Special Bd. of Aldermen — 5/2/17 Page 6
programmer, a professional individual or firm, that is contracted to do some of the riskier part of the building
which is generally about booking arts and entertainment programs and taking the risk associated with that. We
had a couple of discussions with firms based in New Hampshire, Massachusetts, that have expressed interest
in programming and perhaps even operating this.
We think this is a good direction to go. The City has the ability to recruit the skills and resources necessary
and your mandate to serve local residents is consistent with the goals that we have established. That
foundation is very important. It is a way for you to bring private sector leaders to the project and get their
support in getting this up and running. The best thing about budgeting this outside programmer is you can use
the completive bid process, a RFP process essentially, to recruit that programmer and partner.
In our written report, we have written extensively on operating policy. A lot of this came out of the charrettes
and meetings we had with local arts organizations. We have written about how access is managed who gets
first dibs on dates, how to set rental rates and fees, the idea of having some resident users, groups that get
preferred cost of access and first crack at the calendar, the importance of ticketing systems and the analytics
that come with them, food and beverage operations, not just for traditional concessions but importantly for
catering support and even daytime food and beverage operations. We believe Nashua has the kind of
community that can provide significant volunteers support for not only leading on boards and advisory groups
but also supporting the day-to-day operations. Finally, we stressed the importance of green operations, being
environmentally sensitive in a way that the building is operating, particularly given that we are starting with an
adaptive reuse opportunity. We set a staffing plan. The blue boxes are fulltime staff, yellow are part-time and
red are event staff. We put the City on top, but this chart works no matter who the operator of the building is.
The most important part of our work in this round was developing a pro-forma operating budget which is
suggesting how the building is sustained over a period of time. This is a live, excel-based model and after
tonight we will be handing this spreadsheet over to you so you can play with it because it is the kind of thing
you can say what if we increase the capacity by 100 seats. What does that do to the bottom line?
The theory of these pro-formaas is it’s all about projecting activity. We can project how many times there will be
rentals at different price points. How many times there will be presented events, meetings, weddings/ We can
get a pretty good handle on sales which then allows us to project expenses. We have developed this budget
on the assumption that you want to hit the ground running and you will spend significant capital dollars. The
operating budget is based on the idea that the day you open, you are fully staffed. You have a full set of
programs ready to go. You have an option to take a slower approach to getting the building going. You can
decide to be a little bit more cautious and conservative and have a smaller staff and gear up in a more
incremental fashion over the first few years. We formed our budgets by looking at a lot of other buildings in the
regions. These are some examples of other buildings in New Hampshire, Vermont, Connecticut to estimate.
We estimated activity, the key step, so in our main theatre, we are being very conservative. We are estimating
in the first year about 172 days of use with about 76 performances. That grows to almost 200 days of use by
year five. | think we’re being very conservative with this and leaving significant capacity for growth. The multi-
purpose space, we’re also being very conservative around the level of utilization. Even with that, you will see
in the first year, there are 25,000 people coming to performances and that grows to almost 30,000 by the fifth
year. That activity then leads to our estimates of rental revenue for the building.
This is a summary of the budget, itself. It shows in the first year earned revenue, rentals and ticket income and
food and beverage, is about $700,000. That grows to $850,000 by year five. The operating expenses that go
with that start at about $900,000 in year one and grow to a little over $1 million by year five. We are basically
cover three-quarters of the operating budget with earned revenue from the beginning and that percentage
increases to 80 percent by that fifth year. What that leaves is contributed income. Some people may look at
that and say we’re coming up short so we have to chip in some more money. The way | would like you to think
of itis this building is delivering value to your community, value that warrants ongoing support. We have
estimated contributed income from individual appropriations, a little bit from foundations, and a little bit from
