Screen Actors Guild execs have significantly scaled back the size of SAG’s new Gotham offices amid persistent questions about its 20-year, $56 million lease agreement.
SAG has dropped its original plan to occupy three floors with 50,000 square feet and now plans to take up only two floors. It has scrapped its July move-in date and told members it will not occupy 360 Madison Ave., which is still under construction, until later this year.
SAG spokeswoman Ilyanne Kichaven said staffing requirements for the New York office have been reduced since CEO Bob Pisano took office last September, though she gave no specific numbers. “We have new management in place and these steps are part of our ongoing reorganization,” she said.
The disclosure comes a month after chief financial officer Francesca Hickson, whom Pisano appointed in November, told the guild’s national board of efforts to “turn around” SAG’s financial situation.
It also comes amid several recent departures of midlevel execs from national headquarters in Hollywood, which Kichaven cautioned should not be interpreted as signaling cuts to SAG’s overall staff.
The controversy over the New York offices was ignited last year when former guild CFO Gerald Wilson recommended against the move as part of SAG’s need to look at possible cost-cutting (Daily Variety, June 27). Wilson pointed out the new building would cost $2.8 million per year, almost $1 million more annually than the current lease at Viacom headquarters in Times Square at 1515 Broadway.
Wilson at that time questioned SAG’s plans to sublease the space at 360 Madison with no guarantee that it could generate acceptable sublease income during the 20-year term of the lease.
SAG’s national board agreed to the deal in 1999 after being told that the guild was being required to leave its current offices because Viacom wanted to take over the space. John Sucke, who was promoted last fall from New York branch exec director to deputy national exec director, has contended that Wilson’s suggestions were “well-intentioned but flawed” and noted rental rates had increased sharply since 1999.
Sucke also dismissed Wilson’s idea of relocating to a less costly facility outside midtown. The exec continued to defend the move — which he said would take place in November — at a recent New York membership meeting in response to repeated questions about the cost.
Kichaven said SAG has no plans to back out of the 20-year lease deal for 360 Madison. The lease agreement can be terminated if SAG is not in the new office by October.
“The most sensible course for SAG would be to negotiate a new deal with owners of the Viacom building,” said former New York prexy Lisa Scarola, who has been at odds with Sucke on a wide variety of issues.
S.L. Green Realty Corp. recently acquired 1515 Broadway, but the leasing agent for Green said she could not comment about whether SAG could negotiate a new lease deal.
SAG, which has an annual budget of about $50 million, has never officially disclosed the cost of the lease agreement to the membership at large. The New York office reps 25% of members, while Hollywood accounts for 54% and the 23 other branches 21%.