By Wenger Corporation/J.R. Clancy
Last week we met Greg Garfield, President of Public/Private LLC in Dallas, who is involved in the Buddy Holly Hall of Performing Arts and Sciences facility under construction in Lubbock, Texas.
What factors contribute to successful PAC projects – those that meet deadlines, budgets and objectives? In Part 1, Garfield discussed the roles played by his firm and its partners, including development services, market studies, community engagement, conceptual design and budgeting. In Part 2 this week, Garfield discusses budgeting, options for ownership, related financial considerations and the importance of involving the PAC facility operator early.
Armed with the PAC building program and conceptual design, Garfield partners with an active, blue-chip contractor familiar with the local community. “We’re looking for a firm with relevant experience, capable of providing guaranteed maximum price and completion dates with payment performance bonds, if needed,” he says. Either that contractor or a cost consultant that specializes in PACs helps create an early development budget.
This budget includes all of the hard and soft costs, direct and indirect construction costs, professional fees, pre-opening costs, etc. “It’s everything we can think of – from soup to nuts – that it will cost to complete and open the building,” comments Garfield. He says the budget includes various contingencies appropriate for an early phase project.
If the project moves ahead, Garfield’s firm works to further develop and refine the design with the architect and engineer, reducing contingencies along the way. “We want to ensure there’s a realistic budget so we can meet the guaranteed maximum price set by the contractor,” he notes.
Ownership, Financing, and Funding
Garfield says the last piece of pre-development strategic analysis is perhaps the most important: the ownership, financing and funding. Who will own the facility? The city? A nonprofit? “There are many different options for ownership, governance and operations,” he notes. Performing arts centers and other cultural, sports and entertainment venues developed or planned by Garfield have variously been owned by cities or counties, municipally controlled special purpose vehicles, intergovernmental entities or 501(c)(3) nonprofits.
Financing and funding may come from a variety of sources, including philanthropic grants or contributions, naming rights, box seat/suite sales, personal seat licenses, facility net operating income, facility fees, parking revenue and/or financing from one or more municipal agencies/sponsors.
Sources of repayment for municipal bond financing may include increments of sales tax, hotel occupancy tax, TIF income and many other revenue streams. “Every community is different in the municipal financing tools available,” says Garfield. He says that financings for his company’s developments have never required recourse to a municipality’s general fund or its commitment to raise residential property taxes if needed. Garfield works with each client to determine the best possible financing structure consistent with the client’s financial and legal goals and constraints.
Foundation for Success
PACs and other public assembly facilities planned and developed by Garfield have had a variety of different operating models. Whether the operator is a municipality, a private nonprofit, or a commercial operator, Garfield recommends including the operator early in the design process to help ensure the facility is properly planned and equipped. Having the operator’s early involvement along with an experienced theater consultant helps to ensure that all programmatic elements and equipment are included; that spaces are designed for maximum operational efficiency; and that artists, guests, and building staff are secure and comfortable.
Many communities get the “cart before the horse” in approaching performing arts centers and other facilities, says Garfield. Announcing ambitions before a comprehensive strategic business plan is conducted, or designing a building without appropriate planning and assessment of financing and funding capacity are common mistakes. According to Garfield, this can be counterproductive and delay the realization of desired facilities for years. Much more than just a market study, Garfield says good strategic business planning by an experienced developer is the necessary first phase to ensure a successful development.
Garfield says, “We apply a level of professional rigor in early planning that produces results that are diligently researched, realistic and reliable so that community ‘buy-in’ is achieved and there is a solid foundation for success.”
J.R. Clancy’s Patrick Finn is a member of IAVM. Clancy serves as a subsidiary of Wenger Corporation.
This article was originally published by Wenger Corporation on its performing arts blog at http://performance.wengercorp.com/blog/
Venue manager SMG took over management of Citizens Business Bank Arena in Ontario, California on July 1, 2016. One year later, the results are in and they prove the decision by the City of Ontario to change management services at Citizens Business Bank Arena was a very good move.
“We are thrilled that during our first year of management the attendance (outside of the home team sporting events) increased by 45%,” said Michael Krouse, President & CEO of Citizens Business Bank Arena and Regional Vice President for SMG. “Our goals this past year were to improve attendance, increase food and beverage options, and upgrade the overall guest experience.”
SMG has also worked tirelessly to bring a diverse mix of events to the City of Ontario. Recent sellouts by Def Leppard and Tim McGraw/Faith Hill have proven the market will support big name events. In May, SMG and the Los Angeles Clippers announced that the Clippers new development league team, the Agua Caliente Clippers of Ontario, will be moving to Ontario. This team will add to the entertainment options at Citizens Business Bank Arena and to the already busy arena calendar.
“We are proud to team-up with the Agua Caliente Band of Cahuilla Indians to bring highly competitive professional basketball to the Inland Empire,” said Clippers President of Business Operations Gillian Zucker. “This region has already demonstrated enormous passion for the Clippers. Locating our team in Ontario allows us to reward that enthusiasm and continue to build a deep connection with these fans by offering affordable, family fun right in their backyard.”
SMG has also improved the food and beverages options to the delight of guests. The all new street tacos have been a fan favorite, along with the carne asada nachos and the slow roasted brisket sandwich with homemade BBQ sauce. New partnerships have been developed including Hanger 24 Craft Brewery, Jimmie John’s, and Chick Fil A.
Prior to two sold out concerts, Def Leppard and Tim McGraw/Faith Hill, an early outdoor party experience offered dining options, concert merchandise, games and vendors. Part of the overall improvement of the guest experience has been providing excellent food and beverage options.
Since taking over management, Premier Foods by SMG has increased sales by 14%. Not only the fans have recognized the quality, the entertainers have expressed their appreciation for the quality, taste, and presentation of food at Citizens Business Bank Arena.
Other initiatives implemented by SMG during this first year of management include the following:
· Installation of High Speed Wi-Fi
· Ticketing platform returned to Ticketmaster
· Suite scanners were installed -the arena was the first in the nation to install this type of scanner system
· New food and beverage menus and partners including Hanger 24 Craft Brewery, with several more options coming soon
· New paint, wall coverings, and flooring improvements have begun and will continue thru 2018
SMG currently manages Ontario Convention Center, Ontario Town Square, Citizens Business Bank Arena, the Greater Ontario Convention & Visitors Bureau including the California Welcome Center at Ontario Mills, and produces signature events such as Route 66 Cruisin’ Reunion. The overall synergy created by utilizing all the marketing resources to co-promote events is making a difference. There are over 6,000 hotel rooms in the Greater Ontario region. The management of those hotels are provided with a monthly calendar of arena and convention center events. Currently six electronic marquees are advertising upcoming events at the arena on a regular basis. With the new, larger LED marquee sign build that will be in place by the fall of 2017, plus five other local marquees and an additional 10 electronic sign boards throughout the region coming this fall, the promotional reach for upcoming shows will reach over 2.2 million people daily.
Overall, Citizens Business Bank Arena is being upgraded to a better venue that provides the local, regional, and Southern California fans with the best entertainment experience possible.
Jane Kleinberger could barely contain her excitement on the phone when she talked about the company she co-founded 37 years ago, Spectra Ticketing & Fan Engagement, agreeing to acquire the assets of full-service ticketing and marketing service provider TicketsWest and promoter and producer of a variety of entertainment productions WestCoast Entertainment from RLH Corporation.
“This brings both companies a little bit more squarely into what it is they do day in and day out,” said Kleinberger, who said this move is as exciting to her as when her company was acquired by leading college sports marketer Learfield, which in turn restored the name Paciolan to Kleinberger’s company. “What they do is a little different than what we do at Paciolan. Therefore, we’re not looking to upset the apple cart. We’re going to maintain their branding and let them continue to operate.”
“They are operating as our subsidiaries,” Kleinberger added. “Just as in the way that we were excited about our transaction a few months ago being a Learfield-owned company, which celebrates who we are and what we’ve done and restored our name, is how we feel about this transaction. We by the same token are excited that TicketsWest has been such a long-term wonderful partner of over 10 years of Paciolan.”
Jack Lucas, WestCoast Entertainment president, called the partnership “not just a good thing for TicketsWest and WestCoast Entertainment but a great thing.”
“Both Paciolan and TW/WCE share similar values, ethics, the desire to build long-term relationships,” Lucas said. “We also all work as client-focused companies while ensuring that we provide a great customer and guest experience.
“I have had a long relationship with Paciolan starting in the mid-1990’s and I’ve known Jane for over 25 years. They understand the value in the national brand names we bring to them, thus TicketsWest and WestCoast Entertainment brands do not change.”
Lucas promoted Dusty Kurtz in March to serve as president of TicketsWest. Kurtz remains in his position while Lucas continues to serve as president of WestCoast Entertainment.
“It’s been a great 30-year career for me, and as I look back at our humble beginnings, when we started with just one client and now we’ve grown these companies into what they are today, it’s been a ‘pinch me’ career,” Lucas said. “I am excited about the future and look forward to the continual growth of both companies.”
Kim Damron, president and chief operating officer of Paciolan, welcomed the two entities and expressed confidence about the fit.
“Bringing TicketsWest and WestCoast Entertainment into the Paciolan family was a natural fit,” Damron said. “We’ve worked closely with TicketsWest for the last 10 years and have tremendous respect for the company and its leadership team. This acquisition highlights Paciolan and Learfield’s commitment to all aspects of live entertainment, as TicketsWest is a powerhouse in the arts.”
The move solidifies all three businesses going forward.
“After all these years and all the good work so many people have done, we’ve got leadership today at Paciolan with young people that we were able to bring up within the industry and in our company,” Kleinberger said. “They are as passionate about it as I’ve been. I can’t believe I gave birth to this baby 37 years ago!”
VenueConnect 2017 concluded last Thursday, and since then, we’ve heard your feedback. Thank you to everyone who attended VenueConnect in Nashville, and thank you to those of you who have reached out to us with your comments!
“We would like to extend our warmest thank you for all your help during the recent VenueConnect. As always, everyone at IAVM made us feel very welcome and were extremely helpful in making this an extraordinary experience. We will certainly not soon forget the wonderful time we had and the opportunity to further our education in this fascinating world of venues.” – AMEREF
“What a blast Nashville was!” – Nick Zazal, CVP
“For those of us fortunate enough to have attended VenueConnect last week in Nashville, I hope you are still basking in the glow of new found information, strengthened skills and a growing network of friends and colleagues. I encourage you to seize this time of momentum, while topics are fresh in your mind, and reach out to your colleagues close by to organize a Chapter Meeting.” – Alexis Berggren
“Well done by all, congrats!” – Kevin Bruder
“Just wanted to thank you again for all of your support and help throughout the years. This conference was a big hit! Congrats on all of the hard work you put into it.”– Jordan Hergott, Spec Seats
“What a conference! That one is going to be hard to top. You all should give yourselves very big slaps on the back for producing such an amazing event!!!”– Carolyn Gibson, Fortessa Tableware Solutions, LLC.
“As an exhibitor, it is one of the best show I have attended. Everything was nicely organized, it was well attended, leads were high quality, and first class events/entertainment…the Monday party at the arena was a blast.”
The Hong Kong Convention and Exhibition Centre (HKCEC) has continued to be the preferred venue for international organizers staging world-class exhibitions and conferences in Hong Kong. During the fiscal year 2016-2017 (July 2016 to June 2017), a total of 1,102 events were held at the HKCEC, including 116 exhibitions and 104 international and local conferences, along with hundreds of corporate meetings, banquets and entertainment events. In total, over 5.7 million people attended these events. Eight new exhibitions and 36 new conferences were successfully held at the HKCEC. Over the year, Hong Kong Convention and Exhibition Centre (Management) Limited (HML) picked up 28 awards and certificates from international and local organizations, including the award for the “Best International Convention and Exhibition Centre,, the “Award for Excellence in Convention and Exhibition Facilities,” and the “18 Districts Caring Employers 2016 Award.”
Eight of the year’s 116 exhibitions were new to the HKCEC. They represented industries as diverse as fashion, toys, cloud technology, automobiles, and technology for the elderly. The other over 100 exhibitions were recurrent trade and public fairs, including the 5th edition of Art Basel Hong Kong, the Hong Kong Book Fair, and the Hong Kong Electronics Fair.
The HKCEC’s conference business remained strong over the year. Among the 104 conferences held at the HKCEC, 30 were international and 74 were local conventions, with a total of 36 new to the venue. The conventions were on subjects as wide-ranging as medical science, yoga, taxation, law, and waste recycling.
Other significant events held at the HKCEC during the year included Hong Kong phenomenon Rex Tso Sing-yu winning the WBO Asia-Pacific super flyweight title in front of 8,000 enthusiastic spectators. This was an important moment in his personal career, taking him to a winning streak of 21 matches. On another front, the Chief Executive Election held on 26 March at the HKCEC was brought to a successful conclusion due to HML’s professional security, event planning and crowd management services.
A series of celebration activities for the 20th anniversary of Hong Kong’s Return to the Motherland were held at the HKCEC from June 29-July 1. These included the Grand Variety Show, the Flag Raising, the Inauguration of the Fifth Term Government of the Hong Kong Special Administrative Region, along with fireworks display dinners and other activities relating to the visit of President Xi Jinping of the People’s Republic of China. With a rich experience and expertise in handling high-profile events, HML’s 950 permanent staff and an additional 1,500 temporary support staff successfully provided meticulous services in line with the strict security measures. Over the three days, more than 33,000 meals were served for attending guests, HML and Government staff members, contractors, as well as some of Hong Kong’s top performing artists.
“Exhibition and event organizers coming to the HKCEC are not just looking for a suitable venue, but are expecting total event experience for exhibitors, buyers, visitors, attendees and guests, which involves bringing together security services, catering services, technological support and logistics,” said HML Managing Director Monica Lee-Muller. “HML is fully capable to provide them with creative and comprehensive solutions.”
Since the opening of the HKCEC in 1988, the HML team has hosted 46,460 events and welcomed over 103 million visitors. These events have contributed significant economic benefits to Hong Kong by generating spin-offs for tourism and other related industries, creating numerous jobs and business opportunities for small and medium enterprises, and enhancing Hong Kong’s international image and reputation.