HomeMy WebLinkAboutR08-Economic Development Agency
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DIlVIlLOPlIlllf DIlPARflllllf
OF DB crn OF SAlf BDlfARDIIIO
DOUEST FOR COMMISSIOB/COUlICIL ACTIO.
From:
ICEftNETH J. HENDERSON
Executive Director
Subject:
CIVIC LIGHT OPERA
ASSOCIATIOI
DISPOSIfIOI AlfD
IlBVBLOPMBlIT AGbJ5rwn"
Date:
January 2, 1992
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SYnoDsis of Previous CnmmissionlCouncil/Committee Action(s):
None
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Recommended Ration(s):
(COIm1DI.itv Develo....""t Co.mlssion)
That the Community Development Commission review the attached
correspondence and documentation and take whatever action deemed
appropriate.
~~~Ol
Executive Director
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Contact Person(s): Ken Henderson
Phone:
5081
Project Area(s): All
Ward(s):
All
Supporting Data Attached:
Staff ReDort
FUNDING REQUIREMENTS:
Amount:
NIA
Source:
NIA
Budget Authority:
NIA
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Commission/Council Botes:
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KJH:paw:0242q
COMMISSIOI IIBBTIlIG AGBlmA
lIeetiD& Date: 01106/1992
Agenda It_ lI1aber: L
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DIVllLOPlIll.r DIPARTIII.T
OF 'lIII CITY OF SAIl BlIllIAaDIIO
STAFF DPOaT
Civic LiRht Ooera Association
Disoosition And DeveloomeDt Aare~t
The attached correspondence, minutes of the Fine Arts Commission and
legal analysis was recently received by the Cbairman of the Community
Development Commission. In accordance with the attached transmittal
memorandum from the Mayor to the Administrator, Economic Development
Agency. This item has been placed on the agenda for discussion and
action as appropriate.
Staff recommends adoption of the form motion.
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IC.JR:paw:0242q
COIMISSIO. IIIB'lIlIG AGIlUll
lIeetina Date: 01/06/1992
Ageada It. II1aber:
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TO:
City of San Bernardino
Iln:J5KOFFICB KEMORABDOII
Tim Steinhaus, Agency Administrator, EDA
W, R. "Bob" Holcomb, Mayor
Civic Light Opera - DDA Agreement
January 2, 1992
FROM:
SUBJECT:
DATE:
COPIES:
Attached hereto, please find a letter dated December 24, 1991,
received frOlll Mike Hough, Fine Arts Commission Member. I am
requesting that you place this matter on the January 6, 1992 Agenda
for discussion and acti
WRH:JLV:mv
Attachment
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December 24, 1991
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Office of the Mayor
W. R. "Bob" Holcomb, Mayor
300 N. "0" Street
San Bernardino, CA 92401
Dear Honorable Mayor Holcomb:
This letter is beinq written on behalf of Mildred Hudson, Doris
Ballard and myself, as members of the Fine Art. COlDlllission and
appointed as a Special COlDlllittee by saae to investiqate and review
complaints by members of the cultural arts cOlDlllunity over access
to, and costs of utilization of the California Theater.
.
Please refer to the November 12, 1991 minutes of (Exhibit "An) and
a memorandUll dated November 15, 1991 from Andre de Bartnowski the
law firm of Sabo and Green to Timothy C. Steinhouse (Exhibit "8")
for an overview of the conditions under which the California
Theater facilities were deeded to the San Bernardino Civic Liqht
Opera Association and the access and cost issues which have qiven
rise to the Fine Arts COlDlllissions formation of the Special
Committee.
On the basis of interviews with representatives of local cultural
orqanizations, review of correspondence from same, and dialogue
with Mr. Jenks and Mr. Wood of the Civic Liqht Opera, it is the
Special Co_ittee's findinq and conclusion that the Civic Liqht
Opera Association is not in compliance with the intent and meaninq
of certain of the terms and provisions of the Deposition and Joint
Development Aqreement. While there are numerous areas of
complaint, most qrievances fall within the areas of access dates
and rental costs.
Specifically, it is the findinqs of the Special COlDlllittee that:
1.
The Civic Liqht Opera Association has failed to provide
requested financial information reqardinq its'revenues
and expenses in support of the usaqe rates beinq charqed
users of the California Theater. Of further concern is
the appropriateness of whatever accountinq method is
beinq utilized by the Association, particularly in the
301 Vand~i'bill Way · P.O. Box 10216 · San 1\ernardlno, CA 92423-0216 . (714) 888-6363
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Office of the Mayor
W. R. "Bob" Holcomb,
December 24, 1991
Page 2
Mayor
accounting for "non cash" expenses such as depreciation,
and the commingling of revenues and expenses from other
Association ventures.
2. The Association has been unresponsive and unsympathetic
to the reasonable scheduling needs of potential users,
has failed to establish procedures for confiraing
requested "dates", and is unwilling to compromise or aake
a reasonable effort to accommodate potential users when
a specific date is in conflict.
In attempting to reconcile the areas of conflict with the governing
provisions of the Deposition and Joint Development Agreement, the
Special Committee believes that certain ambiguities exist in the
language of the Agreement which preclude the making of specific
recommendations without benefit of legal interpretation and
opinion.
It is our recommendation that once the RDA/Fine Arts Commission's
legal stance is determined, that a roundtable meeting of all
interested parties, including representatives of the CLOA, be
convened, and all issues be resolved on a case-by-case basis,
within the legal framework decided upon by appropriate counsel.
On behalf of the Special Committee appointed by the Fine Arts
Commission, it is a pleasure to serve in this capacity, and we
would be pleased to provide greater detail and/or meet with any
representative of the city of San Bernardino or non-prOfit cultural
arts community if requested.
Sincerely,
SPBCIAL COMHITTBB TO TKB
I'DIE ARTS COMHISSIOH
Copy to: Mildred Hudson
Doris Ballard
Thelma Press
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EXHIBIT "A"
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PINE ARTS COMMISSION
MINU'.rBS
The Pine Arts Commission meeting convened at 3: 00 p. m., on
TUeSday, November 12, 1991, in the Management Information Center,
300 North "D" Street, 6th Ploor, San Bernardino, California.
'.rhose in attendance were as follows:
Clara 0' Campo
Barbara Greene
Barry Silver
Mildred Hudson
Beverly Goodly-Powell
Dorris Ballard
Michael Shaw
Mike Hough
Pat Leathers
Thelma Press
Second Ward
Third Ward
Fourth Ward
Pifth Ward
Sixth Ward
Seventh Ward
Mayor's Appointment
Mayor's Appointment
Mayor's Appointment, Alternate Member
Liaison for the Pine Arts for Mayor
and Council
Ray Gonzales
. The. following were absent and/or excused:
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Others in attendance were as follows:
Mayor's Appointment, Alternate Member
Gene Wood, Board Member, Civic Light Opera
C. Dale Jenks, Civic Light Opera
ADDroval of the October 8. 1991 Minutes.
Chairwoman Doris Ballard asked for a motion to approve the
Minutes of October 8, 1991.
Committee Kember Barry Silver expressed his concerns relative
to the amount allocated to the Inland Dance Theater, Inc. He
, stated that according to his notes the amount approved was $20,000
and not $18,000 as reflected in the minutes.
Ms. Thelma Press explained that after a lengthy discussion at
their prior meeting, the final approval by the Commission was
$18,000. She also stated that discussion regarding the
Metropolitan Opera was not recorded on the tape and that their
grant application needed to be discussed again for purposes of
recording the Commission's decision and for the secretary to
transcribe.
'.rwo motions were made as follows: a) that if the Commission
sUS approve an $18,000 grant to the Inland Dance Theater, !nc. that
the minutes be approved; b) and that if the Commission did no~
approve $18,000 but rather $20,000, that the Fine Arts Commission
amend the amount accordingly. The motions carried unanimously.
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Fine Arts Commission Minutes
November 12, 1991
Page 2
HOTR:
On November 15, 1991 the transcribing secretary confirmed that
on Tuesday, October 8, 1991 the Fine Arts Commission approved
the allocation Of $18,000.00 to the Inland Dance Theater, Inc.
2. Ren9rt bv Committee - ~alifornia Theater
Mr. C. Dale Jenks introduced Mr. Gene Wood, Board of Directors
Member Of the Civic Light Opera (CLO). .
Mr. Gene Wood addressed the Commission and stated that he had
been asked by the CLO's Board Of Directors to co_ up with a
criteria for charging the various users Of the California Theater
(facility) on a per day basis. He stated that the CLO hired the
accounting firm of Rogers, Anderson, Malodyand. Scott, for purposes
of assisting in identifying such criteria. Be explained that the
financj,al figures to be presented at today's lIel[llting have not been
presented to the CLO'. Board of Directors for their review and
consideration, and consequently no decision on costs have been lIade
by the Board Of Directors and that there is no written report to be
presented as requested.
Ms. Thelma Press asked Mr. Wood if said information relates
specifically to the California Theater rental cost and expenses.
Mr. Wood responded affirmatively. He also said that Mr.
Rogers a Certified Public Accountant (CPA) had prepared a report
based on "daily rental figures" for the facility.
Chairwoman Ballard said ti1at the Commission's primary concern
was the operating cost for the facility.
Mr. Wood provided the following report:
a)
The CPA reviewed all of the Theater's cost of
oDerations for the past 10 years and came up with a
3 year average on cost of operation, bringing the
total to $82,470.00 (which is the theater's actual
expenses) .
The CPA came up with a deDreciation schedule for
the buildina and caDital imDrovements. They ran a
10-20 year depreciation schedule, brinqinq the
total to $49,174.00.
b)
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Fine Arts COllllllission Minutes
November 12, 1991
Page 3
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He explained that' the CPA did not .inc1ude the
$25,000,00 salary of the fUll-time building
manager 7 nor did he include the $5, 000.00 in
parking fees that the CLO pays to the Parking Place
Commission, bringing the total to $161,644.00.
c) The CPA reviewed the nWllber of show davs. He
explained that the following organizations fall
under the category of sbow days (show days are
money making days):
* civic Light Opera
* Inland Empire Symphony
* Inland Dance
* Valley Concert Association
* Misc. Show Days
Bringing the total to 84 Show Days.
Mr. Wood said that if the total coat is cU.vidad. by tha ntJ"'''A~
of show day. it will equal a daily figure of $924.00 per day ~
rent the facility. He said that said dollar figure will be
presented to the Board of Directors for tll.eir review and
consideration. He further explained that the sbow days also
include rehearsal days, and cautioned that "rehearsal or non-show
days" do not generate income. He said that the actual usage days
per year is 171 at $945.00 per day to rent the facility.
Mr. Wood stated that these figures are net, non-profit, or
gross costs to the CLO. He said that they do not include any
profit for investment or any other profit, but rather net costs.
A question was asked for a clarification on what a "profit for
, investment" was?
Mr. Wood responded that if an individual buys a building
he/she should get some kind of return on their money, but cautioned
that he did not know what the Board of Directors would want to do
with regards to this issue. He said that the aforementioned
figures are nQt based on any return on dollars invested by the CLO.
A question was asked if the CLO was a non-prOfit organization?
Mr. Wood responded affirmatively.
A lengthy discussion ensued relative to the. profit for
investment issue with regards to the CLO.
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Fine Arts Commission Minutes
November 12, 1991
Paqe 4
A discussion ensued relative to the financial report not
including a section on return on investment and devaluation.
Mr. Wood stated that the $945.00 dollars is a cost fiqure.
A question was asked if the CPA had audited or prepared
financial information showinq a break down on revenues, ir so,
could the revenues be related to the expenses?
Mr. Wood responded that Mr. Roqers had prepared such a
financial report and that the revenues can be related to the
expenses. He further explained that the amount of $945.00 supports
the present $920.00 rental cost that is currently being eharqed.
He reiterated that the fiqures are based on actual cost and
depreciation on a three year averaqe. He said that the fiqures
provided herewith, in his opinion, are extremely conservative.
A question was asked as to' what the total cost for
compensation expense was?
Mr. Wood responded that the total compensation expense was
$25,000 yearly salary for the faCility's Manager.
c:J A question was asked if the $25,000 dollars are reflected on
the report.
Mr. Wood responded that he had not reviewed all of the fiqures
provided in the report, and stated that the total cost of expenses
should be included in the report.
Mr. C. Dale Jenks stated that the CPA sugqested that if the
Commission had their own auditor Mr. Roqers could go over the
fiqures in more detail. Mr. Jenks explained that it will not be
retroactive. He further said that he did not foresee any immediate
problems with the Inland Empire Symphony or any other orqanization,
but that this report was simply a study to make sure that everyone
understands the CLO's situation.
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Mr. Wood read from a letter provided to him by Mr. Don Roqers
as follows: .....it does not include any profit element and does
not indicate a market rate for such a facility, market rate will
best be determined by reviewing rate charae bv comDarable
facility". He said that his accounting firm has done that and that
it is something that they would like to include in the report that
will be provided to the Commission.
Chairwoman Ballard said that the original aqreement said that
the local qroups would receive preferential rates based upon a~tual
cost of operation.
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Fine Arts Commission Minutes
November 12, 1991
Paqe 5
Mr. Wood responded that based'on "actual cost. it 'would be one
of those two figures he previously provided and further explained
that this was the reason why he is sharing those figures prepared
and provided by the CPA.
A question was asked if the cost of $924.00 or $945.00 would
represent the cost of net revenues and expenses equal a deficit
amount of expenses, or is the cost merely an average of the
expenses that the'CLO recognizes in order to operate?
Mr. Wood responded that it will be his raco_endation to the
Board of Directors that the CLO charge themselves the same rate
they would charge every organization. He said that the figures
provided herewith are the total average operating expenditures
based on a three years averaqe. He said that the CPA took all of
the CLO's capital improvements and amortized and depreciated them
for a 10-20 year period.
A discussion ensued reqardinq return on'investment. It was
noted that if the CLO, since is a non-profit organization, i. not
endeavorinq to retain earninqs on an investment: to his owners. An
example was provided as follows:
If the CLO has earninqs of $100,000 and expenditures of
$100,000 and revenue based on $400.00 dollars per day this
would suqqest that: this is a reasonable amount to charqe.
Mr. Wood reiterated that the CLO is a non-profit orqanization
and therefore can not retain earninqs nor qet investment returns.
A discussion ensued reqardinq the need for the Fine Arts
Commission to review the CLO'sfinancial statement, in order to see
if it reflects the theoretical expenditure cost of providinq the
facility to the public and in balancinq revenues and expenses.
Mr. Wood stated that the financial report will reflect the
actual CLO' s ren~l cost on a day-by-day basis based on the current
income and expenses figures.
A question was asked if the audit that was done by Mr. Don
Rogers, CPA is a true audit or rather a compilation or what?
Mr. Wood responded that he was not sure, since he has not seen
the audit report. Mr: Wood asked Mr. C. Dale Jenks if Mr. Rogers
does a review.
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Fine Arts Co_ission Minutes
November 12, 1991
Page 6
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Mr. C. Dale Jenks responded that Mr. Rogers review. the entire
"project". He explained that the "project" relate. to the Civic
Light Opera, Calitornia Theater and the Scenic Studio which are
basically three ditterent operations.
A question was asked as to whether or not an audit is elone for
each respective project.
Mr. C. Dale Jenks responeleel that the Civic Light Opera owns
the California Theater, Inc., anel thct.t the CLO has a general
account for the Scenic studio.
A question was again asked if separate accounting books are
maintained for each individual project?
Mr. C. Dale Jenks responeled that separate accounting books are
maintained for each inelividual project.
Mr.. Gene Woocl stateel that the Board of Directors feels that
the rental cost is very low, based on current expenses and upkeep.
He reiterated that if the rental cost is basecl on rehearsal days,
which no income is generateel, and which he personally opposes, the
price charqeel to the orqanizations will double.
A question was askeel with regarels to capitalization as
follows: Diel Mr. Don Rogers in preparing the financial report anel
more specifically in elealing with "capitalization", used market
value or did he use actual costs?
Both Mr. Woocl and Mr. C. Dale Jenks respondeel that actual cost
was used to prepared the report elealing with capitalization.
A question was asked as to how soon the report would become
available to the Fine Arts Commission Members for their review.
Mr. C. Dale Jenks responeled that the report could be made
available after the Board of Directors' meeting at the end of the
month of November.
Chairwoman Ballarel suggesteel that Commission Member Mike Hough
and Chairperson of the Special Committee review the CLO's report
with his committee.
Co_ission Member Hough asked to speak as Chairperson of the
Special Committee as follows:
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Pine Arts co_ission Minutes
November 12, 1991
Page 7
He said that the Special Committee has been reviewing the
issues that appear to be of concern to the users of the theater.
He stated that there are two specific issues of concern a\ cost and
b\ access. He said that since the Pine Arts C~ssion has certain
limited authority and is attempting and/or tryinq to determine a
fair way to resolve these issues, he asked Mr. Wood for his point
of view relative to the issue of access to the facility.
Mr. Wood responded that he could not share his own personal
opinion, since he felt the CO_ission may not lilte to hear what he
had to say. He explained that a meeting took place 6-7 days ago
between the CLO and the Inland Empire Symphony with regards to
their complaints. He said that one of the CLO's Board Members met
with Mr. Gresham, Chairman of the Inland Empire Symphony and Ms.
Susan Peller, and at that meeting a decision was reached, however,
two days later a letter was sent from the Inland Symphony to the
CLO with a different decision. He said that hs has not had the
opportunity, tQ disc~ the,letter 1o(ith, M;'.....Gr!t..h..""."..". .'1...
Mr. Wood also said that with regards to the issue of usage,
the yearly calendar reflects the schedule of events, and felt that
the days that are not available are just simply not available, he
said he did not understand what the problem was.,
Mrs. Press stated that in the past, the prOblem has been that
after the CLO would verbally confirm a qiven day to an orqanization
the CLO would' change that day after the organization had published
their events, creatinq a negative impact on that qroup and that the
Commission has requested that all future dates be confirmed by
letter. She said that the issue of usage is a delicate matter that
continues to be unresolved, thus the need to address it.
Commission Member Hough stated that a lot of uncertainty
continues to surround the issue reqardinq how the CLO determines
their usaqe dates. He made reference to a letter sent by the Fine
Arts Commission to Mr. C. Dale Jenks requestinq that January 17,
1992 for the Opera and April 25, 1992 for the Inland Symphony be
qranted as requested. Xe further stated that according to what he
has heard the date of January 17, 1992 remains unqranted. He asked
Mr. Jenks if that date has been resolved?
Mr. C. Dale Jenks responded that the date of January 17, 1992
is when the CLO does a .play., therefore, January 11, 1991 can not
be granted as requested. He stated that in the previous two or
three years the Opera has taken place on the 1st of Pebruary or on
the 27th of February, but not in January. He stated that the CLO
has priority over all other organizations and will ObviOUSly
fulfill their own needs first and foremost.
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Pine Arts Commission Minutes
November 12, 1991
Page 8
Commission Member Hough stated that the initial intent of the
Council and the Redevelopment Agency was that the facility be given
or otherwise granted to the CLO for purposes of easy accessibility
by the local cultural organizations.
Mr. Wood clarified that the Redevelopment Aqency sold the
California Theater to the CLO and did not grant the facility.
Commission Member Hough read the followinq'statement fro. the
original agreement between the Redevelopment Aqency and the CLO:
.. . . . in the event of any dispute reqarding the
entitlement of any legitimate fine arts organization of
the City requesting to have access to such property for
any particular performance, that this issue be submitted
to the Fine Arts Commission of the City of San
Bernardino, whose decision shall bebinding-.
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Commission Member Hough said that this paraqraph relates to
disputed dates. He stated that the CLO does have priority of the
usage of the facility accordinq to the agreement, but that the
City'S intent was that organizations in this community would have
access to the theater since that was the guiding reason to sale the
facility to the CLO under the price that was granted.
Mr. C. Dale Jenks stated that the City did not grant the
California Theater to the CLO, but rather that the CLO paid a
donation in the amount of $150,000.
Commission Member Houqh stated that the CLO's real issue is
one of economics, and further explained that the CLO will not grant
a specific performance date to an orqan1zation, if those dates
conflicts with the CLO's dates, thus, creatinq a question of
economics. He further stated that in his opinion, such action is
in contradiction of accessibility to the theater. He said that it
was the Fine Arts Commission's responsibility to make sure that the
various cultural organization in the community have proper access
to the theater.
Mr. Wood stated that he did not aqree that the economic factor
was an issue. He said that the CLO will reserve the facility as
follows:
36 CLQ's days
24 CL01s nerformance days
Total 60 days of usaqe by the CLO.
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Fine Arta Commission Minutes
November 12, 1991
Page 9
He further explained that if a fine arts organization requests
a day that is already been reserved by the CLO, it is DRt on the
CLO's best interest to stop the play. He stated that the only
logical solution is to have the respective organizations work
around the CLO's reserved calendar, thus, creating a fair solution.
Commission Member Silver said that a written agre_ent rather
than a verbal agreement, is now required when requesting-usage of
the California Theater. He stated that the CLO has already
outlined and reserved all of their performance days for next year
and that it talces up to one month to process a signed agre_ent
when requesting dates.
Commission Member Hough explained that the Pine -Arts
Commission is in a difficult position, since it i. trying to be
receptive to the needs of the various organizations in the
community. He said that the Pine Arts Commission is abiding by a
document,that did not anticipate some of the difficulties that are
currently being encountered. He stated that there are a lot of
complaints centered around maintenance and how ushers are handled
and what the organizations are charged for.
Mr. Wood suggested to Commission Member Hough, that if those
complaints are coming to the Fine Arts Commission they should he
directed to the CLO' s Board of Directors for their review and
consideration. He stated that not only does the CLO's llanag_ent
has to hear complaints or concerns but also the Board of Directors,
in order to resolve the issues. He' expressed his concerns
regarding the numerous unfounded rumors by various fine arts
groups.
Ms. Press asked for clarification regarding what rumors he was
referring to.
Mr. Wood would not provide any specifics.
Commission Member Hough stated that as a pine Arts Commission
Member he will serve the City and the Commission and furthermore,
that he understands the CLO's position on the matter previously
discussed herewith. He stated that he will abide by the document
before him to the letter, as vague as it may be in some places, but
he felt that some of the concerns expressed by the various fine
arts groups are very legitimate. He said that he had hoped that
everyone would sit at the table to work out some of these issues,
but he has talked to people of other fine arts organizations and he
hears an entirely different story than what he is hearing today.
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Fine Arts Commission Minutes
November 12, 1991
Page 10
Commission Member Hougb further stated that if the complaints
are such that they can be resolved by the Commission's interaction,
then be intends to do that or be will resign bis position with the
Commission. He stated that there is still a lot of discontent and
many organizations remain of the opinion that they are being shut
out.
Ms. Press stated that be does not bave to resign but that the
issue will be turned over to the City Attorney ~or their guidance.
Mr. Wood stated that be did not attend the meeting to hear
threats from Ms. Pres. or Commission Member Hough. He stated that
if the Fine Art. Commission Members bave any problem. they should
present them to the CLO Board since it is the Board wbo makes the
final decisions with regards to the California Theater. He stated
that the issues that bave been discussed at today's meeting are
matters that bave not been presented to th.e Board.
Commission Member Hougb stated that there';'i~ "~orrespondenc~
between the Inland Empire Symphony and the CLO' s Board that
indicate that the Board of Directors bas been made aware of certain
issues of concern.
Mr. Wood stated that the CLO' s Board bas beldseveral meetings
with the Inland Empire Sympbony and that the Board feels that those
issues bave been resolved and that if they remain unresolved, then
the Inland Empire Sympbony needs to communicate to the CLO's Board
of Directors wbat those issues are.
Ms. Press provided Mr. Wood a brief background information
pertaining to the concerns expressed by the Inland Empire Symphony.
Sbe said that according to tbe documentation before Commission
Member Hougb with regards to the Inland Empire Symphony, those
concerns were to bave been resolved at the Special Committee level
appointed by the Fine Arts Commission. She said that it was
suggested that if those issues were not resolved that the next step
would be to turn the matter to the Redevelopment Agency which has
jurisdiction over' the agreement with regards to the California
Theater property and that at that point the. Fine Arts Commission
will no longer be involved in the matter. Sbe reassured Mr. Wood
that neither she nor the Fine Arts Commission Members were
threatening bim.
Mr. Wood stated that sbe was missing tbe point. He asked that
if any of the members of the Commission bad a problem with his
Board, wouldn't the Commission approacb the Board to resolve the
issue?
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Fine Arta Commisaion Minutes
November 12, 1991
Page 11
Ma. Preas atated that the Fine Arta CO_ission' appointed a
Special COlDlllittee comprised of COlDlllission Member Mike Hough,
COlDlllission Member Mildred Hudson and Chairwoman Dorris Ballard and
that they will be meeting with Hr. C. Dale Jenks to review the
issues at hand.
Hr. Wood stated that he is willing to resolve the problems as
a CLO' s Board Member.
co_ission Member Hough reiterated that the CLO has
understandably blocked out certain un-used days, but if in doing
so, organizations in the cOlDlllunity are denied access of days at
times during the year that makes sense for thea to also want to
present their programs, then the "document" pertaining to the Fine
Arts CQlDIIlission's responsibilities with regards to the theater,
gives the Fine Arts cOlDlllission some ability to question how the
CLO's un-used days are arrived at.
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He reiterated that he was aware of the CLO's financial
inconvenience. He further suggested to invite the different
representatives of the various fine arts organizations in a round
table discussion and the CLO's Board and try to resolve the issues
on a case to case meeting and to point counterpoint type of
environment.
Hr. Wood responded that he would be happy to do that and
further said that he had thought that the issues between the Inland
Symphony and the CLO had been resolved at a prior meeting between
Hr. Allan Gresham and Ms. Evelyn Wilcox.
Chairperson Dorris Ballard explained that the issue that
r_ains unresolved is the 1992 date that the Inland Empire Symphony
requested and felt that the CLO had agreed on and later denied,
which they had to make costly changes. She further said that
Committee Member Barry Silver had made a statement to the effect
that "the Symphony has taken that into account in their application
for a grant, this year".
COlDlllittee Member Barry Silver stated that he thought he had
seen that in their application.
Chairperson Dorris Ballard said that it was not in the
Symphony's grant application but rather in the Ballet.
COlDlllittee Member Barry Silver said that the Ballet w~s one of
the Symphony's functions.
Chairperson Ballard responded that it was not for the Symphony
.
itself.
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Fine Arts Commission Minutes
November 12, 1991
Paqe 12 ',-
Committee Member Houqh asked if there was'a .seasonality. to
the use of the California 'l'heater. He said that if a qiven
orqanization is to use an x number of days out of the year, such as
from May throuqh September or from September to May, in actuality
they are not workinq with 365 days but rather with 180 ~ays.
Mr. Wood stated that there is a' seasonality and they are
called .show. days.
"." ...
Coamittee'Member Houqh asked Mr.- Wood the total number of day.
reserved by the CLO. ,,' '" . :'
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Mr. Wood responded. that the" totn number of days the CLO uses
i. 60 play days' (36 for CLO and 24"'for the Broadway Celebrity Play
Series) . .. . ; , ," . " '
Coamittee-"Member asked' for' the) nUllber of'''Tehearsal days the
CLO has' 'relierved~the California 'l'heater in addition to the 60 play
days.
.... .....
"'''-';~.t._~...
Mr. Wood responded that a total of 87 days out of which 60 are
play days used by the CLO.
Mr. C. Dale Jenks said that about 10 days are used for
rehearsals.
Coamittee Member Barry Silver stated last year 87 days were
used for rehearsal days, but that no specific portion was allocated
to the CLO since Inland Dance used the first six days to perform.
Committee Member Houqh asked that if the season encompasses
180 days and 130 days are utilized by the CLO, are the other
orqanizations beinq denied reasonable access to the California
'l'heater durinq that time of the year.
Mr. Wood responded that he
beinq denied reasonable access.
of users days as follows:
could DOt say that they were not
He further provided an accountinq
60 Days -CLO
10 Days - Symphony Association
5 Days - Inland Dance
5 Days - Valley Concert
4 Days - Misc.
84 Days - TOTAL
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Pine Arts Commission Minutes
November 12, 1991
Page 13 .
Ms. Press said that after hearinq both sides of the arqument,
it is apparent that the confusion or dissatisfaction i. due to an
unresolved date that the Inland Symphony claims to have reserved
via a verbal aqreement with the CLO, versus a written aqreement
required in accordance to the recent policy.
Ms. Press further stated that the issue at hand has nothing to
do with future-dates but rather with the "unresolVed date-
previously requested by said orqanization.
.
Mr. Wood extended an invitation to that. OZ'lJanization to
further discuss their issue before the CLO'.'Board in order to
resolve the IIIlltter. . ._
HOT!::
. ':"~!1\.l'.~:. ...,.~....
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No recordinq of. the rest of the meetinq was done, however,
Chairperson Ballard provided the followinq information:
. .~;...\.t ,.:: ".,.r::' ,,' .....F'!~..:r...~nr..
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The Pine Arts Commission pre-approved- the.i;followinq grant
applications in concept mllX. It was noted that further discussion
on the allocations will be necessary at their next scheduled
meetinq, before forwardinq said applications to the Mayor and
Council for final approval. .
a) Opera Alliance $10,000.00
b) Sinfonia Mexicana Committee $10,000.00 .
c) Almar PrOfessional Music Society DENIED
d) San Bernardino Valley Community
Concert Association $20,000.00
e) Broadway Celebrity $25,000.00
f) Inland Empire Symphony $80,000.00
,
TOTAL $145,000.00
3. Adiournment
There beinq no further business, the Pine Arts Commission
meetinq of Tuesday, November 12, 1991 adjourned at 4:00 p.m. The
next scheduled meetinq will be on TueSday, December 10, 1991 at
3:00 p.m., in the Manaqement Information Center (MC), 300 North RD"
Street, 6th Ploor, San Bernardino, California.
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SABO & GREEN
A PRO.....ONAL CORPORATION
ATTORNEYS AT LAW
SUITE 400
UllO CANOGA A VENUE
WOODLAND HILUI. CALIFORNIA 81887
18181 706-018.
TBLl!lCOPlER 1818' 704-47lltl
MEMORANllIJM
TO: Timothy C. Steinhaus
FROM: Andre de Bortnowski
DATE: NOvember 15, 1991
RE: California Theater
A. INTRODUCTION
We have been requested to review that certain Corporation
Grant Deed (the "Grant Deed") and that certain Disposition and
Joint Development Agreement (the "DDA") dated as of October 15,
1984 pertaininq to the California Theater facilities (the "Theater
Facilities"). Pursuant to the Grant Deed and the DDA, the
Redevelopment Aqency of the City of San Bernardino (the "Aqency")
transferred title to the Theater Facilities to the San Bernardino
Civic Liqht opera Association (the "Association"). The purpose of
the DDA was to provide that the Theater Facilities be used by the
Association and be made available to other entities in order to
preserve and encouraqe fine arts for the cultural arts cODIIDunity of
San Bernardino.
Apparently, certain issues have arisen with respect to
compliance by the Association of the terms and provisions of the
DDA. The concerns have been raised by the Inland Empire Symphony
Association (the "Symphony") who have encountered schedulinq
problems because of conflicts with the Association's proposed use
of the Theater Facilities.
B. SCHEDULING CONFLICTS
The Symphony has indicated that they have souqht to
schedule performances at the Theater Facilities on the fOllowinq
dates: November 13, January 17 and April 25th. Apparently, the
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Association has prevented the scheduling of such events citing
certain scheduling conflicts.
The DDA specifically addresses the scheduling of
performances and the resolution of any conflicts in connection
therewith. Section 2.2(b) of the DDA provides:
-Association shall devote the property to its
own uses, and shall also make the building and
its facilities available for use by all
legitimate fine arts organizations within the
City of San Bernardino for fine arts
performances with all such organizations to be
guaranteed access to the facility. In the
event of any dispute regarding the entitl_ent
of any legitimate fine arts organization of
the City of San Bernardino requesting use to
have access to such property for any
particular performance, the dispute shall be
submitted to the Pine Arts Co..ission of the
City of San Bernardino whose decision shall be
binding.-
In accordance with the above quoted section, the Symphony
apparently presented its case to the Pine Arts Commission in June
and the Pine Arts Commission ruled in favor of the Symphony and
authorized access to the Theater Facilities by the Symphony on
January 17th and April 25th. The Association has to date
apparently not accepted the Pine Arts Commission's rulings.
Prom review of the above quoted language, it is apparent
that the Association would be in breach of the terms and intent of
the DDA, since it is clear that the Pine Arts Commission's decision
as to the scheduling of specific performances should be binding.
However, it should be noted that there is another section
of the DDA which pertains to the scheduling of performances and
WhiCh, at first glance, could be interpreted to be in conflict with
the aboVe quoted provisions. The Association may be relying on
said provisions in support of their position. The section in
question is also found in Section 2.2 (b) of the DDA and provides as
follows:
-Association's own Scheduling shall have
priority in any scheduling of events, which
priority shall be respected by the Pine Arts
Commission. The recommendation of the Pine
Arts Commission shall be transmitted to the
Association, which shall make the final
decision on scheduling.-
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We believe that this section is distinguishable fro. the
former section to the extent that the foraer provisions p.rtain to
the scheduling of particular perforaances wh.r.as the latter
provisions p.rtain more to overall scheduling priorities. Und.r
such an interpretation, the Symphony's inability to us. the Th.at.r
Facilities on the dates that it had scheduled particular
p.rformanc.s, aft.r a ruling by the Fin. Arts Co_ission, would be
in violation of the DDA. Such an interpretation s.... consist.nt
with the intent of the DDA. S.ction 2.2(g) of the DDA specifically
provid.s that the Association is to use best .fforts to promote
great.r us. of the facility for fin. arts progrllll8 and shall
vigorously pursue more activiti.s to uximize the use of the
building. As such, it is our opinion that the Association's
actions ar. in breach of the terms of the DDA.
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C. ENCUMBRANCES
The Symphony has also rais.d questions with resp.ct to
encumbranc.s that may be existing on the Theater Facilities
suggesting that the Association may have placed a greater amount of
.ncumbrances on the property than otherwise permitted by the DDA.
Section 2.2(e) of the DDA provides that the Agency must
approve any .ncumbrances or combination of encumbrances which are
placed on the Theater Facilities and which exceed in total
$250,000.
To the extent the Association has placed .ncumbrances on
the Theater Facilities which total in excess of $250,000, without
the Agency's consent, such action would also clearly be in
violation of the DDA. At the pr.sent time, w. do not have
sufficient information regarding the amount of encumbrances on the
property to properly assess this Claim.
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D. USAGE RATES
In addition to the foregoing, the SyJllphony has complained
as to the rates being charged for use of the Theater Facilities.
With respect to rates and charges, Section 2.2 (c) of the DDA
provides as follows:
-Association shall establish reasonable rates
for the us. of California Theater for fin.
arts organizations of the City of
San Bernardino, which rates shall not .xceed
actual cost. Th. rate sch.dul. shall be
pr.sented by Association to the Fin. Arts
Commission of the City of San B.rnardino
annually for r.view, and the Fine Arts
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Commission shall submit its co.aents and
report on the rate schedule to Association.
Association shall have final authority as to
rates, subject to the limitation that rates
for use by fine arts organizations aust be
reasonable and shall not exceed cost.-
(Emphasis added)
Accordingly, if there exists evidence that the
Association is charging more than its costs for operation and
maintenance of the Theater Facilities, such action would clearly be
in breach of the DDA. Again, a factual determination as to the
fees charged and the costs of providing the services must be
undertaken in order to determine whether a breach of this provision
has in fact occurred.
E. OTHER PROBLEMS
The Symphony has raised several other questions regarcUng
the operations and management of the Theater Facilities. For
example, it questions the maintenance of the facilities, storage of
equipment, training of personnel, etc. While the Symphony
correctly indicates that many of these issues are not specifically
addressed in the DDA, they do indicate that the Association does
not seem to be acting in order to promote the intent of the DDA.
As such, while these actions, if true, uy not give rise to a
specific breach of the DDA, they indicate a general unwillingness
by the Association to abide by the DDA.
F. REMEDIES
The remedies provisions of the DDA are general in nature
and do not clearly set forth all of the rights and obligations of
the parties in the event of a breach. While the DDA does
specifically provide for a Right of Reverter in certain
Circumstances, the facts as presented at this time are not of a
nature so as to enable the Agency to avail itself of this remedy.
The Right of Reverter is only applicable in circUIIIStances where the
property is not being used for the preservation and encouragement
of fine arts for the cultural community. Specifically, Section
2.2(a) provides as follows:
-The real property conveyed hereby shall
remain, in perpetuity, dedicated to the
preservation and encouragement of fine arts
for the cultural arts community, and shall be
used for no purpose inconsistent with this
provision. In the event that the Association,
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its successors or assigns shall fail to abide
by this covenant, the Agency aball have the
power, at its option, to declare this
condition violated, through the following
procedure. After hOlding a public hearing
before the governing body of the Agency on the
issue of such violation, of Which Association
is given at least ten (10) days advance
notice, at which hearing the ~sociation, its
successors and assigns shall be given
reasonable opportunity to be heard, the Agency
deteraines that the condition has in fact been
violated; upon such deteraination ..de in good
faith, Agency shall record its deteraination
of breach of this condition, upon which
recording title to this property aball revert
to the Agency forthwith, and Agency shall have
the right of immediate possession.-
While the Association does not appear to be in full
compliance with the DDA, it does not seem to be using the premises
for events which do not qualify as fine arts events. If the
Association completely prevented the SyIIphony and other
organizations froll using its Theater Facilities, then the
circumstances might warrant an exercise of the Right of Reverter.
Instead, the Symphony's and/or the Agency's remedies
those set forth in the remedy's section of the DDA which
in Section 2.6 as follows:
would be
provides
-In the event the Agency claims AsSOCiation,
its successors or assigns has breached any of
the conditions of this Agreement specified in
Section 2.2, prior to taking action to
terminate the rights of the AsSOCiation, its
successors or assigns, or to seek reverter to
the original owner, and prior to instituting
any action to enforce the conditions of this
agreement, Agency shall give 30 days notice to
Association, its successors and assigns, to
cure said breach. As a further cumulative
remedy, the Association, for itself, its legal
representatives, successors and assigns,
agrees that the Agency, its successors and
assigns, have the right and power to institute
and prosecute at law or in equity to entorce
any covenants and agreements herein contained
and to enjoin the threatened or attempted
violation thereof by Association, its legal
representatives, successors, tenants and
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assigns. In addition, the Association for
itself, its legal representatives, successors
and assigns, does hereby specifically grant to
the Agency such right and power to institute
and prosecute such proceedings.-
Accordingly, in order to remedy the current actions of
the Association, the Agency must first give formal, notice to the
Association of the alleged breaches. '!'hereatter, assUlling no cure
is colIIIDenced, the Agency would have the right to seek the remedies
provided in Section 2.6. Specifically, the Agency may consider an
action tor specific performance whereby it would seek a Court order
requiring the Association's compliance with the terms ot the DDA.
'!'he Agency could also, or as an alternative, seek an injunction to
prevent the occurrence ot any additional or continuing violations
of the DDA by the Association. '1'0 the extent it could prove
monetary losses, the Agency may also consider pursuing a damages
claim. However, in order to be successful, the Agency would have
to demonstrate direct financial losses as a result of the
Association's activities. Lastly, the Agency could consider an
action for recision whereby it would seek to rescind the DDA and
thereby return title to the Agency. untortunately, a recision
action may be hard to pursue since the DDA specifically
contemplated the Right of Reverter under certain circUIIstances and
a court may be hesitant to provide a remedy which would have the
same effect as the Right ot Reverter to circUIIstances which are
different than those giving rise to the Right ot Reverter under the
DDA.
If you have any illllDediate questions regarding the
foregoing, please contact me at your earliest convenience.
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