SUPPORTS ITEM NO. 3  
                                                      CS&B COMMITTEE AGENDA
                                                      JULY 20, 1995        


                                  POLICY REPORT
                                     FINANCE   


                                                       Date:  June 27, 1995


     TO:       Standing Committee on City Services and Budgets

     FROM:     Director of Civic Theatres

     SUBJECT:  Theatre Rental Rates -
               September 1, 1995 to August 31, 1996.




     RECOMMENDATION

          THAT Council approve the Schedule of Rental Rates and  Conditions
          for  Civic  Theatres,  as   detailed  in  Appendix  A,  effective
          September 1, 1995.


     CITY MANAGER'S COMMENTS

          The City Manager RECOMMENDS approval of the foregoing.


     COUNCIL POLICY

     Council annually approves the  Schedule of Rental Rates for  the three
     civic theatres.  Included  is  a  special rate  for  secondary  school
     graduations and an administrative adjustment  benefitting back-to-back
     pairs of school concerts  by the Vancouver Symphony Orchestra  and the
     necessary  adjustment to  grants in  lieu of  rent to  accommodate the
     changes in Rental Rates.


     SUMMARY

     The report recommends  an increase in the  rental rates for  the Queen
     Elizabeth  Theatre (QET), Vancouver Playhouse and Orpheum.  The rental
     increase for the  Playhouse is  from $1,850  for an  evening event  to
     $1,875,  or 1  percent.   The  recommended  increase for  the QET  and
     Orpheum is from $6,500 to $6,800 for an evening event, or 4.6 percent.
     The body of the report goes into some detail to  explain the increases
     in  terms  of  the anticipated  impacts  on  ticket  prices, costs  to
     presenters and the effect on the grants equal to rent programme.

     PURPOSE

     This report seeks approval  of the Schedule of Rental  Rates, Appendix
     A,  for uses of the Queen Elizabeth Theatre (QET), Vancouver Playhouse
     and Orpheum for the period September 1, 1995 to August 31, 1996.


     BACKGROUND

     Rental  rates,   summarized  in   Appendix  A,  are   reviewed  during
     preparation of  the annual  operating budget and  any adjustments  are

     made  effective  September  1 of  each  year,  in  alignment with  the
     traditional performing arts season.  The rental rates are periodically
     reviewed  in relation to those of other comparable facilities in other
     cities to  ensure  that  Vancouver's rates  are  correctly  placed  in
     relation  to the  local,  national and  international  markets.   Rate
     changes also reflect changes in the costs of operation  as affected by
     the City's collective agreements and various purchased services (e.g.,
     heating, lighting).

     A  special  rate  for  secondary  school  graduations  was  originally
     instituted to attract theatre uses at a time of year when the theatres
     were  generally under-utilized.   The  number  of graduations  held at
     Civic  Theatres has  grown from  5 in  1986 to  23 during  the 1994/95
     season.

     The Vancouver Symphony Orchestra  (VSO) stimulates the develop-ment of
     new audiences by scheduling special back-to-back one-hour concerts for
     school audiences at a ticket  price of $5.00.  For the  convenience of
     the  schools, these  concerts are held  at 10:30 a.m.  and 12:30 p.m.,
     spanning the lunch hour.  The  number of these concerts has grown from
     4 (in 2 days)  in 1988-89 to 12 (in  6 days) in 1994-95,  attesting to
     their popularity.


     DISCUSSION

     Base Rates

     The  proposed increase  for  the Vancouver  Playhouse  this year  from
     $1,850 to $1,875 for an evening event is equal to 1 percent.  In 1994-
     95 there was no increase in the  Playhouse rental rate.  The base rent
     for the  Playhouse is already  high enough to  discourage unsubsidized
     uses so  we  are proposing  to  deliberately keep  the increase  at  a
     minimal level.


     The  proposed increase for the Queen Elizabeth Theatre and the Orpheum
     from $6,500  to $6,800 for an  evening event is equal  to 4.6 percent.
     (The rental rate increase for 1994-95 was 4 percent.)  We believe this
     is the maximum increase the market will bear.  It is also the  minimum
     increase needed to  meet the  objective of the  1995 operating  budget
     based  on the  estimated  number  of  events  that  will  occur  after
     September 1, 1995.

     This  increase  in the  QET and  Orpheum rent  may  cause some  of the
     presenters  a certain  amount  of stress  as  they try  to  balance an
     increase  in  cost  of  presentation  with  the  ticket buyers'  price
     resistance.  If a presenter holds  the line on ticket price increases,
     for a  ticket priced  at $30, a  presenter will have  to sell  10 more
     tickets or  forego revenue on 10  more tickets than last  season. On a
     per-ticket basis,  the rent increase would add $0.11 to the price of a
     ticket based on a capacity audience.  If a presenter  is budgeting for
     break-even at 50 percent of capacity, the increase in the ticket price
     would have to be $0.22.

     This increase translates to  a rental rate of approximately  $2.43 per
     seat for events at the  QET and Orpheum, up from $2.32.  The Playhouse
     rate translates to  $2.80 per seat.   For the  sake of comparison  the
     Ticketmaster handling charge ranges from $2.00 to $4.50 per ticket for
     single ticket sales, $0.50 for subscription sales. A $30 ticket, which
     costs  the  ticket  buyer $35.10  ($30,  plus  $2.10  GST, plus  $2.00
     handling, plus  $1.00 Civic  Theatres Capital Surcharge),  will return
     $27.57 to the presenter as compared with $27.68 last year, again based
     on a capacity audience.

     Grants Equal to Rent

     Local non-profit performing arts presenters may receive support in the
     form of  Category II or Baxter Fund grants equal to rent.  Category II
     grants are  awarded to  established non-profit presenters,  including:
     Vancouver Symphony  Society,  Vancouver Opera  Association,  Vancouver
     Playhouse  Theatre  Company,  Ballet B.C.,  Vancouver  Chamber  Choir,
     Vancouver Bach  Choir, Festival  Concerts Society, Friends  of Chamber
     Music,  Vancouver Recital Society, and others.  Baxter Fund grants are
     awarded  to  newly  formed  performing  arts   groups  or  to  special
     programmes or  to organizations  who present infrequently.   Licensees
     who have  benefitted  include: Early  Music  Vancouver, Music  in  the
     Morning,  Vancouver Youth  Symphony Orchestra,  Vancouver Professional
     Theatre Alliance, and others.


     Provided Council  approves the usual equivalent increase in the grants
     budget,  the  local, City  supported  non-profits  are insulated  from
     financial impacts  for those uses of the theatres which are covered by
     the grant programme (which  will be the subject of an upcoming council
     report).   However there are  direct and  indirect impacts on  some of
     these groups.   Based on the  1994-95 season, the impacts  would be as
     follows.

     Vancouver  Opera Association  (VOA) did not  receive grants  for seven
     performances of "The Pearl Fishers" and  three recitals.  On the basis
     of last season,  the proposed rental  increase would  cost the VOA  an
     additional $3,000 plus GST.  Ballet B.C.'s own programme is covered by
     grants except  for some time  used on an  hourly basis.   The proposed
     increase in rent would cost them an additional $1800 based on 1994-95.
     Ballet  B.C. also  present the  Dance Alive  series of  visiting dance
     companies whose performances  are not  covered by grants.   The  Dance
     Alive  series  is  important  to  Ballet  B.C.   for  cultivating  and
     developing  a dance  audience  in  Vancouver.    Ballet  B.C.  may  be
     concerned  about the impact of this increase on its ability to attract
     the touring dance  companies.  There were  a total of  12 performances
     presented by  4 visiting dance companies  not covered by grants.   The
     increased cost for these  performances would be $3,600, plus GST.   In
     addition, the  Vancouver Recital Society presented  one performance of
     Cecilia Bartoli without a grant.


     Special Rates

     Supporting  high  school  graduations  with a  special  afternoon  and
     evening rate serves  the community  by providing a  safe and  suitable
     venue when the schools'  own facilities are inadequate for  one reason
     or  another.    Upwards  of  30,000  people  attend  these  graduation
     exercises.  We feel that, in addition  to fulfilling a community need,
     attending  a graduation exercise in  the QET or  Orpheum increases the
     image of accessibility to Civic Theatres for other events.

     The VSO began hosting the mid-day school concerts in 1988.   Each pair
     of  school concerts is attended  by approximately 2,700  students.  In
     1994-95  there  were  12  school  concerts  in  6 days  with  a  total
     attendance of approximately 30,000 students.  In recent  years theatre
     staff  have  been  reporting  increasing numbers  of  "younger  faces"
     attending regular series VSO concerts.  

     The  VSO  student  concert  rental  rate  is a  simple  administrative
     adjustment to deal  with the irregularity  of scheduling two  back-to-
     back  one-hour concerts which span  two separate rental  periods.  For
     the  convenience of the schools, these concerts are scheduled at 10:30
     a.m. and 12:30  p.m.  Standard policy is to charge 150 percent of base
     rental for two back-to-back performances occurring in the  same rental
     period.  This report requests  approval to charge 150 percent of  base

     morning rental foreach pair ofthese concerts during the1995-96 season.


     FINANCIAL IMPLICATIONS

     While  theatre rental  revenue  is by  far the  major source  of Civic
     Theatres revenue at a budgeted $3,280,800 for 1995, the rate increases
     only affect the  last four months of the current  year.  This increase
     will generate an  additional amount of approximately  $45,000 in 1995.
     The major benefit to the operating budget will occur in 1996.

     The  basic rental increases recommended in this report are the maximum
     we believe  the market can bear.   The increases are  also the minimum
     needed to achieve  the objective of the  1995 operating budget  at the
     time the budget was tabled.

     The special rates for  high school graduations and the  VSO's back-to-
     back school concerts  generate revenue above the  incremental costs of
     operation and contribute to the operating overhead.

     We estimate  that this rental  rate increase  will add $19,120  to the
     remaining grants budget  of $522,900,  for the period  September 1  to
     December 31, 1995.


     IMPLICATIONS FOR CHILDREN AND FAMILIES

     The  special  rates  for  graduations and  student  symphony  concerts
     facilitate access for children and families.


     COMMUNICATIONS PLAN

     The proposed increased rental rates have been verbally communicated to
     Licensees booking dates after  September 1, 1995 during the  course of
     normal  business.   The  proposed increases  have  also been  recently
     circulated to Licensees in a News-letter.


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