FROM:
Development Services
SUBJECT:
Title
Award and approve agreement for management and operation of Stage RED.
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RECOMMENDATION:
Recommendation
1. Award bid (DS-24-16-SP) and authorize the City Manager to execute the agreement with ASM Global and Madison Entertainment for operational and management services for Stage RED.
2. Approve and Authorize the City Manager and/or his designee(s) to make non-material changes to the agreement and execute any future amendments required for the operation of Stage RED.
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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.
• Invest in the City’s infrastructure (streets, sewers, parks, etc.) by maintaining and improving the city's existing infrastructure.
DISCUSSION:
The City of Fontana has undertaken an expansive and comprehensive revitalization of Downtown Fontana. The specific geographic area to be targeted includes Upland Avenue to the North, Orange Avenue to the South, Mango Ave to the East and Juniper Ave to the West.
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.
Specifications for the rebranding, renovation and reconstruction of the venue have been developed in direct consultation with Mr. Hagar and his design development team. The plans are now complete, and renovations are underway.
Operation and management of this one-of-a-kind venue falls outside of the scope or ability of city staff. Upon execution of the contract, ASM Global will assume responsibility for all aspects of daily operations and management of the venue, including food and beverage service, technical support for sound, lighting, and recording, as well as ticket sales. The City, as well as artist’s promoters, will participate with ASM Global and Madison Entertainment on the booking and marketing of specific entertainment events. The City will retain the right to approve all artist bookings.
ASM Global was established in 2019 through a merger of SMG and AEG Facilities, providing more than 50 years of combined venue management and live event experience expertise, with SMG’s operations dating from 1977 and AEG Facilities forming in 2007.
In January 2023, ASM Global acquired Madison Entertainment-music industry professionals with expertise in talent acquisition, event production and planning, and promotion. Over the past 30 years, they have booked acts for clubs, theaters, concert halls, festivals, and private events. Madison Entertainment has a proven track record of booking musical acts, artists, and comedians for clubs and theaters throughout the Americas.
ASM will perform all operational management for Stage RED, including food and beverage purchase, preparation, service, sales, and management, audio visual management, talent bookings, ticket sales and promotional tasks for the venue. In addition, ASM will be responsible for daily required maintenance and cleaning for the facility. The City will remain responsible for structural repairs and major maintenance items.
Contract Terms:
1. Three-year term, with the option to extend for up to two additional three-year terms.
2. Compensation to ASM includes:
a. monthly management fee of $5,000 for pre-opening services, increasing to $10,000 upon opening.
b. 7% of the gross revenue from all food and beverage sales.
c. 10% of the gross revenue for parking services provided, if any.
d. 50% of venue rental fees related to private events.
e. 25% of sponsorship revenue
f. 20% of net operating profit
FISCAL IMPACT:
The fiscal impact associated with the approval of this agreement is $345,000 (Management Fee only) and is not included in the 2023-24 current budget. Necessary documentation has been provided to the Budget Office to facilitate adjustments in the Mid-Year Budget Status Report including the establishment of Fund 720 - Stage Red Operations.
MOTION:
Approve staff recommendation.