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ECONOMIC DEVELOPMENT AGENCY
OF THE CITY OF SAN BERNARDINO
FROM: Maggie Pacheco
Deputy Director
SUBJECT: AME!'<DMENT NO. I TO THE
THEATRICAL ARTS I!'<TER!'<A TIO!'<AL
OPERATION AND MANAGEMENT
AGREEMENT - CALIFOR!'<IA THEATRE
DATE:
August I, 2005
Synopsis of Previous Commission/Council/Committee Action(s):
On July 5, 2005, Redevelopment Committee Members Estrada and McGinnis unanimously voted to recommend that the
Community Development Conunission consider this action for approval.
Recommended ]\'1otion(s):
MOTIO!'<:
(Communih' Develooment Commission)
Resolution of the Community Development Commission of the City of San Bernardino approving and
authorizing the Executive Director to execute Amendment No. 1 to the Theatrical Arts International
Operation and Management Agreement for the California Theatre ("2005 Agreement")
Contact Person(s):
Gary Van OsdeL'Maggie Pacheco
Phone:
(909) 663.1044
Project Area(s)
Central City ]\;orth Redevelopment
Project Area
Ward(s):
Supporting Data Attached: 0 Staff Report 0 Resulution(s) 0 Agreement(s)/Contract(s) 0 Map(s) 0 Letters
Approx.
FUJ\'DING REQUIREMENTS Amount: $ 150,000
Source:
Tax Increment
Budget Authority:
Annual Budget
SIGNATURE:
1v{1::!!::;;;;:~,
ary V ~'Osdel, Executive Di ctor
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Commission/Council Notes: I
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P \Agen"w\Comm De~ Comm,ssi,1n',CDC 200S'.,OS_08_15 TAl Amend No 1 SRJoc
COMMISSION MEETING AGENDA
Meeting Date: 08/15/2005
Agenda Item Number: R.3 P
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ECONOMIC DEYELOPMENT AGENCY
STAFF REPORT
AMENDMENT NO, I TO THE THEATRICAL ARTS INTERNATIONAL OPERATION AND
MANAGEMENT AGREEMENT - CALIFORNIA THEATRE
BACKGROUND/CURRENT ISSUE:
On February II, 1999, the Agency entered into an Agreement with Theatrical Arts International
CT AI") for the operation and management of the California Theatre ("Theatre"). The one (1) year
agreement allowed TAl to book all events in the Theatre, on their behalf and on behalf of the Agency,
to maintain and operate the Theatre within the guidelines of the Agency's adopted budget, to contract
for all required operating staff, to arrange for usher services and for stage hands for all performances,
to develop a suggested operating budget, and to make recommendations for long-term improvements
and capital repairs. The Agreement dictated that TAl would reserve the Theatre for no less than 27
days for non-profit groups.
In return for the Theatre management and operating services, TAl received 20 rent-free performance
days for the larger productions secured by TAL All hard costs associated with TAl's rent free
performances were to be borne by TAl, including, but not limited to, the cost of the production,
security, ushers, stage hands, and janitorial. In addition, TAl was to receive 50% of cash sponsorships
obtained by TAL All rental income associated with other Theatre renters, considered to be Agency
productions, was to be collected on behalf of the Agency, and remitted to the Agency. Likewise, all
costs of these Agency productions were to be reimbursed by the Agency from rental income or
reimbursed directly from the Theatre renters. In accordance with the annual adopted budget, the
Agency was responsible for maintenance of the Theatre, utilities and any other costs not considered
hard costs of TAl's productions. The Agency also paid the costs of direct Theatre personnel (payroll
and benefits of the box office manager and related personnel).
Based upon the success of TAl, in April 2000, the Agreement with TAl was extended for a period of
two (2) years under the same above-mentioned conditions. Amendment No. I was entered into on
April 15, 2002, which continued the previous Theatre operating arrangement and agreement with the
exception that the number of rent free days provided to TAl for their productions was increased from
20 days to 35 days, and the number of reserved days for non-profit groups would increase from 27
days to 30 days. Amendment No.2 to the Agreement, approved on June 2, 2003, allowed TAl to
purchase for $500 the alcohol beverage license from San Bernardino Downtown Main Street for the
operation of the Theatre's alcohol beverage sales. In return for the purchase, TAl was to pay to the
Agency 25% of the gross income generated by the sales of alcoholic beverages and concessions on a
quarterly basis.
The Agreement between TAl and the Agency was due to expire on April 30, 2005; hence, on March 8,
2005, Redevelopment Committee Members Estrada, Longville and McGinnis unanimously voted to
recommend that the Community Development Commission ("Commission") approve a Five Year
extension to the Agreement.
P \Agrndas\Comm [)e_ComIMSion\COC 2005\05-08-IHAl Amend ~lll SRd<.x; COl\'lMISSION MEETING AGENDA
Meeting Date: 08/15/2005
Agenda Item Number:
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Economic Development Agency SlaffReport
TAl California Theatre - Amendment No. I
Page 2
The Committee approved the Five Year extension to the Agreement based on the following
modifications: TAl (1) will be permitted to keep 100% of the alcohol beverage and concession sales in
acknowledgement of the fact that TAl, on behalf of the Agency, oversees and takes the lead on payroll
and payroll taxes for stage hands, ushers, bartenders and others hired on behalf of the Agency's
productions. The Agency does reimburse TAl for these hard costs, but the Agency is relieved of the
burden of accounting for these individuals, and issuing W -2's at the end of the year; (2) TAl will be
required to submit their operating budget to the Agency 120 days prior to the end of each fiscal year
and for the Agency to include in its yearly budget; a line item for retention of a grant writer to help the
Agency and TAl generate other revenues that could be used to augment the Agency/T AI's resources to
fund operations and improvements to the Theatre; (3) and, either the Agency and TAl would be
required to provide a 90 day written cancellation notice to terminate the Agreement and the new
Agreement would expire on April 30, 2010 and finally, (4), Section 11.4 of the Agreement was
expanded to recognize that circumstances may change after execution of the Agreement and that either
party may desire to seek written amendments or modifications to any of the terms or provisions of the
Agreement.
On April 18, 2005, upon the advise of the City Attorney, the Commission approved a one (I) year
contract with TAl, commencing on May 1, 2005 and through April 30, 2006, and further directed Staff
to seek competitive proposals prior to entering into a five (5) year contract with TAl as proposed by
the Redevelopment Committee. Hence, on or about April 26, 2005, Staff solicited operation and
management proposals from the following organizations: Robert Stein Group, Management Company
for the Riverside Municipal Auditorium, Big Red Apple Production and Entertainment Development,
Theatrical Arts International, Inc., and Herald Luther, Manager for Sturges Theater. In addition, Staff
advertised the Request for Qualifications and Proposal Ad in the local newspaper. Other than a
response from TAl, no other proposals were received. Hence, it is recommended that Amendment No.
1 be authorized, to modifY the term (Section 9-Term and Termination) of the existing TAl and Agency
Agreement to be extended from April 30, 2006 to April 30, 2010. All other terms and conditions of
the Agreement will remain the same.
ENVIRONMENTAL IMPACT:
None.
FISCAL IMPACT:
Amendment No. I will result in adding 4 more years to the existing Agreement Term which means that
under the current arrangements with TAl, the Agency incurs all direct costs of Agency productions,
and the budgeted operation and maintenance of the Theatre, which is approximately $150,000 yearly,
after all revenues remitted to the Agency. This budget is reviewed and approved annually by the
Commission.
P ,^gen4as\Comm Dc_ Comrms!iion\COC 2005,05.08.1 5 TAl Amend !';.:o I SR <.loc
COMMISSION MEETING AGENDA
Meeting Date: 08/15/2005
Agenda Item Number:
Economic Development Agency Staff Report
T AI California Theatre - Amendment No. 1
Page 3
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RECOMMENDA nON:
That the Community Development Commission adopt the attached Resolution.
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PAgendas'Cornm Dc\ Commission,COC ~O(J5 OS_08, < TAl Amend :"<0 I ::.R J.,~
COMMISSION MEETING AGENDA
Meeting Dale: 08/15/2005
Agenda Item Number:
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RESOLl1T101\' 1\'0.
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RESOLUTION OF THE COMMUNITY DEVELOPMDIT CO!\IMISSIO'\
OF THE CITY OF SAN BERNARDINO APPROVI'lTG AND
AUTHORIZING THE EXECUTIVE DIRECTOR TO EXECUTE
AMENDMENT NO.1 TO THE THEATRICAL ARTS II\'TERJ\ATIO'\AL
OPERATION AJ\D MANAGEMEJ\T AGREEMEI\'T FOR THE
CALIFORNIA THEATRE ("2005 AGREEMENT")
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WHEREAS. the Agency owns the California Theatre of the Performing Arts (th
"Theatre") and the Agenc,' desires to cause the Theatre to be operated in a manner tha
8 slimulates do"ntO\\"n economic acti\"ity and that pro\"ides a broad range of cultural opportunitie.
9 for San Bcrnardino residents: and
WHEREAS. the Agency and Theatrical Art's International ("TAI") ha\"e pre\"iousl)
entered into an Operation and Management Agreement dated as of February II. 1999. a
amended on April 15.2002 and June 2. 2003. for the operation and management of the Theatre
which agreement. as amended. expires pursuant to its terms on April 30. 2005: and
WHEREAS, prior to entering into the original agreement with TAl for the operation an
I management of the Theatre. the !\gency was incurring substantial costs and use of StafT time il
I an excess amount of 5250.000 annually: and
WHEREAS. TArs operation and management of the Theatre for the past fi\"e \"ears ha
resulted in the communit\" recci\"inl! sil!nificant benefits for the efforts of TAl includin'
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increasing the quality and frequencies of the performances, filling the Th~atre "ith patrons. an
reducing costs to the Agency and increasing re\"enues as documented in the Staff Report. and
WHEREAS, on April 18,2005, upon the ad\"ice of the City Attorney. the Commissio
approved a one (I) "ear contract with TAL commencing on May 1. 2005 and through April 30
2006. and further directed Stall to seek competitive proposals prior to entering into a five (5
)ear contract "ith TAl as proposcd hy the Rede\"elopment Committee 011 July 5, 2005: and
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WHEREAS, on April 26, 2005, Staff solicited operation and management pr"posals f,'um'
the following organizations: Robert Stein Group, Management Company for the Ri\'ersid~
\lunicipal Auditorium. Big Red Apple Production and Entertainment De\elopment. Theatrical!
Arts International. Inc.. and Herald Luther. i'vlanager for Sturges Theater. and also advertised ill
the lllcal newspaper and only one response was received li'OI11 TAL
NO\V. THEREfORE. THE COj,,!\lU0JITY DEVELOPMENT COMMISSIO:\ OF THE
CITY OF SAN BERNARDINO DOES HEREBY RESOLVE. DETERJ\lINE .-\.l\JD ORDER. AS
8 FOLLOWS:
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Section l.
The Commission hereby approves the Amendment :\0. to the Agreement
10 attached hereto and incorporated herein by reference.
Section 2.
The Executive Director of the Agency is hereby authorized to execute the
Amendment No. 1 to the Agreement on behillf of the Agency in substantially the f0I111 attached hereto.
together with such changes therein as mav be appro\'ed by the Executive Director and Agency CounseL
The Executi\'e Director or such other designated representative of the Agency is fUl1her authorized to do
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allY and all things and take any and all actions as may be deemed necessary or advisable to ctTecl!Jate the
purposes of Amendment No, ] to the Agreement including making non-substantive modifications to I
Amendment 1\0, 1 to the Agreement
Section 3.
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The Resolution shall become effective immediately upon its adoption,
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RESOLlTION OF THE COMMUNITY DEVELOPME'\T COMMISSIO:\"
OF THE CITY OF SA:\" BER:\"ARDINO APPROVING AND
AUTHORIZING THE EXEClTIVE DIRECTOR TO EXECUTE
AMENDMENT 1\'0. I TO THE THEATRICAL ARTS INTERNATIO'\AL
OPERATION AND MANAGEMENT AGREEMENT FOR THE
CALIFORNIA THEATRE ("2005 AGREEMENT") ON BEHALF OF THE
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
I HEREBY CERTIFY that the foregoing Resolution \\as duly adopted by the
Community De\'elopment Commission of the City of San Bernardino at a
mecti ng thereof held on the
davof
. 2005. by the following \'ote to wit:
Commis,ion \kmbcrs:
A\e,
Navs
Abstain
Abscn:
ESTRADA
LOl'iGVILLE
:vlCGI"INIS
DERRY
KELLEY
JOHNSON
\!C CAMMACK
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Secretary
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Thc foregoing resolution is hereby approwd this
day of______~_. 2005,
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Judith Valles. ChairpcNln
Community Development Commission
of the City of San Bernardino
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Approved as to form and Legal Content:
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By:
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Agency Couosel
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Amendment No.1
to that Certain
2005 Operation and Management Agreement
California Theatre
This Amendment No. I (this "Amendment") to that certain 2005 Operation and
Management Agreement, California Theatre, dated April 18, 2005 (the "Management
Agreement"), is by and between the Redevelopment Agency of the City of San Bernardino, a
public body, corporate and politic (the "Agency"), and Theatrical Arts International. a California
Corporation ("TAl"), and is dated as of August 15.2005, with reference to the following facts:
RECITALS
Whereas, the Agency and TAl have previously entered into the Management Agreement
as referenced above for a term extending from May I, 2005 through and including April 30,
2006, as further provided in Section 9 of the Agreement; and
Whereas, said Agreement with the one-year term was entered into pending a formal
solicitation process being conducted by the Agency to determine whether other entities were
interested and qualified to operate and manage the California Theatre, and the Agency has
deternlined that TAl was the only entity responding to the most recent solicitation process of the
Agency to obtain a manager and operator of the California Theatre; and
Whereas, it is necessary and desirable that the Agency, after full compliance with its
purchasing and requisitioning procedures and policies, approve a long-term management
arrangement with TAl for the management and operation of the California Theatre during the
term as provided in this Amendment; and
Whereas, all other terms, provisions and conditions of the Agreement shall remain in full
force and effect except to the extent specifically modified by this Amendment.
NOW THEREFORE, the Agency and TAl agree as follows:
Section 1.
Recitals.
The facts and statements contained in the Recitals hereto are true and
accurate in all respects to the best knowledge of the parties as of the date hereof.
Section 2.
Extension of Term of Al!reement.
The parties intend by the approval and execution of this Amendment to extend the
term of the Agreement for four (4) additional years from and after the current
termination date through and including April 30, 2010. Consequently, Section 9.1
of the Agreement shall be amended in its entirety to read as follows:
"This Agreement shall commence on the first (I ") day of May 2006, and shall
remain in effect for four (4) years through and including April 30, 2010".
PAgendu\Agenlla Anachments'AgnTls.Amcn<! :00505.08-15 TAl Amendment No I doc
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Section 3.
Effective Date.
This Amendment shall take effect and be in full force and effect from and after
the date of approval hereof by the governing body of the Agency and the final
execution. and delivery of this Agreement by both the Agency and TAL
IN WITNESS WHEREOF, the parties have executed this Amendment as of the date first
above written.
REDEVELOPMENT AGENCY
OF THE CITY OF SAN BERNARDINO
Date:
By:
Gary Van Osdel, Executive Director
Approved as to Legal Form
and Content:
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Agency C01,lrlsel
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THEATRICAL ARTS INTERNATIONAL
Date:
By:
Joseph Hensen
Date:
By:
Allen Evenson
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PAgendas',Agenda AlIadmcnts'.A.gnms-Amcnd ~OO505.08-15 TAl Arn<'ndmcnl So I Joe