Editor’s Note: This is the second story in the Mirror’s three-part investigation into how local artist groups are faring at the now two-year-old Federal Way Performing Arts and Event Center. The Mirror initially reported that this would be a two-part series, however, due to the continued response from members of the arts community, the Mirror has expanded this series.

Enthusiasm twinkled like the 30-foot-high glass-encased lobby that welcomed visitors to the new Federal Way Performing Arts and Event Center.

The excitement sprinkled over arts patrons and local arts groups alike, sparking a new arts energy in Federal Way. This is the buzz that city officials had hoped the 44,000-square-foot PAEC would generate as the new downtown anchor.

Erin Ceragioli was ecstatic about the opportunities the PAEC would bring to her organization.

As the executive, artistic and school director for the Tacoma City Ballet, she was among the six local arts groups to sign on as a resident arts organization before the facility opened. The ballet ushered in the PAEC with a performance at its grand opening in August 2017, then scheduled their popular “Nutcracker” for the following December.

“I can’t tell you how happy we are and how wonderful Federal Way has been,” Ceragioli told the Mirror about the ballet’s partnership with the city in 2017.

However, in the two years since that initial partnering, she is no longer singing the city’s praises.

After becoming a resident arts organization for the PAEC, Ceragioli says she encountered many problems with the PAEC and the city, including near-constant miscommunication, financial disputes that the city nearly took her to court over, and even alleged “bullying” from the city.

But Mayor Jim Ferrell denies these claims, stating that the city attempted to diplomatically resolve the legal disputes.

The ballet performed five shows at the PAEC, and Ceragioli said for nearly every performance the city did not follow the rules of its own contract and did not charge correct prices for services rendered.

She detailed many of the issues the ballet ran into with the PAEC in a March 20 email she sent to the mayor, Deputy Mayor Susan Honda, PAEC Manager Brian Hoffman and city staff.

Ceragioli stated how “disappointed” she was to find out that city staff ordered Hoffman to retain all of the money the city owed the ballet from their 2018 performance of the “Nutcracker,” $72,802.78 total, as well as nearly $2,000 for their 2018 production of “Dracula.”

She stated this decision was made “because the city had determined, after almost the passage of one year, that the Cinderella 2018 Theater Expenses had not been retained by the PAEC, as is the standard business practice in the theater industry.”

Ceragioli recounted the different times the city allegedly mistreated the ballet and did not pay their proper amount they owed her on time or in full for nearly every performance.

“For Nutcracker 2017, with a closing date of December 23, the Ballet was partially paid on February 14, 2018 and finally paid (in full) on June 26, 2018,” she wrote. “For Nutcracker Boutique 2017, with a closing date of December 23, the Ballet was not paid until July 9, 2018.”

She goes on to recount more examples, from “Cinderella” 2018 closing May 6 and not receiving payment until June 26, with the payment being combined with the “Nutcracker” 2017 payment, causing confusion.

The 2018 performance of “Dracula,” which closed on Oct. 28, was not paid until Nov. 27, Ceragioli said.

Even “Nutcracker” 2018, which closed on Dec. 23 wasn’t paid to the ballet until March 19, 2019.

“Tacoma City Ballet has been very patient throughout these past two years, and despite suffering the poor business practices of the PAEC and the City of Federal Way, continued to perform in your theater,” she said.

In response to these issues and the city and PAEC officials overall treatment of the ballet, Ceragioli said she decided to remove the ballet as a resident arts organization with the PAEC, as she did not perceive there to be any benefit remaining a partner.

“After the purposeful retention of our dully owed Net Proceeds without communication… I do not feel that Tacoma City Ballet has been treated as a faithful client and resident artist by the PAEC of the City of Federal Way.” she wrote. “The fact that the City of Federal Way would be so distrusting of Tacoma City Ballet, who for 34 years has performed in Tacoma’s Pantages Theater and has never owed an outstanding balance, is disheartening to me.”

Hoffman declined to comment on the matter, stating that the issues occurred before Spectra came on board.

However, Ceragioli told the Mirror while the city has blamed some of the financial issues on the transition from when former executive director Theresa Yvonne left the city to when the city hired Spectra, that the issues continued when Spectra took over management of the facility for the ballet’s final two performances.

Ferrell has praised Spectra as a game-changer for the PAEC.

“I’m proud that we brought in a top-level company, Spectra, to run the day-to-day operations of this facility. They have increased the revenue and income to the betterment of $400,000, which is a big deal. They have made great strides in the past year. In the long run, I believe Spectra is going to be a game-changer for this facility and for the community,” Ferrell previously told the Mirror.

Hoffman said in a previous article that Spectra’s goal while managing the facility will be to make the PAEC a household name like the Pantages Theater. He said while it will take time for this goal to be accomplished, he is certain the PAEC will be able to meet it.

Council agrees to pursue litigation

The issues over the legal disputes between the ballet and the city came to a head in September when the council voted to pursue civil action against the ballet.

During a Sept. 3 Federal Way City Council meeting, City Attorney Ryan Call gave a presentation to council regarding why it was necessary to pursue litigation against the ballet over the $18,000 debt — a debt that Ceragioli says the city caused for not following industry standards.

During the meeting, Call asked for council approval to pursue a civil lawsuit against the ballet for alleged refusal of payment.

“The Ballet now disputes the amount it owes the City as a result of those (performance contract) agreements and offered to pay only a small portion of their liabilities,” according to Call’s presentation.

Ceragioli vehemently denied this, saying the city had caused this issue by not taking payment owed out of the total revenue the ballet generated for some of their performances. She said this was a standard industry practice and she was shocked to find out, months later, that the city never did this and was now “bullying” the ballet for more money.

During the council vote deciding whether or not to pursue litigation against the ballet, the deputy mayor recused herself from the voting while all other council members voted in favor. Of her recusal, Honda said that her daughter used to dance with the ballet, so she viewed it as a conflict of interest.

Ceragioli said she was horrified that the council voted to move forward with litigation with such little information. After Call gave his presentation, there was no council discussion before a vote was made.

“If I was a constituent of Federal Way, I would be very disappointed in the folks that I elected to do my work,” she said.

Call said during the meeting that the city had been in prolonged negotiations with the ballet, but was unable to reach a successful agreement so instead were going to pursue litigation.

Ceragioli told the Mirror this was incorrect, as she and her lawyer were told by an attorney working with the city that he did not have negotiating powers during his meetings with them.

What’s more, she said, during a phone conversation with the mayor in March 2019, she said he told her that the city had also not retained theater expenses for the ballet’s “Nutcracker” 2017. But because this was the city’s alleged mistake, he assured her the city would not pursue payment for that performance, she said.

However, according to the legal settlement between the ballet and the city, “The City of Federal Way and the Tacoma City Ballet entered into theater rental agreements for the Ballet to use the Federal Way Performing Arts and Events Center for the Ballet’s Nutcracker 2017 event… and the Ballet’s Cinderella event.”

The settlement agreement goes on to state that there is a payment dispute for these two events but not any of the other performances the ballet had at the PAEC.

Ceragioli said her lawyer informed her that her phone conversation with the mayor and an email thread stating the same thing constitutes a binding legal agreement, meaning the city could not legally ask for payment from that event, which it does in the final legal settlement.

Hemstreet told the Mirror that any previous deals that may have been on the table were negated when Ceragioli involved the ballet’s lawyer.

“We initially had a good working relationship with [the ballet],” he said. “When the billing dispute materialized, the mayor attempted to resolve this matter diplomatically, devoid of litigation.”

He said that those efforts did not seem to appease Ceragioli, and she was the one who decided to initiate the legal process.

According to a June 6, 2019 letter to the mayor and city staff from Ceragioli’s attorney, Robert Pentimonti, the city and ballet entered into a theater rental agreement on April 16, 2018 for “Cinderella.” Per the agreement, the city was to provide a final accounting of ticket revenue and any outstanding facility expenses associated with this agreement 10 business days following the last event.

“It is absolutely clear that the City has no right to come back against [the ballet] more than one year after this performance to assert an adjustment,” Pentimonti stated in the letter. “The time period to provide the accounting was explicitly 10 days. The City was in control of all the financial records relative to the receipts and the expenses, so any fault was its own.”

He continued that since so much time had elapsed, the ballet had no way to verify the additional charges. In reviewing the city’s documents for their requested adjustment, he stated there are inconsistencies and unsupported charges for labor and other items.

“The reason why a reconciliation must be made close to the end of a performance is that memories fade and underlying records are no longer reliable,” Pentimonti continued. “It is a waste of everyone’s time and resources to continue this accounting wild goose chase, especially when there is no contractual obligation no matter the outcome.”

He recognized the city was going through “growing pains” in managing the PAEC, however, the city “has no contractual right to correct its own alleged errors after the expiration of the agreed upon time period for reconciliation. Therefore, [the ballet] will not be paying the City for any demanded overpayment as TCB has no legal obligation to do so. We view the matter of this accounting and event reconciliation concluded.”

Pentimonti added that if the city believed there was any further response necessary in this dispute, that they should direct all communication to him.

In response to this letter and Ceragioli’s overall response to the situation, Hemstreet said, “Her conduct and confrontational behavior with city staff throughout this process also did not contribute to resolving this matter harmoniously. It’s disappointing that she is choosing to rehash and disparage the process publicly after settling the matter by signing a legally binding contract.”

Ceragioli responded to Hemstreet’s comment, saying she is not trying to rehash the issue but rather to bring to light her experience with the PAEC and the city. She said the mayor chose to raise the issue publicly when he brought the matter before council — without her knowledge.

She said city staff was continually condescending and rude to her while she was trying to work with them, and felt this combined with the city’s alleged inconsistent financial documents displayed “incompetence” and a “lack of responsibility.”

However, according to an email sent from Parks Director John Hutton to Ceragioli on March 19, 2019, Hutton wrote that he was “taken aback” by her response and he criticized her behavior.

Hemstreet said that after the initial meeting between Ceragioli and the mayor, he invited the Tacoma City Ballet staff to meet with him a second time to discuss any concerns they had over an audit the PAEC conducted in response to requests from the ballet.

“Ms. Ceragioli declined the meeting and instead had her legal counsel send a letter to the mayor stating that the Ballet did not plan on paying any of the balance it owed and to direct all further communication to be conducted through lawyers,” he said.

Ceragioli denies this, however, and told the Mirror that after meeting with the mayor and after he assured her he wanted to work with the ballet to resolve the issues, all communication from him to the ballet went radio-silent.

She added that during meetings with the mayor, it seemed like he was not interested in listening to the ballet’s issues and concerns.

Hemstreet responded on behalf of the mayor, saying Ferrell “rejects the characterization” of those meetings, and that despite Ferrell’s respectful and helpful aims for the meeting, Ceragioli still refused to negotiate.

“The mayor did everything he could to avoid litigation. However, once he received the letter from Ms. Ceragioli’s legal counsel, the mayor had no other options.”

Hemstreet views this matter as completely resolved.

“By signing the settlement agreement, the Ballet and the City settled the dispute and resolved all issues,” he said.

But Ceragioli is still upset by the events that unfolded with the city and the PAEC, and denies wrongdoing on behalf of the ballet.

“[The mayor] forced us to pay the wrong amounts so that we could avoid litigation because who wants to litigate with the city? This is the ballet.”

More information

Part three of the Mirror’s investigation into how resident artist organizations are faring at the PAEC will include the Tacoma Opera’s experience with the PAEC as they had aimed to become the seventh resident arts organization, as well as other local arts groups’ experiences at the facility. Read the first story in the series here.