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Santa Monica
City Council Meeting: March 8, 2011
Agenda Item: ~ ~'
To: Mayor and City Council
From: Barbera Stinchfield, Director, Community and Cultural Services
Subject: Business Terms and Authorizations related to a Public/Private Partnership
with the Nederlander Organization for the Use and Programming of the
Santa Monica Civic Auditorium
Recommended Aetion
Staff recommends that the City Council:
1. approve the negotiated business terms for the use and programming of the Civic
Auditorium by the Nederlander Organization; and
2. authorize the City Manager to negotiate a presenting agreement with the
Nederlander Organization.
Executive Summery
Both the Civic Gdhter Specific Plan (CCSP) and the City's cultural plan, Creative
Capital, place a high priority on renovation and upgrades to the landmark Santa Monica
Civic Auditorium to allow for a desired future program that provides high quality,
community-responsive cultural events. In exploring ways to reposition the Civic
Auditorium as a vital cultural hub within the Civic Center area, the City issued a Request
for Qualifications (F2F0) for potential partners. Based on its response to this RFO, on
September 22, 2(709, the Nederlander Organization (Nederlander) was approved by the
City Council and the City Manager was authorized to negotiate business terms based
on specified Council-approved parameters. After extensive analysis of models and
options as well as the proposal presented by the Nederlander, the attached term sheet
(Attachment A) was negotiated. This staff report requests approval of the business
terms in the proposed term sheet and authorization for the City Manager to finalize a
presenting agreement with the Nederlander based on these terms. The financial
impacts of the proposed actions are analyzed as a part of this report.
Background
The Current Model
Today the Civic Acuditorium (Civic) functions as a 3,000 seat, full service rental facility
which features a range of events from consumer shows, concerts and community
events, to filming and award shows, with the majority of the use coming from consumer
shows. In FY 20E39-10, the Civic Auditorium hosted 91 events for a total of 272 use
days including dais required for set-up and tear down. Of the 91 events, 50 were
contracted events and 41 were City events. The Civic Auditorium is staffed with a full
management team; permanent event staff, and a number of as-needed staff for specific
events. This level of staffing is needed due to the predominance of consumer and
trade shows that take a great deal of staff time for set up and tear down and require
both general and specialized trade skills to achieve the high level of customer service
for which the Civic is known. The Civic Auditorium was established as a City enterprise
fund and historically has operated without a General Fund subsidy. However, per the
Five Year Forecast; the Civic Auditorium is projected to require a General Fund subsidy
of approximately ~2M in FY 2011-12 and FY 2012-13
Community Contest
The Civic Auditorium was designated a City Landmark by the Landmarks Commission
on November 12; 2001. That decision was upheld by the City Council at its April 9,
2002 meeting. Ih June 2005, the City adopted an update to the 1993 Civic Center
Specific Plan (CCSP) setting forth planning policies and land use and development
regulations for the 67-acre area bounded by Pico Boulevard on the south, Fourth Street
on the east; Ocaan Avenue on the west and Colorado Avenue on the north. The
southwestern corner of the Civic Center is defined as the "Civic Auditorium District" with
the Civic Auditorium as its cornerstone, to be bordered by open space as well as an
early childhood ecftacation center and additional cultural facilities. The CCSP identifies
the need to make improvements to the Civic Auditorium as a venue for large musical
and cultural performances as well as exhibitions and community gatherings. Further, it
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calls for the surface parking to be consolidated into above and below ground parking
thus freeing up the land for park purposes.
Creative Capital, approved by City Council on February. 27, 2007 committed the City to
a cultural use of the Civic Auditorium in line with the community's vision for the facility.
Creative Capital suggests that the recommendations regarding the Civic Auditorium in
the CCSP be refined to clearly reflect specific cultural uses envisioned by the
community. That vision includes the need for significant upgrades to the building and its
technical equipment in order to support its repurposing from primarily an exhibition hall
to primarily a cultural venue or performing arts center, highlighting concerts, theatrical
shows and other special events.
Partnership Opparlunities -- Selection of the Nederlander Organization
In March 2009, City Council authorized the issuance of an RFO to solicit qualifications
from non-profit and/or for-profit entities interested in participating in a public/private
partnership for the cultural use and programming of the Civic Auditorium. In response
to the RFO, Nederlander provided the City with a responsive submittal. On September
22. 2009, the City Council authorized the City Manager to negotiate with Nederlander
based on the extent to which the submittal met the qualifications stated in the RFQ.
Nederlander was selected based on its years of experience, financial capacity, and
expertise in working with historic facilities and the public sector as well as its national
reputation for the quality and breadth of its offerings product, from Broadway
productions to cdncerts. The Council also gave direction to staff regarding specific
parameters to use as the basis for negotiating a potential agreement with Nederlander.
Nederlander, established almost 100 years ago, is one of America's premier
entertainment companies with the ability to secure top headline entertainment based on
long-term industry relationships. Nederlander is one of the primary theatrical producers
and theater operators on Broadway, whose production list includes shows such as Lion
King, Wicked, Rent, Avenue O, Stomp, Riverdance, Evita and Chicago, among many
others. Nederlander also has a major concert programming division that works with a
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broad array of talent across all musical genres, including such superstars as Sting,
Bruce Springsteeh and Bob Dylan, as well as Erykah Badhu and Kristin Chenoweth.
Further they have extensive experience working with municipalities and other
government entities as well as with landmark facilities. In California, they have
agreements to operate or program the Greek Theater in Los Angeles, the Santa
Barbara Bowl, the Grove in Anaheim, the San Diego Civic Theater, and the Civic
Auditorium and Gehter for the Performing Arts in San Jose. Nederlander's standing in
the industry and status as an international promoter are critical to repositioning the
Santa Monica Civic Auditorium as a destination venue for music and theatrical
productions; it is liltely not likely the City can achieve this on its own.
Discussion
Analysis of Venue Management Models
In March 2010, the City received a detailed proposal from Nederlander to partner with
the City to achieve the desired repurposing of the Civic Auditorium. The City retained
the services of the Strategic Advisory Group (SAG), a national consulting firm with
extensive expertise in convention and performing arts centers, to assist in the analysis
of the proposal; development and review of the related financial models, and in
benchmarking the proposal in relation to agreements in place at facilities around the
state and country: SAG's analysis confirmed the benefits and desirability of the
proposed partnership. The consultants prepared a comparative analysis of the
proposed model with the most common operating models for these types of venues.
As part of this analysis, they also looked at associated staffing levels, levels of risk, and
economic benefit: The analysis is summarized in the following two charts. The blue
section in each focuses on the proposed model for the Civic Auditorium.
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TYpIGAL YEM1IUE MAIVJCCiEME NF MODEIS
Risk on
Venue
Booking Calendar Operation
structure Operator Agent Control Compensation s Comment
Open Venue f' City Open City Presenter Takes City Current Model
Booking Risk on Events and
Pays Facility Rent
to City.
Exclusive City Exclusive City or Presenter Takes City Current Model
Presenter with one Presenting Risk on Events and with Exclusive
Presenting Organization Pays Facility Rent
Organization to City.
Exclusive City Exclusive Presenting Joint Venture City Model
Presenter/Joint with one Organization Based on Split of Proposed
Venture Presenting All Net Event
Organization Revenue (Shared
Event Risk)
Management 3` Party Open or 3` Party Operator is Paid City For example
Agreement Operator Exclusive Operator Base Fee. Nederlander,
Presenting SMG, Global
Agreement is a Spectrum
Separate Financial
Arrangement
Privatization 3` Party Open or 3` Party Lessee Long-term
Operator Exclusive Operator fixed Lease Lease with 3`d
Payment Party at Risk
The main advantages and disadvantages of these typical models in relation to the City
of Santa Monica and the Civic Auditorium are summarized in the next chart.
MODE! '" ^~ ADYANTkGES
_., 'DISADVANTAGES .'.
~
Open Venue . City controls both the calendar and use •
Very difficult to attract concerts and theatrical
for City and community events performances without concert and theatrical
`- • Keeps some or all Civic Auditorium staff connexions and a more open calendar; may require
in current positions additional staff with more concert and theatrical
expertise
• Does not achieve programming priorities
• Expensive alternative in terms of City subsidy due to
greatly reduced event revenues because venue only
gets rent and does not participate in larger net
revenues
Exclusive • Top notch promoter/presenter helps to • .Current Civic Auditorium staffing level may be
Presenter athleve programming goals downsized; Presenter may require that number of
• Cify participates in calendar decisions community and City events be limited
• Cliiit serves as catalyst for increased • Since the Presenter is merely renting the facility for
etdnomic activity in hospitality sector events, it may not be "fully invested" in the success
di3e to increased event of the venue
activity/attendance • Expensive alternative in terms of City subsidy due to
- • Keeps some or all Civic Auditorium staff greatly reduced event revenues because the City
in torrent positions only gets rent and does not participate in larger net
revenues
Exclusive Top notch promoter/presenter is Current Givie Auditorium staffing Level will be
Presenter/Joint invested in achieving programming goats dawnsized;Presenter'mayrequlreahatthenumber ':
Venture ~ Ctty participates in calendar decisions of community/City events be.limited
loidt venture benefits from strong ~ •' ~ As venue'.operator City will be at risk for IOQY eat its
cdtlees$ions and other revenue ~` overheadand, depending on the terms of the
opportunities agreement,any loss in the event of negative net
Civic serves as catalyst far increased event revenue fluttuations
ecohomicactivityinhospitalitysectar • Any downside riskbomby}Vpartnerwoufd
tlGe to increased event .typically tie accompanied by additonat base
attivity/attendance compensation
• Keeps some CivicAUditorium staff in
currentpasitions,
Cit'ycanbepartiailyreimbursedfo[use,
of additional City staff for speck events
R@duced Citysubsidy over other models
above because City is participating as the
promofer,assumingmore risk onshows
botalso;gamering more rewards:
Management - Opp~ations would be handled by an Atop notch promoter/presenter still needed to
Agreemert~ experienced third party achieve programming goals
• Civic serves as catalystfor increased CivicAuditorium staff would need to be relocated
economic activity in hospitality sector or laid-off
due to increased event • Operator might lose sight of City programming goals
activity/attendance • City generally loses control over many decisions
such as programming, operational policies, staffing
• Two fees are being paid by the City-one for
management of the facility and a second for the
show promoter or presenter
• City would still be fully at risk for all operational
costs (venue manager presents City with annual
operating budget)
Privatization Top notch promoter/presenter achieves City would need to identify a top notch promoter
programming goals interested in leasing, repositioning the Civic, and
• Civic serves as catalyst for increased bearing all risk
etdnomic activity in hospitality senor • Civic Auditorium staff would need to be relocated
due toincreased event or laid-off
activity/attendance Lessee has full control and all risks and might lose
• City would have certainty regarding its sight of City programming goals
financial obligation/benefit • City would relinquish control overthe facility
• Financial terms would be less favorable • In exchange for financial certainty, City would
to the City in the early years when risk is generally not benefit from any positive or increased
highest and more favorable once the revenue opportunities
venoe has completed repositioning
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The Model Proposed by Nederlander
Nederlander proposed the Exclusive Presenter/Joint Venture model, as highlighted
above. The model was developed taking into consideration the negotiating parameters
previously approved by the City Council and Nederlander's desire to meet both its goals
and those of the City. The structure invests Nederlander, a top industry promoter, in the
success of the venue and ensures that the City shares in that success. The City would
enter into a joint venture for a term of 10 years (an initial five years, with a five year
renewal). The City would grant exclusive presenting rights to Nederlander, with the City
and Nederlander sharing the net event-related revenue from this joint venture. The City
and Nederlander would work in tandem and combine all of the event-related revenues
and expenses to calculate the net event-related revenue, or Contribution Margin as it is
referred to in the term sheet. The net event-related revenue would then be split
between the City and Nederlander based on specified percentages, with the City
retaining the majer share. From its share of the net revenue, each entity would then
cover its own overhead costs: Nederlander would pay for the costs of acquiring the
talent for concerts and theatrical shows and the City would pay the costs of venue
operations. Generally, the goal of this net revenue sharing arrangement is to provide
Nederlander with a reasonable base fee consistent with the services being provided;
plus an incentive fee if it can make the venue perform at high levels. Since Nederlander.
would be responsi[le for booking the venue and would get compensated based on the
venue's success; Nederlander would be a highly invested partner with the City and,
specifically, in the Civic Auditorium's event-related financial success.
Proposed Terms
An interdepartmental staff team from the Departments of Community and Cultural
Services, Finance; Housing and Economic Development, Human Resources and the
City Attorneys Office, with the assistance of SAG, negotiated the proposed term sheet
(Attachment A). The terms reflect specific changes from Nederlander's original proposal
in that it provides additional incentives for Nederlander to increase revenues through
strong pertormance and includes specified City event staff in the event-related costs
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shared by both parties. The changes also provide for the City to retain 100 percent of
specified event-related revenues such as event parking and a theater preservation fee.
The proposed terms will allow the City to achieve both substantial public benefit and
realize a large number of the initial parameters that Council approved when authorizing
negotiations. The degree to which the proposed model addresses the major Council-
approved negotiating parameters is discussed below.
7. Ensure that the programming and operation of the Civic Auditorium are
frnancially sustainable over time
Financial projections were developed to analyze the proposed model,
determining the net event-related revenues under various scenarios, the
Nederlander and City share of those revenues and the impact on each partner's
bottom line: A summary of these projections are included as Attachment B.
Nederlander Share: Under the proposed agreement, annually Nederlander
would receive 40% of the first $500,000 in net event-related revenue (or
Contribution Margin), 15% of the next $1 M, 30% of the next $750,000 and 40%
thereafter (anything over $2.25M). Nederlander would need to create at least
$500,000 ennually in net event-related revenue in order to earn what is
essentially a base management fee of $200,000. Bearing in mind that
Nederlander would incur a variety of significant expenses in order to deliver the
services, rrtiJCh of the initial base fee will be used to pay these corporate
overhead expenses, including for such services as strategic positioning, calendar
management, buying talent, advertising management, Ticketmaster coordination
and event day participation. Per SAG's analysis, this projected $200,000 is
considered a reasonable base fee for this venue given the level of programming
and coordination involved. After the first three year period, Nederlander could be
terminated if it failed to achieve a net gain for any two consecutive year period.
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Reduced fifty Subsidy: The City would receive the remainder of the net event
related revenue, equating to 60% of the first $500,000 in net event related
revenue, 85% of the next $1M, 70% of the next $750,000 and 60% of anything
over $2.251VI. The various financial models developed to analyze this business
model included the baseline scenario developed by Nederlander, a pessimistic
scenario (1ij% and 20% less net event-related revenue) and optimistic scenarios
of 10% and ~0% more. Ih all cases, the City's overhead (of which 2/3 are staffing
costs) are such that the venue would still require an annual subsidy ranging from
$0.6M to $1:7M. The cumulative subsidy range over the ten year term would be
between $$:7M to $14.7M versus a projected cumulative subsidy of over $32.9M
over the same time frame under a "status quo" scenario. This is a significant
reduction of $18M to $24M over the ten year term. The need for a continued
subsidy is partially due to the negotiating parameter to retain as many existing
City staff as possible -resulting in salary rates and benefit levels significantly
higher than private sector industry standards - as well as the establishment of a
new annual dapital outlay contribution of $500,000 that will ensure that funds are
available to properly maintain the facility over the long term.
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It is important to note that a majority of municipally-owned performing arts
facilities operate with a subsidy in order to support the desired community
programming and events. According to a survey by the International Association
of Venue Managers, the average annual operating loss of the 25± theaters with
over 2,500 seats (average was 2,800 seats) that responded to the survey was
about $9017,000. While some theaters actually turn a profit (24% responding to
the survey reported earning a profit), in SAG's experience these would not
generally be public facilities but rather would be private venues that 1) are in a
market position to host a strong event mix focused on profitable events (versus
any community uses) and 2) operate with very lean staffing and operating
policies.
In addition' to reviewing the above study, SAG identified comparable municipal
facilities that are similar in size to the Civic, finding that the vast majority do
require a §tabsidy, particularly if they are associated with community uses and
cultural programming. Some venues require heavy subsidies. Examples of
facilities with annual operating subsidies include:
Operating
Seats Profit (Loss)
New Jersey Performing Arts Center (Newark, NJ) 2,750 ($6,000,000)
Cerritos Centerforthe Performing Arts (Cerritos, CA) 1,800 ($3,300,000)
Oscar MayerTheatre (Madison, WI) 2,200 ($1,500,000)
GusmanCenterforthePerformingArts(Miami,FL) 1,567 ($1,400,000)
Van Wezel Performing Arts Hall (Sarasota, FL) 1,736 ($1,000,000)
Academy of Music (Philadelphia, PA) 2,900 ($250,000)
Average 2,159 (2,241,667)
City-wide ~oonomic Impact. The City can anticipate a substantial increase in
economic activity, primarily in the hospitality sector, as a result of repurposing the
Civic Auditorium due to spending by an increased number of attendees at an
expanded range of Civic Auditorium events. SAG did a general analysis of the
projected oconomic impact of a repurposed Civic Auditorium which shows an
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anticipated increase of approximately 95,000 attendees in year seven of this
proposed agreement over last year's attendance numbers (FY 2009-10), with an
estimated increase of almost $18M in combined direct. spending and indirect
spending. Direct spending includes actual spending by event attendees and
sponsors on such items as hotels, food and retail purchases, and indirect
spending represents the multiplier effect of a dollar spent in the economy
(Attachment C). Furthermore, the renovated Civic should be a strong anchor
supporting the planned development in the area by providing confidence in its
long-term ~iltality and sustainability and by attracting tens of thousands of visitors,
many of whom will stay overnight.
2. Maximize the number and diversity of high quality culturaUentertainment options
available et the Civic Auditorium
Under the proposed model, Nederlander would be subject to termination unless it
delivers a minimum of 200 events/performances in the first 39 months of
operation, with no less than 40 concerts, 40 legitimate theater performances and
40 special events -- versus the current operating model which in 2009 had 25
consumer shows and 4 trade shows, fewer than five concerts and no legitimate
theater. The numbers of proposed events/performances would ramp up over the
term of the .agreement. Nederlander would use its influence as one of the
leading promoters in the industry worldwide to bring top name entertainers along
with touring Broadway shows and other theatrical productions as well as a range
of select special events to the venue, building upon their success up and down
the West Coast, including in cities such as Anaheim, San Diego and San Jose.
This range +3f programming simply cannot be achieved by City staff alone without
an experienced and connected presenting partner.
3. Ensure that the Civic Auditorium will remain available for community use.
Under the proposed term sheet, the City reserves the right to use the Civic
Auditorium at City expense contingent upon calendar availability. This would
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allow the Gify to retain existing important community uses such as Stairway of
the Stars and the Santa Monica Symphony with no additional impact than these
events currently have in terms of the bottom line. The financial models
developed assume that the Civic would continue to be available for a limited
number of Gity supported community events each year. Reasonable limitations
and guidelines would need to be developed to ensure that the calendar has the
available etes to book the revenue generating programming. In addition,
Nederlander is committed to working with community organizations to develop
innovative programming partnerships to expand the cost effective community use
of the Civie: For example, Nederlander has suggested developing a `Pops'
concert series with the Santa Monica Symphony or a musical theater instruction
program fot young people in conjunction with local schools.
4. Ensure thot any advertising or sponsorship arrangements are compatible with
City precedent and policies
The financial models assume revenue from standard and non-intrusive types of
sponsorship agreements such as the pouring rights for concessions, and
promotions with local businesses. However, it specifically excludes possible
revenue froth various opportunities related to title sponsor naming rights which,
though potentially lucrative, were deemed to be incompatible with past City
precedents: However, the various forms of naming rights and signage related to
event sponsorships-could be considered in the future if the City Council chose to
pursue it iri arder to increase the net event related revenue and thus reduce the
City's operating subsidy. It is estimated that $100,000 to $200,000 in additional
revenue could be realized annually from more aggressive naming rights and
sponsorship sales, and potentially more. Given leeway, Nederlander is skilled at
developing innovative sponsorship initiatives and has the industry contacts to
capitalize ort them. Specific direction from the City Council related to the City's
limitations/parameters in this area would assist in finalizing the Nederlander
agreement so that the sales team will have clear ground rules.
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It should also be noted that the City has approached the Civic's renovation and
ongoing operations as solely a City function and has not included a philanthropic
approach to fundraising. Many cities create structures that rely on such
philanthropic support, such as foundations or non-profit boards, but these
structures are typically associated with the support of specific performing arts
such as ballet, opera, or symphony. While the Civic currently and is planned to
host a few symphony events, future event programming is envisioned to be
geared primarily to mainstream concerts, Broadway-style theatrical shows and
other special events, such as awards shows, consumer/trade shows, and
corporate events.
5. Ensure that, as a result of this agreement, existing staff at the Civic Auditorium
maintain eit~ployment comparable to their current employment status
In order to yield the strongest financial position for both the City and Nederlander
while still providing the full range of events desired by the public, the proposed
model calls for "lean City staffing," i.e., keeping a core group of approximately 10
to 12 current Civic staff positions to perform management and event-related
functions, with Nederlander overseeing sales, box office, and some production
staff and bringing in additional event-related staff as needed depending on the
nature of the event. Nederlander would bring in prior Civic event staff for specific
events as appropriate. This staffing model is recommended as it provides the
appropriate staffing level for the type of programming mix envisioned at the
renovated venue. This would reduce the number of City employees working at
the Civic from the current level of 27 permanent and 14 as-needed staff to 10 to
12 permanent employees: In FY 2009/10, the as-needed staff hours ranged from
a low of 3'i5 hours for an Event Operations Attendant to a high of 1551 hours for
an as-needed Event Attendant I. It is anticipated that this transition would
happen over time prior to the closure of the Civic in 2012. The annual staff cost
differential between the proposed "lean staffing" model and the current level of
staffing is approximately $1.3M in 2010 dollars. The impact of this cost
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differential in terms of City cost savings will increase over time due to increased
fringe benefiit factors.
If the City Council were to pursue the lean staffing model, the City's Human
Resources Department proposes to implement the following measures in order to
address the staffing parameter set by the City Council in its earlier discussions.
Strategies take into consideration the building's closure for renovation projected
to begin in fall or winter of 2012 as well as the longer-term staffing needs once
the renovated Civic reopens in 2014.
Strategies include:
1. Deduction in staff by attrition over the next 18 months prior to closure
of the Civic for renovation. As current staff members retire or leave,
eliminate the positions and utilize temporary staffing by event.
2. Actively recruit and prepare Civic staff for other vacancies within the
City as they occur. Also fill in behind those who transition to other
positions with temporary staff at the Civic Auditorium prior to its
closure.
3. Vktork with Nederlander to include former Civic employees in their
service rosters if feasible.
4. Bring in an outplacement service to assist impacted employees with
preparing for outside employment.
5. Consider appropriate severance packages for long term employees
who volunteer to leave early.
As noted above, if a model is adopted that does not include such staff reductions;
the City subsidy will be substantially higher than projected under the proposed
model.
6. Ensure thdt sufficient capital investment will be made to the facility to support its
proposed use and ensure that adequate reserves are projected to maintain the
facility over time
The financial models developed for anticipated future operations include a ticket
surcharge, which is a typical fee charged at the point of sale and is considered
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an event-related revenue item to be shared by both parties, Nederlander and the
City. If the City Council decides to so, a facility preservation fee may be imposed
over and above the ticket surcharge that would go solely to the City to support
maintenance and repairs and capital improvements over time. The financial
models assumed an annual capital outlay by the City of $500,000 (inflated) for
this purpose:
In addition to ongoing capital outlay needs, the fifty year old Civic Auditorium is in
need of major renovation including substantial earthquake retrofit and ADA
accessibility improvements. In order to function effectively as a destination
venue for high-quality theatrical and musical performances, everything from the
sound system to the lighting booth, the seats to the dressing rooms, the
bathrooms to the lobby also need major improvements. The proposed 10 year
agreement with Nederlander is predicated on the City making the requisite
capital investment to upgrade the facility. Nederlander has substantial experience
in the renovation of historic venues including the Greek and the Pantages and
has offered the City its assistance in this capacity at no cost to the City if this
agreement moves forward.
Last year, iri prioritizing the use of Redevelopment Agency (RDA) funds, the City
Council earmarked $25M to partially fund the venue's seismic and ADA
renovation. It is anticipated that substantial additional funding will be required to
bring the Civic Auditorium up to present-day standards. Approval of a final
agreement with Nederlander as well as the award of a design/build contract
pursuant tei the recommended Request for Bid (RFB) process would both be
contingent upon the identification and allocation by City Council of sufficient
additional Redevelopment Agency funding.
Staff is currently refining early cost estimates for the required renovation so the
Auditorium's funding needs can be considered by the Council when it reviews
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RDA priorities this spring. In the meantime, in order to keep the timeline intact,
staff is planriing to issue a designlbuild RFB. Staff would return to Council later
in the spring with a recommendation regarding award of contract and approval of
initial preconstruction services, and would later return for approval of subsequent
actions necessary to effectuate the design build process. The current schedule
anticipates that the renovation of the building would begin in the fall or winter of
2012 and last 18 to 24 months.
Alternatives
The City Council Gould choose to reject the business terms negotiated with Nederlander
and could instead pursue one of several options.
1. The City Council could choose to continue to operate the Civic Auditorium as is,
presenting. primarily consumer shows. However the projected deficit would
continue to mount and the facility would still require major infrastructure
improvements to address ADA accessibility and retrofits for earthquake safety.
2. The City Council could opt to continue with the required renovation of the Civic
Auditorium; enter into a presenting agreement as is currently contemplated, but
continue td operate the Civic at current staffing levels to address the staffing
parameter set forth earlier by Council. This approach would achieve the desired
programming goals, but the additional staff costs would increase by
approximately $1.3M in 2010 dollars and the staffing levels and mix would be
inconsistent with the job functions needed.
3. The City Council could opt to continue with the required renovation and issue a
new Request for Proposals for programming in time for the reopening in 2014.
With a renovated facility and perhaps an improved economy, Nederlander and
other entities might be interested in proposing management options. However, it
should be noted that, in SAG's opinion, there are only a few firms that can fulfill
this presenter role. Furthermore, the proposed operating structure and fee
arrangement are reasonable.
4. The City Council could consider entering into along-term privatization agreement
with Nederlander or another presenting organization to control all aspects of the
Civic Auditorium's operations. This model would involve a payment by the City of
both a management fee and a substantial `risk bonus' which would gradually
decrease over the ten year term as the Civic became an established destination
venue. Entering into a privatization agreement with a third party would allow the
City to know exactly what its financial commitments to the facility would be over
the term of the agreement. However, the City would need to compensate the
private partner for the perceived high risk it would be assuming of an unknown
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product in the marketplace, particularly in the early years. The City would also
relinquish control of the facility and would need to lay-off or transition virtually all
Civic staff to other positions within the City. The City might be better positioned
to pursue such a privatization option at some point in the future once the Civic
has been successfully repositioned as an important destination venue for music
and the performing arts and much of the risk of that transition has passed.
Financial Impacts & Budget Actions
The five year forecast for the Civic Auditorium Fund underscores the need for a new
approach to the use and programming of the Civic Auditorium. It is projected that the
proposed operating model would reduce the operating subsidy required of the General
Fund from the "status quo" range of $32.9M over the 10 year term to a range of $8.7M
to $14.7M.
In addition to the $25M earmarked through the Redevelopment Agency, additional
capital funds will need to be identified in order to fully renovate the facility.
Prepared by: Jessica Cusick, Cultural Affairs Manager
Approved:
Forwarded to Council:
j~ -J-'
/ala..L~rcc~ ..
Barbara Stinchfield Rod Gould
Director, Community & Cultural Services City Manager
Attachments:
A. Term Sheet
B. Business Model Summary
C. Economic Impact Analysis
17
r,9-
TERM SHEET
SANTA MONICA CIVIC AUDITORIUM
17 February, 2011
A. CITY RIGHTS & RESPONSIBILITIES
Facility Improvements: The City will renovate and improve the Civic according to its
budget which shall not be less than $25 million.
The City will insure that there are 1,000 parking spaces proximate to the Civic to
accommodate Civic events on nights and weekends and 630 spaces on
weekdays.
2. Emgloyees: The City shall at its discretion and expense control the City employees at
the Civic who will provide for operations and management of the facility.
3. Physical Plant: The City shall at its expense maintain and insure the physical plant of the
Civic including such items as: repairs and maintenance, utilities, and capital
expenditures.
4. Theater Preservation Fee: The City reserves the right to assess a reasonable theater
preservation fee over and above any other ticket surcharge to establish a fund for the
ongoing upkeep of the Civic Auditorium. If a fee is established, the City understands
that the combined fee and any ticket surcharge should not place the Civic at a
competitive disadvantage to comparable facilities.
5. City Dates: In addition to a limited number of City supported community events, the City
reserves the right to utilize the Civic for its own purposes and at City expense throughout
the year based upon calendar availability.
B. NEDERLANDER RIGHTS & RESPONSIBILITIES
Role: Nederlander shall be the Exclusive Presenter and Booking Manager for the Civic
during the term of the agreement. At its discretion and expense, Nederlander shall be
responsible for strategic positioning of the Civic, calendar management, talent buying
and coordination, coordination with third-party ticket sellers, and Nederlander's
participation at individual events. Nederlander shall at all times work in close
coordination with City Civic staff balancing the following goals: maximize the facility
revenue streams, maintain facility and event expenses at reasonable levels and
maximize the activity level of the facility with a wide range of events.
2. Dedicated Civic Staff: Nederlander will work with the City to identify, select and employ
as Nederlander employees the appropriate individuals to serve as Special Events Sales
Director and Special Events Sales Manager dedicated to attracting special events at the
Civic, along with apart-time, per-event Production Manager, and Box Office Manager.
The parties will discuss the potential to share the services of the Production Manager
and Box Office Manager with other similar venues operated by Nederlander, particularly
in the early years when stage events are at their lowest levels. The cost of these
individuals will be included into the established formula for Contribution Margin as
defined in C.5.
3. Event Staff:
i. The cost of the event staff shall be deemed an expense of the individual event
and will be included into the formula established to calculate Contribution Margin.
Unless impracticable, when such staffing is needed for any specific event,
Nederlander shall utilize the five City staff employed at the Civic to fill Event Staff
needs. Under such arrangement, the City would be reimbursed by the individual
event for the cost associated with such personnel based on the number of hours
worked on the event multiplied by the agreed upon hourly reimbursement rate or
rates for the staff persons utilized. Event staff shall include personnel for facility
set-up, operations, and breakdown and clean-up, including event supervisor(s)
and an event coordinator.
ii. Nederlander will commit to using former Civic employees as additional part-time,
hourly employees for events to the extent practicable.
Consulting: Nederlander agrees to provide design and technical consulting support to
the City and its design and construction team at no cost to the City during the
pre-development and development phase to ensure the best possible renovation. Details
of this relationship and Nederlander scope of services to be articulated in the final
agreement. Nederlander also agrees to consult with and advise the Civic management
team on operational matters during the term of the Agreement.
5. Pre-Opening Sales & Marketing: Nederlander shall perform the pre-opening marketing
and sales efforts necessary to provide the Civic with a strong event mix upon the
re-opening of the renovated Civic. The cost of this initial marketing will be included into
the established formula for Contribution Margin.
In subsequent years institutional venue marketing for all event types will be
included into the established formula for Contribution Margin up to an agreed
upon limit.
6. Calendar and Event Review: Nederlander agrees to review the overall calendar of
events to be held at the Civic with the City and to consult with the City concerning events
proposed to be held at the Civic.
C. ADDITIONAL TERMS
1. Contract Term: The initial term of the agreement shall be for sixty-three (63) months,
commencing upon completion of the facility improvements, with the first contract period
or `year' consisting of fifteen (15) months to allow for appropriate ramp-up and advance
bookings. Each of the subsequent contract years shall be for twelve (12) month periods.
2. Termination: The City shall have the option to terminate the agreement under the
following circumstances:
Option to terminate for failure to achieve activity thresholds: At the end of
Contract Years 3 or 4 in the event the following booking thresholds are not
achieved:
End of Contract Year 3: During the first thirty-nine (39) months of the
agreement a total of two hundred (200) events, and no less than forty (40)
concert performances, forty (40) legitimate theater performances, and forty
(40) special events.
End of Contract Year 4: During Contract Years 2 through 4 a total of two
hundred twenty five (225) events, and no less than forty-five (45) concert
performances, forty-five (45) legitimate theater performances, and forty-five
(45) special events.
Option to terminate for poor financial performance: In addition to other City
termination rights, after the initial three Contract Years of the Agreement (i.e.
first 39 months), the City has an option to terminate the agreement for poor
financial performance. This option, which includes notice to Nederlander, good
faith negotiation and an opportunity for it to cure, will be triggered if the
Contribution Margin shows a loss for any two consecutive fiscal year periods.
This option would not be available if the loss arose principally from force
majeure causes, which includes significant economic downturns such as a
recession as declared by the National Bureau of Economic Research or
successor Agency.
3. Renewal: The agreement shall be renewable at the election of Nederlander for an
additional five (5) year term provided that Nederlander meets the agreed upon activity
and financial criteria. Activity and financial criteria for the term of the renewal will be
developed at the time of renewal, but will be at a minimum those established for the first
five years.
4. Compensation: Nederlander shall be entitled to receive its share of any positive,
annually calculated Contribution Margin subject to the following formula:
i. Forty percent (40%) of any annual Contribution Margin up to and
including $500,000; PLUS
ii. Fifteen percent (15%) of all annual Contribution Margin exceeding
$500,000 and up to and including $1.5 million; PLUS.
iii. Thirty percent (30%) of all annual Contribution Margin exceeding $1.5
million and up to $2.25 million: PLUS
iv. Forty percent (40%) of all annual Contribution Margin exceeding $2.25
million.
Contribution Margin: The term Contribution Margin shall be defined as all Civic
revenues, including all event revenue plus annual and periodic revenue, such as
sponsorship and signage, LESS event expenses plus other direct expenses incurred in
securing such annual and periodic revenue (annual and periodic revenue terms to be
fully defined in the final agreement.) The following are notable exceptions to Contribution
Margin:
i. Contribution Margin revenue specifically excludes any and all parking
revenue and expenses generated at the Civic as well as any `theater
preservation fee' that may be established.
Contribution Margin expenses specifically excludes any and all overhead
costs related to the City's Civic staff for general management and operations
of the facility except for the Event Staff reimbursements for individual events
as described above. Contribution margin expenses also specifically exclude
any and all overhead costs related to Nederlander's management and
concert talent buying staff.
6. Audit: The parties shall. agree upon an independent audit firm experienced in the
industry to perform audit procedures that will assure both parties that the accounting
controls, allocation methods and expense amounts (including payroll) charged to Civic
events is reflective of the agreement between the parties. Cost of the audit is to be
allocated per the established formula for Contribution Margin as described in Section C5.
4
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BUSINESS MODEL SUMMARY
Page 2
Contribution Margin Under Other Scenarios:
Very Optimistic (20°~ increase in CM)
Optimisti~:.(10%-.increase in Gtvl)`
Pessimistic (10% decrease in CM)
Very Pessimistic (20% decrease in CM)
Expected General Fund Subsidy:
Resources:
Ciry Share of Contributi<
Nederlander Reimbursement of City Staf
Event Parking
Total City Resources
Projected City Staffing and Overhead Costs
Net General Fund Subsidy
Legend:
Contribution Margin Net event-related revenue,
Nederlander Share Share of Contribution Marg
General Fund Subsidy City's share of Contribution
Very Optimistic to
Very Pessimistic +20%,+10%, baseline,-10%,
8 fuauayoeuy
Santa Monica Civic Auditorium
Tax Generation Summary (Direct Impact Only)
t` s-~ ~ .~ m,. r
Consumer Other/ City
[ its Sy pha y Theatr'tal ConvenTOn Show Corp SMERF ~ Use TOTAL
TransientOttupanryTaxes (14.0%)
High-Impac[Attendees $0 $0 $0 $169,000 $0 $500 $8,400 $0 $157,900
low-Impact Attendees 0 0 0 0 0 0 0 0 0
TOTAL - $0 $0 $0 $149,000 $0 $500 $8,400 $0 $157,900
Sales Taxes (1.5%)
High-Impact Attendees $1,800 $0 $0 $7,800 $3,400 $0 $400 $0 $13,400
Low-ImpaR Attendees 4,600 100 0 300 23,300 0 0 0 28,300
TOTAL $6,400 $100 $0 $8,100 $26,700 $0 $400 $0 $41,700
Parki~FaciOty Taxes (10.0%)
High-Impact Attendees $800 $0 $0 $2,400 $1,400 $0 $200 $0 $4,800
Low-Impact Attendees 2300 700 0 100 12,400 200 _ 700 0 16,400
TOTAL $3,100 $700 $0 $2,500 $13,800 $200 $900 $0 $21,200
Total
Tax Revenue $9,500 $800 $0 $159,600 $40,500 $700 $9,700 $0 $220,800
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Corp Corp Ticketed 4Wall City
Co its Sy pho y Th tr' 1 Convent'pn Small Large Rentals Rentals Use TOTAL
Transient Ottupanry Taxes (10.0%)
High-Impact Attendees $0 $0 $0 $223,400 $6,100 $1,500 $0 $0 $0 $231,000
low-Impact Attendees 0 0 0 0 0 0 0 0 0 0
TOTAL $0 $0 $0 $223,400 $6,100 $1,500 $0 $0 $0 $231,000
Sales Tazes (1.5%)
High-ImpactAttentlees $48,300 $0 $22,500 $11,600 5200 $100 $1,200 $100 $0 $84,000
Low-Impatt Attendees 63000 S00 28,500 400 800 200 3,000 0 0 96,000
TOTAL $111,300 $100 $51,000 $12,000 $1,000 $300 $4,200 $100 $0 $180,000
Parking Fatility Taxes (10.0%)
High-Impact Attendees $11,200 $0 $9,200 $3,600 $100 $0 $500 $200 $0 $24,800
Low-Impact Attendees 16,800 700 13,800 200 900 200 1,400 700 0 34,700
TOTAL $28,000 $700 $23,000 $3,800 $1,000 $200 $1,900 $900 $0 $59,500
Total Tax Revenue $139300 $800 $74000 $239,200 $8100 $2,000 $6,100 $1,000 $0 $470,500
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_+~~`t,'.,~„k,U:._. 5= ,. u~,<.. ,fir, ., 1, n... r__,., :s.i_ ._.~,.. .,.
Local Sales Taxes (1.50%)
High-Impact Attendees $70,600
Low-Impact Attendees 67,700
TOTAL - $138,300
Transient OCCUpanryTaxes (14.0%)
High-Impact Attendees $73,100
Low-Impac[Attendees 0
TOTAL $73,100
Parking Facility Taxes (10.0%)
High-impact Attendees $20,000
Low-Impact Attendees 18,300
TOTAL $38,300
Santa Monica Civic Auditorium
Economic Impact Summary
"i. AI /~. rcrc ~ ", `~ ..w ~.'4. 4 ~... '4v..,~` .~"i'/w!L { ~.ws '°T~v.. !5 /~ +~n`z'^. '.. -. _.~a~rc.. ~ L~~ .{v`iF::.:'.....a.~~c.31`.:r. ~'-
, zFV.~_.o_.t _ T u~ey ~v ~~e_
Per Cap
Avg. Total Attend Mix Per Dav Soendng DIRER SPENDING INDIRECT SPENDING
E [ Ev n[ Da s Attentl Attentl. xl4RimpaR WwampaC[ HlgnampaR Low-~mpaR xlghimoart L°w-~mpaa nlaRlmpaa mw-~mpatt TOTAL
Concert 5 1,500 ],500 25°0 ]6% ]6 60 $141,000 4338,000 399,000 $23],000 4815,000
6ymphgnY 3 fi00 1,000 6% 96% 26 10 2,000 1],000 1,000 32,000 32,000
TheaMtal 0 600 0 6% 96% 26 10 0 0 0 0 0
Convention/Tatle GM1Ow S 800 6,400 96% s% 300 100 . 1,824,000 32,000 1.D7,000 22,000
- 3,155,000
Consumer Show 69 500 34,500 10°/a 90% ]6 55 259,000 1,]08,000 181,000- 3,196,000 3,344,000
corpoare z zoo aoo s% 9s% zs9 s s,Dg6 z,ooo a,ooo S,DDD Iz,ooD
OMer/SMERF 8 300 2,400 25% JS% 150 5 90,000 9,000 fi3,000 6,000 368.000
City Ilse 29 50 1 450 0°h 100% 0 0 0 0 0 0 0
TOTAL 124 54,450 $2,321.000 $2,106,000 31,625,000 $1,4]4,000 $],526,000
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Avg. Totai Attentl . Mix Per Day Spentlinq DIRECT SPENDING INDIRECT SPENDING
Ev [T E CD Attentl Attentl xpx-impMt (nw-impaG nlgFlmpa2 tow-im pact xlgh-impact tow-Impart woM1-Impact inw-impaG TGTAL
Concert 35 2,000 ]0.000 40% 60% 125 305 $3,500,000 54.410.000 $2,450.000 $3,081,000 $13.44],000
bymphonv 3 600 1,800 ~ 6% 96% 25 30' 2,000 51,000 1,000 12,000 32,000
TM1eaMtal 32 1,800 61,600 a0% 60% J6 fi0 1,]28,000 2,0]4,000 1,210,000 1,452,000 6,464,000
9how
ConveMion/Tratle t2 800 9,fi00 96%p 6% 300 100 2,]36,000 48,000 1,935,000 34,000 4,]33,000
_
Corporzte-Small 25 100 2,500 30°0 90% 250 30 fi3,000 68.000 44.000 98,000 - 223,000
Cprpoate-Large 3 200 600 10% 90% 250 30 15.000 36,000 33,000 11,000 53,000
Tirknetl Rentals 8 600 4,800 26%p J6% 16 60 90,000 216,000 63.000 151,000 520,000
Fqur-Wall Rentals 8 300 2,400 25°/° JS% 25 5 15,000 9,000 33,000 fi,000 41,000
GryUSe 20 50 5,000 0% 100% 0 0 0 0 0 0 0
TOTAL 346 350,300 $S,1a9,000 86,858,000 45,]05,000 3a,801,000 $25,533,000
_
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TOTAL 22 95,850 55,828 000 $4 162 000 $4 080 000 33,32] 000 $1],98],000
Santa Monica Civic Auditorium
Tax Generation Estimates: Hiph-ImOact Only
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Spbjett Taxes Consumer OMer/ Ciry
Rate [ rts Symph n Theatrical ConvenCOn - Shaw Corp SMERF Use TOTAL
Spentling per Highlmpattlntlivlduai
Hotel ROOms
Hotel Rertaeams
Other Resqu2M5
Admission tO Shows
Recreation
Sporting EV¢MS
Sightseeing
BhoDPing
LocalTmnsport
Auto Rental
Gasoline
Parking-Facility
Parking-Other
Other
TOTAL
Togl High-Impattlndivltluais
Taxes Genem[ed
Transient Ocapancy Tax
Sales Tax
Parking Facilities Tax
TOTAL
ToT la.ao% Svs.0o $ns.oo $lao.oo
sales l.so% ss.oo zo.oo ss.oo
Sales 1.50% 1x.00 10.00 10.00 25:00 10.00 20.00 20.00
Sales 1.50% 55.00 5.00 5.00 3.00 10.00
2.00
2.00
J.00
sales 1.50% zs.oo 05.60 2s.0o lo.oo
12.00
Sales 1.50% J.00
4.00
Park 30.00% 4.00 4.00 4.00 4.00 9.00 4.00 4.00
Park - 1.00 1.00 1.00 1.00 1.00 1.00 1.00
9.00
$]0.00 $20.00 $20.00 $301.00 $]0.00 $245.00 $L50.00 $0.00
18]5 90 0 6,060 3,450 20 fi00 0 12,115
$0 $0 SO $149,000 $0 $500 $8,400 $0 $15],900
1,800 0 0 ],800 3,400 0 400 0 13,400
800 0 0 2400 1p00 0 20D 0 4800
$2,E00 $0 $0 $]59,200 $4,800 $500 $9,000 $0 $1]6,100
w ±+.,.~d~.'H ~ ~'J _., x~`~.'..r::.~.t....... ~. .,._i a.~'~~,~. ,.w--x.. ~.. ..~ w '. f } ::. Y v....v ,. v ~-: ~._ a
SubjettTaxes Corp Carp Tilketetl 4-Wall Ciry
Tax Rate C its Symph Th W 1 C rrH n Small Large Rentals Renals Use TOTAL
Spending per High-ImpaR Individual
Notel Raamz TOT 14.00% $1]5.00 $1]5.00 $175.00
Hotel Resaurnts Sales 3.50% 25.00 20.00 20.00
Other Restaurants Sales 1.50% 15.00 10.00 10.00 25.00 20.00 20.00 10.00 ]5.60
pdmiuionto Shows 100.00 5.00 55.00 3.00 45.00
Recreation 2.00
Sporting Events 2.00
Sightseeing - Z00
Shopping Sales 1.50% 25.00 25.00 25.00 10.00
LocalTmnspart 12.00
Auto Renal Sales 5.50% ].00
Gasoline 4.00
Parking-Facility Park 10.00% 4.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00
Parking-Other Park - 1.00 1.00 1.00 1.00 1.00 .1.00 1.00 1.00
Other ~ 9.00
TOTAL $120.00 $20.00 $]0.00. $301.00 $245.00 $245.00 $]0.00 $20.00 $0.00
Total High-ImpaR Individuals 28000 90 23040 9120 250 60 1200 WO 0 ~ 62,360
Taxes Genegtetl
Tmnsient OCCUpanryTaz $0 $0 $0 $223,400 $6,300 $1$00 $0 $0 $0 $231,000
Sales Taz 48,300 0 22,300 11,600 200 100 1,200 100 0 84,000
Parking Facilities Tax 11200 0 9,200 3fi00 300 0 500 200 0 24,800
TOTAL $59,500 $0 $31,]00 $238,fi00 $6,400 $1,600 $1,]00 $300 $0 $339800
Santa Monica Civic Auditorium
Yax Genetatien Estimates: Cow-Impact Only
c ~T?.,i u ~ ~~.>~ ~:. ..-_..s'''+~'-y,.,s.zY_ ~. ..-`..-;M""'~m ... ~ -P2~,~P ~~-'.,..`s"c ..,..Z ..: ~.._ ~r ~'.`s~e~,.s`, ~z~ ~~~ .~i` -'- rR
Subjett Taxes Consumer Other/ City
Tax Rate C Symph y Th trl I [onvenCOn Show Corp SMERF Use TOTAL
Spending pet Inw-ImpaR Individual
Hotel ROOmz TOT 34.00% $0'~
Hotel Resaurants Sales S50% ~'~
Other Restaurants Sales 3.50% 23.00 $23.00
Admission to5hows Sales 3.50°b 33.00 3.00 3.00 3.00 10.00 $]8.00
Recreation 2.00 $2'00
SPOrting Events 2.00 52.00
Sightseeing ].00 $]AO
Shopping Sales 1.50% 23.00 40.00 $65.00
Local Transport 12.00 $12.00
Auto Rental Sales 150% ].00 $].00
Gasoline 4.00 $4.00
Parking-Facility Park 10.00% 4.00 4.00 4.00 4.00 4.00 4.00 4.00 $18.00
Parking-Other Park - 1.00 1.00 1.00 1.00 1.00 1.00 1.00 $].00
Other 9.00 59.00
TOTAL $60.00 $10.00 $10.00 $101.00 $33.00 53.00 $5.00 $0.00 $246.00
Total LOw-0mpattintlivltluais 3623 1]10 0 320 31050 380 1800 1450 42,333
Taxes Genen[etl
Tremient OCCUpanty Tax $0 $0 $0 $0 $0 $0 $0 $D SD
Sales Tax 4,600 100 0 300 23,300 0 0 0 28,300
Parking Facilities Tax 2,300 ]00 0 300 12,400 200 J00 0 16p00
TOTAL $6,900 $800 $0 $400 $33,]00 5200 S]00 $0 544.]00
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. -
SubjeRTaxes Corp Corp Ticketed 4-Wall City
Taz Race Cannrts Symphony Theatrinl [pnventlon Small Large Renals Rentals Use TOTAL
Spending per Individual
Hotel ROOms TOT 14.00% $0.00
Hotel Restaurnts Sales 1.30% $0.00
Other Restaumnts Sales 1.30% 23.00 $25.00
Admission to Shows 100.00 3.00 33.00 3.00 45.00 $208.00
Recreation 2.00 $2.00
Sporting Events 2.00 $2.00
Sightseeing ].00 $]~~
Shoppi~ Sales 1.30% 23.00 25.00 23.00 30.00 $85.00
Local Transport 12.00 $12.00
Auto Renal Sales 150% ].00 5].00
Gasoline 4.00 $4.00
Parking-Facility Park 10.00% 4.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00 $32.00
Parking-Other Park - 1.00 1.00 1.00 '1.00 1.00 3.00 1.00 1.00 $8.00
Other 9.00 $9.00
TOTAL $103.00 $10.00 $60.00 $101.00 $30.00 $30.00 $60.00 53.00 $0.00 $401.00
Spendingpet law-ImpaR Individual 42000 1]10 39560 480 2250 540 3,600 1800 1,000 8],940
Tazes Generated -
Trenzien000UpancyTax $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales Tax 63,000 100 28,500 400 800 200 3,000 0 0 96,000
Parking Facilities Tax 16,800 ]00 ]3,800 200 900 200' 1,400 ]00 0 34.]00
TOTAL $]9,800 5800 .$42,300 $600 $1,]00 $400 $4,400 $]00 $0 $130.]00
Santa Monica Civic Auditorium
Economic Impact Summary
~ ' ~'
3~~5 ~! 0
Per Cap
qv9. Total Attend . Mix Per Dav 6pendnp DIRECT SPENDING INDIRECT SPENDING
Event TVpe Even[Davs Attentl qtt d - x',°n-tmoatt ~awim°aa r.°him°aa mw-~moaa mgRrm°aa mw-~moact TOTAL
Concert 5 1,500 ],600 26°h J6°h JS 60 $141,000 $338,000 $99,000 $237,000 $818,000
GYmDhony 3 600 1,800 5 % 98 % 25 30 2,000 1],000 1,000 -12,000 32,000
TheaMCal 0 600 0 6% 96°0 25 SO p 0 0 0 0
Convention/Tmtle Show 8 800 6,400 95% 5°/a 300 100 1,824,000 32,000 1,2]],000 22,000 3,155,000
Consumer Show 69 500 34,500 ip% 90°/° JS SS 259,000 5,]08,000 181,000 1,196,000 3,344,000
Corporate 2 200 900 6% 93% 250 5 5,000 2,000 4,000 1.000 12,000
O[her/SMERF a 300 2,400 25% JS% 15p 5 90,000 9,000 63,000 6.000 168,000
City Use 29 50 1.450 0 % 100 % p 0 0 0 0 0 -0
TOTAL 124 54,450- $2,321,000 $2,106,000 $1,625,000 $1,4]4,000 $],626,000
Per Cap
AVO. Total gttend . Mlx Per Dav Spentlinp DIRECr SPENDING INDIRECr SPENDING
EventT E tD qtt d A[t tl waham°att ~°wim°act wan-~m°att mwim°act x.°n-~m°att ~°wim°aa TOTAL
Concert 35 2,000 Jp,ppp 40°b 6p% 325 SOS $3,500,000 $4,41p,000 32,450,000 $3,08],000 $13,44],000
Symphony 3 600 1,800 S% 96% 25 SO 2,000 17,000 1,000 12,000 32,000
Theatrical 32 1,800 62600 40% 60% JS 60 1,]28,000 2,074,000 1,210,000 1,952,000 6,964,000
Cpnven[ipn/T2de Show 12 800 9,600 96% 6% 300 100 2,]36,000 98,000 1,915,000 34,000 9,]33.000
Corporate-Small 26 100 2,500 10 % 90 % 250 30 63,000 68,000 44,000 48,000 223,000
Corporate- Large 3 200 600 10% 90 % 250 30 15,000 Sfi,000 33,000 11,000 53,000
Ticketed Rentals 8 600 4,800 25°/° JS°o JS 60 90,OOp 216,000 63,000 151,000 520,000
Four-Wall Ren[als 8 300 2,900 23% 76Wa 25 5 15,000 9,000 SS,000 6,000 41,000
CiN USe 20 50 1.000 0% 100% 0 0 0 p 0 p 0
TOTAL 146 150,300 $8,149,000 $6,858,000 $6,706,000 $4,801,000 $25,513,000
TOTAL 22 95.850 85.828.000 $4 762 000 34.080.000 $3 327 000 $1J 987 000
Santa Monica Civic Auditorium
Tax Generation Summary (Direct Impact Only)
Consumer Other/ City
Concerts Symphony Theatrical Convention Show Corp SMERF Use TOTAL
Transient OccupanryTazes (14.0%)
High-Impact Attendees $0 $0 $0 $149,000 $0 $500 $8,400 - $0 $157,900
Low-Impact Attendees 0 0 0 0 0 0 0 0 0
TOTAL $0 $0 $0 $149,000 $0 $500 $8,400 $0 $157,900
Sales Taxes (1.6%)
High-Impact Attendees $1,800 $0 $0 $7,800 $3,400 $0 $400 $0 $13,400
Law-Impac[Attendees 4,600 100 0 300 23,300 0 0 - 0 28,300
TOTAL $6,400 $100 $0 $8,100 $26,700 $0 $400 $0 $41,700
Parking Facility Taxes (10.0%)
High-Impac[Attendees $800 $0 $0 $2,400 $1,400 $0 $200 $0 $4,800
Low-Impact Attendees 2,300 700 0 100 12,400 200 700 0 16,400
TOTAL $3,100 $700 50 $2,500 $13,800 $200 $900 $0 $21,200
Total Tax Revenue $9,500 $800 $0 $159,600 $40,500 $700 $9,700 $0 $220,800
Corp Corp Ticketed 4-Wall City
Concerts Symphony Theatrical Convention Small Large Rentals Rentals Use TOTAL
Transient Ouupanry Taxes (14.0%)
High-Impact Attendees $0 $0 $0 $223,400 $6,100 $1,500 $0 $0 $0 ~ $231,000
Law-Impac[Attendees 0 0 0 0 0 0 0 0 0 0
TOTAL $0 $0 $0 $223,400 $6,100 $1,500 $0 50 $0 $231,000
Sales Tazes (1.6%)
High-Impact Attendees $48,300 $0 $22,500 $11,600 $200 $100 $1,200 $100 $0 $84,000
Low-Impact Attendees 63,000 100 28,500 400 800 200 3,000 0 0 96,000
TOTAL $111,300 $100 $51,000 $12,000 $1,000 5300 $4;200 $100 $0 $180,000
Parking Facility Tazes (10.0%)
High-ImpactAttendees $11,200 $0 $9,200 $3,fi00 $100 $0 $500 $200 $0 $24,800
Low-Impact Attendees 16,800 700 13,800 200 900 200 1,400 700 0 34,700
TOTAL $28,000 $700 $23,000 $3,800 $1,000 $200 $1,900 $900 $0 $59,500
Total Tax Revenue $139,300 $800 $74,000 $239,200 $8,100 $2,000 $6,100 $1,000 $0 $470,500
Local Sales Taxes (1.50%)
High-Impact Attendees $70,600
Law-Impact Attendees 67,700
TOTAL $138,300
Transient Occupancy Taxes (14.0%)
High-Impact Attendees $73,100
Low-Impact Attendees 0
TOTAL $73,100
Parking FacilityTaxes (10.0%)
High-Impact Attendees $20,000
Low-Impact Attendees 18,300
TOTAL $38,300
Santa Monica Civic Auditorium
Tax Generation Estimates: High-Impact Only
9pentling per High-ImpaR Indivitloal
Hotel Roams
Hotel Res[aumnss
Other Restaurznts
Admission to Shows
Recreation
Sporting Events
Sightseeing
Shopping
Local Transport
Auto Rental
Gasoline
Parking-Facility
Parking-Other
Other
TOTAL
Total High-Impact Individuals
Taxes Generated
Tmnsient Occupancy Tax
Sales Tax -
Parking Facilities Tax
TOTAL
Spending per Nigh-ImpaR Individual
Hotel Roams
Hotel Res[aurz nis
Other Restaurznts
Admission to Shows
Recreation
Sporting Events
Sightseeing
Shopping
LocalTmnsport
Auto Rental
Gasoline
Parking-Facility
Parking-Other
Other
TOTAL
Total High-ImpaR Individuals
Taxes Generated
Transient OccupanryTax
Sales Tax
Parking Facilities Tax
TOTAL
9u67eR Taxes Consumer Other/ City
Tax Rate Concerts Symphony Theatrical Convention Show Corp SMERF Use TOTAL
tot 14.00% 51]s.oo 5vs.o0 $IOO.OG
Sales 1.50% 2s.00 20.00 13.00
sales iso% 10.00 10.00 10.00 zs.ao 10.00 2G.oo xo.ao
Sales 1.s0% s3.00 3.00 3.00 3.00 10.00
2.00
2.00
].00
saie: lso% 2s.o0 4s.o0 zs.oo la.oo
lz.oa
Baia: lso°~ zoo
4.00
Park 10.00% 4.00 4.00 4.00 4.00 4.00 4.00 4.00
Park - 1.00 1.00 1.00 1.00 C 1.00 1.00 1.00
9.00
$]0.00 $20.00 $20.00 $301.00 $]0.00 $243.00 $130.00 $0.00
3,8]3 90 0 fi,080 3,460 20 600 0 12,113
$0 $0 $0 $149,000 $0 $500 $8,400 $0 $15],900
1,800 0 0 ],800 3,400 0 400 0 13,400
800 0 0 2,400 1,400 0 200 0 4,800
$2,600 So $o $IS9,zoo 54soo $soo 59,000 $o $v6,1oo
SubjeR Taxes Corp Carp Ticketed 0.Wall City
Tax' Ra[e Concerts Symphony Theatrical Convention Small Large Rentals Rentals Uze TOTAL
TOT 14.00% $1]3.00 $1]3.00 $1]3.00
Sales 1.30% 23.00 20.00 20.00
Sales 1.30% 13.00 10.00 10.00 23.00 20.00 20.00 10.00 Ss.00
100.00 3.00 33.00 3.00 46.00
2.00
2.00
].00
Sales 1.50% 23.00 23.00 2s.00 10.00
12.00
Sales 1.50% ].00
4.00
Park 10.00% 4.00 4.00 4.00 4.00 4.OD 4.00 4.00 4.00
Park - 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00
9.00
$120.00 $20.00 $]0.00 $301.00 $243.00 $243.00 $]0.00 $20.00 $0.00
230 60 1,200 600 0 62,360
$0 $0 $0 $223,400 $6,100 $S,s00 $0 $0 $0 $231,000
48,300 0 22,500 11,600 200. 100 1,200 100 0 84,000
11,200 0 9,200 3,600 100 0 300 200 0 24,800
$s9,300 $0 $33,]00 $238,600 $6,400 $1,600 $1,]00 $300 $0 $339,800
Santa Monica Civic Auditorium
Tax G¢neratlon Estimat¢s: Low-Impact Only
9ubfect Taxes Consumer Other/ City
Tax Rate Concerts Symphony Theatrical Canventlon Show Carp SMERF Use TOTAL
Spending per LOw-ImpaR lndfvitlual
Hotel ftpoms TOT 14.00% $0.00
Hotel 0.eslauran[s Sales 3.50% $0.00
Other Res[aumnts Sales 1.50% 25.00 $25.00
Adm65ion to Shows Sales 1.50% 55.00 5.00 5.00 3.00 10.00 $]8.00
Recreatlon 2,00
$2.00
Sporting Events 2.00 $2.00
Sightseeing zoo 5>.oD
Shopping Sales 1.50% 25.00 40.00 $65.00
Local Transport 12.00 $12.00
Auto Rental Sales 1.50% J.00 $>.00
Gasoline p.00 $4.00
Parking-Facility Park 10.00% 4.00 4.00 4.00 4.00 4.00 4.00 4.00 $28.00
Parking-Other Park - L00 1.00 ].00 1.00 L00 1.00 1.00 $J.00
Other 9.00
$9.00
TOTAL $fi0.00 $10.00 $10.00 $101.00 $55.00 $5.00 $5.00 50.00 $246.00
Taal LOw-Impact Individuals 6,fi25 1,730 0 320 31,050 380 1,800 1,450 42,335
Taxes Genen[ed
Transien[OCCUpan<y Tax $0 $0 $0 SO $0 $0 $0 $0 $0
Sales Tax 4,600 100 0 300 23,300 0 0 0 28,300
Parking Facilities Tax 2,300 700 0 100 12,400 200 ]00 0 16,400
TOTAL $6,900 $800 $0 $400 $35,700 $200 5700 $0 $44,700
Svblect Taxes Core Core Ticketed 6-Wall City
Tax RaM Concerts Symphony Theatrical Convention Small Large Rentals Renmis Use TOTAL
Spending per Individual
Hotel ROOms TOT 14.00% $0,00
Hotel Restaoran[s Sales 1.50% $0.00
Other Restaurants Sales 1.50% 25.00 $25.00
Admission to Shows 100.00 6.OD 55.00 3.00 45.00 $208.00
Recreation 2.00 $2.00
Spotting Events 2.00 _ $2.00
Sightseeing 7.00 $J W
Shopping Sales 1.50% 25.00 25.00 25.00 10.00 $85.00
Local Transport 12.00 $12.00
Auto Rental Sales 1.50% ].00 $J.W
Gasoline q,Op $4 W
Parking-Facility Park 10.00% 4.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00 $32.00
Parking-Other Park - 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 $8.00
Other 9.00
$9.00
TOTAL $105.00 $10.00 $60.00 $101.00 $30.00 $30.00 $60.00 $5.00 $0.00 $401.00
Spending per LOw-Impa<[IndNitlual 42,000 1,]10 34,560 480 2,250 540 3,600 1,800 1,000 87,940
Taxes Generated
Transient oacapancy'fax 50 $0 5D $o $0 50 $D $o $o $o
Sales Tax 63,000 100 28,500 400 800 200 3,000 0 0 96,000
Parking Fadlities Tax 16,800 ]00 13,800 200 900 200 1,600 ]00 0 34,700
TOTAL $79,800 $800 $42,300 $fi00 $1,]00 $400 $4,400 5700 $0 $130,700
Reference Contract No.
9344 (CCS).