FROM:
Development Services
SUBJECT:
Title
Authorize Operating funding to the Stage Red Enterprise Fund.
End
RECOMMENDATION:
Recommendation
1. Approve funding for operating expenses to ASM Global in an amount not to exceed $500,000.
2. Amend the Memorandum of Understanding (MOU) for the inter-city loan between the City of Fontana General Fund and the Stage Red Enterprise Fund increasing the loan by $314,587 from $1,750,000 to $2,064,587.
End
COUNCIL GOALS:
• Promote economic development by pursuing business attraction, retention, and expansion.
• Practice sound fiscal management by living within our means while investing in the future.
DISCUSSION:
The City of Fontana has undertaken an expansive and comprehensive revitalization of Downtown Fontana. A primary component of this revitalization effort will be creating an entertainment district as a draw for consumers to enjoy as they discover the new downtown area. Stage Red is the keystone to the creation of this new entertainment district for the city.
The opening of Stage Red in the summer of 2024, well in advance of other projects planned in the area, was an intentional decision to help expedite the recovery of downtown. Expanding the show schedule, while requiring substantial investment from the city, has begun to show evidence of success as the downtown area is now home to several new businesses. As downtown continues to progress and more residents visit downtown more regularly for dinner and other entertainment options, attendance at the venue will continue to increase reducing the need for substantial ongoing investment. For operating year 2026, staff is requesting an increase in loan funding in the amount of $500,000 for the enterprise account to operate Stage Red.
The City has previously issued two operating loans (fiscal year 2023-2024 and 2024-2025) from the General Fund to The Stage Red Enterprise Account in the total amount of $750,000 and a third loan from Capital Reinvestment (Fund 601) in the amount of $1,000,000 resulting in a total outstanding balance of $1,750,000. To increase programming in the current fiscal year the operator will require additional funding to carryout upcoming events and operating expenses of Stage Red in the amount of $500,000 thus requiring an additional $314,587 by way of a General Fund loan.
The City will advance funds to ASM Global as a Cash Flow Shortfall and shall advance funds as follows:
• $100,000 upon City Council approval.
• Additional funding will be disbursed on a monthly basis, as needed, after review by city staff of monthly expense and income statements.
Such funds shall be deposited by the operator in the operating or payroll account(s) and used only to pay Operating Expenses.
FISCAL IMPACT:
The fiscal impact associated with the approval of this item is $500,000 and funds in the amount of $185,413 are available in Fund 720 - Stage Red Enterprise. The remaining $314,587 required will be funded through an additional operating loan from the General (Fund 101). The additional loan will increase the current loan balance of $1,750,000 to $2,064,587. All necessary budget adjustments will be included in the midyear budget status report.
MOTION:
Approve staff recommendation.