Why iO founder Charna Halpern is gambling $7 million on comedy in Chicago
On a winter afternoon at the iO improv comedy club in Wrigleyville, three classes are in session, a tiler needs to be paid for the bathroom he just repaired and founder Charna Halpern has just returned from another round of negotiations for a $7 million bank loan she’s about to use to take the biggest gamble of her life.
Halpern is the sole owner and chief darling of an improv empire that grosses more than $2 million annually. At any given time she has about 1,000 students in Chicago and Los Angeles, the best of whom perform live on her stages in front of audiences who Halpern hopes make repeat trips to the theater bar. Pricey classes, cheap labor, hefty bar receipts — add in a smattering of corporate clients, and you have the business model that Halpern built. It is used in one form or another by every major long-form improv theater company in America.
Halpern is 60, an age when many of her contemporaries would be polishing their trophies and feathering their beds. Instead, she’s taking out a huge loan to buy a warehouse on the near North Side with 35,000 square feet of space. It’s twice the size of her current building. In place of the Wrigleyville spot’s two theaters, her new location will house four 200-seat cabaret-style theaters, plus separate bar and eating areas, an outdoor beer garden and a dedicated event space for weddings and corporate functions. In a business where empty seats are terminal and economies of scale are elusive, the risk is enormous.
“This is insane,” she acknowledges. “Of course I panic.”
To make it work, Halpern will need to better than double her sales. By her own estimate, expenses at the new theater will run between $50,000 and $60,000 a month, as opposed to the $26,000 she pays now. She knows what she’s up against. “The first thing I checked when I was doing this was with the legal department and my accountant: ‘So if you go broke, can they take your home, can they take your IRA?’ ” Halpern asked. “They said no. I said, OK.”
Should the business founder, it’ll be Halpern alone on the hook. She’s refused to take on any partners, and nobody is co-signing on the loan. She’s putting up the $1.5 million down payment herself. Improv may be a team sport, but for Halpern, business is not. “[Second City founder] Bernie Sahlins told me a long time ago, ‘Never take a partner. Once you get a partner, you’re not in charge anymore.’ ”
This isn’t the first time that Halpern has skipped a few rungs on the ladder. In 1995 Halpern was clearing $50 a week running CrossCurrents, a comedy club on Belmont Ave., when she signed a monthly lease for $3,000. It scared her. “In those days, it was like, What? I have to pay $3,000 a month? I’m lucky if I have $30 a week,” Halpern says. It’s that very theater that she’s now leaving.
If there’s a breeze at Halpern’s back it’s coming from Chicago’s thriving comedy scene. She sells out most of her 30 weekly shows and has a waiting list for her classes that’s more than a hundred deep. Classes at iO cost $275 and up for each of the five levels. In the summer, when Halpern’s multiweek immersion courses draw students from all over the world, she spends more than $10,000 renting extra space from nearby theaters to accommodate the demand. She still has to turn dozens away.
Trouble is, the excess demand begets competition. When she moves into the new theater at 1501 Kingsbury, she’ll be facing off against Jim Belushi, whose Comedy Bar is two miles away in River North, and Second City, just a mile east in Old Town.
Halpern has been scouting locations for an iO theater for nearly a decade. The current building for iO is on a strip of Clark that’s been targeted for demolition. Taking its place will be Addison Park on Clark, a mixed-use development first approved by the city in 2010. Neighborhood resistance has stilled the wrecking ball for now, but once the development plan emerged Halpern knew what she was looking at . “[Moving] was going to be expensive anyway,” she says. “So I figured what the hell, I might as well go bigger.”
That willingness to roll the dice on her business perhaps stems from Halpern’s improv philosophy. “She lets you try and fail and try and fail,” says Tara DeFrancisco, an iO performer and teacher who moved from Columbus in 2000. “She says, ‘Falling is beautiful. Break some bones.’”
The iO students get lots of chances to bomb because, unlike at other training spots, Halpern puts them in front of an audience. That gives Halpern a steady stream of performers who are willing to work for free or for very little pay. It can pay off big for the students too: Once or twice a year, with little fanfare, Halpern selects 15 of them to audition for Saturday Night Live producer Lorne Michaels. Cecily Strong was studying, performing and working odd jobs at iO last year when she took a turn in front of Michaels and won a place on the show.
That exposure is “invaluable,” says Chicago improviser David Pasquesi, whose “T.J. & Dave” show will occupy one of the four theaters at iO’s new digs. Students tick off the names of famous iO alumni — Mike Myers, Tina Fey, Stephen Colbert — with a practiced pride. Success feels attainable because Halpern is by all accounts a comedic kingmaker. She and the late writer and actor Del Close wrote “Truth in Comedy,” an improv bible published in 1994 and now in its thirteenth printing. Before that Halpern famously helped Close put his life together after a long fight with substance abuse. “She rescued Del Close and all the genius that came with him” says Kelly Leonard, executive vice president of The Second City. Without Halpern, Leonard says, “I don’t think there would be the same improv scene today in Chicago.”
She’s a point person for advertising, television and film agents. Halpern wrote and sold a screenplay about the beginnings of Chicago improv last year, and she’s creating pilots for network television. DeFrancisco says that when improvisers from out of town drop by and see Halpern at the club, “it’s like Beatlemania.”
In addition to trading on her reputation, Halpern garners exposure for her students by keeping ticket prices low. She charges about $12 per show and often lets regulars in for free. The larger the audiences, the more students she can put on stage. And a lot of folks who start out watching end up taking classes. Perhaps more importantly, Halpern keeps prices low as a door-buster for the bar. Warm bodies, parched throats.
Though booze is one of the pillars of the long-form improv business that Halpern pioneered, she loses sales to the densely crowded bar scene in Wrigleyville. Neighboring taverns on Clark Street plaster iO specials all over the walls. Though her bars currently adjoin iO’s two stages, Halpern has no dedicated drinking area. She finds herself glumly shooing would-be bar customers out her doors into the arms of the competition. But in her new space on Kingsbury, a separate bar and kitchen will keep customers tippling for longer.
There are other advantages to moving to the bigger space. She’ll put on as many as 80 shows a week, as opposed to the 30 she does now. The larger space will allow her to accommodate corporate clients like Google and MillerCoors, which dispatch hundreds of employees to learn the tenets of improvisation: trust, communication, timing and memory.
When analyzing her odds of making the new theater work, Halpern is filled with the confidence and urgency of someone who directs an army. People come to study with Halpern and end up working for her, in the office, behind the bar, in the box office, in the classroom, on stage. She has 60 employees in Chicago, most of them part time. “When I told people I finally found a place, I saw the relief. It wasn’t like, ‘Oh, good, congratulations,’” Halpern says. “It was like: ‘Thank god.’”
On the cushy couch outside her shared office, Halpern worries aloud about the investment she’s making in the new building. Passing colleagues remind her of the reasons for the move: the money she spends renting extra space during the summer, the oversubscribed classes, the bar receipts walking out the door. She listens and nods along, sliding over to make room on the couch for one of her oversized dogs.
“I don’t think it’s going to happen in one day,” she says. “I think I’ll be eating cat food for a while.”
To find out how Second City, Sean Flannery and four other Chicagoans are running their comedy businesses, check out our list.
Photo by Sara Mays