Nightmare on Oak Street

With its creaky projection system and feeble heat, this once proud art house is now a fixer-upper

With its creaky projection system and feeble heat, this once proud art house is now a fixer-upper

What do you call a movie theater with virtually no paid staff, no reliable heat, no modern projection equipment, no advertising in the major daily newspaper, and no money in the bank? A success story, according to the Oak Street Cinema. The Stadium Village theater, operated since 2002 by an ailing nonprofit called Minnesota Film Arts (MFA), has been racking up surprising attendance figures in recent months with art films by the likes of David Lynch and Jean-Pierre Melville. Even a recent seven-and-a-half-hour Hungarian drama, Sátántangó, drew a decent crowd on a below-zero day.

Yet the future of the 91-year-old theater has never been chillier. After a year of rumors, City Pages has confirmed that MFA is putting Oak Street Cinema up for sale. What's more, this April's Minneapolis-St. Paul International Film Festival—the organization's annual blowout and windfall—will be half the size of last year's gala (a trim 60 to 80 films compared to last year's 135). With only six weeks to go before the festival's 25th anniversary edition, MFA has yet to announce its set dates, April 19-30, on its website.

But then who is around to publicize those dates? The upcoming shindig has no paid executive director or full-time PR person. It also has no firm opening-night film (though Abderrahmane Sissako's anti-World Bank drama Bamako seems likely to fill the slot), and no confirmed participating theaters, outside of Oak Street and the Bell Auditorium, MFA's other regular screen. (Five venues hosted movies in 2006.) Even the name of the event is up in the air: M-SPIFF might yet break into two smaller festivals, with a sequel to be held in the fall.

Last year, 84-year-old Al Milgrom, the organization's co-founder and sole steady employee, underwent heart bypass surgery, then broke his arm—though he was healthy enough to bicycle around September's Toronto Film Festival, as he does every year. "I can't lift my arm above my head," he says, seated amidst the usual pre-festival chaos at MFA's offices.

Tucking his gray lion's mane behind an ear, the programmer says he's living on his social security until the organization can pay him—"maybe when the building gets sold," he says. That's not to say that Milgrom wants to see MFA unload the theater.

Rather, he confirms what Oak Street regulars have observed: a recent spike in audience support against the DVD tide. Milgrom announces his erratic schedule by email newsletter, while continuing to practice his singular marketing methods. For the recent documentary Obsession: Radical Islam's War Against the West, for instance, Milgrom leafleted the Living Word Christian mega-church in Brooklyn Park.

Why, then, can't success save the Oak Street? "For the simple reason that no nonprofit arts group or single-screen theater exists these days on cash flow alone," says Milgrom. "With that inherited debt, if you're $10,000 in the red or above, you're not going to make enough money, week in and week out, to pay your staff and overhead."

At this point, because of an outstanding balance, Milgrom says the Star Tribune won't even let him pay for ads with his personal credit card.


MFA's debt, and how the organization got into it, has generated enough bad blood to fill a blood bank, and enough drama to be the subject of its own seven-and-a-half-hour epic. Though Al Milgrom and Oak Street founder Bob Cowgill have been dueling over one area theater or another since the 1970s, the current tragicomedy began under the tenure of MFA director Jamie Hook.

Within a year of taking the helm of the organization in 2004, the new guy had accumulated more than $75,000 in debt. Board member Tim Grady stepped in to bail out the Oak Street with his own money—collateralizing it against the Oak Street building. Grady and the board proceeded to dismiss Hook, and MFA's staff left soon after.

The skeleton organization that remained abandoned the theater's glossy quarterly calendar and ambitious schedule of double bills. A proud champion of repertory programming, Cowgill returned with an offer to take over the theater and retire the debt—raising public pledges of $40,000 to do the deed. But Grady rebuffed him, and the Oak Street has been on life support ever since.

"I think the Oak Street was in the position to be a Minneapolis version of the Film Forum in New York City," says Cowgill, who accuses the board of "malevolent incompetence." He argues that the group's scheme is to run the Oak Street just long enough to claim they gave it a shot before cashing out. "MFA has devolved into the old Film Society method of just getting along. And they owe it to the public to be open about their plans. If they choose to sell the theater after it's been doing some business, and after they had offers to run the place, they have some accounting to do."

A real estate transaction involving Oak Street would cancel the debt and then some. Located in a prime location, near a massive alumni center and close to the University hospital system, the property is listed for between $600,0000 and $700,000, according to Grady. "There are plenty of people looking, but we have not accepted any offers," he says. "Selling is one plan."

The other, he says, involves a "$3 to $5 million plan to buy the property next to us, the old Lotus Cafe, and tear down the theater and the cafe and build a three-screen, state-of-the-art film theater, with a skyway to the parking lot."

Grady admits that he hasn't found partners for this project, and that the board is unprepared for a capital campaign. When informed of the idea, Cowgill scoffs. "I think it's in bad faith what these guys are doing now," says Cowgill. "It's become a real estate deal."

Beyond putting his money into MFA, Grady also co-programmed last year's M-SPIFF himself. But Grady is also the owner of a cycling supply and media company in St. Paul, and other commitments have forced him to pare down his involvement this year. He's attempted to recapitalize the organization, he says, pointing to a mail fundraiser that raised some $20,000. Grady estimates that with another $150,000 in grants, MFA could cover needed improvements at the Oak Street, such as new projection equipment.

But last year, the organization lost out on a key McKnight Foundation grant—the one that helped Oak Street Arts secure a mortgage on the theater in the first place. "Someone on the board told McKnight we're going to sell the Oak," says Milgrom. "So McKnight says, 'Why should we back a lame horse?'"

"The problem with McKnight was, we need an executive director," says Grady. "I don't think any proper foundation would put money into an organization without a staff. This is why we're concerned about going forward and asking people for money. What are they really supporting?"

When this year's film festival finally rolls around, local audiences may be asking themselves the same thing.