09/26/1983 Meeting - Laserfiche WebLink

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halls, there was five times the possible gross receipts in the Silva Hall to e offset these costs. He added that the running costs for the Soreng Theatre were similar to those of the Silva Hall without the capability of earning those costs back through ticket sales. He said the tenant must keep down running costs in order to break even, stating that a tenant must limit the cost of the talent in the production to $2,500. He said the market for the talent must be pin- pointed, there being little room for error in operating in the Soreng Theatre. Mr. Reynolds said he would help tenants to develop a budget and to make the decision of whether to proceed with production. He said the stagehands had voluntarily reduced their wage rates by approximately 20 percent for local arts organizations for both theaters. Mr. Reynolds referred to the Rate Structure Analyses printout, distributed to the councilors, which outlined what was neces- sary to generate income and the categories of the users. He then outlined four recommendations on rental rates for the Soreng Theatre: 1) no change in the assessment for non-performance events: $250; 2) non-profit performing arts companies will be assessed a minimum rent of $50 against 10 percent of the gross receipts, not to exceed $250; 3) commercial promoters will be assessed a minimum rent of $100 against 15 percent of the gross recepts not to exceed $350; 4) professional, local performing artists, whose presentation is not affiliated with a qualified non-profit arts company, will be charged no minimum, and will be assessed a rent of 5 percent against the adjusted gross receipts (gross receipts less house charges and patron user fees). He said that it was important to note that the reimbursables would be collected in all cases. Mr. Reynolds said that word of the changes had spread and the number of holds and contracts on the Soreng Theatre had doubled those of the Silva Hall. He said that the Eugene Arts Foundation had assured him that a e donor can be found to cover any deficit below the $28,000 budgeted for rent of the Soreng Theatre. In response to a question, Mr. Reynolds said that the number of inquiries and holds for the theater indicated a good chance of the new rates producing the $28,000. He added that there might be a $4,000 to $6,000 slippage, which could be covered by the Eugene Arts Foundation. Mr. Hansen asked if accounting costs would be increased under a gross sales formula and whether any consideration had been given to an across-the-board 10 percent rent without any guarantee. Mr. Reynolds responded that it had been considered, but it was decided that commercial renters were better able to pay the rent; adding that two of the three commercial users had made a profit. He said that the theater was intended as a local-access facility, but he wished to encourage more experimentation by commercial users. In regard to accounting, he said that no additional cost would be incurred. Mr. Hansen asked what determination was used to ensure that the theater collected all the costs from the tenant. Mr. Reynolds said that a deposit was usually required and that a review committee could be used to study the budget of the tenant and to deter- mine the marketability of the tenant's product. Mr. Hansen asked if any con- sideration was given to taking a higher percentage from the successful tenants to cover those productions which operate at a loss. Mr. Reynolds responded that the profit margin was so small that any increase in the amount charged might result in the loss of those tenants. e MINUTES--Eugene City Council September 26, 1983 Page 6