City Council Meeting: June 6, 2022

are live. Good afternoon everyone. Welcome to the JUNE six twenty twenty meeting special meeting of the past the city council. This agenda is fairly limited but before we get going, why don't we call the roll? Thank you mayor. COUNCILMAN Hampton council member hampton left me here. Uh, COUNCILMAN Kenny is not yet here. COUNCILMAN Madison here. COUNCILMAN MR. Here COUNCILMAN Reeves here. COUNCILMAN Williams, you're vice mayor wilson here. Mayor gordo here. There's a quorum of the council present. MR. Henderson, will you lead us in the pledge of allegiance? Uh, did you see me, mayor? Oh, no, I'm sorry MR. Havoline . Oh, good. The flag of the united states of america and to the republic for which is the one nation under GOD indivisible with liberty and justice for all that you started I I guess it's over ok, um let's go ahead and are there any cards related to either one of the items we do uh so we have an idea yes. Uh we do have at least one speaker card for item number two. Ok um just refresh to make sure and that's still ok so let's let's go ahead and uh jump into the agenda. We have two items. One item has been before us that's the budget and so we all have that in mind. We have the materials in mind. That's item one the main event is item two in looking to the future of the rboc and so why don't we why don't we just go ahead and have an opening comment from rboc PRESIDENT Steve nataline and then we'll have if it's ok with my colleagues just a brief refresher on item one the budget we do have a hard stop. There are members of the council who need to be finished with this matter. I think the hard stop is for 30 and so we should keep that in mind and to ensure that everyone here you cut out oh I'm sorry. That's mean literally just cut out you said needs to be finished and so we do at the request of members of the council we're going to try and wrap this matter up by four thirty and so we should keep that in mind because there are members who have heart stops and for 30 years is the heart stop and so let's bear that in mind both staff as well as members of the council and mayor mayor, I would just note that councilor kennedy did join the meeting so we have a full council at this point that doesn't mean thank you. That doesn't mean that you know, we ended the discussion. We of course this will be an ongoing discussion as we grapple with the future of the rose bowl and frankly the arroyo and beyond. So so in the clubhouse golf course all of that. So if if we can just keep that in mind and then also keep in mind that if the discussion we have the need for more discussion, we can continue the discussion at a later date meeting with that. Let me welcome everyone and turn it over to rboc PRESIDENT And chair steve hoteling. Thank you, MR. Mayor. MR. Mayor, members of the city council, MADAM City manager, senior staff of the city residents pasadena steve nataline. I serve as PRESIDENT Of the rose bowl operating company. I'm joined by members of the rboc team dehradun current general manager and ceo genthe weyden future gm and ceo of salamah controller george cunningham chief operations officer and I understand deden zino is with us by way of the video. I also understand rechannel a member of the board and treasurer is also joining us. I acknowledge their presence here today not just their presence here today but their efforts along the last along with the entire rboc team over the last 18 months or so in two areas one the performance of the rosebowl operating company for fiscal year twenty one and twenty two and the process together to analyze the information being presented here tonight information will be a path forward for the rose bowl. We're also joined by dan barrett and josh cohen of the consulting firm caa icon. There are two items before you this afternoon. The first being the one year budget for fiscal year. Twenty two. The second item is is the five year pro forma and along with a five year pro forma are a series of revenue generating opportunities to address the shortfall seen in the five year pro forma. They are as charles dickens might said, a tale of two budgets looking at the fiscal year 2003 budget because of the strong performance of the rboc in fiscal year twenty one and twenty two the fiscal year twenty three budget projects that the rboc will be able to pay all operating expenses, debt and capital needed without an investment by the city. A strong achievement was absorbed by the stadium, the golf course, the campus of the rboc but more importantly the people of the rboc. As you look at the second agenda item, the main event as the mayor described the five year performa the picture is more challenging after fiscal year twenty three shortfalls exist if there is one fact above all else that this process is reveal is this in the long run the assets the rosebowl operating company has currently utilized do not generate enough cash to pay for operating expenses. Debt service the capital needed to support the stadium. For this reason some MAY think of the rose bowl as a problem that is not a problem. The stadium has challenges and we have difficult decisions ahead. But the rose bowl and brookside golf course are assets of pasadena, the famed or community activity to our local economy and pride to our citizens. The rose bowl is a valuable community asset that needs help wasn't so long ago well it was twenty years ago that I was sitting in a city council chair when then city manager cynthia girds raised the issue that our beloved city hall was structurally unsound. Well together we work through that to preserve this building as you consider the five year pro forma and revenue opportunities keep in mind something I mentioned earlier the assets of the rboc are not currently as currently utilized do not generate enough cash to pay for operating expenses, debt service and the capital needed for the stadium. We request approval of these recommendations before to allow the rose bowl operating company to proceed with the job of maintaining our stadium. The rose bowl was often called america stadium never even heard the mayor call it the world stadium. These are all true but I have a slightly more personal feeling. This is our stadium. This is pasadena stadium and we must do what is necessary to assure that our stadium has a vibrant second century. That is the goal while some of the decisions and actions MAY be difficult or unpopular, keep in mind that goal that we seek to preserve the stadium with that I will introduce current general manager and ceo darryl dunn. But before I turn the microphone over to darryl, I'd like to thank him for all his years of service. As we all know, darryl stepping down in a few weeks. So I want to say thank you for all your years of service on behalf the stadium. Thank you, steve and the mayor and members of the council I think to sort of get the show on the road I think we're going to go and deal with the operating budget. So most allama, our controller widen our current revenue officer are going to present this expedited fashion again because this has been before us previously and we've had long discussions. I'm asking that we keep this part of the presentation streamlined materials are before us. We've had plenty of opportunity to do that and we have had a long discussion unless any member of the council would like a longer presentation. That's my suggestions that ok, thank you MR. Mayor and council jens weiden, chief revenue officer at the rosebowl stadium maslamani as referenced before will be presenting that twenty twenty three budget as we're getting the presentation up here I believe I can skip to the next slide um as been the case we usually take a second to look at twenty twenty two or a year prior and our accomplishments before we roll into the next year's budget I'll do that quickly. the rboc was able to perform quite well in fy twenty one twenty two performing over eleven point six million dollars better than to budget our legacy foundation which has been one of our true success stories also fundraised over eleven million dollars for the stadium we secured a five year contract with aeg during the middle of the pandemic to ensure at least fifteen million dollars more in guaranteed net revenues over the next five years. Our golf complex continued to be an industry leader with net income over two point five million dollars and our enterprise events division resulted in over one point three million dollars in in net revenues which made it one of the most successful in our industry. In partnership with the passing the health department, we welcome fans back to ucla and for the rose bowl game a major accomplishment one it didn't seem realistic in the middle of the pandemic our staff board and city council continue to focus on long term opportunity planning which we'll spend some time on after this item stadium hosted numerous community events generating over a million dollars for our local community and charities and we also supported the passing of community through graduations, football games that are tussle ,cinco de mayo covid testing and many more initiatives to hand it over. Now to most salama who can give a little bit more background on better than expected performance in fy twenty two and then roll into fy twenty three. Thank you chens fiscal year twenty twenty two performance has been superior to anything that we projected as well as twenty twenty one. The ending balance for fiscal or twenty twenty two is approximately twelve point three million dollars which is about eleven and a half million dollars better than what we projected back when we were creating the fiscal twenty twenty two budget since and also the fiscal year twenty twenty three projections of five point three million dollars at the time with assumptions that the city MAY have needs to support with bond that have now been improved by approximately seven hundred and eighty three thousand eighty two thousand dollars with full bond that is not necessary for the from the city of pasadena going into the fiscal twenty twenty three operating uh budget and the recommended column reflects twenty two major events made up of eight music festival events. It's important to note that this contract is up to ten displacement events a year and fourteen other displacement events including football concerts in america fest and soccer. The next slide reflects a cash position beginning of fiscal year twenty twenty three approximately twelve point three million dollars with a net operating income projected to be approximately nine point five for fiscal year twenty three debt service net of twelve point three million with a net loss from operations approximately two point eight million dollars, rosebowl assumes three point one million dollars of reserves for fiscal year twenty twenty three leaving a total loss of five point nine million and estimated ending balance of six point four million in operating income to when we drill down to the revenue components, rosebowl total gross operating revenue of fifty nine point six dollars million is made up of forty seven million dollars of stadium debt service subsidies of three dollars million golf complex operating revenues of nine point five million. The expenditures from operations are estimated to be sixty two point four million dollars which is made up of thirty nine point nine million from the stadium, seven point one from the golf complex and a gross debt service of fifteen point three dollars million. Rosebowl also been approved for twelve point eight million dollars of capital budget, bringing the total appropriation to seventy five point two million. Next slide puts these numbers together to reflect that the stadium's net loss of five point on just five point two million dollars when the golf course profit of two point four million dollars after about after that service has been served with a net loss of that same two point eight that we showed in the audio slide after the three point one million dollars that we reflected earlier. The net losses is again five point eight million. That's the end of the fbi twenty three budget. I thank you MR. One. MR. Dunn, anything to add? I think what I would add is at the end here we had some key issues and strategies going forward. We don't need to go through those. It's not lost on us that the good news we're coming with of doing better in ny twenty two and doing better in ny twenty three than when we came to you last MAY is good news but it's still a loss as steve patterson brought up. It's not sustainable so due to our even due to our best efforts down on the central arroyo there's still more that needs to be done and we understand and that's why we're here today to talk about some other opportunities and things that we would would like to do but want your feedback and the community's feedback on if they're appropriate or not. So not that this fy twenty three budget can be passed on and we can just get to other item we understand that there needs to be really, really hard decisions made at the rboc. But what we believe this budget does is it shows just like it showed in ny twenty two that we are doing everything we can to lead within our industry and try and find as many net revenues as possible because we don't take the decisions that need to be made lightly and and we want to make sure that that the faith that you put in of running that stadium and doing everything we can that we take it serious so that when we have to talk about other uses and other ways for us to make the this building that's one hundred years old and not only has operating challenges but has massive capital challenges as you look at our budget we're putting we're putting nine million dollars we put nine million dollars into capital last year into a reserve to spend against needed capital items. Our stadium is one hundred years old. So to think that those capital challenges are going to stop would be short short sighted. We need to understand that not only do we need to look at ways that we can balance our operating budget but find long term sustainable funding sources for capital. So with that being said, we're happy to answer any questions on the fly twenty three budget. Thank you. Questions are comments related to the budget otherwise we can I think move on to item two if we can take the presentation down so I can see I have a couple questions if we could take down the presentation to ok this is related specifically to the budget MR. Wilson. Yeah thank you. Yeah certainly familiar with the budget. I had just to clarify in questions I don't have to direct them to that one is in the staff report and also in the presentation. It's a legacy foundation generating grant funding of ten million and planned transfer project funding of an additional one million is the ten million include the the relief payment for closed venues or is that something else? That is the ten million dollars is the shuttered venues grant correct. And then they had another million in and in other giving which is pretty per usual for them. You're gay. I was confused. I didn't really pay that actually flowed through the legacy foundation then I was also starting with gap report. It said that the legacy foundation has raised approximately fifty million dollars in gross gifts of this amount like twenty nine million has been transferred so it's about sixty percent. I'm just curious what the other forty percent is that pledges that haven't been fulfilled or hopefully we're not spending forty percent of our fundraising dollars on raising funds or maybe we are just wanted some more detail on that. It's the prior so when a pledge form or a pledges is signed there's a duration of time that they have to to pay that pledge so that it just represents funds that we haven't received yet because they're not due yet based on the pledge form. Ok, so it's just the time it's like pledges that haven't been received but they've been committed and the other question I had is on the staff report page for to remind us how many concerts have we had this fiscal year? What do you think we'll have in fiscal year? Twenty two. So we've not had a concert inside the stadium and since the pandemic took place we're hopeful to announce two concerts this fall we're working through that council has as approved that from a music festival standpoint right now it looks like we MAY only have eight music festival dates in this calendar year. We count our displacement events by the calendar year. Our budget is by fiscal agi. However, has the ability to go up to ten. So our goal with them is to hopefully build up to that if you and our fy twenty three budget we have eight as a placeholder for them as they scale up and ramp up that number for music festivals. And the reason I'm asking I think I saw the detail and I think it was one of the tables that they were three concerts in the pro forma budget and I recollected that we had had nine. Do we are we pretty high visibility on those? I know these things get planned relatively far ahead. Is that a reasonable number? We believe it is a reasonable number. The the concert dates that are going to take place this fall are actually we're originally going to be in JUNE and then we had to change those dates due to visa issues for the performers through the pandemic. so while we're reasonably sure of many things during the pandemic, it's very difficult to be positive. But the three number would be made up of the two potential dates this fall and then another speculative one in the spring. However, we have a multitude of holes throughout the spring for four concerts so we're hopeful that one of those will come through. But it is speculative. Ok, I think it is a pretty tactical eager for item two but I wanted to make sure I understood that the budget itself MISS Williams followed. MR. Madsen, thank you and thanks jens for answering some of my questions before for that got rid of a lot of he said a more complicated question so I only have a couple questions. First of all, the new formatted financials that were in the attachments online are amazing . So so thank you very much and it really helps break out and provide some transparency in terms of how the revenues are done for the stadium versus the golf course, et cetera. So we had I'd asked about the change in the brookside restaurant revenues for fiscal twenty three and could you explain a little bit about the difference in the concessionaire agreement that is that is it seems like it's moving money between the revenues and brookside. So how are we going to see those changes going forward based on the new management agreement? yes happy to so in fy twenty three what we're recommending in our budget is is us moving to a management agreement in the brookside clubhouse. Currently we have a company levy that has a lease of that space for another six years. Levy is willing to walk away from that property and from a staff perspective in the rboc board believes it's important for us to gain some flexibility in that space as we're going to talk about here with the next item next agenda item, we want to be able to have as much flexibility as possible in that space so what we're recommending in this budget is moving to a management agreement with american golf which is our golf course management company with an out after two years. So that way we have the ability to be a little bit more flexible with that clubhouse space as we look at future planning on the campus, what that means is a few things. One is we take on all the expenses so you'll see in the line item for the golf course the expenses have gone up significantly because we're taking on all the expenses. We're also at the same time though taking on the majority of the net revenues. So you'll see that in this upcoming year we'll be pretty close to where we are in this past year and then it's anticipated that if we stay with this management deal with american golf it will have significantly higher net revenues. However, with the flexibility to to think a little bit differently in that space in the future. So there was sort of two fold reasons for making that change. But that's the biggest change. Why the why the expenses are going up. Thank you. So the expenses are going up with the expected revenues and all of that, is that correct? That is correct. Thank you. And then I guess the other question I had was what your annual consulting budget is for each year and it looks like it's about one point to seven million for the current year and then one point three two million. And that's combined with my third question. It just seems like that's a lot of outsourcing for consultants it kind of cost saving measures if you guys looked at it including looking at internalizing some of that work that consultants are doing in any other efforts, you guys have been great on the revenue side. That's why I approved the displacement events and if they come to the council but just trying to look on the cost side a little bit, how are you guys trying to manage the cost the cost structure a little bit better? Yeah, it's a very good question and the mayor's actually brought this up to us a couple of times in that a lot of our core functions we actually use outside vendors to do those so we have vendors that sell our premium seating for us or sell our sponsorship or legal consultants that help us. But we have quite a few positions that we outsource because we don't have the full time equivalent for staff. A great example is buildings. Every building as a director of food and beverage somebody that manages your food and beverage program on property based on our limited number of ease that we've that we operate under, we outsource that to a group called food service matters that consults and helps buildings throughout the country. So as an example that that is an example of one of the things that we spend outside consulting. So we would welcome that conversation to talk about it really it's there are some specialized services. Dan barrett and josh cohen from caa will be presenting with us on this next item. They are included in that number. They're not a massive part of that. No, they wouldn't want me to say that about them. But they are an example of a group that we use that is international that sees a lot of things throughout our industry and can help provide us insights that we wouldn't otherwise have if we were just here on this property. But yeah, we'd be happy to go through that list and see if there's some some overlap. You know, I know there's been a lot of coordination between us mike and mike ross. Mike and I are actually going to be presenting a portion of the next presentation and we continually talk about what kind of what ways we can work better together. We've done a really good job on the marketing and sales side of sort of overlapping our efforts and we we welcome any conversations around that. That would be great to see the collaboration because I think some cost savings could be achieved there. So I hope you guys keep working on it. That's it. For me now. Thanks mayor. If you allow me I'm going to read out the correspondence received at this item the city clerk's office received seven letters advocating for a complete analysis of the rose bowl stadium that includes convention and broadway civic marketing revenues, civic making revenues as well as direct income and or for the city to not use general funds or reserves to pay for rosebowl debt and providing comment on the matter. And then we received twenty three letters in support of the rose bowls rose bowl stadiums, economic and cultural health and economic and cultural health and providing comments which include the rose bowl stadium is an asset to the city students and a vital source of opportunities for small businesses. Those letters were posted online distributed to the council on our part of the record for this item number one thank you. thank you for the presentation MR. Madison. Thank you, mayor. I'm prepared to move this item. I know that the second item on our agenda is important but this operating budget for fiscal year twenty twenty three has been chopped up pretty well by all of us and by the committee and certainly by the rboc and the staff. So I'm prepared to move the staff recommendation. Great move. Is there a second? I'll send in it now. Thank you MR. Massouda and roll call to prove the rboc recommendation from our hampton the best kennedy yeah. Casamayor madison yes. COUNCILMAN Massouda yes. Cast member riva's yes. Cast member williams yes. Vice mayor wilson yes. Mayor gordo yes. Uh motion is approved without opposition. Thank you. And so this brings us to item two and this is consideration of the rboc five year strategic initiative. Let me just say that you know, I agree that with those that have said this is an important asset to the city of pasadena and certainly looking five years out and even beyond is important during my campaign for mayor and before that even you know, I've thought through some of the issues and have spoken to some of the some of the issues involving the ausbil back to when I was PRESIDENT. We've had some of the rose bowl and a board member, some of the challenges involving a historic asset that's one hundred years old and that relies on events. But you know, we have other similar assets in the city and we're a city that has quite a bit of visibility and attention and tourism and as we think through the future of the rosebowl the future of the arroyo and the need to ensure the cities I'm sorry the stadiums long term viability I do think the time in pasadena has come to give some thought to thinking more broadly about some of our assets including the peacock sea and the playhouse and some of the other assets. And I do consider old pasadena and and south lake and some of our shopping districts and the norton simon you know they MAY be privately owned but they're assets of the city, the museum, the auditor, all of these terrific community assets not just city owned assets create a tremendous opportunity for us and we should think through what how we create synergy between all of these community assets in city assets. A lot of cities throughout the country have different models and I think there's an opportunity for us as we have this discussion to to incorporate in the long term thinking about the the possibility of passing the sports entertainment and hospitality authority that would help us to create synergy to market and brand all of these assets together and work together whether it's museums and the convention center, the auditorium or the business districts to brand and market together pasadena as the great destination that it is and it would be an opportunity for us to go to that next level of of thinking in terms of how we see ourselves and the world to see us working with the tournament of course and some of our other partners. So I throw that out there because I do think we're at the point where we should be thinking about this in a more global way in terms of creating synergies with all these community assets and city assets and the opportunity to do that isn't just through this budget discussion the opportunity to think that issue through and I'd invite comments from my colleagues about how we do that, whether it's working group of all of the various entities, whether it's something that we charge one of the council committees with. But that opportunity I think will become I think this is the beginning of possibly that discussion but that opportunity also will come for us when we look at the management between the rose bowl operating company and the city. Let's keep in mind that we are we being the city council are the masters of the deal so to speak. We control by way of the management agreement the work of europe, your U.S. And it's important to keep in mind that that mess that I'm sorry that operating that operating also places limitations serious limitations on the work of the so we need to account for that in this discussion. But as we start this discussion about the future of the rose bowl, the rboc, our beloved arroyo and and the surrounding also factor with the impacts to open space and surrounding neighborhoods we should do so with the understanding that the opportunity to make amendments to how we operate will be will come to us as part of the operation next year. You're losing your analysis important we hear the the opportunity to amend how we operate the rose bowl and I say we because we control the operating agreement the city council in the rboc together it's it's it's a contractual agreement that opportunity will come before us next year when we when the operating agreement is due to be amended. Nothing to say that we couldn't begin that discussion now or or or amend it sooner than that. But I just throw that out there as a as something that I've thought about. I had conversations with some of you in the last few months if not longer with about this concept. I've spoken with some rboc members for quite some time about the possibility of marcosi members of thinking more broadly at our assets and how we create synergies and so we shouldn't view this discussion as a as a linear discussion about the future because there's no such thing as a linear discussion when we talk about a historic asset like this in the needs of it for the next hundred years we should be prepared and open minded about creating synergies with other assets. so I'll leave it at that and turn it over to MR. Dunn or MR. Hoteling in opening comment. I think at this point we'll be turning back over to daryl for the presentation. But MR. Mayor, your comments are well received and I think thinking big picture thinking big, big scope is necessary as we consider the future of the stadium. MR. Dunn, thank you. As I mentioned earlier because member was brought up at the consultants and I think MR. White and talked about the icon and see I can has worked with us. They are one of the country's leading financial strategic organizations in the company. We realize the stakes that we have and we've asked them to present today myself and jens weyden and I think you bring bring in mike ross to help us out a little bit in this presentation then turn it to you. Thank you, darryl. Can you hear me ok? Yes, welcome middleboro. Members of the council thank you for the opportunity to present today. Go ahead and go to the next slide please. So know if you can go to the table of contents. Thank trying to get in respect of your time and try to be thorough but brief. There are a number of things that we're going to try to cover here today including a financial overview, a summary of the capital needs assessment that was undertaken a market overview to discuss the rosebowl position within the region and also nationally the summary of findings of revenue enhancement opportunities that were identified as some ancillary options then looking at some of the community programing economic impact and some recommended next steps you're going to hear this referred to as a strategic plan . You're going to hear a number of options that are laid out here. I think that one thing that's important to talk about on the front end of this is that a lot of work has gone into the various aspects of this presentation. This is a very high level summary of the findings over the past year or so the rboc staff, the rboc board and numerous industry experts were brought on board to try to figure out solutions or options for the city to consider in connection with the rose bowl. And what I would tell you is that there is no silver bullet. There is no easy answer to the challenge that you're facing but there are opportunities. So go ahead to the cycliste. Obviously the rboc recognizes the iconic nature of the rose bowl as one of its most treasured one of the city's most treasured assets, its 100 year old historic facility, a facility that's a source of community pride and generate significant economic impact locally but more important regionally as well. The mission of the rboc is to return economic and civic value to the city of pasadena and by attracting major events to the facility and operating a professional golf course in a residential neighborhood. As you well know, the rboc the rose bowl is facing unprecedented challenges from covid-19 but not just covid-19 also increased competition in the market locally as well as nationally and so the key effort here was to try to identify opportunities to minimize or limit the financial impact the city while allowing for the continued operation maintenance and repair of one of the world's most iconic venues and the rose bowl stadium. As I mentioned, the rboc staff and leadership combined with sports industry specialists and consultants has studied the situation extensively, have assessed the physical condition of the building and developed potential options to address those needs. Go to the next slide show some of the key objectives here when we started this process the first there is the obvious one which is continue to host national and international events but that was events that that generate direct and indirect economic impacts and promote the pasadena brown brand excuse me also to prioritize community events and activities as well as taking into consideration neighborhood relations and the impact on the neighborhood to operate a stadium the golf course in a fiscally responsible way and to consider its current and future obligations in three key areas . one is the operating budget which we'll talk about. Second is ongoing debt service and third is capital needs which is a significant issue as you all know, working closely with existing partners to identify and enhance, identify opportunities to enhance and meet the objectives above, continue to support legacy foundations fundraising efforts. And I'll just pause for a second. I know there's been some discussion and there was a mention of the ten million dollars in the grant money if you strip that ten million dollars out for a second legacy has been incredibly successful in raising funds for the rose bowl. It's very unique in that outside of omaha and colorado springs there really aren't any fundraising organizations like this that have been successful in raising funds for a facility that is not owned or operated by a college directly. Colleges obviously raise funds for their for their facilities that are typically on campus. But as a standalone operation operating independently, legacy has done a really good job of raising funds that have gone into the investment into the building in terms of capital repairs and investment and further investment continuing to identify third party partners for funding aeg levie img have been sources of third party funding in the past to the mayor's point potentially seeking to collaborate more with marcosi and then the bottom line objective here is how to minimize the general fund requests coming out of the rose bowl. Go to the next line. So when you see here is the summary of the historical performance of the rboc since twenty seventeen I think there are a couple of things that I would highlight from this year familiar with this but I think the important thing to understand here is it's really important to look at the net income line before debt service and preventive and maintenance and capex basically the operating performance of the rboc. The rboc has been extremely successful in generating revenues, managing their operating expenses to get to a net profit. They obviously have the golf course operations as part of that those operations fluctuate. They're high. They're currently very high right now as a result of the pandemic. But when you look facilities that don't have a nfl team or major baseball team in them, the rose bowl is the most profitable one of if not the most profitable facility without a major league tenant as an open air stadium. And I think that's an important thing to understand. It's been profitable throughout until obviously in ny 21 with covid you can see the bottom line after that service from 2017 to 2019 continue to operate in the positively and then there were some then when it hit obviously there were deficit deficits in the last two years go to the next slide . The next slide shows the five year pro forma and the projection as put together by staff we had seet icon reviewed those performers and provided important feedback. What's important are again to realize is that prior to debt service and maintenance capex the rboc will continue to operate at a surplus with y twenty three in the nine and a half dollars million range going on for a five year period and positive each year after you look at debt service that's where the problems start and you can see that the net is projected in the four and a half to six million dollar range in twenty twenty seven peaking at about seven point six million dollars. A thirty million dollar overall deficit over the period and these figures do not include major capital repairs and replacement which we'll talk about in a moment to the next slide when you overlay the operating reserve balance that the rboc currently has, you can see the impacts there and you can see that there will be potential shortfall starting in year flight. Twenty five as mo mentioned, there's no operating shortfall request from the city this coming year but starting in twenty five twenty six in 10 you can see that there are negative balances there and they're going to need to be other funding sources identified and less certain performance measures at the facility improve which is possible given that we're ucla football has been historically expecting patients are that things will improve there and the potential to rebound in terms of additional concerts and other events as well as I think was mentioned potential to reduce operating expenses are all areas that the rboc staff is looking at to try to improve the situation. But what this tells you is what you already know is that there are some financial challenges with this facility and those challenges get compounded by the capital needs that are above and beyond the summary go into the next slide. So the capital needs assessment was initiated in FEBRUARY of this year. These are comprehensive studies that look at all of the different aspects of the facility. The rboc hire industry leading consultants we assisted them in overseeing the process but you can see the list of architects gensler's and architect engineers on the map and fire protection. You can see there is a structural engineer turned consultant food service and salt navy and technology consultants all all looked at the facility in a comprehensive manner to identify potential needs from a capital expense standpoint going forward. But the next what you see here is a summary of the needs for the next six years fy twenty three to five twenty eight and these items here reflect a central code compliance and life safety issues and so these are the items that really need to be addressed within the next three to six years. Typically these types of projects are are grouped into three year periods. The rboc has identified eleven point one million of capital needs and twenty three eight point one has been allocated for the twenty three budget leaving about forty million to be funded going forward to the next slide. And you can see here the list of types of projects that are being discussed. These are not revenue generating items. These are not found comfort items. These are essential items that are needed to continue to operate a facility by ti utilities vertical circular food and beverage health code compliance upgrades, a concrete overlay and repair as well. The structure structural improvements, certain items that you do whether it's structural or a concrete overlay you have to take seats out and so when you take seats out you have to put them back in and so the cost assumes that you're putting back in the same types of seats those seats aren't made anymore and they have to be custom made and so those there's significant expenses associated with that. There MAY be options to improve the seating going forward. But you can see that from the list here that these are not nice to haves or want to have. These are must haves in terms repairs and replacement that are needed. The facility in the short term going to next slide. One thing that's important to understand is that circumstances have changed significantly over the last five or ten years and we wanted to just give you a quick summary of what some of those changes are. Some of them are quite obvious with the development of sophi stadium and the renovation of the L.A. Coliseum. Some of them MAY not be so obvious. The rose bowl is facing tremendous competition from facilities nationwide from facilities like legion stadium in las vegas, at&t stadium and outside of dallas levi's stadium etc. These venues are all competing very aggressively for the same types of events that the rose has historically been competing for. They're just more of them now. They're more aggressive and they're very well financed. But the next line this is just a summary of some of the regional facilities here that provide competition. You can see the type of competition that they provide but they are they are competing with you for fans for events or sponsorship for premium seating. There's quite a bit of competition in the marketplace and it's only going to get more competitive when the clippers arena comes online. Go ahead to the next line. One of the things that's important to point out here is the rose bowl and the city of pasadena. The relationship has been unique historically the rose bowl and the rboc have been able to operate and and operate on their own as a self-sustaining operation up until covid had. This is unique when it comes to facilities that don't have an nfl or major league baseball team as a major tenant. Typically there is some form of subsidy coming over to those operations whether it's in terms of operating subsidy or construction or renovation capex subsidies virtually all those facilities have some level of subsidy and in this situation you have the golf course which is contributing to the to the bottom line for the rboc. But several of these other communities also have multiple multiple venues that they oversee, including stadiums and arenas and civic centers and golf courses and so, you know, revenues from golf courses fluctuate. It is something that the city could operate separately and not provide support to the rboc but the typical type of support that these other communities are getting are in the form of hotel tax car rental tax, sales tax or direct general fund contribution to fund those renovations and in and cover debt service and in some cases operating expenses as well. This is a unique situation and that up until kobad that was not the case with the rose bowl . Go to the next site, go in about a year ago we were asked to look at what the potential revenue enhancement opportunities might be for the rose bowl and the first phase of that project was to identify as many opportunities as possible without regard to feasibility and during that process a total of one hundred and thirty projects were identified. Ninety four of those projects were the list was shortened to ninety four projects because there were a number of non revenue generating projects that were not included between the ninety four and the hundred and thirty out of phase one came in. I had a list of twelve projects that were identified for further study and phase two and I want to say that this portion of the study has been done for some time. The capital needs assessment was undertaken earlier this year and it's really important to take both of them into consideration when you think about the overall situation and potential solutions for it. So during the revenue enhancement study, a number of different entities were consulted with including gensler charity, verdie, ulli and others to come up with with options. Go ahead to the next slide. You can see that there are a number of considerations taken into account here in terms of coming up with the list. The first set of categories is financial feasibility, legal feasibility, political and stakeholder feasibility and the operational feasibility. Unfortunately. Well, let me take it let me take the positive. Fortunately we are both cnn staff has done a great job of generating revenue from events at the facility. As I mentioned earlier, the challenge is that in identifying other potential opportunities there are significant constraints that limit your options. Those constraints start with the neighborhood. The facility is in the middle of an extremely unique area and the osako with neighbors that there needs need to be taken into consideration the many things that could potentially be done in the arroyo require significant changes whether it's a municipal code amendment, a charter amendment, a voter initiative, environmental impacts, historic nature of the building ada there are a lot of things that limit your your ability to generate revenue. So in the first phase we didn't focus on those we just put we just identified everything we could in addition to those considerations there there's some other things that that need to be thought about as well. For example, if investments are not made into our building, your ability to sustain revenues and the event levels in the current competitive market could be compromised. There are some fan experience or fan improvements that MAY not have a financial return but are important from an experience standpoint. As I mentioned, there's future necessary improvements for for capex capital needs assessment. You have to think about the tenant relationships and agreements there. There are limitations that you can do given your contracts that you have with ucla, the tournament and flea market, the initiatives and then community usage of the facility provides that find to this site in the next one two slides here just summarizes all of the different items that were identified. We took it from one hundred and thirty down to ninety four. Go ahead to the next slide. We broke it into a number of different categories from physical improvements to financial support looking at city, county, state, federal funding sources and partnerships, looking at different financing options whether it's debt relief or historic tax credits, looking at different types of events, different tax or fiscal opportunities, naming and signage opportunities, ancillary development and restructuring the agreements with your tenants with a number of those different items go to the next slide show. The phase one resulted in the twelve items listed here so a number of these are physical improvements to the building that would potentially generate a net return. So converting suites to those boxes a skybox sky bar rooftop opportunity south end zone project lowers box project reducing the capacity potentially putting a performing arts stage or venue either adjacent to or inside the stadium. Ice skating rink was looked at campus marquee and sponsorship program sponsorship along the signage and sponsorship along the 210 and the the 134 is an opportunity family golf which you've heard of as an opportunity. Also we're considered athletic fields surrounding the stadium and then establishing kind of a consolidation of the rboc marcosi to try to realize some efficiencies in operations go to the next slide from from that list you can see the following items that were in the first category. There are items that were expected to generate incremental net revenue after debt service. So the signage opportunities on the freeways potentially campus market your sponsorship program, the south end zone and the lowes box, both of those have to major considerations. One is the contracts with the tenants. We have to be changed and second, the demand for football is generally with ucla and the rose bowl game would need to increase to make those opportunities viable. The ampitheater as I mentioned family golf and potentially athletic fields is something that requires further study if that's a path that you want to look at the other items that are listed here either broke even or failed to generate incremental net revenue after that service go to the next slide another opportunity that was considered I was looking for trends that are happening in this in the sports industry which is significant development around stadiums and arenas and what you see in many communities including many communities in california are cities and teams realizing that there's a critical mass of people that are coming to venues and people are coming to the venues and they're leaving the venues and the hope with these ancillary development projects is to develop and capture some of those dollars and create a destination around the stadium or arena. And you can see all these examples here. These are massive in many cases mass massive developments around these facilities and it is a trend in the industry. There are significant economic fiscal benefits of doing this type of development. But what I what I will tell you is that having been involved with the city of pasadena since the mid 90s and having attended games or events at the rose bowl since the mid 80s, I certainly understand the sensitivity to doing any type of development at the arroyo and how that could be viewed by the neighbors as well as the residents in the city. But there MAY be some opportunities to do something on a limited basis a low density potential development that takes advantage of the nature and the essence of the arroyo because this is a potential significant revenue generating opportunity that could potentially solve a portion of the challenges that you have going forward. So what we try to do go ahead to the next slide was look at examples where developments have been done on a low scale, low density basis in sensitive areas. So for example, you can see the tavern on the green at central park. You can see the ranch laguna beach go ahead to the next slide. You can see hotels the lodge at torrey pines high valley in and so high you can even see the golf the old horse hotel at st. Andrews and the ahwahnee hotel in yosemite. Go ahead to the next slide there. No development opportunities are commercial obviously a potentially non not necessarily noncommercial but not as commercial development opportunity might be doing athletic fields and complexes that could benefit the community depending on the type of development these facilities MAY or MAY not generate positive net income but they have significant impacts in terms of community use both locally as well as regionally as in the next slide. So this is just a summary because I know that everyone would like to have an easy answer that if you did x, y and z we can cover the four or five six million dollar deficit after debt service and that we could you could cover the 45 million dollars of capex and the reality is there isn't a simple answer there. there's going to need to be a combination of things that take place in order to meet those obligations going forward and some of those and there aren't any easy ones they're going to require investment upfront in terms of capital potentially they're going to be they're going to have that service associated with them. So here's a summary of some of those examples of family golf center costs seven and a half to ten million dollars and after debt service is estimated to generate a million dollars a year on the campus market sponsorship program is estimated to generate somewhere between 600000 and a million five a year. The eight to 10 freeway signage opportunity to generate a million dollars a year or more. There's an opportunity to do that on the one thirty four as well. So if you're looking at potential options and you said yes, go forward with some of these there MAY be three or four million dollars worth between those three or four items that could drop to the bottom line to address some of the issues that the rboc is facing the south end zone and in stadium amphitheaters. The other opportunity I know taxes is difficult for anyone to get their arms around as a potential solution but a city wide parking tax could generate potentially three million dollars a year dedicated transient occupancy tax could generate potentially three million dollars a year and there are other opportunities whether you decide to do something in the arroyo with an ancillary real estate opportunity, whether there's opportunities to realign the interests of the contracts with the tenants due to some of the other options and the continued efforts of legacy and third party funding options are all part of the opportunities and a menu of items that in combination MAY be able to get you close to where you need to be in terms of covering your operating. I should I shouldn't say your net income losses and your capex needs going forward go to the next slide darryl. Take over from here. Thank you, dan. You know again we're switching gears now. I know it's been brought up about the importance of the community and we want summarize what we have been doing is we're very, very proud of it. Everything from egg bowl we're all the different parks in pasadena. We celebrate easter at the rose all this past year we had a great cinco de mayo event of course JULY 4th coming right up. We're unbelievably proud that we are the home to the turkey tussle. We've done a lot of investing in the community particularly during covid and we're working closer than ever with the school district and doing field trips to the field and robotics rallies. The local institute has done amazing work women's empowerment and race and sports programing so again we're very, very proud of what we've done as well as within the business sector. I think that when we go to the next slide please and now actually I'm going to ask jenna to come up and I think mike's also join us for the economic impact section myon. Thank you, darryl. Yes. I'm going to be joined by mike ross, the ceo of the peacock and I'm actually going to tee this up and this is his software then and he's he's much closer to this then than I am as far as using this tool for a long time. One thing I did want to mention though is you know, sometimes we lose track of the economic impact of our events. Rboc when we come to city council we talk about a soccer match generating over three hundred thousand dollars for the rboc. That is not the true impact of that event. Even this past weekend we had an event called food land where we welcomed close to fifty thousand people over the course of three days and on on beverages alone they spent over two hundred and fifty thousand and that's there's tax revenue on top of that that each one of those individuals paid. So we're very cognizant that while our events sometimes are impactful to the community, they also have an economic impact, a positive one. So that being said, we worked with mike ross and the peacock to to look at the impacts of two of our most recent events just like heaven and cruel world which are a music festivals that we do with a golden voice as part of that new arrangement that we that we recently got into with them. Those events for their rboc are guaranteed to make three hundred thousand dollars per event and that's what's in our pro forma for the next five years. However, if those events perform better than expected there's a potential that that three hundred thousand four event can turn into four or five hundred thousand which could be a two million dollar swing in the positive for us. So there's tons of opportunity around these events and so we thought they would be great ones to take a look at to show the the other economic impacts that these events have outside of just the rboc net revenues. So with that I'll hand it over to mike. Thanks, mayor and members of the council. Welcome. Hopefully you can hear me. Yes, is quite a pretty small but let me start out by saying that you know, it's a pleasure to work with the rose bowl and I'm through some of the economic impact information destination internationals is the organization that represents about sixty five hundred professionals and over five hundred and seventy five destinations and specifically they're the organization which receive all of the convention and visitors bureaus within the country. They have an economic impact calculator and it's basically an industry standard that most of all communities use that have a code. There are four different event modules that they developed and that is through tourism and economic which is offered economics company three destination to use this tool out of the five seven five and they've done these reports for over 500000 events. They've been analyzed over the past couple of years. The modules include meetings, conventions and feature that's the one that we use often they have a sports module, they have a festival and cultural events module which we're looking at here and also local public events. Not only is it credible but it's comprehensive. The calculator measures the direct impact event on businesses employment impact. I should point out though that this is localized meaning peoc received access module that is uniquely developed for capacity . The information attached is for venkatraman to come to pasadena and who are not low. But with that said, look, if we can take a look what's the first one that's up there? I'm sorry I can't see it's so small that crew world just like evans on the left and crawls on the right sorry. So just like heaven we'll go to the slides that are up there now and essentially you take a look at this we start off by saying just like heaven it was a one day event. It's a performing arts. the overnight attendance is one thousand one hundred twenty five a day attendance was there. We look at what the direct sales was. What the business tells was the jobs supported, jobs supported total what were the local taxes? What were the net direct taxes, the roic and the estimated room demand. So we looked at it as if you go to the the bottom you look at what what what attendees supported in terms of lodging, transportation, food and beverage and again this was more so for the organizers and those that out of town what they spent on retail recreation and what their total was. And then you look at what the organizers again lodging, transportation, food and beverage the pace rental which was the three hundred thousand jens talk about any business services. So this event and I I want to point out that this is very conservative because this is only the people that spent the night in pasadena and the reason for that is we can't measure the economic impact of what took place outside pasadena because not only do we not have that information, we don't we're not doing this for the county doing that for the people that we're in pasadena and the way the way that we look and the way that we put numbers we get the revenue numbers from the rosebowl. But what we do is we look at number 10 which was thirty thousand there primarily local because that means that the people were from out of town. We estimated about twenty five percent came from outside seventy five mile radius we looked at what the overnight share was, the average room rate and this is really the key that's two hundred and seventy two dollars and that that's we get a report on a weekly basis that analyze our top twelve hotel. They tell us what the average day, what the average daily rate was for the day that there was a festival the average ticket price was three hundred and eig