As WBEZ settles into its spanking new home on Navy Pier, with a press conference next week featuring Mayor Daley, WBEZ watchers are batting around two theories about the public radio station’s future:

(1) Blessed with modern equipment and studios, WBEZ will enter a golden age in which local programming will thrive and the station will produce nationally syndicated programs and reports for NPR broadcasts.

(2) Cursed with the financial obligations that came with issuing $7.6 million in bonds to build its Navy Pier home, WBEZ will go bankrupt.

More people fear theory number two than really believe it. And deep down, even those who loudly subscribe to the doomsday scenario probably only expect a financially strapped WBEZ to cut staff or reduce its programming budget. Former WBEZ program director Ken Davis represents the optimistic adherents of theory number one when he says, “I believe that ten years from now it will be impossible for anyone to imagine that there was dissent about building at Navy Pier.”

No one doubts that the news and jazz station needed to update its home. “WBEZ is one step above a homeless shelter as a radio facility,” says one station insider. Not surprising, considering its 47-year history as a creature of the Chicago Board of Education. When the school board cut the station loose five years ago it hadn’t invested in new equipment for the broadcast studios at 105 W. Adams since 1952. The news department still had rotary phones.

Before independence the station was split between the studios on Adams and the business offices at the Board of Education’s Pershing Road headquarters. After independence business and management personnel joined programming on Adams, but they settled on the eighth floor. The broadcast studios and programming staff were on 39, 40, and 41; the 40th and 41st floors were accessible only by stairs, and the 41st floor was basically a cramped attic. Travel between the station’s two halves was difficult: the eighth floor was served by a different elevator bank than the upper floors, so staff and visitors had to catch an elevator down to the lobby, then switch elevators and go back up.

Programming staff were “all working within a foot of each other–four people sharing a computer,” according to one staff member. They complained about upper-respiratory ailments from the poor ventilation. A makeshift studio on the eighth floor had to be fixed up for morning anchor Melba Gomez, who has allergies and couldn’t tolerate the 41st-floor studio.

“A regular process for us much of the year was to set these huge Rubbermaid garbage cans on our news desk in between our computer and fax machine to catch the water that leaked out of the roof,” says reporter Shirley Jahad. “There were these huge water stains, plaster coming off the walls, puddles right on what little electronic equipment we had. So we’d put plastic on them when we went home, and the morning anchor would come in and literally swab the deck.”

The studio technology was “from the dark ages of radio,” says Ira Glass, a reporter for National Public Radio and cohost of WBEZ’s The Wild Room. “Anyone who listens to The Wild Room hears the equipment regularly break down.”

So the newly independent station’s fledgling board of directors, the WBEZ Alliance Board, made acquiring a new home its first priority. Eventually it decided to erect a $7.6 million building at Navy Pier. Station manager Torey Malatia cites two main reasons for the move: to increase and improve local programming production and to distribute programs nationally.

The move sounds like a no-brainer, destined for unanimous celebration. But the decision troubles many people. They feel the station should have concentrated on its programming and its people, and settled for slightly upgraded studios. They think the station is more concerned with buying fancy real estate than with its on-air product. And they fear that WBEZ has taken on too much debt–and that if the station can’t make its payments, it’s the programming that will suffer.

Even Davis, who says he’s “gung ho” about Navy Pier, believes WBEZ is more concerned with money than with programming, though he says that’s been true for a while. He says that after he left the station in 1992, a head-hunting firm searching for his replacement asked him to come in for a meeting. “They asked, “What would you say would be one of the big challenges that your successor is going to have to deal with?’ And I said, “My successor is going to have to deal with the fact that the station’s singular and most important mission is to raise money, and during the time that I was program director its most important mission was just to do good programming.”‘

Alliance Board chairman Kay McCurdy, a partner at the law firm of Lord, Bissel & Brook, is positive the board made the right decision in choosing Navy Pier. A major achievement of the station since going independent, she says, “is realizing that the first and foremost thing was to find a permanent and economic home.”

WBEZ’s deal at Navy Pier includes a 99-year rent-free lease, which officials say will save it enough money to build a 24,000-square-foot facility, essentially the third floor of a building just north of the Ferris wheel. WBEZ’s portion of the building also includes a small ground-floor lobby that’s open to the public, featuring a fishbowl studio. The station pays no common-area charges in exchange for making promotional announcements for Navy Pier. And station officials emphasize that they won’t have to pay real estate taxes because they’re on the pier.

The building is being financed by tax-exempt bonds issued by the Illinois Development Finance Authority, a debt that can be only partially paid off with the station’s current capital campaign to raise $4.5 million. WBEZ also obtained a letter of credit from LaSalle National Bank, which acts essentially as a guarantee to bondholders and got the station a very low interest rate.

WBEZ president and CEO Carole Nolan says $7.6 million is “not a lot of money for what’s going to happen here.” Alliance Board member Emmitt House, a lawyer for Mid Con Corporation, says the building will cost less than originally planned, but Ken Davis says the price was $3 or $4 million when he was involved in 1992. Melvyn Skvarla–a member of the WBEZ Community Advisory Board, which was set up to advise the station on programming–also thinks costs have gone up, pointing to studio spaces that are now going to be left unfinished and amenities that will wait until funding’s available.

McCurdy says the station’s lease on Adams was nearly up and a long-term commitment to stay there “would’ve been a big mistake.” But despite the third-world conditions on Adams, many WBEZ watchers wonder why the station couldn’t have stayed there and made some improvements, found another lease arrangement, rehabbed an existing building, or built more cheaply elsewhere.

Emmitt House, who also chaired the committee that searched for WBEZ’s new home, says they began with the expectation that the station would either improve the Adams site or find another place to lease, but improving the Adams space was ruled out because of concerns about the Americans With Disabilities Act and those stairs to the 40th and 41st floors, and because the station’s relationship with the landlord wasn’t ideal.

The board considered 40 to 80 other properties, depending on who’s estimating. Older properties were problematic, says House, and they were as expensive as new ones. He says that with leases “what we found was you pay now or you pay later, but you always pay.” Ken Davis was also on the committee, and he agrees that in every case lease arrangements were “unbelievably expensive,” though some landlords offered one or two years of free rent and up to $750,000 toward construction costs.

House says the only option left was building new, as long as they could find relatively cheap land where they wouldn’t have to pay real estate taxes. He says they found both at Navy Pier, and that “pretty much tipped the balance.”

Of course it’s impossible to know how good the Navy Pier deal was without knowing the details of the other options. House preferred not to discuss the other properties that were considered, saying the negotiations were sensitive and “the process was such that I don’t think I could assemble a set of finalists.”

“Economically [Navy Pier] was a deal we couldn’t beat,” says McCurdy firmly. “There’s a couple of reasons for that. One is there’s no real estate tax, and my friends in the business tell me this can be 25 percent of the cost of a lease. Although at the time we started looking it seemed that a commercial lease might make more sense–the rates were low there–the lease rates couldn’t cut the deal we were able to reach with Navy Pier.”

It’s also impossible to know how good the deal was without knowing the details of future costs at Navy Pier–WBEZ will have new expenses, such as maintaining its own physical plant, and all its heating and air-conditioning will be electric. Asked about projected costs, chief financial officer Tom Costello said only that rent costs would have increased “considerably more” than what their electric bill will be.

So could WBEZ have found more economical lodgings? It’s true that downtown leases can include real estate taxes that run up to 25 percent, say Ron Ruby, a vice president at Habitat Company, and Edwin Mills, professor of real estate at Northwestern’s Kellogg Graduate School of Management. But they both thought the figure was high. Ruby says rates vary considerably and 25 percent would be high even for a Class A building. House says WBEZ looked at Class B buildings and didn’t even consider Class A ones.

In a summer press release WBEZ estimated that it will save $6 million in operating costs over the next 15 years by owning rather than renting. Costello says that number was calculated from savings in rent, which he says would have “increased considerably” had they stuck with a lease. In a story published by Crain’s Chicago Business last January a WBEZ spokesman said the Navy Pier free-rent deal would save nearly $1 million annually, based on Navy Pier’s average rent of $40 a square foot.

But $40 a square foot is very high rent, which inflates the potential savings. According to Ron Ruby, Class B buildings downtown typically have gross leases–which cover all expenses, including property taxes, utilities, and maintenance–and they run $12 to $20 a square foot. That would come to $288,000 to $480,000 a year for the equivalent of the space WBEZ will have at Navy Pier. In River North, Ruby says, a gross lease runs $16 to $18 a square foot, and he puts gross leases just west of the Loop at $8 to $10 per square foot.

Moreover WBEZ’s 24,000 square feet make it a midsize to upper-midsize tenant, says Ruby, and commercial leases for such tenants typically cost less per square foot. “In terms of negotiating a deal, you’re going to be able to negotiate better with 24,000 than 2,400, because they’ll be eager to rent that much square footage.”

It may well be that space suitable for a radio station was impossible to find, but other stations haven’t found the obstacles insurmountable. Lots of them, from WGN at Tribune Tower to WGCI at 332 S. Michigan, are located downtown.

Edwin Mills thinks it’s quite possible that there were no existing buildings worth rehabbing in the central downtown area. “My guess is it probably wouldn’t be worth their while to buy a Class C building and upgrade it. That would almost certainly have to be in the River North area. And a lot of those buildings are very old and small and have finicky characteristics, so you have to spend a lot of money to make them into offices.”

That, however, assumes WBEZ had to be downtown. According to Carole Nolan, the board confined its search to property bounded by Harrison Street on the south, Chicago Avenue on the north, Lake Michigan on the east, and Desplaines Street on the west. Should the station have looked for cheaper quarters outside that area? No, says Nolan. “Because who would I get to come to it? We tend to have a lot of movers and shakers who come, so we have to be in a certain area. Why do you think WGN moved their station back downtown from Bradley [Place]? And why do you think WTTW has a downtown space? Well, because it’s hard to get people in outlying areas–and we tend to have lots of politicians, we tend to have lots of authors, we tend to have movers and shakers. You know, Julia Child. They’re on a book tour or on a tour of the media. Well, we want to be in that mix, so we don’t want to be so far that they say, Oh, I’m not gonna go to WBEZ.”

Most TV and radio stations are located downtown, but outlying stations do exist. WTTW–which does not have a downtown space, according to corporate communications coordinator Cindy O’Connor–is located at 5400 N. Saint Louis on the northwest side. It owns classical-music station WFMT, which was at 303 E. Wacker until it recently moved into the new studios it built adjacent to WTTW.

WTTW produces talk shows from its campus, renting studios to such programs as the Danny Bonaduce show, Danny! Four nights a week it produces John Callaway’s half-hour Chicago Tonight, which usually has several guests a night. V.J. McLeer, Chicago Tonight’s executive producer, says it was hard getting guests to make the trip only for the first couple of years. “But really it hasn’t been a problem for us. I can’t remember a time that was the deciding factor on whether a guest was on. I suppose it’s probably been a discussion point once or twice with national presidential candidates or something, but I don’t think it ever kept anyone off the show.”

WGN moved its radio station downtown to Tribune Tower because space was so limited at its studios on Bradley Place, according to promotions writer and producer Debbie Budz. “It was getting very cramped with TV and radio in the same place,” she explains. But the Channel Nine television station, including its news operation, remains on Bradley, and it has no downtown facility.

CLTV, the Tribune-owned, all-news cable TV station, has offices and studios in Oak Brook, though a facility in Tribune Tower allows staff to edit or feed tape and do a live shot. “We’re here in Oak Brook and we’re surviving very well thank you,” says news director Jim Disch, chuckling.

And Navy Pier isn’t exactly convenient. A joke that’s made the rounds of WBEZ staffers goes, “Well Mr. Galbraith, you just take the number-65 bus from the Grand subway station.”

“I figure people go to Channel 11,” says reporter Shirley Jahad. “If they go to Channel 11, the most remote corner of the northwest side, then coming to Navy Pier shouldn’t be bad.”

“I think what’s been on a lot of people’s minds,” says Dayna Calderon, director of programming operations, “is that it’s going to be difficult for our news department because we’re no longer across the street from the Federal Building, a few blocks from City Hall. Right now we’re in a prime location for them. So what’s going to have to happen is we’ll have to install new technology, feed from City Hall, maybe have editing facilities at City Hall. Having people get to us is going to be more difficult, and we’ve talked about that. It’ll probably incur more cost for us to get them some sort of parking or have them get a cab.”

Talk-show host Mara Tapp says she’s not worried about accessibility at Navy Pier. “The book tours tend to have escorts that drive them around. For the others we do usually a couple of eight-minute [interviews] a day, and I’m not going to ask someone to come in for eight minutes. Often our 15-minute interviews are by phone, so I’m not sure how much of a difference it’ll make for us. But I’m talking about something I don’t know about yet.”

If WBEZ can operate at Navy Pier, why couldn’t it have moved a bit farther out of the expensive downtown district? Land or buildings to rehab would have been cheaper, and as a nonprofit organization WBEZ could probably have been exempt from real estate taxes wherever it moved–other public radio stations in the state have qualified. Leases would have been considerably cheaper too. According to Ron Ruby, gross leases in farther-flung neighborhoods like the northwest side would run $5 to $6 a square foot, or $120,000 to $144,000 a year.

But board members and Carole Nolan seemed set on having a high-profile station. “We wanted a location that was visible, so that more people who hadn’t tuned in or heard about public radio would have an opportunity to see something,” says board chairman Kay McCurdy. “We can’t afford billboards, and we can’t afford the kind of advertising that commercial radio stations do. So this location is projected to have four million visitors a year. So just the people passing by would give us a recognition that we can’t get on the 35th floor of an office building.”

To those who say a radio station doesn’t need a high-profile location, Nolan responds, “A public radio station, I think, should be public. I mean, this is my concept–that it should be public, it should be visible, it should be welcoming to the public. And public radio has been a hidden treasure in my mind, and I think that we don’t have a lot of money to do advertising. In fact, we don’t have money to do any advertising. And I think being in a public place, I think that we are going to attract more listeners, and therefore more members. Because the way it’s laid out on the south promenade, where people are walking by, they can come right into our lobby. And there’ll be a little visitors’ center there, and there will be volunteers, docents who will talk to you about public radio.”

“[Nolan] may use that as a rationale, as to why she wanted to be out there,” says Melvyn Skvarla of the Community Advisory Board. But, he adds, “a radio station is only as good as the sound quality it produces and the programming it has, and it doesn’t need to be where there are millions of people. People don’t join because they see it and it’s visible.”

In any case, WBEZ on Navy Pier won’t be WGN on Michigan Avenue. WBEZ’s fishbowl studio looks not out on the pier’s south promenade but on an enclosed pedestrian walkway. The lobby entrance is off an enclosed roadway connecting the north and south promenades. “I had thought we were going to be right out on the promenade,” says Skvarla. “Things may have changed since that initial drawing was first done, because I pictured us being like the WGN studio in the Tribune building on the street–and that’s how it was portrayed to us at the meetings. In the summer, when everyone’s walking on the outside promenade, they’re not going to see us in there. And in the winter I don’t think anybody’s going to be out there.”

And Navy Pier visitors aren’t likely to be lured into the lobby by eye-catching signs, because the pier has restrictions. “They won’t want anything really big,” says Malatia.

The cost of the not-so-high-profile Navy Pier space isn’t the only burning issue for WBEZ watchers and insiders. There’s also debate about whether WBEZ needs the level of technology that’s going in. Some, like production coordinator Karl T. Wright, believe the new facilities are necessary. “I think for a long time we were the little station that could, and there remains a mentality that we should still be the little station that could. But if we’re going to move into a new era with more listeners and people respecting what we do you have to have what it takes. You can’t train people with old equipment that no one else is using. There are colleges with better equipment than we have. We need to take a step up. It’s long overdue, I think.”

Carole Nolan says, “This is a state-of-the-art facility that’s going to last for a long time. It’s going to give us all the production facilities that we need. It’s not the Taj Mahal. You want to have enough studios so you prepare yourself for the future.”

The building will ultimately include two news control rooms, four production control rooms, two master control rooms, four broadcast studios, and an 800-square-foot multipurpose performance studio. Malatia estimates that only two master control rooms with studios, one combo room (a studio that includes controls), and one large production room will be completed in time for the station’s move.

The facility, designed by the prestigious firm Nagle, Hartray & Associates, does appear capable of meeting any future needs. “I’m very impressed with the interior facilities as presently laid out and planned,” said Melvyn Skvarla, who’s also an architect, after he took a tour.

But other people are sure that Navy Pier is overkill. “Because other, greater stations do plenty with less,” says a longtime station associate. “I mean, other radio stations do more with less than what WBEZ has now.” Boston’s WBUR, a flagship public radio station that’s well represented on the national scene, most notably with its Car Talk show, has been operating out of a 6,000-square-foot facility, though it’s about to rehab a building on the campus of Boston University, which owns the station’s operating license, to give itself 18,000 square feet. And the new WFMT studios, which cost only $2 million, take up only 15,000 square feet of space, which includes two broadcast studios, a combo talk studio, two production rooms, and a 1,200-square-foot music performance studio with its own control room.

Another associate says, “I don’t think [the new equipment] is going to change the station very much. The station’s quality is the same as the people in it. I’ve worked in places with fantastic equipment, and if the people using the equipment were really talented they did great stuff. And if they weren’t it didn’t matter how fancy the machinery was. The programming reflected who they were.”

Torey Malatia insists all the new equipment is necessary if the station is ever going to improve local programming and produce shows for national syndication. “If what we are destined to do is become an antenna for programming produced elsewhere, we can do that from my basement on the south side–we don’t need a production facility at all. I think the only way to make the move successful–even with the financial obligation that comes to obviously pay the rent–is to produce. And to distribute that programming and use that programming as a method to fund the operation. Because WBEZ–with the exception of the Blues Festival and the Jazz Festival and occasionally pieces from [the documentary series] Chicago Matters, and of course Steve Cushing’s Blues Before Sunrise–we’re one of the few major-market stations in the country in public radio that really does not have an active national presence. We don’t have a Fresh Air like WHYY. We don’t have a Car Talk like WBUR, you know? We can just go through the list of all the member stations that produce these programs. I want to see us begin to produce and to have at least in the next three years two of these programs be out and well carried and well represented in the public radio system.”

But there’s also debate over the wisdom or necessity of shooting for a national audience right now. The first step in that direction is Ira Glass’s Your Radio Playhouse, a half-arts, half-journalism show that’s scheduled to begin production in October for broadcast in November, with national distribution early next year.

Going national is a natural but difficult step in WBEZ’s evolution, says Tom Thomas, a consultant with the Station Resource Group, which offers technical advice and assistance to member public radio stations, including WBEZ. “It’s not an easy thing to do. There’s really only a handful of public radio stations around the country who have been able to successfully carve out a national production role. I think there are tremendous assets in Chicago that could find a national audience, but being able to do that, finding the funding to pull it off, finding a place on stations’ schedules across the country . . . ” His voice trails off.

Thomas says most stations doing shows for national distribution lose money. WBUR’s Car Talk and Minnesota Public Radio’s A Prairie Home Companion probably make money for their stations, but they’re exceptions. “Most other stations with national productions find it a continuing exercise of hanging on by their fingernails.” He points out three typical reasons for putting programs up for national distribution. First, the programs are primarily local shows, and sharing the show with other stations can help offset costs, upgrade the production, and draw more celebrated guests. Usually these shows are well established in their home markets. “It’s a safer path to get it right locally at first, kind of let these things build to their own level–and you can ratchet them up and down as you find acceptance in the station community.” Second, a national program “makes your station a more exciting place to work,” making jobs there more attractive for the same pay. And third is “just the ego and ambition that brings anyone to want to write a book or make a record.”

One station insider says WBEZ shouldn’t even be thinking of trying to find a national audience now. “Step one should be, get your own local programming up to a certain standard, then start throwing stuff out for a national audience. I don’t see the point of putting things out for a national audience when your own local programming is mediocre. I don’t see the purpose in putting out one or two things to get your call letters recognized by a small club of public radio executives in other cities. If your local stuff is not great, what’s the point?”

This person says that Glass’s Playhouse will “be great because Ira’s great, but it’s not the next Prairie Home Companion. It’s too complex. It’s not gonna make ‘BEZ money. In the end you might do some nice shows. Is it going to have any real effect on WBEZ? Make a tangible difference? Unless it’s something that rakes in tons of money, no. It won’t have the effect that putting a couple of good hosts into the daytime talk shows would.”

Malatia admits that Playhouse won’t make money for WBEZ, regardless of its national success. In fact, he doesn’t even expect the show to pay its own way.

Insiders say some WBEZ staffers are unhappy that the station raised money for Playhouse while local programming is struggling simply to buy recording tape. “Is this the smartest thing to be getting money for? It’s a question of priorities,” says one. “They feel like they’re asked to do more and more stuff they’re not compensated for, but the station will go out and somehow rope in what looks like a lot of money for some totally external thing.”

Given WBEZ’s burning desire to produce national programs, it’s ironic that its only two regular national broadcasts, of the Chicago Blues Festival and the Chicago Jazz Festival, were both in trouble this year. Because its budgets are so tight, the station finds underwriters for the broadcasts each year instead of funding them through its regular operating budget. As of late April there was no funding for the June Blues Festival. The station found the money only because director of programming operations Dayna Calderon attended the opening of Koko Taylor’s blues club, met people she knew from Chicago-based Alligator Records, and told them the Blues Festival wouldn’t be on the air this year. When Alligator president Bruce Iglauer heard, he found $25,000 to fund the broadcast.

Jazz fans were not so lucky. WBEZ never found the $50,000 or so needed to broadcast the Jazz Festival, which it had been broadcasting since 1980. The station did record the festival. “If we get money later on,” says Calderon, “we’ll postproduce the festival and offer it to the network.”

Malatia blames the city for finding underwriters for the festival itself but leaving the broadcast funding to WBEZ. “We need to be a partner with the city as they seek funding for the festivals, because part of the appeal of the underwriting of the festivals for the various underwriters is that there is a broadcast, and that excites them. So it seems to me that that should be folded into the whole presentation made to the various sponsors who support the festivals. It is a partnership between the city and the radio station–except in funding.”

WBEZ officials liken the $7.6 million bond-issue financing to a mortgage–since everyone knows it’s better to own than to rent. The rental market still exists, of course, because not everyone can afford the advantages of owning.

Can WBEZ afford the advantages of ownership now? Station officials believe it can, boasting about the letter of credit from LaSalle National Bank that essentially acts as a guarantee to bondholders (ultimately if WBEZ can’t repay the bonds LaSalle will have to). LaSalle’s backing gave the bonds the highest possible rating from Moody’s and Standard & Poor’s, so WBEZ was able to obtain a very low floating interest rate, which so far has averaged about 4 percent. That has saved the station a tremendous amount in interest payments, probably two percentage points, according to Kendrick Anderson, until recently group vice president at Duff & Phelps Credit Rating Company and now vice president and manager of fixed-income research at Evergreen Asset Management Corporation. The whole project impresses the Station Resource Group’s Tom Thomas. “I can’t think of anything of comparable scale and with the letter of credit. The bankers have had to look it over as well as foundations. I think that’s quite a feat to have pulled off.”

Yet the amount the station will have to come up with each year to pay off the bonds isn’t entirely clear. Chief financial officer Tom Costello says the annual debt service will be $342,000, assuming an average 4.5 percent interest and not including any principal. The principal, he says, is due in a balloon payment after 35 years. But at its December 6, 1994, meeting the WBEZ Alliance Board announced that the annual debt service would be $712,500, including a principal payment. Moreover WBEZ’s agreement with LaSalle requires it to set aside large amounts in cash and investments–one of several bond covenants–as a cushion in the event it can’t repay the bonds on schedule.

WBEZ officials wouldn’t discuss the specifics of the bond covenants for this article. “We don’t think that’s the kind of information that is particularly helpful to you,” said board chairman Kay McCurdy, noting that no one covenant would trigger a default if it isn’t met. If a covenant weren’t met, she says, it would simply be renegotiated, because the covenants “are really guidelines to be reached at different stages.” LaSalle National Bank also declined to discuss the covenants, citing a policy against discussing customers’ loans.

But because the bonds were a public issue, the bond documents are public information. Kendrick Anderson read the documents and agrees that breaking a covenant wouldn’t necessarily mean a default. “The bank probably has taken a gestalt view, and minor violations of some features would be overlooked. But in general those are red-flag alarm buttons for them to look at it more closely. It’s their credit on the line, and they don’t want a bad loan.”

“Nobody likes bond covenants,” says McCurdy, but she calls them “an extremely good discipline for this organization to go through.” She adds, “For me, the whole project’s really important, because I was the one with the relationship with LaSalle that was able to bring LaSalle into the picture. Mark McCarthy, who was the banker who helped us internally within the bank, presenting the case for us, is a longtime friend of mine. So I’ve got a lot personally on the line here too in terms of my reputation and what I’ve told my friends at LaSalle National Bank.”

Anderson says that having a bank involved can be helpful. “The bank is a lot more experienced in financial matters than the company. Having them as a watchdog might be beneficial. If they have a good banker, they might find ways for them to save money, help them with their business. That’s something banks like LaSalle do. That’s one of their value-added elements–they get right out there with their customers and help them meet those covenants.”

Without access to WBEZ budget and financial figures, which the FCC says are not public information, it’s impossible to tell whether all the bond covenants are being met or how certain expenditure limits will affect the station’s budget. One covenant that’s confirmed required the capital campaign to have pledges of $3.5 million by this past August 31, a target the station reports it reached on time. Campaign pledges must reach $4.5 million by August 31, 1997.

Another covenant required WBEZ to have additional cash and investments totaling $2 million on hand by August 31, and $3.5 million by August 31, 1997. The reimbursement agreement with the bank says that the station can’t use any of this money for operating, programming, or maintenance expenses, though WBEZ has said it may use the funds for general operations. Anderson says it’s not supposed to, but if it meets its other bond covenants, such spending might be acceptable to the bank.

Some WBEZ watchers fear that the covenants give LaSalle direct control over the programming budget. They don’t, though they do place restrictions on budget expenditures, which is typical for such agreements. One requirement is that WBEZ “shall not make expenditures in any fiscal year for purchased programming (excluding National Public Radio) or for salaries in excess of 50% of total revenues for the immediately preceding fiscal year.” Without access to the details of WBEZ’s budget, it’s not possible to calculate that figure. The 1994 annual report lists total revenue at $5,258,764, so the limit for purchased programming and salaries for fiscal ’95 would have been $2,629,382.

Another covenant that affects budget expenditures requires WBEZ’s net income to be at least twice its debt service. The station’s net income in fiscal ’94 was $669,785, according to the annual report. If the debt service is only $342,000, as Tom Costello says, the station would have missed the target that year by $14,215. If the true debt service includes the principal and totals $712,500 it would have missed it by a mile.

WBEZ watchers are afraid that these financial obligations will end up depleting the normal operating budget, including programming. It’s true that the station intends to use revenue raised for operations to help retire the bonds, though Nolan has often said that the capital campaign and operating funds “are entirely different streams of revenue,” and the station’s fall newsletter states, “Donations that come in from fund drives, membership renewals and other efforts of our Listener Services department continue to be earmarked for WBEZ’s operation expenses, not construction costs.” But Tom Costello says WBEZ plans to retire the bonds using capital-campaign funds and money from “surplus fund balances,” which refers to income from traditional station funding sources such as membership and corporate underwriting.

If WBEZ were unable to make its bond payments from other resources, it could be forced to use money from its operating budget to retire the bonds–whether the money was considered “surplus” or not. The bond documents state that bond payments take precedence over any other station obligation.

Of course that’s a worst-case scenario, but it should be noted that the current $4.5 million capital campaign was never intended to cover the entire cost of retiring the bonds. The goal is small by fund-raising standards, say several fund-raising executives. “It’s kind of a wacky little number,” says an anonymous senior manager at a major Chicago nonprofit institution that’s in the middle of a capital campaign now. “You usually don’t mount a campaign with a face value of less than your capital project. Even though it may end up being less, as projects get delayed and costs increase you usually overshoot the mark rather than undershoot.” Capital campaigns with goals of less than the capital project cost are unusual, but they do exist.

In addition, the station’s annual debt service will jump if interest rates rise, since WBEZ has a floating rate. In an interview McCurdy said the interest rate is capped, but Kendrick Anderson found no mention of interest-rate caps in the bond documents, and Costello confirms that there are none.

The advantage of the floating rate is that WBEZ is now enjoying the low rate of 4 percent. The risk is that if demand for credit picks up that rate will rise. “From a practical standpoint,” says Anderson, “if interest rates rise a whole lot the company has the option to turn this into a fixed-rate obligation. At the point that the short-term rates become burdensome, that’s when people convert to fixed rate. If rates started to rise, they would probably lock it in. The bank would probably ask them to do that for their own protection. The last thing the bank wants to do is go in and manage the radio station.” But the station would have to lock in at a higher rate.

And there are other ways in which the debt could expand if WBEZ can’t keep up with its payments or meet its covenants. According to the documents, says Anderson, “they make monthly payments, and if they don’t make the payment interest accrues at prime plus half a percent.” Another section of the reimbursement agreement states that a failure to pay any amount due constitutes default, and WBEZ would then pay LaSalle’s declared prime rate plus 2 percent. “Banks extract those from virtually anyone they lend to, because they want to be protected,” says Anderson.

This is what it comes down to: WBEZ needs to raise a whole lot of money. “I have no doubt that we’re going to be able to meet our covenants and repay the bonds on schedule, and enhance, increase our membership as a result of this whole project,” says board chairman Kay McCurdy.

Perhaps. But it’s not going to be easy.

The capital campaign still needs to raise $1 million. It’s due to end in 1997 and will begin its “public phase” this fall–going to the general public as well as private foundations and individuals. Nearly a third of the $3.5 million raised so far came from the family of WBEZ Alliance Board member Ken Lehman; it’s commonly known that the Navy Pier building will be named the Lehman Family Public Radio Center. Interestingly, the John D. and Catherine T. MacArthur Foundation, a major WBEZ funder, is not contributing to the campaign. Instead it recently gave the station $150,000 to produce Your Radio Playhouse, because, says the foundation’s Nick Rabkin, “I think the programming comes first.”

One possible barrier to completing the campaign will be the glut of other capital campaigns now under way in Chicago. According to the Donors Forum of Chicago’s 1995 Capital and Endowment Campaign Survey, Chicago-area nonprofit organizations are now trying to raise almost $2 billion–including $105 million for the Chicago Symphony Orchestra, $100 million for Lyric Opera, and $650 million for the University of Chicago. And Paul Pribbenow, vice president for institutional advancement at the School of the Art Institute and president of the National Society of Fundraising Executives, says WBEZ is chasing many of the same potential donors as the other educational and cultural institutions currently running campaigns.

“Because [WBEZ has] no record of capital fund-raising it’s tough,” says Pribbenow. “It’s a tough business. There’s a lot of capital campaigns in this city that haven’t been successfully completed by small organizations the first time out.”

Meanwhile the station still needs to raise money for operating expenses. WBEZ officials are counting on getting more money than ever, but that won’t be easy either.

The station’s annual reports since it became independent–1991 through 1994–show a steady increase through 1993 in all major revenue streams except government funding. But then revenues dropped in 1994. Membership revenue grew to $2,512,961 in ’93, then dropped to $2,334,397 in ’94. Private grants grew to $456,036 in ’93, then dropped to $387,406 in ’94. Program underwriting grew to $533,557 in ’93, then dropped to $523,784 in ’94. Overall WBEZ’s operating budget was $500,000 short in ’94, a shortfall that was obscured on the station’s financial statements by money from the capital campaign.

Kay McCurdy is well aware that the shortfall was a serious problem. “It’s a warning sign that we weren’t doing something right and that we needed to refocus how we were going about it. You learn more from mistakes, and that goal wasn’t met–and you either have a mistake in the goal that you set or the means in trying to achieve the goal.”

Carole Nolan attributes the ’94 drop in membership donations to the major programming changes instituted in January ’94 by Torey Malatia. He’d followed a trend among public radio stations, making WBEZ’s format more consistent by cutting oddball shows like Stuart Rosenberg’s eclectic music programs The Earth Club and Radio Gumbo. Weekdays remained news and information, with some shuffling and the addition of Talk of the City with Richard Steele and NPR’s Talk of the Nation. Weeknights shifted from separate classic and progressive jazz programs to a mix of jazz styles and world music. The primary weekend addition was Aaron Freeman’s four-hour Metropolis show on Saturday afternoon. The schedule changes initially provoked a loud and hostile reaction among listeners.

Nolan attributes the drop in foundation grants to an increase in not-for-profits looking for funding and to a fall in interest rates. “The foundations live on endowments, give money away based upon the interest they’re making, so they didn’t have so much money to give away.”

But a top executive at a major foundation who prefers to remain anonymous disagrees with that assessment. He says that each year foundations do give away endowment income that depends on market performance, but the amount is tied to the previous year’s market performance. “And ’93 was a good year in the market. She may even believe what she tells you, but she’s wrong.” But, he adds, “I think it’s true that the fund-raising environment for cultural organizations of all kinds–media organizations like ‘BEZ, arts organizations, and humanities organizations–has become increasingly competitive. They weren’t performing well to begin with, and in an environment as competitive as theirs it’s tough to ratchet up their foundation grants substantially. And they may have planned overly optimistic goals.”

Figures aren’t complete yet for fiscal 1995, which ended August 31. Chief financial officer Tom Costello says WBEZ’s ’95 operating revenue exceeds its expenses, but falls short of “internal goals” by about $200,000. “But overall, it’ll still be a wildly successful year, especially compared to last year. Any organization like this one that has a surplus of revenue over expenses should be wildly happy, as we are.”

Yet this year’s on-air fund-raisers fell short of their goals again, by $101,200. The station held four, rather than the usual three, to make up last year’s shortfall. While the October ’94 and January ’95 drives made their goals, the April ’95 one took in $415,900 rather than the goal of $500,000. An extra fund-raiser in July raised $341,500 rather than its goal of $400,000, though $27,000 from its concurrent telemarketing campaign to get on-air challenges brought the fund-raiser as a whole within $21,500 of its goal.

However, public radio stations across the country reported doing 15 to 40 percent better this spring in on-air fund-raising than the previous year, according to John Sutton, director of audience research at NPR. Many stations set fund-raising records, and most credited the well-publicized danger of Corporation for Public Broadcasting funding cuts. WAMU in Washington, D.C., had its best fund-raiser ever in March, collecting $835,000 in one week when the goal was $700,000. Philadelphia’s WXPN set its own record in February by going 42 percent over its goal, and Minnesota Public Radio reports collecting twice what its typical spring drive brings in.

Many WBEZ watchers are troubled that the station didn’t follow that trend. Tom Thomas of the Station Resource Group says, “I wouldn’t read particularly much into that.” He points out that several other successful stations also missed out on the cash bonanza, and he adds that WBEZ has been “very aggressively making its case for community support” since it became independent five years ago. “What that means though is that the untapped potential is a little bit less for having succeeded, whereas in some other communities, where people may not have been putting that extra spin on the pitch, there was something more forthcoming.” But if he’s right, reaching the station’s various fund-raising goals may be harder than WBEZ officials expect.

Thomas says that WBEZ does very well collecting money given the size of its listenership. Adding up all forms of community support, from listener dollars to corporate underwriting, and dividing by the number of people in the station’s listening area, he comes up with 62 cents of revenue per person. “That is the highest number of any station in the country whose population is over five million.” Among the top 30 stations, he says, only two others get more support per listener–WBUR in Boston and WETA in Washington.

Yet WBEZ is also one of the few stations in a large market without any competing public radio stations. WETA has three competitors for public-radio dollars, one of which, WAMU, is a flagship public station. WBUR shares Boston’s public-radio audience with WGBH, another large station. Philadelphia has four public stations, Los Angeles has eight, and San Francisco has six.

“Could [WBEZ’s] audience be stronger?” asks Thomas. “Yes, it could–particularly given its situation as the only full-service metropolitan signal, not having to compete with two or three other public radio stations.” He also says, “If WBEZ needs a certain number of dollars and it’s not raising those dollars it needs, that’s a cause for concern. Whether they’re raising more than anybody else is beside the point if they’re not raising enough relative to what they need.”

And WBEZ is going to need even more very soon. The station will soon have to make up the approximately 10 percent of its operating budget provided by the Corporation for Public Broadcasting, which could lose all of its federal funding after 1998. In 1994 the CPB contributed about $500,000 to WBEZ’s budget.

Carole Nolan seems surprisingly nonchalant about the impending loss of federal money. “Basically for big stations like Chicago, and the way that we’ve built ‘BEZ, is to base it upon memberships. Right now only 10 percent of our annual operating budget comes from the federal government, so for us it isn’t a big problem.”

When pressed, she acknowledges that it is a problem for stations with smaller listening populations. National Public Radio is supported mainly by its member stations, so if a significant number of these smaller stations go out of business their share of NPR’s costs will have to be picked up by other stations, including WBEZ. NPR costs have already risen substantially. Last year, says Malatia, programming fees rose 25 percent “and everyone was screaming.” And this year WBEZ’s NPR costs will rise $120,000, from $560,000 to $680,000, though this is partly because NPR dues are based on the amount of money each station raises and WBEZ’s capital campaign put it in a higher bracket.

Malatia is less sanguine than Nolan about the CPB cuts. “This is only 10 percent of our budget, but 10 percent is 10 percent. It’s a sizable amount. What it’s going to do for us is accelerate membership growth. There’s absolutely no way we can not try to make membership growth the foremost goal for the radio station to keep it operating.”

Membership growth will have to be phenomenal to offset the coming CPB cuts and support any future cost increases and help pay off the debt from the Navy Pier move. Malatia points to other sources that could help, but they’re either minor– renting studios to outsiders–or avenues WBEZ would rather not explore, such as increasing the length of corporate underwriters’ announcements. So, according to Malatia, the station’s main strategy in raising operating funds is to attempt to increase membership renewal through direct mail and focus on-air fund-raisers on getting new members.

WBEZ membership has already grown dramatically since the station became independent–up more than 33 percent to about 31,000 this year. That means one in ten listeners is donating, which is considered typical for public radio. But WBEZ’s stated goal is to get 50,000 members by December 31. Their donations, says Malatia, would make up for any federal cuts and allow the station to reduce its on-air fund-raisers. He adds, “This is one of those goals where if you don’t reach it at the date you’ve set arbitrarily, you’ve still done better than you would have if you didn’t make the goal and try to reach it.” He readily admits that getting 50,000 by December 31 isn’t likely, but Nolan believes 50,000 can be achieved in two to three years.

Thomas thinks WBEZ could reach that goal, but only if it increases its audience first. “We know what can be achieved, and there’s no reason why WBEZ can’t do it too.” Yet neither Thomas, McCurdy, nor Malatia could cite a specific public radio station that has expanded its membership as dramatically as WBEZ hopes to do. Thomas says public radio as a whole doubled its audience over the last seven years, and he thinks there’s the potential for another doubling over the next seven or eight years. But that’s nationwide.

According to Nolan, WBEZ intends to double its membership mainly through direct-mail solicitations, and to increase donations by asking members to renew at a higher rate and by sending out a year-end mailing asking for an additional gift. The disadvantage to direct mail compared with on-air fund-raisers “is that they cost a fair amount for every dollar you raise,” says Thomas. “But I think that’s of necessity going to be one piece of the growth path for ‘BEZ and other stations as you run into some of the natural limits of who will find it persuasive to hear someone on the radio. But is it some magic bullet? No.”

Thomas doesn’t see WBEZ’s audience growing without major programming changes, which he says will “take a lot of hard work and tough programming decisions. And what the station sounds like when we get there will be different from what it is today, and some people will think it’s better and some will think it’s worse.”

That’s just what listeners who tune in for jazz or eclectic shows like Thistle & Shamrock are afraid of. Malatia says the station is currently working on a strategic plan that he hopes to complete this year. “We’re working together as a station, the board and staff, to put together a plan that will identify those sorts of programming that we want to invest in and focus on, that we feel will have some meaning to the audience of the future.”

Yet despite the changes Malatia made in January ’94, WBEZ’s ratings have remained fairly flat. Its AccuRatings since winter ’93 show that for people aged 12 and older the station’s “cume” rating–the percentage of audience that tuned in to WBEZ during the survey time period–rarely fluctuated more than two-tenths of a percent, an insignificant amount, according to Steve Palmer, program director at WAMU in Washington, D.C. There was an unusual peak last winter, but the ratings returned to normal the following quarter, which Palmer says almost certainly indicates a onetime blip.

Gloomy WBEZ watchers are convinced that local programming ratings are down, masked by jumps for NPR’s Morning Edition and All Things Considered. Not so, says Palmer. Local programming is often a share point lower than those two shows, but he says that’s typical for public radio stations.

WBEZ’s stable ratings are actually a good sign, since they mean that any disgruntled listeners who fled the station were replaced. But they also mean that no significant audience growth is likely without more and bigger changes. “Local programming just has not quite measured up,” says the MacArthur Foundation’s Nick Rabkin. “Part of the reason is that the station has not put the resources into developing high-quality programming. In other words, programming costs money too.”

WBEZ’s financial obligations have already squeezed the staff–precisely the people the station will have to rely on to bring in new members and upgrade the programming. Morale these days is usually described in negative terms, such as “sucks.” One insider says, “People are just really overworked and underpaid–trying to do the right thing and getting very little back.” The climate of fear and mistrust made some staff and associates reluctant to let their names be used.

A lot of staff feel they’ve been left out of the process. “I think some of us–not all of us–would like to have more input from the board on what’s going on,” says Dayna Calderon. “We’ve felt a lot of financial information has been withheld from us. It was very open before–I guess before the whole capital campaign began. Sometimes we’ll have open meetings, some board members will sit in, and quite frankly they seem surprised about how emotional we are about this, surprised that we’re interested in how the mortgage is being handled.”

Yet she’s still optimistic. “Certainly all of the problems happening right now come down to finances. The pressures of dealing with the [CPB] funding, on top of increasing the cost of production, in addition to having a capital campaign, have hit us pretty hard, to say the least. And I know it’s been a very difficult year for a lot of us, extremely difficult. But I think this is probably the only light at the end of our tunnel–that we do have these great facilities that we’re moving to. ‘BEZ has always been split up between programming and revenue and administrative staff. Having all of us in one area is gonna be great. I think it’s gonna be great for morale.”

“When you talk about morale,” says longtime producer Johanna Zorn, “you have to say it’s a very creative environment, where if you’ve got a really good idea you’ll probably get the chance to do it. And I have never worked for a boss who was quick to say, no, we can’t do that. That’s been consistent. And I think that is really important to morale–and probably more important than money. People will take not getting a raise. Sure no one likes that, and it hurts morale a little bit. But a strict structure where people couldn’t try new things–that would be awful. And there’s never been a hint of that. I guess what’s consistent is that people have always complained about morale. It’s constant, that’s why I give it very little credence.”

Constant it may well be. Morale was reportedly at an all-time low after Ken Davis’s dramatic departure in 1992. He resigned under fire after distributing a staff memo outlining his vision for WBEZ’s future–dropping jazz and making the station all news and information. Though he proposed developing another all-jazz public station, the memo was explosive and quickly leaked to the press. Alliance Board members were irate to see the memo in the newspaper first, though Davis says he’d faxed them copies. Nolan wrote Davis a reprimand, and he tendered his resignation.

“Morale sank like a stone when he left,” one station insider told the Tribune’s Dan Kening at the time. It took ten months to hire Torey Malatia as Davis’s replacement. Insiders told Kening that for those ten months the station was “rudderless” and “drifting.” A string of departures began in April ’93, when vice president of development Ann Marino resigned.

Malatia’s first major program changes, announced in November ’93, sent popular music host Stuart Rosenberg and producer David Resnick out the door. They were followed closely by director of information Linda Paul, a station stalwart who’d served as interim program director. Paul didn’t comment at the time, but according to the Sun-Times’s Robert Feder, “Insiders said she was miffed about the latest personnel changes.”

Chief financial officer Ted Madaj quit in October ’94. The following month Nolan announced that after 23 years as general manager she was leaving daily operations to become president and chief executive officer, charged mainly with overseeing the $4.5 million capital campaign.

The day after Nolan’s move became public, Don Klimovich, manager of foundation and government support, either was fired or quit. Insiders say he was pushed out. Vice president of development Peter Riccio resigned this past January after only six months at the station. Next was manager of corporate support Tony Judge (who now works for this paper as sales manager). Membership director Barbara Carney left in May.

That’s a lot of changes for a small organization, which listed 47 full-time staff and 11 part-time in 1994. “There was this period where every week there’d be a different notice of someone quote unquote resigning or leaving,” says a station insider.

Why the exodus? “I can’t speak for them, but I can guess,” says Malatia. “This has been a time when the old way in which public radio stations dealt with raising funds is changing, and the pressure’s on. We have to build membership, we have to find revenue, and it just doesn’t come in by resting on the sort of traditional way of looking at public radio as a charity. It’s a much harder job than it ever was.”

The most controversial job switch was Nolan’s move to president and CEO. Many staffers believe she was kicked upstairs by the Alliance Board. Board member Ken Lehman cites two main reasons for her move: planning for her retirement and the increased duties she’d taken on with the Navy Pier project, which had turned her old job into two.

A little more than two months later, in February ’95, the board appointed Malatia as Nolan’s successor, making him station manager as well as program director. Why did the board give Malatia two jobs? Lehman says, “We talked openly about that with Torey, and he felt that he had developed his programming team sufficiently that they would be pretty self-directing and self-motivating, and it would work.”

The staff’s reaction was mixed but decidedly skeptical. “It was a sense of that it had been planned all along, that it wasn’t a real legitimate search,” says a staffer, adding that people were “unhappy about that–and doubtful that one person could do so much. But he seems to be pulling it off.”

Another staffer says, “I’m still unclear whether that’s interim, but the additional responsibilities that Torey has taken on, it’s taken us back about two years to where we had no program director. And I understand it’s a huge undertaking. We’ve lost a lot of people in the last year, we’ve had to make a lot of sacrifices, and this guy has to take the brunt of all of it. But in the meantime we’re kind of lacking the program director like when Ken Davis left. We’re floundering.”

Andrew Patner, cohost of the arts hour on Aaron Freeman’s Metropolis, says, “It does not involve any professional or personal criticism of Torey or Carole to say that we need three people. We need a program director, a station manager, and a president at this point, because of the fiscal obligations we have.”

The strangest thing about the changes was the lack of communication from the board–staff members were nearly the last to find out.

Perhaps worse for morale was a one-year hiring and salary freeze, which just ended; the 1996 budget calls for a 5 percent salary increase across the board. Some staff think their salaries were unofficially frozen for longer than a year, and most believe they’ve been underpaid and overworked for years. “When I came in I took a salary less than I really wanted to,” says education reporter David Schaper. “I’ve stayed at the same pay–there’ve been no raises at all in the two years I’ve been there. So basically I’ve gone back in time, since inflation’s gone up.”

Patner, citing the recent departure of producer Tom Teuber, says, “I don’t want to put down any of our producers, but we don’t have any–other than Johanna Zorn, who does special projects–we don’t have any veteran producers on staff. It’s hard to attract or retain staff because we can’t pay, and in terms of programming we’re not paid anything. I’m paid $50 a week for Metropolis, and it takes tens of hours a week.” His pay recently went to $75.

Last year the staff sent a committee to complain to Nolan about the salary freeze, particularly since they’d noticed that jobs in the deserted development department were being advertised listing salaries between $70,000 and $80,000. “Three times what a lot of us in news and programming make,” says Schaper. And they’d seen positions at other public radio stations in smaller markets advertising higher salaries than theirs for less experience.

Schaper, along with news director Cheryl Corley, represented the news department on the committee. “We wanted to let her know exactly how we felt,” he says. “Because I think a lot of people just didn’t really know the level of discontentment, the level of frustration.” They’d called other public radio stations in large markets and found that most were paying more. “We wanted to make sure our management was aware of that and that eventually it could cost them in terms of personnel.”

Schaper says the committee members were aware the station was financially strapped, so they asked about perks like an extra week’s vacation. Nolan, he says, “never really responded. We were going to meet again, but right after came the announcement that Torey was going to take over as station manager.” The momentum disappeared.

Committee members say Nolan brought her own chart to the meeting showing salaries at other stations. “She presented it to us as if it was going to show that we weren’t as bad off as we thought,” recalls one member. “So you look and it says “starting news position,’ and the average was something like $4,000 more than people were making at our station–when they’ve been here four years. And you look at “producer/host of talk show’ and realize the salary’s $10,000 more than our highest-paid talk-show host is making, and that’s the average salary at those stations. That average was taken from all the stations, including ours, which is way below the average. Besides, in Chicago you should be making more than in Ames, Iowa. And we looked at it and said, “Carole, this shows that we’re worse off than we thought.’ She said, “Well, so you can see I’m not trying to hide anything from you here.’ Thanks, but that doesn’t answer the question.”

Asked about her meeting with the committee, Nolan says, “I think that I’ve said to the staff, you know, compared to other public radio stations they’re really very fairly compensated.” Told that staffers have said their counterparts are paid more, she responds, “Not the case. Everyone would like to be paid more, but I would say that WBEZ is in the top of people who are in public radio.”

The hiring freeze created other problems at the understaffed station. The front-desk receptionist job went unfilled first on the 39th floor, then on the 8th floor. On the 39th floor that meant no one was there to greet talk-show guests and lead them down the confusing path to the studios. “Without that person there the producers would either have to wait for a guest or send an intern to wait for a guest, so they couldn’t be doing as much as they normally would do,” says a staffer. On the eighth floor, a guest arriving to see Nolan might have to wander through the offices asking for directions. The job of “tracking and continuity”–“a real critical behind-the-scenes position,” according to one staffer–also went unfilled. Cheryl Corley says the news department was able to expand only because several jobs were paid for by grants, but it still had unfilled positions.

The hiring freeze also meant that station veterans working on a part-time or contract basis couldn’t be hired as full-time staff with benefits, a sore point for those affected. “We continue to rely on a programming staff that, besides the news department, is made up mainly of part-time, contract, freelance, and volunteer assistance,” says Patner. Some of the station’s most recognizable hosts–including Aaron Freeman, Neil Tesser, and Dick Buckley–aren’t full-time staff. Malatia estimates the programming staff has 23 full-time, 3 contract, and 7 part-time members. He says bringing more contributors on full-time is a goal that was “completely sidetracked” by the freezes, but he hopes to “invest in staff” this year–if the station exceeds its fund-raising goals.

That may seem like a dim prospect for WBEZ staff and associates. “But at the same time,” says one insider, “when people start getting nice offices maybe they won’t complain so much. Assuming the station doesn’t go bankrupt.”

Meanwhile WBEZ watchers wait to see if the station’s gamble will pay off. “The basic issue is, we’re mortgaging a significant amount of our present for a very uncertain future,” says Patner. “The arguments regarding the long-term fiscal health of the station and the need to escape property taxes are indeed compelling, but whether the road had to lead through Xanadu is another question.”

Art accompanying story in printed newspaper (not available in this archive): illustration/Andrew Epstein.