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Beverly center boss fired to avoid foreclosure

The Beverly Arts Center |  File photo

The Beverly Arts Center | File photo

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Updated: November 28, 2013 6:34AM



The Beverly Arts Center owed more than $5 million to its bank and was on the brink of foreclosure in August 2012 when its board of directors got an offer it wouldn’t refuse.

Fire longtime center director Mike Nix and the bank would work with Chicago Mayor Rahm Emanuel’s office to delay the foreclosure of the center, 2407 W. 111th St., in the heart of the clout-heavy 19th Ward, and also reduce its debt.

“We’re going to deliver Mike’s head in a basket ...” former board member Brian Murphy said during a board meeting leading up to Nix’s termination, according to a transcript of that meeting.

While the city, bank and arts center announced a plan last month that may result in the reduction of about $2.75 million of the center’s debt, the center also faces a lawsuit by Nix. He sued in Cook County Circuit Court in February, seeking more than $220,000 in damages from the arts center and $1 million from Fifth Third Bank.

Fifth Third executive David Garcia also is named in the lawsuit, which claims that Nix paid down a “considerable amount” of the center’s debt by boosting membership and programming. It alleges breach of contract, infliction of emotional distress and defamation, among other claims.

Bill Figel, former president of the arts center’s board, has said that Nix, who was hired as director in 2003, inherited a huge debt of more than $12 million due to cost overruns and design changes involved in construction of the center’s new building, which opened in 2002.

Documents obtained by the SouthtownStar, including transcripts of two board meetings in August 2012 at the 19th Ward Democratic Organization office, reveal the behind-the-scenes political maneuvering that occurred to placate the bank and fire Nix.

Ald. Matt O’Shea (19th), a member of the center’s board, said at its Aug. 2, 2012, meeting that Fifth Third Bank executives “made it abundantly clear to me that they want to see new leadership at the arts center,” according to the transcript.

It indicates that some board members were reluctant to dismiss Nix in light of the situation he faced when he took over as director. After hearing O’Shea’s pitch, board member Luke Somerville lamented the staggering debt plaguing the center, saying that “Mike didn’t have the golden $4 million shovel to dig us out of this debt.”

State Rep. Bill Cunningham (D-Chicago) attended an Aug. 21, 2012 board meeting with former state Sen. Edward Maloney (D-Chicago) and informed the board that Fifth Third Bank planned to soon file a foreclosure lawsuit against the center, the transcript reads. But if the board fired Nix, Cunningham said he was assured that “there will be help from the fifth floor of city hall (mayor’s office)” regarding a foreclosure.

“In the words of more than a few city officials, they said you have to make the bank happy,” Cunningham told board members.

Figel, who would resign after Nix’s firing, suggested during the Aug. 21 meeting that the board needed to “stare down the bank on this. I do not want to whack Mike, make him wear the coat or make him wear the jacket as if he did something wrong,” the transcript shows.

It indicates that O’Shea told Figel to “stop with the bulls---. If someone can go to sleep at night saying, ‘I’m willing to stare down the bank,’ let’s see if they have the stones to move forward with foreclosure.”

Eventually, the board voted 8-3 at the Aug. 21 meeting, with four members abstaining, to fire Nix. After the vote, the board discussed adding new board members as a way to boost fundraising, according to the transcript.

“It’s about raising money,” board member James Noonan said.

O’Shea replied, “Whatever we’ve done, we’ve failed at raising money.”

Nix’s attorney, George Xamplas, said last week that Nix did everything he could to improve the arts center’s finances.

“I don’t know why it wasn’t enough,” Xamplas said.

O’Shea declined comment about the lawsuit and Nix’s firing, except to say it was a result of “several years of the bank being frustrated with the leadership at the arts center.”

A Fifth Third Bank spokesman last week also declined to comment.

Maloney, now a lobbyist with MJS Associates, said Nix’s firing unfortunately was necessary to obtain the debt relief provided by the bank and the city.

“Had the board drawn a line in the sand and said no, we’re not going to get rid of Mike, I can’t see the favorable outcome we have now,” he said. “The outcome justifies the pain.”



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