HomeMy WebLinkAbout2022-04-26 - AGENDA REPORTS - THE CUBE OPERATIONS CONTR AMENDAgenda Item: 10
1. CITY OF SANTA CLARITA
AGENDA REPORT
CONSENT CALENDAR
CITY MANAGER APPROVAL: AI1 A11�44_1)
DATE: April 26, 2022
SUBJECT: OPERATION OF THE CUBE - ICE AND ENTERTAINMENT
CENTER
DEPARTMENT: Recreation and Community Services
PRESENTER: Janine Prado
RECOMMENDED ACTION
City Council:
1. Amend the current contract with American Sports Entertainment Company and the Los
Angeles Kings for operations of the City of Santa Clarita Ice and Entertainment Center to
revise the fiscal year 2021-2022 budgets, increasing revenue by $1,622,314 and expenditures
by $583,396.
2. Authorize the City Manager or designee to modify the award over the course of the contract
term with American Sports Entertainment Company and the Los Angeles Kings based on
revenue actuals.
3. Increase recreational facility revenue accounts by $1,674,114 and appropriate $838,396
across recreational facility expenditure accounts per the attached exhibit A.
BACKGROUND
On February 23, 2021, the City Council authorized a five-year operator agreement with
American Sports Entertainment Company and the Los Angeles Kings (ASEC/Kings) to oversee
operations of The Cube - Ice and Entertainment Center, Powered by FivePoint Valencia (The
Cube), following the acquisition of the former Valencia Ice Station in October 2020. Shortly
thereafter on April 12, 2021, The Cube opened to the community as a City of Santa Clarita (City)
facility.
The Fiscal Year 2021-2022 budget for both the operator contract and the facility's utilities were
developed taking into consideration the ongoing pandemic -related public health restrictions in
place from both the State of California and the Los Angeles County Department of Public
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Health, which limited indoor capacity and placed limitations on youth sports activities.
Notwithstanding those restrictions, programming and activity at The Cube has exceeded first
year expectations and continues to grow.
Monthly average foot traffic is 35,535, with a high in November of 37,662. This number
accounts for the number of entries into the building each month.
In the first nine months of the fiscal year between July 2021 and March 2022, The Cube has
registered approximately 64,600 patrons through in-house programs such as public skate
sessions, youth hockey programs, adult hockey leagues, Learn to Skate classes, contract ice
reservations, stick time reservations, birthday parties, meetings, events and more. The
programming figure does not account for the thousands of additional patrons who visited The
Cube to either participate in or watch a wide -variety of offerings such as California Amateur
Hockey Association tournament weekends, high school hockey games and tournaments, figure
skating shows, and the UCLA Men's Ice Hockey team games.
Non-traditional uses of the facility include being utilized as a location for a blood drive, a host to
City contract classes such as yoga and ballet, and most recently, a prime spot for filming with
major projects including a Netflix production, several commercials, and an ongoing location for
the second season of a show being produced by a major studio television production company.
This increase in use of the facility has resulted in revenues exceeding budget in the areas of the
City's Sponsorship Program in the amount of $134,100, which is an increase of $9,100 compared
to budget; Rental Income in the amount of $84,544, which is an increase of $42,000 compared to
budget; and $3,687,052 from ASEC/Kings, which exceeds the budget by $1,622,314.
The higher -than -anticipated use of the facility is also impacting expenditure budgets with an
estimated impact of $255,000 to gas and electric utilities and $583,396 to the ASEC/Kings
operator agreement. An additional contributing factor to the electric utility budget is the
increasing costs of electricity through the City's energy provider, Southern California Edison
(SCE). From 2019 to 2022, SCE rates have increased significantly. Staff, in collaboration with
ASEC/Kings, continue to identify energy -saving opportunities at the facility to help mitigate
future costs against continuously increasing rates.
ALTERNATIVE ACTION
Other action as determined by the City Council.
FISCAL IMPACT
The recommended actions will address budget appropriations for Fiscal Year 2021-22, which
includes an increase of $1,674,114 in estimated revenues and an additional appropriation of
$838,396 in estimated expenditures.
ATTACHMENTS
The Cube Exhibit A
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10.a
Exhibit A
The Cube: Ice & Entertainment Center
FY 2021-22 Year -End Projections to Impacted Accounts
Fund: 120
Account
Budget
Forecast
Variance
Contractor Operator Revenues
Rental Income - Pro Shop 431112
$
34,800
$
21,452
$
(13,348)
Food/Concession 456702
$
56,400
$
16,500
$
(39,900)
On -Ice Revenue 456701
$
1,902,278
$
3,115,000
$
1,212,722
Advertising 456703
$
49,200
$
-
$
(49,200)
Off -Ice Revenue 456704
$
15,000
$
498,000
$
483,000
Misc Cube Revenue 456705
$
7,060
$
36,100
$
29,040
Subtotal
$
2,064,738
$
3,687,052
$
1,622,314
City Revenues
City Merchandise 456206
$
-
$
700
$
700
Sponsorship Revenue 456611
$
125,000
$
134,100
$
9,100
Rental Income - Misc 431107
$
42,544
$
84,544
$
42,000
Subtotal
$
167,544
$
219,344
$
51,800
TOTAL REVISED REVENUE
$
2,232,282
$
3,906,396
$
1,674,114
Contractor Operator Expenses
Ice Rink Operations 1205120-516139
$
1,366,457
$
1,819,078
$
452,621
Revenue Share 1205120-516140
$
-
$
130,776
$
130,776
Subtotal
$
1,366,457
$
1,949,854
$
583,396
City Expenditures
Electric Utilities 1205120-513101
$
200,000
$
425,000
$
225,000
Gas Utilities 1205120-513102
$
32,000
$
62,000
$
30,000
Subtotal
$
232,000
$
487,000
$
255,000
TOTAL REVISED EXPENDITURES
$
1,598,457
$
2,436,854
$
838,396
ET CHANGE TO OPERATION
$
633,825
$
1,469,542
$
835,718
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