REPORT TO THE CITY COUNCIL
FROM: GEORGEANE A. WHITE, City Manager
Office of Mayor & City Manager
BY: RUTH F. QUINTO, CPA, Assistant City Manager
Office of Mayor & City Manager
SUBJECT
Title
Approve a professional services agreement for three years with two one-year extensions with 809 Olive Avenue, LLC, to provide operations and management services of the Tower Theatre and Lounge with a fee equal to 12% of the gross receipts estimated for the first year at $159,480 (RFQ No.100722RQ) (District 1)
Body
RECOMMENDATION
Staff recommends Council approve a professional services agreement for three years with two one-year extensions with 809 Olive Avenue, LLC, to provide operations and management services of the Tower Theatre and Lounge with a fee equal to 12% of the gross receipts estimated for the first year at $159,480.
EXECUTIVE SUMMARY
On July 22, 2022, the City of Fresno closed escrow on the purchase of the Tower property. The City now seeks to contract with an Operator which can deliver a broad array of cultural, educational, entertainment, sporting, meeting, conference, and events for the region’s residents, while optimizing revenues available for reinvestment in the facility. Proposals were submitted by eight vendors and an evaluation committee determined 809 Olive Avenue, LLC, provided the best value to the City and recommends the City enter into a professional services agreement for three years plus two one-year optional extensions. The evaluation committee report is attached to this staff report.
The Operator will be paid 12% of gross receipts as an operations and management services fee. The City is anticipating an average of five events per month during the first year of operation. Based upon this assumption, the City reasonably anticipates a net positive cash flow (after expenses) at the end of year one.
BACKGROUND
On July 22, 2022, the City of Fresno closed escrow on the purchase of the real property at the intersection of Olive and Wishon which contains the Tower and a number of business spaces. As a result, the City is seeking an Operator to perform operations and management services of the Tower Theatre and attached Lounge. It is the City’s desire to partner with an operator that can deliver a broad array of cultural, educational, entertainment, sporting, meeting, conference, and events for the region’s residents, while optimizing revenues available for reinvestment in the facility.
The Tower is comprised of two venues: Tower Theatre, and the Lounge. The Theatre is a historic multi-purpose auditorium that accommodates reserved or general admission seating with a capacity of 761. The Theatre features two separate lobby areas, that allow approximately 2,000 square feet for concession space. Adjacent to the Theatre is the Lounge, which boasts an additional general capacity of approximately 100 seats, and an adjacent patio with an outdoor seating capacity of approximately 50. Additionally, the adjacent parking lot consists of approximately 120 spaces and is managed by the City of Fresno.
The Tower is a community facility of the Parks, After School, Recreation and Community Services department (PARCS). PARCS offers a variety of community facilities throughout the City of Fresno. These centers offer a range of activities, programs, and community services that support all ages.
Proposals were solicited for this project on October 7, 2022, and advertised in the Business Journal. The Request for Qualifications (RFQ) was sent to three building exchanges and specifications were distributed to 42 potential proposers. Proposals were submitted by eight vendors on November 4, 2022. Proposals were evaluated to determine the best value for the City and three proposers were selected for interviews.
The evaluation committee determined 809 Olive Avenue, LLC, demonstrated a high level of understanding of the scope of work and presented a plan which aligned to the City’s expressed utilization of the Tower as detailed in the RFQ. The proposal included coordination of existing programming at nearby Tower District venues as well as focused on providing the community with the best available options for entertainment and community engagement. They demonstrated a proven track record and experience within the Tower District community and are committed to providing the variety of programming the City is seeking for the historic Tower Theatre.
The management team demonstrated a high level of expertise, determination, and depth of understanding both in the written proposal as well as in the in-person interview including data driven decision making via the use of metrics and measurements for community interest.
The Operator will be paid 12% of gross receipts as a fee for operations and management services. The City is anticipating an average of five events per month during the first year of operation. Based upon this assumption, the City reasonably anticipates a net positive cash flow (after expenses) at the end of year one.
This Agreement will be administered by the City Manager or designee, and the City Attorney has reviewed the attached agreement and approved it to form. The estimated net cost of the agreement is available in the General Fund, General City Purpose department.
ENVIRONMENTAL FINDINGS
By the definition provided in the California Environmental Quality Act (CEQA) Guidelines Section 15378, the award of this contract does not qualify as a “project” as defined by CEQA.
LOCAL PREFERENCE
809 Olive Avenue, LLC, is a local business as defined by FMC 4-109.
FISCAL IMPACT
Sufficient funds are currently appropriated in the FY2023 Adopted Budget under General Fund - General City Purpose department.
Attachments:
Evaluation Committee Report
Operator Agreement with Attachments