City of Wichita considers raising rental rates at Century II

07/09/2012 5:00 AM

08/05/2014 8:01 PM

The cost of space will likely go up at Century II to eliminate the annual taxpayer subsidy that helps finance the downtown performing arts and convention center.

Today, the Wichita City Council will weigh the facility’s first rental rate increase in 12 years, a move that won’t balance its budget but should eliminate the annual $400,000 subsidy from the city’s general fund, said John D’Angelo, the faculty’s manager and the city’s arts and cultural services manager.

It’s impossible to bridge the facility’s annual deficit, D’Angelo said, which was almost $500,000 in 2011, despite the annual $1.5 million subsidy from the city’s convention and tourism fund. That fund comes from guest tax revenue collected at the city’s hotels.

D’Angelo is not recommending a fee increase large enough to wipe out the guest tax subsidy.

“I wouldn’t anticipate a fee increase large enough to significantly decrease it,” he said. “We’d run people out of business.

“But as we stand right now, this helps to balance our level of subsidy by lessening the dependency on the guest tax and the general fund.”

But based on 10 percent projected revenue growth built into the rate increase proposal – about $680,000 – D’Angelo believes the general fund subsidy eventually can be wiped out and the guest tax subsidy decreased.

“It’s really hard to project for certain,” he said, “because we’re asking the council for two years to work with our regular clients and we’re contracted out 18 months,” he said. “Some people won’t see any immediate change because they’re already under contract. Everybody will be on the new rates by 2015.”

The rate increase proposal before the council today includes new agreements with Century II’s three primary cultural tenants: Music Theatre of Wichita, Wichita Grand Opera and the Wichita Symphony Society.

The new deals provide higher discounts for regular facility use to the most frequent user, in this case Music Theatre of Wichita, D’Angelo said. The three tenants will see increases of $500 to $1,000 per performance.

For Wayne Bryan’s Music Theatre, the increase translates into about $600 an event, but comes coupled with a slight break on office space since the city has downgraded its quality.

“We’re doing OK and we want the building to thrive and prosper,” Bryan said. “I think it’s very doable. We all know prices have to go up and everyone needs to find more revenue. We’ll do our best and try to keep in business.”

Some of the rate increase covers a general standardization of city policy for renting ancillary space, such as the office space, shop, rehearsal space and costumes at Music Theatre.

“The policy we’re operating under now only covers performances,” D’Angelo said. “We have no consistency with our ancillary space. In some cases we charge, in some we don’t.”

In addition, the proposal shifts rentals for the facility to the day rate method currently used at Expo Hall, rates that have been tailored at or below competing facilities across the United States, D’Angelo said.

“Currently, part of our charges are on periods with four a day,” he explained. “That affects clients differently, because some who use a lot of the building will see a small decrease in their charge versus clients who only use one period of the day and who will now pay for the entire day instead of a small section of it.”

Using Expo Hall as an example, the proposed day rate is $1,280. Currently, the city charges $740 per time period, with each day broken into four periods.

“Obviously, not too many people are buying up the midnight to 6 a.m. period because they don’t need it,” D’Angelo said. “And a lot of people don’t buy the 6 a.m. to noon period because they don’t get here until noon anyway.”

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