sr-062767-6a1.~~
TO:
a
FROM
CITY' O~' SANTA MONICA
June 1966
The Honorable City Council
City Manager
SUPJEGT: Exhibit Hall v
66-C-39
Economics Research Associates has recommended a 47, 500 sduare foot addition
to the Givic Auditorium for exhibit purposes. A diagramatic layout of proposed
additional facilities is attached as Exhibit A, The conclusions of the research
study °were as follows:
"CONCLUSIONS
"Analysis of Santa Monica Civso Auditorium's operations to date,
and of probable demand for an enlarged auditorium complex, indicates
the addition of an exhibit hall and enlargement of existing meeting rooms
are both appropriate and economically feasible.
"The number of events and the attendance projected for the
enlarged. auditorium should provide sufficient re-venue to prod~ece a net
operating profit of approximately $131,000 annually, excluding considera-
tion of debt service and buildsng depreciation. Thss level o: operating
performance should be reached three to five years after completion of
th.e additional facilities.
"Projected use of the enlarged auditorium amounts to 751 event
days: 203 days in the new exhibit hall, 266 days in the present theater,
and 282 days in tine expanded meeting room facility. These pz•ojections
represent an increase of ,390 event days over the event sc; edale for the
fiscal year 1964-1965. ~ °' r~'
"Although the majority of projected events are commercial in
natu.e, the availability of additional facilities permits increased use of u
tine auditorium for community events and streng'ihens Santa Nonica's
ability to attract conventions. "
The study indicates that a normal year of operation after the addition of the exhibit
hall should produce a net operating income of about $130, 900 {exclusive of debt
service and depreciation}~, A direct comparison of projected income with the
proposed budget for 1966-b7 indicates that operating revenues will increase from
$140,000 to $41 b, 100, and annual operating expenses will increase from $181,620
to $285,200.
-1-
bats: .iu.ze ?.l , 19bG
To: i-:cno:~aF-.le City Ccuncil
66-C-39
ye„r Facility s.xis'tin~ Pac3lity
Percent Percent
Opa-ratinm l2Fav:~nues Amount of Tatal Operation revenues Amount o fatal
Building rerzals $238, 725 .5'7.3% Funding l:~;ntals $ 67, 000' r3.7.9%a
Cancession revenues b6,'325 l6. 1 Concessian rev~:.nues 31,000 22. 3
Parking revenues 5b, 530 13.b Par?sing revenues 2,000 17.1
i<:quipm.ent rentals 53, 920 13.0 Equipment -rentals 1'3, 000 12.9
Total $$1b,100 100.0% 't'otal $1~-0,000' 100.0%
1'ersannEl
Operation and
mai~zf:enarace
Capital equipment
$14'1,1b0 X9.5%
129,010 45.'2
15,000 5.3
Total
$2135, 200 10U, 0%
Net open ;ling income $? 30.900
Operatir.~; Expenses
Personnel
Operation and
n~ainte:nance
Capital eeiuip~aent
$1o7,~EO 59.x%
67,100 36.9
6,b~0 3.7
Total
$11,620 100.0%
I,Tet Operating Zoss $ ~,1, b20
In a nornia.l year, i2 is not anticirates: tha+, the new facility would recover debt
service and depreciation in addition to operating e;~penses. However, a nornal
year's operation sl~auld produce $10,000 to $<?5, G00 above `,,cae additional operating
cost and tine cost of debt service for the new facni;.y, A breal;-even analysis oa
th.e ne°.i~ facility is attached as E:.hibit B and D.TSdiC.aies that t'r,e n.tiv aperation will
break even (exclusive of deht service and depreciation) at about 55% off the
estimated operating revenue:. -
St is recommended that the City Councsi consider a general obligation bond issue
at the a,.pail 1967 election for the ;ourpose oz financing this facnity, l3abt service
on a 15-year 3 3J~% bond issue will range from a high of $102,500 to a low of-
$'10,312 pr year. Over the term of these bones, debt service will average
$07, 305 per yeax•, which can be financed from the projected net operatingsncozxae
a': $130,9^^>0 per year, leaving-the balance to be applied to debt servioe and
depreci.atian on the existing facility.
The reseaa•ch firma estimated a total cost of $1,0918000 for the addition, including
aa•chitectural and engineering s"ees.
i
J /
/'2 >:~i~,`l~~_t`}`C~'1/~. , ty Manager
_ ;~~Cfi
c. c. Csty Clerk
17irector of Civic Auditorium
t~.ireCtor aa` a 1nanCL'-City
Controller
City Attorney
THEATER
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SOVRCE: ECO NOMICS RESEARCH ASSO G ATES
Figure 4
DIAGRAMMATIC LAYOUT OF PROPOSED ADDITIONAL FACILITIES
TO SANTA MONICA CIVIC AUDITORIUM
400
350
300
~ 250
a
0
0
0 200
a
z
I50
100
50
0 25% 50% 75% i00%
PERCENTAGE OF ESTIMATED FINANCIAL PERFORMANCE
SOURCE: ECONOMICS RESEnRCN FSSO CIA TES.
Figure 5
BREAKEVEN ANALYSIS, ENLARGED CIVIC AUDITORIUM
EXHIBIT B