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HomeMy WebLinkAboutR29- Economic Development ECONOMIC DEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO FROM: Ann B. Harris SUBJECT: MANAGEMENT OF THE Business Retention/Revitalization Director //�� ((''���/]CALIFORNIA THEATER DATE: October 5, 1998 c O.I� \'/ U Ll Synopsis of Previous Commission/Council/Committee Action(s): On October 26, 1998,the Redevelopment Committee recommended that this item be forwarded to the Community Development Commission. On November 16, 1998,the Community Development Commission authorized staff to prepare agreement with Theater Arts International-to manage California Theatre for one year commencing January 1, 1999-with a 30-day cancellation clause by either party. ---------- Recommended Motion(s): (Community Development Commission) MOTION A: RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO AUTHORIZING THE EXECUTIVE DIRECTOR OF THE ECONOMIC DEVELOPMENT AGENCY TO EXECUTE AN AGREEMENT FOR PROFESSIONAL SERVICES WITH THEATRICAL ARTS INTERNATIONAL MOTION B: That staff be authorized to give a thirty(30)day cancellation notice to the Civic Light Opera and Keith Stava Productions. Contact Person(s): Ann B.Harris/ Colin Strange Phone: 5081 Project Area(s) Central City(CC) Ward(s): Supporting Data Attached: W Staff Report O Resolution(s)O Agreement(s)/Contract(s)O Map(s)❑Letter/Memo FUNDING REQUIREMENTS Amount: S N/A Source: N/A Budget Authority: N/A i SIGNATURE: el ary an sdel, xecutiv irector Ann B.Harris,Drector nomcc Development Agency Business Retention/Revitalization CommissiodCouncil Notes: ---------------------—---—---_---—-----------------—---- ---—---—-------------------------------------------- ABH:Iag:11-16-02.CDC COMMISSION MEETING AGENDA Meeting Date: 1/1111999 /1 Agenda Item Number: f%, �� ECONOMIC DEVELOPMENT AGENCY STAFF REPORT --------------------------------------------------------------------------------------------------------------------- Manat:ement of California Theater On August 31, 1994,the Agency acquired the California Theater of the Performing Arts. Interim management of the facility was obtained from the San Bernardino Civic Light Opera at a cost of $5,000 per month plus a reduction of$1000 per month in debt owed to the Agency. Keith Stava, Executive Director of the San Bernardino Civic Light Opera, was given the position of interim manager on behalf of the Agency. Upon the cessation of activities of the Civic Light Opera in early 1997, Keith Stava was retained as interim manager of the theater,under contract to the Civic Light Opera at a current cost to the Agency of$1000 per week or$52,000 per annum. Staff has received a proposal from Theater Arts International to manage the facility at no charge to the Agency in consideration of twenty days per year theater usage for this company's productions. Current occupancy of the theater runs at approximately 60-70 days per year so this will not displace any potential rentals to the agency in the foreseeable future. Occupancy of the theater has remained more or less constant under the current management arrangement. Theater Arts International recently relocated their operations from Riverside and launched its first San Bernardino Season. Their subscriber base has reached 3,500 members in the first year and four productions have been scheduled. The first productions of Zorro and A Christmas Box achieved attendances averaging 1,000 persons per performance. These are numbers way in excess of any other performing arts group which has utilized the theater in many years. In addition,Theater Arts International has informed staff that they are able to contract with other performing arts groups throughout the nation. This will result in an additional six to eight musical comedy productions per year negotiated on behalf of the agency on a 50/50 split. Theater Arts International has twenty years experience managing the Landis Theater in Riverside. ---—---—---—--------------------—------------------------------------------ ABH:1ag:11-16-02.CDC COMMISSION MEETING AGENDA Meeting Date: 1/11/19999 Agenda Item Number: &4;- 1 Theater Arts International and the Agency propose a one year contract with a thirty day termination clause by either party. Direct savings to the Agency: Management Fees $52,000 Potential additional income from joint venture operations marketed $127,500 through Theater Arts International Less: Additional costs from increased occupancy ($37,000) (Utilities,theater staff, maintenance, supplies, etc) GROSS SAVINGS TO THE AGENCY PER YEAR: $142,000 The current revised expenditures for the theater for 1998/1999 is projected at a cost of$144,000 to the Agency by deducting $52,000.00 from the current budget In the event that Theater Arts International are unable to attract the additional performances the overall cost to the Agency is still reduced from $144,000 per annum to $92,000 per year by deducting another$52,000.00 per year or the management fee payable to the Civic Light Opera. On November 16, 1998 the Commission instructed staff to prepare an agreement with Theater Arts International for one year. Based on the foregoing, it is recommended that the Community Development Commission authorize staff to enter into a contract with Theater Arts International to manage the California Theater for one year, commencing on January 1, 1999 with a thirty day termination clause by either party. i 9 Ann .Harris, irector Business Retention/Revitalization °– °– — ------------------------------------ ------------------------------- ABH:Iag 11-16-02.CDC – – COMMISSION MEETING AGENDA Meeting Date: 1/11/1999 Agenda Item Number: 1 RESOLUTION NO: 2 3 RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO AUTHORIZING THE EXECUTIVE DIRECTOR OF THE 5 ECONOMIC DEVELOPMENT AGENCY TO EXECUTE AN AGREEMENT FOR PROFESSIONAL SERVICES 6 WITH THEATRICAL ARTS INTERNATIONAL 7 e BE IT RESOLVED BY THE COMMUNITY DEVELOPMENT COMMISSION 9 OF THE CITY OF SAN BERNARDINO AS FOLLOWS: to SECTION 1. The Executive Director of the Economic Development Agency is 11 12 hereby authorized and directed to execute an Agreement for Professional Services with 13 Theatrical Arts International, a copy of which is attached hereto and marked as Exhibit"A"and a incorporated herein by reference as fully as though set forth at length. 15 SECTION 2. The authorization to execute the above referenced agreement is 16 rescinded if the parties to the agreement fail to execute it and return it to the Office of the City 17 Clerk within sixty (60) days following the effective date. 16 19 20 21 22 23 29 25 26 27 28 - 1 - 1 RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO AUTHORIZING THE 2 EXECUTIVE DIRECTOR OF THE ECONOMIC DEVELOPMENT 3 AGENCY TO EXECUTE AN AGREEMENT FOR PROFESSIONAL SERVICES WITH THEATRICAL ARTS INTERNATIONAL 4 5 I HEREBY CERTIFY that the foregoing resolution was duly adopted by the 6 Community Development Commission of the City of San Bernardino at a 7 meeting thereof,held on day of , 1999 by the 8 following vote,to wit: 9 10 COMMISSION MEMBERS: AYES NAYS ABSTAIN ABSENT 11 ESTRADA 12 LIEN 13 VACANT 14 SCHNETZ 1s DEVLIN 16 ANDERSON i 17 MILLER 19 19 Secretary 20 21 The foregoing resolution is hereby approved this day of { 1999. 22 i 23 Judith Valles, Chairperson 24 Community Development Commission 1 25 Of the City of San Bernardino 26 Approved as form and Legal Content: 27 29 By: > . 1 Agency Counsel 1 1 i 2 j 1 OPERATION AND MANAGEMENT AGREEMENT This Operation and Management Agreement (Agreement) is made and entered into as of this 1999,by and between the REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO (Agency) and the THEATRICAL ARTS INTERNATIONAL, a California Corporation(TAI)with reference to the following facts: A. The Agency owns the California Theatre of the Performing Arts (Theatre) as described in Exhibit"A". The Agency desires to operate the Theatre in a manner that stimulates downtown economic activity and that provides a broad range of cultural opportunities for San Bernardino citizens without the need for continuing cash subsidies. B. In order to assist the Agency with the operation of the Theatre, TAI is willing to provide operating and management services as more fully described hereunder, upon the terms and subject to the conditions in this Agreement. NOW THEREFORE,the Agency and TAI agree as follows: 1. Engagement of TAI The Agency hereby engages TAI to provide the operating and management services described in Section 2 of this Agreement, and TAI hereby accepts such engagement and agrees to provide such services under this Agreement during the term specified in Section 8. 2. Management Services TAI shall supervise all aspects of the Theatre's management and will provide operating and management services that include physical operation of the Theatre,booking of rentals,collection of rent, development of new business opportunities and assistance in developing approaches to capital expenditures. TAI shall provide the following specific services to the extent required or determined by the Agency's Director of Business Recruitment, Retention&Revitalization or designee(Director)from time to time. (a) TAI shall program the Theatre and book all events in the Theatre,whether in the main auditorium or in any other public room in the Theatre. TAI will program the Theatre in a manner that results in highly active use of the Theatre for a broad variety of performance types. TAI shall make the Theatre's schedule available not less than 27 days per year to local non-profit performance groups and for Agency presentations (including Main Street)which days shall be reasonably available throughout the year upon adequate notice. So long as performance dates are delivered to TAI not later than the last day of February of the immediately preceding calendar year, local non-profit performance groups shall have priority in reserving performance dates for each calendar year during the term hereof. - 1 - (b) TAI shall use a rental contract and ticket sales agreement in substantially the form of Exhibit"C", subject to specific terms it may negotiate with theater users from time to time. Rental rates shall be based upon the Rate Schedule attached as Exhibit"D". (c) Upon approval of each year's budget as described in Section 6 (Operating Budget), TAI shall contract for all required operating staff to operate the Theatre and arrange for all required services needed for scheduled usages. TAI shall negotiate maintenance contracts and obtain services and equipment as required. TAI will diligently strive to obtain the best prices for goods and services or sponsorship of such goods and services consistent with the quality required. Any expense which exceeds its line item allowance in the Operating Budget shall have received the advance written authorization of the Director except in cases of an emergency nature where action is required to preserve public safety or the integrity of the property. Such emergency action shall be reported to the Director as soon as practical but within 24-hours in any event. TAI shall review all bills and invoices prior to submission to the Agency for payment and advise the Agency as to the appropriate action to be taken in each instance. (d) TAI shall assist the Agency, its inspectors, contractors, and consultants in making recommendations regarding the physical condition of the Theatre and any needed capital repairs, improvements or programs needed for long-term operation of the Theatre. TAI shall coordinate the execution of all approved capital improvements. (e) TAI shall supervise the Theatre's operation at each and every performance or use of the building using qualified personnel. Supervision to include all aspects of operation, i.e., box office, stagehands,etcetera. TAI will be physically represented at all functions and will maintain an office on site to be staffed at all normal business hours. (f) TAI shall deposit all ticket or other income.into a separate TAI bank account(Box Office Account) held in trust for the Agency. TAI shall deposit all received funds into the Box Office Account on a regular basis(not less than twice a week). TAI may pay out Reimbursed Expenses (as defined in Section 4) and rental settlements from the Box Office Account. TAI will provide a full accounting of all transactions at the end of each calendar month. Excess funds will be transferred to the Agency in accordance with procedures determined by the Director from time to time. This section 2(f) shall not apply to ticket sales for San Bernardino non-profit performance groups which retain the proceeds from sales of their own tickets. 3. Personnel (a) In performing the management services set forth in Section 2,TAI shall report to and operate under the direction of the Director and shall act as an agent of the Agency and not upon TAI'S own authority. TAI commits Joseph Henson and Allen Evenson,to the performance of TAI'S duties under this agreement. -2 - M (b) It has been determined that Joseph Henson and Allen Evenson are necessary to the successful performance of this agreement. No diversion or replacement of Joseph Henson and Allen Evenson shall be made by TAI without written consent of the Director. 4. Management Fee (a) In consideration for TAI'S provision of the operating and management services set forth in Section 2 above,TAI shall receive 20 rent free performance days during the term of this agreement. (b) In addition, TAI shall receive 50 percent of cash sponsorships obtained by TAI as determined in accordance with generally accepted accounting principles. Said sponsorship fees will be paid annually within 60 days of the close of each fiscal year. (c) TAI shall not bill the Agency separately for any services provided by its officers or other representatives of TAI as such services are included in the management fee. Costs of any direct theater personnel, (i.e., the box office manager and cleaning staff including costs for payroll and pertinent benefits) shall be charged to the Operating Budget described in Section 6. Costs for ushers, security guards, stage manager,equipment rental, etc.,that are reimbursed by Theatre renters (Reimbursed Expenses) may be paid from the Box Office Account in accordance with Section 2(f). (d) All presentations by TAI and/or others are outside the scope of this agreement. TAI will be responsible for losses incurred through its own presentations or its portion of any separately approved co-promotions with Agency. Agency will be responsible for losses incurred through its own presentations (including those of Main Street,etc)or its portion of any separately approved co-promotions with TAI. 5. Vendor Payments Payments for goods and services,other than those for management and operating personnel, shall be made directly by the Agency to the applicable vendors. No such payments shall be made by or through TAI without prior written approval of the Director. 6. Operating Budget Based upon information supplied to the Agency by TAI regarding the cost of operating the Theatre and upon income projections for currently booked events, it appears that the Theatre operations will be approximately break even in the first full fiscal year after the date of this agreement. Ninety days prior to the end of each fiscal year TAI, in consultation with the Director of Business Recruitment,Retention and Revitalization, shall develop a budget for inclusion - 3 - in the Agency's budget to be approved by the Community Development Commission. Such approved budget shall be the following fiscal year's Operating Budget. 7. Maintenance of Services Neither TAI nor its employees shall hinder, delay, limit or suspend the continuity of the Theater's function, operation or service in any manner. TAI shall not in any manner coerce, intimidate, instigate, endure, sanction, suggest, conspire with,promote, support, sponsor, engage in, condone or encourage any employee to participate in any strike, slowdown, mass resignation, mass absenteeism or any type of concerted work stoppage. In the event any of the above-described actions occur,TAI shall be obligated to maintain the management services which are the subject of this Agreement. 8. Term and Termination 8.1 Term This Agreement shall commence on the I'day of January 1999,and stay in effect for one year,January 1, 2000. 8.2 Termination Upon Default If either party is in default under this agreement the other party shall give written notice thereof to the defaulting party who shall have thirty (30) days to cure such default. Upon receipt of such notice and the failure to cure within said thirty (30) days,this agreement may be terminated by providing a ten (10)day written notice of termination. -4 - s ` 9. Indemnification and Insurance 9.1 Indemnification 9.1.1 TAI will accept the full responsibility for and shall defend, indemnify and save harmless the Agency and its commissioners,officials, officers, employees and agents from all claims for all loss or damage to property, including loss of use thereof, costs, attorneys' and witnesses' fees, and expenses incident thereto, and injury to persons resulting from the negligent execution or performance of this Agreement as well as for any claims made by or on behalf of TAI'S agents, servants, and/or employees arising out of their employment or work pertaining to the operations under this Agreement;moreover,the TAI shall at all times defend, indemnify and hold the Agency, its commissioners, officials, officers,employees and agents harmless from and against any and all liabilities, demand, claims, suits, losses, damages, causes of actions, fines, or judgments,including costs,attorneys' and witnesses' fees, and expenses incident thereto, arising out of or in connection with any act or omission of TAI or its agents, servants or employees in the execution or performance of this Agreement or as a result of the failure by TAI to comply with all laws,ordinances or governmental regulations applicable to TAI or the conduct of TAI'S business. The Agency shall accept the full responsibility for and shall defend, indemnify and save harmless TAI and its commissioners, officials, officers, employees and agents from all claims for all loss or damage to property, including loss of use thereof, and injury to persons resulting from the negligent execution or performance of this Agreement as well as for any claims made by or on behalf of the Agency's agents, servants, and/or employees arising out of their employment or work pertaining to the operations under this Agreement;moreover,the Agency shall at all times defend, indemnify and hold TAI,its commissioners, officials, officers, employees and agents harmless from and against any and all liabilities, demand, claims, suits, losses, damages, causes of action, fines, or judgments, including costs, attorney's and witnesses' fees, and expenses incident thereto, arising out of or in connection with the execution or performance of this Agreement or as a result of the failure by the Agency to comply with all laws, ordinances or governmental regulations applicable to the Agency or the conduct of the Agency" business. For the purposes of this section,the costs salaries and expenses of the City Attorney and members of his office shall be considered as attorneys fees. 9.2 Insurance 9.2.1 Without limiting the effect of any indemnity in this agreement, TAI shall purchase and maintain in effect, at its own expense, during the term of this Agreement insurance from insurers acceptable to the Agency protecting TAI,the Agency, its commissioners, officers,employees and agents, against claims for bodily injury, including personal injury,property damage, including loss of use thereof, which may arise or be alleged to have arisen, from TAI's activities in connection with the performance of - 5 - this Agreement, whether such activities be of TAI, TAI'S agents, or of anyone employed by TAI. The types of insurance coverage as well as the amounts of such coverage shall be as follows: 9.2.2 TAI shall furnish workmen's compensation and employers' liability insurance as required by the laws of the State of California covering all persons employed by TAI in the performance of the duties described herein. 9.2.3 TAI shall provide public liability insurance coverage in the amount of not less than$1,000,000 for property, death or injury of one person, and any one accident or casualty, covering the performance of the services herein ordered. The Agency,its commissioners,officials,officers, employees and agents, shall be named as an additional insured. 9.2.4 Within ten(10) days after the acceptance of this Agreement by the Agency,TAI shall deliver to the Agency certificates of insurance evidencing that insurance has been purchased by TAI as required in this Section 9.2 and copies of endorsements providing (i)thirty(30) days' written notice of cancellation,non- renewal, or reduction in coverage by the insurers to the Agency, (ii)automobile liability and comprehensive general liability insurance, and (iii)that the Agency, its commissioners, officials, officers,employees, and agents are additional insureds. Said certificates and insurance and copies of endorsements shall be on file with the Agency at all times thereafter during the term of this Agreement. Failure of TAI to provide the certificates of insurance or subsequent receipt by the Agency of a notice of cancellation of the insurance policy(ies)by TAI's insurance company(ies) shall constitute a material breach of this Agreement and this Agreement may be terminated by the Agency upon written notice. All policies of insurance required and provided by TAI under this Section 9.2 shall include, or be endorsed to provide, a waiver by the insurers of any rights of subrogation that the insurers may have at any time against the Agency, its commissioners, officials, officers, employees and agents. 10. Miscellaneous 10.1 Notices. Any and all notices required or permitted to be given hereunder shall be in writing and shall be personally delivered or mailed by certified or registered mail, return receipt requested, postage prepaid,to the respective parties at the addresses indicated below: If to Agency: Redevelopment Agency of the City of San Bernardino 201 North "E" Street, Suite 301 San Bernardino, California 92401-1507 Attn: Director, Business Recruitment, Retention&Revitalization If to TAI: Theatrical Arts International 108 Orange Avenue, Suite 9 Redlands, California 92373 - 6 - Any party may change its address by a notice given to the other party in the manner set forth above. Any notice given personally shall be deemed to have been given upon service and any notice given by certified or registered mail shall be deemed to have been given on the fifth(5th)business day after such notice is mailed. 10.2 Integration This Agreement supersedes all prior agreements and understandings between the parties relating to the subject matter hereof. Neither of the parties has relied upon any oral or written representation or oral or written information given to it by any representative of the other party. 10.3 Severability If one or more of the provisions of this Agreement is hereafter declared invalid or unenforceable by judicial, legislative or administrative authority of competent jurisdiction, the parties hereto agree that the invalidity or unenforceability of any of the provisions shall not in any way affect the validity or enforceability of any other provisions of this Agreement. 10.4 Amendment; Modification No change or modification of the terms or provisions of this Agreement shall be deemed valid unless in writing and signed by both parties subject to governmental approval, if required. 10.5 Governing Law This Agreement shall be construed, interpreted and applied in accordance with the laws of the State of California. 10.6 Waiver No waiver of any breach or default shall be construed as a continuing waiver of any provision or as a waiver of any other or subsequent breach of any provisions contained in this Agreement. 10.7 Headings The headings of Sections of this Agreement have been inserted for convenience of reference only and shall not affect the interpretation of any of the provisions of this Agreement. - 7 - 10.8 Assignment Neither party hereto shall assign,hypothecate, or otherwise transfer such party's rights hereunder, or delegate such party's duties hereunder,without the prior written consent of the other party hereto. 10.9 Contract Evaluation and Review The ongoing assessment and monitoring of this Agreement is the responsibility of the Director. The Director is authorized to approve changes in Exhibit"C",the Rental Contract,with the concurrence of Agency Counsel regarding legal form and content. The Director is authorized to approve changes in Exhibit"D",the Rate Schedule, as appropriate to the purposes of this Agreement. The Director is authorized to execute such documents as are necessary to implement this Agreement. Notwithstanding the foregoing, the rates set forth in Section 3 of Exhibit D shall not be increased during the term of this Agreement. - 8 - L IN WITNESS WHEREOF,the parties have executed this Agreement as of the date first above written. REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO Gary Van Osdel Executive Director THEATRICAL ARTS INTERNATIONAL Joseph Henson Allen Evenson Approved as to legal fort and Content: "Counsel JBH:Iag:OPRMGMT.AGM - 9 -