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HomeMy WebLinkAboutagenda.council.worksession.20240205AGENDA CITY COUNCIL WORK SESSION February 5, 2024 4:00 PM, City Council Chambers 427 Rio Grande Place, Aspen I.Work Session I.A Wheeler Advisory Board - City Council Joint Work Session I.B Aspen Public House Lease Modification Discussion Zoom Meeting Instructions Join from a PC, Mac, iPad, iPhone or Android device: Please click this URL to join: https://us06web.zoom.us/j/82122103919? pwd=YSoG2VKMXQ56FATAtfiatuSUzl7gIL.1 Passcode: 81611 Or join by phone: Dial: US: +1 346 248 7799 Webinar ID: 821 2210 3919 Passcode: 81611 International numbers available: https://us06web.zoom.us/u/kdpWi0qsLm Joint Wheeler Advisory Board Council Work Session Staff Memo.docx WAB Council Ordinance 02-2021 Reconfirming Board Composition and Acknowledging as a Board of Advisors.pdf By-Laws of Board of Advisors of the Wheeler Opera House 2023 0208.pdf Aspen Public House Lease Modification Request Staff Memo.docx Aspen_Public_House_Council_Lease_Modification_Considerations.pdf Elk Mtn dba Aspen Public House_exp2023.pdf 1 1 MEMORANDUM TO:Mayor Torre and City Council FROM:Lisa Rigsby Peterson, Wheeler Opera House Executive Director THROUGH:Diane Foster, Assistant City Manager MEMO DATE:January 29, 2024 MEETING DATE:February 5, 2024 RE:Joint Wheeler Advisory Board – City Council Work Session REQUEST OF COUNCIL:There is no direct request of Council at this work session, which is being convened to discuss areas of mutual interest. SUMMARY AND BACKGROUND: The Wheeler Advisory Board is empowered to advise the City of Aspen on planning and policy related to the daily and long-term operations of the Wheeler Opera House, guided by the adopted Mission and Goals Statements. Please see the attached Ordinance 2, Series of 2021, reconfirming the board’s position as a board of advisors, as well as the Board Bylaws adopted in 2023 for more detail if needed. Periodically, the board and City Council meet together to discuss topics of mutual interest. The last joint meeting took place in January of 2020. This work session will provide an opportunity for the Council to discuss the following topics as proposed by the board: 1) City Council’s view of the role of the Wheeler Advisory Board and Council’s expectations of the Board. What is the Board doing right/what is the Board doing wrong? 2. Thoughts on the direction and variety of Wheeler programming. What do we use to measure success? Is the subsidy level appropriate? 3. Thoughts on the Wheeler’s role in the arts community. What does the Wheeler mean to the community? 4. Thoughts on Wheeler’s priority in regard to the Real Estate Transfer Tax. Should Wheeler First concept be codified? 5. Thoughts on Wheeler staffing. Is the Wheeler staffed appropriately and where does that staff live? Are there opportunities to help Wheeler staff with housing? 6. Thoughts on the Wheeler parcel lot. What should or shouldn't be done with it and when? 2 DISCUSSION: The mission of the Wheeler Opera House is to monitor and ensure the preservation and viability of the historic venue and its property through exceptional performance experiences for residents, guests and performers, and to support the cultural assets of the Roaring Fork Valley. The vision of the Wheeler Opera House is as follows: At the Wheeler Opera House, we set the stage for connections that create memories for our audiences, artists, and greater Aspen community. The goals of the Wheeler Opera House as adopted by the Board are to provide appropriate facilities and resources in order to: Assist user groups in the successful presentation of rental and community events, series, and festivals; Foster and advocate artistic expression within the Roaring Fork Valley community; Present world-class arts experiences to Aspen, through the production, co-production, or creation of individual events, series, and festivals; Provide opportunities for educational experiences for students of all ages throughout the Roaring Fork Valley; Provide a public gathering place for the use of area groups, residents, governments, and guests; Preserve and enhance Aspen’s reputation as a premiere resort destination with a dedication to arts and humanities; Ensure the long-term viability of the facility through responsible fiscal management; and Operate an environmentally responsible and sustainable venue by advocating and educating visiting artists, guests and community partners on programs and new initiatives. Current Wheeler Opera House Board members are as follows: Chip Fuller, Chair Amy Mountjoy, Vice Chair Dr. Tom Kurt, Secretary Daniel Benavent Ziska Childs Nina Gabianelli Richard Stettner Lauren Forman, alternate Kate Northfield Lanich, Aspen Music Festival and School representative (ex officio) 3 In advance of your discussion specifically about Questions 2 (regarding Wheeler programming) and Question 5 (regarding Wheeler staffing), Council may find the following background information helpful. Direction and Variety of Wheeler Programming Over the past three years, the Wheeler has been rebuilding to pre-pandemic programming levels. In the COVID-truncated 2019-20 Wheeler season, there would have been an estimated total of 49 Wheeler Presents programs. In the current 2023-24 Wheeler season, there will be an estimated total of 45 Wheeler Presents programs. In addition to Wheeler Presents programs, there are a sizable number of community and non-profit rental events. In the 2019-20 season, there were 91 rental events, including 41 film screenings. In the current 2023-24 season, there will be an estimated 67 rental events, including 16 film screenings. One of the biggest factors in the decline in rental events is due to Aspen Film’s acquisition of the Isis Theatre, which now serves as the home for their fall Film Festival and holiday Academy screenings. Additionally, the Music Festival, which has exclusive use of the Wheeler for a summer-long residency through 2034, is rebuilding higher usage of the Wheeler for public performances, especially operas and recitals. Since resuming in the summer of 2021, Wheeler Presents programming has been designed to support audience development efforts. The Wheeler is providing programming for a variety of audiences, including families, community members interested in high quality cultural programming such as dance and classic music genres, audiences interested in celebrating artists of Latino culture, and more, while also remaining true to the traditional community desires for both legacy and contemporary music artists and inspiring programs about skiing and outdoor adventure. Additionally, this year the Wheeler has created a student matinee series, complemented by school outreach programs, to introduce area children to professional performing arts experiences. The goal of these programming efforts is twofold. First, a wide variety of programming means that it is more likely that community members will find something that appeals to them at some point during a season – homogenous programming aimed at just one community demographic would by its nature limit the number of people interested in buying tickets. Instead, a variety of programs means more choices for a wider audience. Secondly, by focusing on artistic quality and memorable programs, the Wheeler can build trust with our audiences so that they will be willing to buy a ticket to something they may not have heard of, but because of their memorable experience with prior programming, they trust that we are offering them something equally excellent. Currently, the Wheeler measures success of our programs both quantitatively and qualitatively. Certainly, ticket sales are an important measure to help gauge popularity of an artist or genre. It’s important to note that it is unrealistic to expect every program to sell out, given many factors including our small community base, market competition both in terms of other entertainment options as well as seasonal work demands and travel, 4 etc. In addition to evaluating quantitative success, the Wheeler also qualitatively evaluates success through multiple lenses which are reflective of our mission, vision, and goals. For example, did a program introduce a new artist or genre to our community? Did the artistic excellence of the program meet our audiences’ expectations? Did the program elicit such a strong positive response that it indicates that similar future programming will be equally popular? Did the program invite members of our community who have not felt welcome before through the Wheeler doors, and did the experience make it likely that they will come back again? And finally, did a program fill a need that has not been met before in our community, such as professional student matinee performances as an example? Wheeler Staffing Currently, the Wheeler has 16 full-time staff members: Production staff 3 Box Office 2.5 Front of House 2.5 Business and Finance 2 Building Supervision & Support 2 Artist Services 1 Rentals 1 Marketing 1 Executive Director/Artistic Planning 1 Additionally, there are three hourly box office representatives, four front of house staff, one building support person, and five hourly production staff whose work and hours vary depending on the level of programming and rental activity. Some may work 25 hours a week; some may work 16 hours in a month. The number of staff adequate to successfully meet the mission, vision and goals of the Wheeler involves an evaluation of programming demands, individual workload, and other priorities as determined by staff and City leadership. Currently, areas of stress include production, marketing and artistic planning. CITY MANAGER COMMENTS: 5 ORDINANCE NO. 2 Series of 2021) AN ORDINANCE OF THE CITY OF ASPEN,COLORADO,REPEALING ORDINANCE NO. 50 SERIES OF 2013)AND RE-ENACTING AN ORDINANCE TO PROVIDE THE AUTHORITY AND DIRECTION FOR THE WHEELER BOARD TO BE GUIDED BY THE ADOPTED WHEELER MISSION AND GOAL STATEMENTS,TO RECONFIRM THE COMPOSITION OF THE WHEELER BOARD AND TO ACKNOWLEDGE THEIR POSITION AS A BOARD OF ADVISORS OF THE WHEELER OPERA HOUSE TO THE CITY COUNCIL. WHEREAS, the City of Aspen owns the historic structure known as the Wheeler Opera House, located at the corner of South Mill Street and East Hyman Avenue in the City of Aspen, Colorado,and has the right and responsibility to manage the same; and WHEREAS,the City Council did appoint a Board of Directors of the Wheeler Opera House to undertake the management of the Wheeler Opera House in accordance with Ordinance No. 10(Series of 1982); and WHEREAS,the City Council repealed Ordinance No 10(Series of 1982)and re-enacted an ordinance(Ordinance 63 of 1992)to clarify that the Board of Directors is to function as an advisory board and not a managing board; and WHEREAS,the City Council repealed Ordinance No.63 (Series of 1992)and re-enacted an ordinance(Ordinance No. 5, Series of 2004)to change the powers and duties of the Board of Directors to clarify its role in establishing policies for the Wheeler Opera House and to expand the membership of the Board of Directors from seven(7)to nine(9)members; and WHEREAS,the City Council repealed Ordinance No.5 (Series of 2004)and re-enacted an ordinance(Ordinance No. 48, Series of 2005)to decrease the membership of the Board of Directors from nine(9)to seven(7)members,one of which was designated as a youth representative, and modified the qualification requirements to eliminate members or candidates that have a conflict of interest as described in the City Charter(Section 4.7)as"a substantial personal or financial interest"in the Wheeler Opera House;and WHEREAS, Ordinance#50, Series of 2013,removed the designation of one of the voting members as a youth representative and returned such board seat to another community representative; and WHEREAS,the City Council,at the request of the Wheeler Board,desires to readopt and codify all pertinent provisions outlined in the previous ordinances and provide within this Ordinance the authority and direction for the Wheeler Board to be guided by the adopted Wheeler Mission and Goal Statements and to acknowledge their position as a Board of Advisors to the City Council. NOW, THEREFORE,BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF ASPEN,COLORADO, THAT: Ordinance#50, Series of 2013, is hereby repealed,and the following is enacted: 6 Section 1. Establishment of the Board of Advisors. There is hereby established the Board of Advisors of the Wheeler Opera House for the City of Aspen, Colorado,which Board of Advisors shall serve for an indefinite term and at the pleasure of the City Council. This board shall also be known as The Wheeler Advisory Board. Section 2. Composition; Term; Qualification. The Board of Advisors shall be constituted as follows: a) Board of Advisors of the Wheeler Opera House shall consist of seven(7) regular members and one(1)alternate member, all of whom shall serve overlapping three(3)-year terms. The Board shall be appointed by the City Council with all appointees designated as at-large appointees who shall be selected primarily for their knowledge of and experience in the performing arts and/or financial,management or marketing capabilities. b) Except for the filling of vacancies,all terms of appointment shall be for three-year periods, commencing at the time of appointment. c) The Aspen Music Festival and School(AMFS)or its successor organization that may have the right to the exclusive use of the Wheeler Opera House during the summer season,as per contract through August 2034,shall appoint a representative to fill a permanent,non-voting,ex-officio seat on the Board of Advisors. By virtue of AMFS's Wheeler Opera House management responsibilities for a significant portion of the year,the AMFS representative shall be entitled to participate in any of the activities and deliberations of the Board but shall not vote. d) All members of the Board of Advisors shall serve at the pleasure of the City Council and may be removed by majority vote thereof. e) The Board of Advisors is declared not to be a permanent board within the meaning of Section 8.2 of the Charter of the City of Aspen and,therefore,there shall be imposed no age or residency requirement for membership on the Board of Advisors nor shall candidates for appointment be required to be qualified electors. Section 3. Powers and Duties. Generally,the Board of Advisors is empowered to advise the City of Aspen on the planning and policy related to the daily and long-term operations of the Wheeler Opera House,guided by the adopted Wheeler Mission and Goal Statements,as may be amended from time to time by the Board of Advisors and approved by City Council . These advisement duties shall include the following: a) Recommend scheduling policy,priorities and rates for the theatre operations;and b) Recommend operating policy and rental rates for the commercial space in the Opera House building. Section 4. Rules of Procedure. a) A quorum to transact the business of the Board of Advisors shall consist of four(4) members. 7 b) At its first meeting(which shall be called by the City Manager),the Board of Advisors shall elect a chairperson,vice-chairperson,and secretary. c) The Board of Advisors shall establish regular meeting times and days. Special meetings may be called by the chairperson or at the request of any two(2)members on at least twenty-four(24)hours written notice to each member of the Board of Advisors,provided that a special meeting may be held on shorter notice if all members of the Board of Advisors waive notice in writing. No business shall be transacted at any special meeting unless it has been stated in the notice of such meeting. Notice by email shall be deemed acceptable. d) All regular and special meetings of the Board of Advisors shall be open to the public except for executive(closed door)meetings as are permitted by law. Citizens shall have a reasonable opportunity to be heard and all minutes and other records of action of the Board of Advisors shall be made available to the public. e) The Board of Advisors may adopt by-laws for the conduct of its business not inconsistent with this ordinance and the Charter of the City of Aspen and shall adopt such rules of procedures as it deems necessary. Section 5. Severability If any section,subsection,sentence,clause,phrase,or portion of this ordinance is for any reason held invalid or unconstitutional in a court of competent jurisdiction, such portion shall be deemed a separate,distinct,and independent provision and shall not affect the validity of the remaining portions thereof. Section 6. Public Hearing A public hearing on the ordinance shall be held on the 9th day of February 2021, in the City Council Chambers,Aspen City Hall,Aspen,Colorado. INTRODUCED, READ,AND ORDERED PUBLISHED as provided by law by the City Council of the City of Aspen on the 26'x'day of January 2021. 40' I Torre,Mayor TESO! enni—ng, 1/1 tica City, A L& C er FINALLY adopted,passed and ordered published this 9`h day of February 2021. Torre,Mayor TEST: Nicole Henning,City Clerk 8 9 10 11 12 13 MEMORANDUM TO:Mayor Torre and City Council FROM:Lisa Rigsby Peterson, Wheeler Opera House Executive Director THROUGH:Diane Foster, Assistant City Manager MEMO DATE:January 29, 2024 MEETING DATE:February 5, 2024 RE:Aspen Public House Lease Modification Request REQUEST OF COUNCIL:The proprietor of the Wheeler’s restaurant tenant, Aspen Public House (APH), would like to discuss with Council your thoughts regarding a possible lease amendment reducing the number of days APH must offer lunch service. SUMMARY AND BACKGROUND: William (“Bill”) Johnson, APH’s proprietor, is in the first year of a final five-year lease extension for the Wheeler Opera House’s ground floor restaurant space. He is struggling with profitability of lunch service during shoulder seasons and winter months and would like to discuss details with Council. A memo regarding this situation is included in this work session agenda item. DISCUSSION: The current lease for Aspen Public House requires the restaurant to be open for both lunch and dinner service seven days a week (Exhibit C, page 22). The restaurant is allowed to close completely for up to 28 days a year with sufficient notice. Earlier this fall, Mr. Johnson spoke to the Wheeler Advisory Board to explain his concerns, and they indicated support for him requesting from Council a modification to his lease terms. APH has operated under a modified lunch schedule since the fall and would like to propose a formal amendment to the existing lease regarding lunch service requirements. FINANCIAL IMPACTS: If APH does not provide lunch service during shoulder seasons and winter months, the financial impact to the city would be in reduced sales tax revenue. It is difficult to accurately quantify this number as it varies depending on the flow of business. Mr. Johnson’s memo broadly describes the financial impacts to the restaurant of the requirement to provide lunch service seven days a week. ENVIRONMENTAL IMPACTS: There are no apparent environmental impacts related to this request. 14 ALTERNATIVES: Council may advise Mr. Johnson to submit a formal request to amend the lease terms to reflect new lunch service requirements. Council may then approve or deny this request. It would be up to Mr. Johnson to determine how to move forward depending on Council’s direction and/or formal action. RECOMMENDATIONS: Staff has no recommendation at this time and will look to Council for guidance. CITY MANAGER COMMENTS: 15 Aspen Public House RE: Lease Amendment Request Written by Bill Johnson 1.24.2024 Objective: To create a lease amendment for Aspen Public House allowing ownership discretion over weekday lunch service during the shoulder seasons and winter months. Currently, the language in the lease states that Aspen Public House is required “to be open for Lunch & Dinner, 7 days a week.” Since Aspen Public House opened its doors to the public in May of 2018, we have done our very best to be an exceptional tenant for the city of Aspen and a great operator for local residents. With our reputation as an affordable, locally serving restaurant & bar that is open year round, we have cultivated a loyal customer base of locals and tourists alike. Since taking occupancy of the Wheeler restaurant space, we have always paid our rent on time, cooperated with the city through Wheeler building renovations and maintenance, and invested large amounts of capital towards restaurant space improvements. While Aspen Public House has enjoyed financial success, the profit margin has always been very slim. Aspen Public House would like to continue to operate in the Wheeler space through the remaining years allowed on the lease, but we are seeking the cooperation of town council to ensure the long-term sustainability of restaurant operations. I believe that the original intention of the lease was to have a locally owned and operated restaurant in the Wheeler space that was affordable, accessible for locals, and open year round. Aspen Public House has achieved these intentions by every possible measure. The menu we offer is objectively among the most affordable in Aspen at full-service restaurants, while still maintaining quality and creativity. The food concept has varied over the years with different chefs running the program, however we have always offered traditional, American gastro-pub cuisine in one form or another. With the exceptions of COVID and construction on the exterior of the Wheeler Building, we have always operated continuously throughout the year. While I understand that there are necessary restrictions for my restaurant due to the nature of my lease with the city, I believe that operation details such as specifically when we will offer lunch should be left to the discretion of the business owner who must maintain profitability to survive. Items to address: Financial sustainability: There is not enough foot traffic or demand to break even on weekday lunch during most of the year. Due to the affordable nature of our menu items, we do not make enough money on the profitable periods [dinner and late night] to allow for losses during non- break even lunches. It is in the nature of a restaurant owner to keep the restaurant open during periods that they are fairly certain will be profitable. Typically we need every dollar in profitable sales the restaurant can produce to survive. As the owner of Aspen Public House I take this a few steps further and operate when I am fairly certain that I will at least break even; and 16 sometimes even operate knowing that I will incur a loss with the intention of honoring the lease and protecting my reputation among local customers. However, being forced to open for lunch every day during the months of October, November, May, etc when there is almost zero demand will push the business to a point of insolvency from which it will not recover. Labor Problems: Labor is another reason that offseason/winter, weekday lunch service is difficult to execute. The ongoing saturation of high-end restaurant concepts focused primarily on dinner services means that there are less people willing to work shifts/jobs at restaurants where they make less money selling cheaper food. During dinner and late night s ervices, our ticket averages are much higher due to alcohol and entrée sales, and the restaurant is generally much busier. This translates to FOH staff making competitive wages relative to other restaurants. However during a slow lunch service this competitive advantage is lost, forcing ownership to offer hourly FOH wages much higher than market standards – which increases our overhead and pushes us even further towards insolvency. While the sub-market rate rent we pay allows us to offer more affordable food than we would be able to otherwise, it does not make us invulnerable to outside market forces that drive up both labor and food costs. The costs that Aspen Public House is paying for labor, food, liquor, etc. have all increased dramatically since we began our operations in 2018. Protecting the reputation of the business: It is important that we offer a consistent product using a consistent model. We are a traditional full service, sit down restaurant & bar. While we have attempted to offer “grab and go” menu items in the past, it was unsuccessful and can be confusing for customers. Offering a consistent schedule is also critical to protecting the reputation of the business. This is one reason I would like to be able to have a set schedule throughout the winter months; rather than try to explain that we will do lunch during the holiday week, X Games, spring break, but not during other times of the winter. The affordable aspect of Aspen Public House is sustainable, but it requires a high volume of customers and sales to remain so. Lunches during certain times of the year where we are lucky to see even a handful of customers do not meet this basic requirement. MISC theories and observations regarding weekday lunch: The largest demographic seeking lunch on weekdays at APH has historically been tourists. This supports why we are busy for lunch when there is ample foot traffic but struggle to breakeven otherwise. Most locals are working 9-5 jobs, and typically do not seek out full service restaurants for lunch. This is why restaurants like Big Wrap, Grateful Deli, and the grocery stores do well. During the summer months there is high volume tourist foot traffic in the downtown core during lunch hours; whereas during the winter months this traffic is more concentrated to on-mountain locations, and tourists are less likely to make their way into town during valuable ski lift operating hours. Again, weekend lunches are a different story – where demand is largely driven by locals even during peak season. 17 Proposed Schedule: Aspen Public House will be open for Lunch & Dinner, 7 days a week from June 1 - Sept 30 Aspen Public House will offer weekend lunch through the month of October, as well as the peak season winter months from Mid-December through Aspen Mountain Ski Lift Operations. Quantitative Support: Aspen Public House requires ~65 guests between the hours of 12pm – 4pm to reach a breakeven sales number. During the slowest times of year, this number frequently dips below 20 guests. Estimated Break Even Sales: 2,581.67 Historical Off Season Check Average: $40 Customers to reach Break Even 65 66%67% 75% 28% 12% 66% 100% 89%85% 43% 19% 72% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec TOTAL MONTHLY SALES VOLUME 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64