The future of Zephyr Theatre in downtown Stillwater is in question following the resignation of its executive director and the furlough of eight staff members.

Calyssa Hall, who opened the theater in 2018, last week resigned from her position as executive director. Her resignation came just days after most of the staff were temporarily let go, according to the theater’s board of trustees.

“While there was no indication of intentional financial mismanagement, it was clear there are organizational and financial challenges that must be addressed immediately,” the trustees wrote in a statement. “We as an organization are currently finalizing a plan to return the Zephyr theater to financial health and stability.”

The theater is a 501(c)3 tax-exempt nonprofit organization whose “charitable purpose is to further the arts and provide arts education,” according to documents filed with the state attorney general’s office.

During the pandemic, theater officials failed to file annual reports and supporting documents for 2019 and 2020 in a timely manner, and the attorney general’s office withdrew the Zephyr’s registration. State officials warned that “it is a violation of Minnesota law to solicit in Minnesota without being registered,” according to a Oct. 25, 2021, letter written by Charities Registrar Julie Brengman.

Officials from the Zephyr, known officially as Only a Dim Image Productions, filed the missing annual reports on Friday and paid the $150 late fee, according to a spokesman for the attorney general’s office. Theater officials also requested an extension to file their annual report ending Dec. 31, 2021, which was granted; it is now due on Nov. 15, he said.

“We are in the process of fixing this,” Hall, 31, said during an interview on Tuesday. “Like a lot of theaters coming out of COVID, it’s been really hard. We’ve been doing really well on programming, but we’ve been having trouble getting our donations to match our programming.”

The theater has received a lot of community support, she said, but “needs donated revenue to support the work that we are doing.”

Over the weekend, the board reached out to a business manager who agreed to join the organization, the trustees wrote in a statement published Monday. The manager, who was not named, is “well positioned to help us manage the theater on a day-to-day basis and to help us develop a realistic achievable plan,” the trustees wrote.

POPULAR EVENTS

The Zephyr’s popular Halloween event, the Haunted History Trolley Tours, co-produced with Wahoo Adventures and Stillwater Trolley Co., will continue this month — as will in-school programming at 18 elementary schools, Hall said. Traintrax, a concession stand located in a renovated trolley car resting on the train tracks between the Brown’s Creek State Trail and the theater, also will remain open, she said.

However, the future of the Ice Palace Maze, which had been held over the past two winters in the theater’s parking lot, is not known at this time, she said.

Tax filings show the theater had a net income of $237,000 in 2018, thanks to a large amount of grants and donations and an all-volunteer staff. But the theater ended the next two years in the red as donations fell off, and the theater apparently began paying some of its workers.

The theater lost $167,000 in 2019 and $114,000 a year later, according to its 990 annual report filed with the IRS.

It reported about $25,000 in compensation for its executive director in 2019 and $36,000 the next year, reports show.

“I’m really proud of the work that I did, and I’m proud of the work that we all did together,” Hall said. “We started with nothing and grew into this community asset that everybody really values. Even though we’re struggling financially right now, you can’t imagine the number of messages I’ve gotten in the last 24 hours from people saying, ‘There’s no way we’re not going to find the support to keep this going.’ We will reorganize, and we will be fine. There’s been a huge outpouring of support.”

Mayor Ted Kozlowski said he is one of the theater’s biggest fans.

“I really hope they can find someone to put this whole thing back together,” he said. “It’s been a huge asset for our town.”

Kozlowski said he especially enjoys the Zephyr’s “plays in the park,” which are produced in North Lowell Park in downtown Stillwater with the St. Croix River as their backdrop. “Those have been just insanely successful,” he said. “They’re so much fun. They brought in ‘School of Rock’ this summer, and my family and I went to see it. We would have seen it five times. It was so good.”

LABOR OF LOVE

Prior to starting the theater, Hall, who graduated in 2016 from the University of Wisconsin-River Falls, worked as a freelance director, musician, stage manager, production coordinator, lighting designer, technician and instructor for professional and community theaters and for the Stillwater Area School District.

On Tuesday, she said she plans to stay involved with the theater on at least “a personal basis” and “continue to be dedicated to the artists and the community and everything that we’ve built, however that looks.”

The Stillwater Depot building was the headquarters of the Zephyr dinner train for more than 20 years. In 2011, the owner of the dinner train, Dave Paradeau, sold the train corridor to the Minnesota Department of Natural Resources for the Brown’s Creek State Trail; the building has not been a depot since 2009.

Hall said the theater has been a labor of love for her family since 2016; her father, Franz Hall, the theater’s operations manager, is one of the furloughed staff.

“When we first walked into the building, there was magic about it — that’s why we’ve been working 100 hours a week for five years,” Hall said. “We’ve had so many beautiful things happen. Even though we’re small, there are actors that want to work with us because there’s just like this energy and magic in this building.

“Fortunately, there is a group of people who are not going to give up on this,” she said. “It’s like anything worth fighting for: It isn’t going to be easy, but we’re going to keep fighting for it as long as it takes.”

Staff writer Josh Verges contributed to this report.