Community Center 2005/09/22s
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Community Center Authority
September 22, 2005
Anaheim Convention Center
Executive Board Room
12 Noon
Members Present: Paul Kott, Ed Munson, Larry Slagle, Pat Carroll, Diane Quezada- Singer.
Members Absent: None.
City Staff. Greg Smith, Executive Director; David Meek, Convention Center Manager; Carol
Meier, Financial Accounting Manager; Ed Zacherl, Assistant Finance Director; Chuck Smith,
Contract Administrator; Alison Kott, Deputy City Attorney; Terry Harper Anaheim Union High
School District; Claire Hahn, Senior Secretary.
Irene Reyes - Hofmann posted the agenda for this meeting on Friday, September 9, 2005, at 1
p.m., in the Convention Center Box Office Advance Sales window.
Call to Order President Paul Kott called the meeting to order and self - introductions were
made.
Public Discussion None.
Approval of Minutes The meeting minutes of the May 26, 2005, were approved.
Financial Report Carol Meier reported on the Statement of Revenues and Expenditures for the
year ended June 30, 2005. Reporting from the schedule, Carol highlighted the Convention
Center's operating profit of $1.074 million versus the original suggested loss of $2.3 million, a
positive variance of $3.362 million attributed to revenues coming in higher than suggested by
$2.6 million. Expenses came in lower than projected of $720,000. The total income for the year
was $712,000 versus the original projected loss of $4.037 million.
On the operating side, most of the revenues came in higher than suggested with the exception of
food and beverage income, which was primarily due to new bookings. The expense side came in
lower due to lower salaries and burden cost. On the non - operating side, operating revenues came
in under projection by $204,000, which was attributed to the losses from the Grove. Carol
pointed out that the Convention Center contributes $1 million to the City's General Fund as a
subsidy to their budget that will continue this current fiscal year 2005/06. The non - operating
expenditures are down in capital outlay by $1.6 million; however, that will be carried over for
the current year.
Greg Smith commented that it is important to know that the Anaheim Convention Center
operates without a City subsidy. From a financial standpoint and a great benefit to the City, the
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September 22, 2005
Page 2
Convention Center contributes to the general fund and also maintains a reserve fund of
approximately $17 million.
Greg informed the members that the reserve fund will be drawn down for an upcoming project
by $5 million. The Convention Center keeps a balance not lower than $9 -10 million. On an
average, the Convention Center's infrastructure maintenance is approximately $2 million a year.
Greg shared that generally the Convention Center turns a profit. Discussion ensued regarding
reserves.
Arena Lighting and Landscaping Update Greg Smith explained the displayed pictures of the
lighting and landscape of Phase I, a multi -phase upgrade project to the exterior of the Arena,
which is almost complete. He described in detail the arrangement and colors of the new lighting
and uplighting of the palm trees. The goal is to make it lush and pretty, pedestrian friendly, and
add balance to Arena's exterior. The maintenance of this project will fall under the Resort
Maintenance District.
Greg updated the members on the replacement carpeting for the Convention Center lobby area
stating his concern about recreating the same dramatic and elegant look. He and David Meek are
still looking and have looked into using large square carpet tiles. The next block of time for
carpet to be installed would be in June 2006. At the next meeting samples may be available to
show.
Greg wanted to fill in the gap regarding the Grove that Carol Meier mentioned earlier in the
financial report. He briefed them on the background regarding the purchase of the Grove from
being sold to Ogden Entertainment to SMG acquiring the property and the City's option to
purchase the land. The Grove property was being sold to a church for $6.2 million; the City of
Anaheim had the option to purchase the property if they could match the offer. The City needed
the property for leverage and tapped in to the Convention Center's reserve fund to buy the Grove
and designated it to be under the umbrella of the Convention Center. The first year the Grove
netted a profit, and the Convention Center was able to share in half of the profits. However, last
year there was a loss, but the Convention Center's share of loss is capped at $200,000. This year
it is projected to make as much as the first year of operation.
Greg communicated to the members on an upcoming announcement on an exclusive Arena
booking rights agreement with Anschutz Entertainment Group (AEG). AEG is the owner of the
Staples Center and a strong concert producer. AEG will book the Arena facility, have
responsibility to sell the naming rights which is worth 600,000 per year, provide all of the
marketing, programming, acts, and the wherewithal. The Convention Center will provide the
facility and the split is 50150. AEG guarantees over the five -year term on the agreement a
minimum net revenue of $2.5 million. Part of this deal includes AEG bringing in a
developmental league NBA basketball team. Discussion ensued regarding events in the arena.
Diane Singer questioned if our facility has any place in the City's recovery plan. Greg indicated
that the Convention Center is a designated shelter for the City's disaster plan, we have a micro
generator on the west side of the building that runs and generates electricity for the City's grid,
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September 22, 2005
Page 3
and the Convention Center has its own emergency backup in the building. Homeland Security is
looking into investing money and using this facility as a beta site for new technologies.
Discussion Concerning Proposed Amendment to Resolution CCA —1669 Establishing the
Date, Hour & Place for General meetings of the Community Center Authority Greg Smith
informed the members that at a Council meeting the Mayor brought up the fact that all boards
and commissions should meet at convenient times such as mornings or evenings for the public to
attend. The Mayor was encouraging boards and commissions to consider establishing more
conducive time slots for the public to attend. The Mayor commented that the lunch period was
not a conducive time. Discussion ensued regarding attendance and the CCA meeting time. With
no public participation or complaints regarding time, no public comments expressing the desire
to change the time for the public to attend or that it is an inconvenient time to meet, the general
consensus was to keep the 12 noon meeting time; however, they will keep it in mind should they
need to change the time.
Discussing of Meeting Room Expansion Project Greg Smith updated the members on the
meeting room expansion project designs indicating that there has been no change. He is waiting
for a resolution by the hotels to create a fee upon themselves that will fund the Convention
Center expansion. The City has stated that the benefactors of the increase meeting room space
will be the ones that pay for it. Hotels are saying the City benefits from the expansion and wants
the City to participate. The hotels are still trying to establish a methodology on who pays how
much based upon proximity of the building, based upon the size of hotels, and TOT. The Bureau
is heading up this effort. There are two phases to the plan, Hall E and the unfinished area on the
third level, the second ballroom that was part of the original construction plan. There is a
committee working on loss of business due to the lack of meeting room space. Discussing
ensued regarding subsidy.
Adiournment There being no further business to discuss, it was, on a motion duly made and
seconded, adjourn at 2:13 p.m.
Signed:
Approved and Certified:
Greg Smith, Assistant Secretary
Secretary of the Governing Board of the Community Center Authority
* * *Next meeting* * *
January 26, 2006