SIR HOWARD MORRISON PERFORMING ARTS CENTRE Value case

Back in 2014, community engagement considered ways to revitalise performing arts in Rotorua, prompted by the fact that SHMPAC:

was underutilised, and

did not meet the needs of the performing arts community

Why are we here

?

Annual Plan

Consultation

Develop a value

proposition for the

project

Improvement Estimates

$6.5m

$$$ of improvements

not understood

During June 2017 annual plan deliberations Council agreed:

‘to commit to further development of the value proposition in conjunction with key stakeholders and bring back to Council for final approval to proceed with the Performing Arts Centre enhancement and upgrade (earthquake strengthening) project.’

Treasury approved Better Business Case process

Better

Business

Case Financial

Commercial

Economic

Strategic Management Achievable & can be successfully delivered

Affordable within available funding

Commercially viable

Compelling case for change – strategic fit & business needs

Preferred option optimises value for money

Current status

SHMPAC is closed – assessed as below required 34% New Building Standard

Utilisation prior to closure averaged about 30% capacity

Building renamed as a performing arts facility but no investment made into making spaces fit for purpose

General décor and ambience is corporate and dated

Operating model is ‘venue for hire’

Audience research findings Brendon Smith Delve Research & Strategy

Nearly all residents are interested in performing arts

Copyright DELVE Research & Strategy 2017 8

55%

55%

51%

50%

48%

42%

42%

40%

38%

32%

28%

26%

24%

22%

18%

17%

8%

Comedians

School shows or productions

Theatre and plays

Large scale musical productions

Kapa haka or Māori cultural performances

Circus type shows such as Cirque du soleil

Contemporary or popular music (jazz, pop etc)

International cultural performances

Film Festivals

Dance / Ballet

Contemporary Dance / Hip Hop dance

Younger children’s shows

Classical or orchestral music

Magicians or Hypnotists

Opera

Clairvoyant shows

None of these

92% are interested in at

least some aspect of

performing arts.

Broad interest

Niche interest

% interested in genre

Base: Rotorua population survey, Total sample n=202

66% of residents have attended a performing arts show in the last 12 months

Copyright DELVE Research & Strategy 2017 9 Base: Rotorua population survey, Total sample n=202

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

92% Interested 66% Attended

Most popular genres:

• School shows (22%)

• Theatre & plays (20%)

• Kapa haka/cultural (20%)

• Large scale musicals (18%)

• Popular music (16%)

• Comedians (13%)

• Dance/ballet (11%)

10% outside Rotorua only

27% Rotorua & elsewhere

28% in Rotorua

only

Encouraging greater attendance at SHMPAC

10 Copyright DELVE Research & Strategy 2017

• Overwhelmingly, driving greater attendance is about the quality, amount and range of shows offered

• This is also why performing arts fans look attend events outside Rotorua and what stops residents from attending more shows here

There is a feeling that Rotorua misses out on the good shows

“More shows and events that I

am interested in. The reason I

go is not because of the venue

- it is what is playing.”

“We need more international

performers, we tend to miss

out on that and get bypassed.”

“It would be the type of shows

that I like I guess, most of them

seem to go to Hamilton and

Tauranga.”

“Finding time and shows I am

interested in going to.”

“Depends what’s the show or

what’s on. I'll go if it's

interesting to me.”

“I guess if there was more

variety of things, we miss out

quite often here in Rotorua.”

Base: Rotorua population survey, Total sample n=202

International visitor interests – leisure & entertainment

Internationals want more evening activities in Rotorua

12

A range of opportunities exist to unlock growth

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Encouraging attendance

amongst non-attendees

who are interested in

Performing Arts

Increasing frequency of attendance

amongst current users in Rotorua

Converting those who are

travelling elsewhere for

Performing Arts

Encouraging attendance

amongst Visitors

(domestic and International)

Driving growth across all of these opportunities is largely about focusing on the type and quality of shows we deliver – and then promoting them effectively.

Estimated current spend on performing arts by Rotorua residents

• Rotorua performing arts market estimated at $12.2m per annum

• Potential for growing performing arts in Rotorua $1.2m - $2.4m

• Rotorua inc. also missing out – accommodation, retail, F&B, etc

Spent elsewhere: $7.2m/year $219/event

Spent in Rotorua: $5.0m/year $101/event

Copyright DELVE Research & Strategy 2017

Hirer feedback

But…

Civic Theatre too big for many

touring & local shows

Civic Theatre too small for larger

touring shows to be viable

Concert Chamber acoustics & lighting

inadequate

Banquet Room format difficult for

acoustics & business events

Venues are poorly

presented

Multiple, diverse spaces are particularly attractive for festival type events, outreach, and business events

Improvements needed to technical

equipment, stage cloths & orchestra pit

So…

• For the audience: it’s about the range and quality of shows

• For hirers: they will only bring the shows if the venue meets their needs

Strategic alignment: A refurbished SHMPAC would contribute significantly to Rotorua 2030

CONTRIBUTION TO 2030

GOALS

• Outstanding places to play

• Vibrant city heart

• A resilient community

• Business innovation and prosperity

• Employment choices

CONTRIBUTION TO KEY STRENGTHS

• Strong culture

• Easy lifestyle

• Diverse opportunities

Adds to value to the proposition that Rotorua is

‘a great place to live, work & play’

SHMPAC floorplan

Concert Chamber

Civic Theatre

Banquet Room Foyer

Toilets

Venue upgrade options

• Seven options were considered, ranging from demolition and total rebuild to retaining the status quo

• Each option was assessed against:

Investment objectives • Optimise value from performing

arts centre • Provide a contemporary

performing arts environment • Provide performing arts

facilities, equipment and services that are market competitive and meet legislative requirements

• Maximise vibrancy of venue

Critical success factors • Strategic fit • Value for money • Achievability of investment

objectives • Capacity and capability to

deliver • Potential affordability

Option 1 – Baseline Earthquake strengthening to 67% New Building Standard

Key benefits • Lowest cost • Safe building

Key drawbacks • Doesn’t meet

performing arts investment objectives

• Won’t address identified audience or hirer needs

Total Investment (incl EQ)

$2.7 - $4.5m

Option 2 – Demolish & rebuild

Key benefits • Brand new bespoke

building • Meets all investment

objectives, audience and hirer needs

Key drawbacks • Most expensive –

affordability? • Loss of heritage

building

Total Investment

$70 - $80m

Option 3 – Upgrade Concert Chamber & stage apron

Key benefits • Flexible, secondary

performance space • Meets needs of

smaller touring shows and local performing arts organisations

Key drawbacks • Only addresses one

of the four key spaces in SHMPAC

• Minimal revenue growth opportunity

Concert Chamber

Stage Apron

Total Investment (incl EQ)

$5.9 - $8.1m

Option 4 – Substantial refurbishment of Foyer, Banquet Room, toilets and add new bar

Key benefits • Largely addresses

issue of poorly presented venue

• Good utilisation & revenue growth

Key drawbacks • No improvements

to Civic Theatre • Minor limitations to

business events set up and acoustics

Banquet Room

Foyer

Toilets

Total Investment (incl EQ & Concert Chamber)

$9.7 - $12.4m

Concert Chamber

Stage Apron

Option 5 – Rebuild Banquet Room in rectangular form, upgrade foyer, toilets & add bar

Key benefits • Best format for

business events and performing arts acoustics

Key drawbacks • High reputational

risk • Large capital cost

for little gain in performing arts

Total Investment (incl EQ & Concert Chamber)

$13.1 - $15.8m

Concert Chamber

Banquet Room

Foyer

Toilets

Stage Apron

Total Investment (incl EQ, Concert Chamber, rectangular Banquet Room & refurbished foyer)

$18.1 - $21.4m

Concert Chamber

Option 6 – Option 5 plus refurbish & extend Civic Theatre to 1,000 seats

Civic Theatre

Banquet Room Foyer

Toilets

Key benefits • Best performing arts

and business events outcomes

• All spaces enhanced to high, fit for purpose standard

• Improvements can be staged

Key drawbacks • High reputational

risk • Highest capital cost

Stage Apron

Total Investment (incl EQ, Concert Chamber & refurbished Banquet Room & Foyer)

$14.7 - $18.0m

Concert Chamber

Option 6a – Option 4 plus refurbish & extend Civic Theatre to 1,000 seats

Civic Theatre

Banquet Room Foyer

Toilets

Key benefits • All spaces enhanced

with good revenues and performing arts outcomes

• All spaces enhanced to high, fit for purpose standard

• Market competitive venue at comparatively low cost vs new build

Key drawbacks • Significant capital

cost

Stage Apron

Description Option 1 Option 3 Option 4 Option 5 Option 6 Option 6a

Earthquake strengthening

Concert Chamber & stage apron refurbishment

Foyer & Banquet Room upgrade, and add bar

Banquet Room rebuild, Foyer refurbishment, and add bar

Expansion of Civic Theatre to 1,000 seats

Total investment range $2.7m - $4.5m

$5.9m - $8.1m

$9.7m - $12.4m

$13.1m - $15.8m

$18.1m - $21.4m

$14.7m - $18.0m

Summary of options

Recommended approach

1. Commence design phase for options 4 and 6a

2. Commit to option 4 because:

It delivers on most investment objectives & critical success factors

It is comparatively affordable, particularly if 33% external funding is sourced

3. Explore option 6a:

If sufficient external funding sourced

It can be staged, so could be undertaken at a later date

OPTION 4:

Investment objectives:

Value Contemporary Meets legislation ? Competitive Vibrancy

Critical Success Factors Strategic fit Value for money Achieves objectives Capacity/capability Affordability

• Gain approval to commence design process through to detailed design for options 4 and 6a within current $1million envelope

• Direct staff to explore potential funding sources including:

Government (Category 1 heritage building)

External organisations and gaming trusts

Private investors/philanthropists

• Note that funding decisions will be made as part of the LTP process

Next steps