SR-121085-11BAU:GGF
Council Meeting, December 10, 1985
TO: Mayor and City
FROM: City Staff
SUBJECT: Recommendation
Negotiate an
Regarding the
Events at the
Introduction
i~ -,~
DEC 1 7 1985
Santa Monica, California
Council
to Authorize the City Manager to
Agreement with Avalon Attractions
Presentation of Certain Concert
Civic Auditorium.
City Staff has been exploring revenue-producing
possibilities for the Civic Auditorium which will increase
revenues without obligating the City to a long-term
commitment of Civic Center property, pending the development
of a comprehensive Civic Center plan.
Background
A significant decline in once-lucrative concert events
at the Civic Auditorium has adversely affected the over-all
revenue picture in recent years. There were only four public
contemporary concerts in FY 1984-'85. This decline is
attributable to greatly-increased production costs, which
regularly exceed the revenue potential of the Auditorium's
limited capacity, and has resulted in a loss of recognition
of the Civic Auditorium as a major concert facility. Exiting
modifications are being made at the Auditorium which will
11-B
DEC 1 7 1985
increase the capacity from 3,500 to 4,500 for "festival" type
events with no chairs on the main floor.
In order to insure utilization of this increased
capacity, a Request for Proposals was issued in mid-August,
1985, seeking an established promoter for a variety of
contemporary music presentations at the Civic Auditorium.
Over 25 requests were sent out and an advertisement was
placed in "Billboard" magazine, the leading music industry
publication. A deadline of October 4, 1985, was given. Only
one proposal was submitted.
Avalon Attractions, Southern California's leading
concert production organization representing most major
concert acts performing today, submitted a proposal which
expressed a willingness to expend resources to rebuild the
reputation of the Auditorium as a viable concert venue. This
proposal also guarantees the City an annual minimum of
$125,000 in rental, equipment, and services revenues from
concert presentations at the Civic Auditorium in exchange for
an exclusive right to present most types of contemporary
music at the Auditorium. This amounts to approximately 25
concerts with an average per-concert revenue of $5,000, an
increase of 25% over our previous per-concert average and an
increase of 525% over concert rental, equipment, and services
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revenues from FY 1984-85. Avalon has a similar agreement
with the Hollywood Palladium. In 1983, the year prior to the
Avalon/Palladium agreement, the Palladium had seven concerts.
In 1984 and 1985 Avalon presented 30 concerts per year at
that facility, an increase of 329.
Average revenues from parking, food and beverage
service, and novelty merchandising per concert are estimated
at an additional $7,500. For 25 concerts this would mean
total revenues to the City of about $312,500 in the first
twelve months under the proposed agreement. This compares to
total concert revenues in FY 1984-85 of approximately
$28,000. Current projections are that concert-related
revenues would increase to $62,500 without the Avalon
agreement. Therefore, it is expected that an annual increase
of approximately $250,000 would result from the agreement
with Avalon Attractions.
An agreement as proposed in this report would also make
more time available for existing Auditorium staff to develop
and solicit other types of bookings which may further expand
revenue sources.
The term of the agreement would not exceed two years,
with an optional third-year subject to further negotiation.
A six-month cancellation provision will be incorporated into
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the agreement in the event Civic Center development would
require the use of the Civic Auditorium space prior to the
expiration of the term.
Alternative
The alternative to entering into an agreement with
Avalon Attractions would be to continue the current policy of
allowing all qualified individuals and organizations to
present concerts. However, the lack of interest in staff's
Request for Proposals seems to indicate minimal interest
among qualified promoters to commit to future productions at
the Civic Auditorium. Even with the increased capacity, an
increase in concert revenues may not be forthcoming. The
success of Avalon Attractions' commitment is dependent upon
the promotion of the facility as well as the events
themselves, and they are prepared to undertake a vigorous
promotional campaign only if granted an exclusive agreement.
Fiscal/Budgetary Impact
The projected annual increase of $250,000 in concert
revenues would begin to accrue at the effective date of the
agreement with Avalon. It is recommended that no budget
adjustments occur until negotiations conclude and the
effective date of the agreement is firmly established.
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No payment to Avalon Attractions from the City would be
required.
Recommendation
Staff recommends Council authorize the City Manager to
negotiate and enter into an agreement with Avalon
Attractions, within the parameters described in this report.
Prepared by: Gary Ferguson, Director of the Civic Auditorium
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Reference Contract
No. 4659 (CCS).