P1
POLICY REPORT
FINANCE
Date: May 24, 1996
TO: Vancouver City Council
FROM: Director of Civic Theatres
SUBJECT: Theatre Rental Rates:
September 1, 1996 to August 31, 1997
RECOMMENDATION
A. THAT Council approve the Schedule of Rental Rates and
Conditions for Civic Theatres, as detailed in Appendix "A",
effective September 1, 1996 and,
B. THAT Council approve an increase in the funding for grants in
lieu of theatre rent for 1996 to offset this rental rate
increase; source of funds, Contingency Reserve.
CITY MANAGER'S COMMENTS
The City Manager RECOMMENDS approval of A and B.
COUNCIL POLICY
Council annually approves the Schedule of Rental Rates for the three
civic theatres including a special rate for secondary school
graduations and an administrative adjustment benefitting back-to-back
pairs of school concerts by the Vancouver Symphony Orchestra as well as
the necessary adjustment to grants in lieu of rent to accommodate the
changes in Rental Rates.
PURPOSE
This report seeks approval of the Schedule of Rental Rates, Appendix
"A", for uses of the Queen Elizabeth Theatre, Vancouver Playhouse and
Orpheum for the period September 1, 1996 to August 31, 1997.
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 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 labour 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 24 in 1995/96. The VSO stimulates
the development 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 10:00 a.m.
and 12:00 p.m. The number of these concerts has grown from 4 (in 2
days) in 1988-89 to 14 (in 7 days) in 1995-96, attesting to their
popularity.
DISCUSSION
Base Rates
The proposed increase for the Vancouver Playhouse this year from $1,875
to $1,900 for an evening event is equal to 1.4%, the same as last year.
The proposed increase for the Queen Elizabeth Theatre and Orpheum from
$6,800 to $7,000 is equal to 3%. On a per-seat basis for a capacity
audience, this rental rate represents an increase per seat of
approximately $0.07. The increase last year was 4.6%, or $0.11 per
seat. While we believe the for-profit sector could bear a higher
increase, the non-profit and community sectors would apparently be
stressed by any greater increase. Rental rates based on $7,000 per
evening performance for performances after September 1, 1996 meets the
objectives of the 1996 operating budget.
Grants Equal to Rent
Local non-profit performing arts presenters may receive support in the
form of grants equal to rent. Grants equal to rent 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,
Friends of Chamber Music, Vancouver Recital Society, and others.
Baxter Fund grants are awarded to smaller, newly formed performing
arts groups or to special programmes. 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 adjustment in the grants budget to
accomodate this rental rate increase, the local, City-supported
non-profit presenters are insulated from financial impacts for those
uses of the theatres covered by the grant programme (which will be the
subject of an upcoming Council report). However not all uses are
covered by grants.
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 35,000 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
1995-96 there were 14 school concerts in 7 days with a total attendance
of approximately 35,000 students.
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 10:00 a.m.
and 12:00 p.m. Standard policy is to charge 150% of base rental for
two back-to-back performances occurring in the same rental period.
This report requests approval to charge 150% of base morning rental for
each pair of these concerts during the 1996-97 season.
FINANCIAL IMPLICATIONS
The basic rental increases recommended in this report are the minimum
possible increases in the "cost of service" that will support the 1996
operating budget.
Provided Council approves an adjustment in the 1996 grants equal to
rent budget to accommodate these rate increases, the local,
City-supported non-profit presenters are insulated from financial
impacts from the increased rental rates for uses covered by the grants.
As noted earlier, not all uses are covered by the grant program.
The special rate for high school graduations generates a small amount
of revenue above the incremental costs of operation and contributes to
the operating overhead.
As these increases apply to the last four months of 1996, they actually
establish the revenue potential (and grants budget) for the first 8
months of 1997.
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 communicated to Licensees
booking dates after September 1, 1996 verbally during the course of
normal business. The proposed increases have also been circulated to
the majority of Licensees in a Newsletter. A group of the resident
non-profit performing arts companies met with the Director of Civic
Theatres to discuss impacts and implications of increases in rental
rates.
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