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HomeMy WebLinkAboutItem B: Cuthbert Amphitheater Update ECC UGENE ITY OUNCIL AIS GENDA TEM UMMARY Work Session: Cuthbert Amphitheater Update Meeting Date: May 8, 2006 Agenda Item Number: B Department: Library, Recreation and Cultural Services Department Staff Contact: Laura Niles www.eugene-or.gov Contact Telephone Number: 682-2697 ISSUE STATEMENT Members of the Eugene City Council requested an information session on Cuthbert Amphitheater services following the staff-initiated Request for Proposals to contract out management. Staff will provide background information on the status of the Cuthbert Amphitheater as a cultural arts venue in Eugene. BACKGROUND The oversight of managing and promoting Cuthbert Amphitheater was assigned to the Cultural Services Division in 1997, when the City Council agreed to accept ownership of Alton Baker Park from Lane County. The council appropriated $125,000 for facility improvements, which included the design and construction of the copper-toned stage roof; however, no appropriation was made for the venue’s operation and promotion. Over the years, these duties have been accomplished by Cultural Services staff as a special assignment through a combination of limited union-represented hours and substantial management overtime, and staff continues to look for a variety of inventive initiatives to stretch the division’s strained resources. Technological advances, increased partnerships, and consolidated efforts with other City divisions have been utilized and yet, costs continue to exceed revenues. Because of limited funding for promotion, the venue has been used only when it is convenient for promoters, putting the City at the mercy of their financial issues, which include those experienced by the industry as a whole. Small, regional promoters have been nudged out of the business in the last several years due to several significant changes in the popular touring entertainment industry: ?Popular entertainers are less willing to tour smaller venues because of lower profit margins and a higher risk for loss. ?Popular acts often require higher artist fees, as well as higher fees for travel, hotel, hospitality, and production, which lead to less profit for managers and promoters. ?Higher fees have led promoters to raise ticket prices, which have resulted in lower sales, because many patrons are thinking more frugally when making major entertainment purchases. ?Outdoor facilities have a greater risk of being affected by weather, which leads to erratic ticket buying patterns. All these factors often eliminate small venues such as the Cuthbert from major tours because capacity cannot generate adequate sales to cover predicted expenses. Artist agreements with managers and promoters provide them with up to 100% of the ticket price, leaving only ancillary revenue such as L:\CMO\2006 Council Agendas\M060508\S060508B.doc merchandise sales, parking and vending, which often do not cover their costs. Because of this, promoters are looking for agreements that enable them to control all aspects of venue revenue and operations expenses to minimize their financial exposure. Cultural Services staff felt that it was economically imprudent to continue to hope the situation would improve. Fewer “marquee” shows and lower attendance have resulted in a net loss of over $100,000 for the 2005 season. Staff is aware, however, from community-wide and Cuthbert event surveys, that the venue is still very popular with area residents. These surveys confirm the community’s appreciation, but also document the disappointment generated by the decreasing number of events and activities. Upon review of expected events for the upcoming season, staff considered canceling the season, but opted against it because of the popularity of the venue and the focus on promoting Eugene as the “World’s Greatest City for the Arts and Outdoors.” Other options for the management and promotion of the facility were explored, in keeping with the City Council’s endorsement of the existing Culture and Leisure Plan, adopted in 1985. The Cultural Services Advisory Committee also reviewed the issue and recommended outside contracting as a possible way to enhance usage. Although staff initiated discussions about the Cultural Policy Review (CPR) process, which would include operation of all Cultural Services operations, a decision was made to go forward to avoid under-utilization of the venue until that review was complete. Staff believes that the City has an obligation to the community to maximize the use of this facility, and to offer quality programs that cover a wide variety of preferences. Staff was encouraged by the RFP responses and by the prospect that the winning proposal could potentially bring back “higher profile” performers and protect the City from losing additional monies— essentially shifting the risk of management and promotion. For the summer, two high profile acts are scheduled, and staff has partnered with the University of Oregon to host the Willamette Valley Folk Festival. Cultural Services staff feels that this agreement is a positive step for the City and for Cuthbert patrons for the following reasons: ?The community will benefit by the anticipated activity level increase at Cuthbert. ?Cultural Services Division is relieved of the high financial risks associated with managing and promoting popular entertainment at Cuthbert. ?The revenues are stabilized with guaranteed payments, and have the potential of additional, ancillary, revenue-generating activities. RELATED CITY POLICIES City Council Goal:Accessible and Thriving Culture and Recreation ? City Council Priority Issue: Strengthen and Promote Community “Arts and Outdoors” Assets ? COUNCIL OPTIONS Because this is an update session only, no City Council action is required. CITY MANAGER’S RECOMMENDATION Because this is an update session only, no City Manager recommendation is required. L:\CMO\2006 Council Agendas\M060508\S060508B.doc SUGGESTED MOTION Because this is an update session only, no suggested motion is required. ATTACHMENTS A. Cuthbert Amphitheater season statistics: 2000 through 2005 FOR MORE INFORMATION Staff Contact: Laura Niles Telephone: 682-2697 Staff E-Mail: laura.m.niles@ci.eugene.or.us L:\CMO\2006 Council Agendas\M060508\S060508B.doc ATTACHMENT A CUTHBERT AMPHITHEATER SEASON STATISTICS 2000 THROUGH 2005 Year 200520042003200220012000 Number of Shows487685 Total Attendance3,49612,75617,01113,34513,2775,780 Total Season Expenses$178,087$252,667$187,591$178,110$233,670$123,807 Total Season Revenues$77,815$253,450$274,349$210,278$210,980$86,849 Net Profit/(Loss) ($100,272)$783$86,758$32,168($22,690)($36,958)