ARTS & VENUES DENVER
2012 BUSINESS PLAN
AVD STRATEGIC BUSINESS PLAN SUMMARY
Mission/Vision Statements
Vision:
Mission:
Building Denver’s communities through arts and performances
To enhance Denver’s quality of life and economic vitality through premier public
venues, artworks, and entertainment opportunities
Strategic Objectives:
To achieve the Arts & Venues Denver mission and vision – as well as fulfilling the Mayor’s promise
to make Denver a world-class city where everyone matters – the Agency has established the
following objectives:
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Provide quality performance venues (safe/affordable/clean/comfortable)
Stimulate economic development and ensure the Agency’s financial sustainability
Connect citizens with diverse art experiences
Satisfy our many patrons and partners
Ensure every team member is critical to our success
Business Overview
Arts & Venues Denver (AVD) operates City-owned performance venues and oversees Citysponsored cultural and public art programs. The agency also coordinates economic development
initiatives in the creative sector. Through collaboration with key cultural constituents and private
sector presenters, AVD offers a unique array of entertainment and cultural opportunities and strives
to live up to its motto of “Building Unique Denver Connections,” supporting the Mayor’s overall
vision for “Creating a world-class city where everyone matters.”
The key venues under AVD’s care are: Colorado Convention Center including the Wells Fargo
Theater; Crossroads Theater; Denver Coliseum; Denver Performing Arts Complex including
Boettcher Concert Hall, Buell Theatre, Ellie Caulkins Opera House; McNichols Building and Red
Rocks Amphitheatre. Principal cultural programs include: One Book One Denver; Five Points
Jazz Festival; Doors Open Denver; and numerous concert, festival and arts events which are
customized annually. The principal focus in creative sector development is the annual Create
Denver program which fosters the growth of creative businesses and industries.
There are 72 full-time City employees in the agency, including two mayoral appointees. They work
in five different locations and have an average tenure of ten years. Due to the episodic nature of
the performances and arts/culture events, AVD also employs several hundred contractors and “oncall” staff for maintenance, security, usher and food and beverage service at AVD venues.
In June 2011, AVD was formed through the merger of two City agencies: the Denver Office of
Cultural Affairs and the Division of Theatres and Arenas. The former had been funded through the
City’s General Fund and had seen steady budget cuts over the recent past, while the latter’s
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steadily improving financial results had required only minimal support from the General Fund since
2008. Through the merger, the new Arts & Venues Denver should be able to pay the salaries and
operating expenses of both former agencies from its annual operating surplus, thus saving the City
$1.2m from the General Fund.
AVD does not operate today like a traditional municipal agency, with funding provided by General
Funds. Instead, its two main businesses reside in Special Revenue Funds. One of those funds
supports all of the activities above without any General Fund support.
The other fund houses the business of the Colorado Convention Center, which plays a crucial role
in stimulating economic development in the City by driving business in the hotel, transportation,
restaurant and related tourist businesses. This fund requires support from the General Fund at the
level of $2.5-3 m annually and that amount is expected to decline at a moderate rate over the next
five years.
Success and Risk Factors
Several factors contribute to AVD’s success. The variety and locations of city-owned
entertainment venues provide easy access to a number of entertainment options and city
amenities. The Denver Performing Arts Complex, with several theaters of varying size, has a
prime location on the resurgent 14th Street corridor with easy access to downtown from around the
metro area. The Colorado Convention Center and McNichols Building in Civic Center Park, just
down 14th Street, have the same desirable city center location, within easy walking distance of
many hotels and restaurants. The historic Denver Coliseum has easy highway access and is
walking distance from the National Western complex. Finally, just a short drive from downtown
Denver, the iconic Red Rocks Park and Amphitheatre symbolizes Denver’s place at the foot of the
Rockies and the venue’s history ensures legendary status with promoters, patrons and performers.
AVD has built a solid reputation for providing safe, comfortable and well-managed venues. Event
bookers return to the venues time after time, knowing that the venues are cared for and fan
experiences will be exceptional. City ownership of these facilities is likewise meaningful to the
city’s citizens. Reputation is also a reason for the success of AVD’s events. Over many years, the
staff of AVD has built a legacy of delivering a wide array of programs using very limited resources.
The staff has very strong links into the community and participate in various arts, entertainment,
education and creative sector forums both locally and nationally.
There are a number of risks to agency operations. Principal among these is the fact that AVD
competes directly with private sector firms with many more resources and much more flexibility
than Denver, or any municipality, has. This list of what AVD needs, and competitors have,
includes: ready access to capital, speedy decision-making, more flexible work rules, volume
discount opportunities, inability to get favorable terms from product/service providers that are part
of vertically integrated companies, and efficient contracting processes. Perhaps the most
significant risk is the ongoing struggle to get adequate capital funding for both routine maintenance
and building upgrades for facilities in which the City has invested more than $1B to date.
Challenges related to arts programming are related to simply processing work in an environment
where community input is essential. Not surprisingly, in a city of millions, there are a like number of
opinions regarding arts and culture. The input is time-consuming, often conflicting and carries the
significant risk of disappointing some whose input cannot be accommodated. The very modest
program budgets for these programs also pose a challenge, as many non-profit groups have
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clearly looked to AVD to support their initiatives with both human and financial resources. This has
been virtually impossible to do, given AVD’s finite resources in relation to the number of programs
it delivers each year.
Current Situation
Over the past several years, AVD has had very strong results, driven principally by robust
attendance at Red Rocks Amphitheatre and successful Broadway shows performed at the Buell
Theatre. With prudent management of costs and a continued supply of good shows for these two
venues, AVD should be able to fund its own operations without a General Fund transfer. That said,
AVD competes directly with private sector venues such Comfort Dental Amphitheater in
Greenwood Village, First Bank Center in Broomfield, Pepsi Center, the National Western complex
and a host of smaller concert venues such as the University of Denver’s Newman Center and
Magness Arena, and the Paramount, Ogden, Bluebird and Fillmore theaters, among others. Even
in this very competitive environment, AVD has achieved the following in the past three years:
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Autonomy for Arts & Venues from the City’s General Fund
The merger of the Denver Office of Cultural Affairs with the Division of Theaters and
Arenas in a sustainable format
Expansion of the Agency’s cultural offerings, concerts and exhibits to encompass a wider
diversity of citizens and programs
While the Arts & Venues Denver operates more autonomously than many City agencies, due to its
Special Revenue Fund structure, it does not have the agility to directly compete on every level with
the private sector providers in the venue business. Nowhere is this more apparent than when
discussing the issue of how to protect the small operating surplus which is typically generated
annually when revenues exceed expenses. This surplus has risen to a fairly healthy level over the
past 3-4 years and the Agency has proposed to BMO that $5.0M from this surplus be moved into a
reserve to be used for capital improvements that arise annually for the Agency’s many facilities.
Just in the past year, the Agency has had to fund a $2.1M improvement at Red Rocks and
contribute to a $1.0M renovation of the McNichols Building. Had the Agency not had a cushion in
its operating reserve, these internally funded improvements would not have been possible. For
instance, AVD currently is coping with costs from extensive wind damage at the Colorado
Convention Center – an example of the need for the Agency to have flexibility to manage both
near-term and longer-term building improvements, ranging from emergencies to planned upgrades.
The key issue is that while there have been several good years of increasing revenue at the
Agency’s venues; it is far from a guaranteed trend. So, establishing a permanent reserve ensures
that AVD can fund its capital requirements in a timely manner. Communication on these funding
plans would still be coordinated with BMO and, where relevant, Public Works.
Related to this request for a permanent fund is the need to recognize that each venue has its own
unique business opportunity, serves unique arts and cultural audiences but may not have an
immediate path to profitability. For instance, when AVD was directed to take on the McNichols
Building during the Hickenlooper administration, $1M was allocated from the Agency’s operating
reserve, but there was no source provided for future capital needs – needs that are significant in a
building more than a century old. Nor was there a way to protect the Agency’s downside in
providing a positive cash flow and current use indicates the likelihood of an operating loss. Rather,
the city’s order to assume responsibility for McNichols requires that AVD use its annual operating
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surplus from other venues to fund a building that was added to its portfolio without real regard for
building condition or use.
There are two opportunities in the current environment to ensure the continued successful
operation of the Agency. First, the Agency will need the support of the MO and City Council to
establish an operating reserve of $5.0M to fund future capital needs and a corollary process for “refilling” that reserve on an annual basis. Second, AVD and the City should ensure that buildings
and venues aren’t brought online—whether a McNichols Building or Ruby Hill Park Pavilion, to give
two examples—without ensuring there is a clear path to operating the venue and funding future
capital needs.
AVD continues to shift its organization to adapt to merger-driven budget and program needs. The
merger’s $1.2M in savings to the City’s General Fund has become a permanent cost to AVD and
covering these costs, without disrupting venue maintenance or programming, is a priority. The
Agency’s business plan must ensure the means to meet these needs. The most near term
opportunity is the careful negotiation of upcoming contracts which could result in increased
revenue to the agency. One covers the expiring Aramark contract for both building maintenance
and food and beverage provision at Red Rocks Amphitheatre and the Denver Coliseum. The other
is for the expiring Centerplate food and beverage contract at the Colorado Convention Center and
the Denver Performing Arts Complex.
MARKET ANALYSIS
Market summary and Competition
The metro Denver market is characterized as the fourth largest, per capita, concert-going city in the
nation. Denver is the 17th largest media market in the US, and has a population which actively
spends in the entertainment sector including sports, concerts, film, theater and outdoor activities.
The market is highly competitive with residents having entertainment choices among seven pro
sports teams, four local university sports programs, outdoor sports including a robust ski industry,
an active theater and museum community and dozens of smaller live music venues. As a venue
owner-operator, there are a number of venues competing for bookings, fans and sponsorship
dollars including venues of similar sizes owned and operated by Kroenke Sports Enterprises (Pepsi
Center, Paramount Theatre, FirstBank Center, Dick’s Sporting Goods Park), AEG Live (Bluebird
Theater, Ogden Theater), Live Nation (Fillmore Theater, Comfort Dental Amphitheatre), University
of Denver Magness Arena and Newman Center and a number of other sports and entertainment
venues. As number of arts facilities are considered competition including new facilities such as
Lone Tree Arts Center and the Parker Arts Culture & Event Center and older venues like the
Arvada Center, Botanic Gardens, and Hudson Gardens.
Competition for discretionary dollars spent in AVD buildings includes events at each of the
aforementioned venues, but often comes at the expense of tickets sold at AVD buildings too.
Family shows, theater, concerts, rodeos and other specialty acts all compete for dollars. Even free
events promoted by AVD receive competition from the large number of festivals and events
sponsored by other groups.
In spite of this competition, the City and County of Denver owns and manages a wide variety of
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public assembly facilities with many of them being industry leaders: Red Rocks continues to be one
of the most desirable venues for bands and fans alike; the Buell Theatre is one of the top
Broadway touring venues in the region and country; and the Ellie Caulkins Opera House is
unmatched in acoustics and design regionally. Locally, each of AVD’s venues meets a specific
need as well as being flexible enough to accommodate a wide range of activities.
Customer evaluation decisions
Customer evaluation decisions at the consumer level are rarely influenced by the venue – a fan will
attend the show regardless of where it is booked. The booker as a customer has terrific input
regarding where to book shows and these decisions may be based on venue size, venue age,
venue appeal, venue access, booking sales arrangements, percentages allowed to promoters,
availability of marketing support, legacy of venue and other factors.
INDUSTRY TRENDS
Industry overview
The entertainment and venues industries remain highly competitive. While sports and
entertainment are generally considered to be recession-proof, that hasn’t been the case during the
most recent recession. Now, the improving economy has provided for a resurgence in the music
touring industry and arts and entertainment spending. While full-scale arena tours are still rare,
mid-size and smaller acts continue to book and sell well at mid-level ticket price levels. Likewise,
spending for theater productions and in art galleries has begun to increase.
Changes in the industry
Technology has been a key contributor to changes in the industry. Consumers have more options
for their discretionary time from the advent of new technologies and the media content available.
This has not hurt the live entertainment industry but has enhanced it. Artists are able to develop
new audiences through digital media which then drives new live entertainment opportunities –
important since concert businesses have grown as the recording industry has lost sales. New
technologies also have made information more readily available, and have enhanced ticket sales
options and other revenue streams for businesses like AVD’s.
Other trends in the industry:
 The popularity of electronic and dance music has generated new business
 A focus on environmental sustainability has produced a number of opportunities
 It’s become acceptable to allow beverages in Broadway shows – allowing for greater sales
 Sponsorship evolution has resulted in better fan experiences at all of AVD’s venues
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Opportunities
 Continued exploitation of new technologies and improvements to AVD venues that enhance
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the customer’s experience
The possibility of self-promoting concerts and creating new events
New food and beverage contracts
Hockey at the Coliseum may be a catalyst for the building and the adjacent neighborhoods
The City has an opportunity to contribute on a larger scale to the citizens’ quality of life
Threats and risks and challenges
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Funding to maintain venues will be necessary to keep pace with new facilities and competitive
factors in the Denver market
Increased competition by development of new venues will increase competition
Loss of key tenants through financial problems or a change of venue creates a loss of revenue,
FDA tax, employment
Non-profit arts groups risk financial stability as they are particularly dependent on the overall
economy
MARKETING AND SALES
The marketing and communications group at Arts & Venues Denver serves as an in-house agency
providing full-service marketing, advertising and public relations functions.
The marketing strategy of the agency is to provide communications support that:
 drives attendance at AVD events and venues
 assists promoters and sponsors in selling tickets and activating brands
 brands venues as city assets
 builds awareness of cultural programs
 educates arts fans
 identifies arts and entertainment as relevant and vital to city life
 develops business in the creative sector
 enhances overall fan experience in any venue or through any event or program
AVD’s marketing group is committed to clear, educational and inspiring messaging.
Communications will invite the region’s residents to experience city-branded events and venues.
Sales strategies and tactics vary according to demographics, events and messaging. AVD will use
all appropriate media to reach City residents in a variety of demographics. The combined effort of
promotion, publicity and advertising – using traditional and new media, earned and paid – all will be
considered in opening events and venues to new participants and repeat customers.
AVD will make every effort to involve media as community partners in city-sponsored events and
venues, thereby providing cost savings and additional publicity for agency properties. AVD will
make every effort to enhance audience experiences through creative development of sponsor
activation. And, AVD will work to provide timely and relevant information through unified websites
and social media efforts.
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EVENT AND VENUE OPERATIONS
Buildings are just buildings until they are brought to life through activation. At the heart of AVD’s
function is making the City’s facilities available to showcase a wide variety of arts, entertainment
and human connections through music, sport, theater, dance, receptions, lectures and cultural,
educational and family programming.
AVD venues are rented by many clients (promoters and presenters) with varying frequency – some
rent once for special events and other use the facilities for regular programming. The following is a
sample of the AVD client roster:
 DCPA, Colorado Symphony Orchestra, Opera Colorado, Colorado Ballet
 AEG Live, Live Nation, Feld Entertainment (Ringling Bros. Circus, Disney on Ice)
 National Western Stock Show
 Colorado Hockey LLC (anticipated in 2012)
 Colorado High School Activities Association
 Denver March Pow Wow
 Colorado Public Television
 Denver Film Society
 Colorado Children’s Chorale
 Let’s Talk Entertainment
 Slam Nuba
 Visit Denver and City-wide conventions such as Microsoft, Ameriprise, Mass Mutual
AVD will work to expand this client roster and implement a number of processes that will improve
experiences for clients – both venue patrons and promoters. New concessions contracts,
wayfinding signage and video projection screens at select venues will improve general fan
experiences. Bookers will find the implementation of an online and mobile booking option to
expedite the booking process.
VENUE OVERVIEW
Denver Performing Arts Complex Galleria and Sculpture Park
The Galleria is located between the theatres of the Denver Performing Arts Complex (DPAC) and
provides protected pedestrian access to the Complex’s ten theatres, event spaces and parking
garage. The elevated walkway bridges 13th Street and is sheltered by an 80-ft tall curved glass
canopy that was installed in conjunction with the Temple Hoyne Buell Theatre construction in the
early 1990’s. The Sculpture Park, adjacent to the performing arts complex, is owned by Denver’s
Division of Parks and Recreation and managed by Arts & Venues. The park serves as the front
door to DPAC and is rented out by Arts & Venues for special events. The most recent large CIP
project was the Galleria paver replacement Phase 1 in 2010 for $500k. The second phase is
scheduled for Q3 2012.
Ellie Caulkins Opera House in Denver Performing Arts Complex
The Denver Municipal Auditorium, now called the Ellie Caulkins Opera House at the Quigg Newton
Denver Municipal Auditorium (“The Ellie”), was originally constructed in 1908 specifically to host
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the Democratic National Convention. The building was designed as a multi-purpose structure to
accommodate concerts, operas, theatrical shows, conventions, basketball games, auto shows and
circuses. The Auditorium underwent major renovations in 1955 and 1990, which eventually
reduced the seating capacity from a maximum of 12,000 to 2,065. Most recently, the City and
County of Denver raised $75 million to renovate the historic shell of the old Auditorium Theatre and
re-envision the lobby space. The theatre now seats 2,225 patrons on four levels. An event space
in the basement currently houses the Kevin Taylor’s at the Opera House restaurant.
Concessionaire services are provided by Centerplate. The most recent major construction entailed
the $2M bond project known as the Studio Loft on the 4th floor of the Ellie.
Chambers Grant Salon/Studio Loft: located in the Newton Auditorium along with the Ellie
Caulkins Opera House, these spaces serve as multi-function spaces for receptions, rehearsals,
and small performances
Buell Theatre in Denver Performing Arts Complex
“The Buell” is Denver’s choice for high-profile Broadway shows and is designed to provide the
audience with a first-rate theatrical experience. Originally part of the Denver Municipal Auditorium,
which was built to house the Democratic National Convention in 1908, the building was converted
to a basketball arena in 1953 and housed the ABA Denver Rockets and later the Denver Nuggets.
The building was transformed in 1990 into a theatre and now seats 2,884 patrons on three levels.
The Buell is a versatile venue and consistently ranks as one of the nation’s top grossing theatre
under 3,000 seats. The theatre is generally well maintained, and does not require any major
repairs. In 2008, all of the seats in the house were replaced, and in 2009, bar areas were updated
and expanded.
Boettcher Concert Hall in Denver Performing Arts Complex
Boettcher Concert Hall was completed and opened to the public in 1978. The Hall was designed to
closely mimic the state-of-the-art vineyard design of the Berliner Philharmonie, which opened in
1963 and received much praise for its original style and excellent acoustics. Unfortunately,
Boettcher Concert Hall did not achieve the acoustical success of the Philharmonie, and has
undergone several acoustical renovations in the last three decades.
In 2007, the citizens of the City and County of Denver voted to approve the Better Denver Bond
Program, a $400 million bond issuance that included $60 million dollars for renovations to
Boettcher Concert Hall. The Colorado Symphony agreed to provide at least $30 million of
additional funding for the project, but has since struggled to raise its portion of the funding.
Colorado Convention Center
The Colorado Convention Center consists of 2.2 million gross sf; 585,000 sf in the Exhibition Hall,
100,000 sf in 63 meeting spaces, 85,000 sf in two ballrooms and 5,000 sf in the Wells Fargo
Theatre. The complex is managed by SMG with concessionaire services provided by Centerplate.
The facility is supported by a total of 55 loading docks and 1,000 attached parking spaces and
hosts approximately 350 events a year. At a cost of $340 million, the Convention Center
underwent an expansion in 2004 that doubled its size. While the expansion was integrated
seamlessly into the original building both visually and functionally, the building systems were not
fully integrated at the time of the expansion. As such, many of the mechanical, electrical and
plumbing systems, as well as some of the finishes, are in need of upgrades. This is due largely to
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their age and not due to poor maintenance. Major projects in the last four years include partial roof
replacement ($2M), variable frequency drives ($900k), ballroom carpet and lighting upgrades
($800k), and card-reader door security ($400k).
Denver Coliseum
Construction on the Historic Denver Coliseum began in 1949 and was completed in 1952 at a cost
of $3 million. The building consists of approximately 122,400 sf in the main building and adjacent
Arcade, and seats a maximum of 10,500 patrons. The Barn provides an additional 60,000 sf of
unconditioned space adjacent to the Arcade. Four parking lots adjacent to the structure can
accommodate 2,604 cars. The Coliseum hosts an average of 120 events each year, including the
National Western Stock Show, which accounts for approximately 25% of total annual traffic to the
facility. While the Coliseum is profitable on an annual basis, it has not been mechanically upgraded
in nearly 60 years of service, and the adjoining 60,000 sf barn has experience several partial roof
collapses without significant structural reinforcement or renovation. The reinforced concrete
structure of the Coliseum is robust and has been well-maintained by the on-site maintenance staff.
The City completed a $7 million renovation of the Coliseum in 2002, but the building is in need of
significantly more upgrades to make it a truly viable alternative to Denver’s other indoor venues.
With a looming deal to bring a minor league hockey team to the Coliseum, the agency is poised to
spend some capital maintenance on hockey infrastructure. Within the next two years, the agency
also plans to add new hockey-specific dressing rooms, offices and a digital marquee along I-70.
Red Rocks Amphitheatre
Red Rocks Amphitheatre is a natural open-air theatre located 15 miles west of Denver, in the
foothills of the Rocky Mountains. It was completed in 1941 and is one of the most celebrated
outdoor amphitheatres in the country. Pollstar magazine, a leading music industry publication,
renamed its annual “best small outdoor venue” prize the Red Rocks Award after bestowing the
honor upon Red Rocks for the 11th time. The amphitheatre, which hosts 50-70 shows per year, is
part of the larger Red Rocks Park, an 868-acre municipal park that is managed by Denver’s
Division of Parks and Recreation and is the flagship of Denver’s storied Mountain Parks. The
seating bowl contains 70 tiered rows of bench seating with a maximum capacity of 9,450. The
amphitheatre is surrounded by towering natural sandstone formations, namely Creation Rock to
the north, Ship Rock to the south, and Stage Rock to the east.
The amphitheatre has undergone many renovations since its opening, but received its most recent
and significant update in 2002 when a new Visitor Center was constructed at the back of the
amphitheatre, a new water treatment and storage system was installed, and a new south
concessions building (the South Tower) was built. The North Tower was reconstructed in 2005.
Red Rocks has parking for 3,085 cars in six lots with additional curbside parking on the four access
roads. Water is collected, treated and stored onsite with a maximum of 14,000 gallons per day of
supply, 300,000 gallons of raw storage and 700,000 gallons of finished storage. During the peak of
the summer concert season, the facility collects up to 70,000 gallons of raw sewage per day, but is
only entitled to discharge 40,000 gallons per day to the Town of Morrison. A 180,000-gallon
sewage storage tank is located under one of the parking lots to handle “overflow,” but fines from
Morrison for over-discharging are frequent. As a remote outdoor amphitheatre with steep grades,
significant natural sandstone formations in close proximity to the patrons, limited space and
historical restrictions, Red Rocks presents unique operations and maintenance challenges, which
are outlined below.
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The complex under Arts & Venues management includes the amphitheatre, Visitor Center, Trading
Post, remote box office, water treatment plant, six parking lots and four access roads. The biggest
investment in 2012 involves construction of a new loading dock and access road for $1.8M. This
project provides a separation between truck delivery and patron access and thus will improve
operations and safety. By 2013, AVD, Parks and Public Works will have replaced the Road 2
Bridge. Looming large for CIP planning is water and sewer infrastructure. The agency should plan
to spend $5M within the next 5 years.
CULTURAL PROGRAMMING AND THE CREATIVE INDUSTRY
Create Denver 2012
Create Denver seeks to strengthen the overall health and vitality of Denver by supporting the
growth and development of the creative sector, including individual artists and creative enterprises
such as film, music, art galleries, art districts, fashion and graphic design.
Denver’s creative sector consists of more than 2,900 creative enterprises and employs
approximately 19,000 people in the city of Denver. The sector includes 8 distinct art districts, more
than 120 galleries, 160 performance venues, and approximately 180 film-related businesses.
Create Denver’s 2011 programming and accomplishments included, the annual Create Denver
Week and Expo, NxLevel for Creatives business development courses, the first annual Art District
Summit, Denver Gallery Guide online edition, Create Denver Revolving Loan Fund for creative
enterprises, and the Design by Colorado exhibit at Denver International Airport.
Cultural Events
Special events are a portion of the cultural programs departments. The events are free and open
to the public, are designed to address a need in underserved communities and to educate the
citizens of metro Denver about the rich cultural and artistic heritage of our community. Cultural
events include: The City Free Concert Series; One Book, One Denver; Denver Arts Week and the
Mayor’s Awards for Excellence in the Arts.
The City Free Concert Series consists of: The Five Points Jazz Festival, Independence Eve
Concert, Film Fiesta and the eight-week Skyline Park Concert Series. The Five Points Jazz
Festival annually draws 10,000 to 14,000 people to the Welton Street corridor for a day of food, fun
and jazz. This event, which takes place the third Saturday in May, is in its ninth year, and has
grown from a one venue concert to a street festival with six stages. The Independence Eve
Concert in Civic Center Park is in its third year and is by far the largest free concert in the city. The
concert is collaborative effort of Arts & Venues Denver, the Civic Center Conservancy and the
Colorado Symphony Orchestra. The 2011 attendance for this concert was estimated at nearly
100,000. Film Fiesta is in its second year and replaced the Latino Rhythms Heritage Festival. This
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four-week film series with performances, celebrates the variety of the Latino culture in Denver.
Finally, the Skyline Park concert series takes place weekly in the months of July and August with a
variety of bands playing in each week.
One Book, One Denver is a community reading program developed by Mayor Hickenlooper. There
are three separate programs designed for different age groups. Preschool One Book, One Denver
is geared toward children age 3-5 and takes place in mid-April during The Week of the Small Child,
Youth One Book, One Denver (new in 2012) is geared toward children ages 9-12 and will take
place in June and One Book, One Denver is geared toward high school age students and adults
who are occasional readers and takes place in September and October. For all programs the
community is invited to get involved in a citywide book club. There are readings and book
discussions, as well as other activities that are related to the book.
Arts & Venues Denver participates in Denver Arts Week with two events. The Mayor’s Awards for
Excellence in the Arts ceremony is the kickoff event to Denver Arts Week and celebrates
individuals and organizations that have made a significant contribution to the arts in the City and
County of Denver. The second event, called “Under the Glasstop,” brings performers into the
Denver Performing Arts Complex for a day of free entertainment that celebrates the performing arts
in the City and County of Denver.
Growing attendance and adding programming will be a focus on all programs, but in particular,
goals for the next 12 months include:
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Increase attendance to all existing programs by at least 10%
Develop 2-day Five Points Jazz Festival for 2013
Develop dance festival for 1st quarter 2013
A major 2012 goal of the agency will be to start the process of defining a large scale cultural plan
for the City. A number of cities have roadmaps for creating and nurturing arts and Denver will be
well served by engaging a number of publics in similar discussions.
Denver Public Art Program
Denver’s Public Art Program was established in 1988 under Mayor Federico Peña. The intent of
the program was to “…expand the opportunities for Denver residents to experience art in public
places, thereby creating more visually pleasing and human environments.” The Order directed that
1% of the construction budget of any capital improvement project over $1 million undertaken by the
City be set aside for the inclusion of art in the design and construction of new projects and
encouraged the participation of private dollars to enhance this public commitment. The Public Art
Ordinance has enabled the City to acquire and display more than 300 works of art in Denver’s
parks, recreation centers, civic buildings and streetscapes. In 2011 alone, the public art team
installed 25 new and unique works of art in 11 locations.
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Urban Arts Fund
The 2007 Graffiti Task Force Prevention Subcommittee identified a need for programs and
initiatives to “reduce the likelihood of graffiti offenses and outline roles and responsibility for
stakeholders to prevent graffiti vandalism.” This program funds education programs with youth
who create murals in target neighborhoods.
Tier III Administrative Support
AVD staffs the annual submission of grant requests for the 100+ Tier III arts and science
non-profits who receive funding from SCFD. This includes supporting the Denver County
Cultural Council and providing technical support to the Tier III grantees.
AVD FINANCIAL OVERVIEW
The majority of the financial operations of Arts & Venues Denver are reported in Special Revenue
Fund (“SRF”) 15815. The Colorado Convention Center financial operations are segregated in SRF
15607. Arts & Venues Denver also encompasses a number of additional special revenue funds
and capital improvement funds that finance improvements to the venues. A consolidated AVD
summary is presented below.
ARTS & VENUES FUNDS
OPERATING FUNDS
DONATION FUNDS / SPECIAL PURPOSE FUNDS
CAPITAL IMPROVEMENT FUNDS
Arts & Venues
Special Revenue
Fund 15815
Preserve The Rocks
Donations
Special Revenue Fund
Fund 15714
Quigg Newton Auditorium
Donations
Special Revenue Fund
Fund 15717
Arts & Venues Capital
Projects Fund
Fund 39010
Boettcher Concert Hall
Maintenance Fund ($20M)
Fund 37110
Colorado Convention Center
Special Revenue
Fund 15607
Temple Hoyne Buell Theatre
Donations
Special Revenue
Fund 15718
Boettcher Concert Hall
Donations
Special Revenue
Fund 15719
Chambers Grant Salon
Grant
Fund 38186
Boettcher Concert Hall
Maintenance
Fund 37140
($40M)
DOCA Donations Program
Special Revenue
Fund 11718
Cultural Capital
Maintenance Fund
(AVD Share)
Fund 34995
Other Agency Capital
Projects
Fund 34080
Arts & Venues Denver generates revenue primarily through the rental of the facilities and
equipment within the facilities, commission payments from concessionaires on food, beverage and
merchandise sold in venues, parking fees generated from parking lots and garages adjacent to the
facilities, and reimbursed stagehand, usher, and other labor costs. Additional revenue is derived
from cultural tourism, corporate sponsorship, and advertising sales, as well as gifts and donations
to the agency.
Approximately half of Arts & Venues Denver expenditures are variable with event activity and
revenue; stagehand, usher and other labor expenses increase or decrease relative to the number
of events booked in venues. In addition to labor expenditures (for both full time and contract labor),
Arts & Venues Denver incurs professional service expenditures, supplies expenditures, capital
equipment expenditures, and other government services (utilities, printing, phones, technology
service support, fleet charges, etc.) A forecast of revenue and expenditures is included below.
Page | 12
SPECIAL REVENUE FUND 15815
TOTAL ASSETS
$
TOTAL LIABILITIES
$
BEGINNING FUND BALANCE
ADD (SUBTRACT): NET REVENUE (EXPENDITURES)
TRANSFERS FROM FUND BALANCE
2009 ACTUAL
2010 ACTUAL
2011 ACTUAL
2012 BUDGET 2013 ESTIMATE 2014 ESTIMATE
2015 ESTIMATE
7,959,311 $
9,854,595 $
11,862,727 $
5,700,000 $
5,700,000 $
5,700,000 $
5,700,000
(1,332,706) $
(4,563,796.03)
(2,062,808.55)
-
(1,177,241) $
(6,652,314.64)
(2,578,038.91)
553,000
(2,007,609)
(1,200,000)
(1,200,000)
(1,200,000)
(1,200,000)
(8,677,353.55)
(3,268,393.20)
2,125,000
(9,820,747)
(47,500)
5,368,247
(4,500,000)
(462,600)
462,600
(4,500,000)
(419,500)
419,500
(4,500,000)
(483,700)
483,700
(4,500,000) $
(5,700,000)
(4,500,000) $
(5,700,000)
(4,500,000) $
(5,700,000)
(4,500,000)
(5,700,000)
ENDING FUND BALANCE
LIABILITIES + FUND BALANCE
$ (6,626,604.58) $ (8,677,353.55) $ (9,820,746.75) $
$ (7,959,311) $
(9,854,595) $
(11,828,356)
TOTAL REVENUE
$
(20,979,533) $
(20,678,890) $
(22,885,050) $
(21,044,600)
(21,602,600)
(22,149,500)
(22,683,700)
$
$
4,808,901 $
10,923,006
670,099
366,077
2,148,641
18,916,724 $
4,429,999 $
10,608,783
697,590
155,770
2,208,710
18,100,852 $
4,882,802 $
11,603,426
738,196
22,403
2,369,829
19,616,657 $
5,712,700 $
13,402,900
789,400
387,700
704,400
20,997,100 $
5,700,000 $
13,500,000
800,000
400,000
740,000 $
21,140,000 $
6,000,000 $
13,700,000
825,000
425,000
780,000 $
21,730,000 $
6,200,000
13,900,000
850,000
450,000
800,000
22,200,000
$
(2,062,809) $
(2,578,039) $
(3,268,393) $
(47,500) $
(462,600) $
(419,500) $
(483,700)
EXPENDITURES
TOTAL SALARY AND RELATED
TOTAL SERVICES
TOTAL SUPPLIES
TOTAL CAPITAL EQUIPMENT
TOTAL GOVT. AND OTHER
TOTAL EXPENDITURES
NET (REVENUE) EXPENDITURES
Assumptions and comments / MD&A
The financial forecast assumes some material operational changes in a number of AVD venues.
These items include:
 Coliseum Hockey team plays 31 events with attendance of and FDA tax of $100,000.
 Crossroads Theatre lease is not extended past 12/31/2012. This results in higher per event
revenue and expenditure metrics through the forecast period.
 Boettcher construction, during which time the venue would be closed for an extended period,
resulting in lost revenue, is not included in the financial forecast for AVD.
 McNichols Building costs are not included in the financial forecast.
 Utilities are accounted for in services and supplies expense beginning 2012 forward through
the projection period and in Other Governmental Expenditures prior to 2012.
 Cultural Programming funding is fixed throughout the projection period at $1.2M per year.
Revenue Surplus / Fund Balance Discussion
The financial projection above illustrates that for the past three years, AVD has surplus revenue in
excess of expenditures in SRF 15815. This is due to a variety of factors, including operating
efficiencies and improvements, increased food and beverage commission percentages, and
recurring seasons with a high number of popular commercial events booked in the Buell Theatre
and at Red Rocks Amphitheatre. Some of these efficiencies (ex. changes in food and beverage
contracts) will shift the burden of providing maintenance funds to support infrastructure from the
vendor to the City in return for higher revenues. Because of these revenue surpluses, AVD
management was confident in the ability to merge the former DOCA with Theatres and Arenas to
form the consolidated AVD agency. As noted previously, this merger saves the General Fund over
$1.2M annually, but will in turn reduce future AVD operating surpluses in SRF 15815.
In late 2010, AVD management, working with the BMO, developed a policy to further leverage the
operating surpluses by using SRF 15815 accumulated fund balance to finance venue
improvements. In early 2010, $553,000 was transferred from SRF 15815 fund balance to retire a
capital lease obligation for the ECOH opera translation system, saving over $100,000 in future
interest expense. In 2011, $1M of fund balance was dedicated to renovation the McNichols
building in order to receive a $1M matching grant from the Boettcher Foundation. An additional
$1.125M was dedicated to fund a service road and loading dock project at Red Rocks, a project
that will greatly enhance the efficiency of the Food and Beverage operations and safety at the Red
Page | 13
Rocks Visitors Center. These venue improvements, combined with the integration of the former
DOCA and its $1.2M annual budget, reduce accumulated operating fund balance with strategic
investments in venue improvements.
Key financial metrics
A summary of the forecast Key Performance Indicators (“KPI”) is presented below:
Consolidated AVD Venues
Attendance at All Venues
Events held at All Venues
2009 ACTUAL
1,740,052
698
FDA Tax receipts at All Venues 2
Avg. Attendance per Event
Avg. FDA Tax per Event
Avg. Gross Revenue per Event
Avg. Consolidated Expense per Event
$
$
$
$
5,920,277
2,493
8,482
30,057
27,101
2010 ACTUAL
1,696,199
732
$
$
$
$
6,022,236
2,317
8,227
28,250
24,728
2011 ACTUAL 2012 BUDGET 2013 FORECAST 2014 FORECAST 2015 FORECAST
1,706,638
1,712,573
1,855,000
1,855,000
1,855,000
755
810
653
653
653
$
$
$
$
6,361,888
2,260
8,426
30,311
25,982
$
$
$
$
5,853,500
2,114
7,227
25,981
25,922
$
$
$
$
6,175,000
2,841
9,456
33,082
32,374
$
$
$
$
6,175,000
2,841
9,456
33,920
33,277
$
$
$
$
6,175,000
2,841
9,456
34,738
33,997
As the table below illustrates, AVD anticipates greater attendance, gross revenue, and FDA Tax
receipts through the projection period.
Capital Construction and Maintenance Funding
For the past four years, AVD received funding for venue Capital Improvement Projects (“CIP”) from
a variety of sources, including bonds (for major venue construction projects), donation funds, grant
funds, and the City’s Entertainment and Cultural Capital Projects Fund (ECCPF) 39010. The
historical trends clearly illustrate declining sources and amounts of funding available to make
improvements in the venues. AVD tracks all capital and maintenance spending with a unique “Org”
within the City’s financial accounting system (3050102) and a history of agency spending and the
funding sources is included below.
AVD Venue Capital and Maintenance Expenditures
By Funding Source and Amount
Org 3050102
Venue Improvement Fund Sources
Private Grant Funds
Donation Funds
Bond Funds
Mill Levy Funds
Surplus Seat Tax / ECCPF Funds
Total Venue Improvement Funds Expended
2008
2009
2010
2011
$ 1,652,772 $ 1,199,698 $
331,918 $
926,947
800,921
14,256
193,943
1,718,198
906,779
1,309,894
1,069,822
317,297
852,085
980,055
4,252,495
3,776,112
2,983,922
1,854,154
$ 8,550,412 $ 7,000,808 $ 5,492,075 $ 4,097,974
Page | 14
Surplus Seat Tax /
ECCPF Funds
$9,000,000
$8,000,000
Mill Levy Funds
$7,000,000
$6,000,000
Bond Funds
$5,000,000
$4,000,000
Donation Funds
$3,000,000
$2,000,000
Private Grant Funds
$1,000,000
$0
2008
2009
2010
2011
Venue Improvement
Fund Sources
The primary source of funding for AVD venue maintenance is from the City’s Facilities
Development Admission Tax (“FDA Tax” or “Seat Tax”), a 10% tax on the purchase price of
ticketed admissions to events held in or on City of Denver owned property. This tax was
Established in 1975 for the purpose of “...payment of expenses in acquiring, constructing, installing,
maintaining, repairing, operating, or improving facilities of the city.” [Chapter 53, Article VII of the
DRMC [53-341 through 53-395].
The Treasurer collects the tax and deposits these funds into an apportioned account from which
they are first applied to service two outstanding AVD debt issues: the 2003A Buell Theatre Excise
Tax Refunding Bonds and the Quigg Newton Auditorium Theatre 2003B COP lease payment. The
total of these two annual debt obligations is approximately $5M. Seat Tax collected in excess of
these two debt service payments may be used to improve City entertainment and cultural facilities
(“surplus seat tax”). The amount of surplus seat tax has declined since 2008, the last year the City
received an annual $2.8M payment from the Denver Broncos pursuant to a ten year agreement to
build Invesco Field.
In addition to funding the agency’s capital improvement projects, surplus seat tax revenue supports
annual CIP improvements to the Helen Bonfils Theatre Complex (“HBTC”), the National Western
Complex (“NWC”), and the Denver Botanic Gardens (“DBG”) equal to the amount of FDA tax
collected in each facility during the previous calendar year. In recent years, the BMO has
supplemented surplus seat tax with Mill Levy funding to support venue capital improvement
projects for AVD venues.
The surplus seat tax and supplemental Mill Levy Funding currently provides approximately $3M per
year for AVD venue maintenance, an insufficient amount to maintain AVD venues at historical
maintenance levels or desired service levels for patrons, promoters and performers. Furthermore,
the lack of adequate CIP and maintenance funding for the existing portfolio of venues will inhibit or
altogether eliminate any future expansion of public assembly venues until a new dedicated
maintenance funding source is identified.
Page | 15
New Special Revenue Fund
AVD management strongly recommends establishing a new SRF that is funded by excess
operating revenue from SRF 15815 to support necessary venue improvements. Such a policy is
consistent with historical practices as previously mentioned, but would not necessitate recurring
ordinances in the future to provide additional funding sources for future venue improvements. This
financial forecast assumes such a new policy is established to sweep excess operating funds (fund
balance over $4.5M) from SRF 15815 into a new special revenue fund dedicated for operating and
capital improvements in the venues. The financial projection therefore assumes a level end of year
$4.5M fund balance is maintained in SRF 15815 throughout the projection period.
AVD SRF 15815
ACCUMULATED REVENUE SURPLUS
DEDICATED TO VENUE IMPROVEMENTS
2009
2010
2011
2012
2013
2014
2015
$ 6,626,605 $ 9,230,354 $ 11,945,747 $ 9,868,247 $ 4,962,600 $ 4,919,500 $ 4,983,700
553,000
2,125,000 5,368,247
462,600
419,500
483,700
12/31 AVD FUND BALANCE (SRF 15815)
$ 6,626,605 $ 8,677,354 $ 9,820,747 $ 4,500,000 $ 4,500,000 $ 4,500,000 $ 4,500,000
$16,000,000
DEDICATED TO VENUE
IMPROVEMENTS
$14,000,000
$12,000,000
$10,000,000
$8,000,000
ACCUMULATED
REVENUE SURPLUS
$6,000,000
$4,000,000
$2,000,000
$0
2009
2010
2011
2012
2013
2014
2015
In addition, based on the event forecast, attendance projections, and FDA Tax revenue and
surplus forecast, the aforementioned financial projection assumes that surplus seat tax and mill
levy funding will be available to support the AVD capital improvement program at a level of $4M
per year. This is believed to be the minimum level required to maintain the existing portfolio of
venues current levels of service. A summary of the FDA Tax sources and uses is presented
below.
Page | 16
FDA TAX COLLECTIONS AND USES
2009- 2015
SOURCES OF FDA TAX REVENUE
Football Stadium Annual Payment
Convention Center
DCPA Helen Bonfils
Boettcher Hall
Buell Theatre
Ellie Caulkins Opera House
Crossroads Theatre
Coliseum
Red Rocks Amphiheatre
National Western
Denver Botanical Gardens
Other / Unallocated to Venue
TOTAL FDA TAX COLLECTIONS
OTHER SOURCES OF REVENUE
Interest Earnings (Fund 39010)
Mill Levy Money (Funds 34080 and 34995)
TOTAL OTHER SOURCES OF REVENUE
TOTAL REVENUE FROM ALL SOURCES
ACTUAL 2009 ACTUAL 2010 ACTUAL 2011 BUDGET 2012 ESTIMATED 2013 ESTIMATED 2014 ESTIMATED 2015
554,119
465,228
597,148
500,000
500,000
500,000
500,000
490,278
576,222
562,703
550,000
550,000
550,000
550,000
387,506
472,002
560,665
500,000
500,000
500,000
500,000
2,737,510
2,183,482
2,532,078
2,200,000
2,400,000
2,400,000
2,400,000
481,473
555,308
479,503
500,000
500,000
500,000
500,000
1,911
1,102
3,500
799,505
646,230
569,810
650,000
675,000
675,000
675,000
1,514,283
2,145,476
2,183,193
2,000,000
2,100,000
2,100,000
2,100,000
67,559
75,562
358,192
85,000
358,000
358,000
358,000
139,053
113,580
125,416
120,000
120,000
120,000
120,000
17,827
35,537
$7,171,285
$7,252,828
$8,005,347
$7,108,500
$7,703,000
$7,703,000
$7,703,000
$
112,918 $
33,164 $
38,795 $
500,000
1,040,000
1,455,000
$
612,918 $ 1,073,164 $ 1,493,795 $
$ 7,784,203 $ 8,325,992 $ 9,499,142 $
35,000 $
1,215,000
1,250,000 $
8,358,500 $
35,000 $
2,543,021
2,578,021 $
10,281,021 $
35,000 $
2,672,831
2,707,831 $
10,410,831 $
35,000
2,672,800
2,707,800
10,410,800
$ 3,054,136 $ 2,558,136 $ 2,857,906 $
USES OF FUNDS
Payments for Excise Debt (1st Priority)
Pmts for Auditorium 2003 COP debt
3,716,794
3,054,243 $
3,057,731 $
3,054,131 $
3,053,600
1,998,931
1,912,031
1,942,531
2,176,981
2,328,700
2,329,200
117,565
139,053
113,580
125,416
120,000
120,000
194,364
358,190
358,000
358,000
576,222
562,703
550,000
5,880,940 $
6,281,021 $
6,410,831 $
6,410,800
2,477,560 $
4,000,000 $
4,000,000 $
4,000,000
APPROPRIATION FOR CIP
Botanic Gardens
$
116,401 $
NW Allocation
470,017
DCPA Helen Bonfils
TOTAL USES OF FUNDS
455,374
490,278
$ 7,357,348 $ 5,130,007 $ 5,399,268 $
SURPLUS SEAT TAX AVAILABLE FOR A&VD CIP
IMPROVEMENTS
$
426,855 $ 3,195,985 $ 4,099,874 $
550,000
As the exhibit above clearly illustrates, a significant increase in Mill Levy funding will be required to
maintain an annual $4M CIP program to maintain AVD venues.
Page | 17