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HomeMy WebLinkAboutSS2 - Balboa Theater:)A PERFORMING ARTS THEATE agenda it u r 0 Ur lFNO J/f NytrrANi Bki KMG,,r,p _ Qilk Nw Sul Syies Endless Summer BOB RUN% AB MIER 10W ailS� M I(• 00 N( f•THf01fR•fIIM- 10q(0110N • 15 Member Board • Bergeson, Marian • Burress, Marnie • Emmi, Catherine • Hart, Evelyn • King, Jo • Mandel, Jerry • Mortenson, Kay • Pennington, Todd • Posnikoff, Judy • Ray, Janet • Siegel, Seth • Smith, Craig • Telem, Yaron • Vasquez, Socorro • Youngquist, Andy • BALBOA THEATER: • Important city -wide asset for Newport Beach. • A much - needed addition to the Newport Beach cultural and performing arts scene. • The City's only professional performing arts venue serving a broad variety of performing arts interests. 2 ft gh PRIPMA Al S IHNIN [OU."'Hillig 1 11 N1VS1 (•DAN(E•iNfA1ER•fI[M-IDV(hI10N • BALBOA VILLAGE REVITALIZATION • The Balboa Theater is a lynchpin for Village revitalization. • An operating theater will stimulate restaurants and other businesses. • It will increase City revenues. • It will encourage investment in the Nautical Museum and other Village improvements. 9 ft gh PRIPMA Al S IMIN [OU."'Hillig 1 11 N1VS1 (•DAN(E•iNfA1ER•fI[M-1DV(hI10N • FLEXIBLE, STATE -OF- ART DESIGN • Design by J. S. Fisher and Associates, noted theater architect. • 300 seat capacity. • Seats fully retractable. • Design for flexibility and sustainability. • Can serve a variety of performing arts needs. 0 ft gh PRIPMA Al S IMIN 1 N N1VS1 (•DAN(E•iNfA1ER•fI[M-IDV(III10N BUILDING NEAR "SHOVEL READY" STATUS • Coastal permit renewed. • Building permit pending (possibly next 30 days). • Contractor discussions proceeding. • Plan to initiate construction FY 2011 -12.* Depends on funding & lease renewal From this: To this: 5 ft gh PRIPMA Al S IHNIN [OU."'Hillig 1 11 N1VS1 (•DAN(E•iNfA1ER•fI[M- IDV(AI10N LEASE STATUS Lease updating on Seats extende agenda for Council evening session. • Important precedent for moving ahead. • Lease term and conditions are important requirement for potential donors. Seats retracted under balcon Al ft gh PRIPMA Al S IMIN [OU."'Hillig 1 11 H1VS1 (•DAN(E•iHfA1ER•flfm•EDV(AIION OPERATIONS •An important addition to cultural enrichment in Newport Beach. •Programs will appeal to entire community. *Plan to retain an experienced firm to program and operate theater. el-lave pilot program for opening season with name musical groups, entertainers, film, drama and dance prospects. Season Without Walls The Elixir oft ft gh PRIPMA FOUN11(1111111 N1VS1 (•DAN(E•iNfA1ER•fI[M-1DV(hI10N • THE PRODUCING GROUP Key personnel: John Sullivan, Ken This Music Phebus, Chris Ricci. Festival features: • Experience staging concerts, theater, Pepper, SODA, and other performing arts. Iration, Tomorrow's Bad • Producer at Mark Taper Forum; Circle Seeds, Suburban Repertory Theater, NY; the Summer Legends and more Concert Series, Costa Mesa; LA at the Queen Mary County Museum of Art, and others. Event Park, a • Ken Phebus lived in Newport Beach, large grass park saw movies at Balboa Theater; located out in front of the legendary • Experience includes The Coach Queen Mary. House, San Juan Capistrano, Ventura Theater, Grove of Anaheim, etc. 74 ROL pm Sept. 3, 2011 at the Queen Mary Event Park featuring sSau1 ft gh PRIPMA Al S IMIN [OU."'Hillig 1 11 ANSI (•0AN(E•IN[ANR- II[M- 10q(hI10N • OPERATING FINANCES • Planning for theater to be self- supporting, independent of donations. • Professional operator will book programs and jump -start operations. • Incentive fee based on profitable programming. PROFORMA (Opening Season) ($million Operating revenue 4.95 Programming costs -4.42 Gross income 0.53 G &A and development -0.36 _Plus Executive Committee 0.10 Net Operations Revenue, excluding donations 0.27 Projected 5 -year cash flow: approx. $3 million P ft gh PRIONA Al S IHNIN 1 N N1VS1 (•DAN(E•iNfA1ER•flfm•EDV(AI10N FUNDRAISING STATUS $3.57 million raised 1995 -56 to 2009 -10. $410,000 raised 2010 -2011, best year since 2004. All operational and admin expenses paid by Directors. Donations restricted 100% to design and construction Current cash and pledges in hand $800,000. a ; - ❑ Campaign $8 M ■ Money Raised $3.98 M Administrative costs reduced by 90% from $200,000 per year to $20,000 per year by all - volunteer organization in 2009. 10 hi gh PRIPMA Al S IMIN [OU."'Hillig 1 11 N1VS1 (•DAN(E•iNfA1ER•fI[M-1DV(hI10N • FUND RAISING FY 2011 =2012 (began7 /1) • Established "Balboa Producers," 10 donors @$100,000 each to raise $1 million. Have lead gift of $100,000. • Executive Committee pledges $100,000 annually. • In process of initiating Balboa Theater Endowment Fund at OCCF with anonymous pledge of $100,000. • Capital campaign committee oversees program • Public event to announce building permit (October, 2011). • Year -end fund appeal (November, 2011). 11 hi gh PRIPMA Al S IHNIN [OU."'Hillig 1 11 N1VS1 (•DAN(E•iNfA1ER•fI[M-1DV(hI10N CAPITAL CAMPAIGN PLAN • On -going private meetings with potential donors. • Identify lead gift (Dec 2011). • Total campaign need: $4.8 million for construction. a. $800,000 cash and pledges in hand. b. $1,000,000 Balboa Producers. c. $1,000,000 lead gift. d. $227,000 from Beach Festival (Sept 2012). e. Balance from community -wide capital campaign. 12 hl gh PRIPMA Al S IHNIN foUll"Hillig 1 11 mVSI (•DAN(E•iNfA1ER•fI[m•EDV(hI10N THE BALBOA PERFORMING ARTS THEATER FOUNDATION THANKS THE CITY OF NEWPORT BEACH FOR ITS SUPPORT. 13 4, BA Nh PERIamig A M I(•000(I- IH1011R•IIIM-10q(01109 STRATEG IC BUS /NESS PLAN (Rev 2 June 2011) FROM THIS: ...TO THIS: Balboa Performing Arts Theater Foundation PO Box 752 Newport Beach, CA 92661 June, 2011 TABLE OF CONTENTS Page Number Executive Summary .................................... ..............................2 Description of Project .................................. ..............................3 • History of Theater • Case Statement • Theater Renderings Community Benef its .................................... ..............................9 • Benefits to Balboa Village • Benefits to the City of Newport Beach • Orange County Benefits MarketAnalysis ........................................... .............................10 • Need for a 300 Seat Theater • Marketing Approach • Sales Plan • Typical Productions • Theater Rental Opportunities • Corporate Uses • The Arts Learning Center • Future - Satellite and Digital Applications Programming......................................... ............................... 12 • Outdoor Fundraising Festival • Opening Season: July 1,2013 • Program revenues and expenses FinancialPlans ............................................ .............................17 • Donations and Endowments Plan • Combined Revenue and Cost Forecasts • Construction Cost Estimate - Theater • Annual Operating Budget • Cash Flow Analysis • Return on Investment • Contingency Plan Organization............................................. .............................20 • Broad -based Community Support • Local Business Involvement and Support • Local Government Support • Board of Directors • Staff RiskAnalysis ............................................ .............................21 • Principal Risks • Risk Management Plan Schedule of Activities .................................. .............................22 • Construction Schedule • Operational Milestones APPENDICES........................................... .............................23 A. Five Year Profit and Loss Forecast and Assumptions B. Typical Space Rental Rates C. The Producing Group Executive Summary The Balboa Performing Arts Theater Foundation is a non -profit organization created for the purpose of restoring and operating the historic Balboa Theater. The theater is currently undergoing renovation, which, when complete, will allow it to operate as a performing arts theater offering music, dance, theater, film, and education. It will be available for rental by both non - profit and for -profit organizations. It will operate an arts education program for the enrichment of children and adults. It will fulfill a critical role in the revitalization of the Balboa Village by creating a unique entertainment venue in the area. The theater building is owned by the City of Newport Beach and is leased to the Balboa Performing Arts Theater Foundation for twenty -five years with no annual fee. The current lease will expire in 2023. The Foundation is in the process of renovating the existing theater structure to create a new 300 -seat performing arts venue. The rebuilt theater will have several features designed to insure its financial viability. First, it will have telescoping seating for maximum flexibility in planning and conducting performances. The seats can be retracted, leaving an open floor for round tables or other seating arrangements. The stage and seating design is planned to provide perfect sight lines under a variety of operating conditions. Finally, there will be an attractive roof deck area with views of the ocean and bay that will be available for fund- raising events, corporate meetings, and other rental events. Balboa Performing Arts Theater Foundation plans to invest an additional $5 million in renovating and upgrading the existing building. This will create an asset that will generate additional tax revenues for the city of Newport Beach and will help revitalize the Balboa Village. For every dollar of theater revenue, experience indicates an additional 1.85 dollars of revenue accrues to local restaurants and other business, resulting in additional tax revenues for the city as well as new sources of revenues for local businesses. In addition, as part of the greater Newport/Balboa Village improvement plan, the existence of the Theater as a dynamic business force in the area will cause property values to increase in the surrounding area, further increasing the property tax basis for the Village. The Balboa Theater expects to cover its operating costs through earned revenue derived from bookings of the 300 -seat venue. These bookings will include theatrical events and building rentals, course fees from an Arts Learning Center, and concessions and product sales at the venue. Theater earnings will be supplemented by donations generated by annual fund raising program underwriting, support guilds and endowment income. The Foundation plans to establish a long -term endowment fund to enhance the Theater's ability to offer educational and community benefit programs. Description of Project • History of Theater The Balboa Theater was constructed in 1928. Originally known as The Ritz, it opened as a vaudeville theater complete with an orchestra pit. In the 1930s, the theater was modified to present movies. In the 1980s, competition from nearby cinema megaplexes began impacting the economic viability of the theater. Attendance declined and the Theater was closed. In 1996, a group of local citizens came together to establish the Balboa Performing Arts Theater Foundation, for the express purpose of renovating the theater and returning a valued asset to the community. In 1998 the City of Newport Beach acquired the property for $480,000 and leased it back to the Foundation. • Case Statement for the Balboa Performing Arts Theater "I believe that ... even in a small city or a village, a great theater is the outward and visible sign of an inward and probable culture." - Sir Laurence Olivier The capital campaign to renovate and restore the Balboa Theater will raise the necessary funds to create an intimate venue for performing arts, film and arts education activities to meet the needs of Newport Beach, the communities surrounding Newport Beach and the wider Orange County community. The project has been envisioned to expand the Theater's original design as a movie house into an intimate, state -of -the -art performing arts facility that will support: • Live music, dance and theatrical performances • The screening of first -run and classic films • The presentation of lectures and seminars • An Arts Learning Center, and • The occasional use as a business conference center While the Theater's original facade has been preserved and will constitute an important element of its redesign, the entire interior of the theater will be newly engineered and constructed to meet the expanded use of the building. A brand new third floor, a roof top entertainment deck, artist dressing rooms, restrooms, elevators and a fully functioning lobby will be incorporated into the building's design to meet the requirements and needs of a modern performing arts facility. The Theater has long served Newport Beach and Orange County as a movie house. There is great affection towards and desire for the Theater to reopen and to once again serve as the cultural hub and identity of Balboa Village and the surrounding environs of Newport Beach. The renovation project has been enthusiastically embraced by the community and community leaders, and has been called "the pride of our community" by well -known Orange County arts philanthropist, Socorro Vasquez. Kris Elftmann (president of Noelle Marketing Group) sees the renovation as "a real golden opportunity for the community to have a wonderful little theater," while Jerry Mandel (past president of the Orange County Performing Arts Center) believes that the Theater's reopening presents "an enormous opportunity for all of us in Orange County." The Theater's expanded use as a performing arts facility will draw upon existing relationships between the Balboa Performing Arts Theater Foundation and top -tier arts imtiratio ns throughout Orange County. It will serve as an intimate venue in which to experience live performances that will be unique in Orange County. This will enable the Theater to present artistic talent under its own aegis, as well as acting as adjunct to arts interests throughout the county, such as the Newport Beach Film Festival, the Pacific Symphony, the Laguna Playhouse and Bowers Museum. Expansion of the Theater's offerings to include performing arts in addition to its traditional movie house fare is an initiative that is being embraced with a firm understanding of the market dynamics of the 21st century. The dominance of multiplex movie theaters has directly impacted the viability of stand- alone, single- screen venues like the Balboa Theater. Redesigning the Theater as a multiuse facility will transform the Theater into a flexible performance space that we believe will prove to be a template for community-based venues of similar size and scope. We believe that this built -in flexibility will enhance donor cultivation and ticket sales, while supporting economic revitalization of the immediate area in ways that a more - limited use facility could not. "Art washes from the soul the dust of everyday life." —Pablo Picasso Upon completion of this campaign: • The Balboa Theater will be transformed from a single- screen movie theater into a multiuse performance space • The restored and expanded -use facility will serve as a new, exciting and organic point of interest in Balboa Village • The renovated facility will provide opportunities for professional development, top -flight artistic programming and educational outreach • The redesigned facility will provide an acoustically vibrant venue for the presentation of live arts events • The renovated Theater will enhance already existing relationships between the Balboa Theater and major arts groups throughout Orange County, while providing opportunities for performances unique to the size and scope of the Theater • The Theater's roof top entertainment deck will provide a unique venue for a variety of social and civic functions that will directly benefit neighboring businesses and the Balboa Village in general • The Theater will operate primarily during summer evenings and the beach off- season, targeting its outreach and programming to the residents of Newport Beach and greater Orange County • The Theater's reopening will serve as an anchor for the revitalization and transformation of Balboa Village, solidifying the Village's unique and historic cache as a desired tourist and educational destination • The Theater's reopening will expand local businesses' economic opportunities beyond their traditional tourist season • The Theater's redesign and reopening will further enhance the existing desirability of Newport Beach as a choice place of residence "We are committed to serving and fulfilling our community's artistic needs," avowed BPATF Board member Janet Ray, "by collaborating with a diverse group of arts and community organizations to realize our shared vision of creating an intimate performing arts venue in the heart of Newport Beach." • Theater Renderings The renderings that follow illustrate how the Foundation and its architects have brought to life the vision of an "artistic jewel for Balboa Village" Figure 1 is a rendering of the exterior (front fapade) of the theater, showing how the historic element of the theater will be maintained. Figure 2 illustrates how the roof deck might be used for a reception. Figure 3 is an elevation drawing. Figure 4 shows the seating layout with the seats extended. Figure 5 shows the seats retracted and the theater arranged in a cabaret style. In addition to the unique architectural treatment of the theater, the Foundation's engineers have created a structure which meets current codes and seismic requirements (the existing theater did not) and that has the electrical and mechanical features to handle both cinema and live performances, with rapid conversion from one format to the other. The design also incorporates provision for expansion to the latest new digital/satellite technologies at a future date. Figure 1: Rendering of Theater �i Figure 2: Roof Deck Reception Figure 3: Elevation View FLEXIBLE SEATING = ENDLESS POSSIBILITIES! 6 Figure 4: Seats Extended Figure 5: Seats Retracted Community Benefits • Benefits to Balboa Village The Balboa Theater has been an integral part of Balboa Village for nearly eighty years. It has a tremendous emotional appeal to thousands of Southern Californians who have fond memories of visiting the Theater while spending spring vacation in Newport or on Balboa Island, or during family vacations in the area during the summer. The Theater has also been a key element in the entertainment offerings of the Village, along with the Pavilion, the Fun Zone, the historic Balboa Ferry, the Balboa Pier and now, the Newport Harbor Nautical Museum. When the theater renovation is complete, it will operate as a performing arts theater offering music, dance, theater, film, and education through its Arts Learning Center. It will be available for rental by both non -profit and for -profit organizations. It will operate an arts education program for the enrichment of children and adults. It will fulfill a critical role in the revitalization of the Balboa Village by creating a unique entertainment venue in the area. In addition to the esthetic contributions the theater will bring to the Village, it will be the centerpiece of the economic revitalization of the area. Since it is within "walkable" distance for many hundreds of local residents, it will reduce traffic in and out of the area for those residents who would otherwise go off the Peninsula seeking entertainment. More importantly, it will attract visitors to the area, where they will shop in local stores and dine in local restaurants. Studies indicate that to encourage spending by visitors and tourists, local attractions must be such that a stay of at least 4 hours is likely. The Theater provides this balance point to the other attractions in Balboa Village. • Benefits to the City of Newport Beach Principal benefits to the City of Newport Beach are economic. Through the volunteer and non- profit efforts of the Foundation, Balboa Village will witness the emergence of a multi- million dollar asset. The Theater will reduce urban blight, increase property values in the Balboa Village, and act as a stimulus to local restaurants and businesses. In addition, Newport Beach will see an increase in tax revenues, both directly from the theater and from the increase in local business revenues created by the theater's presence. From the theater's annual budget of $5 million, approximately $1 million per year will flow back into local businesses, leading to new tax receipts by the City. For every dollar of theater ticket revenue, experience indicates an additional 1.85 dollars of revenue accrues to local restaurants and other business, resulting in additional spending of approximately $7 million per year in the community. In addition, as part of the greater Newport/Balboa Peninsula improvement plan and as a stimulus to increase property values in the surrounding area, the Theater will increase the property tax basis for the Village. • Orange County Benefits The Theater will provide an intimate venue for live performing arts, film, and arts education activities to meet the needs of our surrounding Orange County area. In size, geographic location, and scope of services to be provided, the Balboa Performing Arts Theater fills a needed gap in Orange County's entertainment market, as established by meetings with the executive directors of the Barclay Theatre, the Orange County Performing Arts Center, Chapman University, The Newport Harbor Nautical Museum and others. 10 Market Analysis a Need for a 300 Seat Theater The ticket - buying audiences —the market —for performances at the Balboa Theater will come predominantly from the greater Newport Beach area, including Costa Mesa, Huntington Beach, Santa Ana, Corona del Mar, Laguna Beach, and Irvine. Each of these communities is represented in our mailing list of 5,000 persons and organizations who have participated in Balboa Theater activities. Within each of these communities, there are specific constituents to whom we will direct marketing efforts such as schools, senior groups, performing groups, and tourists. We will tailor our marketing instruments to address and create an interest for the enjoyment of performances at a small venue, also benefiting from the services of the Newport Beach Convention and Visitors Bureau. We will also offer performances not available elsewhere in the community. Orange County rightly boasts of its wealth of large and mid -size theaters with national reputations for excellence. complete with tremendously loyal audiences. We do not intend to compete with these institutions, but rather to complement their work by offering performances best - suited to a small, intimate, venue. With the growing popularity of alternative performance venues such as coffee houses, cabarets and store -front theaters in Orange County, there is a steadily increasing interest in more personal arts experiences. Accordingly, we plan to market to audiences who value the intimacy of a 300 -seat live performance theater. a Marketing Approach The theater has also begun to foster strong connections with other leading arts institutions and local schools and universities, in the planning and production of special projects, festivals and performances. The staff, patrons, students and faculties of these collaborating institutions will become a targeted Balboa Theater market for ticket sales and arts education activities. Demographic information on the communities within the market range of the Balboa Theater indicate an increasing number of families with young children and seniors interested in participating in the performing arts. The Balboa Theater's programming and arts education activities will embrace both these groups with intriguing, high quality performances and competitive ticket prices. a Sales Plan Ticket sales will be marketed through a variety of techniques including: An annual season brochure outlining all major events; direct snail to specific markets for individual performances and festivals; media advertising in newspapers, cable television, and radio as appropriate; and marketing through City of Newport Beach publications. Internet marketing will also be utilized. As a result of the successful "Season Without Walls" program, the theater already has a subscriber base of over 100 individuals and corporations, enabling it to "hit the ground running" with ticket sales once operations begin. Theater rentals will be marketed primarily by the Theater staff through meetings with potential buyers, corporate clients, and by working closely with the Newport Convention and Visitors Bureau. Staff will also use mailings to local performing groups and meeting managers. Tickets will be sold singly, or through a subscription program to offer a discount to major buyers. Tickets will be sold for Balboa Theater sponsored events and productions, including also those sold by outside groups renting the theater. The Balboa Theater plans to establish an Arts Learning Center that will offer courses in drama, 11 music and dance for all age groups from children to seniors. Pricing levels will be based upon current market trends, sponsorship contributions, and expenses, with a constant goal of maintaining a balance between competitive ticket prices and recovery of operational costs. • Typical Productions The Balboa Theater will offer a wide range of programming in all of the classic art forms, including music, dance, theater and film. This programming will be tailored to the size and seating capacity of the theater, an approach that has already been effectively showcased through our ongoing Season Without Walls. The Theater will also provide a perfect setting for readings and lectures by nationally known authors and lecturers. Most importantly, an education component will extend our programming reach into the very fiber of the community, enhancing our performances with the enlightenment and hands -on experience that bring the arts to life on a very personal level. A representative season of arts programming would feature 12 -16 musical performances, 2 -4 lectures, 2 -3 dance programs, and 1 -2 theatrical productions, and 3 -4 films per month, with the bulk of the performances occurring on Thursday through Sunday. The cinematic arts would be highlighted through participation as a presenting theater in the Newport Beach Film Festival, a "classic" movie series, and a surf - themed summer of Movies at the Beach. The next section of this plan describes detailed programming for the first year of operation. • Theater Rental Opportunities As Orange County grows in population and in cultural diversity, there is an increasing need for professional venues for young and blossoming performing groups, as well as alternative spaces for mature companies to experiment with new or different art without the overhead required by a large hall. The Irvine Barclay Theatre was built, in part, to address this growing need. Based on discussions with Doug Rankin, president of the Barclay Theatre, it is unable to accommodate all the requests it receives for rental dates. Bob Bassett, Dean of Chapman University's Film School, states that the college produces hundreds of student films per year and would love to have nearby venue where student films could be featured. Rita Stenlind, Executive Director of the Newport Harbor Nautical Museum, has initiated a new lecture series but notes that the Museum has limited seating in its present facilities. It could attract much larger audiences if a 300 -seat venue was available. Other local arts leaders who have gone on record to voice support for the Balboa Theater and its collaborative approach are John Forsyte, President, Pacific Symphony, Dean Corey, Executive Director of the Philharmonic Society, and Jerry Mandel, Past President, Orange County Performing Arts Center. The theater auditorium, the roof deck, or both can be rented. Rentals would come from the Foundation's marketing efforts, from referrals from other arts organizations (such as the Barclay Theater) and from local groups including the UCI film program and Chapman College. The Newport Nautical Museum could require as many as 12 days per year for its lecture series. Corporate meetings and fundraising events by local non - profit organizations would add another 24 days per year based on expressions of interest from local businesses. Weddings, receptions, student films, and other types of private events would bring the total to 50 days per year • Corporate Uses The theater will be promoted for corporate uses through the formation of a "Corporate Affiliates" program. This will commence with the current corporate sponsors of the Theater and with those corporations represented on the Board of Directors of the Foundation. The use of the theater as a venue for special corporate meetings, annual meetings, and technical /scientific 12 meetings will be promoted through local branches of professional societies s.ach as ;he American Institute of Architects (AIA), the American Society of Civil Engineers, (ASCE), and others. Local universities are another potential user for larger, professional gatherings which can benefit from the theater's state -of -the -art audio - visual equipment. • The Arts Learning Center Successful non -profit organizations incorporate a variety of educational programs in their offerings. These programs, aimed at age groups from elementary school to seniors, span the range from dance, music and drama to film making. Programs also would be developed in collaboration with the Performing Arts Center, Discovery Science Center, the Newport Harbor Nautical Museum and others. Initially, two 12 -week courses would be offered four times per year for a total of 8 classes. These classes would be 1 -hour long and would be taught by local musicians and other artists. Tuition would be charged. • Future - Satellite and Digital Applications We are on the cusp of a new revolution in digital entertainment. The technology exists today to distribute high quality cinema, sporting events, or interactive educational or corporate events via wireless technology. Since the Balboa Theater is located in the center of a high technology community, it is to be expected that the Theater can lead innovation in satellite, wireless- based, and digital performances. These can include corporate programs, educational television offerings, or paid performance sporting or entertainment events. The Theater is designed to permit the installation of the equipment needed to provide this capability. Imagine coming to the Balboa Theater to hear a concert via satellite "Live from the Met." Programming The Theater Board recognizes that the opening season must be a success, and for this reason has sought professional advice. As a pro -bono service to the Balboa Performing Arts Theater Foundation, specialists from The Producing Group, LLC., a professional entertainment booking organization, have developed a plan for an Outdoor Fundraising Festival to raise money operations working capital, plus a detailed plan for the Theater's opening season. As booking agents, The Producing Group will secure talent for performances, make arrangements, and negotiate contracts, in exchange for a monthly fee. To develop the first year programming, two months (March and July) were programmed in detail, with March being an "average" month and July being a peak attendance month. The proformas for these months are based on actual costs for the proposed talent and other expenses are based on The Producing Group's expertise and experience in the Orange county market. (See Appendix C for The Producing Group's qualifications). Experience shows that not a lot of programs are booked in December and January, when the emphasis is on some holiday events, children's Christmas or Hanukkah parties, or theater rental for corporate holiday parties. Concession sales are also reduced during these periods. Besides the detailed programming developed for March and July, The Producing Group also prepared pro forma income statements for a major Outdoor Fundraising Festival, (a beach gala event), and also for a typical wedding function. The programs selected by The Producing Group are primarily musical performers by noted artists. In addition, the monthly schedules include time slots for 2 private parties per months (weddings or other functions) and three to four films. Each month has a ten to twelve "dark nights." These could be utilized for rentals or other types of performances, such as chamber music, dance, or drama, which the Theater might wish to offer. Such productions must be selected on the basis of what the theater stage and facilities can accommodate, and what would appeal to the Theater's patrons. 13 The first year programming includes a limited sample of educational programs that the theater proposes to offer. These will be primarily day -time programs during non - summer months and are described separately in this business plan. Outdoor Fundraising Festival It is proposed to hold the Outdoor Fundraising Festival on the beach near the Balboa Pier in the fall of 2012. The Outdoor Fundraising Festival would raise approximately $227,000, which funds would be used as working capital for the first full season to commence July 1, 2014. The program would include four major performing groups taking part in a beach front concert. We believe that it would be feasible to achieve attendance of 4,000 for this event (BPATF's beach surfing movies attracted 2,000 attendees in the past.) In addition there would be a VIP program for 500 invited guests and donors. Besides raising funds for operations, this event would reassure prospective donors that the project is moving forward to becoming a reality. See Table 1 for a break down of costs and revenue for this event. Opening Season: July 1, 2013 A tentative date for the formal opening of the theater, based on anticipated schedule to obtain a building permit (Application filed June 2011) and allowing 3 months for permitting, 18 months for construction, and 3 months for punch list and final fit out, would be June 2013, with the first full season commencing July 1, 2013. For the opening season, The Producing Group proposes an exciting selection of diverse entertainers it has booked in the past. Among the performers planned are America, an American folk rock band, noted for songs such as "Sandman, "and "Don't Cross the River;" Basia (an incredible original sound); Joan Baez and Judy Collins, folk music. (Collins performed at Bill Clinton's inauguration); Michael Bolton; J. J. Cale; Shawn Colvin; Tears for Fears, an English new wave band; Bruce Hornsby; Arlo Guthrie; Indigo Girls, an American folk rock duo, really good; Al Jareau, huge name for jazz, great voice; Rickie Lee Jones, top pop, rock, and more recently jazz female vocalist; Cowboy Junkies; Kenny Loggins, soft rock and known for numerous film sound tracks; Dave Mason, written many hits; Michael McDonald; Eddie Money, has a hundred hits, fun talented, probably a great show; Randy Newman; John Prine, great country sound; Todd Rundgren; Boz Skaggs, an American songwriter with top 20 hits such as "Silk Degrees" and "Look what you've done to me;" J. D. Souther; and others. The Producing Group has developed an estimate of revenues and expenses for the Balboa Theater's opening season, July 1, 2013 to June 30, 2014. The approach taken was to program two months in detail, July (a high month,) and March (an average month.) Using selected talent from their list, and with the beach venue and capacity of the Balboa Theater, The Producing Group believes that it could "sell out" a high proportion of the summer events. The monthly forecasts typically include 20 -22 dates booked, 22 events (15 concerts, 3 -5 movie screenings, 2 private parties, 9 -10 dates dark. The dark days could be used for other types of performances or for rental to local groups, for example for student films. Tables 2 and 3 show the proposed programming and projected expenses and revenue for the performances planned for July and March.. 14 Table 1: OUTDOOR FUNDRAISING FESTIVAL PROFORMA Prepared by: The Producing Group Venue: Balboa Theater /Newport Beachfront Date of event: Fall, 2012 Name of event: Balboa Theater Beach Festival INCOME Capacity Price Gross Potential General Admission 4,000 $40.00 $160,000 VIP 500 $200.00 $100,000 Local Bands 1000 $20.00 $20,000 Concessions per person net $6.00 $33,000 Sponsorships $100,000 TOTAL INCOME $413,000 EXPENSES Description Price Cost Talent 1 TBD (Pro bono ? ?) $0 Talent 2 TBD $20,000.00 $20,000 Talent 3 TBD $20,000.00 $20,000 Talent 4 TBD $20,000.00 $20,000 Advertising /PR Lump sum $24,000.00 $24,000 Ticket printing 5,000 $0.05 /tick $250 500 $375 VENUE EXPENSES Security Olympic OC $4,000 $4,000 Police NPT PD $2,000 $2,000 Cleanup $800 $800 PRODUCTION Sound and Lights $8,000 $8,000 Generators $2,000 $2,000 Barricades 1 $1,500 $1,500 Stage $8,000 $8,000 Runner $400 $400 Stage manager $500 $500 Stagehands $3,000 $3,000 Production Manager $1,000 $1,000 Hospo Manager $500 $500 Catering $2,000 $2,000 Communications $225 $225 Port Potties 40 $50 $2,000 Fencing $4,000 $4,000 VIP $3,500 $3,500 Promotion fees $18,000 $18,000 TOTAL EXPENSES $146,050 GROSS INCOME $266,950 Promoter's Incentive (15 %) $40,042 NET INCOME TO BPATF $226,908 15 TABLE 2: March 2014 Proforma (Average Month) - Date/ Event No. of shows Ticket Price Talent Expense House Expense Total Expense Ticket sales to break even Percent sold to break even Projected Seat Sales Projected Ticket Revenue Projected Concession Revenue Net 1 GROUP 1 1 $34.50 261 87°( 240 $8,280 $1,200 2 GROUP 2 2 $25.00 Details to be developed after 520 87% 240 $6,000 $1,200 3 GROUP 3 2 $35.00 meeting with talent agents 514 86% 480 $16,800 $2,400 4 GROUP 4 1 $25.00 250 83% 480 $12,000 $2,400 5 MOVIE SCREENING / Q &A 1 $15.00 200 1 67% 240 $3,600 $600 6 dark N/A $0 7 dark N/A $0 8 GROUP5 1 $25.00 250 83% 240 $6,000 $1,200 9 GROUP 6 2 $25.00 520 87% 480 $12,000 $2,400 10 GROUP 7 2 $35.00 514 86% 480 $16,800 $2,400 11 private party - WEDDING RECEPTION 1 na N/A NA $15,000 NA 12 SPOKEN WORD/ CONVERSATION with noted speaker 1 1 $25.001 200 1 67% 240 1 $6,0001 $1,200 13 dark N/A $0 14 dark N/A $0 15 GROUP 1 $75.00 267 89% 240 $18,000 $1,200 16 GROUPS 2 $75.00 533 89% 480 $36,000 $2,400 17 GROUP 8 2 $75.00 533 89% 480 $36,000 $2,400 18 MOVIE SCREENING I Q &A 1 $15.00 200 67% 240 $3,600 $600 19 dark N/A $0 20 dark N/A $0 21 dark N/A $0 22 GROUP 9 1 $75.00 267 89% 240 $18,0001 $1,200 23 GROUP 10 2 1$25.001 520 1 87% 480 $12,0001 $2,400 24 GROUP 11 2 $75.00 533 89% 480 $36,000 $2,400 25 private party 1 N/A NA $10,000 NA 26 MOVIE SCREENING I Q & A 1 $15.00 200 67% 240 $3,600 $600 27 dark N/A $0 28 dark N/A $0 29 GROUP 12 1 $34.50 261 87% 240 $8,280 $1,200 30 GROUP 13 2 $75.00 533 89% 480 $36,000 $2,400 31 GROUP 14 2 $75.00 533 89% 480 $36,000 $2;400 TOTALS 32 1 $316,500 $51,0001 $367,500 1 1 $355,9601 $34,200 RECAP: Revenue/tickets $355,960 Concessions $34,200 Total Revenue 390 160 Less expenses $367,500 Gross income $22,660 Agent's Fee $15k /mo + 25% of net profit $20,665 Theater Net Profit I 1 1 $1,995 Ira TABLE 3: July 2013 Proforma (Peak Month) Date/ Event No. of shows Ticket Price Ticket sales to break even Percent sold to break even Projected Seat Sales Projected Ticket Revenue Projected Concession Revenue net 1 Mon dark NA 2 dark NA 3 GROUP 15 1 $34.50 Details to be developed after 261 87% 300 $10,350 $1,500 4 GROUP 16 1 $75.00 meeting with talent agents 267 89% 300 $22,500 $1,500 5 GROUP 16 2 $7E001 533 1 89% 1 600 $45,0001 $3,000 6 GROUP 16 2 $75.00 533 89% 600 $45,000 $3,000 7 MOVIE SCREENING/ Q &A 1 $15.00 200 67% 210 $3,150 $525 8 dark NA 9 dark NA 10 dark NA 11 AN EVENING OF CONVERSATION-SPECIAL GUEST -TBD 1 $25.00 1 200 67% 210 $5,250 $525 12 GROUP 17 2 $75.001 533 89% 600 $45,000 $3,000 13 GROUP 17 2 $75.00 533 89% 600 $45,000 $3,000 14 MOVIE SCREENING I Q &A 1 $15.00 200 67% 210 $3,150 $525 15 dark NA 16 dark NA 17 GROUP 18 1 $34.50 261 87% 280 $9,660 $1,400 18 GROUP 19 1 $34.50 261 87 % 290 $10,005 $1,450 19 GROUP 20 1 $75.00 267 89% 300 $22,500 $1,500 20 GROUP 21 1 $75.00 267 89% 300 $22,500 $1,500 21 MOVIE SCREENING I Q & A 1 $15.00 200 67% 210 $3,150 $525 22 dark NA 23 private party 1 NA $10,000 NA 24 GROUP 22 1 $34.50 261 87% 290 $10,005 $1,450 25 GROUP 23 1 $75.00 267 89% 300 $22,500 $1,500 26 GROUP 24 2 $75.00 533 89% 580 $43,500 $2,900 27 GROUP 25 2 $75.00 533 89% 580 $43,500 $2,900 28 private party- WEDDING RECEPTION AT 1:00 PM 1 na NA $15,000 NA 28 MOVIE SCREENING IQ & A AT 7:00 pm 1 $15.001 200 67% 210 $3,150 $525 29 dark NA 30 dark NA 31 MOVIE SCREENING IQ &A 1 $15.00 200 67% 210 $3,150 $525 TOTALS 28 $336,000 $48,000 $384,000 $443,020 $32,750 RECAP: Revenue /tickets $443,020 Concessions $32,750 Total Revenue 11475 770 Less expenses $384,000 Gross income $91,770 Agent's Fee $15k /mo + 25% of net profit $37,943 Theater Net Profit $53,828 17 Table 4 uses the July and March pro formas to forecast revenues and expenses for LnZ entire year. Each month is adjusted to reflect how it would fare relative to the sample month of July as a typical high season month, and March as a typical low season month. For example, August is rated at 90% of July, October at 80 %, and so on. The low season months are prorated based on March. Using these assumptions, a conservative estimate of annual earnings has been made. This table shows annual revenues to be $4.5 million, and with expenses of $3.9 million. Net income to the theater (after The Producing Group's fees) would be $269,064. This is after recovery of $519,900 of BPATF operating expenses, including salaries, utilities, and other indirect costs. Table 4: Balboa Pe Tininq Arts Theater First season July 2013 -June 2014 I 2012 1 2012 -2013 2013 J I I OCT -JUNE POLY AUGUST SEPT OCT 1.0 1 0.9 0.9 1 0.8 NOV 1 0.6 I DEC 1 0.5 I 2014 JAN 0.5 FEB 1 1 0 MARCH 1 1.0 APRIL 1.1 MAY 1 1.2 JdNE - 1 1.0 DESCRIPTION SEPT TOTAL Revenue/expense multiplier FY 2014 Program revenues l Beach Gala $413,000 Tcket sales $0.00 $443,020 $398,918 $396.718 $354416 $265,812 $177980 $177,980 $355,960 $355,960 $391.556 $42],152 $443,020 $4,190,292 Concessions $32,750 $29,475 $29,475 $26200 $19,650 $17,100 $17,100 $34,200 $34,200 $37,620 $41,040 $34,200 $353,010 Total Revenue $475,770 $428,193 $428,193 $380616 $285,462 $195,080 $195,080 $390,160 $390,160 $429,176 $468,192 $477,220 $4,543,302 Total Expenses $146,050 Dadafor $384,000 $346,600 $3457600 $307200 $230,400 $183,750 $183,750 $367,500 $367,500 $404,250 $441,000 $384,000 $3,944,550 Gross Income $266,950 Canstruc8on $91,770 $82,593 $82,593 $73,416 $55,062 $11,330 $11,330 $22,660 $22,660 $24,926 $27,192 $93,220 $598,752 Praducerfees 540,042 $37,943 $35,648 $35,648 $33,354 $28,766 $17,833 $17,833 $20,665 $20,665 $21,232 $21,798 $38,305 $32eess Net Income $226.908 $53,828 $46,945 $46,945 $40,062 $26,297 -$6.533 L$6,503 $1,995 $1,995 $3,695 $5,394 $54,915 $269,064 Ex ensebreakdmvn Talent 001 02,400 $268, 201.6001 $158,250 $158,250 $316,500 1 6,500 $348,150 $379,800 $336,000 $3,424,650 House $48,000 S43,2001 $43,200 $38,400 $28,800 $25,500 $25,5001 $51,000 $51,0001 $56,100 $61200 $48;000 $519,900 High Season Months (based on July pmform ) Low Season Months (Based on March p mfm n. The operating staff to manage the theater for these programs would include a House Manager, (who oversees administration, ticketing, catering, etc.,) a Production Manager (who handles lighting, sound, and production aspects); a Facility Manager, (who handles building maintenance and production set -up and tear -down, and an Executive /Development Director, who is responsible for fundraising, theater rentals, the education program, and community liaison. Accounting, promotion, and catering would be contract services. The role and need for The Producing Group would be reviewed annually. Financial Plans • Revenue and Cost Forecasts There are five principal sources of earned revenue: programming (ticket sales), concession income, rentals, merchandise sales, and Learning Center programs. Revenues will be supplemented by contributed income from individual and corporate donations, foundations, Board Member annual contributions, program underwriting and sponsorships, support guilds, and endowment interest. Revenues and operating costs are summarized in Table 5. Details and assumptions are shown in Appendix A. It is believed that these estimates are made on a sound basis. Ticket prices and sales are comparable to other institutions in the area and have been validated by the Season Without Walls experience over three years and by our programming consultants. Our SWOW ticket prices at $50 per event or $175 for a season are competitive, all the more so because each event included a reception with wine and food, making for a special evening experience. For example, here are some comparative prices: • Segerstrom Concert Hall: $26 to $99 • Samuch Theater: $50 -$75 • Hollywood Bowl: 5 event subscriptions: (midweek) $185 -$480; (special) $210 -$580. These events do not include a reception. TABLE 5: Balboa Performing Arts Theatre Foundation Projected Annual Cash Flow - Opening Season Programming & Marketing: Ticket & Rental Revenue Ticket Sales Concessions Revenue Rental Revenue Merchandise Sales Arts Leaning Center Total Revenue Programming & Marketing Costs Talent costs Concessions Cost Producer's fees Education Salaries Education instructors Marketing /Advertising Ticket printing Payroll & Benefits Rental Expenses Total Prog. & Mktg. Costs Net Programming & Mktg Development: Annual Fundraising: Individual Donations Corporate /Business Donations Board Donations Program Underwriting Support Guilds Total Annual Fundraising Development Costs Payroll and benefits Mailing /printing Total Development Costs Net Development General & Administrative Costs: Payroll and benefits Utilities, insurance, services Maintenance and repairs Total G &A Costs Total Earned Income Total Fundraising Income Total Costs Net Operations $4,190,292 Presenting= 80% of Total Revenue $706,020 Concessions = 16% of Ticket Revenue $36,000 Rental = 24 days @$1,500 /day $5,000 $9,600 Learning Center revenues offer growth possibilities $4,946,912 $3,424,650 $353,010 50% of Concessions Revenue $329,688 $86,400 $4,000 $500 per class $50,000 $3,600 60,000 @ $0.05= $3,600 $171,450 $10,000 $4,432,798 $514,114 Annual fundraising anticipated to be $200,000 to $300,000 but not included to keep estimate conservative $102,000 $102,000 $65,475 $5,000 $70,475 26% of funds raised $31,525 $95,175 $81,400 $100,000 Allowance for repairs, maintenance, and upgrades $276,575 $4,946,912 Approx. 104 % of total budget $102,000 Approx. 6% of total budget at break -even point ($4,779,848) $269,064 Planned operations leaves a positive net cash flow 18 Space rental charges have been validated by obtaining rates and annual income data from comparable institutions in the area. Other venues use a variety of methods for space rental. For theaters, it could be on a per seat basis at $3 to $5 per seat, which would earn the Balboa Theater $900 to $1500 per event. Alternatively, some venues charge by the hour, by the square foot, or by the room being utilized. In each case, the basic rental costs are increased by the facility staff required to assist (as a minimum at least one person at $35 to $50 per hour), and by the equipment being used (furniture, projectors, etc.). Another approach involves adding a 19 percentage of ticket sales revenue to the facility rental costs. See Appendix for typical cute sheets and data. Concession income and merchandise sales are also based on the operating experience of other theaters. Learning Center revenues are based on comparable programs at successful organizations in the Southern California area. We have included a modest forecast in this plan, but believe that this represents a significant growth potential for the Balboa Theater. The concept used by other successful organizations is to employ local artists as instructors in dance, ballet, music, drama, etc. and offer courses for students of all ages from children to seniors. Direct costs are minimal and there is no increase in overhead expenses. (Instructors are paid on a per course basis and only if the minimum sign -up requirement is met.) • Donations and Endowment Plan The Theater enjoys a broad base of local support. Cash contributions and pledges have enabled the Balboa Performing Arts Theater Foundation to complete Phase 1 of the theater renovation, namely, engineering studies and tests, preliminary designs, seismic strengthening of the building, a lengthy, 3 -year government approval process to amend the City of Newport Beach general plan and to secure Coastal Commission approval for the renovation program, award of a contract for final design, and finally to submit the plans for a building permit in June, 2010. In addition to the funds raised, there have been untold labor hours donated by volunteer groups over the past decade. Fund - raising for the capital campaign for renovation is comprised of both a direct -mail solicitation program and major gifts campaign guided by the Capital Campaign Committee of the Board. The goal of these efforts is two -fold: first, to raise the Phase 2 funds needed to complete construction and commence full operations, and second, to create an initial endowment fund of $1 million —with an ultimate goal of $5 million. This plan includes development costs but assumes zero development income for operating costs (other than committed Board member contributions). • Construction Cost Estimate- Theater The existing 1928 structure has been carefully evaluated and the measures required to bring it up to current building codes standards, make it seismically sound, and convert it to a performing arts theater have been identified. Demolition of the interior construction has been completed and the structure is ready to be renovated. The cost of renovating the theater is estimated to be $5 million if constructed in the near term while material and contractor prices are low due to the recession. • Annual Operating Costs Annual operating costs can be broken down into three main categories: Programming and Marketing, which includes artist's fees, Learning Center costs, and other programming business expenses; Development, which includes annual fundraising expenses; and General and Administrative costs. The Foundation operates in accordance with an annual budget that is approved by the Board of Directors. In 2006 the Board adopted a series of "Best Practices" standards to guide the operation of the Foundation. Monthly cost reports are prepared and reviewed by the CFO. In order to keep programs affordable to as wide an audience within Orange County as possible, program costs are maintained at a competitive level. The Foundation also is committed to supporting various arts education activities in the local community. Performing Arts venues in general are unable to support operations based on programming revenues alone. Earned revenues are supplemented through fundraising and donations. In this plan, the Balboa Theater has set a goal that programming revenues will cover 100% of operating costs, and no credit is taken for donations, corporate contributions, program underwriting, a support guild, and endowment earnings. The Foundation has a long -term goal of making the Theater completely self - supporting zo through the establishment of an endowment fund which will generate additional *_ evenues. Supporting details concerning projected operating costs and cash flow are found in Appendix A. Once full operations are initiated, a full -time staff of 5 persons is envisioned. This would include and Executive /Development Director, a Production manager, a House manager, and a Facilities manager. An Education director would be added at a later date. Burdened salaries for the operating staff is $418,500 per year • Return on Investment The City invested $480,000 to purchase the original Theater building and supplemented this with a contribution of $175,000 towards the final design. The Balboa Performing Arts Theater Foundation has expended $3 million on the project and is committed to investing an additional $5 million in the building. This will convert a historic facility that was bankrupt, did not meet building codes, and was generally an eyesore, into a functional and beautiful part of Balboa Village. Tax revenues will repay the City's investment and in addition it will be left with a valuable capital asset. Organization • Broad -based community support In order to be successful in today's entertainment market, a small regional theater needs to appeal to a diversity of entertainment needs. It must be flexible and able to respond to the requirements of various media. Most importantly, it must enjoy a strong base of support from within the community it intends to serve. • Local business involvement and support Economic development studies have demonstrated that entertainment venues serve to "anchor" commercial growth and development. In today's economy, where people have more leisure time, entertainment is an important element of community life. If resources do not exist locally, people will travel to locations where they can find entertainment that pleases them. Entertainment venues thus work synergistically with other local businesses (retail stores, hotels, restaurants, parking, etc.) to expand local business revenues and tax revenues. Studies show that for every dollar of revenue received by a theater, an additional 1.85 dollars is spent in the local area for meals, parking, and other expenses. The theater is a "draw" which brings in additional revenue to the community. More importantly, a theater gives a sense of vitality to a community. It fosters other community actions and encourages community support and activity. This in turn creates an atmosphere where other businesses are encouraged to relocate and invest to be part of this new dynamic. The result is an increase in new businesses, new jobs, and a further expansion of the tax base. The Balboa Performing Arts Theater Foundation is a community -based organization that satisfies these requirements. The Foundation sprang out of a deep- seated conviction that renovation of the theater would be a stimulus to the local economy and would assist in the general improvement of the Balboa Village business climate. The strength of this conviction is amply demonstrated by the fact that the Foundation has persevered for more than ten years with the same key personnel in the fulfillment of this goal. • Local government support The support of the City of Newport Beach is critical to the success of the Theater. The Foundation Board is attempting to renovate a theater located in the heart of Newport's Balboa Village historic district. This area is currently characterized by limited parking, high commercial 21 vacancy rates, sub - marginal businesses, and a limited number of high quality re: +4urants Znd other attractions. Several "revitalization" studies have been conducted in the past but these led to largely cosmetic changes and did not address the underlying economic changes needed. Although one of the wealthiest cities in California, historically Newport Beach has not supported the arts in a meaningful way. Lack of a strong City commitment to the area is a disincentive to private investors and donors to the Theater. This situation began to change in 2010 when the City took steps to acquire the Balboa Market property to increase parking, and announced other plans to revitalize the Balboa Peninsula. In May 2010, the Newport Harbor Nautical Museum announced ambitious plans to renovate the Fun Zone area. If both the Nautical Museum and the Balboa Theater succeed in their plans, they will form the nucleus of an economic revival in Balboa Village. They must not be allowed to fail. • Board of Directors The Foundation provides the personnel and management expertise to operate the theater. The Foundation functions under the oversight of a Board of Directors. All Board members are recruited on the basis of their capacity to assist the Foundation in fulfilling its mission. The Directors represent many fields including business, arts, and education and bring a broad range of skills and expertise to the organization. The Board appoints the officers of the Foundation, who serve for the term prescribed by the bylaws. The Executive Board of the Board of Directors consists of the Chair of the Board, Vice Chair, Board Development, Vice Chair, Board Governance and Secretary /CFO. Combined, the individuals in these positions oversee all of the major areas of the Theater's business. In addition, subcommittees of the board and the community are formed as needed to oversee specific areas. Examples include: • Finance Committee — oversees annual budget for board approval, approves monthly financial statements and participates in the development of the long range strategic plan. • Nominating Committee — recruits and recommends new board members and establishes board standards. • Season Without Walls Committee — Prepares a season of performances with the Executive Director for approval by full Board. Solicits sponsorship to support programming and coordinates the ticket sales effort. • Staff: Day -to -day operations of the Foundation are conducted by part-time paid consultants and unpaid volunteers under the direction of the Board. Risk Analysis • Principal Risks The principal risks for this project are as follows: • Failure to raise funds necessary for the project • Construction cost overruns • Failure to generate required revenues • Softening of the entertainment market • Natural disaster (fire /flood/earthquake) • Risk Management Plan The Foundation is committed to the Theater Renovation Project, and enjoys a broad base of community support. Since more than $3 million has already been raised, the Foundation's Board 22 is confident it eventually can find sources for the required funds. Any risk tc'hx "at ci Newport Beach is mitigated, however, by the inherent value of the property. In the event that the project does not go forward, the property is located in a desirable location and the building could be converted to some other use. Construction cost overruns are not likely given the extent of preliminary engineering and building demolition and testing that have been performed. The construction cost estimates carry line item contingencies to cover possible unforeseen conditions likely to arise in the course of construction. If the theater is unable to generate the required level of revenues, the first mitigation strategy will be to scale back the level of operations until revenues and costs balance. The Foundation also believes it can attract a level of dedicated volunteer staff (docents and auxiliaries) to reduce general and administrative staff costs. Donations could supplement earned revenues, although we assume zero donations in this plan. The entertainment market will be emerging from a period of retrenchment brought about by the recession and economic downturn. On the cinema scene, there has been an intense consolidation, with thousands of marginal screens closed throughout the United States. The successful theater today must have flexibility. As the entertainment sector is reviving, the technology is changing rapidly. Flexibility to handle new media (satellite, digital) is critical. The "graying" of the population, and increased leisure time by the population as a whole, are still the drivers which made the idea of the Balboa Theater viable in the first place. Risks of natural disaster will be mitigated by Builder's Risk insurance during construction and by commercial general and public liability policies during operations. Schedule of Activities • Construction Schedule Final design is complete and permitting by the City of Newport Beach is underway. An allowance of 3 months (June - September) has been made for permitting and plan corrections. Construction will require 18 months if performed continuously as a single project (subject to availability of funds). The alternative is to phase the work as funding comes available. Three additional months have been allowed for punch list items and final outfitting of equipment. • Operational Milestones Key milestones in the reconstruction of the Balboa Theater are as follows • July, 2008: Selection of J. S. Fisher, Architect for final design • September 2009: Conceptual design and model completed • July, 2010: Final Design notice to proceed • May, 2010: Final design complete • June, 2011: Apply for building permit • 2011 -2012: Break ground (Subject to adequate funding) • 2013: Theater opens for first performance The opening of the Theater will be marked by a week -long series of local and Orange County festivities. The inaugural program will signal the transition from fundraising for the capital program to fundraising to create an endowment fund to provide ongoing support for the Theater's activities. The principal goal of the endowment fund campaign will be to create a 23 revenue source that ultimately can help support theater operations and in partoa'.a: its educational mission. 24 APPENDICES A. Five Year Profit and Loss Forecast and Assumptions B. Typical Facility Rental Rates C. The Producing Group 25 A. Five Year Profit and Loss Forecast and Assumptions The following tables show details of the financial forecasts commencing with the first year of operation. At this point in time it is assumed that the capital campaign is complete and the building construction has been finished. Fiscal year 12 is defined as the commencement of operations, which gradually build up until fiscal year 16 when full operations are achieved. Appendix Al below explains the definitions of the various categories of revenue and expenses. Appendix A2 shows the revenue projections and outlines the assumptions behind them. Appendix A3 is the staffing plan with salary projections. Appendix A4 is the five -year cash flow forecast based on the revenue and expense projections. Appendix Al Appendix Al Balboa Performing Arts Theatre Foundation Long Range Plan - Category Definitions Capital Fundraising Includes all funds raised prior to theater opening. Building Design & Construction Includes all capital improvement costs associated with the building prior to theater opening. Development Costs (Capital Campaign) Includes expenses incurred to generate donations, including Development personnel and public relations costs prior to theater opening. Other Costs (Capital Campaign) Includes all general & administrative costs to support the on -going operation prior to theater opening, such as office rent, insurance, utilities, equipment and supplies, property taxes, and payroll for Executive Director and other staff. Programming Includes ticket revenue, rental revenue, concession sales, and the associated costs to host events, including artist fees, marketing, equipment, and payroll for Stage and Box Office personnel, Production Manager, and House Manager. Development On -going fundraising income from individuals, corporate sponsorships, support guilds, and special events, as well as the associated costs of raising these funds, including payroll for Development personnel. General & Administrative Costs Includes all general & administrative costs to support the on -going operation after theater opening, such as office rent, insurance, utilities, equipment and supplies, repairs and maintenance, property taxes, and payroll for Executive Director, Administrative Assistant, Facilities Manager and contract services (accounting., etc.) 26 Appendix A3 Salary Projections Base Year Allocation (% FTE) Appendix A2 Position Base Salary Fringe @35% Total Compen- sation Program and marketing Develop- ment General and Admin Edu- cation Executive Director $80,000 $28,000 $108,000 Balboa Performing Arts Theatre Foundation 45% 10% 5% Production manager $70,000 $24,500 $94,500 100% Revenue Assumptions (Revenues in $000) Education Coordinator $60,000 $21,000 $81,000 100% House Manager $50,000 $17,500 $67,500 50% 25% 25% Facilities Manager $50,000 $17,500 $67,500 100% TOTAL PAYROLL FY12 $108,500 FYI FY14 FYI FY16 Notes: # of Events (per year) 200 Programing and marketing 210 General and Admin 220 Total (check) 230 250 1 $48,600 Avg. Revenue per Event $5,400 21 Note: 21 22 22 23 2 $0 Total Ticket Revenue $0 4,190 $81,000 4,410 $33,750 4,840 $16,875 5,060 $67,500 5,750 $0 $0 Avg. Concession income per Event $0 3.53 3.53 3.60 $65,475 3.60 $86,400 3.70 Total Concession Revenue 706 741 792 828 925 # of Rentals (per year) 24 30 40 50 60 Avg. Rental Revenue 1.50 1.50 1.75 1.75 2.00 3 Total Rental Revenue 36 45 70 88 120 Arts Learning Center # classes: 8 12 24 24 30 4 Avg. Revenue per Class 1.20 1.20 1.50 1.50 1.80 5 Total Arts Education Revenue 10 14 36 36 54 6 Merchandise Sales 5 5 7 7 10 Total Revenues 4,947 5,216 5,745 6,019 6,859 Notes: 1. Some days have 2 events /day 2.Revenue /event based on Table 3 as typical year 3.Rental fee /day is combination of auditorium ($2,000) and roof deck ($1,000) 4. Classes meet 12 times per quarter for 1 hour. Some classes off site. 5. Class fee is $100 /student; $125 /student in year 3; $150 /student in year 5. 6. Minimum size is 6, average is 12, maximum is 25. Appendix A3 Salary Projections Base Year Allocation (% FTE) Position Base Salary Fringe @35% Total Compen- sation Program and marketing Develop- ment General and Admin Edu- cation Executive Director $80,000 $28,000 $108,000 40% 45% 10% 5% Production manager $70,000 $24,500 $94,500 100% Education Coordinator $60,000 $21,000 $81,000 100% House Manager $50,000 $17,500 $67,500 50% 25% 25% Facilities Manager $50,000 $17,500 $67,500 100% TOTAL PAYROLL $310,000 $108,500 $418,500 Budget ($) Programing and marketing Develop- ment General and Admin Education Total (check) $43,200 $48,600 $10,800 $5,400 $108,000 Note: $94,500 $94,500 Other staff positions such as $0 $0 $0 $81,000 $81,000 ticket booth, ushers, etc. $33,750 $16,875 $16,875 $67,500 will be volunteers and interns $0 $0 $67,500 $0 $67,500 $171,450 $65,475 $95,175 $86,400 $418,500 27 Appendix A4 Balboa Performing Arts Theatre Foundation Long Range Plan - Cash Flow Detail $000 FY12 FY14 FY15 FY16 Beginning Cash Balance 0.00 K71401 562 1,143 1,768 Income Ticket& Rental Revenue Ticket Sales 4,190 4,840 5060 5,750 Concessions Revenue 706 792 828 925 Rental Revenue 36 45 70 88 120 Arts Learning Center 10 14 36 36 50 Memhandise /Auction Sales 5 5 7 7 10 Total Earner) Revenue 4,947 5,215 5,745 6,019 6,855 General /Annual Fundraising: Individual Donations Corporate/Business Donations FoundatiordGm't Donations Board Donations 102 102 102 102 102 Program Underwriting Support Guilds Interest/Misc Income Total Annual Fundralsing 102 102 102 11 102 11 102 Total Income 51049 5,317 5,847 6,121 6,957 Expenses Programming & Marketing: Talent costs 3,425 3,597 3;768 3,940 4,111 Concessions Cost 353 371 388 406 424 Producers fees 330 347 364 380 397 Education Salaries 86 89 92 94 97 Education instructors 4.0 6 12 12 15 Marketing /Advertising 50 55 60 60 65 Ticket printing 3.6 4 4 4 4 Payroll & Benefits 171 177 182 187 193 Rental Expenses 10 10 11 12 12 Total Programming and Marketing 4,433 4,655 4,880 5,095 5,318 Development Costs: Payroll & Benefits 65 67 69 72 74 Mailing /panting 5 6 6 7 7 Total Development 70 73 75 78 at General & Administrative Payroll & Benefits 95 98 101 104 107 Computer Equip /Software 3.0 1.01 2.0 2.0 3.0 Dues and Subscriptions 1.6 1.6 1.6 1.6 1.6 Fees /Permits /Bank Fees 2.5 2.6 2.7 2.8 3.0 Insurance 8.81 8.9 9.0 9.1 9.2 Meetings /Entertainment 3.0 3.0 3.2 3.2 3.2 Misr 1.0 1.0 1.0 1.0 1.0 Office Equip. & Furnishings 4.0 2.5 2.5 2.5 2.5 Education clr rent 0.0 12 15 20 24 Office Supplies 3.5 3.6 3.7 3.8 3.9 Postage and Delivery 2.5 3.0 3.0 3.5 3.5 Panting & Reproduction 1.5 1.61 1.7 1.8 1.9 Pnhmssional Services 5.0 6.0 7.0 7.5 8.0 Property Taxes 15 16 17 18 19 Repairs & Maintenance Fund 100 100 100 100 100 Utilities 30 35 40 42 45 Total G&A 277 296 310 323 336 Total Expenditures 4,780 5,024 5,266 5,496 5,735 Net Operations 269 293 581 625 1,222 Total Cash Inflows 5,049 5,317 5,847 6,121 6,957 Total Cash Outflows 4,780 5,024 5,266 5,496 5,735 Net Cash Flow 269 293 581 625 1,222 Cumulative 269 562 1,143 1,768 2,990 Ending cash 269 562 1,143 1,768 2,990 Notes 1. Income based on Appendix 2 2. Salary escalation 3 %/ ear 3. Program costs escalated 5 %! ear 28 B. Typical Space Rental Rates Performing arts venues rent their facilities using a variety of charging principles. One method is by the size of the space (typically for 24 hours usage), but it could also be based on an hourly rate, or per seat. Another approach involves adding a percentage of ticket sales revenue to the facility rental costs. In every case the basic rental costs are increased by the facility staff required to assist (as a minimum at least one person at $35 to $50 per hour); by the equipment being used (furniture, projectors, etc.). The charges are greater on the weekend compared to mid -week. For example, The Alex Theater in Glendale, California, has a base rental rate of $3,500 for Monday through Thursday, increasing to $4,000 for Friday and Sunday and $5,000 on Saturday. It is a 3 -tier theater. The orchestra seats 736, the terrace 181, and the balcony, 464, for a total of 1,381 seats. There are discounts for use by non - profit organizations or schools. Theater staff and equipment are added expenses. The Tower Theater in Bend, Oregon, seats 469 persons and has a basic rental fee of $1,000 per day plus 8% of gross ticket fees. Theater staff and equipment are added expenses. The 199 -seat Curtis Theater in Brea charges $140 per hour (4 hour minimum) with a $500 per day dark day fee (when it cannot be rented to others due to sets, etc.). Equipment is available at additional costs. The Discovery Science Center rents its space based on the number of attendees. For up to 175 persons (first floor only) the cost is $3,500 per event. For 500 persons (first and second floors) it is $5,000; for 1,000 persons, $7,500, and for 1,500 persons, $10,000. Typical rates sheets for the Bowers Museum in Santa Ana and the Balboa Theater in San Diego are illustrated on the next pages. 29 BOWERS MUSEUM .. your urinciom to for morlels ricliett rrrlturer Bowers Museum is one of Southern California's finest museums and Orange County's largest and after the completion of two expansions since its opening in 1936, the original Spanish - Colonial building has been blended seamlessly with a more modem, stmeof -the -art wing, providing many unique and elegant settings for any type of event. Contact the Special Events office 714567 -3623 for availability. DOROTHY AND DONALD KENNEDY WING AUDITORIUM (Norma Kershaw Auditorium) State of the Art Auditorium with Sladimn seating. Guests 1 -300 seated $5110.00 per hour COURT (John M. Lee Court) Elegant Open Space for Banquets and Special Events. Guests 1 -350 scaled 500 standing $61111,110 per hour HISTORIC MUSEUM BALCONY Covered madoors, over looks the Key Courtyard. Guests I {0 Seated $225.00 per hour COURTYARD (Margaret and Cleo Key Courtyard) Suitable for outdoor weddings, cocktail receptions, corporate functions, fundraisers, balls and eorrcerts. Courtyard Events will be moved to the Restaurant if RAIN occurs. Guests 1400 seated IOW standing $400.00 per hour FLUOR GALLERY (Plein Air Art Gallery) Intimate and great for mrpomte dinners. Restriction (NO RED WINE) Guests 1 -50 seated al moods 80 Theater seating 100 standing $225.00 per hour TANGATA RESTAURANT & PATIO Unique selling, fabulous menu provided by Patina Catering Guests 1 -120 seated 200 standing CALL 714- 567 -3630 EXHIBIT VIEWING is an option with your rental of museum space, there will bean addilional cost. The cost for our special exhibit is $ 10.00 - $20.00 per person, with a $500.00 - $1,000.00 minimum eA Damage Deposit will be required based on the location and the numberof guess °You will be required rejoin the museum at the Arrive Membership level of$75.00 'rhe Museum requires a 2 hour minimum for events for each location. 'the museum also offers a 2 hour scl up and 1.5 hour clean up time for the Catering staff 2002 North Main Street, Santa Ana, California 92706 San Diego Theatres. a 501(c)3 non - profit, public benefit corporation. looks forward to working with you towards the success of your event. Our goal is to provide exemplary service to you and our mutual guests. Please use this guide to accp o is yourself with the services provided and available rot your event. The Balboa Toone. located at 868 Fourth Ave, is a 1.339 seal restored historic vaudeville theatre located in the heart of the Gaslamp Quarter. After being closed for 20 years. the Balboa Theatre was r canted in January 2008 after a S26 million renovation and restoration. The San Diego Civic Theatre located at 1100 Third Ave, is a 2.067 scat performing arts venue. Originally opened in 1995, the Civic Theatre was designed to accommodate the largest of stage productions and regularly hosts San Diego Opera productions as well as the latest and greatest louring Broadway produelirm, presented by Broadway /San Diego. Additionally, the Civic Theatre hosts a variety of productions by California Balltl and diverse annual community functions For budgeting purposes. the rates provided here are intended io be effective July 2008 through June 2009. however. they are subject to change without notice and should be verified during the planning of your event. Also our webttt at wwwsandiegotheirn,org provides additional information that may be of assistance. We welcome the opportunity to assist you throughout your planning and your use of these facilities and servl,cS. San Diego Theatres License Fees rMT47TITNTrITIPM Balboa Theatre S1250 Civic Theatre $6,500: minimum vs. 10% of gross sales. 58,500 max (Civic Theatre: $500 discount for Monday - Thursday events) rt r r• r• Balboa Theatre -- $1.750 Civic'flleane 53.750 t t Balhna Theatre $3,500 Civic Theatre 57,500 (ClAc Thcalre: $500 discount fur Monday - Thursday events) r s r Balboa Theatre SI.625 Civic Theatre $3.500 (Civic'lliciue: $500 discount for Monday - '111ulsday events) -For MmocIa Relmao al,/MmmOm Days N eases$ of the ..he, or Ticketed Perfarmanm or Non- Ticketol Event Days. then Ihe . following rates will apply: Balboa Theatre S3,250 Civic Thcatrc S6.000 Balboa Theatre Sulo all-obby 5 750 Civic Theatre Sills Grand Salon $1.000 Civic Theatre - Rehearsal Hall S 750 Acoustical Shell. plus IATSE labor Per Wall Sedign No charge Per Ceiling Section 5150.00 Clear Court Intercom First three stations No charge Each add'¢�station S25 dayl $75 week Dance Floor 515.00 Ilurlcquin vinyl only $ 125 dayl $400 week d'Anser Dour only' S750 day] S2,000 week d'Anser B Harlequin' 5850 day/ S2,200 week DVD, CD or Mini. Disc Player $35 dayl S:105 week Follow Spot, plus IATSE labor $100 use/ 5300 week Garlic Lift. 36', plus IATSE labor S851 hour Lighting Node $40 day/ $125 week Microphones. fuss Three wired riles at no charge Each additional wired microphone S30 dayl S90 week Wireless microphones S05 day/ S250 week Monitor System, with two Speakers $75 day/ 5225 week Pianos Concert Grand S350 day/ $1,000 week Baby Grand* S200 day/ SG00 week _ Pcrfnnnange Upriglll $100 doyl'S300 week Ancillary Services Fees From of Hmtsc Guest Services Staffing for 2 - 2 Ih hour Performance/Event Balboa Theatre SB50 Civic Theatre $1,950 Staff Hourly Rates for all other events Chief Usher $22.00 Assistant Chief Usher 516.00 Ticket Takers. Door Persons. Directors 515.00 Ushers $12.50 Com /Bag Check $12.50 Merchandise Seller $16.00 Security /Safely Services Stage Door Attendam/Public Safety Rep. $17.50 Ticketing Services Event Ticket Seller $10.75 Facility Services Electrician /Plumber /Caryouer S48.00 HousekeeperlFacilRy Worker $16.00 Reserved Scat, Advance Sale Events Balboa Theatre $750 Civic Theatre $1.500 Credit Card Transactions 4.00%at'all sales transactions Ticket Printing $0.125 per ticket printed by ticketing office For addisional or allenmte services. discuss wish 17ekeling Scrvtem sto11'. 30 31 C. The Producing Group, LLC. ABOUT THE PRODUCING GROUP The Producing Group (TPG) is a consulting firm that provides planning and strategic management support for independent entertainment venues. Since its founding in 2004, TPG has produced five seasons of summer concerts at the 8,500- person - capacity Pacific Amphitheatre in Costa Mesa, CA, as well as outdoor music festivals in Las Vegas, NV, Modesto, CA and Galveston Island, TX, featuring an eclectic range of popular entertainers including Duran Duran, Bob Dylan, Black Eyed Peas, Alan Jackson, Maldita Vecindad, Paul Simon, B.B. King, Martina McBride, Bill Cosby, Scorpions and Willie Nelson, among many others. JOHN SULLIVAN John Sullivan, President of The Producing Group, has 40 years' experience working at the intersection of strategic communication and entertainment. He has successfully led and managed major cultural institutions, created strategy and advertising for numerous political and ballot measure campaigns, and has provided a broad range of planning and strategic communication services to corporations, trade associations and non - profit organizations in diverse fields including energy, healthcare, real estate and entertainment. John produced the Summer Concert Series at the Pacific Amphitheatre in Costa Mesa, CA for five seasons, where he substantially grew the audience and brought the venue into profitability. A longtime producer of theater at The Mark Taper Forum in Los Angeles, The Circle Repertory Theater in New York and San Francisco's American Conservatory Theater where for eight years he was Managing Director - John has also produced special events at such venues as Town Hall in New York City and The Los Angeles County Museum of Art. As Senior Vice President at the strategic communication company Winner /Wagner & Associates, John provided communication counsel and issue management support to organizations such as Exxon, GTE Mobilnet, and the California Home Builders Association. As an independent communications counsel, he has served a diverse range of clients, including Major League Rodeo, Holy Names College, Trammel Crow Company and the National Mining Association. For seven years, John was a consultant in the field of communication and popular culture at the Rand Corporation, and has served as a Visiting Fellow at the Aspen Institute. He is currently on the board of directors of the Foundation for the Great Park. KEN PHEBUS Ken Phebus has been a dominant talent buyer for independent music venues in Southern California for over 30 years. He has unparalleled experience in start -up situations, having established booking policies and formats for numerous and diverse venues including The Coach House in San Juan Capistrano (500- person capacity); The Ventura Theatre (1,200 capacity); The Galaxy Theatre in Santa Ana (900 capacity); The Sun Theatre (now the Grove of Anaheim, 1700 capacity) and the reopening of the Pacific Amphitheatre in Costa Mesa (8,500 capacity). In an industry notorious for failure rates, Ken takes considerable satisfaction in the fact that all these venues have continued to operate successfully - some for decades - utilizing the formats he developed. Ken has provided talent for clubs, theaters, amphitheaters, fairs, festivals, casinos and private events throughout the country. A seven -time nominee for the Pollster Nightclub Talent Buyer of the Year Award, Ken has booked 59 members of the rock and roll hall of fame, as well as most of the major artists of our time, including Duran Duran, Steely Dan, Steve Miller Band, Bob Dylan, Boston, ZZ Top, Jackson Browne, Juan Gabriel, Scorpions, Paul Simon, Seal, Van Halen, Toby Keith, Dave Chappelle, Luis Miguel, Velvet Revolver, Tina Turner, Ray Charles, Johnny Cash, The Byrds, and Miles Davis. CHRIS RICCI Chris Ricci has created and produced successful festivals, concerts and special events throughout California. As an experienced talent buyer, event producer and venue manager, Chris thoroughly understands the entertainment business and matches the right talent to the right setting; mobilizes and focuses marketing resources; handles ticketing and credentialing; and manages all aspects of technical production. The success of Modesto's X -Fest - a multi -stage festival that Chris has produced since 1999 - can be measured by the 20,000 -plus happy fans who annually flock to the city's downtown streets for a day and evening of rock'n roll and by the positive energy this popular event has contributed to the revitalization of Modesto's central business district. Chris is experienced in developing successful business relationships with talent agencies, and is adept in dealing with artist management, record labels, media, sponsors and government agencies. He is skilled in coordinating these resources to create events that are popular, safe and profitable.