To: MAYOR AND CITY COUNCIL
From: ELIZABETH HAUSE, COMMUNITY SERVICES DIRECTOR
TITLE
title
DISCUSSION AND POSSIBLE ACTION ON THE STATUS OF OPERATIONS AT THE REDONDO BEACH PERFORMING ARTS CENTER AND OPTIONS FOR MAXIMIZING FACILITY REVENUE
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EXECUTIVE SUMMARY
As part of the strategic planning process, the City Council requested a review of the current operations at the Redondo Beach Performing Arts Center (RBPAC), along with an assessment of options to maximize facility use and revenue. This report provides the requested overview and staff recommendations on the facility changes and improvements that are most feasible and would have the greatest benefit to RBPAC operations.
BACKGROUND
The RBPAC is a 1,457-seat theater that hosts a diverse range of performances, including ballet, concerts, plays, corporate meetings, and a popular speaker series. Originally built as a high school auditorium and acquired by the City in 1984, the venue has undergone multiple upgrades, most notably a major renovation that ran from 2001 to 2003. Since that time, the RBPAC has operated as a rental facility with events managed, marketed, and ticketed by individual rental clients.
While the RBPAC has remained consistently booked, it faces growing challenges in staying competitive within the theater rental market. Many of the upgrades that made it state-of-the-art in the late 1990s and early 2000s are now aging, necessitating both near-term improvements and a broader strategy for enhancing and diversifying its use over time. The following review examines the theater’s current status and explores opportunities to maximize utilization and revenue generation.
Current Status: RBPAC Fiscal Health and Facility Condition
Fiscal Status and Revenue
The Redondo Beach Performing Arts Center has been steadily recovering from the marked downturn that followed the COVID-19 pandemic. A number of reliable rental clients that had been slow to return to the stage are once again booking events at the RBPAC. A graph and a table are included below that show a 5-year comparison of pre- and post-COVID-19 rental revenue, represented both annually and monthly.
Redondo Beach Performing Arts Center - 5 Year Monthly Revenue Comparison
|
|
2023-24 |
2022-23 |
2021-22 |
2019-20 |
2018-19 |
|
July |
59,482.29 |
62,873.00 |
28,656.56 |
55,408.71 |
90,742.19 |
|
August |
29,562.88 |
35,601.51 |
25,997.16 |
75,837.68 |
78,792.60 |
|
Sept |
30,527.55 |
22,055.50 |
31,746.88 |
35,880.82 |
60,220.73 |
|
Oct |
48,568.19 |
50,057.38 |
49,695.82 |
53,450.96 |
68,879.58 |
|
Nov |
72,120.46 |
60,003.47 |
27,628.34 |
63,884.17 |
72,588.31 |
|
Dec |
119,734.75 |
99,519.01 |
38,534.38 |
142,643.64 |
130,731.86 |
|
Jan |
111,439.05 |
55,920.25 |
58,481.89 |
83,558.61 |
68,515.79 |
|
Feb |
81,874.75 |
78,373.38 |
63,610.73 |
86,564.73 |
54,034.87 |
|
March |
135,892.74 |
93,111.00 |
52,279.89 |
21,684.95 |
104,475.17 |
|
April |
97,691.94 |
134,559.50 |
80,082.83 |
0.00 |
111,221.16 |
|
May |
98,906.78 |
116,928.13 |
121,592.13 |
100.00 |
120,588.93 |
|
June |
127,957.02 |
102,200.00 |
103,393.38 |
0.00 |
77,259.71 |
|
TOTALS |
1,013,758.40 |
911,202.13 |
681,699.99 |
619,014.27 |
1,038,050.90 |
2019-20: Theater Closed March 20 - June 30, 2020 Due to COVID-19 Pandemic
2020-21: Theater Closed Entire Fiscal Year Due to COVID-19 Pandemic
The table and graph show a rebound in activity since the pandemic. Operationally, the recent improvements to the audio system and video projection have restored the theater’s reputation for having outstanding sound quality which is encouraging more concert promoters to explore hosting performances at the RBPAC. However, there are a number of deferred maintenance items that need attention in order to fully capture the venue’s potential earnings and attract a greater variety of quality offerings.
Facility Conditions, Deferred Maintenance, and Preliminary Cost Estimates
1. Appearance: Maintenance which, when performed, will result in visibly improved appearance. This improves attractiveness to potential clients, ticket purchasers and other attendees and enhances the surrounding neighborhood.
a. Exterior Slate Cladding: The slate cladding has faded significantly from its original deep black to a pale gray, making it nearly indistinguishable from concrete. Visible issues include cracks, stains, and loose or fallen tiles, posing a risk of leaks and further deterioration.
Required Work: Repair damaged tiles, clean the surface, apply color enhancers, and seal the slate to restore its appearance and durability.
Cost Estimate: $175,000
b. Parking Lot: The parking lot has not been sealed or re-striped since 2007, resulting in cracks and an unsightly appearance.
Required Work: Seal and re-stripe the lot to provide a cost-effective yet impactful visual improvement.
Cost Estimate: $92,000
c. Brick Entry Plaza: The sand-set brick entry plaza shows signs of cracking, chipping, and uneven surfaces.
Required Work: Remove existing bricks (preserving engraved donor bricks), re-level the substrate, pour a concrete bed, and mortar the bricks in place. This improvement will significantly restore/enhance the facility's curb appeal.
Cost Estimate: $100,000
d. Exterior Repainting: Exterior metal elements such as railings, gates, and fencing are heavily rusted and require restoration.
Required Work: Clean, repair, and repaint these features to improve appearance and longevity.
Cost Estimate: $100,000
e. Courtyard (East) Patio: The concrete patio has been severely damaged by tree roots, resulting in an uneven and unsightly surface. The defunct marquee sign, now concealed by palm trees and too damaged for use, should also be removed.
Required Work: Remove and replace the damaged concrete patio, and remove the outdated marquee sign. Restoring this space, along with appropriate night lighting, will enhance its appeal for rental events such as parties, luncheons, and outdoor functions. While partially funded in the FY 2021-22 CIP, rising costs have delayed implementation.
Cost Estimate: $250,000
f. Landscape Overhaul: The Public Works Department has made significant progress in enhancing the perimeter landscaping along Aviation Blvd. and Manhattan Beach Blvd., utilizing drought-tolerant plants.
Ongoing Efforts: Continued landscaping improvements are underway.
g. Carpeting: The facility’s carpeting, now nearly 25 years old, has endured extensive wear due to the theater’s high usage and heavy foot traffic. As a result, several areas are visibly worn and have required temporary patching to maintain safety and functionality. Venue carpeting is of “airport” or “casino” grade for maximum longevity, maintainability, so it has lasted a very long time.
Required Work: Full carpet replacement throughout the facility is necessary to restore appearance and ensure long-term durability.
Cost Estimate: $275,000
h. Seating: The seating was last refurbished in 1998. While funding was approved in the FY 2021-22 CIP based on pre-pandemic cost estimates, difficulty finding replacement parts and general inflation have impacted the project.
Current Plan: Staff is proceeding incrementally.
Phase 1 (orchestra, or front seating): $545,850 (funded)
Phase 2 (terrace, or rear seating):$393,725 (not yet funded)
2. HVAC System: The 20-year-old reciprocating chiller, which cools water for the building's air system, is operating at only 50% capacity with no reserve capacity. Additionally, the rooftop HVAC units installed during the 2001-03 renovation are now at the end of their useful lifespan.
Required Work: Repair or replace the chiller and replace the aging rooftop units to restore reliable climate control.
Cost Estimate: $250,000
3. Roofing: Several sections of the roof have leaks and addressed through a patchwork of spot repairs. While the area above the dressing rooms and Gallery (east) Lobby has been addressed, the remainder of the roof requires attention. The majority of the roofing is 25 years old.
Required Work: Complete roofing repairs to ensure the building’s structural integrity.
Cost Estimate: Total cost still being compiled. Some areas may be completed within existing funding.
4. Emergency Egress Lighting System: The system failed in August 2024 and requires immediate attention to ensure compliance with life safety regulations for public assembly facilities.
Required Work: Repair or replace the emergency egress lighting system to meet safety standards.
Cost Estimate: $200,000
Increasing Facility Usage and Revenue
Aside from addressing deferred maintenance projects, other options exist for increasing both the utility (type and frequency of usage) of the RBPAC and its revenue generating capacity. The options fall under four basic categories, some of which are interdependent with other categories, while some can be undertaken as standalone programs:
1. Upgrades
a. The following enhancements/updates will add value and increased capabilities that are becoming expected of modern performing arts venues. It is expected that these efforts will improve marketability, desirability (for both potential rental clients and event attendees), and enhance revenue capacity of the RBPAC
i. Audio: A significant upgrade to the main Public Address system-including high-quality loudspeakers, amplifiers, and digital connections and routing-was successfully completed in late 2022 as part of the FY2021-22 CIP, coming in under budget. The enhanced system has been extremely well-received by RBPAC clientele and audiences. Remaining improvements include upgrading the aging microphone inventory and the monitor speaker system, which is essential for musicians to hear one another clearly, ensuring they stay in tune and perform cohesively.
Cost Estimate: $60,000
ii. Stage Lighting: Lighting modernization is underway, but much of the existing system relies on outdated, energy-inefficient incandescent fixtures powered by a failing wiring infrastructure from approximately 1970. Replacement is essential as lamps are becoming unavailable, energy costs are excessive, and the wiring no longer meets current standards, making maintenance costly. Upgrading to digital LED lighting will reduce energy consumption, lower maintenance costs, and eliminate expensive expendables like color filters and high-cost lamps. LEDs emit less heat, further cutting air conditioning expenses. Modern fixtures also offer built-in color options, motorized positioning, and versatile effects, improving functionality and meeting one of the most frequent requests from potential renters.
Cost Estimate (Infrastructure & Dimming System): $500,000
Cost Estimate (Replace remaining incandescent fixtures: $260,000)
iii. Orchestra Pit Lift: The orchestra pit, an 8-foot-deep space for up to 24 musicians, can be covered and function as a stage extension when not in use. This requires assembling a custom-built pit filler system with interlocking platforms and nearly 100 supports, taking up to six staff members a half day to set up or remove. This limits rental availability and increases costs for clients. A number of theaters address this with a hydraulic or electric pit lift system, which raises or lowers the pit floor at the push of a button in minutes. This upgrade would save time and labor, increase rental availability, and
boost revenue potential.
Cost Estimate: $600,000
2. Operating Modality
There a variety of different operating models utilized by potential patrons, but most consist of one or more of the following:
a. Producing: The producing agency/company pays for the creation of plays, musicals, ballets, etc. Producers sell tickets and, hopefully, recover additional costs by auxiliary methods, i.e., concessions/bar sales, program sales, merchandising, etc. Often, additional support is provided by donations and grants. If a show plays long enough to a substantial audience, it can theoretically reach profitability.
b. Presenting: This is where a promoter/presenter pays to bring in existing artistic productions created by others (plays, musicals, ballets), or concerts, speeches, seminars, etc. They then sell tickets and possibly merchandise, concessions, etc., as above, and expect to make a profit on single/multiple date events.
c. Rentals: The venue is rented by producers, presenters, corporate entities, etc., who provide the content, meeting, speeches, or educational activities. The venue receives the rent and expense reimbursements up front. Production costs are born by the rental client. However, any profits from a successful event are realized by the renter, not the venue. This is the current operating model of RBPAC.
d. Combinations: Hybrid models are common. Some examples:
i. Cerritos Center for the Performing Arts (owned/operated by City of Cerritos) operates as both a presenter (purchasing a season of musical/concert performances and selling tickets, reaping the proceeds) and also rents the venue to various clients.
ii. La Mirada Theatre for the Performing Arts (owned/operated by City of La Mirada) operates as both rental venue and presenting, like Cerritos, but additionally has a residency/partnership arrangement with McCoy Rigby Entertainment to provide a season of Broadway Musical performances, with a split of the proceeds.
Risk Levels of Each Modality:
a. Producing carries the greatest risk, especially when developing new works without proven audience appeal. Additional challenges include navigating union contracts, scenic design and construction (or rentals for revivals), and managing artistic staff such as sound and lighting designers. However, producing allows full control over programming, ensuring offerings align with audience and community preferences. This clear artistic mission often makes it easier to secure corporate sponsorships, naming rights sales, grants, and other funding sources beyond ticket and merchandise sales.
b. Presenting also involves risk, as events must be contracted, and deposits paid before ticket sales begin. However, since promoters typically know the type, quality, and popularity of the purchased event, this risk is more manageable than producing. Success requires a keen understanding of the local market, audience preferences, and appropriate ticket pricing.
c. Operating as a rental venue carries the least risk. Clients cover costs, ensuring no financial loss to the venue if ticket sales are poor. However, this lower risk translates to lower revenue since clients bear the financial burden and require viable profit margins. While rental fees are limited by market conditions, venues are generally expected to recover costs for labor,
utilities, and expendable supplies.
3. Exploring Additional Revenue Opportunities
a. Box Office/Concessions/Bar/Merchandise/Parking: Currently RBPAC does not operate any aspect of the business that involves risk or cash handling. But all of these are potential profit centers that can be considered.
i. A Box Office will only make sense if the venue can offer sufficient ticketed events to make it cost-efficient or profitable. If remaining as a rental-only operation, RBPAC cannot control the types or quantities of ticketed events for which a box office (which can make money by charging service fees) makes sense. Currently, long periods of time in which rentals that do not charge admission (such as dance competitions, which are lucrative but do not sell tickets) predominate. At such times, box office operations would be largely idle and not producing revenue. A box office also requires significant staffing, software, ticket printing equipment, etc.
ii. Concessions (food/drink/bar/merchandise) are currently operated (if at all) by the client. A fee for permission to do so is charged by the venue, but all sales proceeds are realized by the rental client. Bar proceeds in particular tend to be substantial, but service bars require trained staff to operate safely and storage space for the products would need to be identified.
iii. Parking: As RBPAC lacks sufficient parking of its own, a contract with Northrop Grumman Corporation (NGC) provides the needed access to overflow parking. As it is unlikely that NGC will permit a pay parking operation on its property, that leaves only the theater’s main lot. However, a paid VIP or Preferred Parking sections can be considered.
b. Donations/Naming Rights/Seat Endowments: As mentioned above, these become more likely if the theater operates a season of its own (or partners with a producing agency) as donors prefer to give, name, or endow a venue with known content. Unpredictable rental offerings are not particularly enticing to corporate or private donors.
c. Full-scale Motion Picture Presentations: Film festivals, sneak previews (Manhattan Studios are just a few blocks away), classic movie nights, etc. may have significant local appeal and also industry appeal for previews in particular. This would require investing in upgraded projection capability, surround sound installation, and a full-size retractable projection screen.
d. Non-theater Events: Wedding receptions, patio parties/receptions, parking lot events (i.e., farmers’ markets, food truck events, etc.) could be sources of additional revenue.
e. Increase Fees: Rental Rates have not been adjusted since 2019, although rates for reimbursable items such as labor have been adjusted to match current realities. If fees are increased incrementally, the RBPAC could produce more revenue while not driving away clientele with volatile costs.
4. Marketing
Marketing has been widely discussed over the years but remains underutilized. Whether through hiring a dedicated marketing specialist or contracting an outside firm, active marketing is essential for every operating model. Some effective steps have already been taken, such as upgrading the marquee sign at Aviation and Manhattan Beach Boulevards, periodic event listings in local media like the Easy Reader, and maintaining a telephone event information line. However, there are further opportunities to enhance marketing support for rental events.
If the City chooses to present its own events, strong marketing will be crucial to successful events. Even if the City maintains the current rental-only model, a targeted outreach program aimed at potential renters-such as commercial concert promoters and theatrical touring companies-should be a key component of RBPAC’s future strategy.
Staff Recommendations
There are a number of options available to increase utilization and revenue generation at the RBPAC. As noted above, some are more attenable than others. Staff recommends Council consider the following:
1. Continue operating Redondo Beach Performing Arts Center as a “rental-only” venue for the near future
2. Increase rental fees 3% per year for each of the next three fiscal years
3. Direct Staff to explore possible parking lot events
4. Direct Staff to develop a cost estimate for adding full-scale motion picture presentation capabilities
5. Continue to modernize audio capabilities by purchasing updated monitor speaker system
6. Continue incremental upgrade of Stage Lighting fixtures to LEDs
7. Perform deferred maintenance items
8. Develop cost estimate for contracted marketing of the venue
According to Council direction, staff will explore the preferred options and begin the preparation of a Budget Response Report for Council’s consideration as part of the FY 2025-26 budget adoption process.
COORDINATION
The Community Services Department coordinated the preparation of this report.
FISCAL IMPACT
There is no fiscal impact associated with this item. The facility improvements outlined in the report contain preliminary cost estimates that can be considered as part of future discussions of the City’s Capital Improvement Program. Staff is prepared to conduct additional research should Council wish to investigate any specific efforts as part of the FY 2024-25 budget adoption process.
APPROVED BY:
Mike Witzansky, City Manager