STAFF REPORT
PARKS AND
RECREATION
DATE: August 22, 2023
TO: Justin Hess, City Manager
FROM: Marisa Garcia, Park, Recreation and Community Services Director Jennifer Becker, Financial Services Director
By: Grace Coronado, Administrative Officer
Alisa DeHoyos, Purchasing Manager
SUBJECT: R equest for Direction on the Request for P roposal Process for the Sublease, Management , and Operation of the Burbank Center Stage Facility
RECOMMENDATION
Direct staff to proceed with the Request for Proposal (RFP) process for the Sublease, Management, and Operation of the Burbank Center Stage (BCS) facility by commencing negotiations with the highest ranked proposer, Burbank Community YMCA.
BACKGROUND
The BCS facility, located at 555 North Third Street, was developed in conjunction with the Burbank Town Center Mall (Mall). As part of the master lease between the City and the developer of the Mall, the developer was required to devote a portion of the project for a community facility. In 1992, the City entered into a sublease agreement with the developer and the now abolished Redevelopment Agency, as part the master lease. The sublease provided the City rights to use the premises as a cultural facility, including cultural, educational, social, and recreational activities. The lease term was for 50 years, with four 10-year options with rent at $1.00 per year. The City subsequently subleased the facility to the Los Angeles County Natural History Museum . However, due to low attendance, the Museum closed in 1996. Shortly thereafter, the Parks and Recreation Department (P&R) conducted a RFP for the re-use of the facility, which ultimately led to a decision to convert the former Museum site to a 276- seat performing arts facility. For reference, a n RFP is a compet itive solicitation process to generate interest in and receive proposals regarding the acquisition of goods and/or services pursuant to applicable Administrative Procedures.
BCS Facility Operating and Management Timeline – 2002 through 2023 In March of 2000 Council approved the Sublease Agreement and Master Lease Modification (“Sublease”) that provided for occupancy by the Colony Theatre Company (CTC). Pursuant to the Sublease, C TC was authorized to operate the facility in
2 accordance with a Theater Operating Agreement between the City and the Colony, which was executed concurrently with the Sublease.
The initial term of the Sublease was five years, from August 27, 2000 to August 27, 2005.
In August 2005, the City approved a four -month extension through November 30, 2005 to allow the City and CTC time to negotiate a second five- year term. During this time, CTC made the City aware of their financial instability. Consequently, the City and the CTC agreed it would be prudent to only extend the agreement for 180 days , through May 31, 2006 to allow CTC to develop and implement a fundraising plan and reduce operational cost. Additionally, the City requested CTC develop a business plan to address both short- and long- term fiscal solvency . Due to the complexity of the process, a third contract extension was approved through November 2006.
Following extensive support from the City and prominent community business leaders, the City approved a five-year agreement from November 30, 2006 through November 30, 2011. Following the First Extension, CTC exercised, and the City approved, a second five-year extension, to extend the term of the Sublease through November 30, 2016.
During the second extension , on or about February 2016, CTC informed the City that due to financial challenges, CTC was cancelling some scheduled productions.
On May 25, 2016, CTC requested to exercise its third and final five -year extension through November 30, 2021. In response to the request, the City determined that CTC was not in substantial compliance of the Agreement and denied the request for the five- year-extension. Although the Agreement expired November 30, 2016, the City granted a temporary extension to provide adequate time to review CTC’s new proposed terms regarding an extension. As a result, an Interim Extension was executed to extend the Sublease term for a 30-day period from November 30, 2016 through December 30, 2016.
Shortly after, a Third Extension was executed on December 30, 2016 for a one-year term beginning on December 31, 2016, and continued for a maximum one-year period, ending on December 31, 2017.
During the Third Extension of the Sublease which allowed CTC to continue subleasing the BCS facility, on March 7, 2017, Council approved the Amended and Restated Theater Operating Agreement which allowed CTC to operate the BCS facility under its new business model consisting primarily of third-party rentals for outside productions. Due to a variety of factors including CTC’s on- going financial challenges to produce original plays, Council directed staff to solicit proposals, via a competitive RFP process, from organizations to operate and manage the BCS facility consistent with the permitted uses under the Master Lease between the City and the Mall, by providing educational, cultural, social, or recreational activities to the general public.
In response to CTC’s on- going financial challenges and Council’s direction to solicit proposals, on May 25, 2017, P&R released an RFP for the management of the BCS facility. The RFP was released and advertised publicly, seeking a qualified business, organization, or individual to sublease, manage, and operate the BCS. The entity would be responsible for day-to-day operations and maintenance of the facility.
Of the three proposals received, the Burbank Unified School District (BUSD) in partnership with the CTC, was evaluated as the highest ranked respondent and in
3 September 2017 negotiations commenced. During these negotiations, the City and BUSD failed to reach a successful negotiation for the City’s terms and conditions of the agreement, and in October 2017 BUSD withdrew from the process. Subsequently, CTC indicated they remained amenable to delivering the City’s requirements to manage and operate the facility. On December 21, 2017, a Fourth Extension was approved to the Sublease, extending CTC’s term for six months from January 2018 through June 30, 2018.
In January 2018, CTC submitted a formal proposal to continue managing and operating BCS. The City and CTC met in February 2018 to initiate discussion on the proposal with the intent to enter into a new multi -year agreement. However, in May 2018, the unexpected early transition of the DeBell Golf Course operator caused the City to shift priorities. Negotiations with CTC were deferred so staff could focus on sustaining golf operations and initiating the RFP process for DeBell Golf Course. As allowed in the Agreement, CTC operations continued on a month-to-month basis through September 9, 2022 when a new short term agreement through July 31, 2023 was executed.
Over the past several years the City has contemplated various facility management options, including: 1) P&R operating the facility; 2) negotiating a multi -year agreement with CTC; 3) negotiating a multi -year agreement with another interested party; or 4) conducting a new competitive solicitation. In late 2021, the City opted to move forward with a new competitive solicitation. The term for the City’s current short -term agreement with CTC expired on July 31, 2023, but continues on a month-to-month basis until a new agreement is established, whether with the incumbent or another operator.
It is the City’s general practice to conduct a competitive solicitation process upon the termination of operation and management agreements of its facilities, such as the DeBell Golf Course. Traditionally, the City enters into a five-year agreement, with the option for three, five-year extensions.
Key Dates
Table 1 below lists the RFP process steps, deadline dates initially published in the posted RFP, and any rescheduled deadline dates for reference and as described (and bolded) in the narrative that follows:
Table 1
RFP Description RFP Published
Deadline Dates
Amended
Deadline Dates
1 RFP released on PlanetBids December 19, 2022
2 Informational virtual meeting and tour January 5, 2023 3 Questions due on PlanetBids January 13, 2023 January 20, 2023 4 Proposals Due February 2, 2023 February 10, 2023
5 Finalist presentations for review panel
(Round of Interviews)
February 27, 2023 March 30, 2023
6 Final Selection By March 16, 2023 Pending
7 Contract Negotiations March 2023 Pending
8 City Council approval and Contract
signed
June 2023 Pending
4 DISCUSSION
City of Burbank RFP Process
When seeking to assess conditions in a current market, conduct ing a competitive solicitation, such as an RFP, is a common best practice in both the public and private sectors. An RFP is a tool that allows the City to equitably assess interested respondents’ proposals, based on established selection criteria to evaluate and find the highest ranked respondent. With this RFP in particular, the City desired the flexibility to entertain various operational options, such as theaters/performing arts venues , museums, arts institutes and/or interactive galleries, and any other such uses or combination of uses for which respondents could demonstrate creativity, value and cultural benefit to the greater community. A competitive RFP process is in line with the City’s fair and open competition standards. In the City’s experience, healthy competition often results in transformational change, including enhanced and expanded services or differing program offerings for the community, whether with existing operators or new partners. One such example of a healthy and successful competitive process was at the DeBell Golf Course.
BCS RFP Process
Completion of the BCS RFP is a priority to staff, Council, and the community. To commence the development and drafting of the BCS RFP, staff worked alongside the City Attorney’s Office and the Financial Services Department -Purchasing Division from August 2022 through December 2022. Thereafter, the RFP was released on PlanetBids on December 19, 2022.
Per the City’s policy, the RFP solicited qualified businesses, non-profit organizations, and individuals with appropriate experience to submit proposals for the management and operation of the City’s BCS Facility. It should be noted that contracts awarded as a result of a RFP are typically awarded on a best value basis , as defined in Chapter 2 of the Burbank Municipal Code (BMC), Section 2-2-101: “BEST VALUE: A value determined by evaluation of objective criteria that relate to price, features, functions, life- cycle costs, experience, and past performance. A best value determination may involve the selection of the lowest cost proposal meeting the i nterests of the City and meeting the objectives of the project or a tradeoff between price and other factors specified in the solicitation.”
The evaluation criteria established for selecting a firm under this proposed RFP, were as follows:
a) Qualifications and Prior Experience of Proposer
b) Proposed Use and Business Plan
c) Business Plan Assumptions
d) Proposed Rate
e) Interviews of highest rated Proposer(s)
f) Reference Checks
Informational Virtual Meeting and Tour
An informational virtual meeting and tour was held on January 5, 2023. Rather than bringing respective proposers to the facility, staff determined it would be more amenable to provide all proposers with the same knowledge of the facility that the incumbent, the CTC has. Staff reached out to the CTC representative requesting to film the facility for the
5 informational virtual meeting. This virtual tour allowed for fair and equitable access to the facility by allowing for greater participation by eliminating travel time for interested parties.
Question and Answer (Q&A) Period for Interested Respondents The Q&A period for interested respondents was originally scheduled from the date of release through January 13, 2023 . Questions were to be submitted through PlanetBids, the City’s e -procurement platform. Due to the volume of questions received, the Q&A submission deadline date was extended from January 13 to January 20, 2023. The extension was a direct result of the requests for more time for questions to be submitted by proposers. Although only the parties who are submitting proposals are allowed to ask questions, extending the deadline date also allowed the Burbank Cultural Arts Commission members the courtesy of additional time to review the RFP. On January 3, 14, and 30, the Purchasing Division issued three separate Addendums. The additional time to submit questions subsequently impacted the proposal due date.
Proposals Due Date
The Proposals Due date was extended from February 2 to February 10 , 2023, to accommodate the number of questions received and allow adequate time for proposers to incorporate updated information from the resultant addenda into their submitted proposals.
Four responses were received from the following proposers by the proposal submission deadline:
• After Hours Theatre Company,
• Burbank Community YMCA,
• The Colony Theatre Company, and
• The Greenhouse Arts & Media.
Following proposal s submission, the responsible Buyer reviewed the proposals for responsiveness. This means that the Buyer verified all proposers met the RFP submittal requirements, listed on page 11, Section V. Proposal Structure, as well as Section V11.
Selection Process (Attachment 1). Of the four proposals, After Hours Theatre Company was deemed non-responsive for failing to submit any financial statements. After Hours Theatre Company did not seek clarification on this requirement nor submit an inquiry about other acceptable means of demonstrating financial viability during the Q&A period.
Proposal Evaluation and Interviews
Throughout the RFP process, P&R has remained steadfastly committed to promoting Burbank as a regional arts destination, with the objective of preserving and enhancing theatre/performing arts venues in Burbank. Consequently, staff was thoughtful and strategic in selecting the Review Panel. The Review Panel consisted of six representatives, three theat re management subject-matter experts (with similar theater operations experience) from the cities of Brea, Beverly Hills, and Thousand Oaks, and three City staff from Community Development (Economic Development Division), P&R (Administration, Business Services and Facility Operations Division) and P &R (Community Services Division). The Review Panel was selected to promote fair and open competition, transparency, and impartiality.
6 After initial scoring of the written proposals , respondent interviews were postponed from February 27 to March 30, 2023. Because t he proposal due date extension impacted the review panel’s availability, scheduling of interviews was postponed to accommodate all parties' schedules.
All three responsive proposers were interviewed by the Review Panel on March 30, 2023.
The total scores resulting from evaluation of the proposals and the interview process are outlined in Table 2.
Table 2
Proposer Score
Burbank Community YMCA 78.25
The Greenhouse Arts & Media 77
The Colony Theatre Company 61.08
Boards, Commissions, and Committees (BCC)
The City’s BC Cs each have a unique set of duties and responsibilities. BCCs broadly provide greater community participation and input into local government while facilitating quality decisions by the Council. They also provide additional lines of communication between the public and Council to ensure City government responsiveness. BCC s can provide input and make recommendations to Council , but they do not determine or establish City policy or administrative direction. Additionally, BCCs serve in an advisory capacity with many having limited decision-making authority.
Understanding the role of the Burbank Cultural Arts Commission (Commission) or the Parks and Recreation Board (Board), P&R staff did not request input from the Commission or Board prior to releasing the BCS RFP . Due to their active participation and well-connectedness in the community, BCC members can also introduce impartiality or influence into the process based on their direct financial interest or involvement with proposers. In fact, staff was aware of personal and/or professional relationships between Commission members and at least two proposers, the Burbank Community YMCA and the CTC. Despite the City’s care to avoid conflicts
1, early in the RFP process, members
of the Commission declared their concern with not being consulted regarding the R FP prior to its release, expressed a strong desire to participate on the Review Panel and publicly requested that BCS continue to be a facility where only performing arts be programmed.
P&R values the Commission’s mission in celebrating diversity in arts and media in the community and promoting Burbank as a vibrant and enticing regional arts center. Understanding the Commission’s mission and on-going advocacy for preserving and enhancing theatre/perfor ming arts venues in the community, P&R has been committed to representing the Commission throughout the competitive process and aligns
1 A conflict of interest is defined as “a situation that gives a person, while acting in their official capacity, the opportunity through actions or decisions to direct or influence an outcome for personal benefit .” (Source: NIGP, The Institute for Public Procurement, Public Procurement Dictionary of Terms, 2022 edition.) As defined in Section 1210. Illegal and Void Contracts in the Burbank City Charter, any officer or employee attempting to influence decisions through such means is expressly prohibited and can result in a misdemeanor charge.
7 with the Commission in the City’s vision to continue to operate the facility as a vibrant center for cultural, educational, social, and recreational activity benefitting the entire community. However, to ensure the City’s commitment to a fair, open, and impartial process, staff could not accommodate the request for the Commission’s participation on the Review Panel.
Anomalies during the Evaluation Process
Throughout the competitive solicitation , staff received continuous feedback , concerns, and inquiries from the Commission, and inquiries directly to and from Council m embers.
More specifically, members of Council asked staff for updates regarding the status of the RFP process and shared comments of frustration they had received from Commission and community members. Respectfully, City staff assured Council that the City is committed to a fair, transparent and impartial process, and explained that what ensures impartiality is with holding the identity of the evaluators and keeping the evaluation process in confidence while it is ongoing to maintain the integrity of the process itself. Maintaining c onfidentiality during this process has been challenged and successfully defended by public agencies up to the California Supreme Court. ( See Michaelis, Montanari & Johnson v. Superior Court (2006) 38 Cal.4th 1065.)
Staff also advised that Council may continue to receive direct or indirect input from the community regarding this RFP process, and to ensure that the integrity of the RFP process is maintained, it is best that Council not further engage and direct any input or inquiries to staff. A s a best practice, “*a public official should maintain an ‘ arm’s length’ distance from any elements of the procurement process not formally required of the official… Act and conduct business with honesty and integrity, avoiding even the appearance of impropriety. The public expects that public offic ials will serve only the public interest, refraining from anything that enhances or appears to enhance self - interest.” (*Source: The Public Procurement Guide for Elected and Senior Government Officials, published by NIGP, the Institute for Public Procurement, © 2016).
P&R staff provided brief RFP process updates to the Commission at their regularly scheduled meetings on April 13, 2023, June 8, 2023, and August 10, 2023, and to the Council at the regularly scheduled meeting on June 13, 2023. However , it is not best practice to discuss details or status of an evaluation during an RFP process until the evaluation has been completed.
Proposed 2nd Round Interviews
Throughout the RFP process and as outlined in the RFP , the City’s intent was the “Selection of one (1) proposal from among all Proposers with the highest point total will be selected to start the negotiation process. The selection will be based on the experience and qualifications (both in general and more specifically as it relates to management and operations).” Because staff was committed to completing a thorough RFP process, staff thoughtfully considered concerns from the Commission and Council Members and determined that a non -scored second round of interviews , conducted by members of executive staff, would allow management to gain a full understanding of the proposals prior to negotiations, and to clarify any questions they may have, since management did not participate in the first-round interviews.
8 Accordingly, a second round of interviews was scheduled in July 2023 pursuant to page 19 of the RFP, Section VIII. RFP Terms and Conditions, paragraph 3d., which expressly provides the City may “modify or suspend any and all aspects of the selection process, modify the scope of the project or the required responses, or modify the selection process and/or evaluation criteria indicated in this RFP.” S taff intended to present any proposed contract to the Commission and the Board for advisory purposes prior to award recommendation to Council. While these steps further delay ed results of the evaluation of received proposals and the interview process, after many inquiries staff hoped to put any unease about the selection process to rest and demonstrate its commitment to a thorough process.
While the proposed second round of interviews was pending, the City became aware of various external communications, including social media discussions and local press coverage by a member of the Commission and a proposer, pertaining to the RFP process.
These communications, while indicative of the community's passion for the arts, raised new concerns about maintaining the integrity , impartiality, and objectivity of cont inuing the evaluation process. Considering these circumstances, the City Manager , in consultation with P&R staff and the Purchasing Manager, decided to cancel the second round of interviews and seek guidance and direction from the Council. On July 12, 2023, the City suspended the RFP process and notified all proposers.
RFP Process Next Step Options
Traditionally, P&R would commence contract negotiations with the highest ranked proposer, the Burbank Community YMCA. However, because the process was halted and proposals have now passed the proposal validity period of ninety (90) consecutive calendar days, staff is seeking Council direction on how to proceed with the RFP process.
Below are the three options for Council consideration. Staff recommends Option 1:
Option 1: Commence negotiations with the highest ranked proposer, Burbank Community YMCA.
This option allows the City to make an offer of award following the original intent of the RFP and based on the impartial evaluation completed by the carefully selected Review Panel. It allows the City to enter negotiations to complete contract execution. Option 1 honors the RFP process already completed. However, there will be an operational impact anywhere from three to six months due to transitioning services from the incumbent to the Burbank Community YMCA.
Option 2: Cancel the current RFP process and begin a new updated RFP process.
This option allows the City to begin a new process with transparency about the closed process, with clear guidelines regarding attempted external influences. It could also allow staff the option to solicit community feedback related to the use of facility outside of an RFP open solicitation period. However, this option would prolong the timeline for award of a contract for the facility’s operations and m ay discourage existing responsive proposers from re-submitting a proposal.
9 Option 3: Select one of the other two qualified proposers and direct staff to commence negotiations.
This option allows for the option of continuity should Council select the incumbent , and like Option 1 allows immediate commencement of contract negotiations. However, Council would need to override the Review Panel’s scoring and may encourage similar disruptive behavior on other procurement processes in the future. This Option also deviates from the best practice in a competitive and fair market assessment process.
Though staff has been thoughtful throughout the RFP process, in retrospect, staff could have solicited feedback on the needs and desires of the greater Burbank community in an open forum prior to issuing the RFP or holding the Review Panel . As P&R moves forward with RFPs, P&R will solicit input from the respective BCCs and community, as appropriate. Staff acknowledges the initial lack of communication prior to issuance.
ENVIRONMENTAL IMPACT
This activity involves administering an RFP for the Management, and Operation of the BCS facility and has no potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment, and as such, is not a “project” subject to the requirements of the California Environmental Quality Act (CEQA) 14 Cal. Code Regs § 15378.
FISCAL IMPACT
There is no fiscal impact associated with this report. The fiscal impact is unknown until a proposer is selected and brought back to Council for approval at a later date.
CONCLUSION
Staff recommends Council direct staff to commence negotiations with the highest ranked proposer, Burbank Community YMCA. Alternatively, Cou ncil may consider two other options:
• Cancel the current RFP process and begin a new, updated RFP process. • Select one of the two other qualified proposers and direct staff to commence negotiations.
By engaging the City Council in the decision -making process in an open forum, the City is reaffirming its commitment to transparency and impartiality . Staff seeks Council direction on how to proceed with the RFP process to ensure that the future management and operations of the cherished BCS aligns with the collective vision of the community.
ATTACHMENT
ATTACHMENT 1 – Burbank Center Stage RFP