Council PKT 07-21-2009 Special
.~ Federal Way
AGENDA
FEDERAL WAY CITY COUNCIL
SPECIAL MEETING
Council Chambers - City Hall
JULY 21, 2009 - 5:30 pm
www.cityoffederalway.com
1. CALL MEETING TO ORDER
2. PERFORMING ARTS CENTER DISCUSSION
3. EXECUTIVE SESSION
a. Potential Litigation Pursuant to RCW 42.30.110(1 )(i)
b. Property Acquisition or Sale Pursuant to RCW 42.30.110(1 )(b)
c. Collective Bargaining Pursuant to 42.30.140(4)
4. ADJOURN
~ Federal Way
SUBJECT:
July 15,2009
City Council/....V
Patrick DOhe~r.nic Development Director
Report on Performing Arts and Conference Center
DATE:
TO:
FROM:
Background
As you may recall, the City Council directed staff to engage consultants to study the feasibility of
an integrated Performing Arts and Conference Center (P ACC) facility, including business plan,
pro forma analysis, economic impact, etc. Webb Management Services of New York was chosen
after interviews with three consulting firms from around the nation.
The Report
Attached you will find the final draft report from Webb Management Services. It includes the
following components:
. Review of work to date
. Review of comparable projects
. Market analysis
. Competition within the regional marketplace for both performing and conference
facilities
. Working concept for the facility
. Proposed governance and operations models
. Proposed staffing plan
. Multiyear activity schedule and pro-forma operating budget
. Economic impacts
This report will be presented in detail at a Council Study Session scheduled for 5 :30 pm, Tuesday
July 21, 2009. There will be an opportunity to ask questions of our consultants at that time.
Information analyzing and comparing five potential sites for the P ACC will be presented in
Executive Session because public knowledge might adversely impact the City. This analysis has
been conducted by LMN Architects.
Next Steps
With this information, as well as the comparative analysis of five potential sites, you will have
the opportunity at the following regular City Council meeting (8/4/09) to deliberate whether to
continue to pursue the development of a P ACC. Based on consideration and the status of the five
potential sites, Council may also what site or sites to pursue further, provided that the public
Memo re PACC
July 15,2009
Page 2 of2
discussion would not have an adverse impact on the City.
It is important to understand what further pursuit of development of the P ACC means at this
time. As you know, the State has granted the City $500,000 for preconstruction-related expenses
(design, environmental, permitting costs), while the Federal Way Coalition for the Performing
Arts has also been awarded a grant for $325,000 for preconstruction costs. An affirmative
decision at this time to pursue the P ACC further, as well as identification of a preferred site,
would NOT necessarily constitute a commitment to construct the P ACC, but rather a
commitment to begin the design and permitting process, using the State-awarded monies
mentioned above.
That process would proceed while work would continue over the next ten months with
stakeholders, potential funders and the State Legislature to compile a capital funding plan to
finance construction of the PACC. Key to that plan will be the Legislature's potential approval
of a repurposing of the King County lodging tax revenues currently amortizing debts associated
with sports facilities in Seattle that will become available starting in 2012. Work this past
session led to a promising plan that would have potentially included substantial funding for a
Federal Way P ACC, but the plan was not able to be approved this year by the Legislature in a
political climate colored by sweeping budget cuts in the State's general operating budget. There
are positive signs that during the 2010 session, especially thanks to the diligent work and
fortunate representation by Senator Tracey Eide who co-chairs the committee charged with
repurposing the King County lodging tax revenues, the plan may be passed by the Legislature.
The Legislature's action in this regard will be a key component of any potential P ACC capital
funding scheme. For this reason, by approximately May of next year staff would be able to
present to Council a detailed construction cost estimate, based on design work completed by that
time, as well as a more fully fleshed-out capital funding plan. This plan will include whatever
potential contribution would be forthcoming from the Legislature (and approved by the
Governor).
For these reasons, May 2010 is time frame when a key go/no-go decision could be made by the
City Council regarding further pursuit of the P ACC. And at that time the initial commitment
could consist of approval to continue final design development and initiation of work leading to
the public infrastructure improvements associated with the P ACC. You will recall that for these
improvements the City has received a $5 million award from the State, which must be obligated
by June 30, 2011.
Please do not hesitate to contact Brian Wilson, Pat Richardson or Patrick Doherty at any time if
you have questions about this report or require any other information.
- ------------l
manl!all.ent
Feasibility Study for the
Federal Way Performing Arts &
Conference Center
July 2009
Feasibility Study for the Federal Way Performing Arts & Conference Center
table of contents
1. INTRODUCTION ................................................................................................................................................2
2. REVIEW OF WORK TO DATE...........................................................................................................................3
3. COMPARABLE PROJECTS REVIEW AND BENCHMARKING........................................................................8
4. THE MARKET FOR PERFORMANCE FACiLITIES........................................................................................14
5. THE COMPETITIVE SITUATION FOR REGIONAL PERFORMANCE FACILITIES........................................ 16
6. REGIONAL CON FERENCE FACiLITIES......................................................................................................... 19
7. THE FUTURE OF PERFORMING ARTS FACiLITIES..................................................................................... 22
8. FACILITY CONCEPT ....................................................................................................................................... 23
9. GOVERNANCE AND OPERATIONS .............................................................................................................. 28
10. STAFFING PLAN .......................................................................................................................................... 39
11. PRO-FORMA OPERATING BUDGET ..........................................................................................................42
12. ECONOMIC IMPACT .................................................................................................................................... 46
APPENDIX A: MULTIYEAR ACTIVITY SCHEDULE, PRO-FORMA OPERATING BUDGET AND REFERENCES
Feasibility Study for the Federal Way Performing Arts & Conference Center
1. introduction
The City of Federal Way has engaged Webb Management Services to conduct in depth
research around the concept of a Performing Arts & Conference Center, which was first
analyzed by C.H. Johnson and LMN Architects. Following is a review of the work completed to
date, research pertaining to comparable venues, and a strategy for the successful operation
of new facilities that considers the activity levels, operating policy and human and financial
resources required to sustain new facilities.
Many people from the community of Federal Way have informed this planning effort. We
would like to take this opportunity to thank them for their input and advice on the plan, and
for their commitment to the implementation of these recommendations.
July 2009
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Feasibility Study for the Federal Way Performing Arts & Conference Center
2. review of work to date
The idea of performance facilities and conference facilities in Federal Way is generally
recognized as one with great potential. Both components would support the revitalization of
downtown, sustain local arts organizations and attract business to the area. In 2008, City
leadership engaged C.H. Johnson to research both concepts, and ultimately approved the
pursuit of an integrated facility that would support performance and conference activities.
Historically, the Federal Way Coalition of the Performing Arts (FWCPA), a nonprofit formed by
eight local arts organizations, has promoted the development of a performing arts center.
Founded in 1989, the FWCPA advocates for local performance groups and the development
of new performance facilities. In support of the project, the FWCPA has engaged the Collins
Group to conduct a fundraising feasibility study.
The City of Federal Way 2008 National Citizen Survey suggests that residents are supportive
of downtown redevelopment, business enhancement and the construction of a new
performing arts center. In response to the questions "What is the single most important
thing the City of Federal Way can do to make this a better place to live?" business
enhancement ranked number two, downtown redevelopment ranked fifth and a performing
arts center ranked tenth. Additionally, 62% of survey responders strongly support or
somewhat support the use of City funds to help develop a performing arts center in the
downtown core to spur economic development and growth.
In January 2008, C.H. Johnson and LMN Architects completed a feasibility analysis, which
addressed market potential for a performance venue, conference facility and hotel. The
study proposed and prioritized five scenarios for new facilities, considering the potential to
renovate existing performance and conference facilities (Dumas Bay Center and the Knutzen
Family Theatre), develop a new performing arts center or a conference center, or finally, a
complex that would accommodate both performances and events. The project team then
developed preliminary cost estimates, management structures, operating scenarios and
economic impact projections for each development opportunity. The team recommended a
combined Performing Arts & Conference Center with an adjacent hotel. The decision to
pursue integrated performance and conference facilities was affirmed by Federal Way City
Council on January 31, 2009 at its annual retreat.
The project concept is also supported on the State level; the City has already secured
significant funding for capital costs. This includes $500,000 from the State of Washington to
pursue pre-construction activities related to the development of new facilities and $5 million
for facility infrastructure construction costs. And finally, the FWCPA has secured an additional
$325,000 to support pre-construction through the State's Building for the Arts program.
July 2009
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Feasibility Study for the Federal Way Performing Arts & Conference Center
The following pages include our comments on the C.H. Johnson Performing Arts Center &
Conference Center Analysis ("the Johnson Report").
Performing Arts Center
The Johnson Report provides a broad overview of the performing arts industry, market and
programmatic elements to determine the need for new performance venues in the City of
Federal Way. Overall, these comments do not warrant or require significant changes to the
facility concept developed in the initial analysis. However, there might be a need to refine
the conclusions around what types of programming will take place in the facility, who the
users will be, and how new facilities can support broader community goals.
A. Performing Arts Audiences
The Johnson Report makes inferences regarding propensity to attend the arts are based
on age distribution; the report suggests that a high proportion of 0-19 year olds, adults
35 to 54, and adults 55 and over is a good indicator of audiences. We think that this
information is inadequate to determine the likeliness of audience attendance for
performing arts events in Federal Way. One of the best indicators of audience attendance
is educational attainment, as determined by the National Endowment for the Arts (NEA)
Survey of Public Participation in the Arts (SPPA). We provide analysis on potential
audiences later in this report.
B. Theater Capacity
The Johnson Report notes that with the exception of the 234-seat Knutzen Family
Theatre, there is a distinct lack of traditional performance venues in Federal Way. Local
arts organizations requested a facility with 1,000 or more seats but draw audiences of
approximately 500 per show. A 500 to 700-seat facility will accommodate these users,
enable local arts groups to increase their presence, and hopefully their respective
audiences. Seating on two levels will provide an intimate setting for smaller audiences
and productions.
Based on information gathered from local arts organizations and need for a venue this
size in the local market, we agree that the capacity for a performance venue should be
500 to 700 seats. However, the Johnson Report inadequately tests the feasibility of a
500 to 700-seat theater within the highly competitive regional market. This is particularly
important when considering how the Performing Arts Center should be positioned and
programmed in the regional market. We will address this issue in the coming sections.
C. Programming
Based on insufficient demand from local arts organizations, the Johnson Report
recommends that the facility engage the services of a commercial promoter to book the
space. We think this should be reconsidered for the following reasons:
July 2009
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Feasibility Study for the Federal Way Performing Arts & Conference Center
.
The capacity of the facility (500 to 700 seats) is limiting in that it is not large
enough for many commercial events and might restrict the quality and number of
commercial events in the space.
.
Commercial promoters tend to utilize theater spaces for long blocks of time,
which would take precedence over local arts organizations and other users,
reduce flexibility of the booking calendar, increase booking horizons, and affect
booking priorities.
D. Support Facilities
The Johnson Report recommends that facilities also include a number of support spaces,
particularly those that sustain a resident company. The conceptual design for the facility
includes a placeholder of 2,000 square feet for rehearsal facilities for a resident arts
organization. As noted above, local arts organizations have a limited level of demand
and ability to afford these spaces. We think that the space is more likely to be used for
many uses and users. In that scenario, key support spaces should accommodate a
combination of rehearsals, meetings and special event space.
E. Front of House Facilities
The Johnson Report recommends that new facilities have a box office if on-site ticketing
is required. To fulfill audience expectations for a high level of customer service, we think
that new facilities should include an on-site box office. The box office should:
.
Facilitate on-site ticketing, on the basis that performing arts audiences expect the
ability to purchase tickets at the box office, over the phone, and pick up at will-
call.
.
Have flexibility to update the space for new advances in ticketing technology and
purchasing.
F. Involvement of Local Arts Groups
The Johnson Report indicates that current levels of demand from local arts organizations
are inadequate to program new facilities year-round. Our one-on-one interviews with
representatives from local and regional arts groups clarified the level of support they are
able to dedicate to the facility, and their expectations for the space. Combined with
presenting and demand from regional arts organizations, there was sufficient demand for
performance facilities in Federal Way. Additionally, the new arts facilities should:
· Provide professional facilities that enable local arts organizations to grow.
· Encourage the development of new arts organizations and activities.
July 2009 5
Feasibility Study for the Federal Way Performing Arts & Conference Center
G. Community Goals and Economic Impact
The Johnson Report broadly considers the benefits of these new facilities, particularly the
tremendous value of performance facilities, as they increase quality of life, add to
patronage at bars and restaurants and encourage visitation. The Johnson Report also
indicates a combined performing arts center and conference complex would provide $20
million in total spending in economic impact in year 5 of operations, and 200 increased
employments (FTE jobs). This development opportunity provides the greatest economic
impact of the five scenarios.
We think that there is a need to determine how new facilities would support the goals
and objectives of the City of Federal Way, and how those goals might influence the
development of a concept for new cultural facilities. Additionally, the previous economic
impact analysis does not sufficiently account for the induced expenditures by audiences
and the impact of that activity on the local economy. This economic impact can be
calculated using a model developed by Americans for the Arts within its The Arts and
Economic Prosperity report, as discussed later in this report.
H. Governance and Operations
The Johnson Report does not identify or consider all of the ways in which performing arts
facilities are currently operated and sustained. Operating models are more varied and
complex than simply civic or commercial, and it will be important to select the model that
is the best for the space, users and City. A number of models regularly utilized by
performance facilities include non-profit, government-run, user-run, commercial theaters
and educational institutions. Facilities may be owned and ope(ated through one of these
options, but many facilities utilize a variation of one or more of these models. We will
address governance and operation in the coming chapters.
Conference and Hotel Facilities
The consideration of market potential for conference facilities is accurate, assessing
comparable facilities, the local competitive situation, top industries and businesses, and the
quality of the Dumas Bay Conference facilities. Comments on this analysiS are as follows:
.
Based on local inventory, the proposed conference facilities will be significantly larger
than any of Federal Way's professional conference and meeting facilities, and would
not compete with existing local facilities. This is even more so the case if the Dumas
Bay Conference facilities are demolished or closed.
With 14,000 square feet of dedicated conference facilities, the assessment of
market potential does not fully consider the regional inventory of conference facilities
of comparable size. Positioning these facilities as available to trade shows,
exhibitions and conferences will compete with regional facilities located in Tacoma,
July 2009
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Feasibility Study for the Federal Way Performing Arts & Conference Center
Seattle and the region. An assessment of regional facilities is provided later in this
report.
· The Johnson Report recommends a 300-room 3-star hotel to fulfill demand that is
"induced" by new conference facilities. As determined by the Johnson Report and
reaffirmed by our own research, the current hotel inventory in Federal Way is lower
than comparable markets. Additionally, only two out of nine hotels provide on-site
meeting and conference space, something that has contributed to the shortage of
proper meeting and event space in Federal Way. A hotel development in proximity to
new facilities is mutually beneficial, and fundamentally a good idea. Based on the
current conceptual design of the Center, conversations with event planners and
representatives from convention and visitors bureaus, we would recommend a high-
quality hotel with a range of 150 to 300 rooms.
July 2009 7
Feasibility Study for the Federal Way Performing Arts & Conference Center
3. comparable projects review and
benchmarking
In order to test the viability of the performing arts paired with conference facilities, we have
undertaken a comprehensive benchmarking exercise in which we researched a series of
comparable facilities nationwide. Here are the steps we've taken to complete this exercise:
.
We developed a list of 9 comparable venues that contained both performance and
conference facilities.
.
We reviewed this information with the client and then refined the list.
.
The most important criteria in selecting the facilities for our detailed analysis
included the breadth and mix of programming, the size and characteristics of the
market and the nature of the governance and operating structure. Clearly, there is no
one venue exactly like the proposed Federal Way Performing Arts & Conference
Center. However, we were able to select venues that share characteristics and that
collectively consider most attributes of the project.
.
We created a short list of 5 comparable venues, with varying operating models,
market characteristics, programming levels and annual operating budgets.
.
Finally, we interviewed managers and staff of these facilities and collected other data
on activity levels, programming, financial resour.ces, rentals and governance.
We do acknowledge that this exercise is somewhat limited, as none of the facilities have
hotels included in their operations. The Eisemann Center has adjacent hotel operations,
which complement existing facilities. When searching for performance and conference
facilities that also included hotels, we discovered that very few facilities have this
arrangement, and the facilities that do include hotels tend to be large capacity theaters with
adjacent convention facilities. For example, the Cannon Center for the Performing Arts and
Memphis Cooke Convention Center includes 300,000 square feet of meeting and
conference space, a 2,100-seat theater and is connected to a 600-room Marriott Hotel.
Following are descriptions of facilities we researched:
July 2009
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Feasibility Study for the Federal Way Performing Arts & Conference Center
1. Florence Events Center, Florence (OR)
opened in 1994, and houses the 457-seat Events
Center Theater. gallery and a 21,600 square foot
Conference Center, which can be configured for
sit-down dinners, weddings. exhibitions and
breakout meetings. Florence Performing Arts,
Kremlin Chamber Orchestra, Last Resort Players,
and the Jazz Kings regularly use the facilities. The Florence Events Center is owned
and operated by the City of Florence. The facility is supported by revenue from facility
rentals and a 4% Transient Room Tax. Fundraising support is provided by the
nonprofit organization Friends of the Florence Center, a volunteer group that also
provides staffing.
2. Stafford Centre, Stafford (TX) opened in
2004, is located 15 miles from downtown
Houston, and contains a 1,115-seat theater and a
20,000 square foot ballroom, a catering kitchen
and breakout rooms to make up 25,000 square
feet of conference space. The grounds also offer
over 28 acres of outdoor festival green space. The
facility is owned by the City and operated by a
private management company. An outside presenter books about 15 events per year,
including popular musical acts, and the Centre rents the theater space to groups for
both private and public events. The conference spaces are used for corporate
events. weddings and private parties.
3. Eisemann Center, Richardson (TX) opened in
September 2002 and includes a 1,563-seat
theatre and 3,150 square feet of conference
space. Adjacent to the Center, the Renaissance
Dallas-Richardson Hotel and Galatyn Park
Conference Center provides over 30,000
additional square feet of meeting and banquet
space. Additionally, the Eisemann Center's Prelude ~-
Cafe is open for casual pre-show dining. The Eisemann Presents series includes
comedy, music and dance, and presents about 25 events each year; subscriptions
are available for certain series. The Eisemann Center is owned and operated by the
City of Richardson.
4. Mcintyre Hall, Mount Vernon (WA), opened in
2004, was designed by LMN Architects, and
referenced in the Johnson report as a facility similar
in cost and design to that being proposed for Federal
Way; Mcintyre Hall has a 651-seat theater and a
7,000-square foot large lobby and conference facility
that can accommodate up to 350. The Hall has
July 2009
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Feasibility Study for the Federal Way Performing Arts & Conference Center
additional meeting rooms for breakouts and intimate events. The facility is located on the
campus of Skagit Valley College and is close to a 102-room Hampton Inn & Suites.
Mcintyre Hall hosts events from Skagit Valley College, private events and local arts groups
such as META Performing Arts, Northwest Ballet Theatre, and the Skagit Symphony.
Mcintyre Hall is owned by the Skagit County Public Facilities District and is operated by
Skagit Valley College. The facility is also supported by lodging tax funds from the City of
Burlington and City of Mount Vernon, nonprofit organization Friends of Mcintyre Hall, and
a building operating endowment.
5. The Center for Rural Development,
Somerset (KY) The 100,000 square-foot Center
for Rural Development opened in 1996 and has
760-seat theater, 26,000 square foot exhibition
space, and five breakaway ballroom spaces that
can accommodate meetings from 20 to 300.
Programming at the Center includes performances
by local arts groups such as CenterStage, School Time Theatre, Children's Prime
Time Theatre and Lake Cumberland Performing Arts. The Center also produces youth
education and leadership institute programs, and is the largest provider of
videoconference services in Kentucky. The Center for Rural Development is owned
and operated by a nonprofit organization.
We will now work through the comparisons of the venues, and what this data suggests about the
operation of proposed facilities.
Benchmarking: Facilities
location
Local Population
% local Pop with Bachelors Degree (age 25+)
local Median Income
CBSA
CBSA Population
% CBSA Pop with Bachelors Degree (age 25+)
CBSA Median Household Income
CBSA Per Capita Spending on Admission Fees/Ent.
Owner
Operator
Number of Nearby Hotels
Total Number of Hotel Rooms
Theater Capacity
Conference Center Square Feet
Other Public Spaces
FederalWav
Federal Way
88,580 est.
26.24%
$57.539
Seattle- Tacoma-Bell evue
3,3Bl,567
32.44%
$64,239
$27,30
Stafford Centre
Stafford. TX
19,872
36.41%
$56,787
Houston-Sugarfand-Bay Town
5,819,069
26.88%
$54.987
$22.60
City
City
13
1089
1.115
25,000
1 visual arts space; lobby of
17,0005q It on 31e,e15;
ballroom, outdoor green
MdnIYIW Ha!
Mount Vernon. WA
30,809
18.70%
$46,647
Mount Vernon-Anacortes
118.415
20.60%
$53,125
$22.60
Public Facilities District
Skagit Valley College
9
733
651
7,000
A....... Events Cantor
Rorence, OR
6,899
17.57%
$37,000
Eugene-Springfield
348,614
25.79%
$44,145
$20.80
City
City
13
200
450
8.000
Full-service kitchen
BsamannCa_
Richardson, TX
104,661
48.73%
$68,084
Dallas-Ft. Worth-Arlington
6,348,826
29.41%
$56,794
$23.80
City
City
10
2030
1,563
3,150
3GB-seat; 1 visual arts space;
Lobby of 17.000 sq It on 3
levels. Adjacent hotel offers
30,000 additional square
feet of meeting space.
9
914
700
14.000
Multi-purpose room
Demographics Sources: Claritas 2009
.Washington State Office of Financial Management
CantIlrfof Rural DoooIo_
Somerset, KY
11,913
13.30%
$25,298
Somerset
60,992
10.39%
$33,980
$17.60
Nonprofit
Nonprofit
8
402
760
26.000
Outdoor green
It should be noted that the local population only includes households within the boundaries
of the City of Federal Way. Although we would consider the areas surrounding the City be part
of the primary market area, they have been excluded from the exercise. Conversations with
City staff indicate that greater Federal Way's population is approximately 130,000.
July 2009
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Feasibility Study for the Federal Way Performing Arts & Conference Center
We start with the basic comparison of the market and facilities. Federal Way is a relatively
affluent and educated market. Notably, Federal Way has the highest CBSA per capita
spending on admission fees and entertainment, the highest educational attainment levels,
and the highest median household income as compared to these other markets.
Like the Richardson and Stafford, Texas, Federal Way is an "edge city" within a much larger
metropolitan region. Although Federal Way is located within a major metropolitan region, the
number of nearby hotels is lower than both Richardson and Stafford.
The three other facilities are located in rural communities and far from major metropolitan
areas. Located on the coast of Oregon and outside the Eugene-Springfield metropolitan area,
the Florence Event Center is in a rural community within the smaller Eugene-Springfield Core
Based Statistical Area (CBSA). Both Mcintyre Hall and the Center for Rural Development are
located in regions with populations under 150,000.
Three of the comparable venues are owned and operated by cities, including the Stafford
Centre, which contracts a management company to oversee day-to-day operations and
bookings. Mcintyre Hall is owned by a Public Facilities District and operated by the Skagit
Valley Community College, a unique partnership between an educational institution and the
government sector. Finally, the Center for Rural Development is both owned and operated by
a non-profit organization.
Benchmarking: Activity
Stafford Centre
Number of Presented Events
Number of Conference Space Rentals
Non-profit Groups (%)
Private Users j Commercial Users (%)
Number oITheater Rentals
Resident Arts Groups (%)
Other Arts Groups (%)
Other Events (%)
Outside Presenter (%)
Total Attendance
Total Facility Uses
Base Rental Rate for Nonprofit Perfonnance Oay
. Data not available
Mclntyre Hall
6
55
60%
40%
170
192
5%
95%
160
65%
15%
10%
10%
15,000
275
$4,800
Rorence Events Center
3
10
20%
80%
105
75%
25%
EIsemann Center
27
78
41%
59%
354
8%
40%
52%
75%
25%
60,000
225
Average $940j6-hr
10,000
420
$600j8-hr
193,380
459
$1,500 - $1,650
Center for Rural Development
20
1,000
50%
50%
75
NjA'
NjA'
NjA'
NjA'
100,000
1095
$640
Next we compare activity levels in each of the comparable venues. The Johnson Report
projected that new facilities will generate rental income as the primary revenue source. The
Stafford Centre is close to this model. renting facilities to resident arts groups, other arts
groups, private users and to a local presenter. The Florence Event Center and the Eisemann
Center also present non-theatrical events. although in both cases, theater rentals outnumber
the level of other events. Accommodating nearly 500 total facility uses, the Eisemann Center
is one of busiest facilities, and is particularly interesting because only 48% of rentals are
attributed to resident arts groups - the theater is used frequently for other events as well.
Mcintyre Hall's facility also accommodates a number of users and uses. Non-profit groups
account for 60% of conference space rentals and 25% of theater rentals are non-
performance events.
July 2009
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Feasibility Study for the Federal Way Performing Arts & Conference Center
The chart below compares operating budgets and how facilities are supported. For reference,
the Johnson Report estimates that the performing arts component will have an annual
operating budget of $679,000 in the first year of operation, and the conference center will
have an annual operating budget of $1.2 million.
Each of the following City-operated facilities receives a significant level of funding from the
City government, ranging from 32% to 44%. As a non-profit, the Center for Rural
Development has more diverse funding sources, but does receive a significant portion of
contributed income from the State of Kentucky in support of the Center's specialized
Terrorism Prevention Certificate Program. Mcintyre Hall also has relatively diverse funding
sources, including a modest City contribution. Overall, contribute income ranges from 25% to
58% of operating budgets.
Benchmarking: Operating Budget and Contributed Income
Mcintyre Hall Aorence Events Center Eisemann Center
Operating Budget $778,560 $604,000 $3,451,519
Contributed Income
City Government $26,000 $225,000 $1,508,532
Corporations $10,000 $13,945
Individuals $17,000 $10,702
Other $138,500 $36,000
Total $191,500 $261,000 $1.533,179
Contributed Income as % ofTotal Budget 25% 43% 44%
City Contribution as % of Contributed Budget 3% 37% 44%
Stafford Centre Center for Rural Development
$1,266,270 $7,500,000
$401,718
$401,718
32%
32%
$120,000
$60,000
$4,200,000
$4,380,000
58%
0%
Next, we look more closely at earned income, considering rental income, ticket sales and
other revenue generating activities.
Benchmarking: Earned Income and Ticket Sales
Mcintyre Hall
Center for Rural Development
$55,000
3,000
Rorence Events Center Eisemann Center
$36,000 $563,408
$24,247
10,000 15,921
$100,000 $524,092
$16,848
$25,000 $10,286
$10,000 $305,882
$6,000
$4,000 $7,000
$169,000 $466,577
$350,000 $1,918,340
10% 29%
TIcket Income
Total Ticket Income
Ticket Sales
Ticket Service Fees
Total Number of Tickets Sold
Conference & Rental Income
Rental Income
Food & Beverage Income
Catering Commission
User Fees
Selection of Other Income Sources
Education & Outreach Programs
Investment Income
Concessions & Merchandise
Other Income
$330,760
$200,000
$5,000
Eamed Income
Total Earned Income
Ticket Income as % of Earned Income
$590,760
9%
Stafford Centre
$99,000
15,000
N/A'
$645,057
$19,462
$7,567
$179,467
$207,000
$70,000
$69,930
$90,000
$2,595,700
$851,553
0%
$3.131.630
3%
'Oata not available
July 2009
12
Feasibility Study for the Federal Way Performing Arts & Conference Center
The Stafford Centre is the most comparable venue, generating the majority of its income
from rentals and user fees. Ticket income for the Stafford Centre is not included in the
organization's total earned income because this number represents gross ticket sales
generated by outside renters. With the exception of the Eisemann Center, comparable
venues generate very little earned income from ticket sales, instead relying on rental income,
food and beverage income, user fees and catering commission.
The three City operated venues are either staffed by City employees or affiliated through a
contracted management company. With 30 members, the Eisemann Center has the largest
staff. All facilities rely on volunteer support for day-to-day positions including ushers, coat
checkers and concessionaires, but also trustees and boards of directors.
Benchmarking: Human Resources
Mcintyre Hall
Rorence Events Center
Eisemann Center
Stafford Centle
Center for Rural Development
Paid Employees
City Employees?
Total Staff
Full Time
Part Time
Contract Staff
Dedicated Fundraising Staff
Dedicated Marketing Staff
Dedicated Finance Staff
Production/Technical
Front of House/Ticketing
Other Personnel
Trustees
No
33
4
27
2
Yes
4
4
Yes
33
26
4
3
Yes
21
6
6
9
No
12
9
3
as needed
7
6
18
6
1
1
1
1
2
Volunteers
8 College Trustees & 7 Public
Facilities 80ard Members
120 - 150
11
7
12
60
180
15
25
Overall, the benchmarking exercise suggests several things about how one should expect
these facilities to run, and also highlights several unique characteristics about the project.
.
Each of the City-operated facilities does very little fundraising. As indicated in the
Johnson Report, City-operated facilities usually depend on the City to contribute a
significant percentage of the annual operating budget. Theaters operated by
nonprofit organizations have more diverse sources of contributed income, and they
also solicit funding from the private sector and foundations.
Each of these facilities generates the majority of revenue through theater and
conference space rental to resident arts organizations, other arts organizations,
event users and outside presenters.
.
Federal Way has significantly fewer hotel rooms and hotels than any of the
comparable facility markets.
.
There is a distinct lack of fund raising personnel at each of these venues.
July 2009
13
Feasibility Study for the Federal Way Performing Arts & Conference Center
4. the market
fa cil iti es
for
performance
As previously mentioned, the Johnson Report does not adequately address audience
attendance at new performance facilities. To inform this research, and supplement the
market research conducted in the Johnson Report, we evaluated educational attainment
levels of Federal Way and the surrounding region.
As determined by the NEA Survey of Public Participation in the Arts (SPPA), one of the best
indicators of the propensity to attend the arts is education. The NEA conducts the Survey of
Public Participation in the Arts every five years; the last survey was published in 2003 with an
update expected later this year. The SPPA identifies the demographic characteristics of those
who participate in the arts, both as audience members and as active participants in classes,
performing groups and more. The following highlight some of the key findings of the SPPA:
.
Educational attainment is by far the best predictor of arts attendance:
As seen in the chart below, the propensity to attend arts events among those who
have completed college is at least three times greater than for those who have
finished only high school; with each advanced level of education there is an
increased probability of arts attendance.
Rate of Participation: Education
~"' ::: C:
Musicals -==
Opera Ell,
Classical Music ~
Jazz
, I
% 0
5
10
15
20
25
30
35
40
. HS Grad D Some College D College Grad D Grad School
.
Income and age also matter, but not nearly as much; those with higher incomes
and those who are over 45 are more likely to attend.
Race is not a predictor of whether a person is likely to attend the arts, but is a
predictor of the genre of art likely to be attended.
July 2009
14
Feasibility Study for the Federal Way Performing Arts & Conference Center
By considering the previously described research along with
the characteristics of Federal Way and King County and
Seattle-Tacoma-Bellevue markets, we can understand the
potential audience to be served by new performance
facilities. Data used for this analysis comes from Claritas, a
marketing research resources company that provides up-to-
date demographic data as well as future estimates based on
Census data.
This chart shows levels of educational attainment by
market segment. indicating that the population in Federal
Way has education attainment levels comparable to national
averages, with 19% of the population holding a Bachelor's
Degree, and 7% holding a Graduate Degree and higher.
Educational attainment levels in King County and the
Seattle-Tacoma Bellevue CBSA are significantly higher than
national averages; 27% of King County populations have a
Bachelor's Degree, and 13% hold a Graduate Degree and
Higher.
Educational Attainment
~.-
I I
I
I
i '10~
I
f 30~
"- I
"~20%
I ()~
Bachelors De-glee and
higher
Graduate Deg.ree and
hi.;ht?r
o USA 0 Sea:Ue-Tacoma-8elli'\'lIe CBSA 0 Kmg Coor,tl 0 Fe-deral'/ii)
Based on this assessment of educational attainment levels, Federal Way's population of
approximately 88,500 has a good propensity to attend the arts, and is likely to be the
primary audience at new performance facilities. Both King County and the Seattle-Tacoma
Bellevue CBSA are well educated, and there is good potential for new facilities to also draw
from surrounding communities.
July 2009
15
Feasibility Study for the Federal Way Performing Arts & Conference Center
5. the competitive situation
regional performance facilities
for
To understand the competitive situation for regional performance facilities, we developed an
inventory of existing facilities that could potentially compete with proposed spaces,
interviewed facility managers of these spaces and toured regional performance facilities.
An examination of the current inventory of performance facilities and their use is key to this
analysis. Proposed performance facilities in Federal Way include a mid-capacity venue
capable of accommodating many different types of uses and users-as a result. we have
compiled and closely examined facilities located between Seattle and Tacoma with at least
500 seats but not more than 6,000. For the purpose of this exercise, we chose to exclude
large-scale arenas, such as the ShoWare Center, Comcast Arena at Everett and the Qwest
Arena because they accommodate a different set of users and uses.
This analysis found 23 true performance venues that regularly accommodate live
performance. Their capacities and types of activity are detailed below.
Federal Way Regional Facility Activity
Producing ActMty
Pnlsenllng ActMty Rental ActMty
~ 1=
~~~~~~~~~
--
~ --.-
WaMu Theater Seattle
ParamountTheater Seattle
Marlon DINer McCaw Hall Seattle
Benaroya Hall- Mark Taper Foundation Auditorium Seattle
The 5th AvenueTheater Seattle
Emerald Queen Casino Tacoma
K1ngCatTheater Seattle
The Moore Theater Seattle
Meany Hall forthe Performing Arts Seattle
Bremerton High School PerformlngArts Center Bremerton
Broadway Centerforthe Performing Arts . Pantages Theater Tacoma
PlU - Eastwld Auditorium Tacoma
Auburn HS Performing Arts Center Auburn
Town Hall Seattle
Seattle Repertory Theatre. Bagley WrlghtTheater Seattle
Broadway Center forthe Performing Arts. Rlalto Theater Tacoma
MtTahoma High School Tacoma
Kentlake HS PerformIng Arts Center Kent lake
Renton IKEA Performing Arts Center Renton
Uberty Theater PuyaUup
Benaroya Hall. Nordstrum Recital Hall Seattle
The AdmIral Theatre Bremerton
PLU -LagerquIst Concert Hall Tacoma
6,000
3,000
2.900
2.500
2.115
2.000
1.500
1.384
1,210
1,200
1.169
1.100
1,100
850
847
742
600
583
540
537
534
502
500
~
-
-
~
-
-
~
m -- -
~~~ m ~ -
- ~~~~ - -
-
~m~~ m~~~m~ __ =
~'ml
~~~ -- -
~ ~ ~ - -
=- -
~ ~ m -
-
- -
-
-
- .
~ ~ ~~~
-
b ~ .. f f s ~ ~ E ~ b i i .. ~ ~ i "! ~
~ i! I if 1 e i! ...
! i3 Q ,. j!; of ~ i i3 ~ 1 ~ c !
:2
~ ~ i J i "
~ i
---
---
.- -
--
-
-
--
~ i ~ S
I
j!; ~ ,. Q
::,
8
~
This inventory indicates the following:
JUly 2009
-
-
-
-
-
-
-
-
-
-
-
f .
8
_.nd
Promoten
16
Feasibility Study for the Federal Way Performing Arts & Conference Center
.
10 of the 23 spaces have capacities of between 500 and 850.
.
Rental houses dominate the market: 95% of venues are rented by outside users, and
the most common external users are corporate and municipal renters and local arts
organizations, followed by regional arts organizations and other promoters or
presenters.
.
12 (52%) accommodate producing companies; the most common activities are
theatre (35%), schools and colleges (35%), and music (25%).
.
13 (57%) present events, how~ver this is market is quite fragmented. The most
commonly presented events are music (30%), dance (26%) and theater (26%).
Additionally, our interviews with facility managers and tours of regional performance venues
provided insight into the competitive situation. Overall, the market for performance facilities
in the region is highly competitive, particularly for rental facilities and touring product. Facility
managers cited a number of issues that performance facilities are experiencing, including
operating losses, a lack of demand from users, and difficulty attracting audiences. Following
is a review of themes that emerged as a result of these interviews and tours.
· Arts organizations based in Federal Way frequently perform elsewhere, taking their
audiences with them. Not surprisingly, there is a distinct lack of performance
facilities in Federal Way with an ability to accommodate traditional theater, dance
and music. Conversations with local arts organizations combined with interest from
regional arts producers and presenters indicates a level of activity sufficient to
animate the theater.
· Presenting competition is difficult for 500 to 1,000-seat facilities in that many of the
regional spaces have not been able to compete for audiences or product with
facilities in Seattle proper. As a result, facilities such as the Meydenbauer Center in
Bellevue and IKEA Center in Renton have discontinued presenting. And the Edmonds
Center for the Arts presenting program is currently losing money.
· As determined above, the market for presenting is fragmented, and opportunities
remain so as long as strategic decisions are made around the type of event and
product booked in the theater. Based on information from representatives of regional
facilities, we would also recommend that presenting at the Center occur at
conservative levels.
· Some performance facilities in the region are not meeting expectations for usage and
are currently underutilized. Most of these facilities are rental houses that are failing
to meet demand expectations from local arts organizations and outside users.
However the Auburn Performing Arts Center is an incredibly busy theater and
frequently turns users away. This affects the facility in how it operates financially but
also the value that it brings to the community as an active and busy cultural facility.
July 2009 17
July 2009
Feasibility Study for the Federal Way Performing Arts & Conference Center
.
The Center has potential to overcome previously mentioned challenges because it
will have a diverse mix of activity. The theater will accommodate a set of active
performing arts organizations based in Federal Way, attract occasional presenting
and producing from regional arts organizations, have a small but targeted presenting
series and be aggressively marketed as an event venue.
.
Facility managers cited difficulty attracting technical labor. Some performance
venues are union-affiliated, but this makes it more difficult for venues that are not.
Generally, more active facilities hire and retain the skilled personnel who look for
more frequent and regular employment. The development of a technical training
program in association with new facilities could help combat these issues.
.
Within the market, there are a few outside operators and performing arts
organizations that program and/or manage publicly owned facilities. For example,
Village Theater operates Everett Theatre and delivers a high quality product there
and in Issaquah.
18
Feasibility Study for the Federal Way Performing Arts & Conference Center
6. regional conference facilities
To understand the potential for new conference facilities to succeed within the regional
market, we researched existing convention facilities and event spaces, interviewed facility
managers and toured a number of these facilities. Finally, we spoke with representatives
familiar with the local business community and the conference and meeting industry.
Following is a review of the market for regional conference facilities and the potential for new
facilities in Federal Way to succeed.
Initially, we researched conference facilities in proximity to Federal Way, including large-scale
facilities that regularly accommodate trade shows, exhibitions. meetings, conventions and
conferences. We gathered information from Convention & Visitors Bureaus and our through
Facility City
Washington State Convention & Trade Center Seattle
Qwest Field & Event Center Seattle
ShoWare Events Center Kent
Bell Harbor International Conference Center Seattle
The Museum of Flight Seattle
GreaterTacoma Convention and Trade Center Tacoma
Puyallup Fair and Events Center Puyallup
Meydenbauer Center Bellevue
Seattle Center Exhibition Hall Seattle
DoubleTree Hotel Seattle Airport Seattle
Comcast Arena at Everett (Edward D. Hansen Conference Center) Everett
Lynnwood Convention Center Lynwoood
Hilton Sea-Tac Hotel & Conference Center Seattle
Cedar Brook SeaTac
Doubletree Guest Suites Seattle Airport/South Center Seattle
Seattle Center Northwest Rooms Seattle
Seattle Airport Marriott Seattle
Holiday Inn Seattle/ Sea-Tac Airport Seattle
own research.
Total Square Feet
307,000
425,000
153,000
100,000
141,000
136.680
92,000
53,000
34,000
34,000
57,000
34,000
38,808
18,664
29,916
34,000
18,000
9,075
Largest Space
205,700
165,370
153,000
85,387
82,000
50,000
38,272
36,000
34,000
13,600
11,835
11,748
11,000
10,523
6,100
6,000
5,000
5,000
The inventory indicates that there are many facilities in a range of sizes operating within the
market. Although we have included them for reference, it should be noted that large-scale
facilities such as the Washington State Convention & Trade Center and the Qwest Field &
Event Center accommodate events such as trade shows and conventions and are not likely
to compete with proposed facilities because they attract a different clientele. Based on the
conceptual design developed by LMN Architects, the conference center would include
14,000 square feet of conference space. including an 8,000 square foot event space that
would also function at the theater's lobby, and breakout rooms. Based on the largest space
July 2009
19
Feasibility Study for the Federal Way Performing Arts & Conference Center
in each regional facility, we have highlighted facilities most likely to compete with proposed
facilities.
There are 18 facilities that currently accommodate meetings, conferences, exhibitions and
trade shows. The inventory indicates the following:
.
The Washington State Convention & Trade Center has the largest event space in the
region and is able to accommodate events up to 205,700 square feet.
.
7 of 18 facilities have their largest event space between 6,000 and 13,000 square
feet and would potentially compete with proposed conference facilities.
.
Not surprisingly, none of these facilities are located in Federal Way. The closest
conference facilities are more than ten miles away.
.
The ShoWare Events Center in Kent, WA and the Greater Tacoma Convention and
Trade Center are the closest facilities to Federal Way. Both of these spaces are far
larger than proposed facilities and would likely attract a different clientele.
Specifically, the ShoWare Events Center is a 153,000 square foot facility that is
primarily used for sporting events and has a flat-floor configuration for trade shows
and exhibitions.
.
There is significant competition in the region from hotel operators with event space,
as these facilities tend to offer free meeting and conference space with a guaranteed
minimum number of occupied hotel rooms.
To gather information on the level of demand for conferences and meetings in Federal Way
and the region, we interviewed representatives from the Seattle Convention & Visitors
Bureau, Southside Seattle, the Tacoma Convention & Visitors Bureau and local business
leaders. We collected opinions and empirical information on the state of the meeting and
events industry, the events that proposed facilities might attract and challenges that might
face the project. These interviews indicated that:
JUly 2009
.
The current economic climate has caused event organizers to cut catering costs,
postpone events and scale back the size and number of conferences and
conventions. In particular, this trend is prevalent among corporate clients and
consumer shows. It is expected that this is a temporary trend and that sales will
improve as the economy improves.
.
If a hotel is attached (as opposed to adjacent), the conference center could gain an
advantage. Hotel facilities should be designed in a way the properly accommodates
travelers to meetings and events, and should range from 150 to 300 rooms. It
should provide amenities for business travelers and out of town guests, potentially a
fitness center and pool, on-site dining, business center, room service and on-site
parking.
20
Feasibility Study for the Federal Way Performing Arts & Conference Center
· Locally, Federal Way lacks mid-size to large-scale event spaces for events. The
Dumas Bay Center, a City operated facility, is perceived as too small to accommodate
major events, in poor condition, and out-of-the way. There is a need for facilities to fill
this gap, particularly a centrally located space capable of accommodating larger
gatherings and offering the amenities of a proper event space.
· Federal Way's largest facilities are located in community centers, churches and
schools, spaces that cannot properly accommodate events such as weddings,
fund raisers and large meetings, as they do not offer amenities such as on-site
catering, a liquor license, media technology and event production staff.
· Seattle's major conference and convention facilities accommodate a variety of uses
and users, particularly larger conventions and exhibitions. Tacoma hosts mostly 2-day
or 3-day events. Other facilities in the region host mostly not-for-profit users and
events including banquets, fund raisers and more. The conceptual design of the
Federal Way conference facilities is not large enough to accommodate overflow from
larger conventions and events in the region.
· Facilities in Federal Way are likely to compete with existing facilities near the Sea-Tac
Airport for overnight meetings. Conference and meeting facilities in proximity to the
airport have a competitive advantage because they are well established, attached to
hotels and are convenient for out-of-town travelers.
July 2009 21
Feasibility Study for the Federal Way Performing Arts & Conference Center
7. the future
facilities
of
performing
arts
In April 2007, Webb Management Services hosted a conference in New York City to consider
the future of performing arts facilities. Over the course of two days, forty performing arts
facility managers from around the country worked through a series of presentations and
discussions on audiences of the future, where performing arts disciplines are headed, what
is happening in the area of arts funding and how, then, buildings should be planned and
developed in order to succeed some twenty-five years from now.
Across the United States, performing arts organizations and facilities are under increasing
financial pressure. With limited potential to improve productivity (a symphony takes the same
time to rehearse and perform as it did 300 years ago), arts organizations face a never-ending
cost squeeze which forces them to become more reliant on fundraising, more willing to seek
operating efficiencies through collaboration, and more focused on education programs as a
means to attract funding and audiences. Younger audiences are less committed to the
performing arts, particularly the established disciplines (classical music, ballet, opera)
presented in traditional facilities.
So, what, overall, did we conclude about facilities of the future? On the whole, performing
arts spaces will become smaller, more flexible, less permanent and less formal. Equally
important is the idea of designing facilities that support amateur community programs and
attract younger audiences with spaces that are accessible, affordable and welcoming,
offering the possibility of an enriching social experience. For the Federal Way project, we
would therefore encourage a maximum level of flexibility in an inspiring environment and an
operating organization that can minimize costs and maximize programming and partnership
opportunities.
July 2009
22
Feasibility Study for the Federal Way Performing Arts & Conference Center
8. facility concept
Based on a review of the Johnson Report, our own research and experience with similar
projects, we conclude that:
July 2009
A. The 500 to 700-seat theater is feasible, so as long as new facilities are
strategically programmed and positioned within the marketplace.
.
We would discourage hiring a commercial promoter to program the space (as
recommended in the Johnson Report), and instead will offer some alternative
scenarios for consideration in the coming chapters:
o The operator of new facilities should partner with an existing regional
presenter to selectively book touring acts. There are a number of existing
presenters in Seattle, Tacoma and the region, so there is potential to
collaborate with an existing regional presenter, the benefit being that this
organization is already familiar with the region's audiences and could
successfully program new facilities on the basis of that experience.
o The operator of new facilities should be the presenter and have control to
book events into the space, allowing for greater flexibility and a balance
between local arts organizations and touring acts.
.
The market for regional facilities is already highly competitive, with a number of
theaters producing, presenting or renting to other groups in the region. New facilities
should strategically position themselves within the market place, focusing on gaps
identified in our regional facility inventory. There is potential to enter the market as a
presenter, offering:
o Small-scale musicals and theater productions
o Other theatrical touring productions with a dramatic theme
o Family-oriented events
o Comedy
o Spoken word
o Music concerts, such as classical and chamber music, world music, folk and
blues
o Popular music, including regional and national talent
.
While there are a number of performance rental facilities in the region, we think that
the theater can successfully rent the space for a variety of uses and users. The
theater is likely to accommodate a diverse set of renters, including local arts
organizations, regional producers and presenters and meetings and events.
23
Feasibility Study for the Federal Way Performing Arts & Conference Center
B. Based on our initial review, a 500 to 700-seat theater still makes sense
for the City of Federal Way.
New performance facilities in Federal Way would sustain local arts organizations, allow
regional arts organizations to expand their audiences and presence, fulfill local demand
for conference and meeting space and have a diverse set of users and uses. But in our
minds, the issues of quality and flexibility are more important than the question of 500
vs. 700 seats. On that basis, limited resources should be expended on a high-quality
space that is very flexible and has at least 500 seats to:
· Accommodate touring acts.
· Allow local arts organizations to grow audiences.
· Provide a secondary event space that could accommodate events and exhibitions
utilizing conference facilities.
C. New performance facilities should fulfill the needs of local arts
organizations, providing a larger space with sufficient support facilities.
· Demand for space from local arts organizations is positive though insufficient to
fully animate the theater.
· Recognizing that most local arts organizations draw audiences of 400 to 500 per
each show, we recommend that theater seating be split onto multiple levels such
that one or more can be closed for smaller events.
· Instead of a rehearsal facility for a resident company, facilities should include a
multi-purpose space that is available to the local arts community and for events.
D. An attached or adjacent hotel would benefit the project.
As determined by the Johnson Report and reaffirmed by this work and our own
experiences as consultants, a hotel connected to the Performing Arts & Conference
Center will provide the following benefits:
· Meeting and Events: The presence of a hotel will complement demand for
event rentals and the theater, ballroom and meeting spaces.
· Food Service: A hotel would offer a professional and integrated food service for
both the conference center and the theater.
· Perception: Combined with the Performing Arts & Conference Center, a hotel
creates a critical mass of daytime and nighttime activity that drives business and
community development.
· Conference Services: The convenience of an attached hotel provides
amenities that are attractive to meeting event and convention planners.
· Audiences: Hotels provide a built-in audience for the performing arts center
and an additional audience for promotion.
In Richardson, Texas, the Renaissance Hotel is the concessionaire for the Eisemann
Center, as well as the preferred (but not necessarily exclusive) caterer. Additionally, sales
and events staff marketing proposals for conference related activities use the Eisemann
July 2009
24
Feasibility Study for the Federal Way Performing Arts & Conference Center
Center as an option for additional meeting space when they are unable to accommodate
groups. The Eisemann Center event staff market the hotel in the same manner when
potential client groups have the need for both exhibit/reception space in addition to
meeting space. Finally, guests at the hotel frequently go to events at the Eisemann
Center, driving audience attendance. The Renaissance Hotel and the Eisemann Center
do not have a formal agreement, but have instead "playoff each other in our efforts to
get larger events with multiple needs."
E. New facilities should support broader community goals.
As well as serving audiences, local arts groups, local businesses and meeting
planners, the project can also serve a range of community goals, including:
· Drive economic and community development in Federal Way.
· "Induce" additional demand for lodging, and increase occupancy rates at all
Federal Way hotels.
· Increase the quality of life for Federal Way residents, providing opportunities to
support local arts organizations but also be exposed to nationally and
internationally recognized artists, productions and talent.
· Attract visitors from the neighboring communities.
· Support operations at the Conference Center, providing a unique event space for
meetings and lectures.
Overall, we feel that the information developed in the Johnson Report, along with our own
additional research, confirms that the facilities should include:
Performing Arts Center
· A high-quality, flexible 500 to 700-seat theater
· 2,000 square foot multi-purpose space accessible to local arts organizations and the
community
· Backstage dressing rooms and support area
· Administrative space
· Box office with the capability to handle on-site ticketing
· Sufficient parking
The performing arts center will support local arts organizations, offer some presenting and
operate as an additional large conference space for lectures and presentations. The market
for performance facilities in the region is relatively competitive, but interviews with local and
regional arts organizations suggest that the Center would be utilized at sufficient activity
levels to sustain the facility.
Presently, higher education facilities do not have an established presence in Federal Way,
particularly for the performing arts. The Center presents an opportunity to engage a partner
as a user in the project. We think that there is good potential for the performing arts
JUly 2009
25
Feasibility Study for the Federal Way Performing Arts & Conference Center
component to work as an attractor for a community college. This would also support the
City's downtown redevelopment goals.
Conference Center
· An 8,000 square foot large lobby and conference center
· 6,000 square feet of additional meeting space to be used as breakout rooms or for
standalone events
· Sufficient parking
It will be necessary to carefully position and aggressively promote the Center, as the market
for conference and meeting facilities in the region is highly competitive. New facilities should
first cater to daytime meetings and evening events, including fundraisers, banquets,
education workshops, training seminars, private parties, weddings and rehearsal dinners,
social events, board meetings, product launches, and local association gatherings. Once the
Center has established an identity and brand with local and regional businesses and meeting
planners, staff can begin to market the facilities as a destination for overnight meetings. The
market for this type of business is correlated to the development timeline of the hotel.
Locally, the Center will provide the largest gathering space in Federal Way. Presently,
adequate large capacity spaces are limited, and a number of the largest facilities are in
churches, schools, the Dumas Bay Center and the Federal Way Community Center. There is
a need for larger facilities in excellent condition and location that offer on-site catering,
audio/visual capability, trained support staff and more.
On a regional level, the market for conference and meeting facilities is relatively saturated,
and a number of existing facilities are not being utilized to their capacity. This situation is
likely to change with the improvement of the economy. As we see it today, there are
challenges to competing in this market. Nevertheless, there is potential for the Center to
succeed, if marketed at first to local users, and then to regional meeting and event planners.
The success of the facility relies on the ability for conference and hotel facilities to be high
quality and meet expectations of m.eeting and event planners. The Center should be
marketed to these users as an affordable hotel and conference facility centrally located
between Tacoma and Seattle and in proximity to 1-5 and the Sea-Tac Airport.
Hotel
· 150 to 300-room hotel
· 3-sta r rati ng
The hotel should fulfill a number of community goals, realize the City's downtown vision, drive
demand for the conference center and support local business.. The hotel should support
activity at the Center, but it will also add to the local hotel inventory. Information from the
Johnson Report and our own research indicates that for a community of its size, Federal Way
has an unusually low hotel inventory.
July 2009
26
FeaSibility Study for the Federal Way Performing Arts & Conference Center
To gain competitive advantage for regional meetings and overnight conferences, the hotel
should be attached rather than adjacent to the facility, and should be high-end. While many
conference facilities in the region have adjacent or nearby hotel operations, meeting
planners actively seek facilities with an attached hotel; positioning the hotel in this way
would provide an amenity that most facilities in the region do not offer.
Finally, the development of an attached hotel could be approached in phases, or could be
built in concurrence. with the Center. Building the Center's regional and overnight business
will take time, so there is 'potential to develop the hotel in a second phase of construction.
July 2009
27
Feasibility Study for the Federal Way Performing Arts & Conference Center
9. governance and operations
Governance Options
There are several different models that describe how performing arts and conference
facilities are governed and operated.
1. Nonprofit-run facilities are the most common model of operation for performing
arts facilities. These organizations are independent 501(c)(3) corporations that have
been created to serve key constituents and audiences. Most often, organizations are
created for the specific purpose of operating new facilities. These organizations vary in
size and focus, acting as producers, presenters or as service organizations facilitating the
activities of other groups. Often it is some combination of the three. In all cases, these
organizations are mission-driven. The benefit of this model relates to its orientation
towards public service. As 501(c)(3) organizations, their operations are relatively
transparent, which allows for greater public accountability. As mission-driven
organizations, they often have significant community impact, including arts education
and outreach programs. Their nonprofit status also allows for a strong fundraising
infrastructure. which can reduce their reliance on earned revenue and provide greater
curatorial flexibility; this flexibility can ultimately benefit the quality and availability of arts
programs in the community.
The most significant downside of this operating model is the lack of a guaranteed source
of contributed income available to these organizations. Nonprofit-run facilities must
compete each year with a range of charitable organizations in the nonprofit sector. With
fluctuations in the economy and in the policies and commitment of philanthropists and
corporate sponsors, this model is not always the most viable approach to ensure long-
term stability of operations. Despite these factors, discussions with representatives from
FWCPA, non profits, local arts organizations and business leaders indicate that there's
confidence in the community around this type of operator, particularly for its ability to
fundraise and reduce the obligation of the City.
2. User-run facilities represent a slight variation on the nonprofit-run model. Here we
have the principal users of the facility as the operator, as opposed to a nonprofit created
specifically for the purpose of operating the facility. This is an attractive model when
there is one user that dominates the hall or complex. We are not optimistic about this
option in Federal Way. Center Stage Theatre is probably the only organization that might
conceivably take over the space, but the proposed facility is too large for their needs.
They are currently managing the KFT, and they themselves are a lean organization
without the resources to all of the other elements of the job.
July 2009
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Feasibility Study for the Federal Way Performing Arts & Conference Center
3. Commercially-run facilities are operated by an independent, professional
management team. There are three primary examples of a commercial operating model.
The first is a for-profit entity that owns and operates a facility for a profit. In the second
case, the facility is owned by either the public sector or a nonprofit organization that
enters into a management agreement with a commercial organization, allowing them to
run the facility and share in the operating results. One example of this scenario is the
Lynnwood Convention Center, which is owned by a public facilities district, which then
contracts the operation of the facility to SMG. In facilities with performance venues, the
commercial operators present (and occasionally produce) entertainment programming.
Operating expenses and revenues vary significantly from year-to-year depending on the
level of risk exposure taken by these organizations and the success of their programs.
The third type of commercial venture happens when the facility owner or managing
organization subcontracts with commercial operators to manage the facility on their
behalf. In this scenario, commercial operators are contracted to provide professional
staff and experience and to guide overall facility operations. In this case, the facility is
usually made available to outside renters, which can include nonprofit cultural
organizations and commercial presenters.
There is some potential for the City of Federal Way to enter into a management
agreement with an independent management company, particularly for the operation of
and marketing of conference facilities. However, the theater has a capacity that is
limiting for commercial presenting or producing, and booking by a commercial promoter
could limit access and availability of performance facilities to local arts organizations.
4. Other Performing Arts Centers: The other option we are encountering more
often is the operation of multiple performing arts spaces by one organization. This
makes sense when one organization is able to apply its skills and resources to secondary
facilities in the same or a neighboring market, usually on a fee-for-services basis. For
example, Village Theatre operates a facility in Issaquah and manages the Everett
Performing Arts Center.
5. Government-run facilities are generally managed by a department or agency of
local government. They are often managed by convention and visitors' bureaus, usually
as part of a larger portfolio of publicly accessible facilities. By-and-Iarge, government-run
venues operate as rental facilities, making performance venues available to local cultural
organizations and for local and regional presenters to bring touring activity to the market.
The principal benefit of a government-controlled operation is the relative guarantee of
publiC funding to support ongoing operations. The vehicle for such support may vary,
including enterprise taxes, hotel/motel tax funds and/or line-item budget allocations, but
the assurance of annual public sector support provides a significant operating cushion.
Management's orientation toward public service can provide significant benefits to local
cultural organizations in terms of cost and scheduling. Management's access to
resources that often extend to the operation of other facilities can also help keep costs
down.
July 2009
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Feasibility Study for the Federal Way Performing Arts & Conference Center
Governance Recommendations
The Performing Arts & Conference Center supports the City's long-term goals, supporting
downtown redevelopment, enriching quality of life, and driving business in Federal Way. To
ensure that the facility supports these objectives, we would suggest that the City retain
ownership of facilities and select one of the following operating scenarios:
· A new nonprofit entity should be formed to oversee the management of facilities.
· If an existing nonprofit performing arts organization with experience operating
comparable venues emerges as a viable operator, then the City should consider
contracting management of the facility.
A nonprofit operator is the preferred choice for new facilities because it would instill the
ability to fundraise, reduce the level of risk assumed by the facility, and could establish
stand-alone policies and procedures. For the purpose of this study, we have developed the
governance and operations policy on the basis that new facilities are operated by a nonprofit,
501(c)(3) entity.
The benefit to partnering or contracting facilities to an existing performing arts organization
would be that organization's existing audience base, knowledge of the market and
experience as an operator. In this scenario, there is likely to be an annual management fee
for services.
Operating Goals
We can now proceed to consideration of how the Center will be operated on a day-to-day
basis, starting with some goals to guide operations. In our minds, the facility should:
· Operate as an active and community-oriented performing arts and conference facility
offering a variety of programs, events and spaces that serve a range of local and
regional constituents.
· Present a broad spectrum of arts and entertainment events that will attract
audiences to downtown Federal Way.
· Operate in a manner that is friendly to the environment and to the development of
downtown Federal Way and enhances local business.
· Provide accessible and affordable performance, rehearsal and education spaces to
support the growth of local and regional artists, arts organizations, and the programs
and mission of the Center.
· Encourage arts education partnerships for students of all ages, particularly the
Federal Way School District and possibly a higher education institution.
· Operate on a sound financial basis.
Each one of these sounds relatively straightforward and achievable. But it is the combination
of these goals that makes the job of arts facility management endlessly challenging and
rewarding.
July 2009
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Feasibility Study for the Federal Way Performing Arts & Conference Center
The Role of the Board
The Board of the new nonprofit entity should consist of a selection of community members,
City staff and professionals representing diverse backgrounds and constituencies. All board
members should bring a number of assets to the Center including the following:
· Passion and commitment for the mission and programs of the Center.
· The ability to individually contribute to the Center as well as the ability to garner
financial support for the organization and its programs through significant individual,
corporate or in-kind contributions.
· Intellectual capital in the form of professional skills and expertise that can guide the
successful and solvent operations of the Center, both in terms of the Theater and the
conference spaces.
· The ability and willingness to act as an ambassador and advocate for the Center and
its programs and services.
In addition, the Board as an entity should:
· Employ term limits in order to bring new skills and insight to the organization on a
regular basis.
· Be required to contribute financially to the Center (in terms of donated or raised
funds). This is often referred to as a "give or get." An initial "give or get" might be set
between $5,000 and $10,000 for each board member.
· Not only fundraise, but also govern the organization. This includes hiring, evaluating,
and if necessary, firing senior management, ensuring results-oriented goal-setting
and high performance.
· Empower staff to manage the details of facilities management, fundraising,
programming, marketing and more. It is critically important that a board not micro-
manage staff or operations.
· Include a committee structure to provide broad strategic oversight for facilities,
fundraising, marketing, senior staff and board development (or nominating) and
planning. A staff person should sit on each committee.
Building on the roles and responsibilities detailed above, a board development/nominating
committee should develop a manual including the organizational bylaws and detailing the
roles, responsibilities and expectations of each board member including responsibilities
unique to executive board members and committee chairs. This manual should be
distributed to each board member at the beginning of his/her term and discussed at length.
Advisory committees may also be developed to engage members of the community,
students, funders, businesspeople, artists and other friends and constituents that do not
meet all of the board member criteria. The role of this committee is much less formal, simply
inviting advisory board members to provide expertise when called upon and to serve as an
ambassador and advocate for the organization.
July 2009
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Feasibility Study for the Federal Way Performing Arts & Conference Center
The makeup and function of the Board will be critical to its operation, its fundraising
capability, and perception within the community. As Alan Weiss, consultant and nonprofit
board member, recently expressed in an op-ed piece in the Providence Journal:
'Nonprofit' doesn't mean 'non-professional.' We're dealing with huge amounts of public
money and public trust. Boards have to be led, and themselves, lead, so that the money
and the trust are confidently given... It's an issue of stewardship."
Elements of Operating Polley
Now we proceed to offer more specific recommendations on operating policy. These
suggestions are intended to guide City staff and the Center's eventual leadership as they
prepare for new facilities. Recommendations are built based on our prior work with similar
organizations and also on our work thus far with the City of Federal Way.
Utilization and Access
The key to success for new facilities is to make them as busy as possible with a range of
activities. We see the following types of activity as being important, listing activity in order of
scheduling priority for each programmable space:
Theater and Multi-purpose Room
The theater will have a set configuration but will accommodate a variety of uses and
users. It should be central to the Center's mission to animate this space with the right
mix of programs and access to outside users. Following is a list of activities in the space,
in order of scheduling priority:
· Presenting would both activate the space and bring in ticket revenues; these
shows will be booked well in advance and therefore given priority.
· Partnerships and educational programming would allow the community to utilize
the space on a year-round basis.
· Local arts organizations and resident arts organizations would occupy the space
as needed, potentially developing and rehearsing a production and then offering
a number of days or weeks of public performances.
· The theater would also be available to outside to local arts, nonprofits,
community groups, for commercial arts rentals and as a conference and meeting
space.
· An adjacent 2,000 square foot multi-purpose room will provide support for
performance facilities, and would be available for rehearsals and meetings.
The Center's largest conference and meeting facility is also the theater's lobby.
Understandably, large-scale conferences cannot be scheduled at the same time as
performances as they would disrupt activity in the theater. Therefore, we recommend
that performance events have priority over meetings and events.
July 2009
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FeaSibility Study for the Federal Way Performing Arts & Conference Center
Conference Center
Available for meetings and conferences, private events or parties, the conference center
will be busy community spaces available to local and regional businesses, residents,
artists and arts groups. Following are potential types of users, listed by scheduling
priority:
· The conference rooms would be available to rent for meetings, events and more
by commercial businesses and various organizations, local, regional and national.
· The rooms would be made available to local arts and community groups for
meetings, classes and activities.
· The facility would also be available for private events including parties, weddings,
meetings, and other rentals and activities.
Resident Organizations
We would recommend that a group of community-based organizations have the opportunity
to seek classification as residents of the Center. Resident groups gain preferred rental rates
and status for booking in exchange for bringing a certain amount of activity and benefit to
the venue. Performances and events produced by these groups can guarantee a relatively
consistent level of activity to attract residents, students, audiences, and other visitors. They
can also help to build an image of the facility through consistent use, supporting ongoing
marketing and fund raising efforts.
We generally favor a process where organizations qualify as residents through an open
application process. In such a process, the selection criteria should be publicly available, and
might include some of the following:
· Level of programming: The organization agrees to bring a significant portion of their
annual performance and rehearsal activity to the facility. Specific levels of use may
be required within policies and criteria for resident groups.
· Mission: The organizational mission is worthy and consistent with the goals of the
City and the Center.
· Quality: The organization creates work of quality (however the organization wishes to
define it) that will enhance the image and reputation of the Center.
· History: The organization has a track record of success, financial stability and stable
growth.
· Organizational Development: The organization has made a commitment to
organizational development that will bring their administrative skills and resources to
a high level.
Outside Rentals
Research indicates interest from local groups to use space at the Center. Projected activity
levels suggest that both the theater and conference center will be relatively busy spaces
July 2009
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Feasibil ity Study for the Federal Way Performing Arts & Conference Center
used by a number of external users. To maintain the quality of the facility and its equipment,
we would suggest the development of facility policies to ensure the following guidelines are
in place.
· Explicit policies must be established which define how facilities are booked. Policies
should cover booking horizons and procedures, rental rates, scheduling priority,
cancellation fees and other charges and stipulations.
· Policies should address use on the part of presenters and presenting programs,
resident programs, and outside users.
· Rental rates should be scaled to favor some combination of local-based groups and
nonprofit organizations.
Food Service
We would suggest that a contract be negotiated that provides appropriate food service to
audiences and renters, while also benefiting the operation of the Center. This should include
basic concessions for those attending performances, catering capabilities to support
meetings, conferences and special events in the building, and backstage catering for artists
and others working in the building. Leadership should consider how patrons might be
attracted to the facility for pre and post-show socializing in order to build a connection and
comfort with the facility and its offerings and perhaps to generate increased concession
income. Efforts might include pre and post show cocktail hours that may include live music
or performance that promote the lobbies as a gathering space for patrons. We would also
suggest considering a local, sustainable food provider as described in the section about
Green Operating Practices (below).
Ticketing
There are literally dozens of ticketing systems available to performing arts organizations and
venues, each claiming to offer unique features and benefits. The Center should take
advantage of new technologies in ticketing, including online services, in order to best serve
users and audiences and to collect data with which to market the facility and its programs.
The actual box office at the Center could also be expanded to take on the role of a
community ticket outlet for a range of off-site programs.
The next step in the evolution of ticketing will be to replace home-printed and preprinted
paper tickets with an electronic ticket that can be sent to a mobile phone via short message
service (SMS). This mobile ticket (m-ticket) consists of a bar code that can be quickly read
and validated directly from the mobile device's display screen. M-tickets represent a huge
advance in ticketing efficiency and versatility. A significant advantage of mobile ticketing for
event organizers is that they are able to continue to sell tickets right up to, and during, the
event. In addition, they can track attendance at an event automatically and in real time.
Mobile ticketing also cuts down on the illegal trade of scalping, because a barcode on a
mobile phone text message cannot be resold (it may however be transferred). The Center's
ticketing system should be specified to accommodate mobile ticketing.
Juiy 2009
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Feasibility Study for the Federal Way Performing Arts & Conference Center
Our experience with groups and facilities across the country suggests that ticketing systems
must meet a few non-negotiable criteria. Ticketing systems should be:
· Convenient for patrons. This means tickets should be available in-person, by phone
or online at all convenient times of day.
· User-friendly, with a simple interface and clear instructions.
· Affordable. Ticketing systems should not require significant costs and resources.
Instead, any associated fees should be passed on to the ticket buyer. However,
patrons should not be punished for convenience. While a level of ticket fees has
become commonplace and expected by ticket-buyers, extraneous fees and
surcharges can cause disillusionment and frustration in many patrons.
· Flexible, allowing for events to be set up quickly, easily and in various ways (general
admission vs. assigned seating, etc). Reporting should also be flexible, allowing
managers to track sales and attendance on moment-to-moment basis.
· Integrative, with the ability to support marketing and fundraising functions, keep
track of a buyer's attendance and donor history and simplifying e-marketing, direct
mail and other marketing tactics.
Ticketmaster currently has approximately 50 percent of the market share for online ticket
sales in the United States. In the U.S., performing arts presentations represent a very small
portion of Ticketmaster's activity and revenue, with the large majority coming from large
scale, multi-city concert tours. The Ticketmaster interface is designed to best facilitate those
tours. As a result, the system's search function, calendar and seating features are not well
suited to arts ticketing or for ticketing exclusive to a facility. However, Ticketmaster has just
developed a system called Artix, which is a CSR function that combines ticket buying and
fund raising data, with one record for each customer.
In response to Ticketmaster's shortfalls, a number of other systems have been developed
performing arts events and venues-and more are coming. Some of the most popular and
well-revered models that serve performing arts venues include:
· ProVenue from Tickets.com
· TICKETsage
· The Patron Edge (can be used in conjunction with Raisers Edge fundraising
software)
· Tessitura
· TlcketAnnex
We would encourage the Center to conduct a RFP process for ticketing services so that
features, costs and arrangements for each system can be considered.
Volunteer Opportunities
Though the Center must rely on a professional staff, we would encourage the development of
a volunteer labor force to support Center operations. Local volunteers often play an
important role in supporting the operation of arts and entertainment facilities. Additional
human resources are nearly always helpful to the organization, but committed volunteers
July 2009
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Feasibility Study for the Federal Way Performing Arts & Conference Center
can play an even more important role as ambassadors, guerilla marketers, and even
financial supporters for the organization. Staff should identify opportunities for volunteers to
serve in such roles as ushers for performances, tour guides for the facility and roving helpers
for unexpected situations. This particular task should be closely coordinated and perhaps
integrated with volunteer operations of key user groups or resident organizations.
We would also take the position that volunteers should be treated like employees in terms of
how they are trained, monitored, and evaluated. This will help to ensure that, in turn, they
offer professional customer service and represent the Center to the public in the best light
possible.
Scheduling Polley and Procedures
We would suggest that formalized policies, procedures and systems be put in place from the
beginning of operations to manage utilization within the facility. This should include detail on
how far in advance dates can be secured, current rental rates, scheduling priority,
cancellation fees and any other charges related to scheduling.
All of these policies should be placed in writing and available onsite, as well as published on
the Center's website, for the public to access and understand. In addition, programs should
adhere to schedules and policies in order to allow ample time for rentals to be booked
around internal offerings. And a web-based scheduling system should track utilization of
each space and details that inform ticketing functions, house management, volunteer
scheduling and more to create easy access for staff and to streamline planning and client
relations.
Green Operating Practices
Though performing arts and entertainment facilities have traditionally been slow to embrace
energy efficiency and sustainability, changes are occurring in the field and there is an
opportunity for the City to use the Center as a test-bed for green operating practices. Here
are some ideas coming from other performing arts venues and conference centers:
Transportation: If possible, the facility should be located near public transportation
and encourage its use. If it is not near public transportation, bicycling should be
encouraged. This can be done by offering ticket discounts to audience members who use
public transit or bike, providing space for bicycles to be locked up during performances,
encouraging carpooling and offering funding subsidies for employees to use public
transit.
Energy Efficiency: Facilities should use renewable energy, such as green electricity,
and minimize the amount of energy being used. This can be achieved by using energy-
efficient light bulbs in the office and on stage, reducing the hours of use, purchasing
energy-efficient equipment, replacing desktops with laptops, and instituting a policy
July 2009
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Feasibility Study for the Federal Way Performing Arts & Conference Center
regarding "stand-by" mode on computers. Organizations also need to consider the Iife-
cycle cost impact of the materials that are used during a performance and choose green
options for scenic and prop materials as often as possible.
Consumables: Facilities can make a big impact by consuming less and using recycled,
Earth-friendly goods, such as paper and cleaning products. Some other ideas to reduce
the use of consumable goods include printing double-sided when possible, setting
copiers to double-sided as a default, sending materials and other correspondence
electronically and encouraging staff, users and performers to use mugs and bottles
instead of plastic glasses for beverages, including water (which should be provided via a
cooler rather than individual bottles).
Energy-Conscious Conference Facilities: The facility can lower the carbon
footprint of its conference rental operations by championing recycling efforts, reducing
energy and resource consumption and contracting with caterers who provide locally
grown and sustainable foods. Also available on the market are eco-friendly ergonomic
conference chairs composed of 100% recycled steel and plastic.
Community Awareness and Participation: A facility should not only implement
"green" policies for itself, but also should also make the community aware of its efforts
and encourage them to participate by using similar methods. Facilities can post
information about its green initiative and guidelines on the web site, include green
slogans wherever possible (playbills, ads and posters) and organize forums on green
practices, possibly combining with artist talkbacks or special events.
Marketing Strategy
Here are some preliminary recommendations as to how marketing should be approached:
The Theater
· Marketing and programming functions must work closely together at the Center
to identify the message and the media most likely to work for each presentation
and artist.
· It will be critically important to build an online community of customers and
supporters through email lists, social networking sites, and other "push"
technologies.
· Young people, particularly those of college age, must be partners and advocates
for various types of viral marketing.
The Conference Center
· Awareness must be generated for conference facilities via online forums and
databases, publications and marketing campaigns. The Center's conference
July 2009 37
Feasibility Study for the Federal Way Performing Arts & Conference Center
facilities must be integrated as an option for companies and private parties
looking for space to rent.
· A number of spaces at a variety of price points are available to the local
community and regional businesses. The flexibility of the space can
accommodate a variety of configurations and users.
· The branding and positioning of the facility and its programs should stress the
following attributes:
o That this is one of the best conference venues in terms of the quality and
character of its meeting and event spaces.
o That it supports a wide variety of programs that serve a larger mission for the
City and community.
o That it is the largest gathering space in Federal Way.
o That it is professional, fully equipped, aesthetically pleasing, and accessible
for conferences and events.
o That it is easy to find, easy to park, and professionally staffed.
July 2009 38
Feasibility Study for the Federal Way Performing Arts & Conference Center
10. staffing plan
It is crucial that a professional staff, with specific experience in programming and operating arts
and conference facilities, be hired to run the Center. In addition, professional staff can be
supplemented with contract labor and volunteers to support front-of-house and administrative
operations.
Here are job descriptions for key positions; compensation levels are recommended in the pro-
forma operating budget.
· Executive Director: The manager of the Center is responsible for administering
the facility on a day-to-day basis, overseeing operations and staff, overseeing a
presenting series, preparing annual budgets and capital improvement plans,
monitoring performance, and overseeing all programs and rentals. Marketing the
facility to audiences, users, and other elements of community leadership will be a
particularly important duty, as it relates to both audience development and
fund raising. We would suggest that this position should be filled as soon as possible,
to assist with planning, construction, commissioning, and preparation for operations.
· Development Director: Reporting to the Executive Director, key responsibilities
for the Development Director will include the planning, implementation and oversight
of activities that attract contributed income. This includes annual fund development,
corporate and individual underwriting, grant writing and special fundraising events.
Specific duties include: cultivate, develop, manage and maintain relationships with
donors; plan and administrate special fundraising events as needed; solicit and
manage volunteers and staff in executing fundraising activities; oversee solicitation
and acknowledgment process; recommend fundraising policies and procedures to
the Executive Director and Board; oversee grant applications to federal, state and
local government agencies that provide arts funding; conduct prospect research and
develop applications for private foundation and corporate arts grants (including any
sponsorship). This position should be in place at least six months before the building
opens.
· Technical Director: In charge of technical operations of performance, conference
and rehearsal spaces, and the backstage aspects of production in the facility.
He/she is charged with backstage maintenance, the safe and responsible use of
stage equipment and facilities, scheduling all crew calls including load-ins,
changeovers, show calls and load-outs, and coordinating with front of house
activities. The position requires experience with stage, sound, lighting, mechanical
rigging and electronics systems, as well as theatrical equipment set-up, operation,
July 2009 39
Feasibility Study for the Federal Way Performing Arts & Conference Center
and maintenance. The position should be in place at least six months before the
building opens.
· Operations Manager: Responsible for the day-to-day planning and delivery of
activity in the Center, including promoting and coordinating rental events, negotiating
supplier contracts and maintaining the physical plant. Particularly important are
those skills related to facility management, personnel, and fiscal responsibility, and
customer service. This staffer should be in place at least six months before the
opening of the Center, reporting to the Executive Director.
· Marketing Director: Primarily for the marketing and promotion of events to be
presented in the Center, including the development of promotional materials, media
buying, public relations and publicity, and the use of various online marketing tools.
Other duties include supporting the marketing efforts of renter's programs and
events. This we see as a critical function in order that these other users of the Center
are able to find audiences and sell many tickets, thus ensuring their ability to pay
rent for access to these facilities and broadening the visibility of the Center. The
position also reports to the Executive Director and should be in place at least six
months before the building opens.
· House Manager: This part-time position recruits, trains and mobilizes ushers and
ticket takers for events in the theater and multipurpose rooms. This position requires
a strong orientation to customer service training, as well as the ability to train and
motivate paid and volunteer staff to deliver a high level of service at events.
· Ticket Office Manager: This individual runs the ticket office and is accountable
for a high daily volume of cash and credit transactions, working closely with the
Executive Director to prepare daily audit reports and maintain accurate records and
account balances. The position also works closely with renting organizations to
coordinate their ticketing needs. The Ticket Office Manager is a part-time position
that reports to the Marketing Director.
Organizational Structure
We would recommend the following structure for the organization of staff and leadership.
Full-time positions are highlighted pink; part-time positions are highlighted green. Contract
positions are highlighted blue and volunteer leadership is highlighted purple.
July 2009
40
Feasibility Study for the Federal Way Performing Arts & Conference Center
Board of Directors
-. ~"~~
~ Development Operations
Director Manager
I
~ Mai ntenance ~ Event Security II Event Clea nlng
IVor1<er
I
Mar1<eting Director
L
TlckelOfflce
Manager
L Ticket Office Starr
July 2009
lj
,
Administrative
Assistant
Technical Director
I
,
'1 tL::J
~M~'''' J ~.~'~'"'M
I
House Staff Il
Ii
,
Ushers
,
41
Feasibility Study for the Federal Way Performing Arts & Conference Center
11. pro-forma operating budget
In this chapter we offer a description of the format and structure of the pro-forma operating
budget we have developed for the City of Federal Way and its new facilities. The pro-forma
makes assumptions based on the current conceptual design developed by LMN Architects,
which includes a 700-seat theater, 8,000 square foot lobby and conference center, and
6,000 square feet of meeting room space.
The pro-forma, attached as Appendix A, projects how the Center will operate financially. We
included columns for fiscal 2011 through 2015, showing the year before new facilities open,
the first year of operations and then the next three years as operations grow and stabilize.
The completed budget should be considered a "live" model, one that can be adjusted based
on changing circumstances and assumptions. It is fundamentally a tool to help the City and
project leadership prepare for and succeed in new facilities.
The first section of the budget is a summary of activity, both current and future. Following is
a description of those programs and how they develop:
July 2009
.
Live presenting will be held in the 700-seat venue at the new facility. This potentially
includes concerts, plays, dance performances, film screenings, and more. Presented
events are separated into Tiers A, Band C to represent varying levels of performers
and price points.
.
For live presenting, we assume 21 events in year one, and slight increases overall in
subsequent years. However, a drop in the second year from two to one large-scale
presentations accounts for a big opening year followed by a more modest second
season. Attendance is kept to a conservative 7,350 in year one with small increases
over time.
.
The average ticket price for Tier A events is $50; for Tier B, $35, for Tier C, $25, and
for film presentations, $11, with inflationary increases in subsequent years.
.
It is expected that the theater and multi-purpose room will be rented regularly to
resident companies, and on occasion to outside groups and individuals, including
nonprofit organizations and commercial ventures. Due to the high level of usage by
resident companies, we have suggested a relatively small level of outside rentals to
both nonprofit and private renters. Rental rates are based on research of
comparable performance and event facilities.
.
We have also projected rental activity for conference and meeting spaces, including
the usage of the 8,000 square foot lobby space as a conference center. Estimates
42
Feasibility Study for the Federal Way Performing Arts & Conference Center
are based on our assessment of the region and activity of comparable venues. For
the lobby, we anticipate that approximately 60% of rentals will be from nonprofits and
community-oriented organizations and 40% will be corporate rentals.
The following chart summarizes activity levels,
theater and multi-purpose room.
Perfonnance Space Totals OPENING YEAR
2012
174
169
100
269
55,620
$1,378,270
$132,850
Perfonnances
Event Days
Prep Days
Use Days
Attendance
Ticket Revenue
Rent Paid
audience attendance and income at the
2013
189
180
105
285
52,605
$1,307,614
$141,388
2014
207
196
111
307
58,083
$1,505,984
$156,459
2015
221
207
118
325
62,107
$1,659,047
$167,514
And this chart summarizes rentals at the conference center, including the lobby and meeting
rooms.
Conference & Meeting Space Totals OPENING YEAR
2012 2013 2014 2015
Non-profit Rentals 483 535 560 585
Commercial Rentals 472 520 540 565
Conference and Meeting Participation 52,305 58,575 63,360 69,300
Rental Income $226,200 $259,818 $289,760 $327,530
Attendance rates for conference and meeting spaces have been estimated using the number
of rentals and the assumption that facilities are utilized an average of one-third the
maximum occupancy for each space.
The actual operating budget is broken down into three major sections: earned income,
contributed income and operating expenses. Each and every item relates to activity
estimates, or to a formula detailed in the final section of the budget. Here are key
assumptions for the earned income section:
· Most of the earned income numbers are based on the activity projections in the
activity spreadsheet. We have proposed that the organization grow its live presenting
steadily but very gradually, with just a few additional events each year in the theater
and a more substantial increase each year in the multipurpose room.
· Film presentations are expected to scale up significantly each year, and revenues
increase by a greater percentage each year as the program grows.
· There is an increase in rentals and user fees in year two, as the Center becomes
more widely utilized by members of the community and the region. This will happen
in response to the Center's marketing campaigns, visibility of current offerings and
rental events, and word of mouth.
July 2009 43
Feasibility Study for the Federal Way Performing Arts & Conference Center
· Live presenting will offer opportunities to attract sponsorships. Corporate sponsors
should have choices to sponsor certain performances, themed films, or series. This
will effectively provide corporate supporters with a customizable approach and a
greater level of engagement, service, and branding.
· Concessions income in the first year is based on an attendance rate of 70% for Live
Presenting and 50% for rental events at the Center, and assumes a $. 50 gross per
capita concessions.
The contributed income section of the budget is the most difficult to project, and the growth
in these various sources of income is critical to the future success of the organization.
Specifically:
· In the first two years, the City of Federal Way contributes $200,000 towards the
operating of the Center. In subsequent years, the annual contribution decreases by
5% per year.
· It is expected that the Center will fundraise for other government support, which
might include annual funding in the form of grants from sources such as the
Washington State Arts Commission, the National Endowment for the Arts and more.
This type of support increases by 10% in each year following the first year of
operation.
· Special fundraising events are a significant source of income, and are expected to
raise more money with each passing year, as events gain visibility with more new
donors and members of the community.
· In the pre-opening year, the Center receives a $160,000 allocation from the capital
budget, which decreases to $150,000 in the opening year and $75,000 in the
second year. After year three of operations, the allocation from the Capital Budget is
no longer required.
· In the opening year, the Center will receive interest income from a $1 million
operating endowment. It is expected that the Center will actively grow the endowment
in subsequent years. As a result, income from the endowment is expected to triple in
the first three years of operations.
And here's a summary of contributed income sources.
July 2009
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Feasibility Study for the Federal Way Performing Arts & Conference Center
Contributed Income Summary
OPENING YEAR
2011 2012
City of Federal Way $100,000 $200,000
Other Govemment $15,000 $30,000
Individual $15,000 $30,000
Foundation $15,000 $30,000
Corporate $15,000 $30,000
Special Fundraising Events $25,000 $100,000
Allocation from Capital Budget $160,000 $150,000
Endowment Income $0 $50,000 $100,000 $150,000 $150,000
Total Contributed Income $345,000 $620,000 $542,000 $606,200 $623,320
The operating expense section of the pro-forma is extensive, as it outlines all staff,
programming, infrastructure, marketing and facility costs going forward. Following are key
assumptions:
2013
$200,000
$33,000
$33,000
$33,000
$33,000
$110,000
2014
$190,000
$36,300
$36,300
$36,300
$36,300
$121,000
2015
$180,500
$39,930
$39,930
$39,930
$39,930
$133,100
· Staffing expenses are the Center's most significant cost. A team of ten full-time and
part-time employees will manage programs, operations, and development of the
Center. Contract employees are hired to handle technical and event-related work.
· Direct costs of presenting, which are calculated on a per event basis, are the next
largest expense.
· Expenses are increased from the first to the second year of operations using a 3%
escalation rate; for the years following, we have adjusted the rate to a still-
conservative 4%, mirroring the anticipated rates of inflation.
· New facility expenses are also substantial. Base occupancy costs and common area
charges are calculated on a per-square foot basis.
The following chart provides a summary of operating activities from 2011 to 2015.
Operating Budget Summary OPENING YEAR
2011 2012
174
55,620
$970,342
$620,000
$1,590,342
$1,569,710
$20,632
62%
Total Performances
Total Attendance
Earned Income
Contributed Income
Total Income
Operating Expenses
Surplusj(Deficit)
Earned Income as % of 0 Ex
$0
$345,000
$345,000
$344,500
$500
0%
2013
189
52,605
$996,169
$617,000
$1,613,169
$1,595,943
$17,227
62%
2014
207
58,083
$1,193,087
$606,200
$1,799,287
$1,797,268
$2,018
66%
2015
221
62,107
$1,342,681
$623,320
$1,966,001
$1,927,060
$38,942
70%
Overall, the pro-forma shows gradual steady growth in activity driving new revenues and
operating expenses. Earned income grows to represent 62% of total operating expenses in
the first year of new operation of new facilities, and increases to 70% by the third year of
Center operation. Rentals and live presenting programs generate a number of earned
income streams, ultimately creating a sustainable operation. The biggest risk will be growing
programming in a way that does not exhaust the human resources of the organization and
with exciting content that fills seats in the theater and multipurpose room.
JUly 2009
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Feasibility Study for the Federal Way Performing Arts & Conference Center
12. economic impact
Economic impact means that something has happened to increase economic activity, which
includes new sales, new earnings for workers and new jobs in the local economy. These
impacts are caused by the impacts of construction of new facilities (which are counted as
one-time impacts) and then by the ongoing impacts of the new or expanded operating
organization (the entity making expenditures in the local economy), as well as the
expenditures made by their audiences.
All economic impacts are also split between direct and indirect impacts. Direct impacts
(which also include the induced impacts of audiences) are the measure of the economic
effect of the initial expenditure within a community. Then there are the indirect impacts,
which occur as people and businesses receive and then re-spend those initial direct
expenditures locally. The indirect impact is the effect of this re-spending on sales, jobs, and
household earnings. It is often referred to as secondary spending or the dollars "rippling"
through a community. When funds are spent outside the market area, they are considered
to have "leaked out" of the community and therefore cease to have a local economic impact.
Indirect impact is then the sum of the rounds of local spending after the initial expenditures.
The shift from direct impacts to indirect impacts is measured by employing multipliers
developed by the Bureau of Economic Analysis, part of the Department of Commerce in
Washington DC. Multipliers translate an input into an output: for example, a dollar spent on
food (input) has an impact on the local economy by virtue of new sales in that industry, new
earnings for people associated with that industry and new jobs created in that industry
(output). There are three multipliers for each industry. The output multiplier is the estimate
of total new sales associated with the initial expenditure. The output is higher than the input
because that expenditure spurs incremental economic activity through the rippling effect
described above.
The earnings multiplier is the sum of three components of personal income-wage and salary
disbursements, supplements to wages and salaries, and proprietors' income. It is not a sub-
category of the output estimate, but rather the resulting impact of sales on what is earned by
local workers. And then, there is the employment estimate, which forecasts the jobs created
in each industry as a result of new expenditures. Multipliers are obtained for a defined
market area, in this case King County. Finally, we review the benefits a the Center will have
on the City of Federal Way, particularly the downtown.
July 2009
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Feasibility Study for the Federal Way Performing Arts & Conference Center
Construction Impacts
The following chart shows the sum of construction expenditures and resulting impacts.
~One.time Impacts of Construction on King Cou'nty, WA
(Industry Code 230000)
Output
Earnings
Employment (person-years of employment)
Construction Budget
Final Demand Multipliers
1,8961
0.4753
11.7916
$50,000,000
Project Outputs
$94,805,000
$23,765,000
590
Fifty million dollars spent on construction will yield, over the course of the construction
project, new economic activity (Le. sales) of over $94 million and new earnings for regional
workers totaling $24 million, as well as 590 person-years of new employment in the County.
Operating Impacts
We calculate the ongoing impact of Performing Arts & Conference Center's operation using
what is called the bill of goods approach, shown in the following chart. We estimate
expenditures by the organization on everything from utilities and hotels to waste
management and advertising, and then use the three types of multipliers to calculate new
output, earnings and jobs in each of those industries.
Expenditures
New annual expenditures of $985,000 in 2012 (as per the operating pro-forma) equal the
total spent by the organization on everything but staff. Adding up the outputs for each
industry affected, we project that the expanded organization drives $1,796,492 in new sales,
$491,636 in new earnings, and creates 17.3 new jobs (not including those employed directly
by the Center).
Bill of Goods Approach (2012)
Inputs
)mpacts of the New Organization on King County, WA - - _ - - - - _ -.
Cat 0
Power Generalion and Su I
Retail Trade
Transit & passe" Sf transportation
Couriers and Messe" ers
Sound recordin industries
Telecommunications
Data recesSI" services
Insurance A encieslBrokera e
Funds, trusts, other finanical services
E ui men! Rental
La al Services
Accountin & Bookkeepin Services
Com uter related services
Mana affiant consuJtin services
Advertisin & related services
Travel arran aments & reservations
Office administrative services
Business su art services
Securi services
Services to buildin
Waste mana ement
Performin arts companies
Promoters of rformin arts
Hotels & motels
Food services
Averages and Totals
Pro,forma Purchases
85,000
40,000
25,000
25,000
25,000
25,000
50,000
50,000
25,000
25,000
50,000
25,000
25,000
10,000
100,000
10,000
25,000
50,000
25,000
50,000
75,000
100,000
25,000
25,000
15,000
- $ 985,000
Juiy 2009
Multipliers
Eamings
Output (dollars) (dollars) Empl't Gobs)
1.4451 0.2480 4.3088
1.9125 0.5086 17 .3378
1.9412 0.5420 23.5313
1.7990 0.4837 15.3870
1.6755 0.2865 7.8886
1.8175 0.3716 7.3837
1.9423 0.6635 13.3526
1.6712 0.4248 9.4582
2.1844 0.4591 100440
1.5569 0.2797 6.7392
1.9836 0.7175 13.1316
1.9399 0.6931 20.612
1.8280 0.4551 9.8780
1.9467 0.6890 20.5434
1.8488 0.5325 13.3334
2.0309 0.5673 15.0271
1.8415 0.5767 14.1045
1.7418 0.4569 17.4103
1.7799 0.6190 24.1876
1.8991 0.5123 21.6579
1.8718 0.4392 9.9898
1.9079 0.5996 49.9906
1.8646 0.5216 29.0418
1.7845 0.4955 17.3118
1.9403 0.5439 27.3583
1.8462 0.5075 16.7604
OUlputs
New Sales New Earnings New Empl't
($OOO's) ($OOO's) Gobs)
$ 122,834 $ 21,080 0.4
$ 76,500 $ 20,344 0.7
$ 48,530 $ 13,550 0.6
$ 44,975 $ 12,093 0.4
$ 41,888 $ 7,163 0.2
$ 45,438 $ 9,290 0.2
$ 97,115 $ 33,175 0.7
$ 83,560 $ 21,240 0.5
$ 54,610 $ 11.478 0.3
$ 38,923 $ 6,993 0.2
$ 99,180 $ 35,875 0.7
$ 48,498 $ 17,328 0.5
$ 45,700 $ 11,378 0.2
$ 19,467 $ 6,890 0.2
$ 184,880 $ 53,250 1.3
$ 20,309 $ 5,673 0.2
$ 46,038 $ 14,418 0.4
$ 87,090 $ 22,845 0.9
$ 44,498 $ 15,475 0.6
$ 94,955 $ 25,615 1.1
$ 140,385 $ 32,940 0.7
$ 190,790 $ 59,960 5.0
$ 46,615 $ 13,040 0.7
$ 44,613 $ 12,388 0.4
$ 29,105 $ 8,159 0.4
$ 1,796,492' $ 491,636 17.3
47
Feasibility Study for the Federal Way Performing Arts & Conference Center
Ancillary Impacts
The second component of operating impacts is the ancillary spending by facility audiences
and meeting attendees. To calculate these numbers, we start with the estimated 55,000
paying audiences for events in the theater and the multi-purpose room in 2012. Then we add
the additional 53,000 attendees to events in the lobby and meeting rooms. Both of these
numbers come directly from the pro-forma.
In order to calculate the most accurate level of economic impact, we start by making several
adjustments to the attendance figure. First of all, we reduce the total attendance by
estimating what portion of attendees, whether from the County or beyond, would come to a
performance or meeting in Federal Way that would have otherwise been held elsewhere in
the County. Those attendees are simply relocating from another County facility, and the
economic impact to the County is not new but simply shifting from one part of the County to
another. We then adjust this number by those attendees who are re-captured; that is, new
audiences that previously attended events and performances outside the County (due to a
lack of facilities) that would prefer to attend events and performances in Federal Way.
Lastly, we account for dollars that are redirected to Federal Way that would have been spent
on other activities. Economists would hold that a County's residents have a fixed amount to
spend, so their expenditures are simply moving around the County, as opposed to creating
new economic activity. For example, attendees to a new performance in at Performing Arts
and Conference Center may otherwise spend those dollars on dinner and a movie. For the
purpose of the exercise, the preceding assumptions related to relocated and recaptured
attendees, and redirected expenditures result in a reduction of approximately 50% in the
total projected attendance for the purposes of economic-impact calculation.
Then we split the number of attendees further by estimating the in-County audience as
opposed to those attendees coming from outside the County, as the spending habits of these
two groups are different. We will discuss this information on the following page.
rEstim~t;d-A~-dj~nces and Event Attenders _ _ _ _ . _ _ _ . _ _ _
Total Projected Performance Attendance (2012
Relocated less Recaptured Attendance
Projected Incremental Audience
King County Attendance
New Non-King County Attendance
50%
108,000
54,000
54,000
36,180
17,820
67%
33%
Now, we input those attendance estimates into ancillary spending formulas, which are taken
from the 2008 Arts and Economic Prosperity Report published by Americans for the Arts.
That report provides significant data on how much people spend on various things in
conjunction with their attendance at performances, exhibits, films and related events. We
then apply these multipliers to these direct impacts and add the totals for each industry to
arrive at total impacts associated with the expenditures of audiences.
July 2009
48
- .
,
I
I
'Ancillary Spending Impacts .
1. King County Attendance (36,180)
Food Services
Retail Trade
Transportation
Overnight Lodging
Miscellaneous
Sub-total
2. Non-King County Attendance (17 ,820)
Food Services
Retail Trade
Transportation
Overnight Lodging
Miscellaneous
Sub-total Non-King County Attendance
Feasibility Study for the Federal Way Performing Arts & Conference Center
Per Capita Expenditure Output Total New Earnings Total New Job Creation Total New
Outputs
Estimate Multiplier (Sales) Multiplier Earnings Multiplier Jobs
$8.15 $294,867 1.9403 $572,130 0.5439 $160,378 27.3583 8.07
$2.80 $101,304 1.9125 $193,744 0.5086 $51,523 17.3378 1.76
$4.27 $154,489 1.9412 $299,893 0.5420 $83,733 23.5313 3.64
$0.96 $34,733 1.7845 $61,981 0.4955 $17,210 17.3118 0.60
$0.60 $21,708 1.8462 $40,077 0.5075 $11,016 16.7604 0.36
$607,100 $1,167,826 $323,860 14.42
$15.28 $272,290 1.9403 $528.324 0.5439 $148.098 27.3583 7.45
$8.70 $155,034 1.9125 $296.503 0.5086 $78.850 17.3378 2.69
$5.82 $103,712 1.9412 $201,327 0.5420 $56,212 23.5313 2.44
$19.97 $355,865 1.7845 $635,042 0.4955 $176,331 17.3118 6.16
$3.29 $58,628 1.8462 $108,238 0.5075 $29,752 16.7604 0.98
$945,529 $1,769,433 $489,244 19.72
lTotallmpact of Ancillary Spending " Total(1+2} " ..~ $1,552,630 - ~. $2,931,258 . - $813,104 34.14
_ .'_ _... _ _ . . ExcludingJn.County ~ttendance Ronly} $945,529 $1,169,433.. $489,244 . 19.72
At the bottom of the chart, we show these total impacts, adding section 1 and section 2.
Then we show just the section 2 total, which counts only audiences coming from outside the
County. For that outside group, their estimated expenditures of $945,529 in 2012 lead to
new annual outputs of $1,769,433, another $489,244 in new earnings and another 19.72
jobs created on an ongoing basis.
The final chart below summarizes economic impacts by showing first the total impacts of
construction and then total operating impacts.
'Summaryof Ec'on-oiTiic Impacts'on King County - - - .- - ---
~
One.time Impacts Input (Construction $) $50,000,000
Construction Output (Sales) $94,805,000
Earnings $23,765,000
Person-years 590
Ongoing Annual Impacts Input (Expenditures in 2012) $985,000
Operation Output (Sales) $1,796,492
Earnings $491,636
Jobs Created 17.3
Ancillary Spending Input (2012 Customer Spend) $945,529
(excludes In-County Attendance) Output (Sales) $1,769,433
Earnings $489,244
Jobs Created 19.7
Total Annual Operating Impacts Output (Sales) $3,565,924
Earnings $980,879
Jobs Created 37
The construction of the Center, the new operating entity and the expenditures of audiences
will bring new economic activity to King County and create new jobS over the life of the
project.
Impacts in Federal Way
Beyond those quantitative impacts at the County level, it is clear that new conference and
performing arts facilities in Federal Way can have additional impacts, as follows:
July 2009
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Feasibility Study for the Federal Way Performing Arts & Conference Center
Downtown Economic Development: The preceding economic-impact analysis
considered the impacts on a County-wide basis. Setting aside that perspective and focusing
on Federal Way and its City Center, we direct our attention to the direct expenditures by the
up to 108,000 annual attendees at the Federal Way Performing Arts and Conference Center.
Based on the per-capita expenditure estimates found in the preceding tables, 108,000
annual attendees could create approximately $3 million in annual expenditures in the City
Center. In order to present a conservative estimate of this impact, one has to account for the
potential for some events and performances that already occur within Federal Way simply
shifting to this new in-city venue. Those events, of course, would not create new impacts
within the City. In consideration of this, we can conservatively estimate that approximately
$2.25 million in new annual expenditures may be expected in Federal Way. What's more,
from the perspective of the development and/or business community, the construction of the
the Center and its in-city economic impact will have a positive impact on the downtown, in
the following ways:
· Restaurants will start, expand and prosper in service to audiences before and after
performances and to serve those attending meetings and conferences.
· Retail businesses will open in response to the street and pedestrian activity around
new facilities.
· Having the lights on in new facilities will change the perception (and reality) of
downtown safety, which will encourage more commercial and potentially residential
development, including lodging.
· Of particular importance will be the presence of young people around the facility,
perhaps associated with local colleges. Their presence will likely motivate the
development of new urban amenities (bars, clubs, coffee shops, bookstores) that fit
in a downtown core.
The Meeting and Event Business: One particular industry to be directly impacted by
new facilities would be the meeting and event business. The corporate meetings and event
business will grow, as well as the wedding and private event business. In fact, we see this in
many performing arts facilities around North America - an aggressive push to become a
wedding location given the quality of the space for special events and given a strong food
service capability.
Corporate Recruitment: Performing arts facilities are important amenities to offer to
corporations considering where to locate their business. The presence of these facilities is
often seen as an indicator on a community that has an educated workforce and offers a high
quality of life.
Richard Florida and "The Creative Class:" Celebrity-economist and author Richard
Florida, has turned a simple idea into an empire. The simple idea is that people (particularly
people with interesting jobs and skills) like to live and work in creative places, and that cities
ought to promote culture and creativity as a means to recruit these desirable people and
thus drive economic development. Cities all over North America (and not just big ones) are
now pursuing economic development goals by promoting the presence of arts and culture
and the people who prefer those amenities. Of course it's all easier said than done. The
July 2009
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Feasibility Study for the Federal Way Performing Arts & Conference Center
trick is to help artists in ways that don't stifle creativity, and then surround that creative core
with a concentration of more commercially oriented industries (advertising, design, media)
that benefit from and feed off of that creativity.
Cultural Tourism: Tourists and tourism could represent an even more important element
of the Federal Way economic development strategy. And it turns out that cultural tourists
(those interested in attending and participating in cultural programs) are very attractive in
that they tend to spend more and stay longer in a given community. Thus, the presence of
new arts facilities can playa role in developing and promoting Federal Way as a destination
for cultural tourists.
Teaching Innovation and Creativity: Finally, we would raise one last economic
development benefit, which is that the teaching of the arts is now being recognized as a
fundamental need for the North American economy and its workforce, given the automation
of many jobs and growing competition from lesser-developed economies. Or, as some
commentators are now suggesting: "The MFA is the new MBA." Daniel Pink, in his March
2008 Nancy Hanks Lecture on Arts and Public Policy, said the following:
"The argument for the arts is that the fundamental cognitive abilities, the fundamental
abilities of the workforce today and into the future, the fundamental abilities that our kids
are going to be deploying at work are at their core artistic abilities, that arts are neither
an avenue to something else, nor are they a nicety, but they are fundamental to how the
economy functions. And unless our kids have this broad, robust suite of artistic
capabilities, they are going to be in a world of hurt, yes, as human beings, but also as
productive members of the economy."
The Role and Impacts of Culture in Small and Mid-size Communities: Before
leaving this set of arguments, let's be clear that the arts and culture can have significant
impacts in smaller communities, not just in larger cities. According to a recent study for the
Ontario Ministry of Research and Innovation1:
Recent research suggests that while creative and cultural activities are very prominent in
large urban centres, it is not to the exclusion of smaller urban centres (Scott 2004). For
example, Norcliffe and Rendace (2003) use the case of comic book artists to
demonstrate that, due to changes in the organization of production, it is possible for
creative workers to locate outside of major metropolitan centres and continue to work in
creative fields. Gibson (2003) also points to the emergence of communities of musicians
and other artists in rural and small towns in Australia. Markusen and King's (2004) work
on the role of artists in the regional economy also demonstrates this point quite
succinctly. Their study clearly shows that geographical distribution of artistic activity
within the US economy is decentralizing towards second-tier cities. Specifically, the
traditional dominance of artistic and creative centres such as New York and Los Angeles
is declining, as artists appear to be spreading out towards cities such as Minneapolis-St.
Paul, San Francisco, Albuquerque and Seattle.
lVinodrai, Tara and Gertler, Meric: Creativity, Culture and Innovation in the Knowledge-based
Economy, Program of Globalization and Regional Innovation, University of Toronto (2006)
July 2009
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Feasibility Study for the Federal Way Performing Arts & Conference Center
If such a trend continues this may bode well for mid-sized cities, as well as smaller
centres within proximity to large urban regions. Many such places pride themselves on
their 'good quality of life at affordable prices', while also supporting a vibrant cultural
scene. Such characteristics may provide a solid foundation on which to build and
maintain successful urban economies.
Approaching the Project as an Economic Development Tool
Having established the significant role that new arts and cultural facilities can play in
achieving the economic development goals of Federal Way, we would finally offer a few
pieces of advice as to how the community should proceed:
1. Don't Do It Alone: Our most important advice is that these new facilities are not
sufficient to be the catalyst for the economic development of Federal Way. The project needs
to be viewed as one piece in a larger plan, with all of those pieces connected and valued for
their particular roles and impacts.
2. Make Sure Everyone Understands: Some of the arguments for the economic
development value are more complicated than others, but they are all important and they
need all be communicated and explained clearly in order that they all be understood.
3. Tour Communities: As much as we enjoy reading and writing long reports, there is
nothing more important than seeing facilities and how they drive economic development in
other communities. Thus it is important to take community leaders on trips to comparable
communities to see other facilities and districts and talk with elected officials and other
leaders about their experiences and aspirations.
4. Connect to Community Goals: An effort must be made at the beginning of the project
and also along the way to make and maintain connections between the project and
community goals. This relates closely to #2 above, but it also means that advocates for the
project must be at the community development table, continuing to remind leaders of the
role and value of the project.
5. Think of a District Rather than a Place: It will be important to help others advance
their thinking about what the project might be - from the traditional idea of a performing arts
center and conference facility to the more progressive and impactful concept of a cultural
district that is developed over time in a number of steps, including adaptive re-use as well as
new construction of facilities for performance, rehearsal, exhibition, teaching and production,
creating a hive of activity that drives additional commercial and residential development.
July 2009
52
APPENDIX A: PRO-FORMA OPERATING BUDGET
Federal Way Performing Arts and Conference Center
MULTI-YEAR ACTIVITY ESllMATES
OPENING YEAR
2012
2013
2014
2015
COMPONENTS
Theater
Multi-purpose Room
Capacity
700
100
120
200
250
700
200
100
Gross Square Feet
7,800
2,000
Lobby
Large Meeting Rooms (2)
Small Meetim! Rooms (4)
8,000
2,000
1,000
Confil!uration
Theater-style
Theater-style
Banquet
Meeting
Reception
Reception
Meeting
Meetin~
RENTAL RATES Theater Resident/Education Event Day $700 $721 $750 $780
Prep Day $350 $361 $375 $390
Nonprofit Event Day $1,050 $1,082 $1,125 $1,170
Prep Day $525 $541 $562 $585
Commercial Event Day $1,575 $1,622 $1,687 $1,755
Prep Day $788 $811 $844 $877
Multi-purpose Room Resident/Education Event Day $240 $247 $257 $267
Prep Day $160 $124 $129 $134
Nonprofit Event Day $80 $82 $86 $89
Prep Day $40 $41 $43 $45
Commercial Event Day $240 $247 $257 $267
Prep Day $120 $124 $129 $134
Lobby Nonprofit Four-hours $700 $721 $750 $780
Commercial Four-hours $1,050 $1,082 $1,125 $1,170
Large Meeting Rooms Nonprofit Four-hours $200 $206 $214 $223
Commercial Four-hours $400 $412 $428 $446
Small Meeting Rooms Nonprofit Four-hours $100 $103 $107 $111
Commercial Four-hours $200 $206 $214 $223
ATTENDANCE Capacity Sold Presenting 70% 66% 67% 68%
Rentals 50% 45% 46% 47%
ACTIVITY Theater
Facility-presented Events Perfonnances 2 1 2 2
TierA Event Days 2 1 2 2
Prep Days 0 0 0 0
Use Days 2 1 2 2
Attendance 980 462 938 952
Ave Ticket Price $50 $52 $54 $56
Ticket Revenue $49,000 $23,793 $50,239 $53,029
Rent Paid 0 0 0 0
Facility-presented Events Perfonnances 3 2 3 3
TierB Event Days 3 2 3 3
Prep Days 0 0 0 0
Use Days 3 2 3 3
Attendance 1,470 924 1,407 1,428
Ave Ticket Price $35 $36 $37 $39
Ticket Revenue $51,450 $33,310 $52,751 $55,680
Rent Paid 0 0 0 0
Facility-presented Events Perfonnances 4 5 6 7
TierC Event Days 4 5 6 7
Prep Days 0 0 0 0
Use Days 4 5 6 7
Attendance 1,960 2,310 2,814 3,332
Webb Management Services, Inc. Page 1 7/14/09
Federal Way Performing Arts and Conference Center
MUL11-YEAR ACTIVI1Y ESTIMATES
OPENING YEAR
2012 2013 2014 2015
Ave Ticket Price $25 $26 $27 $28
Ticket Revenue $49,000 $59,483 $75,359 $92,800
Rent Paid 0 0 0 0
Facility-presented Film Perfonnances 6 8 10 12
Event Days 3 4 5 6
Prep Days 0 0 0 0
Use Days 3 4 5 6
Attendance 2,940 3,696 4,690 5,712
Ave Ticket Price $12 $12 $13 $13
Ticket Revenue $35,280 $45,683 $60,287 $76,361
Rent Paid 0 0 0 0
Resident Company Rentals Perfonnances 122 124 126 128
Event Days 118 120 121 122
Prep Days 32 33 34 35
Use Days 150 153 155 157
Attendance 42,700 39,060 40,572 42,112
Ave Ticket Price $25 $26 $27 $28
Ticket Revenue $1,067,500 $1,005,795 $1,086,518 $1,172,870
Rent Paid $93,800 $98,417 $103,478 $108,787
Nonprofit Rentals Perfonnances 10 11 12 13
Event Days 8 8 9 9
Prep Days 4 4 5 5
Use Days 12 12 14 14
Attendance 3,500 3,465 3,864 4,277
Ave Ticket Price $25 $26 $27 $28
Ticket Revenue $87,500 $89,224 $103,478 $119,120
Rent Paid $10,500 $10,815 $12,935 $13,452
Private and Corporate Rentals Perfonnances 0 0 0 0
Event Days 8 9 10 11
Prep Days 0 0 0 0
Use Days 8 9 10 11
Attendance 0 0 0 0
Ave Ticket Price $0 $0 $0 $0
Ticket Revenue $0 $0 $0 $0
Rent Paid $12,600 $14,600 $16,871 $19,301
Commercial Arts Event Rentals Perfonnances 2 3 5 5
Event Days 2 3 5 5
Prep Days 0 0 0 0
Use Days 2 3 5 5
Attendance 700 945 1,610 1,645
Ave Ticket Price $25 $26 $27 $28
Ticket Revenue $17,500 $24,334 $43,116 $45,815
Rent Paid $3,150 $4,867 $8,436 $8,773
TheaterTotals Theater OPENING YEAR
2012 2013 2014 2015
Perfonnances 149 154 164 170
Event Days 148 152 161 165
Prep Days 36 37 39 40
Use Days 184 189 200 205
Attendance 54,250 50,862 55,895 59,458
Ticket Revenue $1,357,230 $1,281,621 $1,471,748 $1,615,675
Rent Paid $120,050 $128,699 $141,720 $150,313
Multi-purpose Room
Facility-presented Film Perfonnances 6 8 10 12
Event Days 3 4 5 6
Prep Days 0 0 0 0
Use Days 3 4 5 6
Webb Management Services, Inc. Page 2 7/14/09
Federal Way Performing Arts and Conference Center
MUL11-YEAR ACTIVITY ESTIMATES
Resident Company Rentals
Nonprofit Rentals
Private and Corporate Rentals
Commercial Arts Event Rentals
Attendance
Ave Ticket Price
Ticket Revenue
Rent Paid
Perfonnances
Event Days
Prep Days
Use Days
Attendance
Ave Ticket Price
Ticket Revenue
Rent Paid
Perfonnances
Event Days
Prep Days
Use Days
Attendance
Ave Ticket Price
Ticket Revenue
Rent Paid
Perfonnances
Event Days
Prep Days
Use Days
Attendance
Ave Ticket Price
Ticket Revenue
Rent Paid
Perfonnances
Event Days
Prep Days
Use Days
Attendance
Ave Ticket Price
Ticket Revenue
Rent Paid
OPENING YEAR
2012
420
$12
$5,040
o
6
5
60
65
300
$20
$6,000
$10,800
8
8
4
12
400
$20
$8,000
$800
3
3
o
3
150
$0
$0
$720
2
2
o
2
100
$20
$2,000
$480
2013
528
$12
$6,526
o
8
7
64
71
360
$21
$7,416
$9,641
10
8
4
12
450
$21
$9,270
$824
6
6
o
6
270
$0
$0
$1,483
3
3
o
3
135
$21
$2,781
$742
2014
670
$13
$8,612
o
10
9
66
75
460
$21
$9,855
$10,798
12
10
6
16
552
$21
$11,826
$1,114
7
7
o
7
322
$0
$0
$1,800
4
4
o
4
184
$21
$3,942
$1 028
2015
816
$13
$10,909
o
12
11
70
81
564
$22
$12,566
$12,299
14
12
8
20
658
$22
$14,661
$1,426
8
8
o
8
376
$0
$0
$2.139
5
5
o
5
235
$22
$5,236
$1 337
,
Multi-purpose Room OPENING YEAR
2012 2013 2014 2015
Perfonnances 25 35 43 51
Event Days 21 28 35 42
Prep Days 64 68 72 78
Use Days 85 96 107 120
Attendance 1,370 1,743 2,188 2,649
Ticket Revenue $21,040 $25,993 $34,236 $43,372
Rent Paid $12,800 $12,690 $14,740 $17,201
Multf-purpose Room Totals
Perfonnance Space Totals OPENING YEAR
2012 2013 2014 2015
Perfonnances 174 189 207 221
Event Days 169 180 196 207
Prep Days 100 105 111 118
Use Days 269 285 307 325
Attendance 55,620 52,605 58,083 62,107
Ticket Revenue $1,378,270 $1,307,614 $1,505,984 $1,659,047
Rent Paid $132,850 $141,388 $156,459 $167,514
Perfonnance Space Totals
(Theater and Multi-purpose Room)
Conference & Meeting Spaces
Lobby Non-profit Rentals
Commercial Rentals
lobby Capacity
Webb Management Services, Inc.
33
22
700
Page 3
40
25
700
50
30
700
7/14/09
60
40
700
Federal Way Performing Arts and Conference Center
MULTl.YEAR AClMTY ESTIMATES
OPENING YEAR
2012 2013 2014 2015
Average Capacity Used 33% 33% 33% 33%
Projected Attendance 12,705 15,015 18,480 23,100
Rental Income $46,200 $55,878 $71,235 $93,580
Large Meeting Rooms (2) Non-profit Rentals 150 165 170 175
Commercial Rentals 150 165 170 175
Large Meeting Room Capacity 200 200 200 200
Average Capacity Used 33% 33% 33% 33%
Projected Attendance 19,800 21,780 22,440 23,100
Rental Income $90,000 $101,970 $109,262 $116,975
Small Meeting Rooms (4) Non-profit Rentals 300 330 340 350
Commercial Rentals 300 330 340 350
Small Meeting Room Capacity 100 100 100 100
Average Capacity Used 33% 33% 33% 33%
Projected Attendance 19,800 21,780 22,440 23,100
Rental Income $90,000 $101,970 $109,262 $116,975
Conference & Meeting Space Totals Conference & Meeting Space Totals OPENING YEAR
2012 2013 2014 2015
Non-profit Rentals 483 535 560 585
Commercial Rentals 472 520 540 565
Conference and Meeting Participation 52,305 58,575 63,360 69,300
Rental Income $226,200 $259,818 $289,760 $327,530
ESCALATION RATE
Webb Management Services, Inc.
Page 4
7/14/09
Federal Way Performing Arts and Conference Center
MULTI-YEAR PRO-FORMA OPERATING BUDGEI'
Facility Opens January 1, 2012 2011 " Change 2012 " Change 2013 " CI1ange 2014 " Change 2015
EARNED INCOME
Live Presenting Tier A $49,000 $23,793 $50,239 $53,029
TierB $51,450 $33,310 $52,751 $55,680
TierC $49,000 $59,483 $75,359 $92,800
Rim Presenting Rim in Theater $35,280 $45,683 $60,287 $76,361
Rim in Multi-purpose Room $5,040 $6,526 $8,612 $10,909
Event Sponsorship Revenues Theater - Live $36,000 $32,960 $47,133 $53,474
Rentals Theater $120,050 $128,699 $141,720 $150,313
Multi-purpose Room $12,800 $12,690 $14,740 $17,201
Lobby $46,200 $55,878 $71,235 $93,580
Large Meeting Rooms $90,000 $101,970 $109,262 $116,975
Small Meeting Rooms $90,000 $101,970 $109,262 $116,975
User Fees Theater $80,434 $86,228 $94,952 $100,710
Multi-purpose Room $5,120 $5,076 $5,896 $6,880
Lobby $9,240 $11,176 $14,247 $18,716
Large Meeting Rooms $9,000 $10,197 $10,926 $11,698
Small Meeting Rooms $9,000 $10,197 $10,926 $11,698
Concessions Theater $27,125 $26,194 $29,937 $33,120
Multi-purpose Room $685 $898 $1,172 $1,476
Income from Catered Events Lobby Special Events $20,000 $22,660 $29,994 $37,878
Multi.purpose Room Events $8,000 $9,270 $11,783 $13,369
Other Income Ticket Handling Fee $105,678 $102,948 $118,215 $131,461
Facility Maintenance Fee $111,240 $108,366 $124,437 $138,380
Total Earned Income $0 $970,342 $996,169 $1,193,087 $1,342,681
CONTRIBlIlB> INCOME City of Federal Way $100,000 $200,000 0% $200,000 -5% $190,000 -5% $180,500
Other Government $15,000 $30,000 10% $33,000 10% $36,300 10% $39,930
Individual $15,000 $30,000 10% $33,000 10% $36,300 10% $39,930
Foundation $15,000 $30,000 10% $33,000 10% $36,300 10% $39,930
Corporate $15,000 $30,000 10% $33,000 10% $36,300 10% $39,930
Special Fundraising Events $25,000 $100,000 10% $110,000 10% $121,000 10% $133,100
Allocation from Capital Budget $160,000 $150,000 $75,000
Endowment Income $50,000 $100,000 $150,000 $150,000
$345,000 $620,000 $617,000 $606,200 $623,320
Total Income $345,000 $1,590,342 $1,613,169 $1,799,287 $1,968,001
OPERATING EXPENSES
Full-time Personnel Executive Director $125,000 5% $131,250 3% $135,188 4% $140,595 4% $146,219
Development Director $37,500 $75,000 3% $77,250 4% $80,340 4% $83,554
Administrative Assistant $35,000 5% $36,750 3% $37,853 4% $39,367 4% $40,941
Technical Director $25,000 $50,000 3% $51,500 4% $53,560 4% $55,702
Operations Manager $20,000 $40,000 3% $41,200 4% $42,848 4% $44,562
Marketing Director $22,500 $45,000 3% $46,350 4% $48,204 4% $50,132
Sub-total $265,000 $378,000 $389,340 $404,914 $421,110
Benefits $79,500 $113,400 $116,802 $121,474 $126,333
Sub-total $344,500 $491,400 $506,142 $526,388 $547,443
Part-time Personnel House Manager $20,000 3% $20,600 4% $21,424 4% $22,281
Maintenance Worker $20,000 3% $20,600 4% $21,424 4% $22,281
Ticket Office Manager $20,000 3% $20,600 4% $21,424 4% $22,281
Ticket Office Staff $15,000 3% $15,450 4% $16,068 4% $16,711
Sub-total $0 $75,000 $77,250 $80,340 $83,554
Benefits $0 $11,250 $11,588 $12,051 $12,533
Sub-total $0 $86,250 $68,838 $92,391 $96,087
Direct Costs of Presenting Tier A $82,000 $42,230 $87,838 $91,352
TierB $85,000 $58,367 $91,052 $94,694
TierC $56,667 $72,958 $91,052 $110,476
Film $54,112 $73,206 $95,528 $119,668
Sub-total $0 $277,779 $246,761 $365,471 $416,191
TIcket OffIce Network Maintenance $10,000 $20,000 4% $20,800 4% $21,632
Postage $5,562 $5,418 $6,222 $6,919
Ticket Printing $16,686 $16,255 $18,666 $20,757
Supplies $22,248 $21,673 $24,887 $27,676
Credit Card Fees $27,810 $27,092 $31,109 $34,595
Ticketing Service (net) $11,124 $10,837 $12,444 $13,838
Sub-total $0 $93,430 $101,275 $114,128 $125,417
Administration Institutional Promotion/Advertising $20,000
Webb Management Services, Inc. Page5 7/14/09
Federal Way Performing Arts and Conference Center
MULn-YEAR PRO-FORMA OPERAnNG BUOGEr
Facility Opens January 1, 2012 2011 'l(, Change 2012 % Change 2013 % Change 2014 'l(, Change 2015
Printing & Publications $10,000
Office Equipment/Systems $25,000
Office Supplies/Services $15,000
Legal! Accounting $15,000
Volunteer Management $7,500
Professional Development/Conferences $7,500
Travel and Entertainment $5,000
Telephone $10,000
Miscellaneous $5,000
Sub-total $0 $120,000 3% $123,600 4% $128,544 4% $133,686
Facility Operatlons Projectionist
Theater $1,200 $1,648 $2,142 $2,674
Multi-purpose Room $1,200 $1,648 $2,142 $2,674
Stage Hands
Theater $55,200 $58,401 $64,272 $68,514
Multi-purpose Room $20,400 $23,731 $27,508 $32,085
Event Security
Theater $23,840 $25,379 $28,108 $30,302
Multi-purpose Room $2,000 $2,884 $3,685 $4,545
Event Cleaning
Theater $59,600 $63,448 $70,271 $75,755
Multi-purpose Room $1,875 $2,704 $3,455 $4,261
House Staff
Theater $53,640 $57,103 $63,244 $68,180
Multi-purpose Room $3,000 $4,326 $5,527 $6,818
Sub-total $0 $221,955 $241,272 $270,355 $295,608
Building Expenses Utilities $84,448 $86,981 $90,461 $94,079
for a 52, 780sffacility Repairs and Maintenance $31,668 $32,618 $33,923 $35,280
Service Contracts $13,195 $13,591 $14,134 $14,700
Building Supplies $26,390 $27,710 $29,095 $30,550
Cleaning Supplies $13,195 $13,855 $14,547 $15,275
Technology Services $25,000 3% $25,750 4% $26,780 4% $27,851
Perfonnanee Equipment R&M $10,000 3% $10,300 4% $10,712 4% $11,140
Trash Hauling $50,000 3% $51,500 4% $53,560 4% $55,702
Security System $25,000 3% $25,750 4% $26,780 4% $27,851
Sub-total $0 $278,896 $268,055 $299,992 $312,429
TOTAL OPERAnNG EXPENSES $344,500 $1,569,710 $1,595,943 $1,797,268 $1,927,060
SURPlUS/(DEFlCIlj $500 $20,632 $17,227 $2,018 $38,942
Earned Income as % of Op Expenses 0% 62% 62% 66% 70%
MARGINS, RAnOS AND FORMUlAS
Escalation Rate 2% 3% 4% 4%
Gross Square Footage 52,780 52,780 52,780 52,780
Sponsorship Revenue/Event Theatre - For Uve Events $4,000 3% $4,120 4% $4,285 4% $4,456
Hospitality Net concession income per capita $0.50 3% $0.52 4% $0.54 4% $0.56
Number of Catered Even1s Lobby Special Event Rentals 10 11 14 17
MUlti-purpose Room Events 8 9 11 12
Fees from Catered Events Lobby Special Event Rentals $2,000 3% $2,060 4% $2,142 4% $2,228
Multi-purpose Room Events $1,000 3% $1,030 4% $1,071 4% $1,114
User Fees as a % of Rent Theater 67% 67% 67% 67%
Multi-purpose Room 40% 40% 40% 40%
Lobby 20% 20% 20% 20%
Large Meeting Rooms 10% 10% 10% 10%
Small Meeting Rooms 10% 10% 10% 10%
ncket Handling Fee % of tickets sold online 50% 50% 50% 50%
Charge per ticket sold online $3.00 3% $3.09 4% $3.21 4% $3.34
% of tickets sold by telephone 20% 20% 20% 20%
Charge per ticket sold by phone $2.00 3% $2.06 4% $2.14 4% $2.23
% of tickets sold at box office 30% 30% 30% 30%
Charge per ticket sold at box offiee $0.00 3% $0.00 4% $0.00 4% $0.00
Fadllty Malnlel1ance Fee Charge per Ticket Sold $2.00 3% $2.06 4% $2,14 4% $2.23
Endowment Income Endowment Size $1,000,000 $2,000,000 $3,000,000 $3,000,000
Rate of Return 5% 5% 5% 5%
Benefits Level Full-time Staff 30% 30% 30% 30% 30%
Webb Managemenl Services, Inc. Page6 7/14/09
Federal Way Performing Arts and Conlerence Center
MULn-YEAR PRO-FORMA OPERAllNG BUDGET
Facility Opens January 1, 2012 2011 " Change 2012 % Change 2013 " Change 2014 " Change 2015
Part-time Staff 15% 15% 15% 15% 15%
PTesentlng Expenses
per event Uve Presenting - ller A
Average Artist Fees $30,000 3% $30,900 4% $32,136 4% $33,421
Marketing Costs $6,000 3% $6,180 4% $6,427 4% $6,684
Other Direct Presenting Costs $5,000 3% $5,lS0 4% $5,356 4% $5,570
Uve Presenting - ller B
Average Artist Fees $20,000 3% $20,600 4% $21,424 4% $22,281
Marketing Costs $5,000 3% $S,150 4% $5,356 4% $5,570
Other Direct Presenting Costs $3,333 3% $3,433 4% $3,571 4% $3,713
Uve Presenting - ller C
Average Artist Fees $10,000 3% $10,300 4% $10,712 4% $11,140
Marketing Costs $2,500 3% $2,575 4% $2,678 4% $2,785
Other Direct Presenting Costs $1,667 3% $1,717 4% $1,785 4% $1,857
Rim PresenUng
% 01 Revenues to Distributor 40% 40% 40% 40%
Marketing Costs $2,500 3% $2,575 4% $2,678 4% $2,785
Other Direct Presenting Costs $833 3% $858 4% $893 4% $928
Cost/ Attender Cost/ Attender Cost/ Attender Cost/ Attender
llckeUng Sen/fces Postage $0.10 3% $0.10 4% $0.11 4% $0.11
Ticket Printing $0.30 3% $0.31 4% $0.32 4% $0.33
Supplies $0.40 3% $0.41 4% $0.43 4% $0.45
Credit Card Fees $0.50 3% $0.52 4% $0.54 4% $0.56
Ticketing Service (net) $0.20 3% $0.21 4% $0.21 4% $0.22
Contract OperaUons Labor Projectionist Cost/Screenin~
Theater $20D 3% $206 4% $214 4% $223
Multi-purpose Room $200 3% $206 4% $214 4% $223
Stage Hands Charge Cost/Use Day
Theater $300 3% $309 4% $321 4% $334
Multi-purpose Room $240 3% $247 4% $257 4% $267
Event Security Cost/ Perf
Theater $160 3% $165 4% $171 4% $178
Multi-purpose Room $80 3% $82 4% $86 4% $89
Event Cleaning Cost/ Perl
Theater $400 3% $412 4% $428 4% $446
Multi-purpose Room $75 3% $77 4% $80 4% $84
House Staff Cost/Perf.
Theater $360 3% $371 4% $386 4% $401
Multi-purpose Room $120 3% $124 4% $129 4% $134
Building Sen/fces Utilities $1.60 3% $1.65 4% $1.71 4% $1.78
per square foot Repairs and Maintenance $0.60 3% $0.62 4% $0.64 4% $0.67
Service Contracts $0.25 3% $0.26 4% $0.27 4% $0.28
8uilding Supplies $0.50 3% $0.52 4% $0.54 4% $0.56
Cleaning Supplies $0.25 3% $0.26 4% $0.27 4% $0.28
OperaUng BudgetSummary " Change OPENING YEAR % Change " Change " Change
2011 2012 2013 2014 2015
Total Perlonnances 174 189 207 221
Total Attendance 55,620 52,605 58,083 62,107
Earned Income $0 $970,342 3" $996,169 20" $1,193,087 13% $1,342,681
Contributed Income $345,000 $620,000 $617,000 $606,200 $623,320
Total Income $345,000 $1,590,342 $1,613,169 $1,799,287 $1,966.001
Operating Expenses $344,500 $1,569,710 2% $1,595,943 13" $1,797,268 7" $1,927,060
Surplus/(Delicit) $500 $20,632 $17,227 $2,018 $38,942
Earned Income as % 010 Ex 0% 62% 62% 66% 70%
Contributed Income Summary " Change OPENING YEAR % Change " Change " Change
2011 2012 2013 2014 2015
City 01 Federal Way $100,000 $200,000 $200,000 $190,000 $180,500
Other Government $15,000 $30,000 $33,000 $36,300 $39,930
Individual $15,000 $30,000 $33,000 $36,300 $39,930
Foundation $15,000 $30,000 $33,000 $36,300 $39,930
Corporate $15,000 $30,000 $33,000 $36,300 $39,930
Special Fundraising Events $25,000 $100,000 $110,000 $121,000 $133,100
Allocation Irom Capital Budget $160,000 $150,000
Endowment Income $0 $50,000 $100,000 $150,000 $150,000
Total Contributed Income $345 000 80% $620 000 -13% $542 000 12% $606 200 3% $623 320
Webb Management Services, Inc.
Page7
7/14/09
Reference Points
Federal Way Performing Arts and Conference Center
-Edm~~- Lynnwood MeydenbauerCenter
the Arts Convention Center
Bellevue, WA
410
Venue
Location
Theater Capacity
Lobby Capacity
Rehearsal Hall/Multipurpose Facility Capacity
Meeting Facility 1 (sf)
Meeting Facility 2 (sf)
Meeting Facility 3 (sf)
Meeting Facility 4 (sf)
Meeting Facility 5 (sf)
Theater Rental Rates
Commercial
Non-profit
Overtime
Rehearsal/Prep
Additional Performance - Same Day
Da rk Day
Business Meeting
Theater Rental Notes
Lobby Rental Rates
Commercial
Overtime
Cleaning Fee for Catered Event
Lobby Rental Notes
RehealS8l Hall/Multi-purpose Room
Commercial
Non-profit
Performance Rate
Overtime
Cleaning Fee for Catered Event
RehealS8l Hall/Multi-purpose Room Rental Notes
Meeting Room Rental Rates (High)
Meeting Facility 1
Meeting Facility 2
Meeting FaCility 3
Meeting FaCility 4
Meeting Facility 5
Meeting Room Rental Rates (low)
Meeting Room 1
Meeting Room 2
Meeting Room 3
Meeting FaCility 4
Meeting Facility 5
Meeting Room Rental Rates Notes
Ticketing Fees
Ticket Set-up
Service Charger per Ticket
Online Ticket Set-up
Patron Service Charge
Box Office licensee Service Charge per
Staff Fees Per Hour
Front of House Staff
Stage Technicians
Audio/Visual Engineer
Sound Engineer
Lighting Engineer/Electrician
Technical Director
Security
Police
Webb Management Services, Inc.
L___
Edmonds, WA
700
200
1,302
910
744
$1,250/5 hr block
$200/hr
$600/ 4 hr block
5-hour block with
House Manager,
Concessions Staff
and Ushers
$600/5 hr blOCk
$l00/hr
$75
5-hour block With
one staff member
Weekends/Evenings
$45/hr
$30/hr
$30/hr
Weekdays
$35/hr
$20/hr
$20/hr
$50
$0.10
$100
$2.00
$1.00
$ 18/hr
$22/hr
$25/hr
$25/hr
$25/hr
$25/hr
Lynnwood, WA
6,472
6,123
3,960
1,980
550
Commercial
$1,941jday
$1,836/day
$1,195/day
$600/day
$178/day
Gov'VNon-profit
$1,812/day
$1,714/day
$1, 115/day
$560/day
$167/day
Rates are for a full
day, defi ned as
6AM to 11 PM
$25/hr
$50-$60/hr
$50-$60/hr
$50-$60/hr
$50-$60/hr
$50-$60/hr
18,000
6,000
4,000
3,000
1,000
$ 725 (Resident) or
$775 (Otherl/day
$325/ day
$1.50 - $2.50/tix
$1.00 - $4.00
$18 - $23/hr
$25/hr
$25/hr
$25/hr
$25 - $ 130/hr
$30/hr
$30/hr
$60/hr
Page8
Broadway Center for the
Performing Arts - Rlalto
Theater & RehealS8l Hall
Tacoma, WA
742
125 - 300
$1,019/10 hr block
$651/10 hr block
$126 - $194/hr
$378-$604/ 10 hr block
$257 - $410/performance
$231- $368/day
10-hour block
$236-$331
$142 - $200
$305 - $515
$53 - $194/hr
Packages range from 4 to
10 hours; Event staff
expenses are $300
Everett Performing Arts
Center
MCintyre Hall
Everett, WA
514
$375 - $450/5 hr block
N/A
$ 70 - $80/hr
$200 - $250/5 hr block
$375 - $450/performance
$200 - $300/5 hr block
5-hour block (per
performance); resident
companies qualify to use
per performance fees on a
per-day basiS
$125/5 hr blOCk
$20/hr
5-hour block
$125 - $150/5 hr block
$35 - $40/hr
5-hr block
$1.50
Ticketmaster
Ticketmaster
$22/hr
$20/hr
$24/hr
$24/hr
$20 - $24/hr
$30/hr
Mount Vernon, WA
651
300 - 700
125
variable configurations
$1,015 - $1,225/6 hr block
N/A
$115 - $125/hr
$615 - 750/6 hr block
$200 - $260/performance
$615 - 750/day
$615 - 750/6 hr block
6-hour block, includes technical
liaison, house manager, ushers
and staging; additional 5% faCility
tax on gross sales
$1,000/6 hr block
$ 110/hr
6-hour block, includes staff;
waived when catering charges
exceed $2,500
$550 - $1,000/6 hr block
7/14/09
Reference Points
Venue
Equipment Fees
Sound & Lighting System
Wireless Mic
Orchestra Shell
Risers
Stage Platforms
Piano
Table Covers & Skirts
Tables & Chairs
Podium
Projector
Audio Accessories
Dance Floor
InterneVTelephone Hook up
Other Fees
TIcket Prices (Low to High)
Presented Tier One
Presented Tier Two
Presented Tier Three
Local Region Arts Users
Webb Management Services, Inc.
Federal Way Performing Arts and Conference Center
Ed-;;;;;;;d; Ce~';----L;;"nwood Meydenbauer Center
the Arts Convention Center
Included in pricing
$25/day
$loo/event
$10/day
$lO/day
$200
$5/table
Included in pricing
$15
$45 - $55
$31-$40
$19 - $27
$40 - $85
$125
Included in pricing
$160 - $300
$5-$80
$54 - $2,500
$30 - $35
Cost of set-up labor
$15 - $25
Included in pricing
$80
$ 16/ta ble
$2.50 - $7
Included in pricing
$350 - $1.400
$200 - $300
$185 - $1,200
Hauling, Office
Services. Parking,
Exhibit Booth
Packages, Freight
receiving
$25 - $65
Page9
._J
Mcintyre Hall
-.--.----..-.-
Broadway Center for the Everett Performing Arts
Performing Arts - Rlalto Center
Theater & Rehearsal Hall
$125
$30 - $45
$19 - $36
$5 - $62
$39-54
$25 - $35
$12 - $25
7/14/09
Federal Way Perfonning Arts and Conference Center
Edmonds Center for I,ynnwood Meydenbeuer Center Broedway Center for the Everett PerformIng Arts McI~ Hell
the Arts Corwentlon Center Perfonnlng Arts - RlBIlo CenlBr
Venue Theater & Reheel8lll Hell
Equipment "-
Sound & Lighting System Included in pricing $40 - $85 $54 - $2.500
Wireless Mic $25/day $125 $30 - $35
Orchestra Shell $1oo/event Cost of set-up labor
Risers $10/day $15 - $25
Stage Platforms $10/day Included in pricing
Piano $200 $80 $125
Table Covers & Skirts $5/table $ 16/table
Tables & Chairs Included in pricing Included in pricing $2.50 - $7
Podium $15 Included in pricing
Projector $160 - $300 $350 - $1,400
Audio Accessories $5-$80
Dance Floor $200 - $300
Internet/Telephone Hook up $185 - $1.200
Other Fees Hauling, Office
Services, Parking.
Exhibit Booth
Packages, Freight
receiving
TIcket Prices (lDwtD High)
Presented Tier One $45-$55
Presented Tier Two $31-$40 $30 - $45
Presented Tier Three $19 - $27 $19 - $36 $25 - $35
Local Region Arts Users $25 - $65 $5-$62 $39 - 54 $12 - $25
Webb Management Services, Inc.
Page9
7/14/09