Mayor’s Performing Arts Theater Task Force

Council Report April 28th, 2015

PRESENTATION

• Introduction – Vision

– Organization

– Timeline

• Work of the Task Force – Key Questions

– Needs Assessment

• Committee Evaluations & Recommendations – Facility

– Programming and Operations

– Financing

• Proposed Next Steps

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INTRODUCTION

Oslo Opera House 3

VISION

To build a state of the art, world-class performing arts theater in Sacramento

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ORGANIZATION

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Task Force

Staff Support

Facility Financing Programming and

Operations

Rob Turner (Chair) Dave Pier Lina Fat

Alice Perez

Garry Maisel (Chair) Dennis Mangers

Chris Granger Chet Hewitt

Don Roth (Chair)

Laurie Nelson Richard Lewis

Ron Cunningham Bill Blake

Broader Arts Community

Project Manager

Consultants

Mayor and Council

TIMELINE

PHASE ONE 1st Report out November 13th

PHASE TWO Update to Council February 24th

PHASE THREE Final Report out April 28th

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WORK OF TASK FORCE

Dr. Phillips Center for Performing Arts 7

KEY QUESTIONS

1. What is the cost of the building?

2. What is the optimal location for the building?

3. What is the size and scale of a new performance arts theater?

4. What is the business model of the building that is sustainable?

5. What is the structure of the organization that operates the building and what does the programming look like?

6. How do we pay for the new building?

7. Is it feasible to get a dedicated funding stream for the broader arts community?

8. Why is a new performing arts venue preferable to renovating the existing building?

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There is a case to develop new performing arts facilities in Sacramento.

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NEEDS ASSESSMENT

NEEDS ASSESSMENT

BASED ON

• Audience Demand

– Estimates based on national rates of participation in the performing arts, reconciled with a preliminary analysis of mailing lists of 12 Sacramento area arts organizations suggests there is room for growth in the Sacramento market

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NEEDS ASSESSMENT

BASED ON

• User Demand: significant demand for performance space

– Responses to questions regarding organizational need for new or better performing arts facilities by arts groups

• 85.2% of respondents feel that new or better performing arts facilities are needed in Sacramento; 11.1% do not know

• 80.8% of respondents indicate that new facilities will allow them to expand existing activity; 65% felt new facilities would enable them to develop new activity; and 65% felt they would increase visibility.

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NEEDS ASSESSMENT

BASED ON

• Existing Facilities: There are gaps for high-quality performance facilities

• Recommendation to:

– Replace CCT with a new facility

– Not renovate CCT

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NEEDS ASSESSMENT

COMMUNITY BENEFITS + IMPACTS

• New facilities will support economic and community development goals established by the City, contributing to:

– Sense of Place + Quality of Life

– Quality of Workforce + Corporate Recruitment

– Cultural Tourism

– Neighborhood + Community Development

– Teaching Innovation + Creativity

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NEEDS ASSESSMENT

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BUILDING OPTIONS

• Option A – Multi-Purpose Theater

– 2,200 seat main theater with 500 seat theater and 300 seat multi-purpose theater/rehearsal space

– $254 million cost

– $2.8 million annual funding requirement

NEEDS ASSESSMENT

BUILDING OPTIONS

• Option B – Multi-Purpose Theater

– 2,200 seat main theater with 300 seat multi-purpose theater/rehearsal space

– $189 million cost

– $2.2 million annual funding requirement

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NEEDS ASSESSMENT

BUILDING OPTIONS

• Option C – Flexible Multi-Form Theater

– 2,200 seat main theater with flat floor capability

– 300 seat multi-purpose theater/rehearsal space

– $205 million cost

– $1.4 million annual funding requirement

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NEEDS ASSESSMENT

BUSINESS PLANNING FOR NEW FACILITIES

• Governance Options and Recommendations

– Options include: City, Educational Partner, Non-profit Operator, Commercial Operator

– Recommendation: competitive bid process to choose operator of new theater

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COMMITTEE EVALUATION AND RECOMMENDATIONS

Kimmel Center for the Performing Arts 18

FACILITY

Kauffman Center for Performing Arts 19

FACILITY

• Began by establishing certain assumptions:

– New theater is needed to replace existing CCT

– Theater should be designed in a way to improve patron experience

– Theater should be designed to make visual statement through design

– Theater should be more inclusive of and appropriate for existing as well as small emerging arts groups and multicultural groups

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FACILITY

• In considering sites, established a list of key criteria, weighted in terms of the potential for having the most positive impact on the theater and surrounding areas: – Complementary Retail and Restaurants

– Ease of Acquisition

– Economic Development Opportunities

– Freeway Access & Impact

– Hotel & Convention Center Proximity

– Outdoor Space Availability

– Parking Proximity

– Public Transit Proximity

– Urban Planning

– Visibility

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FACILITY

SITE CANDIDATES

• The Railyards – Near historic shop buildings

• 16th St. between J & K streets – Kitty-corner to Memorial Auditorium

• 16th St. between I & J streets – Adjacent to Memorial Auditorium

• Lot X – Near Crocker Art Museum

• Current CCT Site – Adjacent to Convention Center

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FACILITY

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FACILITY

FACILITY COMMITTEE RECOMMENDS

• Given the criteria, 16th Street has largely emerged as the preferred site, with Lot X presenting itself as a viable alternate site under the right circumstances.

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PROGRAMMING AND OPERATIONS

Kauffman Center for Performing Arts 25

PROGRAMMING AND OPERATIONS

• The Committee is recommending a clearly defined process that will lead to the best possible business model, operating structure and programming model for the PAT. We believe this process will work, whether or not we pursue a multi‐theater center and/or the venue is a fixed or a flexible space.

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PROGRAMMING AND OPERATIONS

• The operator be determined by an RFQ or RFP process based on the following criteria (in order of importance as deemed by the Committee). The potential operators will have to demonstrate a business model and plan which works within these parameters, demonstrates these capabilities and meets these requirements:

– Arts Focus

– Cost Effectiveness

– Theater Management

– Buying Local

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PROGRAMMING AND OPERATIONS

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Potential Operators (right)

Operator Criteria (below in order of importance)

Sacramento Kings Limited

Partnership LLC (Kings LLC )

Existing Non-Profit (i.e. An Established Performing Arts

Organization in the Region)

New Non-Profit (i.e. A Newly Incorporated Entity Focused

on General Management)

Kings LLC &

Existing or New Non-ProfitCommercial Promoter City Operated

Arts FocusExpertise and experience working with the

arts; willingness to provide low cost, non-

compete and booking priority for anchor

tenants; collaboration and coordination with

regional arts.

a a a a

Cost EffectivenessAbility to keep costs low and minimize the cost

to the City based on business expertise,

potential economies of scale, financial

resources and experience in generating

revenue from non-arts activities.a a a a

Theater ManagementOperator demonstrates experience in the key

functions of operating a Performing Arts

Theater or multi-purpose event space, such as

ticketing, venue and facility management, etc. a a a a a a

"Buying Local"Operator has roots in the Sacramento region?

a a a a a

NOTES: The new nonprofit does not receive a check in cost-effectiveness because there is no experience to base that on.

SAC PAT PROGRAMMING AND OPERATIONS COMMITTEE

OPERATOR CRITERIA MATRIX

PROGRAMMING AND OPERATIONS

PROGRAMMING & OPERATIONS COMMITTEE RECOMMENDS

• A clearly defined process that will lead to the best possible business model, operating structure and programming model for the PAT.

• Some combination of regionally‐based groups, for example, the Kings LLC and an arts nonprofit, might be the very best team to meet the criteria laid out in this report

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FINANCING

Kauffman Center for Performing Arts 30

FINANCING

CAPITAL DEVELOPMENT

• Private funding sources include:

– Naming Rights and Corporate Sponsorships

– Foundations

– Individual Gifts and Pledges

– A Broad-Based Grassroots Campaign

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FINANCING

CAPITAL DEVELOPMENT

• Public funding sources include:

– The City of Sacramento • Committed Funds

• The TOT

• Ticket Surcharges

– The State of California • The I Bank

• Development of an Infrastructure Financing District

– Federal Programs • The NEA

• Possibly the New Market Tax Credit Program

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FINANCING

ONGOING FUNDING

• A potential new sales tax which would benefit the PAT but also regional arts organizations in general

– Civic amenities could go to the ballot in 2016 or thereafter, either individually or paired with another cause

– A potential $10-$20M could be generated annually for civic amenities and allocated among various projects/causes, including the PAT, and “return to source” needs

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FINANCING

ONGOING FUNDING

• There are new and innovative arts funding models which could point the way to a vehicle Sacramento could use to solve this issue

– Example: Cleveland Playhouse Square and Newark Performing Arts Center leverage other real estate assets as a revenue stream for sustainability

– In concept, Sacramento could broaden the tent and leverage a new PAT along with existing arts’ facilities to develop, for example, new parking facilitates in midtown which could provide a revenue stream for development (through bonding) and for ongoing sustainability

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FINANCING

FINANCING COMMITTEE RECOMMENDS

• Funding plan for a new PAT to consider not just capital for development but also the adequacy of funding to sustain operational needs and thus ensure ongoing viability.

• For both development funding and for ongoing operational needs, both private and public funding strategies will be considered. There are many possible combinations and everything is on the table for consideration.

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WHY A NEW PERFORMING ARTS THEATER?

The New World Center, Miami 36

WHY A NEW PERFORMING ARTS THEATER?

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Community Center Theater Sacramento Performing Arts Theater

Size Too big for 95% of Arts groups Flexible, multiform

Inflexible, rigid

Function Marginal experience for: Programmed for maximum utility

Performers

Presenters

Patrons

Design Brutalist World-class opportunity

Closed

Not Sacramentan

Landlocked Joins Downtown's Renaissance

Obstructs Convention Center

Contribution

PROPOSED NEXT STEPS

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PROPOSED NEXT STEPS

• Subgroup of Task Force working with City Manager and City Staff

• 3-6 months for a detailed assessment on major components:

– Milestone Schedule

– Site Selection

– Concept Design

– Operator RFP

– Planning/Funding Mechanisms

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