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01/27/2020 Council Work Session Meeting Minutes January 27, 2020 City of Clearwater Main Library- Council Chambers 100 N. Osceola Avenue Clearwater, FL 33755 m Meeting Minutes Monday, January 27, 2020 10:00 AM Special Work Session Main Library - Council Chambers Council Work Session Page 1 City of Clearwater Council Work Session Meeting Minutes January 27, 2020 Roll Call Present 5 - Mayor George N. Cretekos, Councilmember Bob Cundiff, Vice Mayor David Allbritton, Councilmember Hoyt Hamilton, and Councilmember Jay Polglaze Also Present: William B. Horne II — City Manager, Micah Maxwell — Deputy City Manager, Michael Delk—Assistant City Manager, Pamela K. Akin — City Attorney, City Attorney, Rosemarie Call — City Clerk, and Nicole Sprague — Official Records & Legislative Services Coordinator. To provide continuity for research, items are listed in agenda order although not necessarily discussed in that order. 1. Call to Order— Mayor Cretekos The meeting was called to order at 10:00 a.m. in Council Chambers at the Main Library. 2. Presentations — Given. Discuss revenue and expense forecast for the proposed Imagine Clearwater amphitheater. Staff has engaged with Webb Management to provide an expense and revenue model for the proposed amphitheater of the Imagine Clearwater project. Three scenarios were developed based off projected minimal, conservative and aggressive utilization scenarios. All scenarios assume revenues that include the following; a flat rental fee structure for facility usage, city staff costs, city equipment rental chargebacks and the city keeping all food and beverage proceeds along with a percentage of ticket revenues. Per council direction, staff has continued with the subsidization model currently in use for all co-sponsored events for the proposed venue. Assistant City Manager Michael Delk said the project is getting close to construction and staff continues to design every phase of the park and amphitheater venue per the direction provided by Council in April. Staff will meet with Skanska on February 12 and that will be staffs opportunity to see the first iteration of the proposed construction costs. Today's discussion will focus on the impact of the amphitheater's operational costs. He said HR&A is completing the Request for Qualification, which Page 2 City of Clearwater Council Work Session Meeting Minutes January 27, 2020 will be released in February. Staff will work on finalizing the referendum language for November through the Summer. Options to consider today are to stay the course and design a full back of house and covered amphitheater or, defer any modifications to the next legislative body. He said modifications can be made to the back of house or covered seating or Council can modify the park and bandshell to the original plan, with the back of house and seating pursued at later phases. Finance Director Jay Ravins reviewed the Pro Forma Operating Budget. In response to questions, Mr. Ravins said staff revised the pro forma numbers over the past week, the conservative utilization estimate is 45 concert days, with 27 minimum. The City Manager said staff is on board with what Council directs to pursue, staff is trying to be objective with the costs and FTEs associated to operate the venue. Staff discussed the venue with Ruth Eckerd Hall, Live Nation and AEG, each group had their own perspective about what the City should do and what is needed. He said one of the things needed from Web Management was an objective view of these things. Web Management has done work with Ruth Eckerd Hall and other partners and can provide feedback. The City Manager said if the analysis provided by Web Management is not adequate, council direction is needed. Assistant to the City Manager Jim Halios said the pro forma estimates included naming rights, naming rights are difficult to estimate since it is a private contract. The St. Josephs Amphitheater in Syracuse, NY has 17,500 seats, with 5,000 covered seats, and a naming rights contract for$300,000 a year, McGraf Amphitheater in Cedar Rapids, IA has a 6,000-capacity venue, with 3,000 covered seats, and a 5-year term naming rights contract for$5,000 annually, Michigan Lottery Amphitheater in Sterling Heights, MI has 7,700 seats and 3-year term naming rights contract for $300,000 annually. Mr. Delk said the naming rights contract at Spectrum Field is approximately$200,000 annually. He said none of the City's parks make a profit. Staff estimates $500,000 will sustain the civic function the organization performs every year at the park. Mr. Ravins said Council approved a not to exceed $30 million worth of bonds for the Imagine Clearwater project, staff estimates $25 million would be issued, assuming the amphitheater costs would be financed with the bonds. He said if the amphitheater was not added, the City would not be borrowing $25 million in bonds. Interim Parks and Recreation Director Art Kader said typically there are one or two concerts that are cancelled each year due to inclement weather. Concerts are cancelled when there is lightning. The estimated number of FTEs needed for the proposed amphitheater is 9. He said he is working with a committee to review all the costs associated to maintain the amphitheater and park. Mr. Delk said a Page 3 City of Clearwater Council Work Session Meeting Minutes January 27, 2020 budgetary program for the amphitheater needs to be established. He said the venue cannot be leased to Ruth Eckerd Hall and the City needs to manage the facility. Staff will need to begin incorporating those costs this year for future budgets. If Council is not comfortable with that, staff will need to bring back modifications to reduce programming costs. The proposed payroll is approximately 10% of the budget. Staff did not vet the analysis with Ruth Eckerd Hall because the park is being built for the community, Duncan Consulting did discuss the project with Ruth Eckerd Hall in the beginning. The City Attorney said the City can require it receive $1 for from every ticket-goer, such language can be included in the entertainment contract. Discussion ensued with comments made that the ULI study recommended reactivating the park to reactivate downtown, the proposed pro forma estimates are ultra conservative, and that Ruth Eckerd Hall and others stated a larger amphitheater is needed to generate revenue. There was council consensus to pursue the conservative model. Adjourn The meeting adjourned at 11:12 a.m. Page 4 City of Clearwater