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Kennedy’s falling out with Stage 3 unfolded over months


/ Sarah Segars A laptop and makeshift bed were among the items found on Aug. 14 in a part of the building owned by Doug Kennedy on South Green Street where he let Stage 3 Theatre Co. build sets for plays. It was later determined they belonged to two people who an employee of the theater had allowed to stay there without Kennedy's permission. (Courtesy photo)
/ Sarah Segars A Jeep was found parked in part of a building owned by Doug Kennedy on Aug. 14 that belonged to two people who were allowed to stay there by a Stage 3 Theatre Co. employee without his permission. (Courtesy photo)

Doug Kennedy says his relationship with Stage 3 Theatre Co. had already reached a breaking point before finding out in August that an employee of the theater had let people live inside his building without his permission.

Kennedy had been providing the space rent free for Stage 3 to build sets and props while he renovated the company’s former theater at 208 S. Green St. as part of his ongoing Sonora Armory project.

The manager of the project, Sarah Segars, was alerted by a contractor on Aug. 14 that it appeared someone was living in the space. There was a

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Doug Kennedy says his relationship with Stage 3 Theatre Co. had already reached a breaking point before finding out in August that an employee of the theater had let people live inside his building without his permission.

Kennedy had been providing the space rent free for Stage 3 to build sets and props while he renovated the company’s former theater at 208 S. Green St. as part of his ongoing Sonora Armory project.

The manager of the project, Sarah Segars, was alerted by a contractor on Aug. 14 that it appeared someone was living in the space. There was a Jeep parked inside and a makeshift bed tucked in a corner, with two dog bowls on the ground next to it.

Several members of Stage 3’s Board of Directors said Tuesday that they were unaware the company’s former technical director, Hugo Martinez, had allowed the director of their next play, another person and their two dogs live inside the space for an unknown period of time.

Martinez declined to comment Tuesday. He now lives and works in Sacramento after being laid off from Stage 3 last year when the company decided to “go dark” due to a lack of a permanent theater.

The board kicked the people out of the building within hours, but Kennedy said the incident reinforced his opinion of the way that the nonprofit community theater was being managed.

“I was a little surprised the board was that out of touch with what was going on in the facility,” he said. “It just goes back to the way they’ve been running the theater since we’ve been involved with the building.”

How it all began

In the summer of 2015, Kennedy opened a bar called the Bourbon Barrel in the same building that previously housed Stage 3.

Kennedy purchased the entire building in 2016 with an ambitious vision for transforming it into an entertainment complex that would include the Bourbon Barrel, a renovated theater, and beer garden called the Green Dog Beer Co.

Stage 3 vacated the building in January 2017 after Kennedy made a verbal commitment that he would have the theater ready to go by that April. However, the project remains unfinished and has left the theater company without the ability to put on plays.

Regardless of the plans, Kennedy said renovating the theater was essential for safety reasons.

“They were putting on events in a building that can house over 180 people with no sprinklers, exposed wires and other safety hazards,” he said.

Kennedy put his promises into a memorandum of understanding that he sent to the Stage 3 board in May. However, he declined to sign it.

“They were trying to force me into a completion date with the facility, which was something I could not do because there were so many unknowns, including from the City of Sonora and (Pacific Gas and Electric Co.),” he said. “If I did, I would have breached the contract.”

Stage 3 was ultimately forced to find other venues for its 2017 season.

Kennedy said he spent $33,000 paying rent for alternate accommodations to house the company’s box office and storage, as well as upgrading the space on Church Street that was intended for building props and sets.

Some of the money Kennedy provided also went to helping the company put together fundraisers, which board members say are essential to the survival of the small, nonprofit community theater.

Kennedy said he involved Stage 3 employees and board members in planning meetings for the new theater, changing some of the designs at their request. He also said he had his staff of the now-dissolved Trado Restaurant Corporation find alternate venues for putting on plays, but the suggestions were rejected.

“No matter how much I offered, it was never enough,” Kennedy said. “They would always show up with their out looking for more money from me.”

Ryan Scheller, owner of Sound Extreme Productions in Sonora, said he got a similar impression while working with Stage 3 on a new sound and lighting system for the renovated theater.

Scheller said the demands were “above and beyond” what they needed, though he declined to discuss the specific costs. He also said they made requests to rent equipment and other items that had not been cleared by Kennedy.

‘I sleep very well at night’

Kennedy said the demands became too much after the board asked him to move and install two existing swamp coolers on the property in the set-building area. On July 20, he told Williams in an email that he would no longer provide financial support for Stage 3 after Sept. 1.

The Stage 3 board announced on Aug. 29 that it had laid off the company’s two full-time employees, cancelled the remainder of the 2017 season after putting on two plays, and put an indefinite hold on future productions until a new permanent home could be found.

Stage 3’s attorney, Timothy Trujillo, sent a letter to Kennedy on Sept. 28 outlining the basis for a possible breach-of-lease claim. He stated the company had exercised an option to extend its lease for an additional five years in December 2015, months before Kennedy purchased the building and assumed the lease.

Kennedy has dismissed the lease that was originally signed in 2006 as not valid.

Trujillo sent another letter to Kennedy’s lawyer on Dec. 4 that increased the damages sought by Stage 3 to more than $670,000, though it stated the company would be willing to settle for $550,000.

The amount demanded in the letter drew a fiery response from Kennedy, who sent a threatening text message to Williams early the next morning that Trujillo described as bordering on harassment.

Despite the falling out, Kennedy reiterates that he would be willing to offer the same deal he did at the beginning if Stage 3 wanted to put on plays at his venue once it’s complete.

“I sleep very well at night knowing how accommodating I was to them and bent over backwards giving them what they wanted until it just got to the point where it was too much,” he said. “I’d be more than happy to have that conversation (about coming back to the venue), but firing off threatening letters about suing me is not the way to get things resolved.”

Board responds

Stage 3 board members reiterated Tuesday that they are trying to resolve the dispute with Kennedy and have no immediate plans of filing a lawsuit. They said the $550,000 would provide them enough money to purchase a new place and most of the renovations needed to convert it into a theater.

The board has declined to say which specific buildings they have looked at for a new theater.

The company was founded in 1993 and moved to the building at 208 S. Green St. in 1996. This year would have marked the 25th season, though there are currently no plans for putting on plays.

Jim Jordan, who joined the board last summer after the negotiations with Kennedy had begun, said the purpose of going public with their dispute was to let the patrons, sponsors and advertisers know they are working diligently to get the community theater back on track.

Jordan said he believed the people who were caught living in Kennedy’s compound last August was a non-issue because it was not authorized by any of the board members and corrected immediately after they became aware of it.

Kennedy has also frequently talked about the theater’s finances in his criticism of the board.

Since 2013, the nonprofit’s expenses have exceeded revenues each year to the tune of between about $34,000 and $83,000.

Olga Jones, a board member at Stage 3 since 2014, said the community theater has always relied on donations as well as ticket sales to stay afloat and took issue with Kennedy’s criticism of the finances.

“We spend all our time begging for people to contribute, that’s just the nature of the beast,” she said. “If he didn’t want to donate to us, he could have just said that. Many people say no to us, but it’s our job to keep asking for donations.”

Jones said the board has cut back expenses to deal with declining ticket sales since 2013. Admissions generated $146,910 in revenue that year, compared to $103,280 in 2015.

One of the reasons Jones cited for the decrease was due to the board’s parting with ways with former Stage 3 Artistic Director Don Bilotti at the end of 2013. She said the board offered him $20,000 to retire because of the way he handled the preparation for plays was causing volunteers to quit.

The Union Democrat published six letters to the editor in early January 2014 from people lamenting the loss of Bilotti.

“Many people who said they were supporting Stage 3 were really supporting Don Bilotti,” Jones said.

Jones also took issue with the way Kennedy has made public statements claiming that the mayor was considering filing a lawsuit against him, because Williams currently serves as mayor of the City of Sonora.

Williams joined the Stage 3 board in late-2013 and has served as chairwoman since mid-2014. She has stated her elected position on the Sonora City Council is separate from her role at Stage 3, and she’s recused herself from every decision regarding the Sonora Armory project due to the conflict of interest.

“The mayor will never file a lawsuit, but the Stage 3 board may,” she said. “He’s convinced Connie could magically make the project go the way he wants it to go and has said that in many conversations with us.”

Jones also called Kennedy’s reasoning for not signing the memorandum of understanding as “just an excuse.” She said he could have simply added a line to the document stating that the completion date was to be determined.

Jones said the document was important because it was proof of the promises Kennedy made to the board.

“Now, we have no legal document showing the things he promised us, which he really did not follow through on any of them,” she said.

This all unfolded at a time when Jones said she believed the board believed it was making headway on the nonprofit’s recent struggles.

In 2016, the company slashed its deficit nearly in half from the previous year. Jones said they had also acquired a cultivated of new sponsors and supporters.

“We were were so excited because we were starting to turn it around, and then this happens,” she said. “It seems like the last four or five years have just been a constant uphill battle, and everytime we seem to overcome one thing, something else would happen.”

Contact Alex MacLean at amaclean@uniondemocrat.com or (209) 588-4530.