HomeMy WebLinkAbout13 - Balboa Theater Rehabilitation ProjectAGENDA ITEM 13
TO: Mayor and City Council
FROM: Sharon Wood, Assistant City Manager
SUBJECT: Balboa Theater Rehabilitation Project
Recommendation
1. Direct staff whether to enter into negotiations for City acquisition of 111 Main
Street.
2. If the City Council chooses to purchase 111 Main Street, direct staff to amend the
Lease Agreement with the Balboa Performing Arts Theater Foundation as
follows:
a. Add the western third of 111 Main Street;
b. Require the Foundation to contribute $200,000 towards the purchase of
111 Main Street;
c. Require the Foundation to separate 111 Main Street into two shell
buildings meeting Building Department requirements; and
d. Add fundraising and construction milestones.
Background
The City Council discussed this project and the potential for additional City participation,
through acquisition of the adjacent property at 111 Main Street (Orange Julius building),
at a study session on February 26, 2002. The minutes and report for that meeting are
attached. No action was taken, but Council members requested additional information
from the Balboa Performing Arts Theater Foundation, including a business plan, what the
Foundation could accomplish at various levels of fundraising success, and a cost estimate
to bring the Theater to a shell exhibit.
The Foundation has prepared a new Strategic Business Plan, which includes the
information requested by the City Council.
Discussion
The Foundation's plan provides information on community benefits of the Theater,
market analysis, organization, fundraising, a financial plan, risk analysis and schedule.
The construction schedule on pages 24 and 25 of the plan provides answers to the
specific questions raised at the study session in February. The estimated cost of the
Theater shell without the basement is $1,510,000. Construction of this phase and the
improvements to the Orange Julius building could begin when the Foundation has
$2,030,000. Completion of the Theater would not be started until an additional
$3,440,000 is raised. As of March 30, 2001, the Foundation has a cash balance of nearly
$2 million.
In addition to a business plan for renovation and operation of the Theater, the plan
provides an economic analysis of the City's participation in the project, including
purchase of the Orange Julius building. The Foundation's commitment to contribute
$200,000 towards acquisition of this building, made by board members at the February
study session, is repeated in the business plan. Therefore, the analysis assumes an
additional City investment of $1.4 million, making the City's total investment in the
project $1.88 million. Staff notes that the City's investment would be over $2 million, as
the City has agreed to pay plan check and permit fees for the renovation project.
The Foundation's analysis also assumes that the Foundation will lease only the western
one -third of the Orange Julius building, leaving the City with the asset of the eastern two -
thirds of the building. The analysis suggests that the City could sell this asset for $1
million, approximately two- thirds of the assumed purchase price. Staff notes that the
City's return on the eastern two- thirds of the Orange Julius building likely would be less,
due to interior changes needed to make the building useable after its division. The
Foundation's budget includes the basic work to divide the building in two (including an
exterior masonry wall for each "new" building), but does not include costs to relocate
bathrooms and a stairway that may be necessary, depending on the use of the City's
portion of the building. Even with interior changes, the City's investment in the project
would be reduced to approximately $1 million, less than the Foundation's estimate of the
Theater's value after renovation, $1.5 million.
As a contingency plan in the event the Theater is not successful, the Foundation's plan
shows that the City could convert the Theater into a retail building that would provide net
annual income of $124,000. At a 9% capitalization rate, the Theater building's value
would be approximately $1.3 million. The City also would own the western portion of
the Orange Julius building, with a value of approximately $500,000.
Conclusion
Staff agrees with the Foundation that the Theater and 111 Main Street properties would
have value in the future, even if their uses were changed, and that this reduces the City's
risk in additional participation in the project. In addition, the Foundation's plan discusses
many other economic and community development benefits that the Theater project
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could provide to the City and the community (pages 7 -9). These benefits were the City's
original reason for working with the Foundation on purchase and rehabilitation of the
Theater. Staff believes they are still valid, especially as the Foundation has quantified
these benefits. The difficult task for the City Council is to balance the Theater's benefits
to the community and the projected value of the properties against other community
needs, and decide whether to make an additional investment in the Theater project.
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COUNCIL AGENDA
No. 15
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April
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STRATEGIC BUSINESS PLAN
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BALBOA PERFORMING ARTS THEATER FOUNDATION
t 707 East Balboa Blvd., P.O. Box 752
Newport Beach, CA 92661
Prepared by the
BPATF Board, BPATF Staff,
And Community Volunteers
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1 April, 2002
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ITABLE OF CONTENTS
Page Number
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Executive Summary ............................................................................................ ..............................1
Sales Plan ....................................................................................................
Descriptionof Project ......................................................................................... ..............................3
• Staff/ Volunt eers ..........................................................................................
Historyof Theater ........................................................................................ ..............................3
Missionand Vision ...................................................................................... ..............................3
TypicalProductions ....................................................................................
Drawings...................................................................................................... ..............................3
.............................18
CommunityBenefits ........................................................................................... ..............................7
Theater Rental Opportunity ........................................................................
. Benefits to Balboa Peninsula ....................................................................... ..............................7
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• Benefits to the City of Newport Beach ........................................................ ..............................7
Corporate Uses ............................................................................................
Future- Satellite and Digital Applications ....................................................
. Orange County Benefits ............................................................................... ..............................9
•
Sales Plan ....................................................................................................
.............................11
• Staff/ Volunt eers ..........................................................................................
.............................17
TypicalProductions ....................................................................................
.............................II
.............................18
•
Theater Rental Opportunity ........................................................................
.............................11
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•
•
Corporate Uses ............................................................................................
Future- Satellite and Digital Applications ....................................................
.............................12
.............................12
• Annual Operating Costs ..............................................................................
.............................21
Revenue and Cost Forecast .........................................................................
.............................12
.............................22
•
FundraisingPlan .........................................................................................
Capital Campaign ........................................................................................
.............................14
.............................14
• Contingency Plan ........................................................................................
AnnualFund ................................................................................................
.............................15
SupportGuild Activities .............................................................................
.............................15
• Board of Direct ors ......................................................................................
.............................16
A. Evidence of Community Support (letters)
• Staff/ Volunt eers ..........................................................................................
.............................17
TheDivas ...........................................................................................................
.............................18
D. Financial Schedules
FinancialPlan .....................................................................................................
• Construction Cost Estimate- Theater ...........................................................
.............................18
.............................18
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. Renovation Cost - Orange Julius Bldg ..........................................................
.............................21
• Annual Operating Costs ..............................................................................
.............................21
• Cash Flow Analysis .....................................................................................
.............................22
• Return of Capitol ........................................................................................
.............................22
• Contingency Plan ........................................................................................
.............................23
APPENDICES.................................................................................................... .............................26
A. Evidence of Community Support (letters)
B. Curricula Vitae -Key personnel
C. Construction Schedules
D. Financial Schedules
E. BT -2000 Donors
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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
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currently undergoing renovations, which, when complete, will allow it to operate as a
performing arts theater offering theater, musical theater, dance, music, children's
productions and film. 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 Peninsula 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. In the initial concept, the Foundation planned to
renovate the existing theater structure to create a new venue. Subsequent engineering
studies revealed a high cost and technical difficulties associated with this plan due to the
need to create a basement for dressing rooms and toilet facilities. This revised plan is
predicated on purchasing the adjacent building (711 E. Balboa Blvd.) that currently
houses an Orange Julius franchise and other retail space (the "Orange Julius Building "),
using the westerly one -third of that building for the required facilities, and eliminating
the need for the basement.
This plan requires the city of Newport Beach to invest an additional $1.4 million dollars
to purchase the Orange Julius Building for lease -back to the Foundation. This, when
added to the original investment of $480,000 for the theater, will make the City's total
investment in the project equal to $1.88 million. The Foundation will contribute
$200,000 to the purchase price of the Orange Julius Building. Furthermore, the
Foundation plans to spend $4 million renovating the theater and an additional $300,000
upgrading the adjacent portion of the Orange Julius Building. At the conclusion of the
construction program, the City will own two properties with a market value of
approximately $3 million: $1.5 for the Orange Julius Building and $1.5 for the Theater
valued as a theater.
If the City sells the eastern two- thirds of the Orange Julius Building for $1.0 million, its
total investment would be reduced to $880,000 on property having a market value of
$2.0 million.
If for some unforeseeable reason the Theater does not make it, the Orange Julius
Building can be sold as a stand -alone facility, and the Theater can be converted to a
commercial use. At that time the City would have two properties valued at $1.8 million;
the westerly one -third for the Orange Julius Building valued at $0.5 million and the
Theater valued as having a commercial use at $1.3 million. The bottom line is, that if for
some reason the theater does not make it, the $1.8 million market value of the properties
owned by the City, will be $920,000 greater than its $880,000 investment.
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These capital payouts do not include the revenues the City will receive from expanded
taxes. The theater's stabilized annual spending (year 3) of $753,000 is expected to
generate additional tax receipts for the City. For every dollar of theater revenue,
experience indicates an additional $1.85 of revenue accrues to local restaurants and other
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businesses. Indirect spending is typically $1.89 per dollar of theater expenses. The
combined sum of these additional income streams is $2.992 million. In other words, the
impact of the theater is to cause an additional $3 million to be spent annually in Newport
Beach. In addition, as part of the greater Newport/Balboa Peninsula 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 peninsula.
The goal of the Balboa Performing Arts Theater Foundation is to renovate the 1927
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building and reopen the theater as a presenting and producing venue. With a seating
capacity of 350, its first year goal for audience is 100 performances at an average paid
attendance of 60% or 21,000 attendees. Each year following the first, the goal will be to
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offer 150 performances with average paid attendance of 31,500. Paid performances and
rentals are projected to cover 80% of the annual operating budget by the second year. In
addition, the Diva Support Guild is committed to raising a minimum of $100,000 per
year, and the Foundation's Finance Committee has a long -term plan for establishing an
endowment fund to enhance the Theater's ability to offer educational and community
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benefit programs.
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Description of Project
• History of Theater
The Balboa Theater was constructed in 1927. 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 1992. In 1996, a group of local citizens under the leadership of
Dayna Pettit came together to establish the 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.
In 1999, two local firms committed to renovate the theater at cost, foregoing any profits
on behalf of the Foundation. The firms are DMJMH +N, a nationally known
architect/engineering firm with extensive entertainment experience for clients such as
Warner Brothers Studios, Disney, Universal Studios, Edwards Theaters, etc.; and ALY
Construction, a specialist in the construction of new theaters and the renovation on
existing properties. ALY's client base includes hundreds of theater projects throughout
the United States for clients which include AMC, Regal Cinema, Edwards, United
Artists, Brendan, and others.
• Mission and Vision
The Mission Statement for the Balboa Performing Arts Theater is:
"To create an intimate venue for live performing arts, film, and arts education
activities to meet the needs of our surrounding Orange County area."
Our vision is:
"We will create an artistic jewel on the Balboa Peninsula where audiences will
enjoy superlative performances of theater, musical theater, dance, classical and
contemporary music, cinema, and children's fare. We will provide arts
experiences that provoke laughter, tears, questions, perhaps answers,
memories, and lively entertainment for audiences of all ages. With an audience
capacity of 350, the Balboa Performing Arts Theater will attract audiences who
value the intimacy and atmosphere of sharing in the personal and communal
act of performing art."
• Drawings
The drawings which follow illustrate how the Foundation and its architects have brought
to life the vision of an "artistic jewel on the Balboa Peninsula." Figure 1 is a rendering of
the exterior (front fagade) of the theater, showing how the historic element of the theater
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Figure 1: Rendering of Front Facade of Theater
Figure 2: Rendering of the Lobby
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will be maintained. Figure 2 is a rendering of the new theater lobby, which will feature a
wall sculpture commemorating major donors. Figure 3 is a plan view of the theater
showing the seating layout which provides unobstructed, intimate views from any
location. Figure 4 is an interior elevation view that shows the use of stadium seating
constructed on a flat floor. In the unlikely event the theater cannot maintain a successful
operation, the seating can be removed and the theater building converted to a retail or
commercial tenant. Figure 5 and 6 show views of the auditorium and the stage.
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Figure 1: Rendering of Front Facade of Theater
Figure 2: Rendering of the Lobby
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Figure 3: Plan View of Theater Showing Seating Layout
Figure 4: Interior Elevation View Showing Stadium Seating
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Figure 5: View of Stage
Figure 6: View of Auditorium
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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 which has the electrical and mechanical features to
handle both cinema and live performances, with rapid conversion from one format to the
other. Also the design incorporates provision for expansion to the latest new
digital/satellite technologies at a future date.
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Community Benefits
• Benefits to Balboa Peninsula
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The Balboa Theater has been an integral part of the Balboa Peninsula 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 Peninsula,
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along with the Fun Zone, the historic Balboa Ferry, the Pavilion, and the Pier.
When the theater renovations are complete, it will operate as a performing arts theater
offering performances in theater, musical theater, dance, music, children's productions
and film. 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 Peninsula by creating a unique
entertainment venue in the area.
In addition to the esthetic contributions the theater will bring to the Peninsula, 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
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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 on the peninsula.
• 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, the City will acquire a multi - million dollar asset,
which offers a high rate of return on the investment. In addition, the Theater will expand
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tax revenues for the City, reduce urban blight, and increase property values in the
community.
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3. Indirect Audience Spending: $815,850
This is the amount of spending that occurs as audiences purchase
restaurant meals, drinks, transportation, etc., over and above the cost of
their tickets. Using the multiplier of 1.85, indirect audience spending is
estimated by multiplying total admission revenues of $441,000 by 1.85
(see Year 3 in Table D -1).
Note that these multipliers are obtained from the U.S. Department of Commerce,
Economic and Statistics Administration, Bureau of Economic Analyses, Regional Input-
, Output Modeling System.
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This plan requires the city of Newport Beach to invest an additional $1.4 million to
purchase the Orange Julius Building for lease -back to the Foundation. This, when added
to the original investment of $480,000 for the theater, will make the City's total
investment in the project equal to $1.88 million. The Foundation will contribute
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$200,000 to the purchase price of the Orange Julius Building. Furthermore, the
Foundation plans to spend $4 million renovating the theater and an additional $300,000
upgrading the Orange Julius Building. At the conclusion of the construction program, the
City will own two properties with a market value of approximately $3.0 million: $1.5
million for the Orange Julius Building and $1.5 million for the Theater valued as a
theater.
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The City could immediately sell the eastern two- thirds of the Orange Julius Building.
Assuming that the sale nets the City $1.0 million, the City's total investment would be
reduced to $880,000 on property having a market value of $2.0 million.
To protect the City's investment, the Foundation has a contingency plan whereby if the
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Theater is not successful, the balance of the Orange Julius Building can be sold and the
theater can be converted to retail or commercial use. In this case, the market value of the
properties owned by the City ($1.8 million) still will be greater than its $880,000
investment.
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The total economic impact of the Balboa Theater after income and expenses have
stabilized in year 3 will be comprised of the following spending categories:
1. Direct Spending: $753,000
This is the amount the theater will directly spend on all personnel and
operating expenses (see Year 3 in Table D -1).
2. Indirect Spending: $1,423,170
This is the amount of spending that occurs as personnel use their wages
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and as vendors use their receipts to purchase goods and services. A
multiplier of 1.89 is used to estimate indirect spending; hence, the indirect
spending estimate for the Balboa Theater is the direct spending of
$753,000 by 1.89 (see Year 3 in Table D -1).
3. Indirect Audience Spending: $815,850
This is the amount of spending that occurs as audiences purchase
restaurant meals, drinks, transportation, etc., over and above the cost of
their tickets. Using the multiplier of 1.85, indirect audience spending is
estimated by multiplying total admission revenues of $441,000 by 1.85
(see Year 3 in Table D -1).
Note that these multipliers are obtained from the U.S. Department of Commerce,
Economic and Statistics Administration, Bureau of Economic Analyses, Regional Input-
, Output Modeling System.
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' Summing these spending categories gives the following total estimated economic impact:
Total Direct Spending: $ 753,000
Total Indirect Spending: 1,423,170
' Total Indirect Audience Spending: 815,850
Total Economic Impact: $2,992,020
It is needless to say this will have a significant economic impact in Balboa. The City will
receive a healthy increase in tax revenue, the businesses will be healthier and, in
conjunction with the Balboa Peninsula improvement plan, the Theater will act to drive
' up property values in the surrounding area, further increasing the property tax base on
the peninsula.
It is not unusual for the restoration of a theater to be used as the stimulus for the
economic rebirth of a deteriorating neighborhood. Many cities have used a theater as an
anchor for their downtown rejuvenation projects. Cities such as Pasadena, Santa Ana,
Glendale, Long Beach, Coronado, Alhambra, Monrovia, Concord, Modesto and the
granddaddy of them all, 42nd Street in New York, are but a few who have rejuvenated
theaters as part of major renovation projects.
• 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.
' Market Analysis
• Need for a 350 -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, Laguna Beach and Irvine. Each of these communities is represented
in the Foundation's mailing list of 3,500 persons and organizations who have
' participated in Balboa Theater activities.
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' The theater has also begun to foster strong connections with local schools and
universities, in the planning and production of special projects, festivals and
performances. The students and faculties of these partner schools 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 affordable ticket prices.
The Theater's Education Program is considered by marketing specialists to be an
Within each of these communities, there are specific constituents to which we will direct
marketing efforts such as schools, senior groups, performing groups, and tourists. The
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Foundation will tailor its marketing instruments to address and create an interest for the
enjoyment of performances at a small venue. The Theater will also offer performances
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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. The Theater does not intend to compete with these
institutions, but rather to complement their work by offering performances best - suited to
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a small, intimate, venue. With the growing popularity of alternative performance venues
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such as coffee houses, cabarets and store -front theaters in Orange County, there is a
steadily- increasing interest in more personal arts experiences. Accordingly, the
Foundation plans to market to audiences who value the intimacy of a 350 -seat live
performance theater.
• Marketing Approach
' The theater has also begun to foster strong connections with local schools and
universities, in the planning and production of special projects, festivals and
performances. The students and faculties of these partner schools 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 affordable ticket prices.
Studies show that "length of stay" is the key to spending in the local community. The
Theater Board is actively developing plans for pre-show and post -show experiences.
Other examples under consideration include harbor boat tours, dinner cruises followed
' by theater, and so on.
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The Theater's Education Program is considered by marketing specialists to be an
excellent method for increasing awareness and use of the Theater. Links to local
colleges /universities (such as Chapman University), whose curricula include film and
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theater, are being established. The Newport Beach Film Festival wants to use the Balboa
Theater as one of its major venues, and the Foundation Plans to work closely with them
on this important event.
"festival"
Other type events, including cross marketing with local retailers and
restaurants, can enhance theater revenues as well as increase Newport Beach tax
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revenues.
Studies show that "length of stay" is the key to spending in the local community. The
Theater Board is actively developing plans for pre-show and post -show experiences.
Other examples under consideration include harbor boat tours, dinner cruises followed
' by theater, and so on.
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' • Sales Plan
' Ticket sales will be marketed through a variety of techniques including: An annual
season brochure outlining all major events; direct mail 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.
' Theater rentals will be marketed primarily through mailings to local performing groups
and meeting managers.
Tickets will be sold singly, or through a "Create- Your - Own - Subscription" program to
offer a discount to major buyers. Tickets will be sold for Balboa Theater sponsored
events and productions, as well as those by outside groups renting the theater.
Balboa Theater services will also include its arts education program, offering courses,
workshops, and lecture/demonstrations both in the theater and in local schools and
' community centers. Fees will be charged for each of these activities. The Shakespeare
program currently offered by the Theater is an example.
Pricing levels will be set by senior staff, with Board approval, based upon current market
trends, sponsorship contributions, and expenses, with a constant goal of maintaining a
' balance between affordable ticket prices and recovery of overhead costs.
• Typical Productions
The primary programs offered by the Theater will be live performances in theater,
musical theater, dance, music, children's productions, and cinema. hl addition, there will
' be readings or lectures by nationally known authors or lecturers, including readings of
original works.
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• Theater Rental Opportunity
As Orange County grows in population and in cultural diversity, there is an increasing
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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. Only ten years ago, Irvine Barclay Theater was
built, in part, to address this growing need. According to a Los Angeles Times report in
January 2001, the Barclay is now solidly booked and unable to accommodate all the
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requests it receives for rental dates. Estimates for the first year's operating budget for the
Balboa Theater are based on a schedule of 30 rental and 70 presented performances. The
Newport Film Festival is a potential renter.
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• Corporate Uses
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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 meetings will be promoted through local branches of
professional societies such as the American Institute of Architects (AIA), the American
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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-
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art audio - visual equipment.
• Future- Satellite and Digital Applications
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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
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needed to provide this capability.
• Revenue and Cost Forecast
' There are four principal sources of revenue: programming (ticket sales), rentals and
concession income, unrestricted fundraising (underwriting and sponsorships), and
interest. Future sources of income such as those resulting from future satellite /digital
programs are not included here. Revenues and operating costs are summarized In Table
1. Details and assumptions are shown in the Appendices.
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TABLE 1
OPERATING ACTIVITIES (DOLLARS IN THOUSANDS)
YEAR
INCOME:
Programming
Rentals /Concessions
Unrestricted fundraising
Interest
SUBTOTAL
EXPENSES
Programming
Fundraising/Special Events
' Endowment Campaign
General/Administrative
SUBTOTAL
During Year 1 after Year 2 after Year 3 after
Construction Completion Completion Completion
15
294
382
441
0
38
51
57
107
100
100
100
3
3
3
3
125
435
535
601
24
150
200
225
23
30
30
30
24
+ 0
0
0
172
455
490
496
243
635
720
753
NET ACTIVITY <118> <200> <184> <152>
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Number of Performances: 4 100 150 150
Typically Performing Arts Theaters do not operate at a profit. As shown in Table I above,
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in the third year after completion the theater will be operating at a $152,000 loss. It is felt
that this loss will be representative of the following years as well. There is no doubt that
the Divas, who are already raising over half of this amount without the theater even
being open, will be able to significantly reach if not totally raise this amount. In a 1998
report prepared by A. Gray Anderson Center for Economic Research at Chapman
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University and The Orange County Business Committee for the Arts, Inc., total income
and total expenses for Non - profit Arts Organizations in Orange County were analyzed.
The results were that earned income averaged only 59% of Total Expenses and
Contributed income made up the difference. What this points out is that there is a
continuing need for fundraising.
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Currently the fundraising emphasis is on the Capital Campaign for Construction Funds,
but after completion of construction there will be continuing efforts to solicit
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"Contributed" income. (Please refer to the Fundraising section of this Business Plan.) It
should be emphasized that board person members are pledged to either give or get a
minimum of $5,000 each. Currently there is a 12- person board and it is expanding to its
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authorized 25 members. This means that the annual deficit will be covered in -house
between the Divas ($100,000) and the board contributions ($125,000). Other fundraising
activities will be focused on building a long -term endowment for the theater.
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• Fundraising Plan
The Theater enjoys a broad base of local support. Cash contributions to date from all
sources amount to over $2 million (see Table D4 in Appendix D). This figure does not
consider the untold labor hours donated by volunteer groups over the past six years.
Fund - raising for the capital campaign for renovation is comprised of both a direct -mail
solicitation program and major gifts campaign guided by a professional consultant. The
goal of these efforts is two -fold: First, to raise the balance of the funds needed to
complete construction and commence operations; second, to create an endowment fund
of $5 million (based on corporate and foundation grants) which will generate an
additional $250,000 per year in interest income to expand the Theater's offerings and to
subsidize community service efforts such as children's educational programs.
To assist in designing a viable fundraising program, the Foundation has collaborated
with several industry leaders, board members, and community members. An independent
Capital Campaign Planning Study was conducted to assess the potential for the
campaign and determine an appropriate fundraising strategy. Through this collaborative
effort between volunteers and professionals, a fundraising strategy has been developed
and will evolve as our organization grows. The strategy is basically broken down into
three areas: 1) Capital Campaign, 2) Annual Fund, and 3) Support Guild Activities. Once
the renovation is completed, the Foundation will add Endowment Growth as the fourth
area. A brief summary of the comprehensive plan is described below.
• Capital Campaign
This campaign is complex and involves a gift model matrix as well as an overall "good
old fashioned" public relations and marketing plan. Based on results from the Capital
Campaign Planning Study, the Foundation follows a model gift matrix that identifies
suggested contribution ranges and the number of donors required at a variety of ranges.
A Campaign Steering Committee has been initiated to identify potential major
donors /grantees, open doors to provide key prospects, and provide visible leadership and
credibility to this program. To date the capital campaign has raised over $2 million.
Recent successes include one gift of over $1 million, one of over $300,000, two over
$50,000, five over $20,000, one at $15,000, nine $10,000 donations, ten $5,000
donations, and nearly 200 donations in the range of $1,000 to $3,000 each. "In- Kind"
contributions of professional services valued at approximately $150,000 have also been
received.
The capital campaign also relies heavily on marketing and public relations efforts. The
Foundation has conducted focus group sessions throughout the community and the
overwhelming majority of participants agree that actually showing the public its vision
through live performances is a very effective method of sharing the vision. As such, the
board has designated funds to be used for a Sampler Series to raise public awareness
about the project and the wonderful performances that will be a regular fixture of the
theater once it opens. Recent programs include a delightful folk music concert at
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Sherman Gardens, author book signings and discussions, holiday offerings, Shakespeare
in Balboa, and an upcoming intimate jazz concert.
• Annual Fund
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As the current mission of the Foundation is to raise funds for the renovation of the
historic Balboa Theater, virtually all gifts are restricted for the construction. The
Foundation, however, has implemented many fundraising programs that will eventually
evolve into an annual campaign to support programs after the theater is in operation.
These activities can appeal to a broader donor base and add to the "grass roots" feel of
this effort. Current activities include small to mid -size special events such as the annual
5K Run for the Arts and the Balboa Ballroom Dance Bash. The Foundation also required
annual board donations and sends out regular newsletters to report progress and appeal
for support. Perhaps the most lucrative program is the BT 2000 program whereby 2,000
donors can give $1,000 each to have their names inscribed on an art glass wall designed
into the lobby. The BT 2000 program was marketed heavily in late 2000, with an
encouraging amount of return. Nearly 200 members of the local community have
participated (see Appendix E). The Foundation is planning a new phase of the BT 2000
program to coincide with the construction groundbreaking.
• Support Guild Activities
The Balboa Theater Foundation has two support groups, the "Stagehands" and the
"Divas," that assist in promoting awareness of this important renovation project through
fundraising and other activities. The Stagehands, managed by staff, contribute countless
volunteer hours providing administrative and special event support. This growing group
plays an important role in keeping staff costs down and will eventually evolve into a
corps of volunteer ushers. The Divas of the Balboa Theater, managed by a self - governing
board, contribute immeasurably to the public relations and financial stability of the
Foundation. In less than 3 years this group has grown to include 150+ dynamic women,
and men, who are dedicated to the Balboa Theater. Through a myriad of special events,
from hometown beach blanket BBQs to glamorous galas, the guild contributes
approximately $100,000 per year to the Foundation. During this phase in the
organization, these groups play an important role in fundraising and public relations to
support the capital campaign. After the theater is in operation, these guilds will play a
vital role in reducing financial deficits.
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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 Peninsula business climate. The strength of this
conviction is amply demonstrated by the fact that the Foundation has persevered for
more than six years with the same key personnel in the fulfillment of this goal.
• Board of Directors
The Foundation provides the staff and management expertise to operate the theater. The
Foundation functions under the oversight of a Board of Directors made up of
distinguished local citizens. The Board currently has twelve members. (Table 2). The
Board appoints the officers of the Foundation. Day -to -day operations of the Foundation
are guided by an Executive Committee including the President, the Chief Financial
' Officer, and the Secretary. All board members are recruited on the basis of their capacity
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Organization
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• Broad -Based Community Support
In order to be successful in today's entertainment market, a small performing arts 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 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 Peninsula business climate. The strength of this
conviction is amply demonstrated by the fact that the Foundation has persevered for
more than six years with the same key personnel in the fulfillment of this goal.
• Board of Directors
The Foundation provides the staff and management expertise to operate the theater. The
Foundation functions under the oversight of a Board of Directors made up of
distinguished local citizens. The Board currently has twelve members. (Table 2). The
Board appoints the officers of the Foundation. Day -to -day operations of the Foundation
are guided by an Executive Committee including the President, the Chief Financial
' Officer, and the Secretary. All board members are recruited on the basis of their capacity
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to assist the Foundation in fulfilling its mission. All are affiliated with successful
businesses and bring a broad range of business skills and expertise to the board. All are
fully committed to the goals and mission of the Foundation. Curricula vitae of key
personnel are listed in the Appendix.
• StaffNolunteers
The Balboa Performing Arts Theater Foundation is a nonprofit organization which
actively solicits contributions and ticket sales to offset its construction, operating,
programming and fund - raising expenses. Any annual surplus will be applied toward the
following season's expenses.
The organization is guided by a Board of Directors whose volunteer members are
representatives from many fields including business, education and the arts.
Subcommittees of the board are responsible for overseeing specific areas of the
organization including the finance committee, the nominating committee, the arts
advisory council, and the Divas Support Guild.
• The Finance Committee — prepares annual budget for board approval. Approves
monthly financial statements prepared by staff.
• The Nominating Committee — recruits and recommends new board members.
• Arts Advisory Council — prepares a season of performances with Executive Director
for approval by full board. Also recommends rental policies and price structures.
• Divas of the Balboa Theater — the theater support guild; raises funds through special
events and provides social occasions for their members to enhance their experiences
at the Balboa Theater.
Other Key Staff Include:
Jill Forbath. The Foundation has engaged the services of a Marketing /Operations
Management Consultant, a person with over 20 years of experience in both business and
theater operations. Jill Forbath has her MBA from UC Irvine and has worked in the
transportation, housing, computer, and recreation industries in marketing, management,
and sales positions as well as running her own business in web design and marketing
consultation. Additionally, she has worked as an artistic director in local theater in
Orange County performing duties of programming, audience development, fundraising,
box office and volunteer coordination, and daily operations. She is a local director,
producer, and choreographer and the founder of the 9 year old West Coast Ten - Minute
Play Project — a program with a national contest for playwrights and subsequent
showcase festival for the winners. At this time, her duties will include daily operations as
well as marketing and fundraising events.
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Jennifer Wesoloski. Since April 2001, the Foundation has engaged a part-time Director
of Finance, a person with 10 years of experience in not - for - profit accounting, reporting,
and management. While working at KPMG Pete Marwick she completed the
requirements to obtain a CPA license while specializing concurrently in management and
reporting for art organizations and municipalities. She manages business activities,
financial and tax reporting activities, and plays a key role with volunteer coordination,
fundraising, and programming.
The DIVAS
In parallel with the formation of the Foundation, in 1999 a group of local residents
created the DIVAS SUPPORT GUILD, an auxiliary organization charged with the
responsibility to promote the mission and objectives of the theater and to assist in raising
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supplemental funding to support operations. Officers of the DIVAS are also listed in
Table 1. This organization of nearly 150 local residents provides an impressive base of
grass roots support for the Theater and the Foundation. It is broadly diverse and
representative of the diverse interests of the community. All of the Diva fund- raising
events are self- supporting and draw upon local businesses and individuals to underwrite
expenses. The Diva organization is entirely staffed and operated by unpaid volunteers so
that 100% of the net revenues go to offset the operating costs of the Foundation and
Theater. During its first three years of operation, it has raised or forecasts raising
$75,000 per year. Once the theater opens, the goal of the Divas will be to double their
membership base and to increase their annual fundraising goal to $150,000.
Financial Plan
• Construction Cost Estimate- Theater
The existing 1927 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. (See Figure 7.) Demolition of the
interior construction has been completed and the structure is ready to be renovated. The
initial plan called for lowering the ground floor (making a "basement') to create space
for dressing rooms and restroom facilities. This approach requires dewatering the site
during construction as well as costly bracing and other measures. During the demolition
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process it was also determined that the electrical service was tied into the adjoining
structure, which further complicated the planned approach. The construction cost
estimate for this approach is $5.6 million. This is considerably higher than the
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preliminary estimate of $4 million. As a result, the BPATF Board asked the architect and
contractor to explore ways of reducing the construction cost while maintaining the
original objectives of the renovation, and also to establish a phased plan of construction
which would tie the construction to available funding.
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By eliminating the basement, the cost of renovating the theater is estimated to be
$4.3 million. Details of the cost estimate are contained in the Appendices.
F:WmKAWS3 M�N mmNR nU Found=n'WW3 FN 33 Aa 19
At the time these studies were taking place, the adjoining property (711 E. Balboa
Blvd.), which houses an Orange Julius franchise and other retail tenants, came on the
market. Acquisition of this building would reduce the cost of renovating the theater
building by eliminating the need for the basement. Approximately one -third of the
Orange Julius Building (on the west side adjacent to the Theater) could be modified to
provide the restrooms and other facilities needed by the theater, eliminating the need for
the basement. The asking price for the Orange Julius Building is $1.6 million. The City
has appraised the property at $1.4 million. In order for the City to purchase the property,
the Foundation will contribute the additional $200,000 required.
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By eliminating the basement, the cost of renovating the theater is estimated to be
$4.3 million. Details of the cost estimate are contained in the Appendices.
F:WmKAWS3 M�N mmNR nU Found=n'WW3 FN 33 Aa 19
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TABLE 2
DIRECTORS AND OFFICERS,
BALBOA PERFORMING ARTS THEATER FOUNDATION
AND DIVAS SUPPORT GUILD
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Balboa Performing Arts Theater Foundation, Board of Directors, 2001 -2002
Dayna Pettit. President
Agent, Cannery Village Realty, Community Leader
Jo King, Secretary
Broker Associate, Prudential California Realty
Bill Wren, V .P. & CFO
Chevron Land & Development Co., Retired
Yaron Telem, Treasurer
President, AIKO Enterprises Co.
Ronald L. Baers, AIA
Architect, President, Planning & Urban Design
Resources Co.
Amy Larson
Educator, Actress, Financial Advisor
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Art Gronsky
Community Leader
Bart Hackley
CPA, President, Teton Valley Country Club
Stanley J. Katka
Executive, City National Bank
Riki Kucheck
Professor of Mathematics, Orange Coast College
Terry Markowitz
President, A La Carte Gourmet Restaurant
& Catering
Andrew Youngquist
CEO and Chairman, ALY Construction Co.
Divas Support Guild, Board
of Directors, 2001 -2002
Eve Komyei
Joanne Pavia
Producer
Assistant Producer
Peggy Whitehead
VP /Director of Casting
Mitzi Wells
Nancy Lynn Olson
VP/Director of Community Relations
Treasurer
SP Callaway
Secretary
Sue Cannon
Past President
Patti Tomaselli
Past President
Debbie Newmeyer
Co- Director of Act I
Debbie Schweickert
Co- Director of Act I
Joan Bernard
Co- Director of Act II
Marjorie Powers
Co- Director of Act II
Darby Manclark
Co- Director of Act III
Carol Durham
Co- Director of Act III
Nancy Irvine
Co- Director of Act III
Denice Mock
Co- Director of Act III
Carleen Brennan
Stage Manager
Carmen Christy
Sally Hackley
Stage Manager
Stage Manager
Kathy Bambeck
Historian
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Linda Jensen
Lana Chandler
Historian
Playbill Editor /Public Relations
Fran Mulvania
Playbill Editor/Public Relations
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• Renovation Cost -Orange Julius Bldg.
In order to eliminate the basement, it will be necessary to modify the Orange Julius
Building. The changes required will be to construct access to the theater, build out the
restrooms and other facilities, and separate the electrical services. To provide maximum
flexibility, the theater, the modified portion of the Orange Julius Building, and the
remaining two - thirds of the Orange Julius Building, each will have its own electrical
service and separate walls, to facilitate future subleasing. The construction cost to
accomplish these changes is $300,000. Refer to the Appendices for details of the
estimate. Not included in this cost estimate is the cost of new restrooms for the Orange
Julius Building and modifications to one of the existing apartments on the second floor.
Figure 7
Artist's Rendering — Balboa Performing Arts Theater
• Annual Operating Costs
Annual operating costs can be broken down into three main categories: Programming,
which includes artist's fees, arts education, and programming business expenses;
Fundraising; and General and Administrative costs. The Foundation operates in
accordance with an annual budget which is approved by the Board of Directors. Monthly
cost reports are prepared and reviewed by the Chief Financial Officer. In order to keep
programs affordable to as a wide an audience within Orange County as possible, program
costs are maintained at a competitive level. The Foundation also is committed to support
various arts education activities in the local community. As a result of these decisions by
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the Foundation, operating revenues alone are inadequate to cover operating expenses.
The deficit (around 20 %) is supplied by unrestricted contributions obtained through the
DIVAS Support Guild and fundraising events. While this is typical for small regional
theaters, the Foundation has a long -term goal of making the Theater completely self-
supporting through the establishment of an endowment fund which will generate
revenues equal to the additional 20% of costs not covered by program revenues.
Supporting details concerning historical and projected operating costs are found in the
Appendices.
• Cash Flow Analysis
A month -by -month cash flow analysis has been made for calendar year 2002, and
through the end of construction. This analysis assumes that the Orange Julius acquisition
proceeds on schedule and that the Phase 1 renovation begins when sufficient funds are
available to complete the building shell. Phase 2 will start when funds are available to
complete the Theater. Fund raising contributions are included, using estimates based on
past historical performance. The rate of expenditures for construction are based on the
cash flow needs of the Phased approach, to keep the analysis conservative. The schedules
are included in the Appendix.
• Return of Capital
fThe
City has invested $480,000 to purchase the original Theater building. In addition,
this plan requires the city of Newport Beach to invest an additional $1.4 million dollars
to purchase the Orange Julius Building for lease -back to the Foundation. This will make
the City's total investment in the project equal to $1.88 million. The Foundation will
contribute $200,000 to the purchase price of the Orange Julius Building. Furthermore,
the Foundation plans to spend $4 million renovating and outfitting the theater and an
additional $300,000 upgrading the Orange Julius Building. At the conclusion of the
construction program, the City will own two properties with a market value of
approximately $3 million: $1.5 for the Orange Julius Building and $1.5 for the Theater
valued as a theater.
If the City sells the eastern two- thirds of the Orange Julius Building for $1.0 million, its
total investment would be reduced to $880,000 on property having a market value of
$2.0 million.
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If for some unforeseeable reason the Theater does not make it, the Orange Julius
Building can be sold as a stand -alone facility, and the Theater can be converted to a
commercial use. At that time the City would have two properties valued at $1.8 million;
the westerly one -third for the Orange Julius Building valued at $0.5 million and the
Theater valued as having a commercial use at $1.3 million. The bottom line is, that if for
some reason the theater does not make it, the $1.8 million market value of the properties
owned by the City, will be $920,000 greater than its $880,000 investment.
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Assumptions for this economic valuation, which are based on current trends in land,
theater, and retail costs in the Newport Beach area, are as follows:
Theater Land Value in 1998
Building Value in 1998
Purchase Price
Land Value Today (5% /year escalation)
Building Value Today
Market Value of Reconstructed Theater with
Seats and Fixtures ($230 SF)
Cost to Remove Seats and Convert to
Commercial Use ($30 SF)
Value of Theater as Commercial Use
Rental Income: Retail 6,500 SF @ $2 SF
Estimated Expenses
Net Operating Income
Estimated Value @ A 9.0% Capitalization
• Contingency Plan
$400,000
80,000
$480,000
$500,000
Nil
$1,500,000
$200,000
$156,000 /yr
32,000
$124,000 /yr
$1,377,000
The construction cost estimates carry allowances for construction cost contingencies
which are typical for this type of project. There is inherent contingency in the operating
expense estimates in that operations can be scaled back (within limits) depending on the
revenues being realized.
The ultimate contingency takes into consideration that, for some unforeseen reason, the
theater is deemed to be a non - viable operation. In this case the stadium seating would be
removed and the building converted to a retail or commercial facility. The building
(along with the adjacent Orange Julius structure) could then be leased or sold. If the
properties were sold, the City of Newport Beach would realize a capital gain as described
above. If the Theater building was converted to commercial use and leased, it alone
would generate $156,000 in annual rents.
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)
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• Constriction Schedule
Construction will require 13.5 months if performed continuously as a single project, but
it will be phased as funding becomes available. In this case, the work will be divided into
three phases:
Phase 1: Building Shell: Complete additional demolition as required, secure the building
and make weather -tight with roof, walls, and a flat floor.
Phase 2: Building Finishes: Install stadium seating and other tenant improvements
FYm�e`E5[Qmnant8ehm Nft.h8 R ih ,Pountleb,VAF ft. Rah s0 22
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• Risk Management Plan
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The Foundation is committed to the Theater Renovation Project, and enjoys a broad base
of community support. Since over $2 million has already been raised, the Foundation's
Board is confident it can find sources for the required funds. This risk can be mitigated,
however, by the inherent value of the properties. In the event that the project does not go
forward, the buildings are located in a desirable location and have considerable market
value.
Construction cost overruns are not likely given the extent of preliminary engineering and
building demolition and testing which have been performed. In addition, elimination of
the basement greatly simplifies the construction process and eliminates a major area of
potential uncertainty. The construction cost estimates carry line item contingencies to
cover possible unforeseen conditions likely to arise in the course of construction. These
average 6.5% of the construction cost estimate and are adequate for this project.
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. Emphasis can be shifted
from performing arts to cinema or outside production companies to further balance costs.
The entertainment market is emerging from a period of retrenchment brought about by
the recession and over - construction. 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 stadium seating. At the same time as the
entertainment sector is demonstrating renewed vitality, 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
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• Constriction Schedule
Construction will require 13.5 months if performed continuously as a single project, but
it will be phased as funding becomes available. In this case, the work will be divided into
three phases:
Phase 1: Building Shell: Complete additional demolition as required, secure the building
and make weather -tight with roof, walls, and a flat floor.
Phase 2: Building Finishes: Install stadium seating and other tenant improvements
FYm�e`E5[Qmnant8ehm Nft.h8 R ih ,Pountleb,VAF ft. Rah s0 22
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Phase 3: Modify Orange Julius Building
In this scenario, construction would not be started on Phase 1 until the Foundation had
$2,030,000 in the bank. This breaks downs as follows:
rCost of the Theater Shell Without the Basement $1,510,000
Cost of the Orange Julius Building Separation and Tenant 300,000
Improvements(')
Operating Loss During Construction 70,000
One Year's Operating Loss While Soliciting Funds to Complete the 150,000
Theater if Necessary
$2,030,000
This (Phase 3) can be done in the first phase or delayed. In any event, the money must be set
aside from the beginning to ensure that the building will be separated so the easterly two- thirds
can be sold.
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Phase 2 would not be started until an additional $3,440,000 had been raised. This breaks
down as follows:
Cost to Complete the Theater $2,850,000
Operating Loss During Construction 90,000
First Season's Operating Deficit 200,000
Contingency 300,000
$3,440,000
A detailed construction schedule is shown in the Appendices.
• Operational Milestones
Key milestones in the reconstruction of the Balboa Theater are as follows:
• March, 2002: Approval of revised business plan
• May, 2002: Acquisition of the Orange Julius Building
• July, 2002: Revised Plans to City
• September, 2002: City Approves Plans
• TBD: Raise an additional $1.7 million
• TBD + 1 month: Notice to Proceed
• TBD + 2 months: Initiate Phase 1 construction
• TBD + 5 months: Initiate Phase 2 construction
• TBD + 5 months: Initiate Phase 3 construction
• TBD + 3.5 months: 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 on -going
support for the Theater's activities.
Fh®n Tmmnc PM ngA Th., FuuMU ,n PARS %,R. a Nd A.
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APPENDICES
'
A.
Evidence of Community Support (letters)
B.
Curricula Vitae -Key Personnel
C.
Construction Schedules
D.
Financial Schedules
• Table DI: Three Year Profit and Loss Forecast and Assumptions
• Table D2: Construction Cost Estimate — Theater Renovation and Orange Julius
Bldg. Renovation
• Table D3: Cash Flow Projections
• Table D4: Historical Data: sources and uses of funds
• Table D5: Six -Month Actuals: Income and Costs
• Table D6: FY 2001 -2002 Budget Methodology and Assumptions
E.
BT -2000 Donors
4wuntl5031eMC8eEOa Fe mng ft nMw FounESOnWAT Set Phn AwB W-0 dw
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APPENDIX A
1 Evidence of Community Support
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IMarch 22, 2002
400 Main Street, Balboa, CA 92661 9491673 -5245
FAX 9491673 -8340 • www.catalinainfo.com
iTo: Balboa Theater Foundation
We here at the Balboa Pavilion would like to express our support for the Balboa Theater
Foundation. The theater will be a beautiful addition to our downtown area. In addition, we
believe that it will not only bring needed funds to Balboa but will also attract desirable visitors to
this area yearround. We have watched the Foundation from the beginning as it has struggled to
overcome the many hurtles in its path to complete this project. I truly believe this theater is a
marvelous addition and an integral part of the revitalization of Balboa. We eagerly await the first
performance at our new theater.
Bob Black
' Catalina Passenger Service, Inc.
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(hUDY5
Doug Cavanaugh
' President/CEO
Direct Line: (949) 644 -7829 ext. 104
email: rubyman®rubys.com
Re: Balboa Theatre Project
Dear Mayor Ridgeway and Council Members:
The Ruby Restaurant Group wholeheartedly supports the Balboa Theatre Project. We feel
that the theatre's renovation and opening would be an essential element in the downtown
revitalization.
' We are also in favor of the City of Newport Beach acquiring the Orange Julius building as
an important part of the expansion project.
' The revitalization will certainly benefit the residents as well as the merchants of the Balboa
Peninsula. Thank you for your consideration.
Sincerely,
4402
Doug Cavanaugh
u
1 660 Newport Center Drive, Butte 650 • Newport Beach, CA 92660
(949) 644 -7829 • FAX (949) 644 -4625 • www.rubys.com
March 22, 2002
'
Mayor Tod Ridgeway
City Council Members
City of Newport Beach
'
3300 Newport Boulevard
Newport Beach, CA 92663
Direct Line: (949) 644 -7829 ext. 104
email: rubyman®rubys.com
Re: Balboa Theatre Project
Dear Mayor Ridgeway and Council Members:
The Ruby Restaurant Group wholeheartedly supports the Balboa Theatre Project. We feel
that the theatre's renovation and opening would be an essential element in the downtown
revitalization.
' We are also in favor of the City of Newport Beach acquiring the Orange Julius building as
an important part of the expansion project.
' The revitalization will certainly benefit the residents as well as the merchants of the Balboa
Peninsula. Thank you for your consideration.
Sincerely,
4402
Doug Cavanaugh
u
1 660 Newport Center Drive, Butte 650 • Newport Beach, CA 92660
(949) 644 -7829 • FAX (949) 644 -4625 • www.rubys.com
CJ
Balboa
Merchants(Owners
Association
Nothing has stopped the dedicated Balboa Performing Arts Theater
Foundation founded in 1996 from moving forward with their plans to
reopen the Balboa Village.
' Sincerely,
Balboa Merchants Owners Association
3/25/02
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Mayor Tod Ridgeway
City Council of Newport Beach
Re: Balboa Theater, purchase of Orange Julius Building
Dayna Pettit, Cannery Village Realty
The Balboa Merchants Owners Association is in favor of the purchase of
the Orange Julius building. We understand it is a vital factor in the
restoration of the historic theater. It will reduce a major expenditure of
the restoration process helping expedite the theaters' opening.
The Balboa Theater is a unique gem -a community icon. It has been
closed far too long. This theater is not just an Orange County
Theater ... when it opens people from all over the world who have
vacationed here will flock to Balboa.
Nothing has stopped the dedicated Balboa Performing Arts Theater
Foundation founded in 1996 from moving forward with their plans to
reopen the Balboa Village.
' Sincerely,
Balboa Merchants Owners Association
P.O. Box 840 Balboa, CA., 92661
Rnllinp P,t+ tltr CP!? - 4 INnt'Idprfl"l Plnc-.e to RP!
Gay Wassail- Kelly, President, Balboa Beacon News
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Penny Rodheim, V -P, Balboa Boat Rentals
Bob Black. Sec /Treas., Catalina Flyer
Patrick Moore, Balboa Fun Zone Rides
Dayna Pettit, Cannery Village Realty
Dave Walker, Habour House Coffee (out of town at time of polling)
Butch Wilson, Balboa Saloon
Scott St. John, Balboa Market
Ben Swenson, Newport Landing Restaurant
P.O. Box 840 Balboa, CA., 92661
Rnllinp P,t+ tltr CP!? - 4 INnt'Idprfl"l Plnc-.e to RP!
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March 21, 2002
Newport Beach City Council
3300 Newport Blvd.
Newport Beach, CA
The Honorable Mayor Ridgeway and
City Council Members:
BJ's is proud to have been in business on the peninsula since 1979. We always have been
and continue to be a big supporter of the Balboa Theater Project. The realization of this
restoration effort would be beneficial to all businesses in the village and draw renewed
community interest toward this area.
Acquiring the Orange Julius building as part of the expansion project would make this an
even more attractive venue.
Thank you for your consideration.
Sincerely,
Rob DeLiema
Vice President
BJ's Restaurants '
CHICAGO PIZZA 81 BREWERY, INC.
16162 BEACH BOULEVARD, SUITE 100 • HUNTINGTON BEACH, CA 02647
TELEPHONE 714.848.2747 FAX 714.848.5587
r
N L I HAND DELIVERED
CONSTRUCTION, INC.
' Builder of Product and People
March 20, 2002
Ms. Dayna Pettit
BALBOA THEATRE PERFORMING ARTS FOUNDATION
707 East Balboa Blvd.
Newport Beach, CA 92661
Dear Ms. Pettit:
' I am writing to confirm my enthusiastic support for the Balboa Theatre project. This is the
perfect opportunity for ALY Construction Inc. to play a leading role as a contributor to the
Balboa Theatre project. I feel our contribution will help expand an interest in the arts in your
community.
I will provide some publicity through Hahn Communications describing the activities at the
Performing Arts Foundation.
IWe are excited and anticipate moving forward soon with the Balboa Theatre project.
Sincer_cly°
' CEO & Chai
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Andrew L Youngquist Construction, Inc
275 E. Baker Street, Costa Mesa, CA 92626 • 949/629.4300 • Fax 949/629.4310 • www.birtcherconst.com
CA LIC #738757 -B
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-00600 97777
O IV T _H E S A N D A T N E R+' F O R T
' Respectfq? .-
' Michel Pourmussa
Owner
]Cq ..1a r, $cr:: • Bv'Joa, Cali[oma 9266: • ( 714; C75 -3412
Newport Beach City Counsel
3300 Newport Blvd.
Newport Beach. California
March 2l.- 2002
'
Dear Counsel Members:
This letter shall confirm that we strongly support the Balboa Theatre Project. We have
been working cooperatively with the foundation for the last several years and we feel that
the Balboa Inn and it's planned renovation can be a positive support for the theatre by
offering the needed food, beverage and lodging facilities.
'
Furthermore, we feel that the renovation of the theatre will be a great catalyst for
revitalizing the Balboa Village and the mix of related businesses in the vicinity.
'
4Ve also support the Balboa Theatre rehabilitation and the acquisition o£ the Orange
Julius building by the City of Nev port Beach to be a part of the expansior_ of the prefect.
This will add significantly to the revitalization of the Balboa Peninsula and will bring us
'is le step closer io finding a destination point in this area.
'We
feel this whole project will benefit the merchants and the residents ofthe Balboa
Peninsula in a positive manner.
' Respectfq? .-
' Michel Pourmussa
Owner
]Cq ..1a r, $cr:: • Bv'Joa, Cali[oma 9266: • ( 714; C75 -3412
NEWPORT BEACH
Ffue FESTIVAL
De .r Mr. 'Ma \'or and Me..ber: o; ti:e City Council.
'
"The Balboa Theater be
I'm wt ::tiP _ in suppon- o? the Balboa theater project.. would a
wc=der:u'. addit :on to the Balboa Peninsula and The city as a whole. For -lie past three
'
ewrs the \eupor-. Beach 1=ihr Festival Sas worked closely pith several members of the
Board o_* Directors of the Balboa Theater to promote the idea and concept of a renovated
facil:ty. Joe Kitt, currentiv sen °es on both of our boards as a valuable conduit for
inforrna': _-n a nL anaerst:_dinz On ^e::alf of the festival_ staid i wish to encourage you to
surpor, the on_oing effo 'E of he Ba'_boa Theater foundation. Thank you for Four time
and Co- SiCeratlon-
t�iP.CC'Yl�,
Uragg �da�yetrk
Execir% e Director
?•eupar Beach Fiu? Fcsnv::l
LJ
' 4540 CAMPUS DRIVE • NEWPCRT BEACH, CA 92660 T. (949) 253 -2880 • F. (949) 253 -2881
_ .:: Y.'.NE^'?CRTBEhCr:FLMFES':COM • NbFF +�F:.CSELLN� ,
.Event P.lannwg Q
r_S
Z v BAIBOA PAVIUON offf�fsoo����
CATAL /NA LVEq
I = PO: Boxs10 - '. fflfff feo� ®e
�M'rAOe�►7a�n�Street
t —• jQbo Cabfornia 92661
'.
IF
C.4TAL/N.4{YE
.�y.
a?aT.•c;N84:=^+a
March 22. 2002
To: Balboa Theater Foundation
We here at the Balboa Pavilion would like to express our support for the Balboa Theater
Foundation. The theater will be a beautiful addition to our downtown area. In addition, we
believe that it will not only brine needed funds to Balboa but will also attract desirable visitors to
this area yearround. We have watched the Foundation from the beginning as it has struggled to
overcome the many hurtles in its path to complete this project. I truly believe this theater is a
marvelous addition and an integral part of the revitalization of Balboa. N e eagerly await the first
performance at our neNN theater.
Bill Caouette
Tale of the Whale Restaurant
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Balboa Pavilion Company
400 Main Street, Balboa, Calif. 92661 (949) 675 -1905
March 22, 2002
To: Balboa Theater Foundation
We here at the Balboa Pavilion would like to express our support for the Balboa Theater
Foundation. The theater will be a beautiful addition to our downtown area. In addition, we
believe that it will not only bring needed funds to Balboa but will also attract desirable visitors to
this area yearround. We have watched the Foundation from the beginning as it has struggled to
overcome the many hurtles in its path to complete this project. I truly believe this theater is a
marvelous addition and an integral part of the revitalization of Balboa. We eagerly await the first
performance at our new theater.
Bette Tozer
Balboa Pavilion Company
MARINE RECREATION CENTER
Catalina Passenger Service /Harbor Cruise /Sportfishinglrale of the Whale Restaurant/Banquet Facilities
'Mar 21 02 04 ;18p
Sent ay: Hs*;
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'vlarcb z 1, zoo'
uayna reny.z
9 -49723ea -41; Mar-2'-02 3:20PM;
i�tEWPORT LANDIN G
D3yna Pettj:
President
Balboa PeTMarnin Arts Theatre Fuundation
D= Dayna.
I just w'aated to let know 'now excited we here at Newport Landing are about :he
rtmoVduon altu Mu2eta11Ik of itn: Dall.va re,.,e.«. i u,t..>, ....it1 l.. � : : :....,..u;i. :., .....,,,.i,..
to the economy of our town. It should be a boon for mcrchan:s and restaurateurs mike.
We look forward to the business pre - theatre and post - theatre crowds will bring.
I speak for the owners and managers of NC'AT Tt Landing when I say you itat'c our fill
support for your project.. I wish you the best of luck_ and I look forwwd to being t`tere on
opening nigh.'
Warmest Regards,
Ben swensor. _
General Manager
Ne%Tnrt Landirg Restaurant
HESTAtiRA \T- so :5.�abrxp(es VtwwrAce_.`..0 :19?Wil . f4u).e ". -'_7:: . ?t.:!y49'ib'i -;155'
CORPORATE OFFICES - ^usz G ill cue .wence. Suit =CC.. ltvint. C,1 .,W)) :n
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Pv times Lo�kF
o -
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All Boats
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Certified by:
Deep Sea
Coast Guard
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Sportfishing
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Safety First
Private
Fishing
Charters
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Yacht
Charters
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' Whale Watch
Trips
Jan. - Mar.
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All Boats
Inspected and
Certified by:
1 U.S.
Coast Guard
'
Safety First
' Complete
Tackle Shop
Sportfishing, Inc.
Located in the Historic Balboa Pavilion"
400 Main St., Balboa, CA 92661 (949) 673 -1434
www.davevslocker.com
DOUG FERRELL / MIKE BULLARD / DON BROCKMAN - Owners
March 22, 2002
To: Balboa Theater Foundation
We here at the Balboa Pavilion would like to express our support for the Balboa
Theater Foundation. The theater will be a beautiful addition to our downtown
area. In addition, we believe that it will not only bring needed funds to Balboa but
will also attract desirable visitors to this area yearround. We have watched the
Foundation from the beginning as it has struggled to overcome the many hurtles
in its path to complete this project. I truly believe this theater is a marvelous
addition and an integral part of the revitalization of Balboa. We eagerly await the
first performance at our new theater.
�I / � f .
Norr s app'
Davey,s Locker portfishing
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' March 18, 2002
Ms. Dayna Pettit
President
Balboa Theater Performing Arts Foundation
707 East Balboa Blvd.
Newport Beach, CA 92661
Dear Ms. Pettit:
' I am writing to confirm my enthusiastic support for the Balboa Theater project. I first visited the theater in the 1950s, and
then later had an opportunity to take my children there is the 1970s when "The Rocky Horror Picture Show" played at
midnight on a Saturday eve. Since that time I have relocated to the Balboa peninsula. As a resident, I can see the great
' value the theater will bring to our community. The renovation of the theater will also support the $8 million investment in
improvements the City of Newport Beach is making on the peninsula.
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I have committed the full resources of our fine to help with designing a new and improved Balboa theater. We are
dedicated to the challenge of making it a jewel of a performing arts venue. We are performing the work at something less
than our cost. We consider the profit on services which we are waiving a contribution to a project that is vital to the
community. The staff we have assigned to project are enthused with it and have contributed many hours of personal time
as well.
As I have told you previously, you can count on me for any volunteer support you require. I am happy to continue my
efforts with fundraising, and Nancy and I will continue to support the Foundation financially to the extent we are able to do
so as well.
I know the project will be successful and am grateful that we have an opportunity to be part of it.
Sincerely,
c
Craig B. Smith, hD.
President
DMJMH +N
999 Town & Country Road • Orange • California 92868 " (714) 567 -2400
.1 03 /18/2002 01:29 FAS 19496730838 BALBOA THEATRE Ii uI
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December 17, 1998
Dayna Pettit, President
Balboa Performing Arts Theater Foundation
707 East Balboa Boulevard
Balboa, CA, 92661
Dear Dayna:
The Balboa Peninsula Point Association is pleased to help
support your efforts to bring our landmark Balboa Theater back
to life.
Enclosed is our donation in the amount of $1,000.
Our Point dwellers are extremely impressed With the hard -
earned progress your Founders and Board of Directors have made
to date. We stand and applaud you.
Best wishes for continued success,
i
Ralph Bernard
President
KENNETH A. RUBY 11845 W. OLYMPIC BLVD., SUITE 1200, WEST TOWER, LOS ANGELES, CA 90064 310/312.8600
6`4V9 /O
4LL / Il
Nov 2 $ .9
& L `
ES4arE
A/-� N ovember 22, 1999 ,
1.
Mr. Stanley Kaska £
Executive VP/Manager
City National Bank
9701 Wilshire Blvd. Suite 600
Beverly Hills, CA 90212
Dear Stan,
It was nice seeing you and Gigi yesterday, and hearing the
good news about the $1,000,000 contribution to the
Balboa Performing Arts Theater and Foundation. I am
enclosing the balance of my pledge, a check for $10,000,
which, together my previous contribution makes a total of
$25,000.
' Please keep me posted as to the progress of the
construction of the theater.
Regards,
Ken Ruby
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1 THE SEGERSTROM FOUNDATION
3315 FAINVIEI% ROAD • COSTA MESA, CALIFORNIA 92626. (714) 546 -0110
j
November 27, 2000
Ms. Michele Roberge
' Executive Director
Balboa Performing Arts Theatre Foundation
707 E. Balboa Blvd
1 Balboa, CA 92661
Dear Ms. Roberge,
On behalf of Henry T. Segerstrom and the Segerstrom Foundation, I am pleased to
enclose a check in the amount of $5,000 designated for the Balboa Performing Arts
Theatre Foundation. Mr. Segerstrom has personally selected the Balboa Performing Arts
Theatre Foundation as the recipient of this grant as part of the Segerstrom Foundation's
Director's Grant Program.
Very truly yours,
r n�
Nancy W
Vice President, Grants
Enclosure
cc: Henry T. Segerstrom
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THE RO\BI'RGVI AGF\CY. I \C.
245 Fischer Avenue, Building B -4
Costa Mesa, California 92626
phone: 714 - 556 - 4365. fax: 714 - 556 -0817
internet: www.roxburgh.com . e -mail: info ®roxburgh.com
iNTEGEATEG
COMMVN WIONS
Mrs. Dayna Petit
Chairman
Balboa Performing Arks Theatre Foundation
'
P.O. Box 752
Balboa, CA 92661
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THE RO\BI'RGVI AGF\CY. I \C.
245 Fischer Avenue, Building B -4
Costa Mesa, California 92626
phone: 714 - 556 - 4365. fax: 714 - 556 -0817
internet: www.roxburgh.com . e -mail: info ®roxburgh.com
iNTEGEATEG
COMMVN WIONS
Dear Dayna:
On behalf of Mark and I, and our staff and clients, we are pleased to send the
'
enclosed check for $2,500 in support of the restoration of the Balboa Theatre.
We are grateful to you and all of your devoted volunteers for the incredible job
you have done to bring this project to a reality.
Warmest regards to you and Michelle and the entire team for a joyous holiday.
Most sincerely,
Claudia D. Roxburgh
1
THE RO\BI'RGVI AGF\CY. I \C.
245 Fischer Avenue, Building B -4
Costa Mesa, California 92626
phone: 714 - 556 - 4365. fax: 714 - 556 -0817
internet: www.roxburgh.com . e -mail: info ®roxburgh.com
iNTEGEATEG
COMMVN WIONS
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Ford Motor Company
Western Regional Public Affairs Office
December 22, 2000
Michele Roberge
Executive Director
The Balboa Performing Arts Theater Foundation
707 East Balboa Blvd.
Balboa, CA 92661
Dear Michele:
2099 S. State College Blvd., #620
P.O. Box 66026
Anaheim, California 92816 -6026 USA
714 939.3698
Fax: 714 939 -3688
On behalf of all Ford Motor Company employees in Orange County, I am pleased to forward
you the enclosed Ford Motor Company Fund check in the amount of $5,000 in support of the
Balboa Performing Arts Theater Capital Campaign.
Ford Motor Company is very proud to contribute to this effort to save this historic theater and
revitalize the Balboa Peninsula. We applaud your efforts and look forward to the completion
and Grand Reopening of the Balboa Theater.
We also send you our best wishes for great holiday season and successful 2001.
Sincerely,
'0 d�
ob Tarlton
Chairman
Ford Motor Company Community Relations Committee
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encl
THE IRVINE COMPANY
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Carol A. Hoffman
Vice President
I
I am pleased to enclose a check for $5,000 to help with the renovation of the historic Balboa
Theater.
We here at The Irvine Company wish you much success in raising the $3M you need to complete
the renovation of the grand old theater.
ISincerely,
Carol Hoffman
CH:pm
Enclosure
550 Newport Center Drive, P.O. Box 6370, Newport Beach, California 92656-6370 • (949) 720 -2303
June 19, 2000
Michele Roberge, Executive Director
r,
The Balboa Performing Arts Theater Foundation
707 East Balboa Blvd.
P. O. Box 752
Balboa, CA 92661
Re: Renovation Capital Campaign
�(
■
Dear Michele:
I am pleased to enclose a check for $5,000 to help with the renovation of the historic Balboa
Theater.
We here at The Irvine Company wish you much success in raising the $3M you need to complete
the renovation of the grand old theater.
ISincerely,
Carol Hoffman
CH:pm
Enclosure
550 Newport Center Drive, P.O. Box 6370, Newport Beach, California 92656-6370 • (949) 720 -2303
!1
Tod White
9920 East Balboa Blvd.
Balboa, California 92.661
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March 18, 2002
Mr. Bill Wren
Chief Financial Officer
The Balboa Theater
707 East Balboa Blvd.
Balboa, CA 92661
Dear Bill,
I'm writing to congratulate you and the Theater Board of Directors on your tenacious,
competent efforts to revive the theater. Despite more than your share of unanticipated
barriers, Board members have hung in there. Thank you!
What a valuable asset it will be for the peninsula and the whole city when the building is
done and the programming begins. We have given financial support to your efforts
because we share the dream so well articulated by the Board for a year round, diverse
program of theater, dance, classic movies, lectures, music, etc. —the full gamut of cultural
and entertainment activities for children, families and adults.
It's wonderful that the City of Newport has been so supportive of this project. Certainly
the business district needs the shot in the arm that the New and Dynamic Balboa Theater
will provide.
1 S* rely
Tod and Linda ite
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APPENDIX B
Resumes of Board Members
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APPENDIX B
Curricula Vitae -Key personnel
BALBOA PERFORMING ARTS THEATER FOUNDATION
Board of Directors, 2001 -2002
The Foundation is fortunate to have a strong Board of experienced, local, business and
entertainment people to establish policy and guide its operations. Board members include
bankers, real estate specialists, certified public accountants, professors and teachers,
contractors and architects, community leaders, developers, business men and business
I women, artists and actresses —a diverse, dedicated, and thoroughly committed group of
community leaders!
Dayna Pettit, President: Dayna has lived on the Balboa Peninsula for nearly 30 years.
She has been active in the economic development of Balboa and has received numerous
awards for community service including the Sunshine Award for dedicated service to
Newport Beach in 1995 and Citizen of the Year by NHA C of C in 2001. She formed the
Balboa Merchants and Owners Association ten years ago and served as President three
years; she founded the Balboa performing Arts Theater Foundation eight years ago and
has served as its President since inception. In her professional life, she is an agent with
the Cannery Village Realty.
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Jo King, Secretary: Jo is a 15 -year resident of the Balboa Peninsula and a member of
the Peninsula Point Homeowner's Association. She has served as Secretary of the
Foundation's Board continuously since 1996. A graduate of Stanford University, she has
continued her association with the University through various alumni activities, including
serving as President of the Orange County Stanford Association. Jo is active in many
community organizations, including the Newport Beach Library Foundation, the Newport
Beach Film Festival Board, and the Orange County Museum of Art. She has been
honored by The Prudential Foundation with the "Community Champions Award" in
recognition of outstanding volunteer services for the past two years. She is a Broker-
,
Associate of Prudential California Realty.
William (Bill) Wren, V.P. & CFO: Bill and Joan Wren have lived in Balboa for over
30 years. After receiving his Master's Degree in business from Stanford University, Bill
spent many years in the employment of Chevron Land & Development Co. Upon retiring
from Chevron, he formed the William A. Wren Company, which consults with
developers regarding the entitlements process throughout Orange and San Bernardino
counties. Bill has served as President of the Balboa Peninsula Point Association three
times, and was appointed by the Newport Beach City Council to the Balboa Peninsula
Planning Committee.
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1 Yaron Telem, Treasurer: Mr. Telem is President of AIKO Enterprises Co., an
accounting firm specializing in commercial and real estate development clients. With a
background in accounting and a degree from California State College, Dominguez Hills,
Mr. Telem is well qualified to serve as the Foundation's Treasurer, a position he has held
since the Foundation was organized in 1996. Mr. Telem and his family have been long-
term supporters of the performing arts in Orange. He owns property in Newport Beach.
Ronald L. Baers, AIA, Director: Ron Baers is President of Planning & Urban Design
Resources Co. He has over 30 years of experience in architecture, planning, and urban
design in California and Hawaii, where he is a recognized leader in his field. He is
founding member and chair of the AIA Urban Design Committee. His work includes
historic preservation planning, recreation and tourism planning, and large scale mixed use
developments. He has lectured on or taught urban design at UCI, the University of
Hawaii, and Drexel University.
Amy Larson, Director: After graduating Cum Laude with a BA in Theater and BS in
Secondary Education from Bowling Green State University, Ohio, Ms. Larson taught
high school speech and English and served as drama coach for several years in southern
Ohio. She is a founding member of the Alternative Repertory Theater. As an actress, she
has appeared onstage in Los Angeles, Long Beach, San Francisco, and Hawaii. She
received a Best Actress nomination for her portrayal of Camelle in Miss Firecracker
Contest at Newport Theater Arts. She has been associated with Morgan Stanley Dean
Witter, a full service financial firm. She serves as Vice Chair on the Board of Directors
with Leadership Tomorrow, and is actively involved with several other community
organizations.
Art Gronsky, Director: A California native and Balboa peninsula resident since the age
of eight, Art flew for the Navy in W.W.II and studied at UCLA and Berkeley. He owned
the Balboa Pavilion from 1947 -60. From 1963 to 1983, he operated "Art's Landing," now
remodeled and known as Newport Landing. He received the Citizen of the Year award in
1992 and the Silver Anchor Award. He served as past president of the Newport Harbor
Nautical Museum and was instrumental in its move to its new home on the Reuben E.
Lee. Most importantly, Art knows all the best fishing spots in Newport Bay!
Bart Hackley, Director: Bart Hackley has an MBA in International Business from
Pepperdine University. He is a Certified Public Accountant, and has served as Founder,
Officer, Director, and major shareholder in a number of banks, corporations, and a major
foundation. He is currently a Director of Pepperdine University. He brings a wealth of
knowledge and experience in syndications, non - profit organizations, taxes, and business
management to the Foundation Board. He resides in Newport Beach.
I
Stanley I Kafka, Director: Mr. Kafka attended the University of Southern California
where he received BS degrees with majors in Finance and Real Estate. He then received a
MBA degree Cum Laude from Pepperdine University. He has over 30 years of
experience in the commercial real estate and banking business. He is currently an
executive with City National Bank in the Real Estate Group. He is active in many
community and charitable organizations.
Riki Wendy S. Kucheck, Director: Ricki Kucheck is a Professor of Mathematics at
Orange Coast College. She has several degrees, including a MA in mathematics from
California State University at Fullerton. She has been very active in the Academic Senate
at both the state and local levels. As a volunteer at the Laguna Playhouse, she gained first
hand experience in the performing arts, from ticket sales in the box office to assistant
directing. She is active in other community organizations and also serves on the Board of
Leadership Tomorrow.
Terry Markowitz, Director: Terry attended Sarah Lawrence College in New York
where she was student body president and editor of the newspaper. Terry has had a long
association with theater and art. She wrote Broadway drama reviews for her newspaper,
acted professionally in summer stock in Denver, Colorado, and received her Masters
degree in Art from California State University at Long Beach. In 1986, she opened A La
Carte Gourmet, a gourmet takeout restaurant and caterer now available in two locations.
Andrew Youngquist, Director: Andy Youngquist is Chairman and CEO of ALY
Construction Co., a California General Building contractor that is licensed in 18 states.
Prior to the formation of ALY Construction, Andy was President of Birtcher
Construction, where he oversaw the construction of more than 30,000,000 square feet of
commercial /industrial and tenant improvement projects. He developed and pioneered
numerous innovations in the movie theater business, including multi- screen film
complexes, new project delivery methods, stadium seating, and special techniques for
construction and renovation. In the last decade, he has been responsible for the
completion of over four million square feet of theater construction. He is co- inventor of a
patented system used for stadium seating in theaters and public assembly buildings. He is
a long -time resident of Newport Beach.
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APPENDIX C
f
Construction Schedules
1
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BALBOA THEATER RENOVATION
PHASE I - BUILDING DEMOLITION
Status Date: 08-Mar-02 Report Summary:
Job No..- 01-20-1068 TOTAL GROSS BILLING THIS MONTH 6
Original Budget; $382,403 TOTAL GROSS BILLINGS TO DATE $
Current Budget $382,403
Original Completion- 2 MONTHS
Current Completion: 2 MONTHS
Start Date. T.B.D.
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60.00%
70.00%
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0
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20.00%
10.00%
0.00%
6-ft -SCHED PROGRESS
$--ACTUAL PROGPESS
PAcMrm
0-00%
000%
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BALBOA THEATER RENOVATION
PHASE I
- BUILDING SHELL
Status Date:
08- Mar-02
Report Summary:
job No.:
01- 20.1068
TOTAL GROSS BILLING THIS MONTH 5
r�l!
Original Budget.
$1,127,050
TOTAL GROSS BILLINGS TO DATE $
Current Budd
$1,127,050
Oriiginal Completion:
45 MONTHS
Current Completion:
4.5 MONTHS
Start Date:
T.B.D.
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BALBOA THEATER RENOVATION
i
PHASE 2
- BUILDING FINISHES
Status Date:
08 -Mar -02
Report Summary:
job No.:
01 -20 -1068
TOTAL GROSS BILLING; THIS MONTH S
Original Budget:
$2,545,728
TOTAL GROSS BILLINGS TO DATE $
Current Budget:
$2,545,728
Original Completion:
4 MONTHS
Current Completion:
4 MONTHS
Start Date:
T.B.D.
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BALBOA
THEATER RENOVATION
PHASES
- BUILDING NEXT DOOR
Status Date.
08 -Mar-02
Report Summary:
Job No.:
01 -20 -1068
TOTAL GROSS BILLING: THIS MONTH $
Original Budget:
$301,829
TOTAL GROSS BILLINGS TO DATE $
'Current
Budget
Original Completion:
$301,829
3 MONTHS
Current Completion:
3 MONTHS
Start Date:
T.B.D.
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1
APPENDIX D
i Financial Schedules
,� ........................................................................................................................................ ...............................
I
Balboa Performing Arts Theater Foundation
Operating Activities
Three Year Revenue and Cost Forecast
Table D -1
Year 1
Year 2
Year 3
uring After
Foil
After
After
struct ion Completion
Completion
Completion
OPERATING ACTIVITIES
Income
Programming 15,000 294,000
382,000
441,000
Facility Services (Rentals & Concessions) 0 38,000
50,500
57,000
Unrestricted, Fundraising (1) 107,000 100,000
100,000
100,000
Interest (2) 3,000 3,000
3,000
3,000
125,000 435,000
535,500
601,000
Expenses
Programming 24,000 150,000
200,000
225,000
Fundraising,and Special Events 23,000 30,000
30,000
30,000
Capital /Endowment Campaign 24,000 0
0
0
General & Administration 172,000 455,000
489,500
498,000
'
243,000 635,000
719,500
753,000
Net Activity (3) (118,000) (200,000)
(152,000)
(184,000)
Number of annual performances (4) 4 100
150
150
Notes:
1) Fundraising Income includes income from support guild activities based on past performance. This line item does
not include program specific grants or annual fund activities. See note 3 below.
2) Interest is conservative estimated based $200K balance at current money market rates at publication.
3) The net activity deficit indicates the amount the Foundation will be required to raise each year through special
events, program underwriting, endowment interest, and annual fund drives.
4) Performances are projected to be 30% rental and 70% presented.
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Text C n.9
Aly BALBOA THEATRE RENOVATION IS-Mar-02
PRELIMINARY BUDGET RECAP
TOTAL AREA 9.486 sf
CONSTRUCTION( INC. FI BASEMENT 3.180 sf
BYBtl17' M PIbAU6t ll4d!°4101016 NO. OF SEATS 340 ea
DESCRIPTION
Phase 1
De nolttlon
-Ir-tht11
Phase 2
Finbhas
Phase 3
Bldg Neat Dr
Tool Cop
01415
Testin Ins cn SMalitai
535198
51084
so
$36262
01525
Int Finish SCS6o1din
000
$0
$22,000
01570
Pro' Traffic Regulation I Control
$53,240
S26,015
SO
$79.256
01720
Surve n
57590
s0
$0
$7590
02050
Buildln Demoli8on
$16500
$o
$19625
$38125
02140
DeAetert
$0
$0
Eo
SO
02150
Shonna 6 Udenbruiinib
SO
SO
s0
SO
02500
As hall
$o
$0
SO
SO
02520
Site Concrete
$10,375
SO
so
$10,375
02600
Site Under and
$28975
EO
SO
$28875
03300
Concrete - Slabs Fooling5 Decks
$181, 90
$0
$11.133
5192`23
03361
Shut Crete _
$20,663
$0
SO
S20,M
04200
Mm
$170171
$o
$48000
$228171
04500
Brick Verreer
_
$0
$o
$o
so
05100
_
SVWum) Steel
5187590
$196,685
$5,000
5389,275
05110
Seat installation (Labor Only)`_
_ _
- -�-
_$0
-_SO
0
$0
05700
Orramental Speamlass, _ _ -
$o
$60000
$o
E6000
06100
Rough Ca_ enty
$10000
ES�OOO
$10800
$25800
06200
Finish Qarpenity ___`_. -__
--
$0
SIS3,51-6
SO
153616
07100
Wale rig
EO
$0
53.900
$3900
07200
Insulation
Eo
E2 859
5450
__$3,404
07250
EMpmo In
$0
0
EO
SO
07420
07500
Manufacturer Metal Persia, - _ _
ROgfing
__
_
SO
_53,000_
_
SO
E3 W0.
_ $_42 205
SO_
$2,700
$44,905
07600
Sheet Metal
--
577,877
EO_
_E1: 500
_ $79.377
07920
Monshoe Control CaWkln9 -_
E60o
53,083
083
o80os
08310
DCOrs /Frames, Imwdvsle__.
Lw
Silaf_ng ACnustir: Door_- - -_
dweii Firecurtain_- _ _,,,,., _..___-
GlessBGOang ._ _
_-
_ -___.
_ - _
_._
$2500
.� SO
6,507
SOO
S3750
£32757
f0
$6600
08330
08800
___$0
;W 0000
$0
540000,
-....� _SO
E2B,138
$15,800
21,590
$9_
_E111964
EO
60
X21,590
$281, 36
$1. 72984
09200
09250
Plaster
._. _...._._
II _
_
525,200
09300
Cerec Tile Floor A Walls
n
_
E_0_
$44,197
f0-
___y_4197
09510.
Acoustical Ceilings _
$0_
47
$0
__$347
09520
09'
09680
Acoustical_ Panels 8 Curtain _ _
NardWgOtl Flooring _,. _ _
Rnllienl Flooring
_ _
_$0
_ EO
$_24,656_
$ZO U20
SO
$24,656
$20,020_
54641_
SO
50
$1867
$3�
09680
Ca)pet Floor ...___._.___....
- ....._......- _...._._.-
f0
330,570
f0
530 570
0%00
Painting
Wall Covenn9_ _ -_
_ -_ -_
37.50(
_S_0
_22640
$8,250
2625
$327`6fL
581250_
0%50
SO
70410
Poster Cases
$0
$o
so
So
10525
Fire Fx4n Wshers ^ - - -_ --
1300
$1800
$0
52100
10800
10999
TMlet ACCeaspms 7 Part -- -
MI3C. So9galtin .. _._
Foot Grills _
-'. -_
- -_ -
- _
EO
- -SO
$17 360
$0
1a 7.380_
$707 570_
_ 570]1870
50
12680
_ $250
S4,810
SO
$5060_,
14205
Eleuetor 8 Lifts _.
_
_
___
0
_$20750
7 310
52450
EO
EO
547 370
$23200_
15300
_
Fire Sprinklers _
15400
Plumbing ____ __,
__ 330610
$31080
$6000
$67690
__
15500
NVAC
-..
_ _ _
_
_
- -
515800
5253550
$18900
$288250_
(477,4_50_
16010
Elecincal(g!dg._On1y)__
Fxlgrior Neon B_SI9na9 ?. - -.
Conwnlcakon... -
Alarm &- DAFmfion System - -_ _-
General Conditions
Finl$ ressive Cleanin _
Permit t 8 Fees _
5143,675
$303575
w 000
18800
16700
16720
17000
50_
_ s0_-
SO
SO
�.._
_ _50.
SO_
so
SO
$0
_ _ _
,___$3.25.806
E1J_0
5116148
$78
�E520262_
$2333,_3
17230
58741
565
17910
$0
f0
18100
Subtotal
Cmfin a Contrecoes
6.50%
$1.391,202
590428
$2,346,293
$152,609
5278,184
$18,082
$4,015,679
9242937
17950
Subtotal
Insurance
2.00%
$1, 481,630
7824
52,498,802
8926
5296,266
55564
54,256,616
574750
17998
Sublotal
Fee
0.00%
$1, 509,454
$0
$2,545,728
SO
5301,829
$0
$4,333,366
$o
Total
E7, 509,454
$2,545,728
5$41,29
$6333,366
ALV OaabutlbnleNet>Q Ram Ppefatl
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Cost of Theater shell without a basement $1,510,000
Less cash available (3) 800,000
New capital needed to complete shell (3) $ 710,000
Includes costs of $302,000 for building separation and tenant improvements. See Preliminary
Budget Recap attached.
(2) Cash available
Current cash on hand
$1,200,000
NOTES TO TABLE D -2
200,000
BPATF
THEATER CONSTRUCTION COSTS WITHOUT A BASEMENT
200,000
-
AND BPATF CAPITAL REQUIREMENTS
$ 800,000
(3)
'
New Cost of Construction without a basement (1)
Add theater's first year's Net Operational Expense
$4,300,000
200,000
Less cash available (2)
800,000
New capital needed to open theater
$3,700,000
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Cost of Theater shell without a basement $1,510,000
Less cash available (3) 800,000
New capital needed to complete shell (3) $ 710,000
Includes costs of $302,000 for building separation and tenant improvements. See Preliminary
Budget Recap attached.
If�F b. MTrYrfa'diMTIYF .T"--
(2) Cash available
Current cash on hand
$1,200,000
Less cash to City for purchase
200,000
Less G &A during construction
200,000
Net cash available
$ 800,000
(3)
This is the logical holding point to allow time to raise additional
capital if needed to complete
the entire project.
If�F b. MTrYrfa'diMTIYF .T"--
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F
L
' Balboa Performing Arts Theater Foundation
Sources and Uses of Funds
'As of January 2002
Table D-4
In Thousands
Donations:
Net Activity Prior to 99/00 Fiscal Year 387
Donations and Interest Income - 99/00 fiscal year and after '• 1,680
Divas donations 99/00 fiscal year and after 115
Total Donations
I
2,182
981
1,201
Expenses (99/00 fiscal year and after)
Renovation Expenses:
Seismic Retrofitting and Engineering
173
Architecture and Theater Design
281
Construction Management
41
'
495
Programming Expenses (net investment in Sampler Series)
32
Fundraising:
Capital Campaign Consultant
36
Printed Materials
45
Newsletters
26
Other (meetings, donor receptions, ground breaking, etc.)
13
'
120
General and Administrative:
FT Salaries
155
'
PT Salaries
38
PR/Community Relations Consultant
33
Rent and Utilities
Taxes, Insurance, Fees and Permits
28
52
Computer Equipment and Office Supplies
12
Postage and Reprographics
8
'
Misc. (meetings, conferences, professional services)
8
334
'
Total Expenditures
Current Cash and Investment Balance
'
During this period the Foundation secured a long -tens no cost lease
for the $480K city owned building.
'
'• Includes net donations from special events
I
2,182
981
1,201
i
Balboa Performing Arts Theater Foundation
Statement of Activities - Summary
December 2001
Table D-5
December
Year to Date
Year to Date
Variance
Actual
Actual
Budget
(Unfavorable)
UNRESTRICTED ACTIVITY
'
Income
Programming
3,458
5,932
7,940
(2,008)
Facility Services
56
131
0
131
Fundraising
9,870
35,738
37,700
(1,962)
Interest
1,500
14,067
11,940
2,127
14,884
55,868
57,580
(1,712)
Expenses
Programming
4,293
11,559
12,900
1,341
'
Facility Services
0
0
0
0
Fundraising
147
35,708
46,446
10,738
General & Administration
12,138
78,857
95,332
16,475
16,578
126,124
154,678
28,554
Net Activity
(1,694)
(70,256)
(97,098)
26,842
TEMP. RESTRICTED ACTIVITY
Receipts
Capital Campaign
0
11,290
Pending
0
Pending
0
BT 2000
1,200
13,400
0
0
Best Seat in the House
0
0
0
0
Programming
0
1,700
0
0
1,200
26,390
0
0
Disbursements
'
Capital Outlay
4,185
73,499
0
0
Programming
0
0
0
0
4,185
73,499
0
0
(2,985)
(47,109)
0
0
PERMANENTLY RESTRICTED
Endowment Revenue
0
0
0
0
CASH SUMMARY
711101
Current Year
12131101
Beg Cash
Activity
Ending Cash
Unrestricted - Operating Fund
1,417,258
(70,256)
1,347,002
'
Temp. Rest. - Capital Campaign
(122,979)
(48,809)
(171,788)
Temp. Rest. - Preservation Fund
0
1,700
1,700
Penn. Rest. - Endowment
0
0
0
1,294,279
(117,365)
1,176,914
,A
Balboa Pertoming Arts Theater Foundation
Beg Cash
Activity
Statement of Activities, - Detail
Unrssbiled- Operating Fund
December 31, 2001 December
Year to Data Year to Date
131
Actual
Actual Budget
'
UNRESTRICTED ACTIVITY
56
131
Receipts
131
1,700
Programming
Perot. Rest - Endowment
Ticket Sales 3,458
5,791 7,790
0
Arts Education 0
141 150
11,465
3,458
5,932 7,940
Facility Services
Beg Cash
Activity
Ending Cash
Unrssbiled- Operating Fund
Concessions
56
131
0
131
(122,979)
(48,810)
56
131
0
131
1,700
Fundmishg
Perot. Rest - Endowment
0
0
0
General Fund
8,515
11,465
6,000
5,465
i
Dives (net)
855
3,556
10,000
(6,444
Program Underwriting
0
0
1.700
(1,700
Special Events
500
20,717
20,000
717
9,870
35,738
37,700
(1,962
'
mamas
1,500
14,067
11,940
2,127
Total Receipts
14,884
SS,888
S7 S80
(1,712
Disbursements
'
Programming
General Season
4,293
11,105
12,900
1,795
Programming Business Exp
0
464
0
(464
'
Arts Education
0
4,293
0
11,559
0
12,900
0
1,341
Fundmising
General Expenses
0
4,165
5,500
1,335
Spedal Events
Capital Campaign
0
147
9,581
21,962
10,000
30,946
419
8,984
147
35,708
46,446
10,738
General S Administration
Payroll 4 Benefits,
11,000
62,418
73,632.00
11,214
Advertising and PR
0
0
900.00
900
Dues and Subscriptions
0
116
500.00
384
Fees/PermasBank Fees
0
84
250.00
166
lnsumnce
0
4,490
4,250.00
(240
Legal Fees
0
0
2,500.00
2,500
Meetings/Entertainment
85
506
250.00
(256
Misc
50
363
250.00
(113
Office Equip. & Furnishings
0
0
500.00
500
ORke Rem
550
3,300
3,300.00
0
Office Supplies
183
578
1,000.00
422
Postage and Delivery
102
702
750.00
48
Printing 8 Repmduclbn
0
97
250.00
153
Professional Services
48
192
1,300.00
1,108
Property Taxes
0
4,723
4,500.00
(223
'
UtlRes
120
1,288
1,200.00
(Be
12,138
78,857
95,332
16,475
Total Disbursements
18,478
128,124
164,878
28,584
'
Net Activity
(11 894)
(70,256)
(97,098)
26,842
TEMP. RESTRICTED ACTNIfY
Receipts
Pending
Pending
Capital Campaign
0
11,290
0
0
BT 2000
1,200
13,400
0
0
Best Seat in the House
0
0
0
0
Programming
0
1.700
0
0
1,200
26,390
0
0
'
Disbursements
Capital Outlay
4,185
73,499
0
0
-
Pmservatbn Fund
0
0
0
0
4,185
73,499
0
0
'
(2,988)
(47,109)
0
0
Beg Cash
Activity
Ending Cash
Unrssbiled- Operating Fund
1,417,259
(70,256)
1,347,003
Temp. Rest - Capital Campaign
(122,979)
(48,810)
(171,789)
Temp. Rest - Programming
0
1,700
1,700
Perot. Rest - Endowment
0
0
0
1,294,280
(117,J88)
1,178,914
i
Balboa Performing Arts Theatre Foundation
Statement of Activities — Analytical Review
Six Months Ending December 31, 2001
Overall Cash Balance
Overall cash is down $117,366 June 30, 2001 to $1,176,366. In the first six months, the
money market earned $14,067. Cash balances are categorized and tracked according to
the legal restrictions placed on the funds by the donors.
' The most significant cash inflows in the first six months include $27K in restricted capital
gifts, $14K in interest income, $12K in general fund donations, $4K in Diva donations, and
' a net $10K from the 5Krun.
The most significant expenditures year to date include $74K for capital outlay to project
' design and construction management, $30K to full -time salaries, $18K to part time
salaries, $10K to Public /Community Relations Consultant, $4K on payroll taxes and
benefits, $21K on capital campaign consultant and printed campaign materials, $5K net
' investment in the sampler series, $4K in winter newsletter, $6K on rent and utilities, $10K
in property taxes and general insurance, and $2K on office supplies, professional services,
postage, fees, meetings, reprographics and miscellaneous.
Budget to Actual Variances
The majority of variances are carry over variances from prior months and have been
' outlined in prior reports or simply relate to timing of transactions. New significant
variances that have not been previously discussed are 1) the theater received $5,500
more in unrestricted donations than anticipated, and 2) the theater did not hold a capital
' campaign donor cultivation event in the 15t half of the year that was budgeted for $3,750.
Programming
' As stated above, the theaters year to date net investment in the sampler series is $5,314.
The overall net investment committed in the 2001 -2002 budget is $9,460.
We sold 267 tickets to the Christmas Pudding and ended up realizing a positive budget -to-
actual variance of $1,126.
The Executive Committee has reviewed the budget for the February 22, 2002 event with
A.B. Yehoshua and submits the program budget for board approval. The program will be
' co- sponsored with the Jewish Community Scholars Program and the theater's net
investment is budgeted for $3,997.
Upcoming Activity
In January, the theater will be receiving the third $10K installment of a five - year /$50K gift
from the Pacific Life Foundation. The Foundation has also been selected to receive a
' $10K gift from local chapter of a national women's organization (The Ebell Club).
January expenses are basically budgeted for "business as usual ". When we learn news
regarding the City's commitment to purchase the adjacent building (or not), we plan on
spending budgeted funds for another newsletter and BT 2000 campaign.
' F:YmaVE03smVA9 PMCmvgN T WFwMtlimliMes MI toa 30
• Cash balances do not include the approximate $25K in the Diva General Bank Account.
' ** For cash flow management purposes, current year capital outlay is tracked as expense
until year -end.
1
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I
Balboa Performing Arts Theater Foundation
'
Statement of Position
$ 2,954
'
December 31, 2001
1,669,081
Assets
(138,589)
Cash Assets
$1,176,914
BT -2000 Pledge Receivable
1,500
Multi -year Pledge Receivable
30,000
Construction in Process at 6/30/01
322,229 **
'
Office Equipment
2,803
Total
$1,533,446
• Cash balances do not include the approximate $25K in the Diva General Bank Account.
' ** For cash flow management purposes, current year capital outlay is tracked as expense
until year -end.
1
F
1
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L
I
Liabilities and Net Assets
Payroll Taxes Payable
$ 2,954
'
Unrestricted Net Assets
1,669,081
Temporarily Restricted Net Assets
(138,589)
Total
$1,533,446
• Cash balances do not include the approximate $25K in the Diva General Bank Account.
' ** For cash flow management purposes, current year capital outlay is tracked as expense
until year -end.
1
F
1
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L
I
Balboa Performing Arts Theater Foundation
2001 -2002 Budget
Operating Budget
' Table D-6
200=001
2001f2002
Actuals
Budget
UNRESTRICTED ACTIVITY
Unrestricted Receipts
Programming
Ticket Sales
672
14,190
Arts Education
1,017
300
'
(A)
1,689
14,490
Fundraising
General Fund
27,691
12,000
' Divas (Net)
Special Events
73,616
36,446
75,000
20,000
(B)
137,753
107,000
' Imerest "'
Total Unrestricted Receipts
64,224
22,991
(C)
203,666
144,481
Unrestricted Disbursements
Programming
'
General Season
7,800
23,650
(A)
Programming Business Exp
738
0
Arts Education
850
0
9,388
23,650
Fundraising
General Expenses
8,813
15,000
(D)
Special Events
27,986
10,000
(B)
' Capital Campaign
44,297
52,000
(E)
81,096
77,000
General & Administration
Payroll &Benefits
Advertising and PR
110,536
6,413
159,265
8,800
(F)
Dues and Subscriptions
988
1,000
Fees/Permits/Bank Fees
160
500
insurance
1,000
4,250
Legal Fees
0
5,000
'
MeetingslEntenainment
394
500
Misc
731
500
Office Equip. & Furnishings
513
1,000
Office Rent
6,050
6,600
'
Office Supplies
2,408
2,000
Postage and Delivery
1,761
1,500
Printing & Repmduction
103
500
Professional Services
1,587
2,600
Property Taxes
4,638
4,500
Utilities
2,36D
2,400
(G)
139,644
200,915
' Total Umesmcted Disbursements
(H)
230,127
301,565
Net Unrestricted Activity
(26,461 )
(157,083
' PERMANENTLY RESTRICTED
0
0
Endowment Revenue
CUMULATIVE CASH FLOW
Starting cash
1,289,739
1,294,279
Monthly Cumulative Cash Fkwr
4,540
157,083
1,294,279
1,137,196
'
Ending Cash
CASH SUMMARY 7/1101 01102 6130102
Beg Cash Activity Emling Cash
Unrestricted - Operating Fund 1,417,258 (157,083) 1,260,175
'
Temp. Rest. - Capital Campaign (122,979) 0 (122,979;
Temp. Rest - Preservation Fund 0 0 0
Penn. Rest - Endowment 0 0 0
1,294279 (137,083) 1,137.198
1 ' Approved 1x18/01
.1
' Balboa Performing Arts Theatre Foundation
2001 -2002 Budget Methodology and Assumptions
The budget process used to create the 2001/2002 Budget for the Balboa Performing Arts Theater
' Foundation mirrors generally accepted industry standards. Additional concessions were made to
ensure this budget also met the needs of a "start-up" organization and a Capital Campaign.
Basically the budget is broken down into four activities: Programming, Fundraising, General and
' Administrative, and Capital Receipts /Outlay. The Capital Receipts/Outlay section will be
presented after the City and Board formalize the project direction. Several layers of detail and
considerations exist beyond what is presented to you in this summary form. Finance and
' Executive Committee members, employees, and consultants were involved with the assumptions
for all budgeted activities.
1 The following assumptions were used in preparing the 2001 -2002 budget to comply with the
Theater's short-term goals and long -term Business Plan.
' A. Ticket sales for the sampler series are budgeted at approximately $14K for 4 events with a
60% cost recovery ratio for related programming expenses.
' B. Unrestricted donations are budgeted at $30K less than 2000/2001 due to prioritizing capital
campaign efforts and budgeting for only one theater sponsored special event that nets $ l OK.
' C. Interest is budgeted based on a conservative estimate of 2% of projected monthly cash
balances.
'. D. General fundraising expenses include 3 newsletters at full value; however, we are hoping to
have some of the costs donated.
' E. The total capital campaign expenses are expected to total approximately 5% of the $4M
campaign, or $200K, and spread over 2 -3 years. Until we have a solid construction plan that is
' in line with the City's expectations and support level, we recommend a "scaled down" capital
campaign for 2001/02 totaling $52K that covers contracted staff, printing and design, BT 2000
cultivation, and major donor cultivation.
F. Payroll includes salaries for the Executive Director, Operations Manager, Public Relations
Consultant, Community Relations Director and Secretary.
G. For the most part, other G &A expenses will stay the same. The budget for insurance is a bit
higher than the 2000/2001 actuals because the 2000/2001 general liability was paid in early in
' June 2000 and therefore is not included in the 2000 /01 fiscal year.
H. Overall, the Unrestricted Operating Budget is expected to net a negative $132K, which is
$106K less than the actual $26K loss in the prior year. $30K of the $106K net difference
accounts for a reduction in unrestricted donations in lieu of restricted donations for the capital
campaign and $20K of the difference is from a conservative projection for interest revenue. The
' only other significant increase is the addition of an Operations Manager and a Community
Relations Director.
IIs FFnbm9MnlI�MFaFitlelT1tlMM0�M &Fql NCnpas.ei
!/
1 General Notes
• The target unrestricted fundraising disbursement/receipts (excluding capital campaign
expenses) is 24 %.
• The capital budget and target ratios will be presented after the City and Board formalize the
project direction.
I
1
1
1
I
I
1
11
1
i
1
1
! ...........
1
.........,
1
1
1
1
1
............................................................. ...............................
APPENDIX E
BT -2000 Donors
I
I
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I
I
I
I
I
BT -2000 DONORS
In Chronological Order as of January 9, 2002
Recognition No DP Donor Name Date
Michael Craig
Same
11 -23 -99
Bill & Willie Richman
Same
11 -24 -99
Kenny Vick & Christina
O'Beck
Bill & Willie Richman
11 -24 -99
M & M Frank H. Trane
Same
12 -3 -99
Meta Going (may change
wording)
Meta Going
12 -14 -99
Geoffrey & Carol Davis
Same
12 -20 -99
Mary & Ed Hall
Same
12 -21 -99
Ron, Sandy, Mike &
Jennifer Baers
Same
1 -7 -00
John & Liz Wallace
Same
12 -27 -99
Robert Levin & Debra
Winston -Levin
Same
1 -10 -00
Phyllis & Charles Bell
Same
1 -24 -00
Gayle & Roy Jones
Same
1 -28 -00
Peggy & Timm Crall
Same
2 -9 -00
Peggy & Timm Crull
Will decide
2 -9 -00
Nancy & Craig Smith
Same
2 -14 -00
John & Kay Brown,
Jennifer, Amy & Sarah
John & Kay Brown
2 -14 -00
Russel & Hannah Kully
I Same
2 -16 -00
Eva Reed Armbruster
Same
2 -18 -00
Dorothy Beauchamp
Same
2 -28 -00
George & Nancy Dahl &
Family
Same
2 -28 -00
LLWW Foundation
Same
2 -29 -00
Phil & Toni Doane
Same
3 -7 -00
Bert & Colleen Hall
Same
3 -21 -00
Brooke D. Fulford
Same
3 -22 -00
William & Marion
Bifford
Peter - Gretchen -Jan
Brosius
Christian Faber
William & Marion Bifford
4 -14 -00
Mel & Pauline Ventura
Same
4 -14 -00
Molly & Neal
Brockme er
Same
6 -2 -00
Sid & Mildred Mayberry
Avonelle & Dick Kone
6/6/00
FWarsl&OTm'PABeOro Pa NM TM FardlbnlTR WT -=WV
1
I
IRecognition No DP Donor Name Date
I
I
I
I
E
I
I
I
I
I
W
I
I
I
I
Woodie & Rosalie Mayberry
For Sam & Roan
Furmanski
Martin & Virginia Furmanski
6 -16 -00
Jack & Kathy Brown &
Family
Same
6 -23 -00
C.J. Se erstrom & Sons
Same
7 -3 -00
William & Kathalleyne
McCullough
Pacific Media Group
7/3/00
Hensel Phelps
Construction Co.
Wayne Lindholm
7/5/00
Joe & Barbara Genshlea
Same
7/6/00
In Memory of Dr.
Edward Deeb, Sr.
Marion Deeb & Family
7 -31 -00
Jack Balderston
Same
8/2/00
Louise S. Greeley
Same
8/29/00
AECOM Technology
Corp.
Ray Holdsworth
8/31/00
Dr. Peter S. Bing
Same
9/1/00
Michael & Christine
Muench with sons Bryce
& Kyle
Michael & Christine Muench
9/11/00
Edward D. Halvajian
Family Foundation
Same
9/26/00
Doug, Julie, Taryn &
Sk ler Garn
Same
9/27/00
Eileen Forsberg
PLEDGE
10/2/00
Marian L. Turpin
Same
10/2/00
John & Sandy Wessman
Same
10/5/00
Arlene & David Rose
I Same
10/6/00
Chandler P. Desforges &
Luke C. Desforges
Peter Desforges
10/12/00
Rhodes Family: Win,
Bryce, Emery & Adam
Winifred Rhodes
10/16/00
Clint & Pat Hoose
Same
10/16/00
Theresa & Breeann
Schmidt
Katitza Schmidt
10/16/00
Lorie & Tom O'Loughlin
I Same
10/24/00
Joi Dell Hurd
Same
10/24/00
Jim & Michele Muth
Same
10/26/00
Dr. David & Leann
Benvenuti
Same
10/26/00
Tony & Kathy Shaw
Family
Same
10/30/00
IRecognition No DP Donor Name Date
I
I
I
I
I
i
I
I
I
11
Elouise & David Gogerty
— Jesse & Trevor Miller
Same
10/30/00
Pat Lopez
Same
10/30/00
Gus & Mary Chabre
Same
10/30/00
Edie & Perry Grant
Same
10/30/00
David & Sylvia McEwen
Same
10/30/00
R. Scott Dee
Same
10/30/00
Philip & Carol
Westbrook
Same
10/30/00
Richard & Stephanie
Scott
Same
10/30/00
Ed & Anne Hirschman
Same
11/2/00
Lopez, Hodes, Restaino,
Milman, Skikos & Polos
Same
11/2/00
Garth & Tracy
Blumenthal
Same
11/7/00
Jane & Richard P. Taylor
Same
11/7/00
Ballet Montmartre
Same
11/7/00
Peter & Gloria Hoffman
& Family
Same
11/7/00
Nancy R. Stern
Same
11/7/00
Jim & LuAnn Jalet
Same
11/7/00
Donald & Q. Ann Rogers
Same
11 /10 /00
Don & Jan Webb & Don,
Kellie, Cameron & Paige
Webb
Don & Jan Webb
11/15/00
Bill & Sally Hurt
Same
11/17/00
Bob & Karen Rogers in
honor of Howard & Trudi
Rogers
Bob & Karen Rogers
11/21/00
Joyce Jack
Same
11/27/00
Cathi & Les Klingerman
— Celebrate 25 Years
Dr. & Mrs. P.L. Klingerman
11/27/00
Don & Doris Peterson
Same
11/27/00
Irvine Apartment
Communities
same
12/4/00
Bob & Dayna Pettit
Same'
12/5/00
Robert E. & Janet A.
Mays & Family
Same
12/5/00
Secondo & Dona
Colombero
Same
12/6/00
Peggy Crull
Same*
12/12/00
The Remley Family
Same*
12/14/00
Recognition No DP Donor Name Date
Stephen & Pamela
Thome
Same*
12/14/00
Theodore Robins Ford,
established 1921 in
Balboa
Bob Robins
12/14/00
Tod White
Tod & Linda White
12/18/00
Linda White
Tod & Linda White
12/18/00
STLN White Family
Foundation
Tod & Linda White
12/18/00
Dana & Bill Wysong
John & Patricia Stanley
12/18/00
Doug & Beth Stanley
John & Patricia Stanley
12/18/00
Dex & Jo Stanley
John & Patricia Stanley
12/18/00
Dan & Jeannie Stanley
John & Patricia Stanley
12/18/00
SEBCO Industries, Inc. —
Sam & Margaret Barker
Sam & Margaret Barker
12/18/00
Mr. & Mrs. Dave Tax,
Newport Beach, CA
Dave Tax
12/18/00
Kingsley & Jack Croul
Jack Croul
12/18/00
Victoria & John Miller
X
Same
12/20/00
The Allison Family
Robert Allison ($1,250)
12/20/00
Steve & Jenny Mizusawa
Same
12/20/00
Herb & Kathy Cook
Same
12/20/00
Jennifer & John &
Matteson Wesoloski
Same
12/20/00
Carol A. Hoffman
Same
12/21/00
Peter & Harriet Pallette
X
Same
12/21/00
David, Stefanie & Riley
Beek
Same
12/27/00
Leona Aronoff
Same
12/27/00
George & Phyllis
Drayton
Same
12/28/00
Judith & Willis Lon ear
X
Same
12/29/00
Lyle & Janis Eisel
X
Same
12/29/00
John Thomas & Viola
Fischbeck Leggett
Same
12/29/00
Michael Garmon (may
change)
Same
12/29/00
Bambi Wiltchik
X
Same
12/28/00
Bill, Sherrie, Senzie,
Heather & John
Underwood
Same
12/28/00
Joan & Bill Wren
Same
12/30/00
Basil & Judi Witt Family
Same
1/3/01
I
IRecognition No DP Donor Name Date
I
1
I
I
1
I
I
I
1
I
I
Wallace Jeffs
X
Same
1/3/01
Derek Johnson, Lynn lba
& Dashiell & Blaise
Johnson
Same
1/3/01
Valerie Hilton Howard
Same
1/3/01
The Steve A. Morrill
Family— Michele, Starla
& Brant
Rosemary Morrill
12/29/00
Robert Kupper Family
Same
12/31/00
In memory of Donna
Baers, a great supporter
of performing arts
Ron Baers
12/29/00
Al & Denise Frink
Same
1/5/01
Marilyn C. Brewer
Same
1/8/01
John, Debra, Jack & John
Pa liassotti
Same
1 /01 /01
Jo, Paul, Jr., Jonathan &
Stephanie King
Same
1115101
Jan Debay
Same
1/22/01
William, Donel & Joseph
Wiles
Same
1/22/01
Charles & Irene
Vermeulen
Same
1/22/01
Louise Alden McClure
Brooke McClure-Wizel
1/23/01
Lido Isle Woman's Club
Nancy Helm
2/1/01
Terry & Mark Markowitz
Terry Markowitz
2/5/01
John & Kay Munshower
& Family
Same
2/5/01
In memory of Edith
"Granny" Tobin
Tom Tobin
2/1 3/01
Ed & Louise Maloney
Same
2/19/01
Peter J. & Joan L.
Ka Tanis
Same
2/19/01
Jule C. Marshall
X
Same
2/20/01
Rosann M. Seidner
Same
2/22/01
The Greg & Cindy
Dillion Family
Same
3/12/01
Don & Winnie Spengler
Same
3/16/01
The O Hill Family
Robert O Hill
3/19/01
The Gardners — Tina,
Gina, Irene, Lillian, Peg
& Ernie
Irene Gardner
3/19/01
The Leveilles — Roc,
Irene Gardner
3/19/01
I
J
I
I
1
1
I
Recognition No DP Donor Name Date
Mary, Bill, Edna & Irene
Everett & Betty Spriggs
Same
3/28/01
Mr. & Mrs. Andrew J.
Evans 11
X
Same
3/28/01
Ira & Gail Rosenstein
X
Same
4/3/01
The Zielinski Family
Same
4/3/01
Allan & Sandy Fainbar
Same
4/3/01
Mr. & Mrs. John H.
Siegel
Same
4/5/01
Michael & Sonja Saltman
Same
4/16/01
Thomas & Caroline
Maddock
Same
4/25/01
Andy & Betsy Ackerman
Same
4/25/01
Kelly Pauls - Cummins
Same
4/25/01
Bob & Pat Seymour
Same
5/9/01
Ross & Kathy Stewart
Same
5/14/01
Ann Van Ausdeln
Same
5/29/01
Mr. & Mrs. Frank Trane
Same second gift)
5/29/01
Louis Sands IV
Same
5/29/01
Louis, Patti & Logan
Tomaselli
Same
5/29/01
Viva & Paul M. Medina
Same
5/30/01
In Appreciation — The
Ruth Beier Family
Ruth Beier & Susan Lee
Martinez
6/1/01
Dr. Stewart & Emily
Wright
Same
6/7/01
Edward (Duke) & Evelyn
Hill
Evelyn Hill
6 -18 -01
Jack & Pat McMillan in
memory of Dennis Danell
Jack & Pat McMillan
6/18 -01
Dr. Rajendra G. Desai
Same
6/18/01
Robert M. & Marjie A.
Bennett
Same
6/26/01
Sofia Christiana Abre o
Jon Myers
7/2/01
Homer, Aimee, Brad &
Heather Bludau
Same
7/2/01
Dorothy A. Needelman
Same
7/5/01
Dr. Stanford Green
Same
8/16/01
The Edward Giddings
Family
Patricia Giddings
8/28/01
Mickey & Susan
Schwartz
Same
9/28/01
Leslie & Larry Miller
Elouise R. Gogert
12/7/01
r
r
1
i
i
1
r
r
r
r
r
r
r
r
r
r
r
Recomition No DP Donor Name
Date
Dana McNeill
Same
12/27/01
Cam, Suzanne, Alanna,
Same
12/28/01
Campbell, Kira & Dain
Woods
Howard & Helen House
Same
12/28/01
Family Foundation
Mar eta Klassen, Ph.D.
Same
12/31/01
Total
$176,251 cash
$1,750 in -kind
A Study Prepared by the
A. Gary Anderson Center
for Economic Research
Chapman University
The Orange County
:B
.usiness _Committee for:=the_ArtsInc.
51i!itS.ew q. ..
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The Orange County Business Committee for the Arts would like to express their NW
appreciation to Dr: James L. Doti, President of Chapman University, who generously
volunteered his time to serve as Project Director of this Economic Impact Report and to
Dr: Esmael Adibi, Director of the A. Gary Anderson Center for Economic Research,
and staff for their assistance toward the completion of this report.
hl nddilirnr. the OCBCA ,rarefull), aclaunrleclges the generous grant support
from the following:
=if OPr;Wv
T H EIR� T Y
0
Colm ighr0 /998 by the Orange Comer Bnsincs.v C .. ummeefor Or Ares.
Cupciny,J'nI adn'r Than peem"aI u.ce or imernal refry euce n irhour mprer.s
permission of he eoln'n;hr owner is expressly pmhibireA.
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off,, ..
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Mnald I' Aon nvd,
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WImR Gam
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'ILmn.n I1 Sirbrn
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16:h,"n It 4ram
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L.nuJ: r t hah man
9
BUSINESS COMMITTEE
FOR THE ARTS INC.
Dear Reader,
Fall 1998
The Orange County Business Committee for the Arts, in collaboration
with the A. Gary Anderson Center for Economic Research at Chapman
University, is pleased to present a fourth economic impact study, The
Economic Impact of the Nonprofit Arts on Orange County. This report,
for the year 1997, is a professional, factual study which presents an
overview of cultural organizations by quantifying and describing the
economic and social impacts of the responding institutions.
The goal of the OCBCA is to encourage support of the arts and to
encourage new and increased support from the business community. We
hope that this study will create a heightened awareness in the business
and cultural communities of the relationship of the arts to the economy
and community.
Our deep gratitude to Dr. James L. Doti, president of Chapman
University, who has once again generously volunteered his time to serve
as project director for this economic impact study and to Dr. Esmael
Adibi, director of the A. Gary Anderson Center for Economic Research,
and his staff for their invaluable assistance with this project.
On behalf of the Orange County Business Committee for the Arts, we
wish to express our appreciation to First American Title for underwriting
the printing costs of the study and to 777e Times Orange County for
creation of the graphics used on the cover. In addition, we extend our
heartfelt thanks to the California Arts Council, Boeing, Deloitte &
Touche LLP, Fluor Corporation, 7-he Orange County Register and the
US Trust Company of California for generously providing grant support
toward the completion of this study.
onald P. Kennedy
Chairman
OCBCA
Chairman of the Board
First American Financial Corporation
Betty R ss
Found' Executive Director
OCBCA
695 'ruwn Centrr I) rice • �,Atv I2U11 • ('.u.[a Mesa. Ca Iifontla 92626 • -14 -j 1 "II866
I, itp: ., % a'.00R( SCONIM t.V(7:S.ORG
CHAPMAN
U n i v e r s i t y
Orange, California 92866
Office of The President (714) 997-6611 • FAX (714) 997 -6887
September, 1998
Dear Reader:
It has been a rewarding experience for the A. Gary Anderson Center for Economic
Research to partner with the Orange County Business Committee for the Arts (OCBCA)
in examining the economic impact of nonprofit arts organizations in Orange County.
These are the only such studies that have been conducted on a regular basis for a
metropolitan area. The value of having such studies conducted over a given interval of
time (every four years) is made clear when comparing changes in the economic impact of
nonprofit arts organizations.
Two important caveats are in order: First of all, with all the care we have taken to be as
accurate as possible in measuring the economic impact, there is much that has been
omitted. For example, we were not able to include the important economic impact that
our colleges and universities have in the presentation of performing arts events. Many
other community groups that perform or stage dance, music and art shows have also been
omitted. As great as the measured economic impact this study suggests, these omissions
point to the fact that the economic contribution of the arts is even greater than that
reported in our analysis.
A second caveat is also necessary. Nonprofit arts organizations enrich our lives in ways
that cannot be measured by dollars and cents. The programs made possible by these
organizations excite our hearts and minds. They also help us understand our rich cultural
heritage and in doing so bring us together as a community.
As always, I wish to thank Betty Moss, director of the OCBCA, for her leadership in
making it possible to complete this report. I am also grateful to the director of the
Anderson Center, Dr. Esmael Adibi, for his contribution of time and talent in completing
the study. Finally, I wish to thank the sponsors of this project whose financial support
helped bring to light an aspect of the arts that is often ignored -- namely, their role in
contributing significantly to the economy of Orange County.
4 V
J es L. Doti
hapman University
0
Contents
I. Summary and Highlights .............................. 1
...............
II. Description of Survey .................... .. 4
III. Attendance and Ticket Prices ............................ 6
IV. Employment Impact .. 7
V. Income ... 8
VI. Income by Organization Category ........................ 10
VII. Expenses ..... ............................... . 12
VIII. Expenses by Organization Category ....................... 13
IX. Economic Impact .. ............................... 14
X. Economic Impact by Organization Category ................... 15
XI. Comparison of the 1989, 1993, and 1997 Studies ................ 16
XII. Projected Economic Impact in 1998 ....................... 22
XIII. Future Plans and Challenges ........................... 23
Appendix A: Sample Survey ............................... 26
Appendix B: Statistical Results ............................. 31
i
I. Summary and Highlights
The Survey
Following the mailing of survey forms on April 1, 1998, completed surveys were received
from 50 of the largest nonprofit arts organizations in Orange County during the May to July,
1998 period. To the extent that a number of smaller organizations are not represented, the
economic impact measured in this study represents an underestimate of the true impact.
• Survey respondents reported their most recent actual operating performances
that, on average, covered the fiscal year ending December 31, 1997. Respondents
also projected operating performances into their next fiscal period.
• Nonprofit arts organizations represented in the survey included all of the large
and many of the smaller organizations in categories defined as "dance," '.mu-
sic," "presenter," "theatre," and "museums."
Attendance and Employment Impact
A more accurate picture of the nonprofit arts impact on the community can be obtained by
analyzing the attendance at arts events and employment in these organizations.
Of approximately 2.9 million total admissions, almost 44 percent or roughly
1,259,000 were free admissions.
Admission revenues totaled $30.4 million. Of that total, $25.0 million or 82
percent emanated from the performing arts organizations.
• Not including free admissions, the average paid admission for a performing arts
event was $26.98, for museums was $2.18, and for other events was $12.10.
• Nonprofit arts organizations employed a total of 4,725 paid positions, making
these organizations taken as a whole Orange County's 8th largest non- govern-
ment employer.
• Volunteers contributed almost 592,000 hours, roughly equivalent to 285 full -time
paid positions.
894 directors or trustees served on boards of nonprofit arts organizations.
0
0 Income, Expenses and Economic Impact
An estimate of the economic impact of nonprofit arts organizations can be obtained by adding
the direct spending of nonprofit arts organizations on personnel and operating expenses and
the indirect spending of individuals on secondary purchases, restaurant meals, drinks,
transportation, etc. Such an estimate helps give perspective to the significant role the arts
play in the overall business vitality of our economy.
• Government grants and private donations totaled $35.1 million.
• Museums received 33.9 percent of all government grants to nonprofit arts
organizations. Performing Arts organizations and Other organizations received
28.9 and 37.2 percent of all government grants respectively.
• Contributions totaled $35 million, with $7.1 million (20.2 percent) going to
museums, $21.2 million (60.4 percent) going to the performing arts and $6.8
million (19.4 percent) going to all other organizations.
• Earned income, comprised mainly of admission revenues, was $45.8 million.
• There was direct spending of $77.9 million on all personnel and operating
expenses, comprised of $45.5 million in personnel expenses (58.4 percent) and
$32.5 million (41.6 percent) in operating expenses.
• Indirect spending of 147.4 million in the arts occurred as a result of personnel
and vendor secondary spending.
• Audience spending on restaurant meals, drinks, transportation, etc. over and
above the ticket cost is estimated at $56.2 million.
The total economic impact of the responding nonprofit arts organizations was
$281.6 million of which museums contributed $27 million, performing arts
contributed $199.1 million, and other organizations contributed $55.5 million.
Comparison With 1989 and 1993 Economic Impact Studies
The economic impact of nonprofit arts organizations on Orange County as estimated in the
earlier 1989 and 1993 economic impact studies are compared to the 1997 economic impact
estimated in the current study.
• Paid admissions decreased 3.4 percent since the last survey.
• A sharp increase in free children's admissions occurred, increasing from 236,373
free admissions in 1993 to 727,029 free admissions in 1997 —an increase of 208
percent over the four year period.
• Average ticket prices decreased by $2.79 since 1989 to approximately $18.76.
• Full -time employment increased on average 6.3 percent each year between 1989
and 1997.
• Total contributions increased 24.0 percent during the 1993 -97 period.
• Operating expenditures increased 7.4 percent between 1993 and 1997 while
personnel expenditures leaped by 22.2 percent over the same period.
• The total economic impact increased by 11.6 percent over the 1993 -97 period.
Projections and Future Challenges
Arts organizations were asked to supply income and expense projections for their coming
fiscal years as well as respond to a series of questions relating to their plans and challenges
for the future.
• Arts organizations are more optimistic than our last survey calling for a 7.4
percent increase in the total economic impact in 1998. This compares to a
projected rate of increase of 4.7 percent in the 1994 survey
• Contributions are expected to decline by 1.3 percent in 1998.
• Total income is expected to increase in 1998 by 4.1 percent as compared to a
projected increase of 6.7 percent in total expenses.
• Not surprisingly, those organizations that perceive private donor and government
support as significant on presentations received most of that support.
• There is a widely shared view that volunteerism will become "more important"
in future years and that their organizations will grow larger.
0 II. Description of Survey
•
The survey form shown in Appendix A was mailed on April 1, 1998. This survey instrument
is virtually identical to the survey form mailed on May 29, 1990 and April 1, 1994, that
formed the basis for the 1989 and 1993 studies entitled, "The Economic Impact of the
Nonprofit Arts in Orange County."
Except for projected income and expenses, the information presented in this study relates to
the arts organizations' last fiscal year. These varied by organization with some fiscal years
ending as early as June 1997 and some ending as late as July 1998. The average fiscal year
end was December 1997. With the exception of the projected income and expense data,
therefore, the information presented in this study, on average, covers the 1997 calendar
period, as compared to the 1989 and 1993 coverage of the previous arts impact studies in
Orange County.
Care was taken to ensure that all the respondents in the previous study returned completed
survey instruments for the current study. Of the 37 original participants in 1989, 24
responded to the current survey. In Section XI, the results of the 1989 and 1993 economic
studies are compared with current findings.
The arts organizations listed on the following page participated in this survey. We wish to
express our appreciation to each of these organizations for their investment of time and
resources to respond and complete the survey form.
4
Survey Participants
Museums:
Anaheim Museum*
Bowers Museum*
Children's Museum at LaHabra*
City of Brea Gallery"
Discovery Museum*
Fullerton Museum Center*
Laguna Art Museum*
Orange County Museum of Art*
The Irvine Museums*
Other:
Art Institute of Southern California
Arts Orange County"
City of Brea Cultural Center
Festival of Arts of Laguna Beach
Huntington Beach Art Center
Imagination Celebration of Orange County"
Irvine Fine Arts Center*
KOCB -TV Public Television
Muckenthaler Cultural Center*
Orange Art Association **
Orange County Art & Jazz Festival"
Orange County High School of the Arts
Foundation
Placentia Art Association
Sawdust Festival Corp."
Very Special Arts California**
Performing Arts:
Dance
Anaheim Ballet
Ballet Pacifica*
Dance Kaleidoscope of Orange County"
Festival Ballet Theatre
St. Joseph Ballet Company*
Music
All American Boys Chorus"
Buena Park Community Chorus
Capistrano Valley Symphony
Laguna Chamber Music Society*
Opera Pacific'
Orange County Youth Symphony Orchestra*
Pacific Chorale*
Pacific Symphony Association*
William Hall Master Chorale*
Presenter
Orange County Perforating Arts Center*
Philharmonic Society of Orange County*
Theatre
City of Brea Curtis Theatre"
Fullerton Civic Light Opera*
Irvine Barclay Theatre
La Habra Community Theatre
Laguna Playhouse*
San Clemente Community Theatre
Shakespeare Orange County*
South Coast Repertory*
STOP -GAP*
Vanguard Theatre Ensemble"
* Participated in '89, '93, and '97 studies. ** New participant in '97 study.
0
0
E
0
III. Attendance and Ticket Prices
Attendance figures for the responding nonprofit arts organizations are reported below.
Performing Arts include all arts organizations that describe themselves either as "music,"
"theatre," "dance," or "presenter."
References:
I. See line 1, column B in Appendix B.
2. See line 1, column A in Appendix B.
3. See line 1, columm C in Appendix B.
4. See line 2, column B in Appendix B.
5. See line 2, columm A in Appendix B.
6. See line 2, columm C in Appendix B.
7. See line 3, columm B in Appendix B.
8. See line 3, column A in Appendix B.
9. See line 3, columm C in Appendix B.
Average ticket prices, calculated by dividing total admission revenues by the number of paid
admissions, are shown below:
Free
Other
Organization
Organization
Paid
Children's
Free
Total
Category
Admissions
Admissions
Admissions
Admissions
Museums
299,5501
59,3994
255,2937
614,242
Performing Arts
924,7622
410,3805
94,8548
1,429,996
Other
394,9223
257,2506
181,7069
833,878
Total
1,619,234
727,029
531,853
2,878,116
Percentage of Total
56.3
25.3
18.4
100.0
References:
I. See line 1, column B in Appendix B.
2. See line 1, column A in Appendix B.
3. See line 1, columm C in Appendix B.
4. See line 2, column B in Appendix B.
5. See line 2, columm A in Appendix B.
6. See line 2, columm C in Appendix B.
7. See line 3, columm B in Appendix B.
8. See line 3, column A in Appendix B.
9. See line 3, columm C in Appendix B.
Average ticket prices, calculated by dividing total admission revenues by the number of paid
admissions, are shown below:
References:
1. See line 24, column B in Appendix B.
2. See line 24, column A in Appendix B.
3. See line 24, columm C in Appendix B.
R
4. See line I, column B in Appendix B.
5. See line 1, column A in Appendix B.
6. See line 1, columm C in Appendix B.
Calculated
Organization
Admission
Paid
Average
Category
Revenues
Admissions
Ticket Price
Museums
$ 653,3811
299,5504
$ 2.18
rm
Perfoing Arts
$ 24,952,0652
924,7625
$ 26.98
Other
$ 4,778,9443
394,9226
$12.10
Total
$ 30,384,390
1,619,234
$ 18.76
References:
1. See line 24, column B in Appendix B.
2. See line 24, column A in Appendix B.
3. See line 24, columm C in Appendix B.
R
4. See line I, column B in Appendix B.
5. See line 1, column A in Appendix B.
6. See line 1, columm C in Appendix B.
IV. Employment Impact
The responding nonprofit arts organizations employed a total of 4,725 full -time, part-time,
and contracted positions.
Full -time Positions 4791
Part-time Positions: 2,4042
Contracted Positions: 1,8423
Total Paid Positions: 4,725
References:
1. See line 6, columm D in Appendix B.
2. See line 7, columm D in Appendix B.
3. See line 8, columm D in Appendix B.
In addition to the paid positions, volunteers (ushers, clerical, tour guides, etc.) contributed
592,085 hours to the responding organizations. This is roughly equivalent to 285 full -time
positions. A total of 894 directors or trustees are reported to have served on volunteer boards
of the reporting organizations.
Of course, the total number of individuals employed by arts organizations is much greater
than the figures shown here. Many more independent performers, writers, directors, artists,
etc., would add significantly to the reported total.
Nonetheless, even the conservatively reported figure of 4,725 positions would make non-
profit arts organizations a major employer in Orange County. The following comparison
suggests that these organizations taken as a whole in 1997 represent Orange County's 8th
largest non - government employer.
Employer
Walt Disney Company
Boeing Company
Tenet Healthcare Corp.
American Stores Company
St. Joseph Health System
BankAmerica Corp.
Tricon Global Restaurants, Inc.
Nonprofit Arts Organizations
Ralphs Grocery Company
Pacific Telesis Corp.
Dayton Hudson Corp.
Memorial Health Services
Toshiba Corp.
PacificCare Health Systems, Inc.
Marriott International, Inc.
7
Number or Employees
12,633
11,000
10,500
7,900
6,535
5,300
4,820
4,725
4,688
4,650
4,145
4,028
3,989
3,800
3,482
9
0
0
V. Income
Total income of the responding nonprofit arts organizations are comprised of two major
income categories:
1. Contributed Income: $35,051,090
This is the amount of income derived from government grants and
contributions from the private sector. See line 23, column D in Appen-
dix B.
2. Earned Income: $45,798,732
This is the amount of income derived from admission revenues and the
sale of other goods and services. See line 30, column D in Appendix B.
Summing these income categories gives total income.
Total Contributed Income: $ 35,051,090
Total Earned Income: $ 45,798,732
Total Income: $ 80,962,215
The following pie chart shows a finer breakdown of income. Note that the white areas show
contributed income and the shaded areas show earned income.
Other Earned
Income
19.0%
Total Income
Private Donations
36.3%
jovernment Grants
7.2%
sions
37.5%
The following figure shows the percentage distribution of the sources of contributed income.
Percentage Distribution of Contributed Income
Governenent;Grants ?: 16.6
Individuals
Business /..Co'rporate.' "'' 12.3
;
-Foundations; &'Grants" 17.0
- Membership §` 11.4
- Fundraising Events 113
- Other $.6
0 5 10 15 20 25 30
E
0
11
VI. Income by Organization Category
The following figures break down income by major organization category.
Organization
Number Contributed
Earned
Category
Surveyed Income
Income
Museums
9 $ 7,067,1371
$ 2,098,4054
Perforating Arts
26 $ 21,186,6842
$ 34,262,3155
Other
15 $ 6,797,2693
$ 9,438,0126
Total
50 $ 35,051,090
$ 45,798,732
Percentage of Total
43.3
56.7
References:
Total
Income
$ 9,277,9357
$ 55,448,999s
$ 16,235,2819
$ 80,962,215
100.0
1. See line 23, column B in Appendix B. 6. See line 30, column C in Appendix B.
2. See line 23, column A in Appendix B. 7. See line 31, column Bin Appendix B.
3. See line 23, column C in Appendix B. S. See line 31, column A in Appendix B.
4. See line 30, column B in Appendix B. 9. See line 31, column C in Appendix B.
5. See line 30, column A in Appendix B.
The following pie charts show the distribution of contributed income from individuals,
business, and foundations, and contributed income from all government grants (federal, state,
and local) on the basis of individual organization categories.
Distribution of Contributed Income
from Individuals, Business, Foundations & Grants
Government Grants\\ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \O\ \ \\ \16.3
Individual/Corporate
Foundations /Grants�� \ \ \\O \ \ \ \ \�� \ \\ \143
0 10 20 30
10
144.2.
O 1989
® 1993
® 1997
40 50
Museum
33.9%
Distribution of Contributed Income
from All Government Grants
11
Others,
37.2%
0
L
0
VII. Expenses
Total expenses of the responding nonprofit arts organizations are comprised of two major
expense categories:
1. Personnel Expenses: $45,451,283
These expenditures are for full and part time artistic, administrative, and
technical services. See line 38, column D in Appendix B.
2. Operating Expenses: $32,521,941
These expenditures are for facilities, marketing, production, and other -
related expenditures. See line 45, column D in Appendix B.
Summing these expenditure categories gives total expenses.
Total Personnel Expenses: $ 45,451,283
Total Operating Expenses: $ 32,521,941
Total Expenses: $ 77,973,224
The following pie chart shows a finer breakdown of expenses. The white area shows
personnel expenses and the shaded area shows expenses related to operations.
Total Expenses
Administrative
18.2%
Technical
12.3%
Artistic
27.8%
Travel & Other
7.3%
4.6% 12.7%
Fundraising
Production
12
8.1%
Facility
9.0%
VIII. Expenses by Organization Category
The following figures break down expenses by major organization category.
Organization
Number Personnel
Operating Total
Category
Surveyed Expenses
Expenses Expenses
Museums
9 $ 4,480,9791
$ 4,440,9634 $ 8,921,9427
Performing Arts
26 $ 31,436,1572
$ 21,468,7605 $ 52,904,9178
Other
15 $ 9,534,1473
$ 6,612,2186 $ 16,146,3659
Total
50 $ 45,451,283
$ 32,521,941 $ 77,973,224
Percentage of Total 58.3
41.7 100.0
References: 5.
See line 45, column A in Appendix B.
1. See line 38, column B in Appendix B. 6.
See line 45, column C in Appendix B.
2. See line 38, column A in Appendix B. 7.
See line 46, column B in Appendix B.
3. See line 38, column C in Appendix B. S.
See line 46, column A in Appendix B.
4. See line 45, column B in Appendix B. 9.
See line 46, column C in Appendix B.
0
13
0
IX. Economic Impact
The total economic impact of the responding nonprofit arts organizations is comprised of
the following spending categories:
Direct Spending: $77,973,224
This is the amount nonprofit arts organizations directly spend on all
personnel and operating expenses. See line 46, column D in Appendix
B.
2. Indirect Spending: $147,369,392
This is the amount of spending that occurs as personnel use their wages
and as vendors use their receipts to purchase goods and services. In this
study, the multiplier of 1.89 was used to estimate indirect spending.
Hence, the indirect spending estimate was derived by multiplying direct
spending of $77,973,224 (see above) by 1.89.
Indirect Audience Spending: $56,211,121
This is the amount of spending that occurs as audiences purchase
restaurant meals, drinks, transportation, etc., over and above the cost of
their tickets. Using the multiplier of 1.85, indirect audience spending is
estimated by multiplying total admission revenues of $30,384,390 (see
line 24, column D in Appendix B) by 1.85.
Note that these multipliers are obtained from the U.S. Department of Commerce, Economic
and Statistics Administration, Bureau of Economic Analysis, Regional Input- Output Mod-
eling System.
Summing these spending categories gives the total estimated economic impact.
Total Direct Spending:
Total Indirect Spending:
Total Indirect Audience Spending:
Total Economic Impact:
14
$ 77,973,224
$ 147,369,392
$ 56,211,121
$ 281,553,737
X. Economic Impact by Organization Category
The following figures break down the economic impact by major organization category.
References:
1. See line 46, column B in Appendix B.
2. See line 46, column A in Appendix B.
3. See line 46, column C in Appendix B.
15
11
is
Indirect
Total
Organization
Number
Direct
Indirect
Audience
Economic
Category
Surveyed
Spending
Spending
Spending
Impact
Museums
9
$ 8,921,9421
$ 16,862,470
$ 1,208,755
$ 26,993,167
Performing Arts
26
$52,904,9172
$99,990,293
$46,161,320
$199,056,530
Other
15
$16,146,3653
$ 30,516,629
$ 8,841,046
$ 55,504,040
Total
50
$ 77,973,224
$147,369,392
$ 56,211,121
$281,553,737
Percentage of Total
27.7
52.3
20.0
100.0
References:
1. See line 46, column B in Appendix B.
2. See line 46, column A in Appendix B.
3. See line 46, column C in Appendix B.
15
11
is
0
r�
�J
XI. Comparison of the 1989,1993, and 1997 Studies
The economic impact of nonprofit arts organizations on Orange County as estimated in the
earlier 1989 and 1993 economic impact studies are compared in this section to the 1997
economic impact as estimated in the current study.
Paid Admissions
Free Children's Admissions
Other Free Admissions
Total Admissions
❑ 1989
13 1993
19 1997
0 500 1,000 1,500 2,000 2,500. 3,000 3,500
The effects of the recent recession in Orange County are clear as paid admission declined
3.4 percent since 1993. Free admission, however, increased sharply, particularly free
admissions for children. As a result total Admissions increased 20.8 percent since 1993,
roughly half the 40.4 percent increase that occurred between the 1989 and 1993.
il.II
Attendance
Annual
Compounded
Percent Change
Rate of Change
1989
1993
1997
1989 -93
1993 -97
1989 -97
1,039,663
1,676,513
1,619,234
61.3
-3.4
5.7
233,781
236,373
727,029
1.1
208.0
15.2
424,309
470,486
531,853
10.9
13.0
28.6
1,697,753
2,383,372
2,878,116
40.4
20.8
6.8
The effects of the recent recession in Orange County are clear as paid admission declined
3.4 percent since 1993. Free admission, however, increased sharply, particularly free
admissions for children. As a result total Admissions increased 20.8 percent since 1993,
roughly half the 40.4 percent increase that occurred between the 1989 and 1993.
il.II
Ticket Revenues and Prices
Reflecting the lower number of paid admission in 1997 as compared to 1993, admission
revenues also dropped over that period by 1.8 percent. This compares to a 38.2 percent
increase that occurred between the 1989 and 1993.
Average ticket prices remained roughly the same in 1997 ($18.76) as compared to 1993 and,
more surprisingly, are somewhat lower than ticket prices in 1989 ($21.55)
Full -time Positions
Part-time Positions
Contracted Positions
Total Paid Positions
Employment
Annual
Annual
Compounded
Compounded
Percent Change
Rate of Change
Rate or Change
1989
1993
1997
1989 -93 1993 -97
1989 -97
Admission Revenues
$ 22,405,439
$ 30,955,405
$ 30,384,390
38.2 -1.8
3.9
Paid Admissions
1,039,663
1,676,513
1,619,234
61.3 -3.4
5.7
Average Ticket Price
$ 21.55
$ 18.46
$ 18.76
-14.3 1.6
-1.7
Reflecting the lower number of paid admission in 1997 as compared to 1993, admission
revenues also dropped over that period by 1.8 percent. This compares to a 38.2 percent
increase that occurred between the 1989 and 1993.
Average ticket prices remained roughly the same in 1997 ($18.76) as compared to 1993 and,
more surprisingly, are somewhat lower than ticket prices in 1989 ($21.55)
Full -time Positions
Part-time Positions
Contracted Positions
Total Paid Positions
The downward pressure in admission revenues has obviously had an impact on employment.
Full -time positions increased from 458 positions in 1993, to 479 positions in 1997, an
increase of only 4.6 percent. This compares to a 56.3 percent increase between 1989 and
1993.
Part-time positions, however, have continued to increase rapidly, growing from 1,724
positions in 1993 to 2,404 positions in 1997 - an increase of about 40 percent. This growth
in part-time positions was roughly equal to the growth that occurred during the earlier 1989
to 1993 period.
17
E
0
Employment
Annual
Compounded
Percent Change
Rate or Change
1989
1993 1997
1989-93
1993.97
1989 -97
293
458 479
56.3
4.6
6.3
1,208
1,724 2,404
42.7
39.4
9.0
2,380
2,108 1,842
-11.4
-12.6
-3.2
3,881
4,290 4,725
10.5
10.1
2.5
The downward pressure in admission revenues has obviously had an impact on employment.
Full -time positions increased from 458 positions in 1993, to 479 positions in 1997, an
increase of only 4.6 percent. This compares to a 56.3 percent increase between 1989 and
1993.
Part-time positions, however, have continued to increase rapidly, growing from 1,724
positions in 1993 to 2,404 positions in 1997 - an increase of about 40 percent. This growth
in part-time positions was roughly equal to the growth that occurred during the earlier 1989
to 1993 period.
17
E
0
0
0
0
Income
Contributions increased from $28.3 million in 1993 to $35.1 million in 1997. This increase
of 24 percent compares to an increase of 36.1 percent during the 1989 to 1993 period. Over
the entire 1989 to 1997 period, the annual percentage increase in contributions was 6.8
percent. This compares over the same period to an average percentage increase in Orange
County's personal income of 4.7 percent.
The following figure shows a comparison of changes in the sources of contributed income
for the 1989, 1993, and 1997 studies.
Percentage Distribution of Contributed Income
Gm ernment Grants
IndividuatlCorporate
Foundadons/Grants
Memberships/
Fundralsing Evened
Other
a to 20 30 40 so
The 10.1 percent increase in earned income between 1993 and 1997 as shown in the "Income"
table, seems inconsistent with the decline in admissions revenue as reported above. This is
explained by the fact that while earned income is generated mainly by admission revenues,
LU
Annual
Compounded
Percent Change
Rate of Change
1989
1993
1997
1989 -93
1993 -97
1989 -97
Contributed Income $ 20,772,444
$ 28,270,593
$ 35,051,090
36.1
24.0
6.8
Earned Income $ 31,088,179
$ 41,608,486
$ 45,798,732
33.8
10.1
5.0
Total Income $ 51,860,623
$ 69,879,089
$ 80,962,215
34.7
15.9
5.7
Contributions increased from $28.3 million in 1993 to $35.1 million in 1997. This increase
of 24 percent compares to an increase of 36.1 percent during the 1989 to 1993 period. Over
the entire 1989 to 1997 period, the annual percentage increase in contributions was 6.8
percent. This compares over the same period to an average percentage increase in Orange
County's personal income of 4.7 percent.
The following figure shows a comparison of changes in the sources of contributed income
for the 1989, 1993, and 1997 studies.
Percentage Distribution of Contributed Income
Gm ernment Grants
IndividuatlCorporate
Foundadons/Grants
Memberships/
Fundralsing Evened
Other
a to 20 30 40 so
The 10.1 percent increase in earned income between 1993 and 1997 as shown in the "Income"
table, seems inconsistent with the decline in admissions revenue as reported above. This is
explained by the fact that while earned income is generated mainly by admission revenues,
LU
other sources of earned income such as contracted services and interest income increased
sharply since 1993.
The 'Income" table also shows that total income increased to $81.0 million in 1997, an
increase of 15.9 percent from $70.0 million generated in 1993. This rate of increase is roughly
half the rate of growth that occurred between 1989 and 1993.
Expenses
As in the case of total income, the growth rate in total expenditures between 1993 and 1997
was roughly half the rate of growth that occurred between 1989 and 1993. It should be noted
however, that expenditure growth declined more sharply for operating as compared to
personnel expenditures.
The following table shows the economic impact of all organizations that responded to the
1989, 1993, and 1997 economic impact studies.
Total Economic Impact
1989
1993
1997
Number Surveyed
37
Annual
50
Direct Spending
$ 50,758,605
$ 67,470,675
$ 77,973,224
Indirect Spending
Compounded
$127,519,576
$147,369,392
Indirect Audience Spending
$ 40,205,487
Percent
Change
Rate of Change
$186,897,855
1989
1993
1997
1989-93
1993 -97
1989 -97
Personnel Expenses
$ 27,212,796
$37,201,586
$ 45,451,283
36.7
22.2
6.6
Operating Expenses
$ 23,545,809
$ 30,269,089
$ 32,521,941
28.6
7.4
4.1
Total Expenses
$ 50,758,605
$67,470,675
$ 77,973,224
32.9
15.6
5.5
As in the case of total income, the growth rate in total expenditures between 1993 and 1997
was roughly half the rate of growth that occurred between 1989 and 1993. It should be noted
however, that expenditure growth declined more sharply for operating as compared to
personnel expenditures.
The following table shows the economic impact of all organizations that responded to the
1989, 1993, and 1997 economic impact studies.
Total Economic Impact
19
Annual
Compounded
Percent Change Rate of Change
1989.93 1993 -97 1989-97
32.9
1989
1993
1997
Number Surveyed
37
49
50
Direct Spending
$ 50,758,605
$ 67,470,675
$ 77,973,224
Indirect Spending
$ 95,933,763
$127,519,576
$147,369,392
Indirect Audience Spending
$ 40,205,487
$ 57,267,499
$ 56,211,121
Total Economic Impact
$186,897,855
$252,257,750
$281,553,737
19
Annual
Compounded
Percent Change Rate of Change
1989.93 1993 -97 1989-97
32.9
15.6
5.5
32.9
15.6
5.5
42.4
-1.8
4.3
35.0
11.6
5.3
r]
9
0
0
Although indirect audience spending was negatively affected by the drop in admission
revenues between 1993 and 1997, the total economic impact over this period increased 11.6
percent to $281.6 million. This rate of increase for the total economic impact was about a
third of the 35.0 percent increase that occurred between 1989 -1993.
Over the entire 1989 to 1997 period, the average annual percentage rate of increase of 5.3
percent compares to a 4.7 percent increase in Orange County's personal income over the
same period.
Direct Spending
Indirect Spending
Indirect Audience
Spending
Total Economic
Impact
Total Economic Impact
Millions of $
50 100 150 200 250 300 350
The preceding analyses included comparisons of all organizations that responded to the
survey in 1989, 1993, and 1997. In order to keep the comparison consistent, only those
organizations that responded to all three surveys were included in the following comparative
analysis.
The following table presents the economic impact of 24 organizations that responded to the
1989, 1993, and 1997 economic impact studies. It should be noted, however, that these 24
organizations comprised 97 percent, 81 percent, and 77 percent of total income reported in
the 1989, 1993, and 1997 studies, respectively.
`o
Total Economic Impact
(Organizations that responded to all three surveys)
1989 1993
Direct Spending $ 48,682,553 $ 54,023,164
Indirect Spending $ 92,010,025 $102,103,780
Indirect Audience Spending $ 40,233,394 $ 49,952,440
Total Economic Impact $180,925,972 $206,079,384
The total economic impact of these organizations increased by 13.9 percent over the 1989 -93
period and 5.0 percent over the 1993 -97 period. The smaller increase in the total economic
impact during the 1993 -97 period is mostly the result of decreasing indirect audience
spending. Over the longer period of 1989 to 1997, the total economic impact of these 23
organizations increased at an average annual rate of2.3 percent, lower than the average annual
percentage rate of increase in personal income of 4.7 percent.
21
0
0
0
Annual
Compounded
Percent Change
hate or Change
1997
1989 -93
1993-97
1989-97
$ 58,890,742
11.0
9.0
2.4
$111,303,502
11.0
9.0
2.4
$ 46,175,572
24.2
-7.6
1.7
$216,369,816
13.9
5.0
2.3
The total economic impact of these organizations increased by 13.9 percent over the 1989 -93
period and 5.0 percent over the 1993 -97 period. The smaller increase in the total economic
impact during the 1993 -97 period is mostly the result of decreasing indirect audience
spending. Over the longer period of 1989 to 1997, the total economic impact of these 23
organizations increased at an average annual rate of2.3 percent, lower than the average annual
percentage rate of increase in personal income of 4.7 percent.
21
0
0
0
0 XII. Projected Economic Impact in 1998
In addition to being surveyed about their last fiscal year, arts organizations were also asked
to supply income and expense projections for their next full fiscal period. Since the average
last fiscal year ended in December 1997, the projections, on average, relate to calendar year,
1998. See lines 48 -82 in Appendix B.
Economic Impact of Non - Profit Arts Organizations
Actual and Projected
Actual
Projected
Percent
1997
1998
Change
Contributed Income
$ 35,051,090
$ 34,609,023
-1.3
Earned Income
$ 45,798,732
$ 49,691,043
8.5
Total Income
$ 80,962,215
$ 84,300,066
4.1
Personnel Expenses
$ 45,451,283
$ 48,658,631
7.1
Operating Expenses
$ 32,521,941
$ 34,554,248
6.2
Total Expenses
$ 77,973,224
$ 83,212,879
6.7
Total Economic Impact $281,553,737 $302,314,308 7.4
Nonprofit arts organizations are decidedly negative about their prospects for additional donor
support, projecting a 1.3 percent decline in 1998. They expect earned income to increase a
rapid 8.5 percent. When considering the anticipated decline in contributions, however, total
income is projected to increase 4.1 percent.
This increase is lower than the projected increase in expenses of 6.7 percent. On average,
therefore, the nonprofit arts in Orange County are anticipating a narrowing margin or surplus
in 1998.
These projections point to a 7.4 percent increase in the total economic impact from $281.6
million in 1997 to $302.3 million in 1998. This projected increase of 7.4 percent compares
to an average annual increase of 5.3 percent over the 1989 to 1997 period as estimated in
this study and a 5.9 percent increase in personal income in 1998 as forecasted by the A. Gary
Anderson Center for Economic Research at Chapman University.
22
XHL Future Plans and Challenges •
A series of questions on the survey form (see Appendix A) related to the future plans and
challenges facing nonprofit arts organizations. The survey results regarding these questions
are presented in tabular form on lines 83 -95 in Appendix B. The following figures show the
percentage of organizations that checked each of the individual responses listed after each
question for the 1993 and 1997 survey.
Influence of Private Donor Support on Presentations
Significant
\ \ \ \ \ \ \ \ \ \ \ \ \ \\ O \ \ \ \ 00 \ \ \ O \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \\ \ \ \ \\ \ \ 00 \ \\ \ \\
Somewhat 269/4
O\00\\\\O1 ,
Little
NotAtAll
\ \\ \ \\ \ \ \ \ \ \ \ \ O \ \ \ \ \ \ \ \ \ \ \ O \ \ \ \ \ \ \ O \ 00
As shown in the above figure, 42 percent of respondents indicated that private donor support
had a significant influence on presentations. This is not surprising given the fact that the
organizations that perceive private donor support as significant in influencing presentations
received $23.4 million or 80 percent of total private donor support. As compared to 1993,
the respondents in 1997 perceived a slightly greater influence of private donor support in
presentations.
Influence of Government Support on Presentations
Not At All
a\MEMEERMEM\�
\\ O\ O \ \\ \ \\ \ 00 \ \\ \ \\ \ \\ O \\ \ \ \ \\ \
O \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ O \ \ \ 0 0 \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \
0.1, 03 0.3 0.4_ 0.S
Twenty percent of organizations perceive government support as significant in influencing
presentations. These organizations received about $3.0 million or 52 percent of total
government support.
0
23
E
0
Importance of Volunteerism Over Next Ten Years
More
Same
Less
Not At All
�EUE
REEM
0 0.2 0.4 0.6 0.8 1
The above figure suggests that volunteerism will become slightly more important in coming
years.
Growth of Organization Over Next Ten Years
Larger
Same
Smaller
Do Not Know
' 1
'
o'
■
e
■4'
0 0.2 0.4 0.6 0.8
Not surprisingly, the figure above reflects the expectation on the part of the respondents that
their organizations will grow larger over the next ten years.
24
Challenges Facing Orange County Nonprofit Arts Organizations
Recruiting Employees
Recruiting Board/Vol
Balancing Budget
Growing in Quality
Building Audiences
Private Support
Government Support
Expanding Facilities
The average response on a scale of 0 to 4 with "0" being "not important' and "4" being
"extremely important" regarding challenges facing their organizations in the future are shown
above.
In comparing the results, (see lines 83 -95, columns A and B in Appendix B), it is interesting
to note that there was little difference between the performing arts and museums in their
perceived challenges. The only two differences related to the perception on the part of
performing arts respondents that "recruiting employees" and "growing in quality" were
significantly more important than that perceived by museums.
It is also interesting to note that the only significant difference in the response relating to
future challenges was in the "recruiting employees" category. The respondents were much
more concerned about that challenge now than they were in the last survey. This heightened
concern should not be surprising in light of the current tightness in the labor market.
25
0
0
0
9 Appendix A: Sample Survey
0
0
26
Economic Impact of the Nonprofit Arts on Orange County
Sponsored by the Orange County Business Committee for the Arts
All financial information will be held in confidence. It will be used only to develop basic
information on programs and activities of arts organizations and to collect detailed information
on income and expenditures needed for an assessment of the impact of the arts on the Orange
County economy.
The information will be used only for the purpose stated in this survey and will be published in
statistical aggregates that will not permit the identification of any individual organization
without the consent of that organization.
Organization:
Organization Name:
Address:
Person Completing Survey - Name:
Title:
Phone:
Which category best describes this organization? (Circle One)
Museum Music Theatre Dance Service
Presenter Special Event Other*
* If "Other," please describe
Period of your organization's last fiscal year
NOTE: Unless specified otherwise, please answer all questions on the basis of
your organization's last fiscal year.
If question Is riot applicable to your organization, please write "N /A" in the
space provided.
[J
27
Attendance:
0 1. How many paid admissions did your organization record?
2. How many free children's admissions did your organization record?
3. How many other free admissions (not including children)
did your organization record?
4. What is your average ticket price?
Board, Staff and Artists:
5. How many full -time paid positions did your organization employ?
6. How many part -time paid positions did your organization employ?
7. How many independent contracted positions did your
organization employ (exclusive of the above)?
8. If you employed artists, what percentage were local (Orange County)?
9. What percentage of employed artists were hired
from outside the Orange County area?
10. How many volunteer hours did individuals contribute to your organization?
(Ushers, clerical, tour guides, etc.)
11. Currently, how many Board of Trustee members or
Directors does your organization have?
M
Income and Expenses:
1996 -97*
1997 -98*
(Actual)
(Projected)
I. Income
A. Contributed
1. Federal Government
$
$
2. State Government
3. Local /Municipal Government
4. Individual Contributions
5. Business /Corp. Contributions
6. Foundations
7. Grant Amount Received (not included above)
8. Memberships
9. Fundraising Events
10. Other
11. Subtotal Contributed (Sum Items 1 thorough 10)
$
$
B. Earned
12. Admissions
$
$
13. Touring
14. Contracted Services
15. Product Sales
16. Interest and Other Investment Income
17. Other
18. Subtotal Earned (Sum Items 12 thorough 17)
$
$
19. Total Income (Item 11 plus Item 18)
II. Expenses
A. Personnel
20. Full -time Artistic
$
$
Other Artistic (part -time and /or contracted)
21. Full -time Administration
Other Administration
(part-time and /or contract)
22. Full -time Technical Production
Other Technical Production
(part-time and /or contract)
23. Subtotal Personnel (Sum Items 20 thorough 22)
$
$
B. Operating
24. Facility Expenses /Space Rental
25. Marketing
26. Production/Exhibition
27. Travel
28. Fund Raising Expenses
29. Other (if greater than 10% of budget
attach separate schedule
30. Subtotal Operating (Sum Items 24 thorough 29)
$
$
31. Total Expenses (Item 23 plus Item 30)
III. Surplus (Shortfall) at Year End
Total Income [Item 19] minus Total Expenses [Item 31]
* If fiscal year begins January 1, report 1997 results in 1996 -97 column above and report 1998 projections in
1997 -98 column above.
29
Future Plans and Challenges:
1. Over the next ten years, how will volunteerism change in its importance to the long -run viability of your
organization?
More
Less
Same
Not Applicable
2. Ten years from now, how will your organization compare to its current size?
Larger Smaller Same Do not know
3. How does external private donor support influence the content of your organization's presentations?
Significantly Somewhat Little Not at all
4. How does external government support influence the content of your organization's presentations?
Significantly Somewhat Little Not at al
5. How important are the following challenges facing Orange County arts organizations in the next ten
years:
Extremely Very Somewhat Not
Important Important Important Important Important
a. Recruiting employees
b. Recruiting board /volunteer leadership
c. Balancing budget
d. Growing in quality
e. Building audiences
f. Attracting private donor support
g. Attracting government support
h. Expanding facilities
i. Other:
30
Appendix B: Statistical Results
31
0
9
9
W
(A) Total
(B) Total
(C) Total
(D) GRAND
Performing
Museum
Others.
TOTAL
Attendance:
1 Paid Admissions
924,762
299,550
394,922
1,619,234
2 Childrens Admissions
410,380
59,399
257,250
727,029
3 Free Admissions
94,854
255,293
181,706
531,853
4 Average Ticket Price
$21.35
$1.82
$15.22
$12.80
5 Calculated Ticket Price
$26.98 r
$2.18
S12.10
$18.76
Board, Staff, Artists:
6 Full -time Paid Positions
251
100
128
479
7 Part-time Paid Positions
1,662
97
645
2,404
8 Contracted Positions
1,552
68
222
1,842
9 Percent Local
56.25
84.17
85.63
75.35
10 Percent Non -local
42.11
17.58
7.36
22.32
11 Volunteer Hours
391,371
120,714
80,000
592,085
12 Board/Directors
500
210
184
894
Income and Expenses (Actual):
Income
Contributed:
13 Fed. Govt.
126,610
63,789
852,708
1,043,107
14 State Govt
638,185
5,000
718,110
1,361,295
15 Local Govt.
919,480
1,898,269
588,454
3,406,203
16 Individuals
7,531,117
996,035
172,538
8,699,690
17 Business/Corporate
2,706,198
906,183
708,980
4,321,361
18 Foundations
1,768,369
641,918
883,736
3,294,023
19 Grants
2,258,390
277,025
115,857
2,651,272
20 Memberships
787,037
900,799
2,316,093
4,003,929
21 Fundmising Events
3,191,719
1,087,685
390,988
4,670,392
22 Other
1,259,579
290,434
49,805
1,599,818
23 Subtotal Contributed
21,186,684
7,067,137
6,797,269
35,051,090
Earned:
24 Admissions
24,952,065
653,391
4,778,944
30,384,390
25 Touring
204,933
41,361
246,294
26 Contracted Services
2,336,268
52,003
1,755,673
4,143,944,
27 Product Sales,
763,030
608,749
509,736
1,881,515
28 lnterestAnvestments
965,055
440,796
2,107,005
3,512,856
29 Other
5,040,964
302,115
286,654
5,629,733,
30 Subtotal Earned
34,262,315
2,098,405
9,438,012
45,798,732
31 Total Income
55,448,999
9,277,935
16,235,281
80,962,215
Expenses:
Personnel:
32 Full -time Artistic
1,220,204
333,801
3,322,122
4,876,127
33 Other Artistic
1518011010
77,100
931,899
16,810,009
34 Full -time Administration
7,482,223
1,979,407
2,185,506
11,647,136
35 Other Administration
1,349,999
241,114
926,295
2,517,408
36 Full -time Technical
2,725,337
1,199,742
2,056,165
5,981,244
37 Other Technical
2,857,334
649,815
112,160
3,619,309
38 Subtotal Personnel
31,436,157
4,480,979
9,534,147
45,451,283
Operating:
39 Facility Expenses
4,368,499
1,425,408
1,194,286
6,988,193
40 Marketing
4,723,212
397,644
1,226,903
6,347,759
41 ProductiontExhibition
6,873,570
1,223,461
1,784,396
9,881,427
42 Travel
354,082
37,880
34,441
426,403
43 Fundraising
1,924,073
422,497
1,245,124
3,591,694
44 Other
3,225,324
934,073
1,127,068
5,286,465
45 Subtotal Operating
21,468,760
4,440,963,
6,612,218
32,521,941
46 Total Expenses
47
52,904,917
8,921,942
16,146,365
77,973,224
Surplus/(Shonfall)
2,544,082
355,993
88,916
2,988,991.
W
Projected Income and Expenses:
Income
Contributed:
48
Fed. Govt.
49
State Govt
50
Local Govt.
51
Individuals
52
Business/Corporate
53
Foundations
54
Grants
55
Memberships
56
Fundraising Events
57
Other
58
Subtotal Contributed
Earned:
59
Admission
60
Touring
61
Contracted Services
62
Product Sales
63
Interest/Investments
64
Other
65
Subtotal Earned
66 Total Income
Expenses:
Personnel
67
Full -time Artistic
68
Other Artistic
69
Full -time Administration
70
Other Administration
71
Full-time Technical
72
Other Technical
73
Subtotal Personnel
Operating
74
Facility Expenses
75
Marketing
76
Production/Exhibition
77
Travel
78
Fundraising
79
Other
80
Subtotal Operating
81 Total Expenses
82 Surplus/(Shonfall)
Future Plans and Challenges:
83 Volunteerism
84 Sin
85 Private Donor Support
86 Government Support
Challenges:
87 Recruiting Employees
88 Recruiting Board/Volunteera
89 Balancing Budget
90 Growing in Quality
91 Building Audiences
92 Private Donor Support
93 Government Support
94 Expanding Facilities
95 Other
(A) Total
(B) Total,
(C) Total
(D) GRAND,
Performing
Museum.
Others
TOTAL
108,560
119,063
805,384
1,033,007
307,000
85,000
753,821
1,145,821
858,540
1,821,561
668,789
3,348,890
7,911,108
883,600
311,050
9,105,758
2,912,257
340,650
871,170
4,124,077
2,003,300
799,900
1,185,000
3,988,200
656,260
87,650
66,016
809,926
864,433
1,200,410
2544,000
4,608,843
2,674,642
1,643,725.
419,600
4,737,967
1,118,125
118,894
59,400
1,296,419
19,824,340
7,100,453.
7,684,230
34,609,023.
26,876,821
1,168,238
5,376,070
33,421,129
192,025
60,000
252,025
1,683,325
74,647
1,802,838
3,560,810
722,022
718,450
679,950
2,120,422
1,472,379
531,979
2,362,500
4,366,858
5,329,199
379,500
261,100
5,969,799
36,275,771
2,932,814
10,482,458
49,691,043
56,100,111
10,033,267
18,166,688
84,300,066
1,323,700
373,377
3,707,287
5,404,364
15,988,105
12,000
959,500
16,959,605
8,182,889
2,522,543.
2,446,901,
13,152,333
1,403,840
284,494
922,306
2,610,640
2,976,890
1509,220
2,153,051,
6,639,161
3,017,793
740,968
133,767
3,892,528
32,893,217 -
5,442,602
10,322,812
48,658,631
4,705,898
1,576,432
1,170,872
7,453,202
4,802,013
555,679
1,521,310
6,879,002
6,846,218
1,437,240
2,044,652
10,328,110,
291,190
70,786
35,100
397,076
1,804,598
647,846
233,547
2,685,991.
3,474,214
1,018,938
2,317,715,
6,810,867
21,924,131
5,306,921.
7,323,196
34,554,248
54,817,348
10,749,523_
17,646,008
83,212,879
1,282,763
(716,256)
520,680
1,087,187
1.48
1.14
1.23
1.28
1.74
2.21
IA6
1.80
2.05
2.54
2.12
2.23
3.11
2.93
2.10
2.71
2.58
3.21
2.77
2.85
3.56
3.79
3.71
3.69
3.32
3.14
3.40
3.29
3A4
3.39
3.37
3.40
3.72
3,16
3.63
3.61
3.64
3,16
3.65
3.59
1.96
2.68
2.94
2.53
2.30
1.92
3.09
2.43
4.00
33
0
0
0
(A) Total (B) Total (C) Total (D) GRAND
Performing Museum Others TOTAL
.
Projected Income and Expenses:
Income
Contributed:
48 Fed. Govt
108,560
119,063
805,384
1,033,007,
49 State Govt
307,000
85,000,
753,821
1,145,821.
50 Loral Govt
858,540
1,821,561,
668,789
3,348,890
51 Individuals
7,911,108
883,600
311,050
9,105,758
52 Business/Corporate
2,912,257
340,650
871,170
4,124,077.
53 Foundations
2,003,300
799,900
1,185,000
3,988,200
54 Grants
656,260
87,650
66,016
809,926
55 Memberships
864,433
1,200,410
2,544,000
4,608,841
56 Fundmising Events
2,674,642
1,643,725
419,600
4,737,967
57 Other
1,118,125
118,894
59,400
1,296,419
58 Subtotal Contributed
19,824,340
7,100,453
7,684,230
34,609,023
Earned:
59 Admissions
26,876,821
1,168,238
5,376,070
33,421,129
60 Touring
192,025
60,000
252,025
61 Connected Services
1,683,325
74,647
1,802,838
3,560,810
62 Product Sales
722,022
718,450
679,950
2,120,422
63 Interest investments
1,472,379
531,979
2,362,500
4,366,858
64 Other
5,329,199
379,500
261,100
5,969,799
65 Subtotal Earned
36,275,771
2,932,814
10,482,458
49,691,043
66 Total Income
56,100,111
10,033,267
18,166,688
84,300,066
Expenses:
Personnel
67 Full -time Artistic
1,323,700
373,377
3,707,287
5,404,364.
68 Other Artistic
15,988,105
12,000
959,500
16,959,605
69 Full -time Administration
8,182,889
2,522543
2,446,901,
13,152,333
70 Other Administration
71 Full -time Technical
1,403,840
2,976,890
284,494
1509,220
922,306
2,153,051
2,610,640.
6,639,161
72 Other Technical
3,017,793
740,968
133,767
3,892,528
73 Subtotal Personnel
32,893,217
5,442,602
10,322,812
48,658,631
Operating
74 Facility Expenses
4,705,898
1,576,432
1,170,872
7,453,202
75 Marketing
4,802,013,
555,679
1,521,310
6,879,002
76 Production/Exhibition
6,846,218
1,437,240
2,044,652
10,328,110
77 Travel
291,190
70,786
35,100
397,076
78 Fundraising
1,804,598
647,846
233,547
2,685,991
79 Other
3,474,214
1,018,938
2,317,715
6,810,867
80 Subtotal Operating
21,924,131
5,306,921
7,323,196
34,554,248
81 Total Expenses
54,817,348
10,749,523
17,646,008
83,212,879
82 Surplus/(Shonfall)
1,282,763
(716,256)
520,680
1,087,187.
Future Plans and Challenges:.
83 Volunteerism
1.48
1.14
1.23
1.28
84 Size
1.74
2.21
1.46
1.80
85 Private Donor Support
2.05
2.54
2.12
2.23
86 Government Support
3.11
2.93
2.10
2.71
Challenges:
87 Recruiting Employees
2.58
3.21
2.77
2.85
88 Recruiting Board/Volunteers
3.56
3.79
3.71
3.69
89 Balancing Budget
3.32
3.14
3.40
3.29
90 Growing in Quality
3.44
3.39
3.37
3.40
91 Building Audiences
3.72
3.46
3.63
3.61
92 Private Donor Support
3,64
3.46
3.65
3.59
93 Government Support
1.96
2.68
2.94
2.53
94 Expanding Facilities
95 Other
2.30
4.00
1.92
3.08
2.43
33
IN 11,41,11011
{ City of Newport Beach
Study Session Minutes
February 26,2002
that this is why h
8. BALBOA THEATER
to err on the side of conservatism.
PROJECT.
Assistant City Manager Wood reported that the City purchased the Balboa
Theater in 1998 for $480,000, and the City entered into a lease with the
Balboa Performing Arts Theater Foundation in 1999 to use it as a theater
and to renovate it without paying rent to the City. She stated that the
initial lease contained some provisions for protecting most of the historic
aspects of the theater; however, through amendments to the lease, this was
changed and now the requirement is for the improvements to return the
exterior design and treatment of the front fagade as close as possible to its
original appearance. She indicated that, in keeping with the lease
requirement to retain this as a first class community theater, the
Foundation decided to provide stadium seating, dressing rooms, expand the
lobby, provide concessions, and increase the number of restrooms. She
reported that the two options to add these amenities included constructing a
basement for $300,000 or purchasing the building next door at 111 Main
Street for $1.6 million. She stated that the basement construction is the
most difficult part of the construction project because of its location on the
Peninsula and the high water table. Ms. Wood stated that, as the
Foundation continued the design process with continual input from the
Building Department, the basement construction cost has increased to about
$1.7 million. She indicated that they spoke with the owner of 111 Main
Street who has a $1.6 million appraisal for the property. She stated that the
City's appraisal was $1.4 million. She indicated that the Foundation would
need only the parcel closest to the theater, noting that the building sits on
three parcels. She believed that it would be possible to cut the building in
two, lease the part closest to the theater to the Foundation, and then sell the
remainder of the building to recoup the cost of the project.
Ms. Wood reported that the City's contribution so far has been $500,000
which includes the original purchase price, as well as the lease which
provides that the City pay the building plan check fees from Community
Development Block Grant (CDBG) funds. She stated that the current cost
estimate with the basement is $5.5 million and the fund balance the
Foundation has is $1.2 million. She indicated that the staff report outlines a
number of options for Council consideration. Regarding Option 1, she stated
that the Foundation spoke to staff about demolishing the side and rear
walls, shoring the front fagade, and constructing the basement, but would
not move forward until they complete more fundraising. She reported that,
since the City is the property owner, staff was not interested in having the
Foundation move forward without having a guarantee that they would
finish the structure.
In response to Council Member Heffernan's question as to who called this
item up for Council consideration, Mayor Ridgeway noted that a negotiation
item was discussed during closed session and it was agreed upon that this
should be discussed in a public forum.
Mayor Pro Tem Bromberg stated that the initial investment in November
1998 was with CDBG funds, but asked if the new project would not involve
these funds. Ms. Wood reported that the CDBG funds are currently
Volume 55 - Page 5
INDEX
C•3248
Balboa
Performing Arts
Theater
Foundation
(38)
City of Newport Beach
Study Session Minutes
February 26,200E
committed to the Balboa Village Public Improvement Project. She stated
that, not only is this project using a bulk of the funds but the City has
applied for a Section 108 loan which is an advance on future CDBG funds.
She indicated that this means that, for the next 20 years, the City has a
repayment of over $200,000 /year on the loan. She added that this does not
give much flexibility to do other large projects. Mayor Pro Tern Bromberg
noted that there is discussion about having the Balboa Theater contribute
$200,000 to the project and then they would get the lease for the portion of
the other building. He asked if the $200,000 would also give them
ownership interest. Ms. Wood stated that this is entirely up to how Council
wants to structure the agreement. Mayor Ridgeway noted that the $200,000
could also be used toward construction.
Dayna Pettit, President and Founder of the Balboa Performing Arta Theater
Foundation, requested Council's help with the project by purchasing the
Orange Julius building. She indicated that they would pay $200,000 for 1/3
of the building to take the place of the current basement, noting that this
would save them over $1 million. She reported that their Board of Directors
has grown to 13 members who are very serious about a revitalized Balboa
with a vibrant performing arts center and cinema theater being the
centerpiece for the current renovation. She added that it would also serve as
a catalyst to change the current nature of the Village which now has
decrepit shops, vacant buildings, and graffiti. Ms. Pettit reported that they
were ready to begin construction upon the receipt of their permit last May,
but the Building Department raised a red flag about the liability of
constructing a basement in the theater. She stated that this came after they
spent $250,000 on plans which already went through the plan check process
for 1% years. She emphasized that the money used to purchase the theater
was CDBG funds which is earmarked for only depressed areas. Ms. Pettit
reported that they raised over $2.4 million; their 2000.2001 campaign has
brought in over $180,000; and the Divas and Support Guild have raised over
$100,000 since their inception two years ago. She stated that they have been
off course the last 1% years, but have corrected this and are moving forward.
She added that they hired a search team to find a business person with
strong fundraising skills, they completed a sellout Israeli author event in
concert with the Orange County Jewish Federation, and have been voted one
of the top ten non-profit organizations in the Greater Newport Beach and
Orange County communities by 714 Magazine. She stated that they need an
additional $3.9 million to help the City purchase the building next door,
build the theater, and endow them through their first year of operation. She
emphasized that the purchase of the building next door is a major part of the
solution and the City's support is critical to the success of Balboa.
Council Member Heffernan noted that the City already has $500,000
invested in this, now it is supposed to spend three times that amount, and
the Foundation has $1.2 million in the bank. He asked whether the City will
have to fill the gaps in the budget until the project is completed if the
theater comes up short with their fundraising. Ms. Pettit stated that she
firmly believes that the funds will be raised and that everything the City is
spending in Downtown Balboa is not going to do any good unless the nature
of the area is changed. Council Member Heffernan noted that the new
library in Westcliff needs $1 million and the City told them to raise funds in
the neighborhood first rather than look to the City for funding. He
Volume 55 - Page 6
_ TI DO
City of Newport Beach
Study Session Minutes
February 26, 2002
expressed the opinion that a library is more in tune to the long term
business of the City than a theater. He stated that, what the theater is
asking the City to do, is a fraction of what it will take to get the job done. He
indicated that, if the City purchases more real estate but does not have the
money to complete the job, the citizens will look at Council strangely.
Ms. Pettit assured Council that they are intent on getting this project done.
Adele Mann agreed with Council Member Heffernan. She asked if the City
has an extra $1.6 million to do this, noting that two weeks ago someone
mentioned that there are budget shortfalls. She stated that this project has
been going on since 1998 and asked what the timeline was for this.
Vaughn Dyle, 310 Fernando, stated that he will be speaking as an
arbitrator. He indicated that a number of years ago, an investment was
made for $480,000 with the expectation that the investment would take off
because other investors would come in and make money available. However,
there was a change in the market, it did not take off, and there was a margin
call for $1.6 million. He indicated that we have to assume that things might
be a little slow and, in turn, there may be another margin call for $1 million
in another year. Further, if things still did not work out and the investment
did not bring in additional money, there might be another margin call for $1
million. He noted that the City will find itself with $3.6 million invested in a
project that started out at $480,000. He suggested that Council look down
the road and determine what they are willing to spend to have this happen.
Bill Wren, Balboa Theater Director, stated that they are willing to put in
$200,000 to help pay for the difference in the appraisal cost for the
additional building. He indicated that having the property eliminates the
need for a basement and would save them about $1.4 million. He stated that
they found out from the Building Director that they can easily separate the
building so the City can sell the remainder of it in order to recoup some
money. He stated that he did not know there was any consideration of
starting the project unless the building was self sustaining and, if something
went wrong, the City would still have a marketable building. He believed
that there is no value lost and there is no need to force the City into putting
more money into the project.
Council Member Adams stated that he met with Mr. Wren and Ms. Pettit
last week to express the same concerns that Council Member Heffernan has.
He indicated that he suggested that they generate a business plan to show
how they'plan to move forward. He stated that, based on the information
they have, he does not feel comfortable and would like to see an update to
the plan, what their fundraising goals are, and the next steps. Mr. Wren
stated that the business plan that Council has did not include income
because they could not determine how fast they would receive donations. He
indicated that the economic portion is what they think the costs would be to
carry them through the building process. He stated that they would be
happy to provide Council with more information, but they would have to
second guess the donation amounts. He added that the timing for the
construction and its cost are correct if Council acquires the orange Julius
building. Council Member Adams stated that he would be more comfortable
about this investment if he had various scenarios about different fundraising
successes and what they do if they reach certain levels. He indicated that he
Volume 55 - Page 7
City of Newport Beach
Study Session Minutes
February 26, 2002
X024,
would be willing to support this if he sees better evidence that this will work.
He suggested that Council receive quarterly reports from the Board.
Mr. Wren stated that they could do that and that Council is welcome to
attend the meetings. He indicated that the City can also have a City
representative on the Board. Mayor Ridgeway added that, as part of the
business plan, he would like an estimate on how much it will cost to bring
the theater to a shell exhibit because once it is a shell exhibit, the City has
something marketable if they do not perform. Mr. Wren reported that they
would need to raise $1.2 million to get it to that stage, but he will get these
numbers to the City Manager.
Council Member Glover expressed the opinion that the Board is better off
not having a Council Member on it. She stated that she was on the Board
for the Laguna Art Museum for three years and for the Orange County
Museum, and that raising money was really tough for them even though
they are established entities. In response to Council Member Glover's
questions, Mr. Wren indicated that their budget will be about $635,OOO1year
once they are operational, but the net is less than that. He stated that they
will still be in the negative about $150,000 /year. Council Member Glover
noted that, when the operating budget for an art institution is over
$300,OOO1year, it gets more difficult to raise money. She indicated that she
is interested in seeing how the new business person analyzes this since there
is a direct correlation between the operating budget and donations.
Mr. Wren stated that the job description for the business person is strong
and that the theater realizes they are a business, not just a theater. He
indicated that they will be bringing more people onboard at the correct
stages of the theater.
Mayor Pro Tem Bromberg encouraged Mr. Wren to provide a good business
plan as soon as possible because this will need to come back as an action
item. Further, he suggested that they meet with Council Members in the
event they have concerns about the plan.
Sue Cannon, Principal of Orange County Public Relation, stated that she
has served as the publicist for the Balboa Theater for the past 5% years
when it was a mere thought. She reported that they specialize in non-profit
organizations in Orange County and has been doing this for about 20 years.
She indicated that she is proud to say that the theater has accomplished
hallmark fundraising techniques within a short period of time. She stated
that, 2Yx years ago, as Founding President of the Divas they have been able
to triple their net proceeds and also brought in over 130 members to the
Guild. She indicated that everyone is vying for volunteer time and money.
She believed that this exists because of the leadership that has been evident
with this Board and its mission to recreate one of the oldest theaters in
Orange County. She stated that they did have a hiccup, but are moving full
steam ahead knowing that they have a Iot of work to do. Ms. Cannon
reported that part of their research when they started was to look at other
theaters in Orange County, their plans, and how they started. She stated
that all the theaters are asking for money, but no one thinks this can be
done overnight or quickly. She indicated that she will do the research for
the Board and will let Council know the statistics on how long it takes to
actually open a theater. She believed that the theater is like the Laguna
Playhouse because they are creating the theater from an old building. She
Volume 55 - Page 8
9
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City of Newport Beach
Study Session Minutes
February 26,2002
emphasized that the fundraising efforts are way ahead of schedule.
Dick Ashoft, owner of Bubbles, stated that he lives in the Village and has a
business there. He indicated that the City has the opportunity to buy a
piece of land and if it does not purchase it, someone else will. He stated that
he bought Bubbles for $740,000 three years and, at Christmas, Denny's
offered him $1.5 million, but he turned it down. He expressed the opinion
that the area is not doing well but thanked Council for cleaning it up
because it will be beautiful when it is done. He indicated that urban
developers told him that the only thing that will change the area is if there
was a four hour venue. He believed that the City needs the theater and
more things like it because it will attract people to the area for at least four
hours. He emphasized that the price of the property will only increase, and
stated that, if the theater is lost, at least the City can sell the property.
Council Member Heffernan asked if this decision should be looked at relative
to how the City is doing during the mid- budget year and projections for next
year, and asked which fiscal year this will fall into. He noted that the City
has some shortfalls that are pending. Mayor Ridgeway stated that some
type of budget analysis should also be made part of the presentation if this
goes to a closed session. Council Member Heffernan stated that the theater
supporters should probably hear what the Administrative Services Director
tells Council about the shortfalls so they understand that Council is not just
being hard on them, but is facing a multi- million dollar shortfall.
4. CITYWIDE WAYFINDING & DIRECTIONAL SIGNAGE PROGRAM:
OVERVIEW OF PROPOSED PROJECT AND SCOPE OF
PROFESSIONAL DESIGN SERVICES (contd. from 11/13/01).
Assistant City Manager Wood reported that one of the recommendations
from the Balboa Peninsula Planning Study in 1998 was to do a public
signage program for the Peninsula. She stated that they brought a report to
Council and staff was given the direction to try to implement a Citywide
directional signage program. She added that this was backed by the
Economic Development Committee (EDC) because their study on how to
enhance the City's Transient Occupancy Tax recommended identifying ways
to improve, coordinate, and simplify public and visitor signage throughout
the City. She reported that this was brought to Council and, in 2000,
Council identified $50,000 for the program. Ms. Wood stated that a Request
for Proposals (RFP) was issued and five firms responded. She reported that
Hunt Design and Associates is the firm that staff and the review committee
(EDC members) felt would be best for the project. She indicated that this
was presented to Council at the November 13, 2001, Council meeting. She
stated that, following Council's concerns, Hunt Design removed using
different icons for each district from the scope of services but still kept some
type of identification for each district; removed the pedestrian mapping
system in high tourist areas; included engineering services; and included
requiring that the consultant have errors and omission insurance. She
stated that, as a result of the revisions to the scope of work, the project cost
is about $80,000, which is a reduction of $3,700 from the original project cost
that was presented to Council. She indicated that Wayne Hunt, owner of
Hunt Design, and John Temple, project manager, are present tonight.
Volume 55 - Page 9
0-3495
Citywide Wayfinding
and Directional
Signage Program
(38)
C-3�y4
STUDY SESSION AGENDA ITEM z
TO: Mayor and City Council
FROM: Sharon Wood, Assistant City Manager
SUBJECT: Balboa Theater Rehabilitation Project
Background
� Eu 2 2002
The Balboa Performing Arts Theater Foundation requested City assistance with
acquisition (S550,000) and renovation ($500,000) of the Balboa Theater in February
1998. After an appraisal, much City Council discussion, and negotiation with the
Foundation and the then owner of the Theater, the City purchased the Theater in October
1998, for the appraised value of S480,000, using Community Development Block Grant
funds.
The City entered into a lease with the Foundation in November 1998. The lease
(attached) allows the Foundation to occupy the Theater with no rent payments to the City.
The Foundation is required to make improvements to the Theater, including seismic
retrofit and renovation, required of a "first class community Theater." Renovation plans
were required to be prepared and submitted to the City in phases. Conceptual Design
Plans and Design Development Plans were to be reviewed by the City Council
Committee to Promote Revitalization of Our Peninsula (PROP), and Final Plans and
Specifications were to be submitted along with applications for building permits within
one year from the effective date of the lease. The Foundation is required to begin
construction within 60 days of approval of building permits, and complete construction
oneyear later.
The lease has been amended three times. The first amendment changed the amount of
comprehensive general liability insurance required. The second amendment provided
that the Guidelines for the Rehabilitation of Historic Structures published by the
Secretary of the Interior apply only to the exterior of the Theater. The third amendment
removes reference to these Guidelines, and requires that the improvements return the
exterior design and treatment of the front fapade as close as possible to its original
appearance
The latter two amendments were needed to accommodate the extensive rehabilitation
proposed by the Foundation to satisfy the lease requirement that that the improvements
be consistent with a first class community theater. In trying to meet this requirement, the
Foundation decided to use stadium seating, provide dressing rooms, expand the size of
the lobby and increase the number of restrooms. Because the existing Theater building
has insufficient space for all these features, the Foundation explored two options:
purchasing the building next door (111 Main Street), and expanding the Theater
rehabilitation to include demolishing the side and rear walls, excavating for a basement,
and rebuilding the side and rear walls and cladding them with original brick veneer.
Initially, the Foundation believed that the owner of the adjacent property was not
interested in selling. The City and the Foundation later learned that the property was
listed for $1.6 million. At that time, the cost estimate for constructing the basement was
$300,000, and the Foundation decided to proceed with that plan rather than spend the
tiine;and money to redesign the project in a way that would make it more expensive
PROP approved Conceptual Design Plans in November 1999 and Design Development
Plans in April 2000. The City Council granted one extension of six months for the
submission of building permit applications, changing that deadline from November 1999
to May 2000. The Foundation did meet that deadline, and the plans are approximately
70% approved by the Building Department.
Discussion
The most difficult component of the Theater design for the Building Department to
approve is the basement. Shoring and dewatering must be planned properly so that
construction will not cause damage to adjacent buildings, the basement is kept dry and
usable, and the water is discharged property. Such work can be done safely if designed
properly, but as owner of the Theater property, the City is being especially cautious about
protecting the adjacent properties from damage.
As the Foundation has done more detailed plans for the renovation and consulted with the
Building Department on dewatering and shoring concerns, the cost estimate for this part
of the project has increased to $1.7 million. This high cost, combined with concerns
about the basement construction, made it reasonable to consider acquisition of the
adjacent property.
111 Main Street
The property owner has an appraisal of $1.6 million, and that is her asking price. The
City also had the property appraised, and our appraiser's opinion of value is $1.4 million.
The building at 111 Main Street occupies three parcels of land (each 25 x 95 feet) shown
on the attached map. The first floor has three retail tenants, Orange Julius, Toys in the
Attic and J.J.'s Hair Cutting. The second floor has six apartments. There are eight
parking spaces off the alley in the rear.
0
2
The Foundation needs only the parcel closest to the Theater for its dressing rooms,
restrooms and offices. The building is constructed of reinforced concrete. It could be cut
in two, and the two lots at the corner of Main and Balboa could be sold to another party
to recoup some of the acquisition costs. Cutting the building likely would require
relocating a stairway and some bathrooms, which could result in the loss of one
apartment unit. The Building Director believes that the structure could be cut in two, but
cannot estimate the cost without more extensive study.
Financial Status of Theater Project
The City's contribution to the project so far is approximately $500,000, including
acquisition of the property and payment of plan check fees as provided in the lease,
Community Development Block Grant (CDBG) has been the funding source for all
expenditures. These funds are not available to purchase the adjacent property, because
the City has committed them to the Balboa Village streetscape improvement project.
Staff has not explored other fttnding sources.
The current cost estimate for the Theater renovation is $55 million. The Foundation has
received $2.2 million in donations, and has spent almost $500,000 on seismic retrofit,
design and construction management. After these project costs and ongoing operational
costs, their fund balance is $1.2 million. The Foundation Board believes that their
fundraising would be more successful if the project were under construction.
Options
The City Council may wish to consider additional City participation in the Theater
project. Staff has outlined some options to help the Council's discussion of this matter.
1. Make no additional City investment in the project, but amend the lease to provide
additional time for construction to begin and to prohibit any demolition until the
Foundation has sufficient funds to construct the basement and the new shell
building.
While this option would give the Foundation more time to raise the money needed
to complete the project, it would continue their heavy reliance on donations. If
fundraising is not successful, the City eventually would need to terminate the
lease and make decisions about the Theater's future.
iDirect staff to negotiate for purchase of the property at 111 Main Street. If
successful, amend the lease to (a) include the additional property, (b) provide for
cost sharing and project management if the building is to be divided, and (c) add
deadlines for specific milestones in the fundraising, design, permitting and
construction processes.
This option could serve as a catalyst for progress on renovation and increase
fundraising potential. Expanding the Theater to the side instead of into a
3
basement would be a less complicated construction project. However, cutting the
adjacent building in two and selling the portion not used by the Theater has
complexities of its own. Other concerns with this option include the investment
of more City money, and potential City responsibilities in relocating existing
tenants.
3. Direct the Foundation to negotiate with the owner of 111 Main Street to lease a
tenant space.
Staff recently learned from the listing real estate agent that the commercial tenant
closest to the Theater, Toys in the Attic, is leaving, making that space (1,438
square feet) available. This might provide offices for the Foundation, but it could
not satisfy their dressing room and restroom space needs.
4. Direct the Foundation to redesign the project within the existing Theater building.
This option would reduce construction costs by at least $1.7 million, eliminate the
potential for damage to adjacent properties, and preserve more of the historic
Theater. On the other hand, this option would not allow for live performances,
and the likelihood of success for a small film house may be limited (especially
since Newport Beach also has the Lido and Port Theaters).
5. Terminate the Foundation's lease. Is
The lease requires the Foundation to "diligently process any corrections and
changes to the submittals that are necessary to comply with State and local
law..." If the City Council is not satisfied that the Foundation has complied with
this provision of the lease, the City could invoke the default provisions, up to and
including termination. This would have very serious consequences for the
Foundation, which has raised over $2 million for the Theater project. Such an
action would return the Theater to the City, which would need to make decisions
about its future.
v
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RECORDING REQUESTED AND
WHEN R�GOFPM RE N TO:
City Clerk's Office
71" rt --Y
City of' IViniqI BeaelI ,, °,i�,i
3300 Newport Botif6ard-
P.O. Box 1768
Newport Beach, CA 92658 -8915
Recorded in the county of orange, caiifornia
Gary L. Granville IA1III�QIIIIE11111IIIINa11111fiII1llll Clark/Reco Fee
19990066742 1:10pm 01/29/99
005 11011852 11 19
L02 43 6.00 126.00 0.00 0.00 0.00 129.00
Space above this line for Recorder's use only.
Exempt Recording Request per Government Code 6103
Contract No. 3248
LEASE
BY AND BETWEEN
THE CITY OF NEWPORT BEACH
F, J,
THE BALBOA PERFORMING ARTS
THEATRE FOUNDATION
0
l
1i
N�
Table of Contents 1.
Page
ARTICLE 6 CONTRIBUTIONS FUND ......................................... ............................... 6
0
�1
ARTICLE 1
SUBJECT OF LEASE ..............................................
............................... 2
1.1
Purpose of the Lease ................................................
............................... 2
1.2
The Property .............................................................
............................... 2
1.3
Lessor .......................................................................
............................... 2
1.4
Lessor .......................................................................
............................... 2
ARTICLE 2
LEASE OF PROPERTY ...........................................
............................... 2
2.1
Lease of Property ......................................................
............................... 3
2.2
Condition of Title .......................................................
............................... 3
ARTICLE 3
POSSESSION OF PROPERTY ................................
............................... 3
3.1
Quiet Employment .....................................................
............................... 3
3.2
Condition of Property ................................................
............................... 3
3.3
Ownership of Improvements .....................................
............................... 3
3.4
Surrender of Property ................................................
............................... 4
3.4.1 ..........................................................................
............................... 4
3. 4. 2 ..........................................................................
............................... 4
3. 4. 3 ..........................................................................
............................... 4
ARTICLE 4
TERM /OPTION TO PURCHASE ..............................
............................... 4
4.1
Duration and Commencement
4
4.2
..................................
Option to Extend .......................................................
...............................
............................... 4
4.3
Option to Purchase ...................................................
............................... 4
4.3.1 ..........................................................................
............................... 5
4. 3. 2 ..........................................................................
............................... 5
4. 3. 3 ..........................................................................
............................... 5
4. 3. 4 ..........................................................................
............................... 5
4. 3. 5 ..........................................................................
............................... 5
4.4
Option - Purchase Price ............................................
............................... 5
4.5
Right of First Refusal .................................................
............................... 5
ARTICLE 5
RENTI CONSIDERATION .........................................
............................... 5
5.1
No Money Payable by Lessee ..................................
............................... 5
5.2
Other Consideration ..................................................
............................... 6
5.2.1 ..........................................................................
............................... 6
5. 2. 2 ..........................................................................
............................... 6
5.2.3 ..........................................................................
............................... 6
5. 2. 4 ..........................................................................
............................... 6
5.2.5 ..........................................................................
............................... 6
ARTICLE 6 CONTRIBUTIONS FUND ......................................... ............................... 6
0
�1
k
Paqe
ARTICLE .7
ANNUAL BUDGET /OPERATION AND MARKETING PLAN . ...............
6
7.1
Budgetl Timing ........................................................... ...............................
6
7.1.1 Initial Budget ................................................... ...............................
6
7.1.2 Proposed Revision ......................................... ...............................
7
7.1:3 Year End Financial Statement ........................ ...............................
7
7.1.3 Proposed Revision ......................................... ...............................
7
7.1.4 Year End Financial Statement ........................ ...............................
7
7.2
Contents of Budget ................................................... ...................:...........
7
7.3
OOperations and Marketing Plan ................................. ....:..........................
7
7.4
Records ..................................................................... ...............................
8
7.5
Audit .......................................................................... ...............................
8
ARTICLE 8
USE OF PROPERTY ................................................. ...............................
8
8.1
Permitted Use ............................................................ ...............................
8
8.2
Performances / Frequency ............................................. ..............................8
8.2.1 ........................................................................ ...............................
9
8.2.2 ........................................................................ ...............................
9
8.2.3 ........................................................................ ......................:........
9
8.3
Program Standards .................................................... ...............................
9
8.3.1 ........................................................................ ...............................
9
8.3.2 ........................................................................ ...........................:...
9
8.3.3 ........................................................................ ...............................
9
8.3.4 ........................................................................ ...............................
9
8.4
8.5
Cooperation ............................................................... ...............................
Change of Use ......................................................... ...............................
9
10
8.6
Compliance with Laws ............................................. ...............................
10
8.7
Zoning and Planning ................................................ ...............................
10
8.8
Nondiscrimination ..................................................... ...............................
10
8.8.1 ...................................................................... ...............................
10
8.8.2 ...................................................................... ...............................
10
8.8.3 ...................................................................... ...............................
11
ARTICLE 9
REQUIRED IMPROVEMENTS ................................ ...............................
11
9.1
Lessee's Obligations ................................................ ...............................
11
9.2
Seismic Retrofit/ Remediation ................................... ...............................
11
9.3
Conceptual Design Plans ......................................... ...............................
12
9.4
Design Development Plan ........................................ ...............................
12
9.5
Final Plans and Specifications ................................. ...............................
13
9.6
Building Permits ....................................................... ...............................
13
9.7
Construction of Required Improvements .................. ...............................
13
9.8
General Requirements ............................................. ...............................
14
9.8.1 ......................................................................... ...............................
14
9. 8. 2 ......................................................................... ...............................
14
9.9
Extensions ............................................................... ...............................
14
Page
ARTICLE 10 REPAIRS AND MAINTENANCE .................. ............................... 14
ARTICLE 11 STATUS AND MANAGEMENT OF LESSEE .............................. 15
11.1 Nonprofit Status ....................................................... ............................... 15
11.2 Executive Committee and Advisory Committee ....... ............................... 15
11.3 Employment of Staff ................................................. ............................... 15
ARTICLE 12
ALTERATIONS ............................................. ...............................
16
12.1
Written Consent ....................................................... ...............................
16
12.2
Notice of Non - responsibility ..................................... ...............................
16
ARTICLE 13
PAYMENT OF UTILITIES, TAXES, CHARGES AND FEES .......
16
13.1
Public and Private Utility Services ............................ ...............................
16
13.2
Taxes, Assessments. Fees and Charges ................ ...............................
16
13.3
Proof of Payment ..................................................... ...............................
17
13.4
Payment by Lessor .................................................. ...............................
17
13.5
Property Taxes not Valid .......................................... ...............................
17
13.6
Notice of Possessory Interest: Payment of Taxes and Assessments
on Value of Entire Lease Premises .......................... ...............................
17
ARTICLE14
LIENS ............................................................ ...............................
17
14.1
Indemnification ......................................................... ...............................
17
14.2
Satisfaction of Liens ................................................. ...............................
18
14.3
Notice to Lessor ....................................................... ...............................
18
14.4
Notice of Non - Responsibility .................................... ............................... 18
ARTICLE 15
INDEMNIFICATION ...................................... ...............................
18
15.1
Indemnity ................................................................... .............................18
15.2
CERCLA Liability ...................................................... ...............................
19
15.3
Expense of Proceedings .......................................... ...............................
19
15.4
Release ...................................................................... .............................19
15.5
Waiver of California Civil Code Section 1542 ........... ...............................
19
15.6
Definition of Hazardous Materials ............................ ...............................
20
ARTICLE 16
INSURANCE ................................................. ............................... 20
16.1
Insurance to be Maintained ...................................... ...............................
20
16.1.1 ....................................................................... ...............................
20
16. 1. 2 ....................................................................... ...............................
20
16. 1. 3 ....................................................................... ...............................
20
16. 1. 4 ....................................................................... ...............................
21
16.2
Acceptable Terms of Coverage ................................ ...............................
21
16.3
Index ........................................................................ ...............................
21
16.4
Waiver of Subrogation .............................................. ...............................
21
3
v
Page
ARTICLE 17
DAMAGE BY FIRE OR CASUALTY ............. ...............................
22
17.1
Lessee to give Notice ............................................... ...............................
22
17.2
Restoration ................................................................. .............................22
17.3
Casualty Late in Term ...............................................................
:............. 22
17.4
Acceptable of Insurance Proceeds .......................... ...............................
23
17.4.1 ....................................................................... ...............................
23
17. 4. 2 ....................................................................... ...............................
23
17. 4. 3 ....................................................................... ...............................
23
ARTICLE 18
' EMINENT DOMAIN ..................................:.... ...............................
23
18.1
Lease Governs ......................................................... ...............................
23
18.2
Termination of Lease ............................................... ...............................
23
18.3
Partial Taking - Restoration ...................................... ...............................
24
18.4
Distribution of Award ................................................ ...............................
24
18.5
Allocation of Award - Partial Taking ......................... ...............................
24
18.5.1 ....................................................................... ...............................
24
18. 5. 2 ....................................................................... ...............................
24
18. 5. 3 ....................................................................... ...............................
24
18.6
Allocation of Award - Temporary Taking .................. ...............................
24
18.7
Allocation of Award - Total Taking ........................... ...............................
24
18.7.1 ....................................................................... ...............................
25
18. 7. 2 ....................................................................... ...............................
25
18.8
Conduct of Proceedings ........................................... ...............................
25
18.9
Notices ..................................................................... ...............................
25
ARTICLE 19
ASSIGNMENT AND SUBLETTING .............. ...............................
25
ARTICLE 20
LEASEHOLD MORTGAGES ........................ ...............................
25
ARTICLE 21
PERFORMANCE OF LESSEE'S COVENANTS ..........................
25
21.1
Right of Performance ............................................... ...............................
25
21.1.1 ....................................................................... ...............................
26
21. 1. 2 ....................................................................... ...............................
26
21. 1. 3 ....................................................................... ...............................
26
21.2
Reimbursement and Damages ................................ ...............................
26
ARTICLE 22
REPRESENTATIONS ...........................................................
:...... 26
22.1
Lessor's Representations ......................................... ...............................
26
22.1.1 ....................................................................... ...............................
26
22. 1. 2 ....................................................... :..............................................
26
22.2
Lessee's Representations ........................................ ...............................
26
22.2.1 ...................................................................... ...............................
26
22. 2. 2 ....................................................................... ...............................
26
22. 2. 3 ....................................................................... ...............................
27
22. 2. 4 ....................................................................... ............................... 27
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ARTICLE 23
DEFAULTS, REMEDIES AND TERMINATION ...........................
27
23.1
Legal Actions ........................................................... ...............................
27
23.1.1 Institution of Legal Actions .................. ...............................
27
23.1.2 Applicable Law ................................... ...............................
27
23.2
Rights and Remedies are Cumulative ...................... ...............................
27
23.3
Occurrence of Default ....................................:......... :.....:........................
27
23.3.1 ............................................................ ...............................
27
23.3.2 ............................................................ ...............................
28
23.3.3 ............................................................ ...............................
28
23.3.4 ............................................................ ...............................
28
23.3.5 ............................................................ ...............................
28
23.4
Remedies ................................................................... .............................28
23.4.1 ............................................................ ...............................
28
23.4.2 ............................................................ ...............................
28
23.4.3 ............................................................ ...............................
28
ARTICLE 24
PERMITTED CONTESTS ............................. ...............................
29
ARTICLE 25
ENTRY BY LESSOR ..................................... ...............................
29
ARTICLE 26
FORCE MAJEURE ....................................... ...............................
29
ARTICLE 27
27.1
MISCELLANEOUS ....................................... ...............................
Notices ....................................................................... .............................29
29
27.2
No Claims Against Lessor ........................................ ...............................
30
27.3
Integration ................................................................ ...............................
30
27.4
No Waiver By Lessor ............................................... ...............................
30
27.5
Severability ................................................................. .............................31
27.6
Holding Over ............................................................ ...............................
31
27.7
No Partnership ......................................................... ...............................
31
27.8
Federal Funds Provisions ........................................ ...............................
31
27.9
Time of the Essence ................................................. ...............................
32
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U
LEASE BY AND BETWEEN
THE CITY OF NEWPORT BEACH AND THE BALBOA PERFORMING ARTS
THEATRE FOUNDATION
This Lease ( "Lease "), entered into as of November 23, 1998 (Effective Date) by
and between the City of Newport Beach, a Charter City and municipal corporation
( "Lessor') and the Balboa Performing Arts Theatre Foundation ( "Lessee "), is made with
reference to the following:
RECITALS
A. Lessor is the owner of the property, structures and improvements,
commonly known as the Balboa Theatre located at 707 E. Balboa Blvd in
the City of Newport Beach ( "Property ").
B. Lessee purchased the Property with Community Development Block
Grant (CDBG) funds ( "Federal Funds ") from the United States Department
of Housing and Urban Development. The Federal Funds were granted
pursuant to Title 1 of the Housing and Community Development Act of
1974 (42 U.S.C. 5301 et. seq.) as amended (Act) and the Regulations of �)
24 C.F.R. Section 570 e.-seq. (Regulations).
C. The Federal Funds were granted to Lessor, in part, to benefit low income
residents and households in the vicinity of the Property and to revitalize
the economy in the primary commercial area that serves these residents.
D. Lessee is a non - profit corporation organized pursuant to and in
compliance with the provisions of California law and is presently in good
standing. Lessee was organized by, and its members include, individuals
who reside in an around the Property and the area to be benefited by.the
use of the Federal Funds.
E. The City Council of the City of Newport Beach (City Council) has
determined that this Lease and the use of the Property as a Theatre is
consistent with the City Charter, the Newport Beach General Plan and
Zoning Ordinance and all other applicable Federal, State and local laws.
F. The City Council has also determined that this Lease will benefit, and
serve the interests of, the low income residents and business owners in
the area for which the Federal Funds were granted.
NOW, THEREFORE, in consideration of the terms, covenants and conditions in
this Lease, Lessor and Lessee hereby agree as follows: 0)
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. ARTICLE 1 SUBJECT OF LEASE
1.1 Purpose of the Lease
The purpose of this Lease is to require Lessee to renovate and rehabilitate the
Property consistent with its original design and architecture and, subsequent to
renovation, require Lessee to operate a first class community Theatre. The
renovation and operation of the Theatre is intended to serve the needs and
interests of the residents and business owners in the area to be benefited
through the use of the Federal Funds.
1.2 The Property
The term "Property" includes the land described in Exhibit A and depicted in
Exhibit B as well as the structure(s), any improvements and personal property.
The term "Theatre" generally refers to the use of the structure(s), improvements
and fixtures located on the Property as a non - profit cultural and performing arts
center.
1.3 Lessor
Lessor is the City of Newport Beach, a Charter City and municipal corporation.
The principal office of Lessor is located at City Hall, 3300 Newport Boulevard,
Newport Beach, California 92658 -8915. For the purposes of this Lease, the term
"Lessor" shall include all officers, employees, agents or representatives of
Lessor..
1.4 Lessee
Lessee is the Balboa Performing Arts Theatre Foundation. Lessee is a
California non - profit public benefit corporation organized for the purpose of
renovating, operating and maintaining the Theatre and engaging in activities that
will, among other things, serve the interests of, and benefit, the area commonly
known as Central Balboa or Balboa Village. For the purposes of this Lease, the
term "Lessee" shall include all officers, employees, agents or representatives of
Lessee.
ARTICLE 2 LEASE OF PROPERTY
2.1 Lease of Proverty
Lessor leases the Property to Lessee, and Lessee leases the Property from
Lessor for the Term and pursuant to the terms, provisions, covenants and
conditions of this Lease. Lessor reserves all rights to substances below the
2
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is
surface of the Property and the right to produce or take any of those substances
so long as the activities do not impair or interfere with the operation or aesthetics
of the Theatre.
2.2 Condition of Title
The Property is leased subject to the Permitted Exceptions (Exhibit C) and other
matters affecting title which do not inhibit, prevent or impair the operation,
maintenance or use of the Theatre.
ARTICLE 3 POSSESSION OF PROPERTY
3.1 Quiet Enjoyment
Lessee shall be entitled to peaceably and quietly use and enjoy the Property for
the Term, without hindrance or interruption by Lessor except for the exercise of
Lessor's rights pursuant to this Lease. Lessor shall not be liable in damages or
otherwise, because of the interruption or termination of any service provided by
Lessor (such as, water or sewer service), or a termination, interruption or
disturbance of any service attributable to any act or omission of Lessee.
3.2 Condition of Property
Lessee has investigated and researched all physical conditions of the Property
that could affect Lessee's use, enjoyment and improvement of the Property
including soil conditions, the condition of structures, and the condition of utilities.
By execution of this Lease, Lessee shall be deemed to have accepted the
Property in an "AS IS" condition. Lessor has provided Lessee with a report that
confirms the presence of lead -based paint on the Property and Lessee
acknowledges that substantial improvements, including seismic retrofit and
remediation of the lead -based paint, will be necessary before the Property can
be operated as a first -class community Theatre as required by this Lease.
3.3 Ownership of Improvements
During the Term of this Lease, Lessee shall hold title to the improvements and
personal property necessary or convenient to the operation or maintenance of
the Theatre, such as fixtures, machinery, rigging, lighting, staging, merchandise,
trade fixtures (collectively, Equipment) that have been constructed or placed on
the Property
3 0)
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. 3.4 Surrender of Property
3.4.1 On expiration of the Term or termination of this Lease, Lessee shall
peaceably and quietly leave and surrender the Property and
Equipment to Lessor, in good order, condition and repair,
reasonable wear and tear and obsolescence excepted. Lessee
shall deliver to Lessor all contracts, agreements, books, records,
and other documents related to the operation, maintenance or use
of the Property.
3.4.2 Upon the expiration of the Term or termination of this Lease and
within ten (10) days of a written request by Lessor, Lessee shall
immediately deliver to Lessor the following:
(i) Documents reasonably necessary for Lessor's ownership of the
Property and Equipment to be clearly reflected of record.
(ii) Title insurance, surety bond, or other security reasonably
acceptable to Lessor insuring Lessor against all claims and liens
against the Property other than those incurred by Lessor or
accepted by Lessor in writing.
(iii) All plans, surveys, permits and other documents relating to the
Property as may be in the possession of Lessee at the time.
3.4.3 All documents and instruments to be delivered pursuant to this
Subsection shall be in a form satisfactory to Lessor.
ARTICLE 4 TERM /OPTION TO PURCHASE
4.1 Duration and Commencement
The Term of this Lease shall commence on the Effective Date and shall expire
on the twenty -fifth (25th) anniversary subject to early termination or Lessee's
exercise of the option to purchase as provided in Section 4.3.
4.2 Option to Extend
Any extension of this Lease, and the terms and conditions of the extension, shall
be at Lessor's option, in its sole and absolute discretion.
4.3 Option to Purchase
Lessee shall have the option to purchase the Property subject to satisfaction of
the following:
0 4
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i
4.3.1 Lessee shall have completed the Required Improvements; and
4.3.2 Lessee shall have operated the Theatre in full compliance with the
provisions of Article 8 for a period of five (5) years; and
4.3.3 Lessee has given Lessor thirty (30) days written notice of its
intention (notice of intent) to exercise the option to purchase; and
4.3.4 Lessee is not in default when the notice of intent is served or at
close of escrow; and
4.3.5 Lessee, within fifteen (15) days after service of the notice of intent,
opens an escrow for the purchase of the Property and deposits ten
percent (10 %) of the purchase price into escrow.
4.4 Option - Purchase Price
The purchase price of the Property shall be the sum of (1) the price paid by
Lessor ($480,000) and (2) an amount equal to $480,000 multiplied by the
cumulative percentage increase in the Consumer Price Index (All Urban
Consumers — Los Angeles, Anaheim Riverside — All Items) from the Effective
date to the date of the Notice of Intent. For example, if Lessee exercises the
option nine (9) years after the Effective Date and the increase in the CPI during
that period is thirty percent (30 %), the purchase price would be $624,000.
($480,000 plus $144,000)
4.5 Rioht of First Refusal
Lessee shall have the right of first refusal to purchase the Property prior to the
sale to any third party. Lessor shall give Lessee sixty (60) days written notice of
its intent to sell the Property and Lessee's right to purchase during that period.
Lessee shall exercise the option by serving Lessor with written Notice of Intent to
purchase within sixty (60) days after receipt of the notice of intent to sell and
complying with Subsection 4.3.5. The purchase price for the Property shall be
as specified in Section 4.4.
ARTICLE 5 RENT /CONSIDERATION
5.1 No Money Payable by Lessee
Lessee shall not pay money as rent to Lessor.
5 10)
l2
9 5.2 Other Consideration
In consideration for this Lease, Lessee covenants that, during the Term, it will:
5.2.1 Operate and maintain a Theatre on the Property in full compliance
with the terms and conditions of this Lease and at no cost to
Lessor.
5.2.2 Maintain its non - profit status.
5.2.3 Construct the Required Improvements in accordance with the
provisions of Article 9 and maintain the Property in accordance with
this Lease at.no cost to Lessor.
5.2.4 Defend, indemnify and hold Lessor harmless with respect to the
renovation, use, maintenance and operation of the Property.
5.2.5 Use any excess revenue or funds for purposes related to the
operation of the Theatre or the revitalization of Central
Balboa/Balboa Village. The term "excess revenue or funds" means
any revenue or funds (other than the principal and interest of the
Contributions Fund) in excess of the amount projected in Lessee's
then current Budget and which, in Lessee's reasonable
determination, are not needed for Lessee's reserve account(s).
ARTICLE 6 , CONTRIBUTIONS FUND
Lessee shall establish and maintain, at a financial institution in an account insured by
FDIC, FSLIC or similar insurance, a separate fund (Contributions Fund) for the purpose
of accepting contributions from any source. Lessee shall use the Contributions Fund to
pay for the improvements required by this Lease and /or to support the operation and
maintenance of the Theatre. Lessee shall establish and maintain an on -going fund
raising program as part of its Operations and Marketing Operations Plan Article 7 and
use its best efforts to ensure the success of the program.
ARTICLE 7 ANNUAL BUDGET /OPERATION AND MARKETING PLAN
7.1 Budget/Timing
7.1.1 Initial Budget
Lessee shall prepare, and submit to the Lessor, an annual budget
for the renovation, maintenance and operation of the Theatre
(Budget). The first Budget shall be adopted, and submitted to
6
13
7.2
7.3
Lessor, within sixty (60) days after the Effective Date. Subsequent
annual Budgets shall be submitted to Lessor no later than fifteen
(15) days after adoption by Lessee.
7.1.2 Proposed Revision
Lessee shall provide Lessor with material modifications or revisions
to the Budget within fifteen (15) days after adoption by Lessee.
7.1.3 Year End Financial Statement
Within ninety (90) days after the last day of Lessee's fiscal year,
Lessee shall submit to Lessor a cash flow statement itemizing all of
its revenues and expenditures.for that fiscal year.
Contents of Budget
The Budget shall specify in reasonable detail (as appropriate given the status of
renovation), (i) the proposed rates and charges for the use of the Theatre, (ii) the
balance in all funds and accounts maintained by Lessee, (iii) all projected
revenues and sources of funds for the fiscal year, (iv) the expenditures proposed
to be made by Lessee in fulfilling its obligations pursuant to this Lease, (v)
marketing program and costs, (w) all other proposed expenditures of Lessee, 0
(vii) the principal balance of the Contributions Fund, (viii) income from the
Contributions Fund, and (ix) cash reserves, if any.
Operations and Marketing Plan
Lessee shall prepare and adopt an Operations and Marketing Plan (Operations
Plan) during the Term. The initial Operations Plan shall be adopted one hundred
and eighty (180) days prior to anticipated completion of the Required
Improvements. The Operations Plan shall be revised from time to time to reflect
new performances /events, new fund - raising strategies and new or revised
marketing programs. The Operations Plan shall comply with, and provide
information relevant to, the provisions of Article 8 and specify in reasonable
detail (as appropriate given the status of renovation), (i) performances, meetings,
concerts and other events at the Theatre that have been, or are proposed to be,
scheduled (ii) performers and events which Lessee is actively seeking to
schedule at the Theatre, (iii) a marketing Plan for the Theatre including programs
for attracting attendees and efforts to integrate the operation of the Theatre into
efforts to revitalize the local economy, and (iv) fund raising efforts including a
report on fund raising efforts for the prior year. The Operations Plan shall be
submitted to Lessor within fifteen days after adoption or any material
modification.
7�
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! 7.4 Records
Lessee shall keep and maintain complete, accurate and customary records and
books of account on all sales, whether for cash or on credit, all business
transactions made with respect to the Property during each fiscal year, and the
principal and income of the Contributions Fund. These records shall be retained
intact for a period of not less than three (3) years after the end of each fiscal year
to which the records and books of account pertain. Lessor and representatives
of the United States Government shall be entitled, upon reasonable notice and
during business hours, to inspect and make copies of any and all of the records
and books of account.
7.5 Audit
Lessor and /or the United States Government shall, once per fiscal year, be
entitled to conduct an audit of all records and books of account that Lessee is
required to maintain.
ARTICLE 8 USE OF PROPERTY
8.1 Permitted Use
M The Property shall be used primarily for the operation of a first class cultural and
performing arts center (Theatre) open to the general public. Lessee shall
operate the Theatre in accordance with the standards specified in this Lease and
the relevant Operations Plan. Lessee may, in conjunction with performances,
events and fund - raising activities, conduct incidental operations such as limited
food service or catering, on premises sale of alcoholic beverages (provided
Lessee obtains all required governmental permits and approvals), concessions,
and retail sales directly related' to performances or fund raising events.
(Permitted Uses). Lessee may conduct benefits, fund - raising events, previews,
receptions and similar activities where admission is restricted subject only to
compliance with this Lease. Lessee may allow nonprofit civic, charitable,
educational and community organizations to periodically use the Theatre for fund
raising, education or community events in accordance with this Lease and the
Operations Plan. Lessee may conduct fund - raising and similar events on the
Property after completion of the improvements contemplated by Section 9.2
(Seismic Retrofit) and before completion of Required Improvements subject to
issuance of a Special Events Permit by Lessor.
8.2 Performances /Frequency
Lessee shall operate the Theatre in a prudent and . businesslike manner
reasonably calculated to assist in the efforts of Lessor and others to revitalize the
8
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8.3
local economy and in full compliance with the Operations Plan.
8.2.1 Lessee shall schedule and present performances or cultural events
on at least one hundred (100) days of the twelve (12) month period
commencing sixty (60) days after completion of Required
Improvements.
8.2.2 Lessee shall, for each subsequent twelve (12) month period,
schedule and present performances or cultural events on at least
one hundred and fifty (150) days.
8.2.3 Operation of the Theatre is the fundamental consideration for this
Lease and Lessee shall ensure and promote the maximum
reasonable use of the Theatre by performers, artists, and
entertainers likely to attract patrons. The Theatre shall be operated
consistent with the standards, practices and procedures utilized by
first class community Theatres in other jurisdictions.
Program Standards
Lessee shall operate the Theatre in a manner reasonably calculated to achieve
the following objectives:
8.3.1 Provide frequent and high quality performances and cultural events
to attract patrons to the Theatre and Central Balboa /Balboa Village.
8.3.2 To serve as a catalyst to the revitalization of the economy of the
area to be benefited by use of the Federal Funds.
8.3.3 To make the Theatre accessible to, and enjoyable by, as wide a
potential audience as possible including the low income residents
of the area to be benefited by the use of Federal Funds;
8.3.4 To utilize the skill, ability and energy of members of the community
in combination with a capable and experienced professional staff to.
fund and complete the renovation as well as operate and maintain
a first class community Theatre.
8.4 Cooperation
Lessor and Lessee shall, at least ninety (90) days prior to completion of the
Required Improvements, commence discussion of a parking validation program
that would allow patrons of the Theatre to use public parking at reduced rates.
Lessor and Lessee shall also discuss ways to integrate operation of the Theatre
9
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0 into programs for the economic revitalization of Central Balboa /Balboa Village.
8.5 Change of Use
Lessee shall not use, or conduct any activities on, the Property except the
Permitted Uses without the prior written consent of Lessor, which consent may
be withheld at Lessor's sole discretion.
8.6 Compliance with Laws.
Lessee shall not use the Property in a manner liable to create a public or private
nuisance or liable to cause structural injury to the Theatre. Lessee shall not
conduct any operation that would invalidate any insurance coverage required of
Lessee. Lessee shall not violate any local, state or federal law in the renovation,
maintenance, or operation of the Property or Theatre. Lessee shall obtain any
required permit(s) from the City and approval from the Department of Alcohol
Beverage Control prior to any sale of alcoholic beverages on or from the
Property.
8.7 Zoning and Planning
Lessor acknowledges that the use of the Property as a Theatre is a legal non-
conforming use as that term is defined in Title 20 of the Newport Beach
Municipal Code (Zoning Code). Lessee shall be entitled to repair, alter, and
modify the structures and improvements on the Property in accordance with the
provisions of the Zoning Code provided Lessee complies with the provisions of
this Lease. Lessee shall also use the Property in conformance with the
provisions of the Central Balboa Specific Plan.
8.8 Nondiscrimination
8.8.1 Lessee shall not discriminate against any person or group of
persons, on account of race, color, creed, religion, sex, marital
status, national origin, or ancestry, in the renovation, operation,
enjoyment or occupancy of the Property.
8.8.2 Lessee shall not discriminate against any employee or applicant for
employment because of race, color, religion, sex, national origin,
age or handicap. Lessee shall take positive steps to ensure that
applicants are employed, and that employees are treated during
employment, without regard to their race, color, religion, sex,
national origin, age or handicap. Lessee shall post in conspicuous
places, available to employees and applicants for employment,
notices specifying the non - discrimination provisions of this Lease.
10
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Lessee shall, in all solicitations or advertisements for employees i
placed by or on behalf of Lessee, state that all qualified applicants 7�
will receive consideration for employment without regard to race,
color, religion, sex, national origin, age or handicap. Lessee shall
not discriminate on the basis of age in violation of any provision of
the Age Discrimination Act of 1975. Lessee shall not discriminate
against, or with respect to, any otherwise qualified handicapped
individual as provided in Section 504 of the Rehabilitation Act of
1973.
8.8.3 Lessee agrees not to discriminate on the basis of sex, marital
status, race, color, religion, creed, ancestry or national origin of any
person with respect to any agreement, license, contract related to
the renovation, operation, use or occupancy of the Property. All
such contracts, licenses, agreements shall contain non-
discrimination provisions substantially similar to this Lease.
ARTICLE 9 REQUIRED IMPROVEMENTS
9.1 Lessee's Obligations
The Property requires substantial renovation and rehabilitation to be used as, or
considered, a first class community Theatre. Lessee shall design, obtain building
permits for, and then construct the improvements specified in this Article
(Required Improvements) at Lessee's sole cost and expense
9.2 Seismic Retrofit/Remediation.
The primary structure on the Property is an unreinforced masonry building
constructed prior to 1935 and is subject to the provisions of Chapter 15.07 of the
Newport Beach Municipal Code (Earthquake Hazard in Existing Buildings). In
addition, a preliminary investigation of the Property has revealed some lead -
based paint. Lessee shall submit to Lessor, plans and specifications for
improvements to the Property necessary to comply with the provisions of
Chapter 15.07 (Seismic Retrofit) and a plan to remediate the lead based paint
( Remediation). Lessee shall retain a licensed contractor to construct the Seismic
Retrofit and complete the Remediation. Lessee shall complete the Seismic
Retrofit and the Remediation no later than the date on which the Required
Improvements are required to be completed. Lessee shall be solely responsible
for all costs and expenses associated with the Seismic Retrofit and the
Remediation.
11 .�
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9.3 Conceptual Design Plans
Lessee shall prepare, and submit to Lessor for approval, a proposed conceptual
Plan for the design, construction, furnishing and equipping of the Property for
use as a theatre (Conceptual Design Plan). The Conceptual Design Plan shall
be prepared by a licensed architect. The Conceptual Design Plan shall generally
describe those elements typically included in preliminary Conceptual Design
Plans for the renovation and rehabilitation of a theatre constructed in the 1920's.
The Conceptual Design Plans shall include, without limitation, (1) seating layout
and design; (2) stage and dressing room layout and design (3) lobby and
concession area design; (4) structural modifications necessary to comply with
uniform codes; (5) interior design elements and treatment; (6) exterior design
and treatment; (7) sound and projection systems; (8) lighting systems and
design; (9) public area layout, design and treatment; and (10) stage, orchestra
pit and roll -down backdrop design and treatment. Lessor's right to approve the
Conceptual Design Plan shall be limited to ensuring that the improvements
contemplated by the Conceptual Design Plan are consistent with a first class
community theatre and reasonably consistent with the Guidelines for the
Rehabilitation of Historic Structures published by the Secretary of Interior. The
Conceptual Design Plan shall be deemed approved if Lessor fails to serve
written notice of disapproval within thirty (30) days following submittal. Lessor's
approval shall not be unreasonably withheld and any disapproval by Lessor shall
specify with particularity the components of the Conceptual Design Plan
disapproved, the reasons for disapproval and alternatives that Lessor would
approve. The Parties shall agree on a Conceptual Design Plan within sixty (60)
days of submittal.
9.4 Design Development Plan
Subsequent to approval of the Conceptual Design Plan, Lessee shall submit
Design Development Plans to Lessor for approval. The Design Development
Plans shall be based on, consistent with and amplify on the information provided
in the Conceptual Design Plan. The Design Development Plans shall include,
(1) specific interior and exterior lighting. Plans and design; (2) specific information
regarding the color, material, treatment and design of all interior and exterior
elements; and (3) schedules showing the principal stages, phases and timing of
construction. Lessor's right of approval, which shall not be unreasonably
withheld, shall be limited to a determination that the Design Development Plans
are based on and consistent with the approved Conceptual Design Plans. The
Design Development Plans shall be deemed approved if Lessor fails to give
written notice of disapproval within thirty (30) days after submittal. Lessor shall
specify with particularity those components of the Design Development Plans
disapproved, the reasons for disapproval and the alternative(s) Lessor would
approve. The Parties shall agree on design Development Plans within sixty (60)
12
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9.5
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days after submittal.
Final Plans and Specifications
Subsequent to approval of Design Development Plans, Lessee shall submit Final
Plans and Specifications. The Final Plans and Specifications shall be based on,
and consistent with, the Design Development Plans. The Final Plans and
Specifications shall be in sufficient detail to provide the information necessary to
obtain building permits from Lessor. Lessor's right of approval pursuant to this
Lease, (distinct from Lessor's rights and obligations as a Charter City and entity
responsible for administration and enforcement of Uniform Building Codes),
which shall not unreasonably be withheld, shall be limited to a determination that
the Final Plans and Specifications are based on and consistent with the
approved Design Development Plans. The Final Plans and Specifications shall
be deemed approved (as to consistency with Design Development Plans) unless
Lessor serves written notice of disapproval within thirty (30) days after submittal.
Lessor shall specify, in detail, each element of the Final Plans and
Specifications disapproved, the reason for disapproval, and alternative(s) that
Lessor would approve. The Parties shall reach agreement on the Final Plans
and Specifications within 60 days of submittal.
Building Permits
Lessee shall apply for all necessary building permits from Lessor within one (1)
year after the Effective Date. Lessee shall diligently process any corrections and
changes to the submittals that are necessary to comply with State and local law
and to ensure consistency with approved Final Plans and Specifications. Lessee
shall have the option of submitting Final Plans and Specifications as the
documents necessary to obtain building permits assuming suitability for that
purpose. Lessee shall also obtain all permits or approvals required of any other
governmental entity having jurisdiction over the Property or any modification to
the Property. In the event that another governmental agency with jurisdiction
over the Property requires modification of the Final Plans and Specifications, the
modifications shall be submitted to Lessor for review and approval. Lessor shall
not unreasonably withhold or delay the issuance of building permits. Lessor
shall pay all building permit fees, planning fees and other fees and charges
normally imposed on similar projects.
Construction of Required Improvements
Lessee shall begin construction of Required Improvements within sixty (60) days
after approval of all required building permits by Lessor and approval of any
permit(s) required by other governmental agencies with jurisdiction over the .
Property. Lessee shall diligently pursue construction of the .Required
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Improvements to completion. Lessee shall complete construction of Required
Improvements within one year and sixty (60) days after issuance of all necessary
permits and approvals. The Required Improvements shall be constructed by a
licensed contractor.
9.8 General Requirements
9.8.1 The Required Improvements shall be constructed in compliance
with the provisions of this Lease that regulate, or relate to, the
construction, alteration or maintenance of improvements on the
Property. Lessee acknowledges that the reviews and approvals
required by this Section, with the exception of the issuance of
building permits, are proprietary activities related to Lessor's
ownership of the Property and separate and distinct from any
review or approval conducted by Lessor in its municipal capacity.
Lessee also acknowledges that any approval given pursuant to this
Section, except the issuance of building permits, does not bind
Lessor when acting in its governmental capacity.
9.8.2 Lessor has designated the Committee to Promote Revitalization of
the Peninsula (PROP), or its successor, to review, and approve or
disapprove, the Conceptual Design Plan, the Design Development
Plans and the Final Plans and Specifications. Lessee shall provide
PROP with bimonthly reports on the status of the renovation of the
Property. Lessee may request City Council review of any decision
by PROP disapproving submittals by serving a request for review
within fifteen days after receipt of the notice of disapproval.
9.9 Extensions
Lessee may request, and the City Manager of the City of Newport Beach may
grant, an extension of up to sixty (60) days with respect to any of the deadlines
specified in this Article. The City Council of the City of Newport Beach may,
upon a showing of good cause, grant extensions in excess of sixty (60) days.
The extensions authorized by this Section are in addition to any extension
resulting from force majeure.
ARTICLE 10 . REPAIRS AND MAINTENANCE
Lessee recognizes that the Theatre is a designated local historical landmark and is to
be maintained as such. Lessee shall, at Lessee's expense, perform all routine and
recurring maintenance necessary to keep the Theatre in first class condition and in
accordance with the standards in this Lease. Lessee shall, at a minimum perform the
following: (i) the maintenance of the exterior surfaces of the Theatre (including patching
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and resurfacing the roof membrane and painting or other protective treatment of the
exterior wall of the Theatre); (ii) maintenance of the public rest rooms (including repairs
or replacements of tile or rest room fixtures); (iii) the maintenance of electrical systems
serving the Property and Theatre and the repair and replacement of components; (iv)
maintenance of all pipes and plumbing systems serving the Theatre and Property, and
the repair and replacement of components; and (v) the maintenance of all building
service equipment (including HVAC equipment, conveyancing systems, and fire; life
safety, and emergency equipment) and the repair and replacement of components. As
soon as reasonably practicable following the completion of Required Improvements,
Lessee shall prepare and submit to Lessor a schedule for the periodic inspection and
maintenance by Lessee of the Theatre. Lessee shall revise the schedule for
maintenance from time to time during the Term as necessary to maintain the Theatre to
the standards required by this Lease. Lessee shall have the benefit of all warranties
available to Lessor with respect to the Theatre or any component thereof. Lessee shall
not be responsible for the cost of and repair or maintenance required because of the
acts or omissions of Lessor. Lessee may terminate this Lease If the cost of repairing or
replacing any of the structural, roof, main electrical, plumbing, building service or fire /life
safety components of the Theatre would make continued operation of the Theatre
economically infeasible.
ARTICLE 11 STATUS AND MANAGEMENT OF LESSEE
11.1 Nonprofit Status
During the Term, Lessee shall maintain its status as a California public benefit
nonprofit corporation in full compliance with the California Nonprofit Corporation
Law (California Corporation Code Section 5000 et seq.). Lessee shall also
maintain its qualification as a tax - exempt organization under 501(c)(3) of the
Internal Revenue Code (or any successor statute).
11.2 Executive Committee and Advisory Committee
During the Term, Lessee shall appoint an Executive Committee consisting of no
more than five (5) members. The Executive Committee shall be authorized by
Lessee to interact with Lessor and promptly respond to problems or concerns
expressed by Lessor or members of the general public relative to the operation
of the Theatre. Lessee shall also appoint an Advisory Board or Advisory
Committee that is responsible for fund - raising. Lessee may appoint or establish
other Boards or Committees to perform specific functions . relative to the
renovation, maintenance or operation of the Property and Theatre.
11.3 Employment of Staff
During the Term, Lessee shall use its best efforts to employ a professional
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Executive Director to manage the day to day renovation and /or operation of the
Theatre and perform such other duties as Lessee may assign. The Executive
Director shall be appointed at least ninety (90) days prior to anticipated
completion of Required Improvements.
ARTICLE 12 ALTERATIONS
12.1 Written Consent
Except as otherwise provided in this Article, Lessee shall obtain the written
consent of Lessor prior to making any structural or nonstructural alterations to
the Property. All structural and nonstructural alterations to the Property shall
conform to the Theatre's designation as a local landmark and shall be consistent
with the original design and architecture of the Theatre as well as the Guidelines
for the Rehabilitation of Historic Structures published by the Secretary of the
Interior. Lessee shall be solely responsible for all costs and expenses incurred in
making any alteration. All alterations shall be surrendered with the Property
when this Lease expires or terminates.
12.2 Notice of Non- resoonsibility
Structural and nonstructural alterations shall not be commenced until ten (10)
days after Lessor has received written notice from Lessee stating the date work
is to commence so that Lessor can post and record an appropriate Notice of
Non - Responsibility. Structural alterations shall be made by a licensed
contractor.
ARTICLE 13 PAYMENT OF UTILITIES, TAXES, CHARGES AND FEES
13.1 Public and Private Utilitv Services
Lessee will pay all charges for all public or private utility services and all sprinkler
systems and interior protective services provided to or for the Property. Lessee
will comply with the terms and conditions of contracts relating to such services.
Lessor shall not be liable for any failure or defect in the supply of any utility.
13.2 Taxes Assessments, Fees and Charges
Lessee covenants to pay when due all applicable taxes, assessments, fees,
charges, and levies of every type and character, including all .interest and
penalties, that are imposed, assessed or levied on the Property, any occupancy
or use of the Property, or any income derived from the Property.
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13.3 Proof of Payment 0
Lessee agrees to furnish to Lessor, upon request, proof of the timely payment of
any tax, assessment, levy, fee or charge or other. Lessee may pay any
assessment or tax in installments if legally permissible to do so. In the event
Lessee elects to pay assessments or taxes in installments, Lessee shall be liable
only for those installments which become due and payable during the Term of
this Lease.
13.4 Payment by Lessor
Lessor shall have the right to pay any assessment, tax, fee or charge before the
due date if Lessor has an objectively reasonable belief that Lessee is unwilling or
unable to make the payment. In such event, Lessee shall fully reimburse Lessor
within ten (10) days of written notice of payment by Lessor.
13.5 Property Taxes not Valid
The obligation of Lessee to pay taxes shall not be construed as evidence that
Lessor or Lessee believe that any tax is legal. This Lease is intended only to
obligate Lessee to pay taxes if legally imposed.
13.6 Notice of Possessory Interest: Payment of Taxes and Assessments on Value of
Entire Lease Premises
In accordance with California Revenue and Taxation Code Section 107.6(a) and
Health and Safety Code Section 33673, Lessor states that by entering into this
Lease, a possessory interest subject to property taxes may be created, and if so,
that Lessee shall pay taxes upon the assessed value of the entire property and
not merely the assessed value of its leasehold interest. Lessee or other party in
whom the possessory interest is vested may be subject to the payment of
property taxes levied on such interest.
ARTICLE 14 LIENS
14.1 Indemnification
Lessee shall indemnify, defend and hold Lessor and the Property free, clear and
harmless from any claims, liens, demands, charges, encumbrances or litigation
arising directly or indirectly out of (1) Lessee's use, occupancy or operation of
the Property or (2) any work performed on, material furnished to the Property.
Lessee shall pay, prior to.delinquency, for all work performed on, and material
furnished to, the Property which may result in a lien on the Property and shall
use its best efforts to keep the Property and Theatre free and clear of all
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mechanic's liens and similar liens.
14.2 Satisfaction of Liens
Lessee shall fully pay and discharge a judgment or lien affecting the Property
upon entry of final judgment in any action contesting any claim of lien (if final
judgment establishes the validity of all or a portion of the lien). Lessee shall also
pay any lien within fifteen (15) days after notice of the filing of any lien that
Lessee does not contest. Lessee shall reimburse Lessor upon demand for any
and all loss, damage and expense, including reasonable attorneys' fees, incurred
by Lessor with respect to any judgment or lien resulting from the acts or
omissions of Lessee related to the Property. Lessor shall have the right to
satisfy any judgment or lien if Lessee fails or refuses to do so and Lessee shall
fully reimburse Lessor in such event.
14.3 Notice to Lessor
Lessee shall give Lessor written notice of any claim or lien filed against the
Property and any action or proceeding instituted affecting the title to the
Property.
14.4 Notice of Non - Responsibility
Lessor shall have the right to post and maintain on the Property any Notice of
Non- Responsibility authorized by law.
ARTICLE 15 INDEMNIFICATION
15.1 Indemnity
Lessee shall defend, indemnify and hold harmless Lessor from and against any
and all legal or administrative proceedings, claims, reasonable attorneys' fees
and costs, expenses, penalties, actual damages, punitive damages and losses,
including indemnity claims, in any way related to (1) the improvement, use,
maintenance, or operation of the Property (ii) this lease (iii) the use, release,
generation, storage or disposal of Hazardous Materials (as defined in Section
15.7 on the Property or Theatre, (iv) compliance or non - compliance with any
federal, state or local environmental law, ordinance, rule or regulation, (v) any
accident or injury to, or death of, persons or damage to property occurring on or
about the Property (vi) the removal, clean -up, encapsulation, detoxification or
any other action taken by Lessee or any other party, directly or indirectly arising
out of the presence of Hazardous Materials in, on or around the Property.
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15.2 CERCLA Liability Is
Lessee agrees that this Lease is intended to operate as an indemnification under
Section 9607(e)(1) of the Comprehensive Environmental Response,
Compensation and Liability Act ( CERCLA), as amended, and the California
Hazardous Substances Act (CHSA), as amended.
15.3 Expense of Proceedings
The defense of any suit, action, legal or administrative proceeding that may be
threatened, brought or instituted against Lessor that is the subject to the
indemnity provided in this Lease shall be conducted at Lessee's sole expense by
legal counsel selected and approved by Lessor.
15.4 Release
Lessee waives, releases and forever discharges Lessor from any and all suits,
causes of action, legal or administrative proceedings, claims, demands,
liabilities, losses, costs, interest, attorneys' fees, expenses, penalties, actual
damages, punitive damages and losses, known or unknown, which Lessee ever
had, now has, or may have in the future that are in any way related to (i) the
condition, status, quality, nature, contamination or environmental state of the
Property including Lessee's claims under the CERCLA, the Carpenter-Presley-
Tanner Hazardous Substance Account Act and any other federal, state or local
law, ordinance or regulation, or common law theory of recovery, pertaining to the
presence, release, clean -up or containment of Hazardous Materials on the
Property.
15.5 Waiver of California Civil Code Section 1542
Section 1542 of the California Civil Code states:
A general release does not extend to claims which
the creditor does not know or suspect to exist in his
favor at the time of executing the release, which, if
known by him, must have materially affected his
settlement with the debtor.
Lessee knowingly and voluntarily waives its rights pursuant to California Civil
Code Section 1542. Lessee fully understands the consequences of this waiver
and has been advised of the consequences by legal counsel. The Parties intend
this Lease will be effective as a bar to Lessee's Claims.
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0 15.6 Definition of Hazardous Materials
The term "Hazardous Materials" means, without limitation, gasoline, petroleum
products, explosives, radioactive materials, hazardous materials, hazardous
wastes, hazardous or toxic substances, polychlorinated biphenyls or related or
similar materials, asbestos or any other substance or material that may be
defined as a hazardous, toxic or dangerous substance, material, waste, pollutant
or contaminant under any federal, state or local environmental law, ordinance,
rule or regulation as now or at any time hereafter in effect, including, without
limitation, (a) CERCLA, (b) the Federal Water Pollution Control Act, (c) the Clean
Air Act (d) the Resource Conservation and Recovery Act, (e) the Toxic
Substances Control Act, (0 the Hazardous Materials Transportation Act, (g) the
Carpenter - Presley- Tanner Hazardous Substance Account Act, (h) Hazardous
Waste Control Law, and the (i) the Porter - Cologne Water Quality Control Act
(California Water Code Section 13000 et seq).
ARTICLE 16 INSURANCE
16.1 Insurance to be Maintained
Lessee shall take out and maintain, no later than thirty (30) days after the
Effective Date and for the Term of this Lease, at Lessee's sole cost and
expense, the following insurance.
16.1.1 Comprehensive General Liability in an amount not less than five
million dollars ($5,000,000) combined single limit per occurrence.
Lessor and its officials, employees and representatives shall be
covered as additional insureds with respect to liability arising out of
activities by or on behalf of Lessee or in connection with the use or
occupancy of the Property. Coverage shall be in a form acceptable
to Lessor and shall be primary and non - contributing with any
insurance or self - insurance maintained by Lessor or Lessee.
16.1.2 Workers' Compensation Insurance as required by the Labor Code
of the State of California.
16.1.3 "All Risk" Property Insurance (Operations) including coverage
against the perils of earthquake, fire, explosion of machinery or
equipment, and vandalism covering the full replacement cost of all
improvements and fixtures on the Property. Lessor shall be added
as insured under the standard loss payable endorsement. Lessee
waives all rights of subrogation against Lessor for any damage to
the improvements or fixtures covered by collectable commercial
insurance. Lessee's obligations to provide insurance under this
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paragraph shall apply to all improvements and fixtures on the
Property without regard to the date of construction or installation.
Lessee's obligation to provide this coverage is contingent on the
availability of coverage at commercially reasonable rates.
16.1.4 Property Insurance - Construction. During construction of any
improvements on the Property, Lessee shall maintain Builder's Risk
Insurance against "all risk" of physical loss, including the perils of
fire, collapse and transit, with commercially reasonable deductibles,
covering the total cost of work performed, equipment, supplies and
materials furnished on a replacement cost basis. Lessee's
obligation to provide this coverage is contingent on the availability
of coverage at commercially reasonable rates.
16.2. Acceptable Terms of Coverage
Acceptable insurance coverage shall be placed with carriers admitted to write
insurance in California, or carriers with a rating of or equivalent to AVIII by A. M.
Best & Company. Any deviation from this standard shall require the specific
written approval by Lessor. Any deductibles or self - insured retentions must be
declared to and approved by Lessor. At the option of Lessor, Lessee may be
required to reduce or eliminate such deductibles or self- insured retentions or to
procure a bond guaranteeing payment of losses and related expenses and
costs. Coverage under each policy shall not be suspended, avoided or canceled
by either party except after thirty (30) days prior written notice to Lessor. Lessee
shall furnish City and Lessor with certificates of insurance and with original
endorsements effecting coverage required by this Lease. The certificates and
endorsements for each insurance policy shall be signed by a person authorized
by the insurer to bind coverage on its behalf.
16.3 Index
The limits of insurance coverage required by this Article shall be adjusted on
each seven (7) year anniversary of the Effective Date. The adjustment shall
reflect the percentage increase for the preceding seven (7) years in the
Consumer Price Index for All Urban Consumers, Los Angeles- Anaheim-
Riverside. All Items (1982 -84 Base), published by the Bureau of Labor Statistics,
Department of Labor. Consumer Price Index.
16.4 Waiver of Subrogation
Each policy of insurance procured pursuant to this Article shall contain, if
feasible, either (i) a waiver by the insurer of the right of subrogation against
either party for negligence of such party, or (ii) a statement that the insurance
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. shall not be invalidated should any insured waive, in writing prior to a loss, any or
all right of recovery against any party for loss accruing to the property described
in the insurance policy. Lessor and Lessee waive any and all rights of recovery
against the other for any loss or damage to that Party arising from any cause
insured against under the insurance policies required by this Article.
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ARTICLE 17 DAMAGE BY FIRE OR CASUALTY
17.1 Lessee to give Notice
In case of any material damage to or destruction of the Property, Lessee will
promptly give written notice to Lessor generally describing the nature and extent
of the damage or destruction.
17.2 Restoration
Except as provided in Section 18.3, in the event of damage to or destruction of
the Property, Lessee shall repair and restore the Property to its original condition
(subject to changes necessary to comply with then existing laws and any
changes in design approved by Lessor), at Lessee's sole cost and expense. To
the extent the insurance proceeds are insufficient to cover the cost of such repair
and restoration, Lessee shall make up the deficiency out of Lessee's own funds.
The repair and restoration shall be commenced within a reasonable period of
time following the casualty and shall be completed with due diligence. Lessee
shall have the option to terminate this Lease and surrender possession of the
Property to Lessor if the event the cost of such repair and restoration exceeds
the sum of (i) the amount of insurance proceeds available to Lessee plus (ii) the
amount of the deductible by an amount which Lessee reasonably determines
renders reconstruction of the Property economically infeasible. In the event of
such a termination, Lessee shall pay to Lessor the amount of the deductible and
assign to Lessor any and all rights Lessee may have to the insurance proceeds.
17.3 Casualty Late in Term
Lessee or Lessor shall have the right to terminate this Lease on ninety (90) days
written notice If (i) the Property is damaged or destroyed subsequent to the
fifteenth (15th) year of the Term, (ii) the costs of restoration and repair are
estimated to exceed fifty percent (50 %) of the then full replacement cost of the
Property (excluding land costs /value), and (iii) Lessee elects not to repair or
restore the Property. In such event, Lessor shall have the right to receive and
retain all insurance proceeds paid or payable to Lessee on account of any
damage or destruction to the Property.
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17.4 Application of Insurance Proceeds M
In the event that Lessee is required to restore the Property pursuant to Section
17.2, proceeds from policies of insurance required by Article 16 and which are
received on account of any damage to or destruction of the Property (less the
costs, fees and expenses incurred in the collection), shall be applied as follows:
17.4.1 Lessee shall furnish to Lessor satisfactory evidence to Lessor of
the total cost of Restoration pursuant to Section 17.2. Lessee shall
then furnish to Lessor satisfactory evidence that it has available the
total amount of money which, when added to the insurance
proceeds received, shall be sufficient to pay the cost of such
Restoration.
17.4.2 Assuming satisfaction of the conditions of subsection [17.4.11 net
insurance proceeds shall be paid to Lessee, unless Lessee is in
Default, to fund restoration. Payments from the proceeds of
insurance for restoration shall be made only upon written request of
Lessee accompanied by a certificate of an architect to the effect
that the amount requested has been paid or is then due, is properly
a cost of restoration, and there are no mechanic's or similar liens
for labor or material supplied in connection with the restoration to .
date. )
17.4.3 Upon completion of restoration and assuming Lessee is not in
default, excess insurance proceeds shall first be paid to Lessor to
the extent of its actual expenses incurred in the restoration, then to
Lessee as working capital
ARTICLE 18 EMINENT DOMAIN
18.1 Lease Governs
The rights and obligations of the Parties with respect to any Award shall be as
provided in this Article if there is any Taking during the Term of this Lease.
18.2 Termination of Lease
This Lease shall terminate effective on the date of surrender of possession of the
Property to the condemning authority in the event of a Total Taking. Lessee shall
continue to observe and perform all of the terms, covenants and conditions of
this Lease until the date of termination.
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18.3 Partial Taking — Restoration
If there is a Partial Taking, Lessee may, at its sole cost and expense, whether or
not the condemnation award is sufficient for the purpose, promptly commence
and diligently proceed to effect restoration of the Property as nearly as possible
to the condition and character immediately prior to such Taking.
18.4 Distribution of Award
All awards and damages received on account of any Taking, whether partial or
total, including interest received (Award), shall be paid promptly by the person(s)
receiving the same to an escrow agent mutually acceptable to Lessor and
Lessee to be distributed upon appropriate instruction from the Parties.
18.5 Allocation of Award — Partial Taking
Any Award in a Partial Taking shall be distributed by escrow in the following
order of priority:
18.5.1 First, to Lessor and Lessee to reimburse all costs and expense
incurred in the collection of the Award, including fees and expenses
incurred in the condemnation proceeding;
18.5.2 Second, to Lessor, as reimbursement for the costs and expenses
of restoration of the Property and as those costs and expenses are
incurred by Lessee;
18.5.3 Third, if Lessor and Lessee are unable to agree upon the allocation
of the balance of the Award, if any, it shall be deposited by escrow
into a court of competent jurisdiction to be equitably allocated by
the court.
18.6 Allocation of Award — Temporary Taking
In the event of a Taking for temporary use or occupancy, this Lease shall
continue in full force and effect and Lessee shall be entitled to claim, recover and
retain any Award made on account of such temporary Taking.. However, if the
period of temporary Taking extends beyond the Term, the Award shall be
apportioned between Lessor and Lessee as of the date of expiration.
18.7 Allocation of Award — Total Taking
Any Award in a Total Taking shall be distributed by escrow in the following
priority:
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18.7.1 First, to Lessor and Lessee to reimburse for all costs and expenses
incurred by each in the collection of the Award;
18.7.2 Second, if Lessor and Lessee are unable to agree upon the
allocation, the balance of the Award shall be deposited by escrow
into a court of competent jurisdiction to be equitably allocated by
the court. The determination of the value of Lessee's and Lessor's
respective interests in the Property shall be made as if the Lease
were to continue in full force and effect until the Expiration Date.
18.8 Conduct of Proceedings
Lessee and Lessor shall jointly participate in and prosecute /defend any action or
proceeding involving a Taking of the Property by condemnation or under the
power of eminent domain and shall jointly make any compromise or settlement.
18.9 Notices
Any Party receiving notice of or becoming aware of any condemnation
proceedings shall promptly give written notice to the other party.
ARTICLE 19 ASSIGNMENT AND SUBLETTING
Lessee may not 'assign or sublet this Lease or any portion of the Property, without 1
Lessor's prior written consent which consent may be withheld in Lessor's sole
discretion. However, Lessee may grant such licenses, permits and concessions as are
reasonable, appropriate and customary to promote a Permitted Use and are in
accordance with the Operations Plan. Lessor may, at any time during the Term and in
its sole discretion, assign this Lease or its interest in the Property to a non - profit entity.
ARTICLE 20 LEASEHOLD MORTGAGES
Lessee shall have no right to encumber its interest in this Lease, the Property or the
Theatre without Lessor's prior written consent, which consent may be withheld in
Lessor's sole discretion.
ARTICLE 21 PERFORMANCE OF LESSEE'S COVENANTS
21.1 Right of Performance
If Lessee fails to pay any tax, fee or other charge in accordance with Article -13
within the time period required or'shall fail to pay for or maintain any of the
insurance policies provided for in Article 17 within the time required, or to make
any other payment or perform any other act within the time required by this
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Lease, then Lessor may, after 30 days' written notice to Lessee (or without
notice in case of an emergency) and without waiving or releasing Lessee:
21.1.1 Pay the tax, assessment, fee or charge payable by Lessee
pursuant to this Lease; or
21.1.2 Pay for and maintain any insurance policies required by this Lease;
or
21.1.3 Make any other payment or perform any other act_ that Lessee is
required to pay or perform pursuant to this Lease.
21.2 Reimbursement and Damages
Lessee shall reimburse Lessor for all costs and expenses incurred by Lessor in
the exercise of its rights pursuant to Section 21.1.
ARTICLE 22 REPRESENTATIONS
22.1 Lessors Representations
Lessor represents to Lessee that:
22.1.1 Lessor owns the Property in fee simple subject only to the
Permitted Exceptions and other matters affecting title that do not
inhibit, prevent or impair the operation, maintenance or use of the
Theatre.
22.12 Lessor has the power and authority to enter into this Lease and
perform all the obligations of Lessor hereunder.
22.2 Lessee's Representations
Lessee represents to Lessor that:
22.2.1 Lessee has examined the Property and finds it will be fit for use as
a cultural and performing arts center in accordance with this Lease
and the Operations Plan upon completion of Required
Improvements,
22.2.2 Lessor has not made any representations or warranties regarding
the condition of the Property, or its suitability for the construction of
Required Improvements or the operation and maintenance of a
Theatre consistent with this Lease and the Operations Plan.
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22.2.3 Lessee has the right, power and authority to enter into this Lease
and to perform all the obligations of Lessee.
22.2.4 Lessee is a California public benefit nonprofit corporation in full
compliance with the provision of the California Nonprofit
Corporation Law (California Corporation Code Section 5000 et
seq.), and is a tax exempt organization under 501(c)(3) of the
Internal Revenue Code.
ARTICLE 23 DEFAULTS, REMEDIES AND TERMINATION
23.1 Legal Actions
23.1.1 Institution of Legal Actions
In addition to any other rights or remedies, either Party may
institute legal action to cure, correct, or remedy any default, to
recover damages for any default, or to obtain any other remedy
consistent with the purpose of this Lease. Any legal action shall be
filed in the County of Orange, State of California.
23.1.2 Applicable Law
The laws of the State of California shall govern the interpretation
and enforcement of this Lease.
23.2 Rights and Remedies are Cumulative
Except with respect to rights and remedies expressly declared to be exclusive in
this Lease, the rights and remedies of the Parties are cumulative.
23.3 Occurrence of Default
The following acts or omissions shall be considered material breaches of this
Lease if Lessee fails to cure the default within thirty (30) days after written notice
of default from Lessor or, if cure is not feasible within thirty (30) days, Lessee
has failed to commence cure within thirty (30) days or fails to diligently complete
the cure:
23.3.1. The failure of Lessee to comply with the provisions of Article 9
.related to the design and construction of Required Improvements.
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23.3.2 The failure of Lessee to operate the Theatre in compliance with the
provisions of Article 8 related to frequency and quality of
performances and events.
23.3.3 The failure of Lessee to maintain the Property as specified in
Article 10.
23.3.4 The failure of Lessee to restore or repair the Property in the event
of damage or destruction
23.3.5 The failure of Lessee to pay any fee, tax, charge, or assessment
when due or the failure to reimburse Lessor in the event Lessor
pays the fee, tax, charge or assessment.
23.4 Remedies
If Lessee has materially breached this Lease then a Default shall be deemed to
have occurred, Lessor may give written termination notice to Lessee, and on the
date specified in the notice this Lease shall terminate. In addition to the right of
termination, Lessor shall have the following additional rights and remedies:
. 23.4.1 Lessor shall have the immediate right to reenter the Property
and /or the Theatre, take possession of the Property and /or
Theatre, any and all Equipment, books and records, contracts and
any other property.
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23.4.2 Lessor may, at its option, enforce all of its rights and remedies
under this Lease, including the right to recover the consideration
and all other sums payable as they become due. Lessor shall also
be entitled to recover from Lessee all costs of maintenance and
preservation of the Property and /or the Theatre, and all costs,
including attorneys' and receiver's fees, incurred in connection with
the appointment of and performance by a receiver to protect the
Property.
23.4.3 Lessor shall be entitled to recover all money payable to Lessee
related to the operation and use of the Theatre, all bank accounts,
accounts receivable, working capital and cash reserves (if any after
payment of Lessee's debts), and the balance in the Contributions
Fund.
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ARTICLE 24 PERMITTED CONTESTS 0
Lessee, at no cost or expense to Lessor, may contest (after prior written notice to
Lessor), by appropriate legal proceedings conducted with due diligence, the amount or
validity or application, of any Imposition or lien, provided that the proceedings suspend
collection from Lessor and any action against the Property. If Lessee fails to contest
the matter, or fails to protect Lessor and Lessor's interest in the Property, Lessor may
contest or settle the matter in its sole discretion and obtain reimbursement from Lessee.
ARTICLE 25 ENTRY BY LESSOR
Lessor may enter the Property at reasonable times for the purpose of inspecting,
servicing or posting notices, protecting the Property and /or the Theatre, or for any other
lawful purposes, including showing the Property to prospective purchasers or lessees.
ARTICLE 26 FORCE MAJEURE
Any prevention, delay, non - performance or stoppage due to any of the following causes
shall be excused: any regulation, order, act, restriction or requirement or limitation
imposed by any Federal, State or municipal government; acts of God; acts or omissions
of Lessor; fire, explosion or floods; strikes, walkouts or inability to obtain materials; war,
riots, sabotage or civil insurrection; or any other causes beyond the reasonable control
of Lessee.
ARTICLE 27 MISCELLANEOUS
27.1 Notices.
All notices and other communications shall be in writing, shall be sent by first
class registered or certified United States mail, postage prepaid, and shall be
deemed to have been given two (2) days after the day of mailing, addressed:
To Lessor;
City Manager
City of Newport Beach
3300 Newport Blvd.
Newport Beach, CA, 92658 -8915
With a copy to:
City Attorney's Office
City of Newport Beach
3300 Newport Blvd.
29
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s
Newport Beach, CA, 92658 -8915
or at such other addresses as Lessor shall have furnished to Lessee; and
To Lessee;
Balboa Performing Arts Theatre Foundation
P.O. Box 752
Balboa, CA 92661
With a copy to:
Steve Bromberg
Bromberg & Yeager
620 Newport Center Drive
11' Floor
Newport Beach, CA, 92660
or at such other addresses as Lessee shall have furnished Lessor in writing.
27.2 No Claims Against Lessor
Nothing in this Lease constitutes any consent or request by Lessor for the
performance of any labor or services or the furnishing of any materials to the
Property
27.3 Integration
This Lease, and the exhibits, are the entire Agreement between the Parties, and
there are no agreements or representations between the Parties except those
specified in this Lease. This Lease supersedes any prior negotiations,
representations, discussions or agreements between the Parties with respect to
the Property and /or the Theatre. Except as otherwise provided, no subsequent
change or addition to this Lease shall be binding unless in writing and signed by
the Parties.
27.4 No Waiver By Lessor
To the extent permitted by law, no failure by Lessor to insist upon the strict
performance of any term of this Lease, or to exercise any right, power or remedy
upon a Default under this Lease, shall constitute a waiver.
30
37
27.5 Severability
If any term of this Lease or any application thereof shall be declared invalid or
unenforceable by a court of competent jurisdiction, the remainder of this Lease
shall not be affected. Unless otherwise expressly provided, any approval or
consent of Lessor required shall not be unreasonably withheld or delayed. This
Lease shall be binding upon and inure to the benefit of and be enforceable by
the respective successors of the parties.
27.6 Holding Over
A tenancy for month to month shall result if Lessee remains in possession of the
Property or the Theatre with the consent of Lessor after the expiration of the
Term. The month to month tenancy shall be on the same terms and conditions
as contained in this Lease.
27.7 No Partnership
This Lease does not cause Lessor to be a partner of Lessee, a joint venturer
with Lessee, or a member of a joint enterprise of Lessee relative to the operation
of the Theatre or otherwise.
27.8 Federal Funds Provisions
No Federal appropriated funds shall be paid, by or on behalf of Lessee to any
person for the purpose of influencing or attempting to influence an officer or
employee of any Federal agency, a Member of Congress, an officer or employee
of Congress, or an employee of a Member of Congress in connection with the
awarding of any Federal contract, the making of any Federal grant, the making of
any Federal loan, the entering into of any cooperative agreement, and the
extension, continuation, renewal, amendment, or modification of any Federal
contract, grant, loan, or booperative agreement. If any funds other than Federal
appropriated funds have been paid or will be paid to any person for influencing
or attempting to influence an officer or employee of any agency, a Member of
Congress, and officer or employee of Congress or an employee of a Member of
Congress in connection with this Federal contract, grant, loan or cooperative
agreement, Lessee shall complete and submit Standard Form -LLL, "Disclosure
Form to Report Lobbying," in accordance with its instructions.
Lessee shall require that the language of this certification be included in the
award documents for all contracts, subcontracts, and agreements.
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27.9 Time of the Essence
Time is of the essence relative to all of the terms, provisions, covenants and
conditions of this Lease.
FOR LESSOR
W EWPORT BEACH
eil
Mayor for City of Newport Beach
FOR LESSEE
BALBOA PERFORMING ARTS
TTHHEAA%T�RE� FOUNDATION
Dayna Pettit
President of Balboa Performing Arts
Theatre Foundation
APPROVED AS TO FORM
CIS ?OF NEWPORT BEACH:
/Robert H. Burnham
City Attorney for City of Newport Beach
ATTEST:
CITY OF NEWPORT BEACH
Dated 12 _ ✓ � - /
Dated /J� /
LaVonne Harkless
City Clerk for City of Newport Beach
F: \cat\sh a red\ da \Projects\BalboaTheatre\Lease \Final Lease 120398.doc
32
CALIFORNIA ALL - PURPOSE ACKNOWLEDGMENT
State of California
ss.
County of (JCCli,r\
On ��� _t1 beforema,Q "r (.JT'
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CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
State of California
ss.
County of
On \ d - `\ - 1"ll, q , before me,
Date
personally appeared
a
CA: nY =;SHER
1 COmmi;Sion s 1174329
ro - Notary PUDiiC - COlifomia _
Orange County
W Comm. Egies Feb 21, 2002
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personally known to me
proved to me on the basis of satisfactory
evidence
to be the person) whose name(i fare
subscribed to the within strument and
acknowledged to me tha�e he hey executed
the same in his er�their authorized
capacity(i)W, and tha by hi he /their
signature(X on the instrument the person or
the entity upon behalf of which the persor!N)
acted, executed the instrument.
W ESS my hand and of cial seal. -
Place Notary Seal Above Sqn u e of otary P blic
OPTIONAL
Though the information below is not required by law. it may prove valuable to persons relying on the document
and could prevent fraudulent removal and reattachment of this form to another document.
Description of Attache
Title or Type of Document:
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Document Date: , �T — - 1 O Number of Pages:
Signer(s) Other Than Named Above:
Capacity(ies) Claimed by Signer
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CALIFORNIA ALL - PURPOSE ACKNOWLEDGMENT
State of California
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County of l��t itn 6�r/ SS_
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On 11 'x{'4f !(� I 'i "jibeforeme, W1�(lVl �,�. �(,6i I�� tCj
Data Name and Title of Officer (e.g.. 'Jane Doe. Njibury public)
personally appeared Ll�cl 0
LEILANI V. INES
1 Commission = 1170960
No:ary Puolic - CoFfomio
Orange County
My C=m. Expires Jon 25, 2002
Place Notary Seal Above
Namels) of Slgner(s)
lly known to me
to me on the basis of satisfactory
iFf
to be the person(is) whose name(s) is /are
subscribed to the within instrument and
acknowledged to me that Wshe /they executed
the same in his /her /their- authorized
capacity(ies}, and that by his/her /their
signature(e) on the instrument the person(s), or
the entity upon behalf of which the person(e)
acted: executed the instrument.
WITNESS my hand and official seal_
!c L& .
Signature of Notary Public
OPTIONAL
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and could prevent fraudulent removal and reattachment of this form to another document.
r Description of Attached Document
GTitle or Type of Document: z
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Number of Pages:
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® 1997 National Notary Association - 9350 De Soto Ave.. PO. Box 2402 - ChaMvorth, Ca 91311 2402
Prod. No. 5907 Reonfer. Call Toll -Free 1-800-876-652-
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EX13IBrr A
LEGAL DESCRIPTION
All that real property situated in the City of Newport Beach, County of Orange, State of California and
more particularly described as follows:
Lots 4 and 5, Block 10, Balboa Tract, in the City of Newport Beach, as shown
on a map recorded in Book 4, Page(s) 11, of Miscellaneous Maps, in the office
of the County Recorder of said County.
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2807239
Exhibit C
A. General and special taxes and assessments collected with taxes for the fiscal year
1998 -1999.
Total: $4,018.90
First Installment: 2,009.45 Open
Second Installment: 2,009.45 Open
Homeowners' Exemption: s0
Code: 07 -001
Parcel: 048- 135 -02
B. The lien of supplemental taxes, if any, assessed pursuant to the provisions of Section
75, et seq. of the Revenue and Taxation Code of the State of California.
1. Covenants, conditions and restrictions (deleting any restrictions indicating any
preference, limitation or discrimination based on race, color, religion, sex, handicap,
familial status or national origin) as set forth in the document
Recorded: in book 153 page 225 of Deeds
2. Covenants, conditions and restrictions (deleting any restrictions indicating any
preference, limitation or discrimination based on race, color, religion, sex, handicap,
familial status or national origin) as set forth in the document
Recorded: in book 3377 page 501, Official Records
Said covenants, conditions and restrictions provide that a violation thereof shall not defeat
or render invalid the lien of any mortgage or deed of trust made in good faith and for
value.
3. Water rights, claims or title to water, whether or not shown by the public records.
4. Matters which may be disclosed by an inspection or by a survey of said land that is
satisfactory to this Company, or by inquiry of the parties in possession thereof.
An inspection of said land has been ordered; upon its completion we will advise you of our
findings.
q�
CLTA Pmllminery Report Fofm (Rry 111/95) PaQe 1 of 2
6
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2807239 0
5. Rights of the parties in possession of said land, under unrecorded leases. Please
submit copies of said Ieases for our examination.
6. Before issuing its policy of title insurance, this Company will require evidence,
satisfactory to the Company, that the vestee corporation named herein:
(a) was duly incorporated on the date of acquisition of title hereinafter set forth and
(b) is now of good standing in the state where it was formed:
Date of Acquisition: October 17, 1995
7. This Company will require a corporate resolution of the board of directors from the
corporation(s) vested herein, authorizing this transaction and the execution of the documents
necessary to complete it in accordance with instructions given to the Company.
Note No. 1: The only conveyances affecting said land recorded within six (6) months of
the date of this report are as follows: None.
Note No. 2: The premium for a policy of title insurance, if issued, will be based on 80%.
1p/lmk
cc: Land America Attn: Linda Hamilton
Page 2 of 2
CLTA Preliminary Report Fomt (Rev. 111195)
4�
0
RECORDING REQUESTED BY AND
WHEN RECORDED RETURN TO:
City Clerk
City of Newport Beach
P. O. Box 1768
Newport Beach, CA 92658 -8915
TITLE OF DOCUMENT:
9
'OftecBR A 4n ActVARecords, County of Orange
Gary Granville, Clerk- Recorder
CFFIGWN���I�NN��N{�NlNUll�ll�l No Fee
CITY CF �jz.WP 90MI 09:54am 04110100
116 16 A17 4
0.00 0.00 0.00 0.00 9.00 0.00 0.00 0.00
THIS SPACE FOR
USE ONLY.
Exempt Recording Request per Government Code 6103
First Amendment to
Lease by and between the City of Newport Beach
and
the Balboa Performing Arts Theatre Foundation
1.
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9-Al
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10
FIRST AMENDMENT TO
LEASE BY AND BETWEEN THE CITY OF NEWPORT BEACH
AND
THE BALBOA PERFORMING ARTS THEATRE FOUNDATION
This Amendment, entered into as of September '27 , 1999, (Effective Date) by
between the City of Newport Beach, a Charter City and municipal corporation ("Lessor")
and Balboa Performing Arts Theatre Foundation ( "Lessee "), is made with reference to
the following:
RECITALS
A. Lessor and Lessee entered into the subject lease as of November 23, 1998.
(Recorded in the County of Orange, California; 19990066742; 01/29/99)
B. The parties agree that the insurance requirements in the original Lease are
greater than needed for protection of the public interest, and desire to amend
those requirements so as to increase the Foundation's economic viability and
ability to .meet the other requirements of the Lease.
NOW, THEREFORE, Lessor and Lessee hereby agree as follows:
ARTICLE 1 AMENDMENT TO ARTICLE 16, INSURANCE
Paragraph 16.1.1 of the Lease is amended to read as follows:
16.1.1 Comprehensive General Liability in an amount not less than two
million dollars ($2,000,000) combined single limit per occurrence.
Lessor and its officials, employees and representatives shall be
covered as additional insureds with respect to liability arising out of
activities by or on behalf of Lessee or in connection with the use or
occupancy of the Property. Coverage shall be in a form acceptable
to Lessor and shall be primary and non - contributing with any
insurance or self - insurance maintained by Lessor or Lessee. Any
third party permitted to use the Property pursuant to Paragraph 8.1
of this Lease shall provide the same insurance, unless this
requirement is waived or modified, in writing, by Lessor's City
Manager.
0
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ARTICLE 2 NO AMENDMENTS TO REMAINDER OF LEASE
All other provisions of the Lease shall remain in force and effect in their original form.
FOR LESSOR
CITY OF NEWPORT BEACH
r
Dennis O'Neil
Mayor
FOR LESSEE
BALBOA PERFORMING ARTS
THEATRE FOUNDATION
Dayna Pettit
President
APPROVED AS TO FORM
CITY OF NEWPORT BEACH
art H. Burnham
Attorney
ATTEST:
CITY OF NEWPORT BEACH
M. rla
LaVonne Harkless
City Clerk
Dated /0-iy`99
Dated l� /
Dated I D 011
1
Dated
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CALIFORNIA ALL - PURPOSE ACKNOWLEDGMENT
State of California
%�
County of \ 1 tixAr\ ss.
On W\ d, V) 9 before me,
Date r'
personally appeared
CATHY FISHER
Commission # 1174329 a
Notary Public - California s
Orange County
My Comm. BVires Feb 21, 2002
Place Note,y Seal Above
r�L.t I
personally known to me
❑ proved to me on the basis of satisfactory
evidence
to be the perso (s) whose namc) is/ re
subscribed to th within cost ant a
acknowledged to me that he hey xecuted
the sal in his /he her uthori
capacity I and that by his /he air
signatur s n the instrument the perso (s
the entity upon behalf of which the perso (s
acted, executed the instrument.
I SS my hand and fcial seal.
Setae O�alaty PubtiCjM j PublkW
OPTIONAL
Though the information below is not required by law, it may prove valuable to persons relying on the document
and could prevent fraudulent removal and reattachment or this form to another document.
Description of Attached
Title or Type of Document: _
Document Date: f7� ' Ii - 1 Number of Pages: a
Signer(s) Other Than Named Above: _
Capaclty(les) Claimed by Signer
Signer's Name:
Cl Individual Iiijue
Top of Numb here
❑ Corporate Officer — Title(s):
❑ Partner —O Limited ❑ General
❑ Attorney in Fact
❑ Trustee
❑ Guardian or Conservator
❑ Other.
Signer Is Representing:
®1997 National NM y A ..em5an • 9350 De Soto Ave- P.O. Box 2402 • Chemwonb. CA 91313-2402
Pmd. No. 5907 ReoMar Ca0 To"m 1A00411164827
0
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11
0
RECORDING REQUESTED BY AND
WHEN RECORDED RETURN TO:
City Clerk
City of Newport Beach
P. O. Box 1768
Newport Beach, CA 92658 -8915
TITLE OF DOCUMENT:
P
E,IV n.
•ao WR 14 w9:03
Recorded in Official Records, County of Orange
Gary Granville, Clerk
kl No Fee
20000181652 09:54am 04110100
116 16 A17 5
0.00 0.00 0.00 12.00 0.00 0.00 0.00
THIS SPACE FOR RECORDER'S USE ONLY.
Exempt Recording Request per Government Code 6103
Second Amendment to
Lease by and between the City of Newport Beach
and
the Balboa Performing Arts Theatre Foundation
IT
g1l
PF
Sk
SECOND AMENDMENT TO
LEASE BY AND BETWEEN THE CITY OF NEWPORT BEACH
AND
THE BALBOA PERFORMING ARTS THEATRE FOUNDATION
This Amendment, entered into as of December /3 , 1999, (Effective Date) by
between the City of Newport Beach, a Charter City and municipal corporation ( "Lessor")
and Balboa Performing Arts Theatre Foundation ( "Lessee "), is made with reference to
the following:
RECITALS
A. Lessor and Lessee entered into the subject lease as of November 23, 1998.
(Recorded in the County of Orange, California; 19990066742; 01/29/99)
B. Lessor and Lessee approved the First Amendment to the subject lease on
September 27, 1999, which amendment altered the insurance requirements of
Lessee.
C. The parties agree that the existing lease requirement for required improvements !)
and other alterations to be consistent with the Guidelines for the Rehabilitation of
Historic Structures published by the Secretary of the Interior goes beyond the
goals of the parties.
NOW, THEREFORE, Lessor and Lessee hereby agree as follows:
ARTICLE 1 AMENDMENT TO ARTICLE 9, REQUIRED IMPROVEMENTS
Paragraph 9.3 of the Lease is amended to read as follows:
Lessee shall prepare, and submit to Lessor for approval, a proposed conceptual
plan for the design, construction, furnishing and equipping of the Property for use
as a theatre (Conceptual Design Plan). The Conceptual Design Plan shall be
prepared by a licensed architect. The Conceptual Design Plan shall generally
describe those elements typically included in preliminary Conceptual Design
Plans for the renovation and rehabilitation of a theatre constructed in the 1920's.
The Conceptual Design Plan shall include, without limitation, (1) seating layout
and design; (2) stage and dressing room layout and design; (3) lobby and
concession area design; (4) structural modifications necessary to comply with
uniform codes; (5) interior design elements and treatment; (6) exterior design
and treatment; (7) sound and projection systems; (8) lighting systems and
design; (9) public area layout, design and treatment; and (10) stage, orchestra)
pit and roll -down backdrop design and treatment. Lessor's right to approve the
Conceptual Design Plan shall be limited to ensuring that the improvements
contemplated are consistent with a first class community theatre and that the
exterior design and treatment are reasonably consistent with the Guidelines for
the Rehabilitation of Historic Structures published by the Secretary of the Interior.
The Conceptual Design Plan shall be deemed approved if Lessor fails to serve
written notice of disapproval within thirty (30) days following submittal. Lessor's
approval shall not be unreasonably withheld and any disapproval by Lessor shall
specify with particularity the components of the Conceptual Design Plan
disapproved, the reasons for disapproval and alternatives that Lessor would
approve. The Parties shall agree on a Conceptual Design Plan within sixty (60)
days of submittal.
ARTICLE 2 AMENDMENT TO ARTICLE 12, ALTERATIONS
Paragraph 12.1 is amended to read as follows:
Except as otherwise provided in this Article, Lessee shall obtain the written
consent of Lessor prior to making any structural or nonstructural alterations to
the Property. All structural and nonstructural alterations to the exterior of the
Property shall conform to the Theatre's designation as a local landmark and shall
be consistent with the original design and architecture of the Theatre as well as
the Guidelines for the Rehabilitation of Historic Structures published by the
Secretary of the Interior. Lessee shall be solely responsible for all costs and
expenses incurred in making any alteration. All alterations shall be surrendered
with the Property when this Lease expires or terminates.
ARTICLE 3 NO AMENDMENTS TO REMAINDER OF LEASE
All other provisions of the Lease shall remain in force and effect in their original form or
as amended by agreement of the Parties.
FOR LESSOR
Dated 3 (j q(c,
5,3
FOR LESSEE
BALBOA PERFORMING ARTS
THEATRE FOUNDATION
Lj:41 t�4,pe�t,�—
Dayna P ttit
President
,OVED AS TO FORM
OF NEWPORT BEACH
Robert H. Burnham
City Attorney
ATTEST:
CITY OF NEWPORT BEACH
LaVonne Harkless
City Clerk
Dated ' — /-7 _.02�
Dated �)r `F Od
Dated �' /6 G
1
9
sa
11
CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
State of California
County of
before me,
Dare
personally appeared
CATHY FISHER
Commission # 1174329
Notary Public - CoffomiO
Orange County
h
I ss.
iiS\'�
personally known to me
proved to me on the basis of satisfactory
evidence
to be the perso (s whose Warn (s is/ re
subscribed to th within In ent an
acknowledged to me that he/ the executed
the sa in his /he thei author'
capacity and that by his /he ei
signature n the instrument the persons or
the entity upon behalf of which the perso s)
acted, executed the instrument.
W ESS my hand and offs ial seal.
i
Piece Naary Seel Atrove sgne re o<! t P ti
OPTIONAL
Though the information below is not required by law, it may prove valuable to persons relying on the document
and could prevent fraudulent removal and reattachment of this form to another document.
Description of D cement: D c9 ument \� "k –()
Title or Type of Document: ���Q� � k � vC7 � 1 �f
Document Date: N r�,, ` Number of Pages: 3
Signer(s) Other Than Named Above:
Capacity(les) Claimed by Signer
Signer's Name:
❑ Individual
Corporate Officer — Title(s):
Partner —❑ Limited ❑ General
Attorney in Fact
Trustee
Guardian or Conservator
❑ Other:
Signer Is Representing:
._._. - -
O 7991 NaOonsl Notary Association • 9359 De Soto Ave., P.O. Bm 2402 • Chebwwth, CA 913134402
RIGHT THUMBPRINT
OF SIGNER
Prat. No. 5907 Reartl . Call Tdl -Free i- S00.676 %V
55
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WHEN RECORDED RETURN TO:
City Clerk ror FEB 26 A8:46
City of Newport ach
P.O. Box 1768 ��TYEt�'6F"-THE CRY CLERK
Newport Beach, 9`MR49Mcm
TITLE OF DOCUMENT:
Recorded in official Records, County of Orange
Gary Granville, Clerk- Recorder
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200IM8725912:35pm 02116f01-
114 27 A17 6
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THIS SPACE FOR RECORDER'S USE ONLY.
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Exempt Recording Request per Government Code 6103
Third Amendment to Lease By and Between the City of Newport Beach
and the Balboa Performing Arts Theatre Foundation
Recording Reference:
Lease: 19990066742, 1/29/99
First Amendment: 20000181651, 4/10/00
Second Amendment: 20000181652, 4/10/00
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THIRD AMENDMENT TO
LEASE BY AND BETWEEN THE CITY OF NEWPORT BEACH
AND
THE BALBOA PERFORMING ARTS THEATRE FOUNDATION
This Third Amendment to Lease, entered into as of December 2000,
(Effective Date) by and between the City of Newport Beach, a Charter City and
municipal corporation ( "Lessor") and Balboa Performing Arts Theatre Foundation
( "Lessee "), is made with reference to the following:
RECITALS
A. Lessor and Lessee entered into a ground lease (Original Lease) on November
23, 1998.
B. Lessor and Lessee approved the First Amendment to the Original Lease on
September 27, 1999, modifying the insurance obligations of Lessee.
C. Lessor and Lessee approved the Second Amendment to the Original Lease on
. December 13, 1999, deleting the requirement for interior improvements to be
consistent with the Guidelines for the Rehabilitation of Historic Structures
( "Guidelines ") published by the Secretary of the Interior. ,
D. Lessor and Lessee agree that further amendments to the Original Lease are
necessary to modify provisions that require certain exterior improvements to be
consistent with the Guidelines.
E. Lessor and Lessee agree that the modifications to provisions related to exterior
improvements are necessary. to.. achieve the primary goal of the lease which is
the reconstruction and use of the building as a venue for live theatre
performances and other events that require dressing rooms and related facilities.
NOW, THEREFORE, Lessor and Lessee hereby agree as follows:
ARTICLE 1 AMENDMENT TO ARTICLE 9, REQUIRED IMPROVEMENTS
Paragraph 9.3 of the Lease is amended to read as follows:
Lessee shall prepare, and submit to Lessor for approval, a proposed conceptual
plan for the design, construction, furnishing and equipping of the Property for use
as a theatre (Conceptual Design Plan). The Conceptual Design Plan shall be
prepared by a licensed architect. The Conceptual Design Plan shall generally
describe those elements typically included in preliminary Conceptual Design
Plans for the renovation and rehabilitation of a theatre constructed in the 1920's.
The Conceptual Design Plan shall include, without limitation, (1) seating layout
1.
and design; (2) stage and dressing room layout and design; (3) lobby and
concession area design; (4) structural modifications necessary to comply with
uniform codes; (5) interior design elements and treatment; (6) exterior design and
treatment; (7) sound and projection systems; (8) lighting systems and design; (9)
public area layout, design and treatment; and (10) stage, orchestra pit and roll -
down backdrop design and treatment. Lessor's right to approve the Conceptual
Design Plan shall be limited to ensuring that the improvements contemplated are
consistent with a first class community theatre and that the exterior design and
treatment of the front fagade return it as close as possible to its original
appearance. The Conceptual Design Plan shall be deemed approved if Lessor
fails to serve written notice of disapproval within thirty (30) days following
submittal. Lessor's approval shall not be unreasonably withheld and any
disapproval by Lessor shall specify with particularity the components of the
Conceptual Design Plan disapproved, the reasons for disapproval and
alternatives that Lessor would approve. The Parties shall agree. on a Conceptual
Design Plan within sixty (60) days of submittal.
ARTICLE 2 AMENDMENT TO ARTICLE 12, ALTERATIONS
Paragraph 12.1 is amended to read as follows:
Except as otherwise provided in this Article, Lessee shall obtain the written
consent of Lessor prior to making any structural or nonstructural alterations to the
Property. All structural and nonstructural alterations to the exterior of the
Property, especially the front fagade, shall conform to the Theatre's designation
as a local landmark and shall be consistent with the original design and 10)
architecture of the Theatre. Lessee shall be solely responsible for all costs and
expenses incurred in making any alteration. All alterations shall be surrendered
with the Property when this Lease expires or terminates.
ARTICLE 3 NO AMENDMENTS TO REMAINDER OF LEASE
All other provisions of the Lease shall remain in force and effect in their original form or
as amended by agreement of the Parties. .
FOR LESSOR
CITY OF NEWPORT BEACH
Dated o 0
Mayor
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FOR LESSEE = "� <!x, s t 40199
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BALBOA PERFORMING ARTS
ton THEATRE FOUNDATION �`c? � F"y� , `V�ry
C mir -�.6q. _,31.7.071
Dated �� l
Dayna P tit ' � y�
President .yr�d:, xt, APPR E TO FORM � a
CITYAF NEWPORT BEACH
,obert H. Burnham
/City Attorney
ATTEST:
CITY OF NEWPORT BEACH
LaVonne Harkless
City Clerk
Dated /
Dated /� (C� / /CO
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CALIFORNIA ALL - PURPOSE ACKNOWLEDGMENT
State of California
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County of \ J
On • o , before me, J
pare Nam a Tare o/ Oflbar (e.g., •Jan Doe, Notary blic
personally appeared �& ,
Vpersonally known to me
❑ proved to me on the basis of satisfactory
evidence
Place Notary Seal Above
to be the person(§ whose nam46 is are
subscribed to the wi instrumen and
acknowledged to meha h she/they executed
the same in hi her /their thorized
capacity('A), and that by hi her /their
signature(o on the instrument the personj, or
the entity upon behalf of which the person
acted, executed the instrument.
I SS my hand and offs ial sepl.
Sign re° NotaryP Nic
OPTIONAL
Though the information below is not required by law, it may prove valuable to persons relying on the document
and could prevent fraudulent removal and reattachment of this form to another document.
Description of Attached D�cume t 1 ' y /
Title or Type of Docum..elnt 1 �^ �� Jt�fY\ 4 v, 1, J
Document Date: a ' ( cp' - Number of Pages:
Signer(s) Other Than Named Above: t `° �
Capacity(ies) Claimed.by Signer V Or T 3rd A � ller. }L,
Signers Name: �X�l, 4 d a °
❑ Individual Top of thumb here
• Corporate Officer — Title(s): _
• Partner —❑ Limited ❑ General
• Attorney in Fad
❑ Trustee
❑ .Guardian or Conservator
❑ Other.
Signer Is Representing:
®1997 Nadanet Notary Ass°riaew, • 9350 Do Soto Avo., P.O. Box 2402 • Chatsworth, CA 91313 -2402
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CALIFORNIA ALL - PURPOSE ACKNOWLEDGMENT'
State of California
County of
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n
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personally appeared
before me, C"
It n ` mot Title of O6 cer (e.9.'Jena Doe. Note O ic,
CATHY mHat
Comm -1 on # 1174349 b
Notary Public - California 5
Orange Courtty
MyCcmm. E1�ifes Feb
21,2fb2
W personally known to me
❑ proved to me on the basis of satisfactory
evidence
to be the person(1W whose namew fs/ re
subscribed to the within trument and
acknowledged to me that sh ey executed
the same in his heir authorized
capacity( ), and that by his a their
signature on the instrument the person(V, or
the entity upon behalf of which the person
acted, executed the instrument.
7�04. SS my hand and icial sea.
Plooe NotarySeal Above of Not Pubtlo
OPTIONAL
Though the information below is not required by law, it may prove valuable to persons relying on the document
and could prevent fraudulent removal and reattachment of this form to another document.
Description of Attached D ment
Title or Type of Document: C o\
Document Date: \9-\0)--00 Number of Pages:
Signer(s) Other Than Named Above:
Capacity(ies) Claimed by Signer
Signer's Name: iffiEffim
• Individual Top of thumb here
• Corporate Officer — Tdle(s):
❑ Partner —❑ Limited ❑ General
• Attorney in Fact
• Trustee
❑ Guardian or Conservator
❑ Other:
Signer Is Representing:
O 1997 NeVeral Notary Association • 8350 De Soto Am. P.O. Boa 2402 • Chalseorlh, CA 9131 3-2002 Prod. No. 5907 Reorder. Cad TOtlfree 1400876-6627
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