towering condos.

The state had ceded the property to the board in 2004. Pino promised eight million dollars to develop his vision, but those plans were scuttled when the City of Miami Historic Preservation Board designated the Mediterranean revival building a historic landmark.

It appears the board has lost patience with Mittelman, the man who has guided the troubled theater's artistic and business endeavors for the past twenty years. This past weekend, the trustees asked Mittelman to tender his resignation. On Monday he declined, citing his desire to finish out his contract, which expires in 2008, according to the Miami Herald. (The theater's most recent tax filing with the IRS shows that Mittelman earns a $190,000 annual salary plus $14,000 in benefits and $17,140 in expenses.)

One of the anonymous board members blames Mittelman for mismanaging the playhouse and leaving the board out of the loop on a questionable business transaction. He contends that Mittelman also erred in using a $125,000 state grant as collateral for the credit line. "Now the bank will not release the state funds until the playhouse repays the $125, 000," he alleges.

Coconut Grove Bank president and chief executive officer Daniel Eggland did not return two messages left with his secretary.

Playhouse chairwoman Shelly Spivack declined comment, referring questions about the $125,000 to Mittelman. "You have to ask Arnold about that," she said. Nor would she comment on efforts to cut Mittelman loose.

To date, the board has not informed the state's Division of Cultural Affairs that the grant, set aside for capital improvements, was used to cover operational expenses. "The playhouse has not told us how the money has been spent," said department spokeswoman Susan Smith. "But we have no reason to believe the money has been misspent."

Smith, however, added that the cultural affairs division was unaware the playhouse was hemorrhaging financially.

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Francisco Alvarado was born in Nicaragua and grew up in Miami, giving him unique insight into the Magic City and all its dark corners. An investigative reporter with a knack for uncovering corruption, Alvarado made his bones as a staff writer at Miami New Times and remains in dogged pursuit of the next juicy story.