Agenda Item: 10
CITY OF SANTA CLARITA
AGENDA REPORT
CONSENT CALENDAR
CITY MANAGER APPROVAL:
DATE: April 26, 2022
SUBJECT: OPERATION OF THE CUBE - ICE AND ENTERTAINMENT
CENTER
DEPARTMENT: Recreation and Community Services
PRESENTER: Janine Prado
RECOMMENDED ACTION
City Council:
1. Amend the current contract with American Sports Entertainment Company and the Los Angeles Kings for operations of the City of Santa Clarita Ice and Entertainment Center to revise the fiscal year 2021-2022 budgets, increasing revenue by $1,622,314 and expenditures by $583,396.
2. Authorize the City Manager or designee to modify the award over the course of the contract term with American Sports Entertainment Company and the Los Angeles Kings based on revenue actuals.
3. Increase recreational facility revenue accounts by $1,674,114 and appropriate $838,396 across recreational facility expenditure accounts per the attached exhibit A.
BACKGROUND
On February 23, 2021, the City Council authorized a five-year operator agreement with American Sports Entertainment Company and the Los Angeles Kings (ASEC/Kings) to oversee operations of The Cube - Ice and Entertainment Center, Powered by FivePoint Valencia (The Cube), following the acquisition of the former Valencia Ice Station in October 2020. Shortly thereafter on April 12, 2021, The Cube opened to the community as a City of Santa Clarita (City) facility.
The Fiscal Year 2021-2022 budget for both the operator contract and the facility's utilities were developed taking into consideration the ongoing pandemic-related public health restrictions in place from both the State of California and the Los Angeles County Department of Public
Health, which limited indoor capacity and placed limitations on youth sports activities.
Notwithstanding those restrictions, programming and activity at The Cube has exceeded first year expectations and continues to grow.
Monthly average foot traffic is 35,535, with a high in November of 37,662. This number accounts for the number of entries into the building each month.
In the first nine months of the fiscal year between July 2021 and March 2022, The Cube has registered approximately 64,600 patrons through in-house programs such as public skate sessions, youth hockey programs, adult hockey leagues, Learn to Skate classes, contract ice reservations, stick time reservations, birthday parties, meetings, events and more. The programming figure does not account for the thousands of additional patrons who visited The Cube to either participate in or watch a wide-variety of offerings such as California Amateur Hockey Association tournament weekends, high school hockey games and tournaments, figure skating shows, and the UCLA Men's Ice Hockey team games.
Non-traditional uses of the facility include being utilized as a location for a blood drive, a host to City contract classes such as yoga and ballet, and most recently, a prime spot for filming with major projects including a Netflix production, several commercials, and an ongoing location for the second season of a show being produced by a major studio television production company.
This increase in use of the facility has resulted in revenues exceeding budget in the areas of the City's Sponsorship Program in the amount of $134,100, which is an increase of $9,100 compared to budget; Rental Income in the amount of $84,544, which is an increase of $42,000 compared to budget; and $3,687,052 from ASEC/Kings, which exceeds the budget by $1,622,314.
The higher-than-anticipated use of the facility is also impacting expenditure budgets with an estimated impact of $255,000 to gas and electric utilities and $583,396 to the ASEC/Kings operator agreement. An additional contributing factor to the electric utility budget is the increasing costs of electricity through the City’s energy provider, Southern California Edison (SCE). From 2019 to 2022, SCE rates have increased significantly. Staff, in collaboration with ASEC/Kings, continue to identify energy-saving opportunities at the facility to help mitigate future costs against continuously increasing rates.
ALTERNATIVE ACTION
Other action as determined by the City Council.
FISCAL IMPACT
The recommended actions will address budget appropriations for Fiscal Year 2021-22, which includes an increase of $1,674,114 in estimated revenues and an additional appropriation of $838,396 in estimated expenditures.
ATTACHMENTS
The Cube_Exhibit A