Opera Boston to close

Opera Boston, the city’s second-largest opera company, is closing its doors because of a $500,000 budget deficit its leaders say could not be overcome.

The stunning announcement, occurring amid considerable conflict within the organization, marks the end of a company that since its 2003 founding had grown steadily. Earlier this year it celebrated a Pulitzer Prize for music, won by composer Zhou Long, for the opera “Madame White Snake,’’ which the company commissioned and premiered.

“I’m shocked,’’ said a tearful Carole Charnow, the company’s founding general director and currently the president of the Children’s Museum. “I don’t know what to say. I’m in a state of shock. It’s like a death for me, for the city, all of us.’’

Opera Boston has a $2.5 million annual operating budget compared with Boston Lyric Opera’s $6.7 million budget. BLO, which produces more mainstream operas, is financially sound, according to the company.

John Hess, who teaches English at the University of Massachusetts Boston and has subscribed to both opera companies for years, said he was saddened by Opera Boston’s closing. “You get the chestnuts in one company, and the more adventurous with Opera Boston; you don’t usually get to see the things they do.’’

Opera Boston’s demise comes after a conflict within the organization’s leadership. At least six of 17 members of the board of directors did not attend the Tuesday night meeting during which the vote was taken to disband the company.

Lesley Koenig, who succeeded Charnow as general director in January, was in California Thursday when she received a call from chairman Winifred Gray and president Gregory E. Bulger telling her that her job, and eight others, would be eliminated Dec. 31.

Koenig, in an interview yesterday, said she disagreed with the decision to shut down Opera Boston, and that the company could have been saved.

“This is a tragedy for Boston,’’ said Koenig. “I came in and made every effort to bring the institution to the next stage. And I’m very sorry the board has made this decision.’’

Stephen M. Weiner, one of a group of board members who recently resigned, said he agreed with Koenig that Opera Boston could have survived. He said he resigned over disagreements with the board’s leadership and the unwillingness by longtime members to allow newer board members to help work on the company’s financial problems.

“There were a number of people who, once they began to realize there was a financial problem, wished to have it addressed,’’ said Weiner. “They were not consulted.’’

Bulger said he would not discuss the board split and termed it a “private issue.’’

Randolph Fuller, one of Opera Boston’s founders and currently its president emeritus, denied that there were financial problems with the organization when contacted earlier this month. He angrily hung up on a reporter when contacted Thursday to discuss the company.

The closing of Opera Boston is due to its struggle to raise money from individuals, the box office disappointment of its October season-opening production of “Béatrice and Bénédict,’’ and the failure to land a hoped-for grant from a foundation, said Bulger.

“It was a very sad decision for us all to make,’’ he said. “This is not something we take lightly. But if we can’t pay the staff and we can’t pay the rent, we can’t move ahead.’’

Opera Boston emerged from the Boston Academy of Music, which was remade into the current company in 2003. Over time, the company gradually increased its budget, repertoire, and ambition. After Charnow left, in 2010, the company hired Koenig, a former stage director at the Metropolitan Opera and general manager of the San Francisco Ballet.

The company’s semistaged First Night production of Mozart’s “Bastien und Bastienne’’ will go on as scheduled, at Emmanual Church, but the remainder of the season has been canceled.

Koenig inherited a $220,000 deficit in the most recent fiscal year, which ended last July. But the funding gap has grown to $500,000, Bulger said, and the planned February production of Michael Tippett’s “The Midsummer Marriage’’ was to have been the company’s most expensive yet, tapping out at more than $500,000.

Earlier this year, some of the freelance musicians engaged by Opera Boston filed a complaint with the state attorney general’s office because they had not been paid, a spokesman for the office confirmed yesterday. The claim was resolved because the players were eventually paid.

Bulger said Opera Boston had been counting on a grant from a foundation, which he would not name, that would provide in “the hundreds of thousands of dollars.’’ The foundation decided not to fund Opera Boston, he said.

Gray, one of the company’s founders and a longtime donor, said a last-ditch effort was made to raise money from a few board members, but those supporters ultimately decided not to help. She declined to name them.

“We had been holding out hoping that might happen,’’ she said.

Opera Boston’s closing is the latest blow to local opera lovers. Boston has often struggled to support the discipline as consistently as cities of similar size. The original Boston Opera House built on Huntington Avenue in 1909, was knocked down in 1958. Sarah Caldwell’s brilliant but financially challenged Opera Company of Boston folded in 1991. (The Boston Opera House theater has no connection to Opera Boston.)

But opera lovers had been encouraged by the growth of Boston Lyric Opera, which sold about 23,000 tickets last year, and Opera Boston.

Charnow said that the company’s closing speaks to the city’s larger problem.

“I think it’s not an opera town,’’ she said. “I have to be honest. It’s been hard from the very beginning.’’

Esther Nelson, BLO’s general and artistic director, said that Boston is a difficult place to raise money. There simply aren’t enough foundations and corporations, she said.

She has already been talking to Bulger to see if BLO can offer discounts to upcoming productions to Opera Boston supporters, but acknowledges that the younger company’s fans are going to be upset.

“This is a tremendous loss to the community,’’ said Nelson. “To have two different opera companies with two different missions is of great benefit to the opera-loving community.’’