TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Kristen Crane, Assistant City Manager
PREPARED BY: Brian Ambrose, Community Services Director
SUBJECT:
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Approve First Amendment to License Agreement with Newman Hospitality Group for Special Event Management Services for Town Square Park Amphitheater
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RECOMMENDATION
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Authorize the City Manager to execute a First Amendment to the License Agreement with Newman Hospitality Group, LLC, for special event management services at the Town Square Park Amphitheater.
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PRIOR ACTION/VOTE
In October 2023, the City Council approved entering a License Agreement with Newman Hospitality Group, LLC for special event management services at the Town Square Park Amphitheater.
CITY COUNCIL GOAL
Foster and promote an engaged, connected and caring community.
BACKGROUND
Within the last several years, the City constructed an amphitheater at Town Square Park with the vision of using the space to host major community events. Part of the City Council’s vision for the Amphitheater was to work with a third-party that specializes in special event management to host large-scale events.
In 2022, the City completed a Request for Information (RFI) process, which yielded helpful information and led the City to pause in order to develop a Use Policy and Operations Framework for the Park and Amphitheater, deemed as a critical foundation for a prospective private firm to understand the broad scope of their responsibilities prior to the selection process.
Following City Council adoption of the Use Policy and Operations Framework in April 2023, the City Council provided direction to proceed with a Request for Proposals (RFP).
The goal of partnering with a special event management company for use of the amphitheater was to activate the Town Square Park Amphitheater with community events and add vitality, considering this as an economic development driver to draw visitors to Murrieta, while also being a good neighbor and taking good care of the facility.
Following the RFP process, in October 2023, the City Council awarded a License Agreement to Newman Hospitality Group, LLC (NHG). NHG proposed to provide four events per calendar year for 2024, but the scope could be up to six events per year. The original Agreement was for a two-year term, consistent with the 24-month pilot period, with the ability for extension upon City Council approval.
Summary of 2024 Events
During 2024, NHG held three two-day events at the Town Square Park Amphitheater, including:
• Jazz and Blues Festival - A live music event showcasing local and national jazz musicians
(April 20-21);
• Old Town Music Festival - A two-day annual country music festival with national touring
artists (June 8-9); and
• Rocktoberfest, a live music event showcasing local breweries (October 19-20).
Originally, NHG’s vision was to host an event in August as well, but based on the heat during the June event, which impacted the visitor experience, they opted to forego an event in August, when temperatures are generally even higher.
Under the terms of the Agreement, NHG is fully responsible for all facets of their events, including financial responsibility and all aspects of planning and producing the special events, before, during, and after, in conformance with the operational framework and use policy established by the City Council.
In exchange for use of the space, the terms of the original agreement were that NHG would be responsible for all other costs associated with the event and NHG would share with the City 5% of any net revenues.
Reflecting on the three events of 2024, overall, they went well. Highlights include:
• The events were considered safe on all accounts, related to topics such as alcohol, crowd behavior, first aid, and set-up;
• Attendance at the So Cal Jazz and Blues Festival was 1,700 to 1,900; Old Town Music Festival was 2,700 to 3,000; and Rocktoberfest was 1,400 to 1,600;
• Customer feedback was positive from guests and vendors reporting that they had an enjoyable experience and really liked the venue;
• The team exercised continuous process improvement during the progression of all three events, each time implementing changes to make the operation more cost-effective and efficient;
• The first event generated numerous noise complaints to the City, but NHG addressed them appropriately, and there were few noise complaints for the following two events;
• The NHG team is working to develop a strong, foundational relationship with the City team, which will help in working toward further process improvement; and
• Continuing to look at ways the City could leverage its partnerships to help NHG with publicity, such as working with the Chamber of Commerce, Explore Murrieta, and the Downtown merchants since the City’s goal is for these events to help attract visitors, shoppers, and diners to Murrieta as part of attending the festivals.
• Data from Explore Murrieta indicated that collaboration between Explore Murrieta and NHG for ticket giveaways in September and October to raise awareness, grow engagement, and build followers for both yielded positive results, particularly in October with over 32,000 impressions and 1,743 engagements.
Proposed Changes for 2025 and First Amendment to Agreement
As a new endeavor, the initial set-up costs for the NHG events are proving to be expensive. Moving into the 2025 series of events, further consideration will be given to managing the overhead costs for each event while increasing attendance and revenue from ticket sales. Additionally, NHG continues to seek sponsorship opportunities, which would increase revenues to offset expenses and assist with the overall profitability of the events.
The vision of the original License Agreement was that NHG would bear the cost of City staff present during the NHG events, such as Fire, Police, Public Works, and Community Services. However, as the right-sizing approach continues to determine the necessary balance of City staffing during events to ensure safety and facility functionality, and while the two-year pilot is in process, staff and NHG have discussed NHG not paying the cost of the City personnel that are present. Based on 2024 staffing levels, the value the City would absorb in 2025 is approximately $15,000 per event day.
Additionally, instead of hosting three two-day events for 2025, NHG proposes to host two three-day events. They are proposing to host the So Cal Jazz and Blues Fest on May 16-18, 2025, and the Old Town Music Festival in September and October (exact date to be determined). The event times each day would be as follows: Friday from 5:00 to 10:00pm; Saturday from 2:00 to 10:00pm; and Sunday from 2:00 to 8:00pm.
The attached draft First Amendment to the License Agreement for City Council consideration accomplishes these adjustments. Foregoing reimbursement for all staff costs is a considerable expense for the City, valued at approximately $90,000 for one-year using the 2024 staffing model for three two-day events. Considering that this is a trial endeavor for the City, as well as the City Council’s broader goal to activate the Town Square Park Amphitheater with large-scale events as an economic development strategy to draw visitors to Murrieta and add vitality, and that there is a start-up phase for establishing a viable business model and raising regional awareness about the events and the venue, staff recommends that the City Council approve this Amendment.
For the 2024 events, the Amendment would retroactively allow foregoing reimbursement for direct staffing costs provided by the City during the event dates (approximately $7,500 per day for Fire, Public Works, and Community Services), with the exception of services provided by the Police Department (valued at about $7,000 per day). For 2024, this amounts to $45,000 for six event days at $7,500 per day. If approved, the Amendment would allow foregoing reimbursement for all direct City staffing costs provided during the 2025 events, including services provided by the Police Department. Cumulatively, this amounts to an estimated $90,000 for six event days at $15,000 per day. All other provisions of the original License Agreement would remain in effect.
Since NHG’s original agreement was for two years as a pilot program, staff plans to report back to the City Council at the end of 2025, or sooner, to discuss the structure for the continuation of the agreement.
FISCAL IMPACT
The fiscal impact associated with this item is estimated to result in a cost of approximately $45,000 for 2024 for three two-day events, and $90,000 per year, starting in 2025, for two, three-day events. Generally, these costs are for overtime staffing, budgeted in each respective department budget. If a department has insufficient capacity to absorb this cost, a budget adjustment request may be brought to the City Council separately as part of the quarterly budget review.
ATTACHMENTS
1. First Amendment to License Agreement with Newman Hospitality Group