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100907 Sandler CenterCITY COUNCIL PRESENTATION October 9, 2007 PROJECT STATUS Achievements: •Received over $14.0 million in cash & pledges •Current fundraising to build endowment for education and performances •Strong subscription and ticket sales Upcoming Events: •November –Grand Opening Month •Dedication Ceremony –November 1, 2007 at 10:30 a.m. •Opening Night with Itzhak Perlman –November 3, 2007 at 7:30 p.m. CONSTRUCTION STATUS •99% Completed •Completing finishes •Installing theatrical/acoustical drapes and curtains •Finishing touches to woodwork and metal rails • th Staff Occupancy: Week of Oct. 8 RFP SELECTION PROCESS Selection Committee made up of volunteers from the • Theatre Advisory Committee, Virginia Beach Performing Arts Center Foundation and City Staff RFP Issued on April 4, 2005 • Interviewed proposers • Involved local arts organizations • Established criteria by which City will preserve • booking priorities for local arts groups In August 2006, City Council was briefed on • Committee recommendation and entered into Pre- Opening Services Agreement with Global Spectrum BOOKING POLICY •Purpose: to maintain maximum utilization and to provide fair and equitable availability •First Priority: 1.In-house productions for maximum revenue potential 2.Resident organizations 3.Great Performers Series •Second Priority: ? Established Regional Arts Groups and Former Tenants of Pavilion Theatre •Third Priority: ? Community Organizations and Events GLOBAL SPECTRUM SELECTED •Extensive facility management experience •Extensive booking experience –established contacts •Does not add numerous, permanent City staff •Corporate competitive advantage –numerous facilities for multiple bookings •Established software systems Global Spectrum –Member of the Comcast Family of Companies A subsidiary of Comcast-Spectacor •Comcast-Spectacor owns Wachovia Center & Spectrum NHL Philadelphia Flyers NBA Philadelphia 76ers AHL Philadelphia Phantoms *** 2005 Calder Cup Champions Flyers Skate Zone Comcast SportsNet Ovations Food Services New Era Tickets Who Global Spectrum Is… Fastest growing private management company 2000Now # of Managed Facilities747 # of Events7245,783 Gross Ticket Sales$39,900,000$266,539,212 # of Attendees1,596,00012,037,249 Total Sales$57,760,000$421,128,658 Theatrical Experience •7 Global Spectrum managed facilities present theatrical events on a regular basis: -FARGODOME Gate City Bank Theatre(4,200 seats) – -John Labatt Centre RBC Theatre(2,800 seats) – -Old Dominion University Ted Constant Convocation Center/Theatre theatrical set-up (4,000 seats) – -Portland Rose Quarter Theatre of the Clouds(6,300 seats) – -Sovereign Bank Arena theatrical set-up (3,500 seats) – -Temple University Liacouras Center Ester Boyer Theatre – (1,960 seats) -University of Massachusetts Mullins Center theatrical set- – up (4,000 seats) Best Relationships in the Industry •Global Spectrum knows and works with : -Live Nation -Feld Entertainment -Concerts West -United Talent Agency -Jam Theatricals -Princeton Entertainment -Artist Group -Vee Corp International -Joe Fletcher Presents -Creative Artist Agency -AEG -Howard Rose Agency -Evolution Talent Agency Global Spectrum’s Relationship with Virginia Arts Festival Global Spectrum will be the contracting entity with the • City of Virginia Beach. The Virginia Arts Festival will be a sub-contactor of Global Spectrum. Festival will take the leading role in the programming and • marketing of the grand opening and the creation of an annual series featuring nationally recognized artists. Global Spectrum will take the leading role in the day-to- • day operation of the building. Virginia Arts Festival Experience Virginia Arts Festival was founded and incorporated • in December 1995. First full season was in the spring of 1997. Virginia Arts Festivals mission: •’ Present the worlds finest performing artists in cities ’ ? throughout Southeastern Virginia Enrich the lives of Hampton Roads children through the ? arts Promote the Hampton Roads region as a rising cultural ? destination throughout the Mid-Atlantic in order to generate cultural tourism and its resulting positive economic impact on the area. OVERVIEW OF CONTRACTS PRE-OPENING SERVICES PERFORMED THROUGH OCTOBER 2007 •Reviewed Facility design & construction ? Hardware schedules, interior finish schedules, graphics and signage, recommend FF&E, coordinate transitions from construction project to operating facility •Fine tuned operating pro-formas •Developed operating & maintenance manual •Booked & scheduled events (as outlined in Booking Policy) •Developed reporting system & accounting systems •Developed marketing plan & advertising campaign •Planned Grand Opening events •Hired staff Pre-Opening Services Management Fee: (April 2006 -October 2007) = $ 111,000 MANAGEMENT CONTRACT •Promote, operate and manage all aspect of Sandler Center •Book and schedule events (as outlined in Booking Policy) •Provide day-to-day administrative services •Execute marketing plan, advertising campaign and materials •Maintain ongoing community relations and exposure •Maintain detailed, accurate financial and other records •Submit monthly reports to City •Manage & operate concessions •Ticket sales (held in trust) •Comcast-Spectacor guarantees Global Spectrum’s performance DAY TO DAY ADMINISTRATIVE RESPONSIBILITIES •Employ, supervise and direct all of Global Spectrum employees •Manage procurement •Purchasing •Payroll •Fire prevention •Security and crowd control •Traffic management •Parking management and coordination •Routine repairs •Preventative maintenance •Janitorial and housekeeping services •Energy conservation •Admission procedures •Accommodate the needs of the mobility impaired and handicapped patrons TICKET SALES – NON-RESIDENT ORGANIZATIONS Ticket sales held in trust until settlement after each event •Protects ticket buyers •Protects City TICKET SALES - RESIDENT ORGANIZATIONS •Ticket sales will be held by Resident Organizations Symphonicity(Virginia Beach Symphony) ? Virginia Arts Festival ? Virginia Beach Chorale ? Virginia Beach Forum ? Virginia Musical Theatre ? Virginia Symphony ? •This enables these long-standing groups to operate, pay employees, etc. CITY’S RIGHTS & RESPONSIBILITIES City’s Rights: ? Monthly reporting and oversight by City’s Contract Administrator ? Annual report to City Council through City Manager ? Periodic reports through Council liaisons ? Office space for City staff ? Use of Center by City & Schools City’s Responsibilities: ? Capital needs ? Net operating costs & management fee COSTS INVOLVED TOTAL ESTIMATED COSTS Pre-Opening Contract and Management Contract Costs FY07FY08FY09FY10 Net Revenue N/A$ 717,366$ 767,581$ 790,609 Management Fee * $ 87,000 $ 152,000 **$ 197,760$ 203,693 Estimated Incentive Fee N/A$ 48,651$ 31,570$ 32,517 Total Operating $ 212,944$ 1,796,720 ***$1,719,009$ 1,758,579 Expenses Operating Loss $ 299,944$ 1,280,005$ 1,180,758$ 1,204,180 * Adjusted annually applying consumer price index. ** Includes both pre-opening and operating management fees. *** Includes both pre-opening and operating expenses. Capital reserves may be necessary. ESTIMATED INCENTIVE FEE* FY09 : 1st Full Operating Year 12% of Combined Rental Revenue over $250,000 $ 12,521 12% of F&B Revenue over $100,000 $ 4,036 12% of Valet/Parking Revenue $ 635 12% of Reimbursed Expenses/Markup $ 2,287 12% of Box Office Rebate Revenue $ 5,911 12% of Gross Sponsorship over $100,000 $ 6,180 $ 31,570 ? Incentive fee is contingent on Global Spectrum achieving in eachoperating year the aggregate budgeted revenue from the operating revenue categories on which the incentive fee is calculated. DEDICATED REVENUE STREAMS •In addition to rental income and ticket sales, Sandler Center will generate the following additional revenue streams to the General Fund. Estimated City Revenue FY08FY09FY10 City Admission Tax $ 188,945$ 202,172$ 208,237 (10%) City Facility Fee * $ 150,440$ 160,971$ 165,800 Total $339,385$ 363,143$ 374,037 * $1-$2 included in ticket price •Request has been submitted to Commonwealth of Virginia for $300,000 to offset operations “COMING ATTRACTIONS” [NEXT STEPS] COMING ATTRACTIONS •October 9, 2007: City Council approves Operating Agreement and authorizes the City Manager to execute Operating Agreement •November 1, 2007 at 10:30 a.m.: Dedication Ceremony •November 3, 2007 at 7:30 p.m.: Opening Night with Itzhak Perlman www.sandlercenter.org QUESTIONS & ANSWERS PLAZA VIEW www.sandlercenter.org