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 contract documents for the operation of Burbank Center Stage.  The first, a Sublease and Master Lease Modification between the City, C.T. Operating Partnership and The Colony Theatre Company (Colony) relating to the Performing Arts Center, and a 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 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 separate and successive periods of five 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, 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 year term.  Following Council�s approval, negotiations resumed.  During this time the Colony indicated some concerns regarding their financial status. A joint meeting between the Colony Theater, the Colony Theater Board of Directors, City Manager, City Attorney, and Park, Recreation and Community Services Departments was held to review and discuss the Colony�s fiscal status.  The meeting focused on the Colony�s proposed program to address its short and long range financial issues. A three phase plan was presented to enhance revenues through fund raising sponsorships and enhanced subscriptions.  At the conclusion of this meeting, representatives from both the Colony and 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 five year agreement.

On November 22, 2005, City Council approved a second extension for a period of one hundred eighty-two (182) days, extending the current agreement through May 31, 2006.  City and Colony representatives concurred that this extension would provide the Colony a time period to initiate the first phase of its fundraising plan, kick off its annual subscription drive and implement reductions to operational costs.  During this meeting, Council requested that the Colony develop a business plan addressing both the short and long range fiscal programs.   

Analysis:

In response to Council�s direction and at the initiation of the Colony management, a group of five prominent community businessmen volunteered to assist the Colony and its Board of Directors with developing a comprehensive business plan.  The group has met six times during the course of several months.  The community group has examined and evaluated the current management structure of the Colony Theatre.  The meetings between the volunteers and the Colony staff have been open and very productive.  There is a general understanding that there will be change.

The community group has completed an initial draft of operational guidelines.  This document proposes a plan to address issues such as; board of directors, staff and operations, outreach and communication, marketing, and generating additional revenue.  Upon finalizing the guidelines, this group of volunteers will present their recommendations to the Colony staff and its Board of Directors for discussion and implementation.     

Staff is confident that this recommended extension, which will expire on November 30, 2006, will provide a time period for the Colony Theater Company to respond to the recommendations of the volunteers, to develop its business plan, and allow staff to craft a new agreement with the Colony for a subsequent five year period.

During the extension periods the Colony Theater Company has been in compliance with their contractual obligations with the City, which include quarterly payments, evidence of insurance and annual reports.  

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 with the Colony Theater Company, for the operation of the Burbank Center Stage.

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