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Home My WebLink About04- Economic Development ,6VELOPMENT DEPARTMENI OF THE CITY OF SAN BERNARDINO ECONOMIC DEVELOPMENT AGENCY REQUEST FOR COMMISSION/COUNCIL ACTION FROM: KENNETH J.HENDERSON SUBJECT: CALIFORNIA THEATER- Executive Director INTERIM MANAGEMENT AGREEMENT DATE: August 31, 1994 ------------------------------------------------------------------------------------------------------------------------------------------- Synonsis of Previous Commission/Council/Committee Action(s): On August 15, 1994,the Community Development Commission directed staff to negotiate with the staff of the San Bernardino Civic Light Opera Association to obtain interim management services for operation of the California Theater at a monthly cost not to exceed$5,000. ------------------------------------------------------------------------------------------------------------------------------------------- Recommended Motion(s): (Community Development Commission) MOTION A: That the Community Development Commission authorize the Executive Director to execute an agreement with the San Bernardino Civic Light Opera Association(SBCLO)to provide operating management of the California Theater upon terms and conditions outlined in the staff report. AND MOTION B: That the Community Development Commission authorize an increase in the Agency budget to reflect an average net operating cost of$5,000 per month for the period September 1994 through December 1994 plus a reduction of$1,000 per week in the debt owed by SBCLO to the Agency. — M!!!��p� Administrator KENNETH J.HEND RSON Executive Director ------------------------------------------------------------------------------------------------------------------------------------------- Contact Person(s): Kenneth J.Henderson/John Hoeger Phone: 5081 Project Area(s): Central City North(CCN) Ward(s): One 1) Supporting Data Attached: StaffRenort; FUNDING REQUIREMENTS: Amount: $20,000 Source: Bond Proceeds Budget Authority: Requested ------------------------------------------------------------------------------------------------------------------------------------------- Commission/Council Notes: ------------------------------------------------------------------------------------------------------------------ KJH:JBH:lag:09-01-05.cdc COMMISSION MEETING AGENDA MEETING DATE: 09/06/1994 Agenda Item Number: DF "'ELOPMENT DEPARTM '- "' T L_ JNOMIC DEVELOPMENT AGEN%_ STAFF REPORT ----------------------------------------------------------------------------------------------------------------- California Theater- Interim Management Agreement i BACKGROUND Escrow closed on August 31, 1994 for the Agency's acquisition of the California Theater. Approximately four months may pass before a long term operator will be in place. During the interim, short-term operating management of the Theater is necessary. Staff has negotiated with the San Bernardino Civic Light Opera Association(SBCLO)to obtain interim operational management of the California Theater. The form motion will authorize execution of a management agreement with SBCLO with the following provisions. CONTRACT PROVISIONS I A. The contract term will be on a month to month basis with a provision for cancellation upon 30 day's written notice. B. Payments for goods and services (other than those for management and operating personnel)will be made directly to the vendors involved. Money will not be paid through the SBLCO's offices. C. SBLCO will act at the direction of and as an agent of the Agency and not upon its own authority. SCOPE OF WORK SBLCO will provide operation management services that include physical operation of the Theater, booking of rentals, and assistance in developing approaches to capital expenditures. The following specific services are included to the extent required or determined by Agency staff on a day to day basis: 1. SBLCO will maintain a master calendar and, under the direction of Agency staff, book events in accordance with the current and established practice. SBLCO will provide rental information and assistance for all potential Theater users. 2. Upon approval of a rental contract form by Agency staff, SBLCO will arrange for execution of contracts between the Agency and all booked rentals of the Theater based upon the rental rates currently in use by the SBCLO. ---------------------------------------------------------------------------------------------------------------- -- KJH:JBH:1ag:09-01-05.cdc CONMMSION MEETING AGENDA MEETING DATE: 09/06/1994 Agenda Item Number: DEVELOPMENT DEPAR .ENT STAFF REPORT California Theater-Interim Management Agreement August 30, 1994 Page Number-3- ----------------------------------------------------------------------------------------------------------------------- 3. Upon approval of a short-term budget (as described below), SBLCO will contract for all required operating staff to operate the Theater and arrange for all required services needed for scheduled usages. Any expense that exceeds the approved budget must receive Iadvance written authorization except in cases of an emergency nature where action is required to preserve public safety or the integrity of the property. I 4. SBLCO will arrange for all rental payment to be made payable to the Agency and will monitor such payments and collect payments as required. I 5. SBLCO will review all bills and invoices prior to submission to the Agency for payment and advise as to the appropriate action to be taken in each instance. 6. SBLCO will assist the Agency, its inspectors, contractors, and consultants to make recommendations regarding the physical condition of the Theater and any needed repairs, improvements or programs needed for long term operation of the Theater. OPERATING BUDGET Agency staff has reviewed information supplied by SBCLO regarding the cost of operating the Theater. Based upon this information and upon income projections for currently booked events, it appears that the Theater operations will be approximately break even for the next four month period (ending 12/31/94). The cost of carrying the Theater during a month in which there are no events is approximately$10,000. Costs are higher during months with events because additional staff(ushers, cleaning crew, etc)is required and utility costs are higher. At the same time, income is received to more that offset the additional operating costs, thus repaying most or all of the costs for non-operational months. Staff recommends that these first months of operation be approached upon a net cost basis after generated income for the month is applied. Using this approach, staff believes the net operating deficit would be approximately $5,000 per month. A detailed estimate is attached to this report. (This estimate actually projects a December 31, 1994 profit $2,704, but staff believes $20,000 is a prudent amount to appropriate based upon historical data and the fact that SBCLO has mischaracterized the free rent provided by the Agency as income).. A recommendation for certain capital improvements(such as a fire alarm system)will be forwarded separately when the necessary specifications and bid estimates have been developed. ------------------------------------------------------------------------------------------------------------- KJH:JBH:1ag:09-01-05.cdc COMMISSION MEETING AGENDA MEETING DATE: 09/06/1994 Agenda Item Number: DEVELOPMENT DEPAP"NIENT STAFF REPORT California Theater- Interit. ianagement Agreement August 30, 1994 Page Number-4- MANAGEMENT FEE In exchange for the above services, SBCLO will receive a credit reducing the outstanding i principal due on its loan from the Agency. The reduction will be $1,000 per week for each week I during the term of the interim agreement. SBCLO will not bill the Agency separately for any services provided by its General Manager as these are included in the management fee. Costs for direct personnel (plant manager, ushers, cleaning staff, etc) plus costs for payroll burden including pertinent benefits, will be charged as a part of the operating budget above. RECOMMENDATION Based upon the above, staff recommends adoption of form motions "A" and 'B".&41 KE TH J. IIANDERSON, Executive Director Development Department ------------------------------------------------------------------------------------------------ KJH:JBH:1ag:09-01-05.cdc COMMISSION MEETING AGENDA MEETING DATE: 09/06/1994 Agenda Item Number: G� SAN BERNARDINO CIVIC LIGHT OPERA CALIFORNIA THEATRE- ITERIM MANAGEMENT SHORT TERM OPERATION BUDGET- ESTIMATE BASED ON 8/16/94 SCHEDULED USAGE DATE PREPARED: 08/30/94 INCOME 9/94 10/94 11/94 12/94 TOTAL NET COKE SALES $63 $413 $575 $363 $1,413 NET BAR SALES $250 $425 $750 $750 $2,175 SBCLO RENT/CITY CREDIT $0 $0 $16,320 $0 $16,320 IESA RENT $1,760 $1,760 $0 $1,760 $5,280 SBVCC RENT $0 $0 $1,760 $0 $1,760 INLAND DANCE TH RENT $0 $0 $2,000 $7,040 $9,040 OTHERS RENT $0 $7,550 $2,100 $0 $9,650 MISC TH INCOME $0 $3,850 $550 $1,200 $5,600 TOTAL INCOME $2,073 $13,998 $24,055 $11,113 $51,238 EXPENSE 9/94 10/94 11/94 12!94 TOTAL REPAIRS/MAINT $1,000 $1,000 $1,000 $1,000 $4,000 ELECTRICITY $4,500 $3,500 $3,500 $3,500 $15,000 GAS $300 $300 $400 $500 $1,500 WATER $200 $200 $200 $200 $800 REFUSE $70 $70 $70 $70 $280 PHONE $150 $150 $150 $150 $600 S12-CURITY SYSTEM $125 $125 $125 $125 $500 11 PIP IES $500 $500 $500 $500 $2,000 EQ%JIPMENT PURCHASE $350 $350 $350 $350 $1,400 PROPERTY TAXF,S $0 $0 $0 $0 $0 INSURANCE-PROPERTY $0 $0 $0 $0 $0 PROMOTION $100 $100 $100 $100 $400 MISCELLANEOUS $250 $250 $250 $250 $1,000 SECURITY GUARDS $70 $392 $672 $336 $1,470 CLEANING CREW $270 $324 $1,026 $324 $1,944 FOH STAFF/USHERS $180 $1,260 $1,980 $1,080 $4,500 PLANT MANAGER $2,167 $2,167 $2,167 $2,167 $8,667 INSURANCE-HEALTH $703 $0 $0 $703 $1,405 BURDEN/W COMP(18.5%) $497 $766 $1,081 $723 $3,067 TOTAL EXPENSE $11,431 $11,454 $13,571 $12,077 $48,533 PROFIT(LOSS) ($9,359) $2,543 $10,484 ($965) $29704 INTERIM MGT FEE-TO BE DEDUCTED FROM CITY LOAN $4,000 $4,000 $4,000 $5,000 $17,000 *RENT CREDIT SHOULD NOT BE CHARACTERIZED AS CASH INCOME TO AGENCY.