As a long time
venue administrator, I would reiterate what a couple of the posters have mentioned about including operating costs as a part of the project plan. Whether you are building new or converting a space, the capital costs are not going to be your biggest problem because they are often a one-time expense. There is a brand new community performing arts centre in the next town that opened a couple of years ago. During the concept and construction
phase, the community did all of the committee things and hired HPH to consult and I admit that it is a jewel of a facility. However, recently, city council expressed outrage because the
theatre which was supposed to be working towards a "cost recovery" model came back to council looking for a $1 million annual subsidy. Everyone was shocked and surprised and the fiscal conservatives screamed bloody murder.. the
theatre board tried to spin the issue into the economic benefits the
theatre provides (a conversation for another day), but the real issue is that despite the available evidence, they really didn't have a
clear grasp of what their operating costs were going to be. But those costs are essential to the operation and so the money must be found.
Staff are obvious costs.. someone to do contracts and process them, accounting, custodial, technical, building maintenance are huge costs because the people that do those things usually need to eat in order to be effective. Consumables like
gel, lamps, tape,
stage paint... toilet paper, paper towels, garbage bags cleaners and all of the little things that don't necessarily cost a lot but really add up over the course of a year. The other big ones that come to mind are
power which goes through the roof once you turn the
stage lights on and in the summer the air conditioning. Gas for heating in the winter is also huge. Did I mention insurance? And even though the building and equipment may be new, there is the ongoing cost of repairs and maintenance to the building and equipment.
Getting the building built is great, but operating the building is the real challenge because your only revenue stream are user groups. You can fiddle with them a
bit by charging a
box office fee, and making technical charges separate, but the bottom
line is that a $1 per ticket service charge adds $1 to the cost of the ticket and even though it's the ticket buyer that is paying the charge, it increases the ticket price. You can make technical charges separate (as most facilities do), but that too adds to the cost to the user and when you realize that
box office is usually their only source of paying for things (keeping in mind that the
venue is only one of the costs incurred by the user) is
box office, the producers revenue potential is limited by ticket sales and capped by seating capacity. The long and short of it is that there is a limit to what the user can pay for the
venue and whatever it is, must provide the means to provide the money to operate.
Once you get into "multi-use" community spaces, costs go even higher. One nighters (most functions at a "roadhouse" facility) are horrifically expensive to service from a
venue point of view because of the huge cost involved in the set up and resetting and the limit the user can afford to pay. That is why every community facility I have seen operates with a subsidy. Quite often, a city council will hide costs by providing utilities, insurance, accounting and such as a part of a central operating budget model, but that doesn't help the
venue when the parent group (city council, school,
etc) needs to
trim their budget.
Too often, committees and consultants (not to denegrate either) over estimate revenues, underestimate expenses and once the
venue is opening, the reality comes as a
shock. You can sometimes compromise on building and technical design and they become challenges, but
theatre people can be very innovative in finding work arounds... but the operating costs are generally not negotiable.
So, my suggestion is that when you visit other facilities, take the time to meet with the
venue administrators to talk plainly about their operating budgets. Because of their scope and on-going nature I really don't think your proposal is complete unless it includes a reasonable and sustainable operating strategy.
On the other
hand, once the facility is built, shutting it down is not usually an option. However, it's a counterproductive strategy to take because it builds lots of stress and animosity into the relationships of those involved.