Santa Maria Valley
Performing Arts & Conference Center
City Council Presentation – December 19, 2023
Final Feasibility Study Summary
by AEA Consulting and RIOS
Agenda
Santa Maria Valley Performing Arts & Conference Center // Final Feasibility Study
1. Project Summary
2. Site Evaluation
3. Program & Design
4. Operating Financial Projections
5. Next Steps
Project Summary
1 The future Santa Maria Valley Performing Arts and Conference Center will be a multi-modal home for art, culture, business convenings, and community gatherings in Downtown Santa Maria.
This study proposes two options– a 600-capacity main space and a 1,000-capacity main space.
Our recommendation is that a 600-capacity space will best serve the community’s near and medium-term needs while minimizing required operating and capital support.
§ Proposed Location: T own Center West
§ Projected capital cost: $58 million – $73 million
(1,000-seat space would raise capital costs to $72 million – $90 million) • A non-producing venue, primarily renting its spaces to business, community, and performing arts groups – for seated / ticketed cultural events, commercial events and community events
• Requires $290,000 ongoing annual contributed income via annual giving, endowment, and/or grants (1,000-seat space would require over $585,000 in annual operating support)
Project Overview & Study Recommendations
1. Project Summary
Future SMV PACC Concept
Use Case Scenario: Performance + Simultaneous Community Event Beginning in March 2023, AEA Consulting and RIOS
worked iteratively with the Santa Maria Valley Chamber of Commerce and the project steering committee to develop
and refine an initial concept, programming, physical plans, and financial model for the SMV PACC.
Key inputs:
§ Site visit to Santa Maria Valley and various arts and culture organizations in the region in April 2023
§ Nearly two dozen stakeholder interviews
§ Demographic and market analysis
§ Benchmarking of other venues
§ Close coordination with the project’s Steering
Committee and its appointed leadership
Process
1. Project Summary
[Image: Santa Maria Chamber of Commerce]
Project Goals
Confirmed by Steering Committee
1. Project Summary
Serves diverse, broad regional
community
Animates downtown spaces
consistently
Operates sustainably
Source for economic development
through downtown revitalization
Offers incremental path for
implementation
Provides space for anchor users
(Philharmonic, conference event users,
local community members, tourists)
Market Assessment Summary
1. Project Summary
§ Social and economic indicators show that the
hyperlocal market is characterized by its family-
friendly values, affordability, and diversity...
§ A young and highly Hispanic / Latino market
§ An area rich in arts and culture – but lacking an
accessible space that legitimizes and activates
them
§ Well-positioned for future growth and
development
Key Gaps
Venue
§ 600+ seat venues
§ Larger, flexible, multi-use space
Programs
§ Works by and for Latino audiences
§ Focus on families and children or have varied
programming for different age groups
§ Maintaining affordability
Site Evaluation
2 RIOS was asked to evaluate four potential site
locations:
1. T own Center West
2. The Old Library
3. The DMV
4. The Former Movie Theater
Sites were evaluated based on:
§ Site Size and Location
§ Site Visibility
§ Walkability
§ Access to Public Transportation
§ Access to Parking
§ Loading Access
§ Land Ownership
Site Evaluation Overview
2. Site Evaluation
Located in the Town Center parcel at the heart of Santa Maria, this parcel is ideally suited as a site for the SMV Performing Arts and Convention Center
…in the middle of the commercial center of the city, with close proximity to shops, restaurants, and parking.
…potential to create a new town square and an iconic landmark for Santa Maria.
…proximity to the planned mixed -use development in the T own Center parcel that promises to create a vibrant and walkable downtown to supports existing and future businesses.
…located near two city owned parking garages and is naturally situated to provide off street access to a loading dock. …the site is currently unoccupied which is an advantage if incremental development is desired.
Town Center West
2. Site Evaluation
Future
Development
Restaurant Parking Access
Parking Loading
§ We recommend between 630-870 spaces to
support an event with a fully occupied theater and
conference rooms
§ This scenario is a maximum and is unlikely to
occur frequently…if we look only at sold out
events in the theater, the recommended number
of spaces is 350-590
§ There are 3,245 surface and structured parking
spaces available near T own Center – a surplus of
727 spaces beyond what is required by the City
for the existing development
This surplus may be adequate for the proposed PACC,
but it is recommended that a study of current parking
usage should be performed to confirm.
Parking
2. Site Evaluation
Church
Parking
Restaurant
Future Development
Program & Design
3 Key User Groups
1. Seated Ticketed Cultural Events including symphony
concerts, amplified music, dance, comedy, and theater.
2. Commerce Events including conferences, meetings,
banquets, trade shows, and tourism events such as
wine festivals or craft fairs.
3. Community Events such as weddings, graduations,
scouts/4H meetings, town hall meeting, cultural events, and faith groups.
Facility Virtues
1. Flexibility: Facility can be used for a wide variety of purposes.
2. Ease of Operation: The technical systems are equally accessible to sophisticated productions and community
volunteers.
3. Simultaneity: Multiple events can happen at the
same time.
Program Development
3. Program & Design
Two schemes were developed, one with a 600-seat theater and one with a 1,000-seat theater.
§ In order to accommodate a 500-person seated banquet
in the theater, each scheme has the same footprint. The larger scheme adds seats on the ground floor and a
balcony above. The larger scheme also has added back of house space to accommodate larger productions.
§ Areas not captured by this program are all exterior
improvements or exterior gathering areas. These areas
are shown in the plans and renderings below.
§ Parking is also not included as it is assumed to be
accommodated in existing facilities.
Program: Summary
3. Program & Design
Use Case Scenario: Performance + Simultaneous Community Event TOWN
CENTER
WEST PUBLIC PLAZA
SUPPORT
LOADING
CONCESSIONS
SYMPHONY
FOUNDERS ROOM
COMMUNITY MEETING
BACKSTAGE OVERFLOW
VERNON
DEVELOPMENT
METHODIST
CHURCH
3. Program & Design
Use Case Scenario: Conference
TOWN
CENTER
WEST FOOD TRUCK
SUPPORT
LOADING
CHECK IN
BANQUET
BREAK OUT LUNCH
BREAK OUT BOARD MEETING
BREAK OUT COCKTAILS
VERNON
DEVELOPMENT
METHODIST
CHURCH
BREAK OUT PRESENTATION
PRESENTATION
3. Program & Design
Capital Cost
3. Program & Design
Construction costs vary depending on several
factors including the complexity of the work, level of
finish, location, and material availability. Construction pricing has also recently experienced volatility due to pandemic-era material market distortion and recent
inflation increases.
Key benchmarks:
§ Recently completed fine arts building at Allan
Hancock College. This 88,000 SF facility cost $48.4
million, or approximately $550 per square foot.
(The proposed facility has a greater proportion of
costly theater and conference room spaces, so we
anticipate a higher cost per square foot)
§ AEA’s extensive database of performing arts
center and cultural facility construction costs.
When the inputs were consolidated into our analysis, we estimate that the proposed facility will cost between $800-$1,000 per square foot.
Based on the gross areas shown above, the 600-seat theater option will cost between $58 million and $73 million. The 1,000-seat theater option will cost between $72 million and $90 million.
§ This does include soft costs such as architectural and engineering fees; however, exterior areas or land acquisition costs are excluded. § This estimate is quoted in 2023 dollars – a 5% cost escalation should be assumed for every year going forward, though it should be noted that inflation has recently been volatile.
Site Plan
3. Program & Design
Option 1
Option 2
Operating Financial Projections
4 Overview
Methodology & Key Inputs
4. Operating Financial Overview
Key Assumptions
The SMV PACC’s forecast operating results are underpinned by a flexible financial model made in Microsoft Excel, intended to be tested and updated as the project progresses, or as relevant data is obtained.
Note that inflation and other cost/price escalation is not included in the operating model in order to focus primarily on the operating efficiency of the venue itself.
Benchmarks
Venue Name Location Capacity City Population
James R. Armstrong Theatre - Torrance Cultural Arts Center Torrance, CA 502 143,600 Pasadena Playhouse Pasadena, CA 686 135,732
Morgan-Wixson Theatre (Santa Monica Theatre Guild) Santa Monica, CA 435 91,105 Lobero Santa Barbara, CA 604 88,255
Lensic Performing Arts Center Santa Fe, NM 821 88,193
Clark Center Arroyo Grande, CA 617 18,456
Two River Theater Red Bank, NJ 350 12,920
Usage: 600-seat venue
The 600-seat venue will ramp up from 100 to 150 events over the first 5 operating years.
§ This model assumes about 30% of the total events will be large, conference style events where the entire venue is rented § The remaining events are split between larger, seated events in the main theater space, and smaller events like meetings, rehearsals, parties on the plaza, and smaller performances in the flexible conference rooms.
T otal audience visitation would run from 58,000 in the opening year to 89,000 in year 5.
Usage: 1,000-seat venue
Due to a decrease in demand given price and size, the 1,000-seat venue ramps up from 76 performances to 136 in year 5.
T otal audience visitation would run from 59,000 in the opening year to 109,000 in year 5.
Summary Projected Financial Results
Summary Income Statement: Base Case
4. Operating Financial Overview
600-Seat Financial Summary
By 2031, a 600-seat venue is projected to have an annual deficit of $237,500.
1,000-Seat Financial Summary
By 2031, a 1,000-seat venue is projected to have an annual deficit of $518,500.
Note: All figures are in thousands ($000s).
2027 2028 2029 2030 2031
Event Facility Rentals 440.9 480.4 522.3 596.0 678.1 Facility Fees 85.9 93.8 101.8 117.5 134.3 Food & Beverage 221.1 238.4 258.9 296.4 335.1 Event Income 747.9$ 812.7$ 882.9$ 1,010.0$ 1,147.5$ Venue Sponsorship Income 50.0 50.0 50.0 50.0 50.0 Total Income 797.9$ 862.7$ 932.9$ 1,060.0$ 1,197.5$ % Growth NM 8.1% 8.1% 13.6% 13.0%
Total Event Expenses 69.7$ 75.7$ 82.1$ 95.2$ 108.6$ Salaries 650.0 650.0 650.0 650.0 650.0 Taxes & Benefits 104.0 104.0 104.0 104.0 104.0 Other G&A 559.9 561.9 564.2 568.2 572.4 Total G&A Expense 1,313.9 1,315.9 1,318.2 1,322.2 1,326.4 Total Expenses 1,383.6$ 1,391.6$ 1,400.2$ 1,417.3$ 1,435.0$ Operating EBITDA / (Required Support) (585.7)$ (529.0)$ (467.3)$ (357.3)$ (237.5)$ 2027 2028 2029 2030 2031
Event Facility Rentals 376.6 424.7 475.1 589.1 698.7 Facility Fees 90.9 103.4 115.8 145.0 172.5 Food & Beverage 225.9 253.9 285.1 353.2 417.0 Event Income 693.4$ 782.0$ 876.0$ 1,087.3$ 1,288.2$ Venue Sponsorship Income 100.0 100.0 100.0 100.0 100.0 Total Income 793.4$ 882.0$ 976.0$ 1,187.3$ 1,388.2$ % Growth NM 11.2% 10.7% 21.6% 16.9%
Total Event Expenses 84.6$ 96.2$ 108.1$ 135.5$ 160.9$ Salaries 720.0 760.0 910.0 910.0 910.0 Taxes & Benefits 115.2 121.6 145.6 145.6 145.6 Other G&A 671.6 674.3 677.3 683.9 690.2 Total G&A Expense 1,506.8 1,555.9 1,732.9 1,739.5 1,745.8 Total Expenses 1,591.3$ 1,652.0$ 1,841.0$ 1,875.0$ 1,906.7$ Operating EBITDA / (Required Support) (798.0)$ (770.1)$ (864.9)$ (687.7)$ (518.5)$ Funding Model + Key Risks & Mitigation Strategies
4. Operating Financial Overview
Key Risks
Demand & Programming
§ Potential for slow demand in a still-developing market § Calendar and partner management
§ Connecting to tourism and developing support
infrastructure for conference center operations
§ Ensuring a compelling programming offer
Fundraising
§ Reliance on ongoing contributed income
§ Developing a supportive governance model
Operations
§ Complexity of capital project + additional maintenance § HR and staffing
§ While the actual percentages of funding sources varies across difference facilities and geographies, the largest source of contributed income for cultural facilities is usually individuals § In general, all government sources of revenue total 10% or less in California…unless the city and/or county determines it will provide ongoing dedicated support – which some do Earned $748
55%Individual $381
28%
Foundation
$54 4%
Corporate
$41 3%
Federal Govt
$41 3%
State Govt
$41 3%
Local Govt
$54 4%
Indicative Funding Split
600-seat venue
Next Steps
5 Next Steps
Design
• Determine the size of theater to be incorporated into the project. • Coordinate parking strategy with the surrounding businesses and adjacent development.
• Prior to releasing this report to the public, select one of the two design options to represent the stylistic direction the project will take. • Once a decision is made to proceed with the project, it will go through a series of stages in the design including Schematic Design (SD), Design Development (DD), Construction Documentation (CD), Bidding, and Construction Administration.
• Develop a cost model and update it at major milestones.
Operational Planning
§ Continue to develop and refine the operating model as programming and staffing plans are codified
§ Refine staffing salary assumptions alongside specific recruiting requirements for each function
§ Develop onboarding plans for when and how new employees are incorporated into the organization prior to the building’s opening § Determine potential levels of state, county, and city support for both capital costs as well as operating subsidies
§ Determine RFP process and/or messaging strategy to engage protentional facility operators and partners
§ Prepare messaging and strategies surrounding community expectations and partnerships for the SMV PACC upon opening
§ Develop a long-term fundraising plan to raise capital funds and maintain the ongoing revenue gap (could include but not limited to endowment fund, naming rights, capital campaign, etc.)
Santa Maria Valley Performing Arts & Conference Center // Final Feasibility Study Santa Maria can continue to push forward the planning with a community-centered process. Areas of focus include:
© 2023 – AEA Consulting, LLC