Date: April 18, 2000
Author/Local: Rae Ackerman
RTS No. 1436
CC File No. 4251
Council: May 2, 2000
Vancouver City Council
Director of Civic Theatres
Theatre Rental Rates: September 1, 2000 to August 31, 2001
A. THAT Council approve the Schedule of Rental Rates for Civic Theatres, as detailed in Appendix "A", effective September 1, 2000, and
B. THAT Council approve an increase in the funding for grants equal to theatre rent for the last four months of 2000 to offset this rental rate increase, if needed; source of funds to be Contingency Reserve.
Council annually approves the Schedule of Rental Rates for the three civic theatres as well as the necessary adjustment to the grants equal to rent budget to accommodate the changes in rental rates.
This report seeks approval of the proposed Schedule of Rental Rates attached as Appendix "A", for uses of the Orpheum, Queen Elizabeth Theatre and Vancouver Playhouse, during the period September 1, 2000 to August 31, 2001. It also requests approval of a matching increase in the grants equal to rent budget for the fall of 2000, should an increase be needed. At this moment it appears an increase will not be necessary due to scheduling changes.
A companion report will recommend approval of two new rental rate policies to be added to those referred to in this report.
Rental rates are reviewed each year during the preparation of the annual operating budget and any adjustments are made effective September 1st of each year in alignment with the traditional performing arts season. The rental rates are periodically reviewed in relation to those of comparable facilities to ensure that Vancouver's rates are correctly placed in relation to the local, national and international markets.
In 1999 the increase was 4% for the QET/Orpheum and 3.8% for the Playhouse; the increase in the fall rental grants budgets was approximately $34,000.
The Performing Arts and Live Entertainment Environment
1999 was another year of change in our market. In spite of the closure of the theatre formerly known as Ford, we did not see a return of Broadway musicals to the QET. What we saw instead was a continental dearth of such shows that has lead American road houses to innovatively begin trying to source product from places other than Broadway and the West End. In addition, the continued disparity between the Canadian and American dollar has maintained the high risk of importing shows into Canada.
During the past four years there has also been a large increase in the number of venues available for live entertainment and public assembly events. The table below shows 6 new venues added to the four pre-existing, although the former Ford Centre remains closed and the Commodore was only closed for a few years. The total number of seats available to sell increased from just over 10,000 to just under 20,000 (using the Coliseum and GM Place in concert bowl configuration only).
The new venues are shown in Bold face type;
VENUE CAPACITY TYPE
G.M. PLACE 5,500 to 20,000 Concert Bowl to Arena
COLISEUM 4,000 to 16,000 Concert Bowl to Arena
QET 2,929 Theatre - Road House
ORPHEUM 2,788 Concert Hall
FORD CENTRE (closed) 1,840 Theatre - Road House
CHAN SHUN HALL 1,200 Concert Hall
VOGUE 1,200 Theatre
COMMODORE 1,000 Cabaret/Ballroom
VANCOUVER PLAYHOUSE 668 Theatre
STANLEY 650 Theatre
The number of venues has led to a redistribution of events. Some high school graduations, music recitals and concerts went to the Chan Centre which is a more appropriate size for those events. Some pop/rock concerts moved to the Vogue and now the Commodore. GM Place has aggressively promoted its 5,500 seat theatre configuration which competes directly with the QET and Orpheum.
The 8 resident performing arts organizations who use the civic theatres and receive City grants have been relatively stable, although neither we nor they take that stability for granted. This is the group we know as the "Prime Performers at the Centre of Vancouver's Entertainment District" and with whom we partner in a variety of marketing and publicity efforts.
The Theatre Rental Market - Comparisons
Exactly equivalent comparisons are difficult to make since the majority of theatres in our study area have different rental rate structures from each other and from Civic Theatres. For the analysis we used the published rates for 17 theatres from Oregon, Washington, BC, Calgary, Thunder Bay, Toronto, Kitchener and Ottawa. Including the QET and Orpheum, only 5 of these theatres post "flat rate" rentals. All others use a formula involving a base rent, roughly equal to $1.00 per seat, plus a percentage of the ticket sales. For a simple comparison, we ignored the manner in which different theatres charge labour and equipment usage, box office fees, merchandising commissions, and seat surcharges. Many add on some or all of these costs, increasing the differential. Appendix "B" shows the results of the survey, reduced to a cost per seat basis, with the proposed new rates for Civic Theatres inserted.
The proposed increase for the Orpheum/QET is $300 per evening to $7,900, or 4%. The survey shows that the proposed new rental rates are still reasonable in comparison to the majority of theatres.
The Proposed increase for the Vancouver Playhouse is $80 per evening to $2,130, or 4%. The Playhouse at 668 seats is comparable to the Stanley at 650 seats, and the proposed rent is also comparable.
Grants Equal to Rent
Local non-profit performing arts organizations may receive support from the City in the form of Grants Equal to Theatre Rent or Baxter Fund Grants. Grants equal to rent are awarded to the established non-profit presenters: Vancouver Symphony Society, Vancouver Opera Association, Playhouse Theatre Company, Ballet B.C., Vancouver Chamber Choir, Vancouver Bach Choir, Friends of Chamber Music, Vancouver Recital Society. The Vancouver Foundation's Baxter Fund grants are awarded to smaller, developing performing arts groups or to special programmes. Licensees who have benefited include: VancouverNew Music for "Elsewhereless", Rosario Ancer Flamenco Festival, Uzume Taiko and Vancouver Chinese Choir Association.
It must be acknowledged that the Baxter Grant Fund will run out in the near future. The Director of Cultural Affairs notes that increases in theatre rental rates further erodes the sustainability of the fund.
Normally, an increase in theatre rental rates dictates an increase in the budget for rental grants for the fall. This year it appears that, due to some rescheduling by the resident companies, an increase may not be required. The Director of Cultural Affairs will report on this later in the year.
The local City-supported non-profit presenters participating in the grants programme are insulated from financial impacts for those uses covered by a grant. Not all of the resident companies' uses are covered by grants. It is worth noting that Ballet BC receives rental grants for its own productions at the QET but does not receive any assistance for the touring dance companies it presents in the Dance Alive! series (Royal Winnipeg Ballet, Les Grands Ballets Canadien, National Ballet of Canada etc.). In these instances, the rental rate increase could be seen to create a hardship.
The Office of Cultural Affairs will be bringing a report to Council in the near future, for allocation of the fall theatre use grants.
High School Graduations were provided with a special rental rate to encourage their use of the theatres at a time when bookings are traditionally low. The reduced rental rate also facilitated the schools access to the theatres at a time when their own facilities were often inadequate for one reason or another. 24,000 people attended graduation ceremonies in the QET and Orpheum in 1999, down from 30,800 the year before.
The number of graduations is down from 30 in 1997 to 21 in 1998 and 18 in 1999. In some cases, they have found a smaller venue, e.g. the Chan Centre, to be more suitable for their audience size. In another case, Burnaby school district is "staying home", holding all of their graduations in a local arena, as far as we know.
The rental increases described here are the minimum necessary increases in the cost of service to meet the objectives of the 2000 operating budget.
The local City-supported non-profit performing arts presenters are insulated from impactsof this increase for uses of the theatres which are covered by the grants program. As noted earlier, not all theatre uses are covered by grants.
The reduced rate for high school graduations still generates income above the incremental costs of operation and contributes to the operating overhead.
As this rental rate increase only applies to the last four months of 2000, it actually establishes the revenue potential for most of the year 2001.
The proposed new rental rates have been communicated in writing to Licensees of the theatres. Copies of this report have been sent to a selected list of major users.
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(c) 1998 City of Vancouver