LTC 243A-2006 re: Revised Attachments for LTC 243-2006
& MIAMI BEACH
OFFICE OF THE CITY MANAGER
LTC # 243A-2006
lETTER TO COMMISSION
FROM:
Mayor David Dermer and Members of the City Commission
Jorge M. Gonzalez, City Manager ~,;-~
October 13, 2006 () 0
Revised Attachments for L TC#243-2006
TO:
DATE:
SUBJECT:
The Letter to Commission regarding summary sheets for the Term Sheet offers to
operate the Jackie Gleason Theater have been updated with more accurate information.
All of the updates are in regard to the 1 O-year summary of financial value for each of the
respective companies. In each case, the amount of the potential value to the City was
understated. The revised sheets have been updated to provide a more realistic picture
of each proposal as presented by the respective company and as interpreted by the City.
Please keep in mind that the attached sheets are summaries of each offer and not an
analysis or discussion of same.
Please feel free to contact me with any questions or concerns that you may have.
Attachments
C: Jose Smith, City Attorney
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Parties
Concept
Project
Proposed Use - Types of Events
Form of Agreement
Proposed Term
Base Compensation to CMB
Bonus/Percentage Rent/Facility Fees
Real Estate Taxes
Project Investment
AEG Live LLC (AEG) and City of Miami Beach (City)
Traditional performance venue with diverse venue bookings using existing seating
capacity of 2,700
Improvements include sound and lighting systems; orchestra pit; concession areas;
electrical upgrades for audio & lighting; acoustical treatments; emergency system
linkages & interfaces; and marquee signage.
140 ticketed events per year with attendance projected to total 246,000 by 2008. Types
of Events include Award Shows, Holiday Festivals, Community Nights, Consumer
Shows, Concerts, Family Shows, Festivals, Film Premieres, Film Festivals,
Meeting/Catering Events, Speaking Association, Television Productions, Theatrical
Productions, Trade Shows
Management Agreement
Initial 1 0 year term and two (2) five-year options, up to 20 years; Termination Right for
AEG after 2 years if AEG sustains losses in excess of $500,000 in a year.
$250,000 per year, adjusted by CPI after 2008
City will retain 100% of all facility fees ($1.50 per ticket), estimated to be $300,000 by
2008. City will receive 50% of the ticketing convenience charge rebate received from
Ticketmaster, estimated to be $242,000.
$0, theater is currently exempt from property taxes. If venue becomes taxable, then
City pays property taxes.
City: $0
Other: $2,000,000
. The City may use venue rent free 10 days per year; the City reimburses operating
expenses.
. 60-80 free tickets for seniors and students (per event).
. Assume commitment to Invitation to the Arts Festival with annual event advertising.
. Work with local schools to provide after school programs.
Naming Rights . AEG will have the right to sell naming rights. City will receive 50% of any naming
rights revenue based upon the assumption that name in title sponsorship will be
approved by the City Commission.
Social/Community Benefits
Sponsorship $0
Maintenance AEG will be responsible for day-to-day operational maintenance, as well as minor
fixture and small equipment replacement up to an amount to be determined.
City will be responsible for all capital renewal and replacement for the theater.
Insurance AEG will obtain spectator and general liability insurance; the City will continue to be
responsible for property insurance.
Operations AEG shall provide all event-related operations and pay all event related expenses
Corporate Guaranty All obligations will be guaranteed by AEG Live, LLC
Art in Public Places TBD
10 Year - Total Value
Rent
Facility Charge
Taxes
Incremental Parking
Community Benefit
Private Investment
Maintenance Cost deduct
Sum $15,220,000
Parties
Concept
Project
Proposed Use - Types of Events
Form of Agreement
Proposed Term
Base Compensation to CMB
Bonus/Percentage Rent/Facility Fees
Real Estate Taxes
Project Investment
Live Nation Worldwide, Inc. and its subsidiaries (LVN) and the City of Miami Beach (City)
Live performance venue with flexible seating to allow for a variety of entertainment options, such as
comedy and live concerts
Improvements include: seating re-configuration with re-grade on ground floor to create terraced,
general admission floor areas (2,750 total event capacity); updated auditorium finishes; updated
draperies, lighting and paint in the lobby; new bars, lighting, finishes and furnishings to create an
upscale atmosphere and more points of sale; $200,000 allowance for a significant new exterior
sign; update and reconfiguration of dressing areas and band accommodations.
Projected 120 events in the first full year of operation with potential to grow to 150 to 180 events
per year. Projected to grow past 240,000 tickets per year in 2008. Public entertainment, live
entertainment, public assembly, bar and/or restaurant and anciliary uses. Proposed types of
entertainment include concerts, comedy acts, private rentals, television broadcasts, artist recording
studio, filming events
Lease or Management Agreement
Initial 15 year term with two (2) five-year options, up to 25 years
$1,000,000 per year, 2% escalator per year
$1 per ticket after 240,000 tickets per year (excludes community benefit fund program tickets,
charitable events, third party rentals). $2,000 per event above 200 events (same exclusion)
$0, theater is currently exempt from property taxes. If venue becomes taxable, then City pays
property taxes.
City: $0
Others: $3,500,000
. The City may use venue rent free twice per year for City events, once per year for charitable use;
once per year for Play Ground Review event; the City reimburses operating expenses; L VN keeps
f&b revenue; no sponsorship violation; no concerts.
.Annual Event and Auction for Community Needs consisting of autographed memorabilia of the
performing acts at the JGT
. Resident Ticket Program - Live Nation will make 100 tickets for specified events available for
purchase 2 days early to City residents
.Community Benefit Fund - Live Nation will continue the current discounted ticket program for
senior citizens and students w/o City contribution
.Free booking/programming Consultation to City for Byron Carlyle and Colony Theaters
.20 tickets to City for each event.
Naming Rights If naming rights are approved by City and Theater name is changed from "Jackie Gleason" then
Live Nation will share 25% of net naming rights with City
Social/Community Benefits
Sponsorship $0
Maintenance Live Nation will cover all costs, including capital plant renewal and replacement
Insurance Live Nation will cover all costs
Operations Live Nation will cover all costs
Corporate Guaranty Provided by Live Nation Worldwide, Inc.
Art in Public Places TBO
Rent
FaCility Charge
Taxes
Incremental Parking
Community Benefit
Private Investment
Maintenance Cost deduct
10 Year - Total Value
Sum
$11,000,000
$0
$0
$3,500,000
$6,000,000
$3,500,000
$0
$24,000,000
Parties
Concept
Project
Proposed Use - Type of Event
Form of Agreement
Proposed Term
Base Compensation to CMB
Bonus/Percentage Rent/Facility Fees
Real Estate Taxes
Project Investment
Social/Community Benefits
Naming Rights
A joint venture consisting of Cirque du Soleil, Inc. with its affiliated partners (CDS)
and the City of Miami Beach (City)
Permanent Cirque du Soleil Show, with related facilities including a theme
restaurant, show related retail boutique, theme lounge, and special events venue
that provides both private and public live entertainment, which can be operated as a
nightclub up to three nights a week.
Economic Development project that converts the Jackie Gleason Theater and the
adjacent 555 building into a multi-purpose entertainment complex. Includes the
complete renovation of the theater and adjacent 555 buildings to accommodate the
proposed uses. Current components include a 1,700 seat theater, 250 seat theme
restaurant with a related 300 seat lounge, and a 600 to 1,500 person special event
area for private rentals that will open as a live entertainment or nightclub venue for
the public up to three nights a week.
Permanent theater venue for a CDS live show production with a projected 430
shows annually; theater adjacent concessions and merchandising retail; theme
restaurant and lounge; special event area for private and public functions;
surrounding gardens. The proposed show is anticipated to qualify as a partially
nude establishment under the City Code and state law.
A development agreement for the development and constructon of the project; and
a lease agreement for the use and operation of the project.
Initial term of 15 years with 10 year subsequent renewals up to 50 years. There are
two related, substantive agreements, one for the show and one for the lease on the
property. Both include a termination right: for the Show if after two years the
expenses exceed revenues for 12 consecutive months; for the lease after 4 years if
expenses exceed revenues for 12 consecutive months. If either is involved, the term
ends no later than year 15.
$4,200,000 (estimated) in year 1, based on percent of gross show ticket sales and
other revenues (boutique, VIP, food & beverage, restaurant, lounge, special event,
etc.).
$6,100,000 (estimated) in year 6, based on a percent of gross show ticket sales,
which increases this year, and other revenues (boutique, VIP, food & beverage,
restaurant, lounge, special event, etc.).
$1,100,000 (estimated, based on $2 per ticket) for years 1 through 5; $1,400,000
(estimated, based on $2.50 per ticket) for years 6+. This is a facility surcharge on
each ticket sold.
$1,500,000 (estimated for all overlapping jurisdictions) CDS is responsible for
payment of all taxes.
City: $40,000,000 to $45,000,000
County: $15,000,000 to $10,000,000
Others: $75,000,000
. $1,000,000 (estimated, based on 1 % of project revenues) to social programs on
Miami Beach (at least 50%) and in developing countries. Proposed programming to
focus on youth-at-risk, cultural programs to promote/support emerging talents, in-
school/extracurricular activities for youth.
. Availabilty of rehearsal nights for fundraising opportuntiies for non-profit
organizations
. The City shall have booking rights (subject to availability) to the special events
area for City use.
. 4 premium seats per performance for City use.
Not applicable
~~
Sponsorships
Maintenance
Insurance
Operations
Corporate Guaranty
Art in Public Places
Revenue generated by sponsorships and non-facility naming rights shall be used
toward capital construction costs during the development phase and towards debt
service and building maintenance during operation phase.
CDS is responsible for all regular, "day to day" maintenance activities, such as
painting, carpeting, filter replacement, light bulb and fixture replacement, etc., as
well as minor equipment and machinery replacement.
City maintains responsibility for replacement of capital equipment and machinery in
the project,' the cost of which are funded through the facility fee.
CDS shall maintain all risk casualty insurance, including windstorm (unless not
commercially available) & flood; general commercial liability; business interruption
insurance; performance insurance; auto liability insurance; worker's compensation
insurance; intellectual property.
CDS is responsible for all operational requirements.
All obligations will be guaranteed by CDS and its joint venture partners.
$1,500,000 projected value of proposed public art to be in and paid for by the
project.
10 Year - Total Value
Rent
Facility Charge
Taxes
Incremental Parking
Community Benefit
Private Investment
Maintenance Cost (deduct)
$54,600,000
$12,400,000
$15,000,000
$15,000,000
$10,000,000
$75,000,000
($10,000,000)
Sum
$172,000,000