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Council Agenda - City of BurbankTuesday, November 22, 2005Agenda Item - 10 |
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Purpose:
The purpose of this report is to request City Council approval for a one hundred eighty-two (182) day extension of contact documents for the operation of Burbank Center Stage.
Background:
On March 28, 2000 City Council approved two resolutions related to contract documents for the operation of Burbank Center Stage. Resolution No. 25,710 approved the Sublease and Master Lease Modification between the City, C.T. Operating Partnership and The Colony Theatre Company (Colony) relating to the Performing Arts Center. The second resolution (No. 25,711) approved the Theater Operating Agreement between the City and The Colony Theater Company. The terms of both agreements were to commence on the occupancy date and expire on the fifth (5th) anniversary of the opening day. The opening day was August 26, 2000, therefore the agreements terminated on August 27, 2005.
The Agreements allowed the City to extend the terms for three (3) separate and successive period of five (5) years each, upon the same terms and conditions. However, with the approval of both the Park, Recreation and Community Services Board and the City Council, the terms could be amended, modified or eliminated.
On August 23, 2005, the City Council approved an extension of the current agreements to December 1, 2005 to allow the Colony and staff to finalize negotiations for the second five (5) year term.
Analysis:
In February of 2005, Park, Recreation and Community Services staff received official correspondence from the Colony indicating its intent to initiate its contractual option to renew the second of three (3) separate and successive five (5) year periods. Meetings were held and a variety of issues were discussed. It became apparent that a finalized agreement would not be reached by the August 27th termination date. In light of this situation, the Colony and City staff requested City Council extend the current contractual agreement until December 1, 2005. It was believed by both parties that this extension of approximately ninety (90) days would provide adequate time to finalize an effective agreement. City Council approved the extension on August 23, 2005.
Following the City Council�s authorization of the extension, staff and the Colony immediately initiated additional agreement discussions. During the course of these negotiations, the Colony indicated some concerns regarding their financial status. A joint meeting including the Colony Theater Administrative staff, a representative of the Colony Theater Board of Directors, the City Manager, City Attorney�s Office, and Administrative Staff from the Park, Recreation and Community Services Department was scheduled to review and discuss the Colony�s fiscal status.
Some background information which was presented included the following:
The meeting focused on the Colony�s proposed program to address its short and long range financial issues. The plan as presented, calls for three (3) phases to enhance revenues through fund raising sponsorships and enhanced subscriptions.
Phase I will focus on a goal of $324,000 to address a current shortfall of $317,000. This phase will focus on the implementation of a Wall of Honor to recognize monetary donations in support of the Colony. The Colony plans to host a fundraising event at the conclusion of the current run of �The Grand Tour� with a Command Performance on November 29th. It will be designed to draw key participants within the Burbank community. It is hoped that this event will be an important component for Phase I, as well as the upcoming annual season subscription drive.
Phases II and III will focus on building stability and security through a graduated facility naming program. At this time it is the Colony�s objective to raise over $1,000,000 in revenue.
At the conclusion of this meeting, representatives from both the Colony and the City determined that at this time, in light of the Colony�s current fiscal condition, it would not be prudent for the City or the Colony to initiate a second 5 year agreement. However, both the City and Colony representatives concurred that an extension of the current agreement through May 31, 2006 would provide the Colony a reasonable time period (182 days) to initiate Phase I of its fundraising plan, kick off its annual subscription drive and implement reductions to operational costs.
Staff is confident that this recommended extension will provide a reasonable time period for the Colony Theater Company to address its financial position and allow staff and the Colony to craft a new agreement for a subsequent five (5) year period.
Financial Impact:
Under the terms of the current agreement, the Colony will be obligated to pay its quarterly rent payments throughout the extension period. These payments would be equal to $9,000 for the entire 6 month extension.
Recommendation:
It is Staff�s recommendation that the City Council approve a one hundred eighty two (182) day extension of contact documents for the operation of the Burbank Center Stage facility, to allow the Colony Theater Company to address and enhance its financial position.
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