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District suit alleges mismanagement at Howard Theatre

The exterior of the historic Howard Theatre in Washington. Originally built in 1910, the theatre underwent a $29 million renovation and reopened in 2012. (Kyle Gustafson/For The Washington Post)

The nonprofit organization that oversaw the publicly funded renovation and reopening of the Howard Theatre has failed to maintain a functioning board, file tax returns or administer proper financial controls, according to a lawsuit recently filed by D.C. Attorney General Karl A. Racine.

Howard Theatre Restoration Inc. led the 2012 revival of the historic theater from a fenced-up eyesore to a modern attraction, thanks largely to $12 million in taxpayer funds from the D.C. government, which owns the building.

In the Feb. 27 suit filed in D.C. Superior Court, Racine alleges a lengthy list of violations of the District’s rules governing nonprofit organizations that “impaired [the organization’s] ability to fulfill its responsibilities as the landlord of the Howard Theatre, one of the most important ways it furthers its nonprofit mission.”

Among Racine’s contentions are that the organization failed to maintain a minimum of three people on its board of directors, as required by D.C. law, and failed to obtain independent audits in any of the past seven years.

The complaint says Howard Theatre Restoration, or HTR, has not filed the required federal tax form 990 since 2015 and did not file any tax forms for fiscal 2013 and fiscal 2014.

“HTR’s financial and governance issues have impacted its ability to act in accordance with its nonprofit purposes, particularly its ability to maintain the operation of the Howard Theatre as a center of performing arts and entertainment in the District,” the suit alleges.

The Howard Theatre, at 620 T St. NW, was a blighted property for years following the 1968 riots, despite a National Historic Landmark designation and a gilded past hosting the likes of Ella Fitzgerald, Duke Ellington and James Brown.

It reopened with a gorgeous new look and a schedule thick with big names, but in the past two years, the organization fell behind on its tax bills to the city, and employees, board members and former board members raised concerns about the theater’s operations and finances.

In 2016, a slew of departures from the nonprofit’s board left only one active member overseeing the Howard, as reported by The Washington Post. Vendors detailed bounced checks and missed payments, and the nonprofit — which relies on rent from for-profit subsidiaries managing the theater — considered parting ways with its management company.

Developer Roy “Chip” Ellis, who created Howard Theatre Restoration, led the redevelopment of the building and also has a stake in its management company, did not immediately return a request for comment.

Myla Moss, who has served as the chairwoman of the organization’s board, could not immediately be reached.

In the past, Ellis and Moss have defended their work on the building, which had been abandoned and vacant until the renovation. Ellis and his brother Rodney, once board members, both resigned after other board members raised conflict-of-interest concerns.

But Ellis and Moss also have had disagreements over the organization’s finances and Ellis’s role in the management of the theater with Blue Note Entertainment Group, a prolific New York venue operator.

Howard Theatre Restoration is the parent of two for-profit subsidiaries also formed by Ellis, Howard Theatre Subsidiary Inc. and Howard Theatre Landlord LLC. Both were formed to obtain tax credit financing for the project.

In a previous interview, Ellis disputed that management had fallen short of expectations. “Nobody’s making any money, but we are trying to get this thing to a point where it will be a great success,” he said.

The District’s suit asks that Howard Theatre Restoration appoint an independent auditor to review the organization’s financial records and asks the court to ensure that the organization complies with District law.