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ATTACHMENT I

Final Report

MARKET AND FEASIBILITY ANALYSIS


FOR A COMMUNITY ARTS CENTER IN
OLYMPIA, WASHINGTON

Prepared for

City of Olympia

Submitted by
Economics Research Associates

March 2007

ERA Project No. 16504

388 Market Street, Suite 1580


San Francisco, CA 94111
(415) 956-8152 FAX (415) 956-5274
www.econres.com
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ATTACHMENT I

GENERAL LIMITING CONDITIONS

Every reasonable effort has been made to ensure that the data contained
in this study reflect the most accurate and timely information possible,
and they are believed to be reliable. This study is based on estimates,
assumptions and other information developed by Economics Research
Associates from its independent research effort, general knowledge of
the industry and consultations with the client and the client's
representatives. No responsibility is assumed for inaccuracies in
reporting by the client, the client's agent and representatives or any other
data source used in preparing or presenting this study.

This report is based on information that was current as of March 7,


2007, and Economics Research Associates has not undertaken any
update of its research effort since such date.

No warranty or representation is made by Economics Research


Associates that any of the projected values or results contained in this
study will actually be achieved.

Possession of this study does not carry with it the right of publication
thereof or to use the name of "Economics Research Associates" in any
manner without first obtaining the prior written consent of Economics
Research Associates. No abstracting, excerpting or summarization of
this study may be made without first obtaining the prior written consent
of Economics Research Associates. This report is not to be used in
conjunction with any public or private offering of securities or other
similar purpose where it may be relied upon to any degree by any person
other than the client without first obtaining the prior written consent of
Economics Research Associates. This study may not be used for
purposes other than that for which it is prepared or for which prior
written consent has first been obtained from Economics Research
Associates.

This study is qualified in its entirety by, and should be considered in


light of, these limitations, conditions and considerations.
ATTACHMENT I

TABLE OF CONTENTS
Section Page

I INTRODUCTION ................................................................................... I-1


Study Goals and Tasks....................................................................... I-1
Report Outline.................................................................................... I-2

II COMMUNITY NEEDS AND CONCEPT.............................................. II-1


Community Input ............................................................................... II-1
Preliminary Concept .......................................................................... II-7
Site Analysis ...................................................................................... II-12

III OVERVIEW OF AVAILABLE MARKETS .......................................... III-1


Resident Market ................................................................................. III-1
Arts Education ................................................................................... III-4
Quantification of Resident Market..................................................... III-5
Visitor Market.................................................................................... III-5
Summary of Available Markets ......................................................... III-9

IV CASE STUDIES OF SELECTED ART CENTERS ............................... IV-1


Comparable Facilities ........................................................................ IV-1
• Arts Council of Snohomish................................................. IV-1
• Bainbridge Arts & Crafts .................................................... IV-4
• Blue Star Arts Center .......................................................... IV-5
• Centrum............................................................................... IV-6
• Consolidated Works ............................................................ IV-7
• Cooper Cultural Arts Center ............................................... IV-8
• Coupeville Arts Center........................................................ IV-10
• Department of Safety .......................................................... IV-11
• Kirkland Arts Center ........................................................... IV-12
• Palos Verdes Art Center...................................................... IV-13
• Riverbend Arts Center ........................................................ IV-14
• Torpedo Factory .................................................................. IV-15
Lessons Learned................................................................................. IV-16

V FACILITY USAGE AND FINANCIAL ANALYSIS ............................ V-1


Facility Management ......................................................................... V-2
Earned Income Potential .................................................................... V-4
Operating Expenses ........................................................................... V-12
Physical Planning Issues .................................................................... V-17
Economic Impact Discussion............................................................. V-18

VI ESTIMATE OF CAPITAL COST........................................................... VI-1


Assumptions....................................................................................... VI-1
Project Cost........................................................................................ VI-2
Other Capital Cost Issues................................................................... VI-3

APPENDIX A: CAPITAL COST SUPPORTING DETAIL

i
ATTACHMENT I

SECTION I: INTRODUCTION

Olympia has an active and vibrant arts community, with close to 200 arts organizations
and venues. The city has developed a national reputation for its arts offerings, and also
serves as a regional provider and role model for arts programs. The Olympia Arts
Commission was formed in 1988 in order to support the continued growth and provide
direction for the development of arts in the area. One of the Commission’s priorities is
the creation of a community arts center that would serve to anchor and promote the
diversity of arts in the area.

In order to further the goal of developing an arts center and to better understand the
financial implications of such a facility, the City of Olympia retained Economics
Research Associates (ERA) to conduct a feasibility study that would evaluate facility
concept options, identify potential management and operational structures, determine
market and revenue potential, and identify operating costs and other financial issues.

STUDY GOALS AND TASKS

The general purpose of this study is to create a workable art center concept and identify
broad feasibility parameters so that the City can effectively respond to any future
development opportunities. It should be noted that there are no current specific plans,
sites, or buildings identified for a community arts center in Olympia, so this report does
not analyze a specific opportunity. Rather, the City goals for this study are as follows:

• To assist the City of Olympia to best position itself for any project, land or
building that may become available in the future;
• To provide a framework for analyzing various costs and benefits of any such
opportunities;
• To better understand what type of arts center is most needed in the community,
identify a range of development costs, and determine how much subsidy an art
center could require on an ongoing operating basis; and
• To provide a roadmap for future planning for development of an art center.

As part of this study, ERA completed the following tasks:

• Met with City staff and the Olympia Arts Commission to identify project goals
and parameters;
• Conducted a community input process that consisted of workshops, focused group
interviews, and site visits to arts organizations and facilities in Olympia;
• Based on the community input, created a hypothetical concept for the proposed
arts center and held another workshop to receive feedback;

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• Developed criteria that can be used to evaluate sites for a future art center and
applied these criteria in a matrix used to rank three sites in Olympia;
• Evaluated the size and characteristics of the available resident and visitor markets;
• Conducted case studies of 12 art centers in the Northwest and around the United
States;
• Evaluated usage potential and developed a financial analysis for the proposed art
center including earned income, operating budget, and amount of contributed
income required on an annual basis;
• Based on the estimated usage, evaluated physical planning parameters and
recommended the appropriate size for an arts center in Olympia;
• Evaluated parking requirements and needs for the arts center;
• Worked with Oppenheim Lewis, a cost estimating firm specializing in
environmental design and construction of cultural facilities, to determine likely
capital costs for the facility; and
• Identified economic impact mechanisms.

REPORT OUTLINE

The concept and site analysis is located in Section II immediately following this
introduction. Section III includes an overview of the available markets, and the case
studies are discussed in Section IV. Section V includes ERA’s usage projections and
financial analysis, and the Oppenheim Lewis capital cost estimate is in Section VI.

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SECTION II: COMMUNITY NEEDS AND PRELIMINARY


CONCEPT

In this section, ERA discusses the strengths, challenges, and perceived needs of the
Olympia arts community and, based upon these factors, presents a preliminary concept
for the community arts center to be used for feasibility analysis purposes.

COMMUNITY INPUT

ERA collected information on the needs of the Olympia arts community and solicited
recommendations for art center concepts. ERA’s public outreach included:

• A meeting with the Arts Commission to identify project goals and parameters.
• Three community workshops open to the public, with attendance of
approximately 60 people over the three workshops. Each community workshop
was structured to cover the following topics: strengths of the arts community,
needs and challenges for the community, vision for an arts center, important
features for the center’s location, and suggestions of other art centers that could
serve as good models or ones that would not work well in Olympia.
• Four small group sessions with members of the performing arts, visual arts, arts
education and literary arts communities.
• Numerous site visits to and phone interviews with art galleries, arts organizations,
and existing performing arts and other cultural facilities.
• A fourth community workshop to receive input related to the proposed art center
concept.
In addition, ERA distributed a short written questionnaire to gather standardized input
from workshop and small group attendees, as well as from additional stakeholders. This
section highlights the findings from our public input process.

Strengths of the Arts Community

One of the primary strengths noted about Olympia’s arts community is its vibrancy and
diversity. Its diversity is apparent in many ways:

• There is a strong mix of arts disciplines, including many types of visual, literary,
and performing arts.
• Olympia has a range of professional, semi-professional, and amateur artists.
• Arts organizations range from grassroots and informal to highly structured.
• There are mainstream, traditional arts organizations as well as more progressive,
alternative groups.
• Arts organizations are both non-profit as well as commercial.

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Other strengths of the Olympia arts community include:

• The sheer number of arts organizations and activities is impressive, particularly


relative to the size of the Olympia community.
• The arts community has a “do-it-yourself,” independent nature. Part of the reason
that there are so many arts organizations is that Olympia has attracted people who
have taken initiative to start new groups.
• The arts environment is very inclusive and supportive, particularly of artists trying
new art forms or of general community members dabbling in the arts.
• There is a strong volunteer base associated with many arts activities and
organizations.
• Olympia has a number of arts oriented public events, including Arts Walk and
Procession of the Species. The public actively participates in and attends many of
the local cultural events.
• There are a number of performing arts facilities in existence and a burgeoning
theater district downtown.
• Olympia has a beautiful natural environment that attracts artists as well as
tourists.
• Olympia’s identity as the state capital is an asset. This is particularly related to
Olympia’s ability to attract the visitor market.

Needs and Challenges

While the arts community is very large, diverse, and strong in Olympia, there were
several needs and challenges identified, as summarized below:

• The arts community tends to be very decentralized, with hundreds of small arts
groups who seldom interact.
• While there are a number of performing arts spaces, most of these are not
perceived to be affordable to rent and/or do not have the space or availability to
meet specific event needs.
• Due to the small resident base, it is difficult to be financially viable as an artist.
Many artists develop their craft in Olympia but need to leave due to the lack of
financial support in the community.
• There is a need for a centralized system for distributing information regarding the
arts in Olympia, including shows, classes and community events.
• There is a need for affordable studio and rehearsal space.

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• There is currently no venue large enough to bring in a traveling visual art show or
have a large group gathering for a reading or lecture.
• A single facility does not exist where the public can go to both watch and create
art.
• There is a need for additional arts and crafts space where people can learn to
create art.

Vision for Community Arts Center

During the community workshops, focus groups, and interviews, ERA also asked about
what type of vision people have for an arts center, and what types of experiences they
would like to have in an arts center. A summary of ideas discussed is as follows:

• An arts center should be accessible to the entire Olympia community, including


artists, people who want to learn to create art, and people who just want to view
art. The arts center should be as inclusive and participatory as possible.
• The arts center should accommodate many different art forms.
• There should be a space where traveling exhibits can be brought in, so that the
Olympia community can be exposed to a diversity of art without having to travel
to Seattle.
• People should feel inspired upon entering the arts center.
• An arts center should be lively, active, and vibrant. It should be a place where
artists can gather and collaborate.
• The arts center should be a place where the community can both view and create
art and observe artists.
• An arts center facility should be designed to be flexible, so that it can
accommodate a number of different uses.
• An arts center in Olympia should be economically sustainable. It should not be
overbuilt.
• Artists of all genres and levels of experience should view the arts center as an
important resource.
• A community arts center should appeal to both residents and tourists.

Small Group Sessions

ERA also conducted four small, focused group meetings with members of the arts
education, literary arts, performing arts and visual arts communities. The focus groups
centered on the specific needs and interests of each community with respect to an art
center. The following is a summary of key points raised during each meeting.

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Visual Arts

ERA conducted a visual arts focus group and also visited several studios in Olympia.
Key characteristics of the visual arts community and issues raised during the focus group
that are relevant to a proposed arts center are summarized below:

• There is a large semi-professional and professional visual arts community in


Olympia. In addition, there are events in Olympia where a larger segment of the
community gets involved in arts creation.
• Artists typically work in their homes or small studio spaces.
• There are currently a number of art galleries, particularly in downtown Olympia.
In order to be profitable, most of these galleries supplement their art showings
with gift-oriented retail sales, facility rentals, or other arts related services such as
classes or framing.
• There is a general consensus that there is not adequate visual arts exhibit space in
Olympia. Many medium to large sized shows have to go to Seattle or outside the
Olympia community. While there are informal locations that are currently
serving as exhibit space (e.g. cafes, restaurants, and local facilities), there should
be a space large enough to hold juried shows. Existing facilities have constraints
such as limited hours or limited access.
• Visual arts services organizations, and artists in Olympia are fairly decentralized,
with no one focal point for the community to gather or for information exchange.
• There is a need for a larger gallery space that could host traveling exhibits, as well
as additional workspace for artists.
• While many arts groups indicated that their members would like to have a place
such as an arts center to sell their work, a concern was also raised related to
potential competition with existing private galleries.
• An arts center could provide valuable professional training for artists on how to
market their art work, how to run an arts business, etc.

Arts Education

Olympia has a strong arts education community. There are a number of art classes,
provided through both established institutions, such as the Olympia Center and the
Mariah Collaborative Arts School, and by individual artists, who provide classes in their
homes and/or studios. In addition, there are potential opportunities to connect with the
School District in order to provide arts education to school-aged children. A summary of
key points raised as part of the arts education focus group and through subsequent phone
interviews is as follows:

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• As part of education reform in Washington State, policymakers have recognized


the importance of arts in children’s learning. In 1993, Washington State adopted
broad learning goals in the arts, and in 1994, added specific arts standards to its
Essential Academic Learning Requirements. Discipline-specific and grade-level
frameworks were adopted in 2001. In 2004, state policymakers required schools
to offer comprehensive sequential instruction in four arts disciplines by qualified
and certified instructors, and by establishing a high school graduation requirement
in the arts. By the end of the 2008-09 school year, school districts must
implement classroom-based assessments to assure that their students can apply
core arts concepts in at least one art form. An arts center in Olympia could be
designed in a way that supports schools in meeting these requirements. While this
would require professional staff and high quality programs that are designed
specifically to meet State requirements, it could be an excellent opportunity for a
new arts center in Olympia.
• Regardless of whether or not the art center programs can meet these new
curriculum standards, there is a strong need for professional development for
teachers and development of curriculum in the arts for teachers to use.
• An arts center should be designed to support school programs, with adequate
classrooms, a lunchroom space, workshops areas, and appropriate staffing.
• Affordability is an important issue that should be addressed. Programs for
school-aged children should be as affordably priced as possible to meet the needs
of all children.
• In the past there was a program that matched teachers with local community
artists. This was a highly successful program that was cut due to budget
constraints, but this is something that could be developed as part of an arts center
program.
• The art center could either operate its own programs or just serve as a facility for
the operation of existing organizations and programs.
• There are a number of individual artists who currently offer art classes out of their
homes or studios, but there is no way for the general public to find out about all of
the arts learning opportunities in Olympia.

Literary Arts

There is an extremely active literary arts community in Olympia, with numerous poetry,
storytelling, playwrights, and other writing groups. A summary of key issues raised
during the literary arts focus group is as follows:
• Most of the literary arts groups tend to be grassroots and fairly informally
organized. While many of them are membership based, they are not highly
structured and aim to be as inclusive as possible.

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• Most of the literary groups have very small budgets and no paid staff. Many are
organized and run by volunteers.
• Many groups prefer to meet in living rooms, cafes, or other lounge type spaces, as
this environment is more conducive to their activities than a more institutional
type classroom or meeting room.
• Space within an arts center could still be useful, as it would provide a place for
artists to collaborate, connect with artists of different genres, learn from each
other, market their activities or organization, hold organizational meetings, or
perform readings.
• However, arts center space would have to be very affordable or free, as most
literary arts groups have very small budgets.

Performing Arts

Olympia has very strong performing arts community, with a diverse offering of dance,
theater, and music. ERA conducted a focus group with performing arts groups and also
visited most of the performing arts facilities in Olympia. Key issues related to the
performing arts community and a community arts center are highlighted below:

• There are numerous performing arts facilities already in Olympia, ranging from
informal all-ages spaces to small black box format theaters to larger more
traditional performing arts theaters. Some of the performing arts facilities include
the Washington Center for the Performing Arts, the Midnight Sun, the Capital
Playhouse, the Olympia Little Theater, the Kenneth J. Minnaert Center for the
Arts at South Puget Sound Community College, Yes Yes, and Harlequin
Productions. The Capital Playhouse, Harlequin Productions and Olympia Little
Theater have resident companies that utilize the space for the majority of the year.
Furthermore, Olympia has a flourishing live music community. There are choral
and orchestral groups that perform at several of the venues identified above. The
Midnight Sun and Yes Yes also serve as an all ages venue for live musical acts.
• While there are many performing arts facilities in existence, affordability is
perceived to be a major problem. Many of the performing arts groups indicated a
need for more affordable space.
• There is also a need for additional rehearsal, teaching, and recital space.
• Local orchestras and music performing arts groups currently use local high
schools to rehearse in and pay fairly high rent. A facility that could have two
large rehearsal halls and four chamber rooms would be ideal to meet the needs of
the larger groups.
• Existing facilities that are used for dance include the Eagles building and the
Olympia Center ballroom. Any dancing space within an art center should have a
wooden floor.

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ATTACHMENT I

OLYMPIA COMMUNITY ARTS CENTER PRELIMINARY CONCEPT

The concept for the arts center will drive many aspects of the feasibility, from attendance
potential to ability to generate earned income. As shown through the case studies and
through ERA’s community input process in Olympia, the term “art center” is a fairly
broad term that can include many different types of facilities, programs, and activities.
The ideal concept at this early phase in the planning process will be broad and flexible
enough to adapt to various opportunities that could arise in future years and meet
changing needs, yet specific enough to allow for realistic analysis of physical,
operational, and financial issues.

Thus, while it is neither necessary nor advisable to develop a concept that is too specific
at this point, it is important to identify key characteristics and define major parameters for
the art center. In the section that follows, ERA has identified several key parameters that
will eventually need to be addressed for the arts center. For feasibility testing purposes,
ERA has developed assumptions related to some of these issues.

Key Concept Questions

Organizational and Management Structure

• Who will own the facility?


• Will the facility by managed and operated by the City of Olympia, a new, 501(c)3
organization, or an existing arts organization?
• Will the facility have a staff that “produces” its own programs and activities, or
just be a conduit for existing arts organizations?
• Will the art center have a membership structure?

Arts Disciplines

• Will the arts center be focused on one particular art form (i.e. visual, literary, or
performing arts) or be inclusive of all art genres?
• To what extent will the facility be designed to accommodate specific physical
space needs required by certain arts organizations (e.g. large rehearsal space,
fixed seat theater, darkroom, kiln, etc.)?

Arts Education

• Will the arts center offer classes?


• If so, who will teach the classes? Will the arts center offer its own classes, and
will the facility be available to rent by outside teachers?

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• Will the arts center be able to develop curriculum that meets newly developed
Washington State arts assessment guidelines?

Exhibit / Gallery Space

• Will the arts center include exhibit or gallery space?


• If so, how much space? What will the largest gallery size be? How many
galleries will there be?
• Will there be an area to host traveling exhibits?

Tenants / Office Users

• Are there any arts organizations in Olympia that are interested in having
permanent office space within the building?
• Are there any organizations that are key partners or resident tenants who provide
services or programs within the facility?
• Should there be a transient office area that can be used by members or arts
organizations?
• If so, are there any services (i.e. copy machines, file storage, etc.) that are
associated with this space?

Retail Sales / Gift Shop

• Should the arts center include a gift shop?


• Should exhibited pieces be available for sale? If so, does the arts center receive a
commission?
• Can there be a commercial restaurant or café associated with the arts center that
provides a revenue stream?

Studio Space

• Should the art center have studio space for rent?


• If so, are these spaces available on a long-term or short-term basis?

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Other Questions

• Should the art center be part of a mixed-use development with artist housing?
Will there be any housing associated with the center to accommodate artists in
residence or overnight workshop attendees?
• What are the key factors that are important to site selection?
• Should the art center be a collecting organization?
• What are the major sources of earned income?

Recommended Overall Concept

Based upon our research and analysis to date, ERA developed the following guiding
principles upon which the Olympia community arts center preliminary concept was
developed. These principles are as follows:

• ERA believes that the mission of an arts center in Olympia should be broad
enough to include a range of arts programs and genres. One of the strengths of
the arts community in Olympia is its diversity, and a community arts center needs
to be able to incorporate and reflect this diversity.
• The space needs to be flexible in order to accommodate a variety of activities.
Generally speaking, ERA does not believe that any expensive, single use areas
that cannot be used in a flexible manner should be included.
• Based on our review of the existing Olympia arts community, it is ERA’s opinion
that there is a need for a high quality, medium sized exhibit area that can be open
and accessible to the public during normal operating hours and accommodate a
range of arts exhibitions.
• ERA believes that there are adequate performing arts facilities in existence in
Olympia. While these facilities may seem too expensive for certain performing
arts groups, ERA does not believe the affordability issue can be solved with the
development of another performing arts facility.
• The arts center needs to be financially viable on an operating basis, and as such,
should be designed to maximize earned income potential. ERA assumes that
there is no capital cost debt to cover once the facility is operating.
• A new 501(c)3 organization should be created that would allow the arts center to
fundraise. Possibilities include having the arts center run by a new non-profit, by
the City of Olympia, or a hybrid between these two options. ERA does not
believe that an existing arts organization should manage the arts center. There
are various advantages to different management structures. The facility itself and
the land could be owned by the City and leased to the non-profit on a long-term
lease basis for a nominal fee (i.e. $1 per year) or just owned by the City,
depending upon the management structure.

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• The arts center should offer a variety of classes and workshops for amateur and
professional artists as well as the general public.
• There is an opportunity to provide curriculum-related school programs that could
result in eligibility for public and private grants.
• It is ERA’s preliminary opinion that some limited general use studio space should
be provided, but private studios should not be available for rent on a long-term
basis.
• One of the strengths of Olympia is its beautiful environment, particularly along
the waterfront. ERA believes that an arts center should be located on a site that
maximizes Olympia’s waterfront location. It should also be located centrally,
close to other cultural facilities in the downtown.

Facility Components and Size

Based upon our public input process and review of other arts centers, ERA developed a
preliminary physical concept for a community arts center in Olympia that can be used for
feasibility testing purposes. It must be noted that this concept is preliminary and
primarily created to provide a general sense of scale and broad uses.

Major components within ERA’s preliminary concept for the community arts center in
Olympia include:

• Exhibit Area – Approximately 4,000 to 6,000 square feet of exhibit area, which
can be divided into two to three galleries that range in size from 1,500 to 3,000
square feet. There should be one larger sized gallery that can be used to host
special events and for private facility rentals.
• Office Space – ERA assumes approximately 1,500 to 2,000 square feet of office
and administrative space for art center staff and other office functions. This space
includes a small guest workspace that can be used on a transitional basis by arts
groups, but does not assume any long-term arts tenants. If there are arts
organizations looking for permanent office space, this option should be explored.
• Classroom / Workshop / Meeting Space - ERA has estimated between 1,500 to
2,000 square feet for classroom and workshops. This assumes approximately
three to four classroom or workshops. ERA recommends that at least two of the
spaces be designed as one larger space that can be subdivided. These spaces
should be designed so that they can be rented out as meeting spaces as well.
• Studio/ Work Space – There should be some studio space, between 500 and
1,000 square feet, developed for local artists or members of the arts center to use
on a temporary basis. This space could also be used by visiting artists.
• Retail Store –ERA recommends that a retail component be developed as part of
the art center. There appears to be demand from community artists who need

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avenues for selling their art, and the retail store can provide an additional earned
income source for the art center.
• Restaurant / Café – A restaurant or café should be included, particularly if the
art center is located in a desirable waterfront location. This could provide both an
informal place for artists to gather as well as an ongoing revenue stream for the
arts center. It could also enhance the event rental potential by providing a kitchen
for events.
• Resource / Information Center – There is a need for a centralized marketing and
information center for arts activities and events in Olympia. This function could
be part of the art center lobby or part of the gift shop.
• Back of House / Visitor Flow / Other – ERA estimates between 2,500 and 5,000
square feet to accommodate other functions such as restrooms, circulation, visitor
flow, public areas, and storage.
• Outdoor Areas – Outdoor areas are not included in this estimate but will include
landscaping and parking, and depending upon the site, could include some
outdoor programming space as well.
ERA has used these square footage estimates as a general guide for determining
preliminary operating costs and earned income potential. When added together they
result in between 12,000 and 19,500 square feet. We assume that more detailed design
work would be conducted prior to the actual development of an art center should a site
and/or existing building be identified.

A breakdown of the facility size by component is shown in Table II-1.

Table II-1: PRELIMINARY SIZE RECOMEMNDATION FOR PROPOSED OLYMPIA


COMMUNITY ARTS CENTER

Facility Component Low High


Exhibit space 4,000 6,000
Office / Admin space 1,500 2,000
Classrooms / Workshops 1,500 2,000
Work / Studio space 500 1,000
Retail Space 500 1,000
Subtotal 8,000 12,000
Circulation, Back of House, etc. 2,500 5,000
Restaurant / Café 1,500 2,500
Total Facility Size 12,000 19,500
Source: Economics Research Associates.

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SITE ANALYSIS

Site and Location Characteristics

ERA also asked Olympia community members about what types of site characteristics
would be important for an arts center and to suggest possible sites. A summary of these
responses is as follows:

• It is important to have adequate parking.


• The site should be in an accessible and central location.
• The arts center should be located in a highly visible site.
• There should be some outdoor space available as part of the arts center.
• An arts center should have proximity to the waterfront, since this is a strength of
Olympia’s natural environment.
• An arts center should be located downtown.
• An arts center should be clustered near other cultural facilities.
Specific sites suggested during the community meetings include:
• Anywhere in the downtown core;
• The Armory building;
• The Port area;
• The former site for the proposed conference center;
• State Street;
• West Bay Drive;
• The old brewery in Tumwater;
• The Carnegie building;
• The old Thurston County Department of Public Health building;
• The former Greyhound Bus Station;
• The former State Capitol Building; and
• Bernie’s Garage.

Specific Site Analysis

At this point there are no specific sites being considered for the proposed arts center;
however, the City of Olympia asked ERA to analyze some potential sites discussed in the

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ERA Project No. 16504 Page II-12
ATTACHMENT I

community workshops in order to illustrate how sites could be analyzed for


appropriateness and viability. ERA analyzed the following three sites: 1) the waterfront
site where the new City Hall facility will be located; 2) the old Armory building; and 3)
an existing building in downtown Olympia.

ERA used the site criteria discussed above to create a site evaluation matrix, as shown
below in Table II-2. Each site is ranked according to how well it meets the given
criteria, with a “1” being the lowest and a “3” being the highest. It is important to note
that since a specific building in downtown was not evaluated, the rankings could change
substantially depending on the specific characteristics of the site and building.

Table II-2: SITE EVALUATION MATRIX FOR PROPOSED COMMUNITY ART CENTER IN
OLYMPIA

Downtown
Waterfront Armory Existing
Site Characteristics Site Building Building
Central & Accessible Location 3 1 3
Highly Visible Site 3 1 3
High Traffic Area (pedestrian) 3 1 3
Availability of Outdoor Space 2 2 1
Compatibility with Adjacent Uses 3 2 3
Waterfront proximity / views 3 1 2
Downtown Proximity 2 1 3
Near Other Cultural Facilities 3 1 3
Parking Availability 2 3 2
Development / Acquisition Cost 2 1 2

Total Points 26 14 25
Source: Economics Research Associates.

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SECTION III: OVERVIEW OF AVAILABLE MARKETS

The size and characteristics of the available market for a cultural institution are important
factors in determining potential audience demand. As part of our demand analysis for
the proposed arts center, ERA researched and analyzed trends in the resident and tourist
markets in the region. ERA collected data on historical population, projected population
growth, and key demographic characteristics of each market.

RESIDENT MARKET

The Olympia metropolitan region is defined as Thurston County. The County includes
the cities of Olympia, Tumwater and Lacey. In 2005, Thurston County had a population
of 225,000 and was ranked as the eight largest county in Washington State.

Historic Growth

The historic growth of the resident market can be seen through trends in the five-county
region. As shown in Table III-1, Thurston County experienced the greatest annual
growth rate within the five-county region.
Table III-1: POPULATION GROWTH IN FIVE COUNTY REGION, 1990-2006.
Ann. Rate
of Growth
1990 1995 2000 2005 2006 1990-2006
Grays Harbor 64,200 67,900 67,200 69,800 70,400 0.6%
Lewis 59,400 65,300 68,600 71,600 72,900 1.3%
Mason 38,300 44,900 49,400 51,900 53,100 2.1%
Pierce 586,200 649,100 700,800 755,900 773,500 1.7%
Thurston 161,200 190,900 207,400 224,100 231,100 2.3%

Total 911,300 1,020,100 1,095,400 1,175,000 1,203,000 1.8%


Source: State of Washington Office of Financial Management, ERA

Overall, Thurston County’s population grew at an average annual rate of 2.3 percent,
increasing from 161,200 in 1990 to over 231,100 in 2006. Neighboring Mason and
Pierce Counties also experienced reasonable annual growth between 1990 and 2006.

The city of Olympia is home to approximately 20 percent of the Thurston County


population. The city has experienced steady growth between 2000 and 2006. While the
County grew by 1.8 percent annually, between 2000 and 2006, the city of Olympia grew
at a rate of 0.5 percent annually. The city of Tumwater grew at the same rate as Olympia
while the city of Lacey grew by 1.5 percent annually.

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As indicated in Table III-2, Tacoma is largest city in the two county region, with a 2006
population of nearly 200,000, and is growing at approximately the same rate as
Tumwater and Olympia.

Table III-2: POPULATION OF SELECTED REGIONAL CITIES, 2000-2006


Ann. Rate
of Growth
2000 2001 2002 2003 2004 2005 2006 2000-2006
Pierce County
Lakewood 58,300 58,300 58,700 58,900 59,000 58,900 59,000 0.2%
Tacoma 193,600 194,500 194,900 196,300 196,800 198,100 199,600 0.5%
County Total 700,818 713,400 725,000 733,700 744,000 755,900 773,500 1.7%
Thurston County
Olympia 42,500 42,500 42,700 42,900 43,000 43,300 43,740 0.5%
Lacey 31,200 31,600 31,900 32,200 32,500 33,200 34,060 1.5%
Tumwater 12,700 12,800 12,700 12,700 12,900 13,000 13,100 0.5%
County Total 207,355 210,200 212,300 214,800 218,500 224,100 231,100 1.8%
Source: State of Washington Office of Financial Management, ERA

Projected Population Growth

Thurston County is expected to maintain its steady rate of growth over the next 25 years.
Between 2010 and 2030, the County is forecasted to grow at a rate of 1.9 percent
annually. This translates into an absolute increase in population of 118,000 people.
Tumwater, including its urban growth area, is expected to experience the greatest annual
rate of growth, increasing by 17,200 people, at a rate of 2.7 percent annually. Lacey is
forecasted to grow at the same rate as the County, while Olympia is expected to grow at a
rate slightly lower than that of the County. Table III-3 includes the projected population
growth for Thurston County and the cities of Lacey, Olympia and Tumwater, which
include their respective urban growth areas.
Table III-3: PROJECTED POPULATION GROWTH IN TRI-CITY REGION, 2010-2030

Ann. Rate
of Growth
1
Jurisdition 2010 2015 2020 2025 2030 2010-2030
Lacey 73,900 82,900 92,200 99,900 106,700 1.9%
Olympia 60,900 67,000 72,900 77,900 82,200 1.5%
Tumwater 24,400 27,100 32,200 37,100 41,600 2.7%

Thurston County 255,000 285,000 319,000 348,000 373,000 1.9%

1
Estimates for Lacey, Olympia and Tumwater include their respective Urban Growth Area.
Source: Thurston County Regional Planning Commission

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ATTACHMENT I

Resident Market Demographics

Key characteristics of the resident market for the arts center are summarized in Table III-
4. Overall, residents of Thurston County are more educated and achieve a higher median
household income as compared to Washington State and the United States.

Table III-4: COMPARISON OF KEY COUNTY, STATEWIDE AND NATIONAL


DEMOGRAPHIC CHARACTERISTICS

Educational Attainment Age Distribution

Median High School Bachelor


2005 Household Graduate or Degree or Under
Market Area Population Income Higher Higher 20 21-64 65 +

Thurston County 225,000 $48,080 92.2% 31.3% 25.1% 63.5% 11.4%

Washington State 6,146,338 $49,262 88.8% 30.1% 26.6% 62.3% 11.1%

United States 288,378,000 $46,242 84.2% 27.2% 27.8% 60.2% 12.1%


Source: United State Census, 2005.

Highlights of the region’s demographics are as follows:

• The median household income of Thurston County is $48,080, slightly lower than
the state median of $49,262 although it is higher than the national median.
• Residents of both Thurston County and Washington State have a higher level of
educational attainment, as compared to the United States. Over 92 percent of
residents in Thurston County received a high school diploma or higher degree and
over 31 percent received a bachelor degree or higher. The presence of the
Evergreen State College in Olympia is likely a contributing factor to this
demographic.
• Thurston County population age distribution is proportional to both the state and
national averages indicating that no single age demographic dominates Thurston
County.

Thurston County Schools

School groups are an important component of the attendance to any cultural attraction,
particularly community arts centers. Local schools are excellent sources of enrollment
potential for arts education classes and visitation to art exhibitions.

During the 2004-2005 school year (the most recent available data) there were
approximately 39,000 public school students and 1,900 private school students in the
Thurston County. There are eight school districts in Thurston County. Roughly three

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quarters of all public school enrollment is in the three north county school districts: North
Thurston County, Olympia and Tumwater. The 1,900 private school students are
enrolled in 16 private schools. A summary of schools and enrollment by grade level is
shown in Table III-5.

Table III-5: OVERVIEW OF THURSTON COUNTY ENROLLMENT, 2004-05

Thurston County Olympia School District


Grades Public Private Public Private
Pre-Kindergarten 395 183 187 116
Kindergarten 2,583 232 600 102
Grade 1 2,693 166 598 97
Grade 2 2,689 158 584 92
Grade 3 2,692 166 589 103
Grade 4 2,717 146 611 74
Grade 5 2,831 157 599 86
Grade 6 2,927 162 623 98
Grade 7 3,059 172 669 125
Grade 8 3,028 144 681 106
Grade 9 3,301 55 842 5
Grade 10 3,396 61 868 5
Grade 11 3,338 41 832 0
Grade 12 3,527 57 858 0
Total 39,176 1,900 9,141 1,009
Source: Washington State Office of Superintendent of Public Instruction

ARTS EDUCATION

Arts education has become an important component of education in Washington State; as


it has recently developed Essential Academic Learning Requirements (EALRs) for the
Arts. The component requires that every student understands and applies arts knowledge
and skills; demonstrates thinking skills using artistic processes; communicates through
the arts; and makes connections within and across the arts to other disciplines, life,
cultures, and work. The State has established benchmark testing in Grades 5, 8 and High
School to determine a student’s competency in the arts. The recent development of the
art component of the EALRs presents a great opportunity for the art center. If the Center
develops an extensive arts education program it could fill the void in arts education and
assist the local schools in preparing their students to meet the EALRs grade specific
benchmarks.

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ATTACHMENT I

QUANTIFICATION OF RESIDENT MARKET FOR OLYMPIA ARTS CENTER

Attendance at cultural facilities, including community art centers, has a direct


relationship to proximity. For the purposes of this study, ERA divided the resident
market for an arts center in Olympia into two submarkets: the primary and secondary
markets. ERA determined the boundaries of these two resident sub-markets based on
distance from the downtown Olympia.

• Primary market: defined as zero to 15 miles from downtown Olympia


encompasses much of Thurston County and stretches into parts of Pierce and
Mason Counties.

• Secondary market: defined as 15 to 30 miles from downtown Olympia,


encompasses the rest of Thurston and Pierce Counties and stretches into Mason,
Grays Harbor, Lewis and Kitsap Counties.

A map illustrating the resident market by segment can be found in Figure III-1.

The total resident market population is estimated to be nearly 948,000 in 2006 and
expected to grow to over one million by 2011. The primary market in 2011 is projected
to comprise 25 percent of the total resident market, while the secondary market will
comprise 75 percent of the total market. The primary market is roughly equivalent to the
population of Thurston County and is estimated to increase by 1.8 percent annually
between 2006 and 2011. The secondary market, which includes the city of Tacoma, is
expected to increase by 1.2 percent annually, reaching a population of 760,000 by 2011.

A summary of the available resident market is shown below in Table III-6.

Table III-6: CALCULATION OF AVAILABLE RESIDENT SUBMARKETS

Current Estimated Future


Market Size Market Size
Market Segment (2006) (2011)
Primary Market (0-15 mi) 230,180 251,267
Secondary Market (15-30 mi) 717,633 760,148
Total Resident Market 947,813 1,011,415
Source: ESRI Business Information Solutions and ERA.

VISITOR MARKET

Tourists to Thurston County are an important part of the potential visitation to the arts
center. Visitors chose to visit Thurston County for a number of reasons including the
State Capitol and related institutions, hiking and scenic surroundings of the area, and the
local art galleries and theaters.

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ERA Project No. 16504 Page III-5
Figure III-1: OLYMPIA ARTS CENTER AVAILABLE RESIDENT MARKETS ATTACHMENT I
Seattle
Olympic
Olympic National
National Park
Park
Bremerton Seattle Tiger
Tiger Mountain
Mountain State
State Forest
Forest

Seattle-Tacoma Intl

Tacoma

Fort
Fort Lewis
Olympia--Lacey Lewis
Capitol
Capitol Forest
Forest

Mount
Mount Rainier
Rainier National
National Park
Park

Snoqualmie National Forest

Legend
Primary Resident Market (0 to 15 miles)
Secondary Resident Market (15 to 30 miles)
ATTACHMENT I

Visitor Volume

Visitor data was not available for Olympia or Thurston County, so ERA employed a
methodology based on hotel room nights in order to estimate the approximate number of
visitors to Olympia. Specifically, ERA utilized a calculation of visitor numbers using
countywide lodging tax collection. In addition, ERA applied its knowledge of the
tourism industry to estimate the number of visitors staying with friends and family. ERA
assumed that 60 percent of visitors staying in hotels and other like accommodations were
leisure visitors. This method results in a total of 491,000 overnight leisure visitors.
ERA’s calculations are summarized in Table III-7 below:

Table III-7: THURSTON COUNTY OVERNIGHT VISITOR VOLUME 2005.

Total Rooms in Thurston County


Number of Hotel Rooms in Thurston County 1,700
Estimated Additional Rooms (B&B, inns, etc.) 150
Total Rooms 1,850
Calcuation of Estimated Room Nights
TOT Tax in 2004 $890,000
Tax Rate 2.0%
Estimated ADR $125
Potential TOT Collection with Full Occupancy $1,688,125
Derived Occupancy Rate 53%
Calculated Number of Occupied Room Nights Annually 356,000
Calculation of Visitors Staying in Accommodations
Calculated Number of Room Nights 356,000
Average Length of Stay 2
Visitors per Room 2.5
Estimated Number of Visitors 445,000

Calculation of Visitors Staying with Friends & Relatives


Population of Thurston County 224,100
Estimated Number of Visitors per Capita 1.00
Total Number of VFR 224,000

Estimated Leisure Visitors to Thurston County 491,000


Source: Olympia - Lacey - Tumwater Visitor & Convention Bureau, Pierce & Thurston County Visitor
Profile, ERA.

Visitor Characteristics

The most recent visitor study of Thurston County was released in 2004 by the
Washington State Department of Community, Trade and Economic Development. The

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ATTACHMENT I

survey indicates that almost half of visitors to Thurston County are between the ages of
35 to 54; typically these visitors are not traveling with children; and have a household
income that is almost twice that of Thurston County. Table III-8 summarizes the
demographic findings of the visitor survey.
Table III-8: THURSTON COUNTY OVERNIGHT VISITOR PROFILE, 2004.

Characteristic
Age
20-34 25%
35-54 46%
55-64 21%
65+ 9%
Traveling with Children
Yes 35%
No 65%
Household Income $89,928
Source: Pierce & Thurston Counties Visitor Profile, 2004

While in Thurston County, the visitor survey indicates that tourists have the highest
propensity to visit a museum followed by hiking and sightseeing. In the 2004 visitor
survey, over 40 percent of visitors reported attending a museum. As indicated in Table
III-9, between eight and 15 percent of visitors indicated that they had attended a festival
or event, visited a gallery or attended an arts performance or concert during their stay in
Thurston County. The high propensity to visit a museum, combined with the visitors’
likelihood of participating in an arts related activity is favorable for visitation to an arts
center in Olympia.

Table III-9: ACTIVITES OF OVERNIGHT VISITORS TO THURSTON COUTNY, 2004.

% of
Activity Respondents
Visit Museum 42%
Hiking 42%
Sightseeing/Driving Tours 38%
Family Event 30%
Shopping 20%
Wildlife Viewing 20%
Festival/Event 15%
Visit a Gallery 13%
Performing Arts/Concerts 8%
Source: Pierce & Thurston Counties Visitor Profile, 2004

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ATTACHMENT I

SUMMARY OF AVAILABLE MARKETS

Based upon the information presented in this section, ERA has carefully quantified the
size of each market segment available to the proposed arts center, shown below in Table
III-10.
Table III-10: SUMMARY OF AVAILABLE MARKETS, 2006-2016
Market Segment 2006 2010 2012 2014 2016
Primary Market (0-15 mi) 230,180 246,900 255,711 264,835 274,286
Secondary Market (15-30mi) 717,633 751,448 768,949 786,857 805,182
Total Resident Market 947,813 998,349 1,024,659 1,051,692 1,079,468
Overnight Visitor Market 491,000 510,937 521,206 531,683 542,369

TOTAL AVAILABLE MARKETS 1,438,813 1,509,285 1,545,866 1,583,375 1,621,837


Source: ESRI Business Information Solutions and ERA.

The analysis was conducted for 2006, and the size of each market was projected through
2016.

A summary of key implications of ERA’s overview of available markets is as follows:

• The resident market available for the proposed arts center is currently 948,000,
with approximately 25 percent in the primary market and 75 percent in the
secondary market. Given the size of the secondary market, it will be very
important for an arts center in Olympia to actively market to communities that are
outside Thurston County in order to access this larger population.
• The resident market is expected to grow at a rate of 1.1 percent annually, resulting
in a market size of nearly 1.3 million in 2010 and 1.4 million in 2016.
• The resident market is highly educated, which is favorable given the connection
between education level and attendance and utilization of cultural facilities.
• Thurston County has an equal proportion of young residents as compared to
Washington and the United States. This is favorable, if the Center chooses to
develop an extensive arts education program.
• While the visitor market is relatively small, visitors to Olympia have a high
propensity to visit museums and galleries.

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ERA Project No. 16504 Page III-9
ATTACHMENT I

SECTION IV: CASE STUDIES OF SELECTED ART


CENTERS

As part of this study, ERA identified and researched key operating characteristics of
community arts centers throughout the United States. ERA developed the list of centers
based on suggestions and input from the Olympia community and the Olympia Arts
Commission, in addition to our own knowledge of the industry. ERA reviewed arts
centers that are both nationally recognized facilities as well as smaller grass-roots
organizations. In this section, ERA summarizes key characteristics and lessons learned
from case studies of 12 arts centers around the United States. The case studies included
within this section are as follows:

1. Arts Council of Snohomish – Everett, WA


2. Bainbridge Arts & Crafts – Bainbridge Island, WA
3. Blue Star Arts Center – San Antonio, TX
4. Centrum – Fort Worden, WA
5. Consolidated Works – Seattle, WA (no longer in existence)
6. Cooper Cultural Arts Center – Seattle, WA
7. Coupeville Arts Center – Whidbey Island, WA
8. Department of Safety – Anacortes, WA
9. Kirkland Arts Center – Kirkland, WA
10. Palos Verdes Art Center – Palos Verdes, CA
11. Riverbend Arts Center – Dayton, OH
12. Torpedo Factory – Alexandria, VA

A summary of key characteristics of the art centers reviewed is shown in Table IV-1.

CASE STUDIES

As shown in the following section, there is no single definition of an arts center. There
are a wide variety of organizational structures, management approaches, programs, and
services that are all encompassed in the term “art center.”

Arts Council of Snohomish – Everett, Washington

Located in Everett, Washington, the Arts Council of Snohomish was developed in the
mid-1970s by a group of concerned citizens who wanted to support and promote the arts
in Snohomish County. Over time, the focus of the Arts Council has shifted considerably.

The Arts Council was originally intended to serve as a grant-giving organization for the
arts, but it could not develop enough seed funding for this purpose. Therefore, it initially
developed into a theater facility that brought in national touring companies. The theater
had enormous community support, although suffered from financial difficulties due to the
high cost of productions. In the 1980s, the Council realized that the community had a
greater need for exhibit space and switched its focus from performing arts to visual arts.

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Table IV-1: KEY CHARACTERISTICS OF SELECTED ART CENTERS

Facility Size Annual Classes per


Art Center Location Management Structure (Sq. Ft.) Budget Attendance Year Brief Description of Programs & Services

Managed by non-profit, Visual arts education and artist resource


Arts Council of Snohomish Everett, WA 20,000 $650,000 13,000 70
funded partially by City organization.

Exhibitions, gallery, classes, workshops,


Bainbridge Island,
Bainbridge Arts & Crafts Non-profit 25,000 $350,000 500 n/a lectures, gallery talks - all free except
WA
workshops.

Non-collecting contemporary art center


Blue Star Arts Center San Antonio, TX Non-profit 11,000 $1,000,000 100,000 n/a
providing exhibitions and workshops.

Visual arts education and artist-in-residency


Centrum Port Townsend, WA Non-profit n/a $2,300,000 37,000 n/a
programs.

Music and performance space, galleries with


Consolidated Works Seattle, WA Non-profit 29,000 $350,000 n/a n/a
local and international artists.

Program within larger Live/work space and meeting space for local
Cooper Cultural Arts Center Seattle, WA 25,000 $200,000 75,000 100
non-profit arts organizations.

Visual arts education and artist resource


Coupeville Arts Center Whidbey Island, WA Non-profit n/a $256,000 800 80
organization.

Grassroots, informal organization based on a


Department of Safety Anacortes, WA Non-profit n/a ~$2,000 ~3,300 n/a residential model. Exhibits, workshops, and
all-ages music venue.

Kirkland Arts Center Kirkland, WA Non-profit n/a $610,000 1,800 260 Visual arts education and exhibitions

Traditional community arts center with


Palos Verdes Art Center Palos Verdes, CA Non-profit 11,000 $1,000,000 2,400 200
classes, exhibits, and events.

City-run art center with classes, exhibit, and


Riverbend Arts Center Dayton, OH City owned and managed n/a n/a 1,000 100
events.

Facility owned by City,


Highly successful artist incubator with studio
Torpedo Factory Alexandria, VA leased to non-profit 72,000 n/a 800,000 n/a
spaces, galleries, and workshops.
management.
Source: Individual Centers, ERA.
ATTACHMENT I

The first exhibit was held in a donated shoe store and was a tremendous success. As a
result, the Council subsequently decided to focus solely on the visual arts. While the Arts
Council had incurred debt from the theater, the Council’s Board of Directors was able to
persuade the bank to forgive the debt, enabling the Council to concentrate its efforts on
expanding the visual arts program. As the years progressed, the Council continued to
hold exhibitions of local art, and in the 1990s, started developing a more comprehensive
arts education program. Today, in addition to their gallery space, the Council provides a
wide array of arts education and artist support programs. The Council is currently
planning a new building that will contain artist studios, production spaces and
classrooms.

The Arts Council is currently located on the ground floor of the historic Monte Cristo
hotel. Owned by Catholic Services, the building includes a restaurant and a ballroom
used for private events on the ground floor, in addition to affordable housing units on the
upper floors. The City of Everett has paid the rent on the ground floor lease on behalf of
the Arts Council for several years, although this lease will end next year, and the Council
is currently planning for the construction of a new, regional arts center.

The new building will be a partnership with the Artspace Project of Minneapolis, a non-
profit developer of affordable housing for artists. The City of Everett recently committed
$20 million towards the acquisition of the 20,000 square foot site, located next to the
current facility. The new facility will provide studios for living and creating art,
galleries, workshops and classroom space. The Council is starting a capital campaign
with a goal of raising $5.5 million within two years. Under the current plan, Artspace
will maintain the entire building and develop and manage 40 units of affordable housing
geared towards artists on the upper floors. The Arts Council will own and manage the
first floor art center. Artist workshop / studio space on the ground floor will be open on
certain days for members to use.

There are an estimated 13,000 people who participate in the Art Council’s programs,
including community art classes, student art contest, and teacher and art docent training
workshops. A brief summary of programs is as follows:

• Community Arts Classes: Over 300 people attend approximately 70 classes per
year in a donated space adjacent to the Art Council’s current facility. Traditional
drawing and painting classes are offered in addition to classes on metal works,
glass mosaics, jewelry, fabric collage, bookmaking, leaf casting and basketry.
The Council also offers a class teaching artists how to make a living from their
art. Tuition ranges from $30 to $120 per class, which can be as short as one
session or as long as one month. The Council also provides art classes at the
local juvenile center.
• Student Art Contests and Opportunities: The Council offers four separate
student scholarship programs and opportunities: the Snohomish County Regional
Scholastic Art Award for young artists, the College Scholarship Award, the

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Black and White Photography Contest for high school students, and the Art
Portfolio Workshop.
• Teacher and Art Docent Resources and Workshops: The Arts Council
provides many services geared towards teachers, including an outreach suitcase
program, teacher workshops, an art docent fair, art curriculum guides, and field
trips to local exhibits
In addition to its art education services, the Snohomish Arts Council also provides artist
support through gallery space, portfolio services, festivals, and a garage sale for artists,
art fairs, and an art auction. For these services, the Council pays all operating costs and,
in return, receives a 35 percent commission on sales.

Finally, in addition to their internally produced shows, the Council allows other
organizations to utilize the gallery space. Rather than charging a rental fee, the Art
Council receives a 35 percent commission on any art sales for these shows as well. The
Northwest Water Color Society is one such outside organization that has utilized the
gallery space in the past.

Bainbridge Arts & Crafts – Bainbridge, Island, Washington

Bainbridge Arts & Crafts, located on Bainbridge Island, was founded in 1948 to sell local
art. The organization considers itself a gallery rather than an arts center, although it does
provide a range of arts education services.

In addition to functioning as a traditional gallery with exhibition and retail components,


Bainbridge Arts & Crafts also has the following programs:

• A visual arts education program that provides grants to local schools to promote
arts education outreach;
• Monthly workshops taught by local and out of town artists;
• A conversations with artists program with free artists demonstrations and gallery
talks for the public; and
• Art rental services, which allow business to rent art from the gallery store.

Exhibits rotate on a monthly basis, and curatorial decisions are made by the art director.
In the past, Bainbridge Arts & Crafts has featured exhibitions ranging from children’s art
to professional artists. The gallery does not host traveling exhibitions, and admission is
free to the public. The gallery store, a major source of revenue, sells works by over 200
artists, primarily from the state of Washington. The organization receives a 50 percent
commission on all sales. Artists are selected via an open jury, which occurs six times
per year.

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The Center has a $650,000 operating budget, of which, 75 percent is covered by arts sales
and 25 percent by grants. Last year they sold over $500,000 worth of art and shipped art
pieces to 32 states and Canada. Their peak season is Christmas and summer, with the
low season occurring in March and April. Bainbridge also holds annual art auction
fundraisers, which generate an estimated $25,000.

Bainbridge Arts & Crafts has a 13 member board of trustees comprised of artists,
business people, and local volunteers. The programs are run by 10 part-time staff and 40
volunteers. Key staff work four days per week. The organization has 400 members who
pay at least $100 annually, and in exchange, receive a 10 percent discount on purchases
and workshops and receive the local Bainbridge newspaper. Artists pay membership on a
sliding scale basis.

Bainbridge Arts & Crafts is housed in a 25,000 square foot facility, with very little back
of house or office space. Approximately two-thirds of the space is occupied by the
exhibit area, with the retail store occupying the remaining space. The organization has
been in the same facility since the 1970s and pay $5,000 in rent. They are well located,
next to a bookstore on Main Street with high foot traffic, but the staff would like to have
additional space for back of house functions such as storage, designating parking, and a
loading dock.

Blue Star Arts Center – San Antonio, Texas

The Blue Star Arts Center, located in San Antonio, Texas, is a non-profit, non-collecting
contemporary art center whose mission is to advance the growth and understanding of
contemporary art, artists and the curatorial process. The center was born over twenty
years ago when a group of artists were chosen for an exhibit at the San Antonio Art
Museum. The show was canceled before the opening, so the artists started looking for
an alternative space. The artists identified a downtown space and convinced the
developer to allow them to use the facility for one show. In addition to providing the
space, the developer also contributed financially to the exhibit. The show occurred in
July of 1986 and was an enormous success. The artists were expecting 200 guests, but
2,500 attended the show. Due to this success, the developer and the artists decided to do
a second show, resulting in the formation of the Blue Star Arts Center. For the first three
years, the organization was operated through the efforts of dedicated artists and
volunteers. In 1988, a professional director and staff were hired to manage and operate
the facility.

The Blue Star facility is approximately 11,000 square feet. The center is housed within
the Blue Star Complex, an arts-oriented, mixed-use development of loft/studio
apartments, galleries, retail, performance spaces, artist work spaces, and design offices.
In addition to Blue Star Arts, there are over 15 art studios and galleries, three performing
arts theaters and studios, a restaurant and micro-brewery and an arts education program
called “Say Si.” The Blue Star Arts Center itself is comprised of four gallery spaces:
the Main Gallery, the Middle Gallery, the Project Space, and Gallery 4. The exhibitions

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are either curated internally or by independent curators who contract with the
organization. The Main Gallery and the Middle Gallery are traditional galleries spaces
with set annual programs. However, the Project Space is designed to allow quick
response to current opportunities and to support an additional exhibition independent of
and complimentary to exhibitions found in the Main and/or Middle galleries. The
executive director is the curator and works closely with an exhibition committee to select
artists. Artwork must be identified as contemporary art, but does not necessarily need to
be from San Antonio. Gallery 4, the smallest gallery, is reserved for San Antonio artists.
It is dedicated to showing new and emerging artists, as well as the experimental work of
more established artists. Each artist is given the space for approximately one month,
with a public opening on the first Friday of the month.

Blue Star hosts between 15 and 25 shows annually and receives a 30 percent commission
on all sales. Annual attendance ranges from 85,000 to 100,000, with most visitors from
the San Antonio region. Admission to the exhibits is free, although $2 donation is
requested. The Blue Star Arts Center focuses on exhibitions and works with other
programs such as “Say Si” to provide art education classes.

The Blue Star Arts Center has a $1 million operating budget. Major sources of revenue
include membership fees, commission from exhibition sales, public and private grants,
and two annual fundraisers. The organization also receives free rent. The two
fundraisers bring in approximately $100,000 annually. There are over 800 members who
pay annual fees of between $25 and $1,000 annually, in return for invitations to private
openings, public lectures, information on artist submissions for upcoming events or
exhibitions, a subscription to Blue Star’s quarterly newsletter, a 10 percent discount at
several local restaurants, and a 10 percent discount off of all Blue Star merchandise.

Centrum – Port Townsend, Washington

Located on Fort Worden, a former military base in Port Townsend, Washington, Centrum
produces workshops, artist-in-residence programs, and performing arts events. Centrum
started as a center for creative development over 34 years ago in partnership with the
State of Washington.

Centrum serves over 37,000 people per year through its workshops and performances.
Centrum’s workshops are based on a residential learning module. Both the students and
the teachers reside in Fort Worden for the duration of the workshops, which are typically
between three to eight days. Workshops are taught by master artists in various
disciplines and targeted towards individual groups such as teachers, elementary school
students, middle school students, high school students and adults. The workshops can
focus on a single topic such as chamber music or creative writing or can be
interdisciplinary. Tuition is based on the length and subject of the workshops and ranges
from $75 to $500, in addition to room and board. Centrum also hosts ongoing public
performances of music, dance and theater in two theaters – one with 1,200 seats and one
with 300 seats.

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Centrum is governed by a traditional board of directors comprised largely of residents of


the surrounding area and local and state elected officials. In addition, there are eight
advisory boards, one for each program.

Centrum has a $2.3 million operating budget and generates revenue from seven sources:
workshop tuition, room and board, admission to performances, partnerships and service
fees, advertising, contributed income and scholarships. Annual revenue totals
approximately $2 million dollars per year, with 50 percent generated by earned income
sources. Centrum receives over $1 million in contributed income, including $260,000 in
State funding. Table IV-2 summarizes revenue by source. As shown, workshop tuition
constitutes 56 percent of Centrum’s earned revenue, while room and board represents
another 32 percent of earned income.

Table IV-2: CENTRUM REVENUE BY SOURCE

Revenue Source Amount


Workshop Tuition $560,000
Room and Board $320,000
Admission to Performances $3,000
Partnerships Service and Fees $1,000
Advertising $46,000
Contributed Income $1,000,000
Scholarships $75,000
Total Revenue $2,005,000
Source: Centrum

Centrum pays between $500,000 and $600,000 annually in rent to Fort Worden. In
addition to this space which includes offices, artists in residency space, and studios,
Centrum also rents storage and multi-purposes space on an as-needed basis. Such
multi-purpose spaces are used for performances and cost between $0.08 and $0.10 per
square foot to rent, in addition to utilities.

Consolidated Works – Seattle, Washington

Between the time of initial research and development of this study, Consolidated Works
lost their space, which was underwritten by a major donor, and was unable to secure a
new space without that support. As such, the organization is not currently operating. We
still feel that it is a useful model and have chosen to include it as a case study.

Consolidated Works located in Seattle, Washington, was committed to presenting


provocative contemporary work through providing performance space, a café and
resident artist spaces. Founded in 1998 on a short-term basis, the organization evolved
into a multi-disciplinary contemporary arts center that actively developed and presented
performance art, visual art, film, and music. Consolidated Works’ programming also
included AccessWorks, which supplied affordable administrative and event support to

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arts organizations, and OfficeWorks, which offered low-cost office space and office
infrastructure to other not-for-profit organizations.

Housed within a 29,000 square foot building, the Consolidated Works facility included a
150-seat performance space, a 50-seat cinema, a 300-person capacity music hall, a 4,500
square foot gallery, three additional exhibition rooms, a bar/café, and resident artist
spaces. The organization annual operating budget was $350,000, with revenue generated
from memberships, grants, event rentals, food and beverages sales, and self-produced
events. The artist-in-residency program was underwritten by grants.

Consolidated Works also had an extensive membership program, with membership fees
ranging from $30 to $60 per year. Membership benefits included member
communications, free admission to the visual arts programming, and significantly
reduced admission to all film offerings, lectures and performances. The organization
had 10 staff members and a governing board that met four times per year

There were three major components to Consolidated Works program:

• Performing Arts – Consolidated Works produced or partnered to produce shows


for five months per year. In addition, two months were allocated to non-profit
shows, and for the remainder of the year, the space was rented out to for-profit
events. The schedule was closely controlled by the organization, and their in-
house productions were given priority. An outside organization was responsible
for box office and promotion for all shows.
• Exhibits – The exhibition space at the Consolidated Works facility was funded
through sponsorship, memberships, and in-kind donations. The organization did
not receive a commission from sales. The exhibit space was primarily geared
towards artwork that was not commercially viable. In addition, the organization
hosted traveling exhibitions.
• Artist-in-Residency – This program selected three artists who would provide
programming for the public. Artists were given a set stipend and granted access
to all of Consolidated Works’ resources.

Cooper Cultural Arts Center – Seattle, Washington

The Cooper Cultural Arts Center opened in February 2006 as part of the Delridge
Neighborhoods Development Association (DNDA). The DNDA is a 10-year old
community development organization for the Delridge neighborhood located in Seattle,
Washington. The Cooper Center is part of a larger community program which also
includes the Croft Place Townhomes, a provider of services to formerly homeless and the
West Seattle Food Bank & Community Resource Center. A recently completed $30
million capital campaign funded the development of the three projects.

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The Delridge neighborhood is a low-income community with no commercial district and


no cultural intuitions. An extensive community involvement process was conducted
prior to the development of the Cooper Cultural Center. During this process, several
community needs were identified including youth programs, live/work space, arts classes,
and performing arts space.

The Center is located in a 78,000 square foot former school that was vacant for 14 years.
The Cultural Center occupies the first floor with a total of 25,000 square feet. The
second floor is comprised of 36 live/work studios managed by DNDA. The building
cost $12 million to renovate and was funded by historic tax credits and low income tax
credits. The Center has five classrooms / technical spaces, a 150-seat theater with
retractable seats, a dance studio with a sprung dance floor that also serves as a black box
and has two dressing rooms, a 24 channel recording studio, and a vocal isolation booth.

The Cooper Center has nine resident companies who each rent space from the Center at a
below market rate through a five-year lease. DNDA, who must approve each tenant,
requires that the organization must fit in with the mission of both the Cooper Center and
the DNDA. The Cooper Center functions in a property management role, coordinating
services and managing the tenants, but is not responsible for programming. The
following are a list of the tenants:

• The Nature Consortium: an organization that teaches environmental lessons


through the creative arts and hands-on conservation projects.
• Arts Corps: which recruits and places experienced teaching artists in a variety of
after-school programs.
• Southwest Interagency Academy: an alternative middle and high school, with a
current enrollment of 37 students.
• Theatre Puget Sound: a grass roots organization that promotes the spiritual and
economic necessity of theater.
• Twelfth Night Productions and the Pandemonium Players: a local theater
company.
• Pacific Northwest Ballet's Discover Dance: the community outreach program of
Pacific Northwest Ballet.
• Jack Straw Productions: a production company that creates, produces and
presents audio art (music).
• Seattle Symphony's ACCESS Project: the community outreach program of the
Seattle Symphony.
• The Power of Hope: a provider of intergenerational and multicultural learning
programs.

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The Cooper Center also allows the general public to rent the facility. Daily rates range
from $100 to $500 per day depending on the size of the rental space. Detailed rates for
each available space are shown in Table IV-3 below:

Table IV-3: RENTAL RATES FOR COOPER CULTURAL ARTS CENTER


Day Rate Hourly Rate
Non-Profit For-Profit Non-Profit For-Profit
Theater $250 $500 $40 $75
Movement Studio $150 $250 $25 $45
Recording Studio $150 $250 $25 $45
Media Lab $150 $250 $25 $45
Workshop $150 $250 $25 $45
South Classroom $125 $225 $20 $30
North Classroom $100 $200 $15 $25
Kitchen $100 $200 $15 $25
Dressing Rooms $50 n/a $10 $15
Source: Cooper Cultural Arts Center

In addition to managing the resident tenants, the Center also organizes open studios.
Once a month, each tenant holds an open studio where they display their services either
through a performance, gallery exhibition or workshop. Over 3,000 people attended the
initial open studio held in the spring of 2006. The artists residing in the live/work spaces
above the center are also encouraged to open up their studios during these events.

The Cooper Center has a goal of serving 75,000 people during its first year of operation.
Its operating budget is approximately $200,000, with each resident tenant paying a rental
rate of $.80 per square foot. The initial start up budget for the Center was built into the
$30 million capital campaign. The Center intends to generate enough revenue from
facility rentals and resident organization leases to cover the operating costs.

Organizationally, the Cooper Center is considered a program of the DNDA, and as such,
is governed by the DNDA Board of Directors. The Cooper Center director reports to the
DNDA director. The Cooper Center currently has three full-time staff members and six
event staff who only work a few hours per week for large events. The Center has an
extensive volunteer list, but are currently limited in their ability to utilize volunteers due
to insurance and other organizational issues.

Coupeville Arts Center – Whidbey Island, Washington

The Coupeville Arts Center (CAC) was founded in 1986 as an outgrowth of the
Coupeville Festival Association. The CAC is a not-for-profit, visual arts education and
artist resource organization dedicated to enhancing the arts learning experience. The

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CAC offers arts education in six categories: photography, 3-D, fiber, painting, youth and
the business of art. Classes are for all ages and level of artistry from beginner to
professional artist.

Located on Whidbey Island in Washington State, the CAC’s initial office was in the
home of its first director. In September of 1987, the CAC offered it first workshop
series, the Fiber Forum, a week-long conference of classes in weaving, spinning, dyeing,
and basketry. As the organization did not have a facility, the workshop was held at the
Camp Casey Conference Center. During the next several years, photography, painting,
quilting, beading, knitting, and many other art classes were added. In February 1993, In
February 1993, classes started being held in what is now the Arts Center.

Today the CAC serves more than 800 students annually. Its current facility includes two
classrooms, a small gallery and a small office. The CAC schedules 98 classes per year
and typically holds 80 classes, based on demand. The classes average four days in
length, and students stay in local hotels. The CAC assists the students in finding
lodging, but do not collect for room and board. An estimated 70 percent of the
workshop attendees come from the Puget Sound area. In addition to the workshops, the
CAC has an exhibition gallery. All of the art exhibited is from the CAC’s permanent
collection. There is no admission fee to the gallery.

The CAC’s operating budget is $256,000, of which, $196,000 (77 percent) comes from
workshop tuition. An additional $20,000 is generated from memberships and $40,000
from County, State, and City grants. Membership fees range from $40 to $1,000
annually and include discounts on a specified number of workshops based on
membership level.

Members to the CAC contribute between $40 and $1,000 annually and receive discounts
on a specified number of workshops correlated with their membership level. The CAC
also receives revenue from rentals of their classrooms by non-workshop teachers. The
CAC is a non-profit, 501(c)3 organization and is overseen by a 12-member board.
Staffing includes one program director who works full-time between April and October, a
part-time registrar, and a full-time executive director who is not paid.

Department of Safety – Anacortes, Washington

The Department of Safety (DOS), is a grassroots arts center developed four years ago by
four Trinity College graduates. The DOS started out functioning as an art gallery, studio
space, all-ages music venue, and hostel. The hostel no longer operates. In addition they
have recently added an artist in residency program, a darkroom, and movement
workshops (yoga classes, dance, and self-defense). The DOS also plays an artist
incubator role, as some young people who have utilized the DOS have developed into
professional artists.

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All of the employees at the DOS are unpaid and pay $300 per month rent to live in the
facility. In addition, the DOS rents out studios for $150 per month and also receives
nominal revenue from admission to all-ages shows and their artists-in-residency program.
The DOS charges a sliding scale of $5 for students and $7 for adults for admission to the
all-ages shows and allocates 75 percent of revenue to the band. All of the remaining
revenue is used to cover the $1,500 monthly rent for the building.

The Department of Safety has no hierarchy. The members are dedicated to involving the
community in the governance of the center and to making all decisions by consensus.
The mission of the Department of Safety is flexible and services are modified based on
the interests of the current residents, including employees and studio tenants. The DOS
is not a 501(c)3, although they are contemplating starting the process as it will enable
them to apply for grants. However, in order to formalize, they will need to establish a
board and other organizational components such as a constitution and bylaws. While
there is no board of directors, the founders of the Department of Safety (none of whom
are currently living in the facility) act as informal advisors.

The DOS is located in a 1951 building that once served as the police commission
headquarters and fire station. Over time, the building transferred hands to a used car
salesman who vacated the building. The founders of the Department of Safety
approached the owner for permission to occupy the vacant building. The first floor
includes four studios which are rented for $150 per month, with one studio reserved for
the artist-in-residence. The former fire truck garage serves as the music venue. In
addition, there is a 2,600 square foot gallery space. The second floor, originally used as
the dormitory for the fire station, has been converted to six bedrooms that are rented by
the employees. In addition, there is a common kitchen, living room and bathroom,
which are jointly shared by the tenants.

The Department of Safety holds visual art exhibitions in the gallery space on the first
floor. The space is open whenever residents at DOS are present and during the music
shows. Artists are selected by word of mouth, and shows run for three to four weeks.
There is no admission to view gallery exhibitions.

Kirkland Arts Center – Kirkland, Washington

The Kirkland Arts Center is the oldest arts organization on the east side of Seattle.
Established in 1962, the Center was partially founded to save an historic arts building.
Over time, the Kirkland Art Center has transformed its historic building into an
exhibition gallery, community arts studio and education facility to serve students of all
ages and skill levels. In the 1970s, the Center started paying the director and
professionalizing the teaching staff. Currently Kirkland is looking to upgrade and
expand its facility and services.

The arts education program at Kirkland focuses on the visual arts. Classes fall into the
following categories: painting and drawing, printmaking, ceramics and sculpture,

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multimedia, workshops, art camps for children, and open studio. Classes are also targeted
towards specific age groups such as adults, youth, and families. Kirkland serves an
estimated 1,800 students annually. Approximately 200 to 400 of the students are
reached through Kirkland’s partnership with the school district in which Kirkland
provides off-site art classes. The overall student population is comprised of 75 percent
adults and 25 percent children. An estimated 80 percent of the students are from Eastern
King County and Southern Snohomish County, 15 percent are from the rest of King
County and Southwest Snohomish County and five percent are from outside the area.
Only 27 percent of the students reside in Kirkland. The arts education program is highly
professionalized with many of their teachers holding masters in fine arts.

The Kirkland Arts Center also has a gallery where they display work from regional and
national artists. The gallery is internally curated, with occasional guest curators.
Kirkland receives 50 percent commission from gallery sales but do not select art
exhibitions based on salability. The mission of the gallery is to exhibit quality art and
not to maximize revenue generation. The gallery is funded through the arts education
tuition fees, and admission to the gallery is free. Kirkland hosts three annual exhibits:
the Members' Exhibition, Annual Holiday Arts Sale and either the biennial ceramics
exhibition or the biennial Kirkland Arts Center Invitational.

The current facility includes a large classroom for painting and drawing classes, a
printmaking studio, and a complete ceramics facility, including two gas-fired kilns. The
Art Center has an annual operating budget of $610,000, with approximately 70 percent of
revenue generated from class tuition and the remaining 30 percent from contributed
income. The Center has a 10-member board and 14 working committees.

Palos Verdes Art Center – Palos Verdes, California

The Palos Verdes Art Center is located in Rancho Palos Verdes, a community located
outside of Los Angeles, California. Palos Verdes is a planned community developed in
the 1930s. The art center was part of the initial community plan and was originally
envisioned to include both performing and visual arts. An arts association was
established to curate exhibits for the gallery, and over time, the Art Center became solely
focused on the visual arts. Today it provides visual arts education, workshops, gallery
talks, exhibitions, and an artist co-op shop.

The Center operates over 200 classes per year for both adults and youth in the subjects of
drawing, painting, ceramics, sculpture, and wearable art. In addition, the Center runs
workshops on art history and concepts, design, literary arts, and photography. There are
four sessions per year, with 50 classes offered during each session. There are between 8
and 15 students per class. Tuition fees for adult classes range from $140 to $220 and
average $80 for youth classes. Members receive a discount. In addition to these
regularly scheduled classes, the Center also provides weeklong workshops conducted by
visiting teachers.

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The Palos Verdes Art Center has begun to work more closely with local schools in
providing art education services due to recent school district cuts in art education. All of
the services provided to the school district are conducted by volunteers. Currently, Palos
Verdes is working with the County to develop an integrated arts curriculum.

Exhibitions held at the Art Center primarily focus on Southern California artists and are
curated by a part-time director of exhibitions. Admission to the gallery is free, although
the Center receives a 25 to 33 percent commission on any gallery sales. Each exhibition
includes conversations with the artists for the public, which has been a very popular
program. The Center also runs an artists’ co-op for local artists to sell their works of art.

The existing Palos Verdes Art Center facility was built in 1974 and has a total of 11,000
square feet divided among three buildings. This space includes three visual arts
classrooms, in addition to the exhibition space and co-op shop. Currently, the Center is
in negotiations with the City to build an expanded art center building with 40,000 square
feet.

The organization has a budget of $1 million, which is partially funded by income from a
$2 million endowment. The Center did not receive any public funds until recently when
they began to receive a small grant from the Los Angeles Arts Commission. Tuition
from the Center’s classes generate approximately one-third of the Center’s revenue.
Another important revenue source is facility rental fees, as the facility is rented between 8
to 12 times per year for special events. The facility includes a commercial kitchen, which
strengthens their draw for facility rentals. In their new building, the Center hopes to
increase the number of special event rentals and develop and even larger commercial
kitchen.

The Palos Verdes Art Center has a board with a balance of artist and potential donors.
There are eight full-time and four to five part-time employees, in addition to the class
teachers who are hired on a contract basis.

Riverbend Arts Center - Dayton, Ohio

The Riverbend Arts Center is owned and managed by the Youth and Recreation
Department of the City of Dayton, Ohio The Center was originally developed as an
extension of the craft-oriented classes the City offered at local community centers in the
1960s. Demand for the classes grew to such a level that the City decided to construct an
independent facility to house the arts classes. This facility, the Riverbend Arts Center, is
a four-story building with a total of 16 classrooms.

Classes are offered quarterly, with an estimated 250 students per quarter. In addition, the
Center operates a summer camp, where the majority of students are retirees, with some
children in attendance. Classes include beadworking drawing, enameling and metals,
gem cutting, glassworking, graphics, painting, pottery and sculpture, textiles and
weaving, and woodcarving.

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The Riverbend Art Center facility also has an exhibition space that can accommodate 50
small pieces. The gallery has its own curators, and typically, only 10 percent of the
artists who exhibit in the gallery are from the local Dayton area.

As a City department, the operating budget is fully covered by City funds. The Center
has six full-time employees and numerous volunteers. There are a total of 40 teachers
who are paid between $40 and $58 per student. Community groups can also rent the
facility for meetings.

Torpedo Factory – Alexandria, Virginia

Located in a historic building in Alexandria, Virginia, the Torpedo Factory is one of the
nation’s largest and most successful visual arts centers. Founded in 1974, the Torpedo
Factory started as a three year experiment to coincide with the Bicentennial. Today, it
receives over 800,000 visitors a year and is home to over 160 artists.

The building is historically significant, as it was used to manufacture torpedoes during


World War I. Currently, the building is owned by the City of Alexandria and leased by
the Torpedo Factory Artist Association (TFAA), a non-profit organization which is
responsible for leasing the space to individual artists and galleries. The facility is open
360 days per year from 10 a.m. to 5 p.m. and houses 160 artists who work in 83 studio
spaces. The building also houses numerous galleries. The Target Gallery is rented and
operated by the TFAA and hosts international and national shows. The building is
approximately 72,000 square feet, including office space and common areas. Two-thirds
of the building is comprised of artist studios and galleries. Key building characteristics
are summarized in Table IV-3.

Table IV-3: SELECTED BUILDING CHARACTERISTICS

Type of Space Average Size


Single Studio 250 square feet
Group Studio 850 square feet
Size Range 193 to 1,818 square feet
Total Leased Space 49,000 square feet
Total Building Area 72,000 square feet
Percent of Leased Space 66 percent
Source: Torpedo Factory

The factory is managed by the TFAA and the Friends of the Torpedo Factory Center
(FTFC). The TFAA is a membership organization and is responsible for the day-to-day
operations of the facility. The FTFC is 501(c)3 organization that assists with fundraising
and development. Membership in the TFAA is determined through a jury process that

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selects the tenants of the factory. Voting members currently occupy studios within the
building, while associate members are artists who have been accepted via the jury process
but do not have a lease. Voting members elect the board, approve the annual operating
budget, and oversee revisions to the bylaws and constitution. After being approved by the
jury, an artist becomes an associate member and placed on a waiting list for a studio, a
process which generally takes a few years. Member artists are required to maintain
certain public studio hours and can only sell and display their own work, which should be
made predominantly within the Torpedo Factory.

There are three types of tenants: independent artists, galleries and workshops.
Independent artist tenants are those who occupy studio space. Workshops (of which
there are two) are large group studios where tenants share equipment and work
simultaneously. Finally, there are six galleries within the Torpedo Factory, in addition to
the Target Gallery. All of the galleries have control over which artists are exhibited and
do not need to go through the TFAA jury process.

The Torpedo Factory generates revenue from studio leases, membership dues, jury fees,
Target Gallery sales commission, gift shop sales, and fees generated by evening facility
rentals. The revenue covers rent paid to the City, utilities, staff and administrative costs,
gift shop overhead, jury expense, and publicity and marketing. Commission is not
collected on sale of artwork by member artists.

The TFAA has seven staff employees. The staff handles property management, website
marketing, gift shop operations, tour scheduling, and newsletter publishing. Janitorial,
accounting, and legal services are provided by contractors that are overseen by the
TFAA. The City is responsible for the exterior maintenance of the building, and the
TFAA maintains the internal public spaces. Individual artists are responsible for their
personal property within their studio. TFAA provides publicity and subsidizes
advertisements placed by individual artists. In addition, the TFAA staffs an information
desk that provides general information regarding the Factory and specific information on
resident artists. The desk also serves as a gift shop, which subsidizes the information
desk staffing costs.

LESSONS LEARNED

As part of our case study research, ERA asked each center to share challenges they faced
and lessons they learned during their development and operational history. Much of the
advice from the art centers centered around location, the planning process, and financial
stability. A summary of key “lessons” learned is described in the following section.

Location

Location is a critical success factor for almost all of the art centers reviewed. Key
lessons learned from ERA’s case studies related to location are as follows:

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• The location should match the mission and atmosphere of the center. For a
facility such as Centrum, its secluded location reinforces its mission. Similarly,
Fort Worden is located at the end of a road, allowing people to leave the stress of
their daily lives and focus on creating art. However, for other centers that thrive
on foot traffic and word-of-mouth, a central, accessible, and visible location is
more important.
• When designing an art center that offers multiple services, consideration should
be taken to design the facility such that a single service does not hinder the
viability of other services. For example, it is extremely difficult to have artist
housing with an event space unless you have excellent soundproofing.
• Potential revenue streams should be considered in the design of a facility. This is
particularly true for flexible event spaces that can be rented out in order to
generate income.
• The relative benefits and costs of ownership versus leasing should be carefully
analyzed. Ownership provides the distinct advantage of control over the future of
the organization.
• If possible, the potential for expansion should be a criteria used when considering
various site options.

Planning Process

Sufficient resources should be allocated to a thorough planning process that allows


enough time to determine the needs of the community and the audience the center will
serve. A community planning process that includes a strong public participation
component can help build community support and provide the public with a greater sense
of ownership over the center, which will ultimately allow for higher initial attendance and
usage. Other issues that may be considered during the planning process are as follows:

• How can “green” building design be incorporated?


• What is the target audience for classroom space?
• How can technology be integrated into the center?
• What are the needs of the education services community? Given nationwide cuts
in arts education, what role can the art center play in working with schools to
fulfill these needs?
• How much demand is there likely to be for studio space? Many art centers
indicated that they underestimated the demand for this type of space.

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Financial Stability

Financial stability is one of the most challenging issues facing almost all art centers. Key
lessons emphasized in ERA’s case studies relating to this issue are as follows:

• Art centers should be viewed as a long-term community investment.


• Almost all art centers are dependent upon some form of contributed income, but
funding sources have become more limited with cuts to government arts funding
at almost every level.
• Earned income is becoming increasingly more important. The development of a
large membership base and the use of volunteers are essential to the viability of
most art centers.
• The pressure of generating earned income can sometimes be at odds with the
mission of the art center. While it is important to maximize earned income in
order to achieve greater financial sustainability, actions should not be taken that
could sacrifice the mission and overall vision for the center.
• An endowment can play a very important role in long-term sustainability.
• Corporate sponsorship and partnerships are an important source of revenue as
well. Staff and board members should be involved in developing these
relationships.

Other Lessons

• Separation of Facility Operations from Programs - Many of the art centers


reviewed emphasized the benefit of separating the management and maintenance
of the building facility from the provision of programs and services. In several
models, an umbrella organization is created with the sole purpose of managing a
facility with several non-profit tenants who provide programs and services. In
other cases, a city or government entity oversees the building and site
maintenance, while a non-profit organization handles program operations and
services.
• Community and Government Relations - Community relations are important in
the planning process and in the ongoing operations of the facility. While
connections to local government are very important, it is also important to
maintain some independence from the government to avoid issues of censorship.
• Art Center Atmosphere – Art centers need to create an environment that is
comfortable to students, artists, and visitors to the center in order to ensure repeat
visitation and establish a sense of community. Common space can also help
foster a sense of collaboration. The goal of the art center design should be to
create a level of traffic and comfort that makes it a true community resource.

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SECTION V: FACLITY USAGE AND FINANCIAL ANALYSIS

Based upon our review of the existing arts offerings in Olympia, key operating
characteristics of art centers researched in our case studies, and the size and
demographics of the available resident and visitors markets, ERA determined the
potential facility usage for the proposed Olympia Arts Center. We also developed a
preliminary financial analysis focused on identifying the gap between earned income and
operating expenses that will be required to be fundraised on an annual basis.

Key assumptions that are part of this analysis are as follows:

• Facility Size – In Section II, ERA recommended a facility size of between 12,000
and 19,000 square feet. Subsequent to that analysis, we performed an initial
financial analysis of the art center’s operations based upon a 16,000 square foot
facility, the midpoint of the recommended size. We also conducted sensitivity
testing using the entire range of between 12,000 and 19,000. Based on this
sensitivity testing, we determined that based on the market demographics and
likely programs, a size of 12,000 square feet would be more feasible on an
operating basis, at least as a first phase of development. It should be noted that
this size excludes the restaurant and/or café, which could bring the overall size
closer to the midpoint of 16,000 square feet.
• Level of Detail - This is a hypothetical budget only, which ultimately will be
dependent upon the direction provided by the director and/or Board. This budget
represents what ERA believes are reasonable estimates of earned income and
operating budget based upon the available markets, proposed concept and facility
size, and characteristics of comparable facilities. However, specific budget items
are only provided as a guide and will be highly dependent upon exact
programming decisions.
• Approach - ERA used a “bottom up” approach initially, analyzing each
individual earned income and operating cost component to estimate budget
amounts, then compared the top level to industry standard ratios and statistics as a
test for reasonableness.
• Management - For purposes of analysis only, this analysis assumes that the
facility is managed by a non-profit organization. Tradeoffs between public
versus non-profit management are addressed immediately following these
assumptions.
• Time Frame - For purposes of analysis, ERA assumed opening year to be 2008
and the first stabilized year to be 2010. All income and cost estimates are
calculated initially for 2010, and then estimated for a 10 year period. It is very
important to note, however, that this is only a hypothetical opening year, and there
is no specific art center project currently being planned. However, for purposes
of usage analysis, ERA had to assume a timeframe in order to use accurate
population estimates.

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FACILITY MANAGEMENT

The usage and financial conditions of the proposed arts Center will be affected by the
type of management. There are three primary forms of management for most arts and
cultural facilities:

• Non-profit management – In this structure, a non-profit, 501(c)3 organization is


formed to run the facility. This organization has a Board of Directors that
typically creates an executive director position. The executive director is
responsible for day to day management of the center, while the Board sets overall
direction and policies, has a fiduciary duty to the organization, and typically helps
fundraise. The non-profit status of the organization allows it to receive grants and
donations from individuals, corporations, public agencies, and foundations. For
many non-profit art centers, a city and/or public agency was involved with the
facility development but has limited or no involvement with ongoing operational
funding.
• Public management – With this structure, the facility is owned and operated by a
public agency, usually a city. Typically, the facility will function under a city
department such as arts, leisure and recreation, and staff are all city employees.
Sometimes there will be a citizen’s advisory committee to provide community
input regarding the direction. The city or public agency is entirely responsible for
the operations and operating budget of the facility.
• Hybrid – A hybrid management structure is a blend of the above. Typically under
this structure, the director and certain staff are city employees, and the public
agency owns the facility. However, there is also a non-profit organization created
to allow the organization to receive grants and contributions, and sometimes there
are staff positions that are funded by the non-profit. The operating budget is
typically a blend as well, although facility maintenance is often provided by the
public agency in order to take advantage of city janitorial, maintenance, and
landscaping staff or existing contracts for these services.

There are advantages and disadvantages for each management structure, which depend in
part upon the individual community and resources available. Publicly run facilities
typically have higher staff expenses, although they are sometimes able to achieve
efficiencies with regards to functions such as maintenance, accounting, etc. A public
management structure requires city funding on an ongoing basis, which some cities are
reluctant to commit to.

Non-profit organizations have the ability to generate income from the private sector and
are sometimes more creative in fundraising, although there are some good examples of
entrepreneurial government agencies as well. There may be a perception of increased
independence and less censorship with a non-profit model, which could be important to
an arts center.

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While a hybrid structure can offer benefits of both, they can also be complicated and face
difficult staffing issues due to different salary and benefit structures.

A brief summary of some of the advantages and disadvantages of each structure is


shown in Table V-1.

Table V-1: MANAGEMENT STRUCTURE ANALYSIS

Structure Potential Advantages Potential Disadvantages

Non- • Ability to receive grants and donations. • No ongoing source of public subsidy
Profit • More flexibility in operating cost - required to raise contributed income
structure. on an annual basis.
• The public agency has less financial risk • Success relies on extraordinary
on an operating basis – no ongoing and/or committed leadership
commitment to fund. • Have to create a new organization
• Center has more control over creative • Often less staff stability due to lower
direction and decisions. salaries, fewer benefits, and
• Ability to generate earned income may be workload.
greater, can operate as a “business.”
• Non-union labor / more flexible salary
and benefits structure

• Continual source of operating income. • Expectation for subsidized tuition


Public • Potential for certain services (i.e. rates and services
maintenance, accounting, etc.) to be • Higher salary structure
provided through existing employees or • Potential for perceived censorship
contracts, resulting in operating • May face bureaucratic challenges in
efficiencies developing new programs and
• Perception of serving entire community services (although some local
government agencies are
entrepreneurial)
• Could be subject to local politics

• Can take advantage of strengths from both • Roles can be confusing


Hybrid • Complicated budget
• Salary and budget structure can be
unequal

Source: Economics Research Associates.

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EARNED INCOME POTENTIAL

ERA has identified the following programmatic and facility components that could
generate earned income for the proposed art center in Olympia. Again, there are a
number of programs that could be developed – this analysis is meant to determine a
reasonable earned income estimate that can be used for planning purposes.

• Arts education
• Exhibitions
• Workshops
• Memberships
• Gift Shop
• Event rentals
• Café/restaurant

Based on market demand and comparable analysis, ERA estimated that with the above
mix of components the Arts Center could generate approximately $187,000 annually, in
2010, the Center’s first stabilized year after opening in 2008 (Table V-2).

Table V-2: ESTIMATED EARNED INCOME

EARNED INCOME 2010


Art Education $60,300
Exhibitions $29,900
Workshops $10,800
Memberships $12,300
Merchandise Sales $37,300
Event Rentals $6,300
Café/Restaurant $30,000
Total Earned Income $186,900
Source: Economics Research Associates

Detailed facility usage and financial projections for each component of the proposed art
center are described below. It should be noted that all financial projections are in 2006
constant dollars.

Arts Education

In order to estimate earned income potential from arts classes, ERA evaluated market
demand, capacity constraints and tuition potential. The following summarizes each step
of the analysis:

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• Enrollment Analysis – ERA used a market penetration analysis to determine


potential enrollment to define the size and scope of the arts education program.
ERA used the penetration rate of comparable facilities as a baseline.
• Capacity Analysis – ERA evaluated the potential market demand with the
estimated capacity to confirm that the size of the classrooms in the preliminary
concept are adequate for the potential number of students.
• Tuition Analysis - The tuition fees at comparable facilities were used to
determine the likely price structure for art center classes.
• Revenue Analysis – ERA applied the average tuition at comparable facilities to
the estimated market demand to determine the potential revenue.

Enrollment Analysis

ERA determined arts education enrollment based on the market penetration rates of
similar facilities with a substantial arts education program. Market penetration measures
the propensity of available market segments to enroll in arts education programming and
is generally defined as the ratio of students from a market to total market size. ERA
defined the market size as 15 miles from downtown Olympia. As shown in Table V-3,
the comparable population penetration rates of other arts facilities ranged from 0.05
percent to 0.91 percent, although facilities in metro areas with large populations achieve
lower penetration rates. Of the selected comparables the average penetration rate was
0.21 percent.

Based on the penetration rate of selected comparable arts centers, ERA estimated that the
proposed Olympia Arts Center will experience an enrollment ranging between 400 and
600 students per year. Assuming an average class size of 15 students, there would be
somewhere between 25 to 40 classes per year.

Table V-3: ARTS EDUCATION PENETRATION RATES FOR SELECTED COMPARABLE


FACILITIES

Penetration
Art Center Location Enrollment 15 mile pop Rate
Arts Council of Snohomish Everett, WA 300 656,329 0.05%
Bainbridge Arts & Crafts Bainbridge Island, WA 500 1,032,413 0.05%
Cooper Cultural Arts Center Seattle, Washington 1,000 1,452,471 0.07%
Coupeville Arts Center Whidbey Island, WA 800 88,162 0.91%
Kirkland Arts Center Kirkland, WA 1,800 1,581,096 0.11%
Palos Verdes Art Center Palos Verdes, CA 2,400 2,097,060 0.11%
Riverbend Arts Center Dayton, Ohio 1,000 702,081 0.14%
Average 1,114 1,087,087 0.21%
Median 1,000 1,032,413 0.11%

Source: Individual Facilities, Economics Research Associates.

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Capacity Analysis

The facility size in the preliminary concept estimates that there should be between 1,500
and 2,000 square feet of classroom space, which assumes approximately three to four
classrooms and/or workshops. Based on market demand, the proposed arts center could
offer between 25 and 40 classes per year. If each class includes 10 meetings, and classes
are offered on a quarterly basis, the art center would offer between six and 10 classes
each quarter. Assuming that each class meets weekly, there would be excess capacity
with three to four classrooms and the proposed facility size would clearly not be a
constraining factor on the potential revenue generated by the arts education program.
Therefore, it is ERA’s opinion that 1,500 square feet of classroom space would be
adequate given market demand.

Tuition Analysis

At comparable facilities, tuition depends on the type of class and number of sessions.
The price for a class that meets for 10 sessions (the typical length of a term) can range
between $65 and $250. Table V-4 summarizes the range in tuition at selected comparable
facilities. In general, fees range from $30 to $250 per class at comparable facilities. The
average tuition fee ranged from $82 to $162.

Table V-4 ARTS EDUCATION TUITION RATES FOR SELECTED COMPARABLE FACILITIES
Tuition
Art Center Location Low Mid High
Arts Council of Snohomish Everett, WA $30 $75 $120
Bainbridge Arts & Crafts Bainbridge Island, WA $65 $70 $75
Coupeville Arts Center Whidbey Island , WA $120 $173 $225
Kirkland Arts Center Kirkland, WA $90 $170 $250
Palos Verdes Art Center Palos Verdes, CA $140 $180 $220
Riverbend Arts Center Dayton, OH $48 $66 $83

Average $82 $122 $162


Median $78 $123 $170
Source: Individual Facilities, Economics Research Associates.

Estimated Potential Revenue

Based on the above analysis, ERA estimated that the arts education program will service
between 400 and 600 students annually and offer between 25 and 40 classes per year.
Utilizing the average tuition rate of comparable facilities with significant art class
offerings, ERA estimated that the arts education program will generate between $45,000
and $75,000 annually. Table V-5 summarizes the enrollment, number of classes and total
revenue for the arts education component for the proposed Olympia Arts Center.

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Table V-5: ESTIMATED REVENUE FOR ARTS EDUCATION COMPONENT

Low Mid High


Number of Students 370 494 617
Avg. Number of Students per Class 15 15 15
Number of Classes per Year (10 meetings per class) 25 33 41
Average Tuition $122 $122 $122
Total Revenue $45,234 $60,312 $75,390
Source: Economics Research Associates.

Exhibitions

ERA conducted an analysis to determine potential market demand for the exhibition
component. ERA applied reasonable assumptions regarding the number of shows and
admission fee to determine the potential revenue for the exhibition component of the Arts
Center.

Attendance Analysis

ERA estimated exhibition attendance based on the market penetration rates of similar
facilities. ERA divided the Olympia market into three submarkets:

• Primary Resident Market - Residents located within 15 miles of the center;


• Secondary Resident Market - Residents located between 15 and 30 miles from the
center; and
• Overnight Visitors - Visitors who are staying overnight in the Olympia-Lacey-
Tumwater area.

As shown, in Table V-6, ERA expects that the center will have the highest penetration
into the primary resident market, given that most community art centers typically focus
their services on the local community. However, the secondary market, given its size, is
still important, and it will be important for the arts center to actively market beyond
Thurston County. In total, ERA projects that the attendance for exhibitions at the
proposed center will range between 19,000 and 31,000 visitors annually.

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Table V-6: ESTIMATED ATTENDANCE AT ART EXHIBITIONS

Low Mid High


Resident Market
Primary Market
Population 251,267 251,267 251,267
Penetration Rate 3.5% 4.0% 4.5%
Attendance 8,794 10,051 11,307
Secondary Market
Population 760,148 760,148 760,148
Penetration Rate 1.0% 1.5% 2.0%
Attendance 7,601 11,402 15,203
Visitor Market
Overnight Visitor Market
Population 495,910 495,910 495,910
Penetration Rate 0.5% 0.7% 1.0%
Attendance 2,480 3,422 4,959
Total Attendance 18,875 24,875 31,469
Source: ESRI, Economics Research Associates

Revenue Analysis

Based on industry knowledge, ERA assumed that the Olympia Arts Center can host
between six and 12 exhibitions per year, with the exhibition offerings to range from
regional traveling exhibits to artwork produced through the arts education program.
Based on the experience at comparable facilities, ERA recommends that the exhibition
component have a suggested donation rather than a strict admission fee. Assuming that
40 percent of the attendees pay the requested donation fee, ERA estimates that the
exhibition component will generate between $23,000 and $38,000 annually (Table V-7).

Table V-7: ESTIMATED REVENUE FOR EXHIBITION COMPONENT

Low Mid High


Number Attendance 18,875 24,875 31,469
Events per Year 6 8 12
Requested Donation $3 $3 $3
Capture Rate 40% 40% 40%
Total Revenue $22,650 $29,850 $37,763
Source: Economics Research Associates.

Capacity Analysis

ERA’s preliminary concept for the arts center included 4,000 to 6,000 square feet of
exhibit space, which is roughly two to three galleries of varying size. In order to examine

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physical planning parameters for the exhibit component, ERA conducted a capacity, or
“design day” analysis for the exhibit space based upon likely seasonality and visitation
peaking patterns. In planning for the capacity requirements of a cultural attraction such
as the proposed art center, the “design day” or average high attendance day is used as a
key determinant of capacity requirements needed to adequately handle expected crowd
levels. For all types of visitor attractions, it is neither necessary nor economically
desirable to size facilities for absolute peak periods of on-site patronage, as some degree
of crowding on special holidays or other major attendance times will be accepted by the
visiting public. However, the facility must be designed to comfortably accommodate
peak crowd loads on a normal high day of attendance, or lasting negative effects on
visitation performance will result.

As shown in ERA’s design day analysis (Table V-8), the minimum amount of exhibit
space required is 3,000 square feet. It should be noted that this is the minimum required
from a capacity standpoint and does not necessarily reflect the amount of exhibit space or
attraction capacity needed to achieve this level of visitation.

Table V-8: CAPACITY ANALYSIS FOR EXHIBIT SPACE

Peak "In Art Center" Attendance Analysis 2010


Estimated Mid Scenario Attendance 25,000
Peak Month Attendance (@ 12% of total) 3,000
Weekly Attendance in Peak Month (@ 22.5% of peak month) 675
Design Day Attendance (@ 20% of week) 135
Peak In-Museum Attendance (@ 40% of design day) 54
Exhibit Sq. Ft. per Person 50

Minimum Exhibit Sq. Ft. Required 2,700

Source: Economics Research Associates.

In order to determine the minimum exhibit space required to attract the projected number
of visitors to exhibitions, ERA utilized the average industry ratio for visitors to exhibit
square feet. On average, cultural facilities generally attract between four and six visitors
per exhibit square foot. Applying this ratio to the expected number of visitors results in
between 4,300 and 6,200 square feet of space, which is close to the amount
recommended in the preliminary arts center program presented in Section II.

Workshops

In addition to the arts education program, ERA estimated earned income from special
workshops. These workshops could be one or two day events and focus on a specific
topic, such as how to write a business plan for a theater company, how to market artwork,

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how to build a website to sell artwork, how to make your own holiday presents, etc.
While we realize that there could be a great variety in workshop types, the purpose of this
income stream is to reflect the fact that the center can offer special one-time events,
programs, or classes that could generate income. For purposes of analysis, we assumed
that the proposed center would offer between eight and 16 workshops per year, with an
average of one per month. With approximately 15 attendees per workshop and a tuition
fee between $50 and $70, ERA estimated that the workshop component would generate
between $6,000 and $16,800 annually (Table V-9).

Table V-9: ESTIMATED REVENUE FOR WORKSHOP COMPONENT

Low Mid High


Number of Workshops 8 12 16
Number of Attendees per Workshop 15 15 15
Number of Attendees 120 180 240
Avg Tuition $50 $60 $70
Total Revenue $6,000 $10,800 $16,800
Source: Economics Research Associates

Membership

Membership is another important revenue stream for most of the comparable art centers.
Membership benefits could include a newsletter, discounts on gift store purchases,
members-only programming or events, and reduced art class tuition. While membership
rates vary greatly at art centers, ERA used an average rate of between $40 and $60. ERA
utilized a market penetration rate analysis to determine the number of potential members,
comparing the ratio of membership to community size in several comparable art centers.
Similar to arts education, membership participation is highly correlated to proximity to
the facility, thus ERA utilized the primary resident market to determine the size of the
membership. As shown in Table V-10, ERA estimated that the membership component
could generate between $4,800 and $22,200 annually. ERA believes that although there
are many competing arts organizations in Olympia, the strength of interest in many types
of arts activities will support a level of membership that is proportionate (relative to size)
with art centers in other communities.
Table V-10: ESTIMATED MEMBERSHIP REVENUE

Low Mid High


Penetration Rate 0.05% 0.10% 0.15%
Number of Paid Members 120 250 370
Avg Memberships $40 $50 $60
Total Revenue $4,800 $12,500 $22,200
Source: Economics Research Associates

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Gift Shop

Most art centers have some version of a gift shop. While some art centers focus more on
art sales and basically function as a gallery, others sell products related to the current
exhibitions and/or gift items. Others sell art supplies required for classes. Since the
content of the gift shop can vary greatly, ERA used a per capita rate of $1.50, which is
the standard rate for small museums. Based on the estimated annual attendance at the
exhibitions and the average per capita spending, income from the gift shop component
could generate between $28,000 and $47,000 annually (Table V-11). It should be noted
that while this estimate is calculated using a per capita visitors spending estimate for
exhibition visitors, it still assumes spending from students of art classes, workshops
attendees, and the general public. The amount is simply captured using a per capita
spending model that can be easily compared to comparable art centers in other
communities using exhibition visitors as a proxy.
Table V-11: ESTIMATED MERCHANDISE REVENUE

Low Mid High


Exhibit Attendance 18,875 24,875 31,469
Avg Sale $1.50 $1.50 $1.50
Total Revenue $28,313 $37,312 $47,204
Source: Economics Research Associates

Event Rentals

Event rentals are another important source of revenue for any cultural facility, although
the amount can vary greatly depending on facility design, quality, and location. From
ERA’s interviews, it is apparent that there is a demand for additional event rental space.
The potential market for the event rentals could range from traditional food and beverage
events to meetings for art organizations located in Olympia. One potentially strong
market could be events associated with State government activities. This market would
be seasonal, but could present a strong revenue stream with proper marketing.

The average rental rate at comparable facilities in Olympia ranges from $125 at Midnight
Sun to $500 at the Olympia Flight Center. Based on the existing inventory of event
spaces and the existing rental rates, ERA estimates that the proposed community arts
center could generate between 40 and 60 rentals per year, with an average rental fee
ranging between $100 and $150, resulting in between $4,000 and $9,000 in revenue (see
Table V-12).

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Table V-12: POTENTIAL REVENUE FROM EVENT RENTALS

Low Mid High


Number of Rentals 40 50 60
Avgas Rental $100 $125 $150
Total Revenue $4,000 $6,250 $9,000
Source: Economics Research Associates

Café/Restaurant Lease

In recent years, a trend in cultural facilities has been to incorporate commercial real estate
income streams into the development of the facility. Depending on location, cultural
facilities can successfully develop retail spaces for restaurants or related retail. Typically,
the space will be leased out to a third party who operates the retail shop or restaurant.

If the proposed arts center is located in downtown or on the waterfront, there may be
potential for a successful restaurant on site, which could not only bring in annual income
to help subsidize the arts center operations, but could also serve as another space for
holding events in a less formal setting.

Annual lease rates in downtown Olympia for retail space range from $10 per square foot
to $18 per square foot on a triple net basis (NNN). Currently, a retail property is listed at
5th and Capital for $17 per square NNN. The market rate for retail space in downtown
Olympia is hovering around $15 per square foot NNN annually. For purposes of analysis,
ERA assumed that a restaurant space, of approximately 2,000 square feet, developed as
part of the center could achieve a lease rate of about $15 per square foot. As shown in
Table V-13, the proposed arts center could generate between $24,000 to $34,000
annually by leasing space to a café or small restaurant.
Table V-13: ESTIMATED REVENUE FROM CAFÉ/RESTURANT LEASE

Low Mid High


Size of Café/Restaurant 2,000 2,000 2,000
Avg Annual Lease Rate per SF NNN $12.00 $15.00 $17.00
Total Revenue $24,000 $30,000 $34,000
Source: Prime Locations Inc, Economics Research Associates.

OPERATING EXPENSES

The operating budget for the proposed Olympia community arts center was developed
using two approaches. First, we analyzed each operating budget required for typical art
centers, and, using industry standards calibrated for this particular concept, estimated the
cost of each line item. Second, we compared the overall budget to key benchmarks for
comparable facilities to determine the reasonableness of the overall budget. The
resulting operating budget, including earned income and expenses, is shown in Table V-
14.

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Table V-14: PRELIIMINARY FINANCIAL ANALYSIS FOR THE PROPOSED COMMUNITY


ARTS CENTER IN OLYMPIA

% of
Operating
CATEGORY 2010 Budget
EARNED INCOME
Art Education $60,300 11.5%
Exhibitions $29,900 5.7%
Workshops $10,800 2.1%
Memberships $12,300 2.3%
Merchandise Sales $37,300 7.1%
Event Rentals $6,300 1.2%
Café/Restaurant $30,000 5.7%
Total Earned Income $186,900 35.7%
OPERATING COSTS
Personnel Costs (4 to 5 FTE) $239,000 45.6%
Art Teachers $29,800 5.7%
Art Supplies $11,900 2.3%
Workshop Costs $9,600 1.8%
Administrative Costs / Supplies & Services $40,000 7.6%
Marketing / Advertising $25,000 4.8%
Utilities $24,000 4.6%
Maintenance & Janitorial $36,000 6.9%
Exhibit Related Costs $60,000 11.5%
Cost of Goods Sold $18,700 3.6%
Education & Programming $15,000 2.9%
Reinvesment / Replacement Reserve $15,000 2.9%
Total Operating Costs $524,000 100.0%
Contributed Income Required $337,100 64.3%
Source: Economics Research Associates.

Specific assumptions for the operating budget are as follows:

• Personnel costs – In order to estimate the cost of salary and benefits, ERA
developed a hypothetical staffing plan for the proposed art center. As shown in
Table V-15, the center will have approximately four to five full time equivalent
(FTE) employees. It should be noted that while exact staff positions may be
different depending upon specific programming, the level of staffing reflected can
be used for purposes of analysis.

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Table V-15: HYPOTHETICAL STAFFING PLAN

Total Salary &


Staff Salary # FTE Salary Benefits
Executive Director $65,000 1.0 $65,000 $76,700
Development & Marketing Director $45,000 1.0 $45,000 $53,100
Building & Exhibit Maintenance $40,000 1.0 $40,000 $47,200
Part-Time Assistant $25,000 0.5 $12,500 $14,750
Program Director $40,000 1.0 $40,000 $47,200
Total $215,000 4.5 $202,500 $238,950

Source: Economics Research Associates.

• Art teachers – In this model, art teachers will be contracted with independently and
are not part of the facility permanent staff. ERA estimates that each teacher will
be paid $50 per student per class, so a teacher would receive $750 for teaching one
quarterly class.
• Art supplies – While students will be required to purchase supplies, a basic level of
art supplies still need to be provided for every class in the arts education program.
Based upon comparable facilities, ERA assumes that for each class meeting the
center would spend $2 per student. As an example, if a class meets 10 times and
has 15 students, the art supply budget for that class would be $300.
• Workshops - ERA estimates that each workshop would cost $800 to produce. The
cost of the workshop includes teacher salary and supplies.
• Marketing - The marketing budget is estimated at five percent of the total budget.
Marketing is typically under-funded in many cultural institutions and art centers,
but will be important to attracting visitors from out of town, attracting the
secondary resident market, developing members, and selling facility rentals.
• Utilities, maintenance and janitorial costs – These building maintenance costs are
estimated based upon a square foot basis, with utilities at $2 per square foot and
maintenance and janitorial at $3 per square foot.
• ERA estimates that the center will produce or assume the cost for six exhibitions
held at the center per year. Exhibit related costs include production costs, fee for a
contract curator, additional labor and opening costs. ERA estimates that exhibit
costs average $10,000 per exhibit. Exhibit costs can fluctuate depending on the
content of the exhibit.
• Merchandise cost of goods sold – The cost of goods sold based on industry
standards is estimated to be 50 percent of total sales revenue.
• Education and programs – This budget allocates funds for educational activities
and programs at the arts center and is estimated to be $15,000.

Olympia Community Arts Center Feasibility Study Facility Usage and Financial Analysis
ERA Project No. 16504 Page V-14
ATTACHMENT I

• Administrative Costs / Supplies and Services – Includes insurance, office supplies


and other administrative associated costs and is estimated to be $40,000.
• Reinvestment / Replacement Reserve – ERA has included a budget allocation for
reinvestment and major repairs. This amount is estimated at approximately three
percent of the total operating budget or $15,000.
Based upon these assumptions, ERA estimates that the total operating budget for the
proposed arts center in a stabilized year will be approximately $524,000.

Assuming a total of 12,000 facility square feet, which does not include the additional
2,000 square feet for the restaurant, this operating budget reflects an overall cost of $43
per square foot, which is well within industry benchmarks. Most cultural facilities have
operating expenses between $40 and $60 per gross square foot. The percentage of budget
allocated to staff costs is also reasonable at 45 percent.

Required Contributed Income


The remaining amount of contributed income required is close to $337,000. The earned
income percentage is roughly 36 percent. Most cultural facilities generate anywhere
from 25 to 50 percent of their budget from earned income, so 36 percent is considered a
reasonably healthy ratio of earned income. Corporate sponsorships of exhibits,
individual donations, grants, public funding, and annual fundraisers can all contribute to
closing the gap between earned income and total operating costs.

Ten-Year Financial Analysis

Based upon the above describe assumptions, ERA developed a 10-year financial analysis
for the proposed arts center in Olympia. It should be noted that the financial analysis is
presented in constant dollars, so any increases are a result of real price or attendance
increases rather than inflation. ERA estimates that the total operating budget will grow
slightly from 2008 to 2017.

Similar to museums, ERA believes the arts center will experience a slight increase in
attendance at exhibitions, arts education enrollment, workshop participation and event
rentals in its initial operating years, based on pre-opening marketing activities, additional
media coverage, and an increase in the number of events. Pre-opening marketing is
necessary if the center is to experience a surge in arts education enrollment, exhibition
attendance and event rentals during the center’s initial two years of operations.

Table V-16 contains the 10-year financial analysis.

Olympia Community Arts Center Feasibility Study Facility Usage and Financial Analysis
ERA Project No. 16504 Page V-15
ATTACHMENT I

Table V-16: OLYMPIA ART CENTER PRELIMINARY 10-YEAR FINANCIAL ANALYSIS


All estimates are in constant 2006 dollars.

CATEGORY 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
EARNED INCOME
Art Education $72,800 $68,200 $60,300 $62,500 $63,600 $64,700 $65,900 $67,000 $68,200 $69,400
Exhibitions $34,900 $33,900 $29,900 $30,600 $31,000 $31,300 $31,700 $32,100 $32,500 $32,900
Workshops $14,400 $12,200 $10,800 $10,800 $11,500 $10,800 $13,000 $10,800 $13,700 $10,800
Memberships $11,900 $12,100 $12,300 $12,800 $13,000 $13,200 $13,500 $13,700 $14,000 $14,200
Merchandise Sales $43,600 $42,400 $37,300 $38,200 $38,700 $39,200 $39,700 $40,200 $40,700 $41,200
Event Rentals $6,900 $7,100 $6,300 $6,400 $6,500 $6,600 $6,800 $6,900 $7,000 $7,100
Café/Restaurant $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000
Total Earned Income $214,500 $205,900 $186,900 $191,300 $194,300 $195,800 $200,600 $200,700 $206,100 $205,600
OPERATING COSTS
Personnel Costs (4.5 FTE) $239,000 $239,000 $239,000 $239,000 $239,000 $239,000 $239,000 $239,000 $239,000 $239,000
Art Teachers $28,800 $26,900 $29,800 $24,700 $25,100 $25,600 $26,000 $26,500 $27,000 $27,400
Art Supplies $11,500 $10,800 $11,900 $9,900 $10,100 $10,200 $10,400 $10,600 $10,800 $11,000
Workshop Costs $9,600 $9,600 $9,600 $9,600 $9,600 $9,600 $9,600 $9,600 $9,600 $9,600
Administrative Costs / Supplies & Services $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000
Marketing / Advertising $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000
Utilities $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000
Maintenance & Janitorial $36,000 $36,000 $36,000 $36,000 $36,000 $36,000 $36,000 $36,000 $36,000 $36,000
Exhibit Related Costs $60,000 $60,000 $60,000 $60,000 $60,000 $60,000 $60,000 $60,000 $60,000 $60,000
Cost of Goods Sold $21,800 $21,200 $18,700 $19,100 $19,400 $19,600 $19,900 $20,100 $20,400 $20,600
Education & Programming $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000
Reinvesment / Replacement Reserve $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000
Total Operating Costs $525,700 $522,500 $524,000 $517,300 $518,200 $519,000 $519,900 $520,800 $521,800 $522,600
Contributed Income Required $311,200 $316,600 $337,100 $326,000 $323,900 $323,200 $319,300 $320,100 $315,700 $317,000

Source: Economics Research Associates


ATTACHMENT I

PHYSICAL PLANNING ISSUES: RECOMMENDED BUILDING SIZE AND


PARKING ISSUES

Recommended Building Size

Based upon the above financial and usage analysis, ERA re-evaluated the appropriate
size for the proposed cultural facility. The resulting recommended facility size is shown
below in Table V-17. As indicated, ERA recommends an art center with approximately
12,000 square feet, with an additional 2,000 square-foot restaurant, for a total facility size
of 14,000 square feet.

Table V-17: RECOMMENDED FACILITY SIZE FOR PROPOSED ART CENTER IN


OLYMPIA

Recommended
Facility Component Low High Size
Exhibit space 4,000 6,000 5,000
Office / Admin space 1,500 2,000 1,500
Classrooms / Workshops 1,500 2,000 1,500
Work / Studio space 500 1,000 500
Retail Space 500 1,000 250
Subtotal 8,000 12,000 8,750
Circulation, Back of House, etc. 2,500 5,000 3,250
Restaurant / Café 1,500 2,500 2,000
Total Facility Size 12,000 19,500 14,000
Source: Economics Research Associates.

Parking

Off-street parking is required by the Olympia Municipal Code. The uses that apply best
to an art center are library/museum or government building. The requirement for the
library/museum use is 3.3 stalls and for government building is 3.5 stalls per 1,000 square
feet of space. Using 14,000 square feet and the higher of the two ratios, there would be
49 required parking spaces.

It is ERA’s opinion that this number of parking space would be adequate for the proposed
arts center based upon our peak usage projections. Given the peak in-facility attendance
for exhibits calculated previously, the parking requirements would be approximately 22
spaces. If a class of 15 students was occurring at the same time, the required parking,
including staff cars, would be around 45. This represents a peak situation, and most of
the time, the art center would require far fewer parking spaces.

Olympia Community Arts Center Feasibility Study Facility Usage and Financial Analysis
ERA Project No. 16504 Page V-17
ATTACHMENT I

ECONOMIC IMPACT DISCUSSION

This section includes a brief discussion of the major mechanisms in which cultural
facilities contribute to their local economy.

Economic impact is created when an institution or business in a local community is able


to attract spending from outside the economy or retain spending that otherwise would
have left the local economy. The specific ways in which an art center could generate
economic impact are as follows:

• Direct impact – An art center in economic terms is viewed as a business that


makes expenditures, some of which are to local businesses. Art centers spend
money on staff salaries, supplies, and services, all of which contribute to the local
economy.
• Indirect impact – The initial expenditures made by an art center are re-spent by
the people and businesses that receive the money. The effect of this re-spending
on jobs, household income, and revenue to local government agencies is referred
to as the indirect economic impact, or the multiplier effect. As an example, an art
teacher who receives a salary from the art center may, in turn, spend that money
at a local grocery store. The local grocery store, in turn, will spend that revenue
on hiring local employees. This effect represents the multiplier effect of the
initial direct expenditures. Expenditures made outside the local economy are
referred to as “leakage” and are no longer part of the economic impact.
• Induced impact – Art centers do not only function as businesses in the local
economy, they also attract or induce outside visitors to come into the community
and make purchases. The impact of outside visitor spending is referred to as the
induced impact. As an example, an art center in Olympia could, theoretically,
hold an exhibit that could attract visitors from Tacoma to view the exhibit, eat
dinner at a local downtown restaurant, and purchase gas from an Olympia gas
station. The expenditures made by the Tacoma visitor while in Olympia would be
considered part of the induced impact. Similarly, if a local Olympia resident
would have gone to Tacoma to take an art class, but now because of the art class
offerings at the art center in Olympia, stays within Olympia, the spending that has
been retained is also considered part of the economic impact of the art center.
Economic impact can be measured in number of jobs created, personal income, and
impact on gross regional product (GRP).

A recent study funded by the National Endowment for the Arts (NEA) examined the
economic impact of nonprofit arts organizations and their audiences. Highlights of the
study’s findings are as follows:

• Non-profit arts organizations in the United States have total expenditures of $53.2
billion and are responsible for creating nearly 2.1 million jobs and $47.4 billion in
household income on an annual basis.

Olympia Community Arts Center Feasibility Study Facility Usage and Financial Analysis
ERA Project No. 16504 Page V-18
ATTACHMENT I

• The non-profit art sector is a growth industry. Total spending by non-profit arts
organizations in the United States grew by 45 percent between 1992 and 2000,
which reflects a 25 percent increase when adjusted for inflation.
• Attendance at arts events generates related commerce for local businesses such as
hotels, restaurants, and retail stores. This spending generated about $80.8 billion
of revenue for local merchants in 2000, which is an average of $22.87 per person
per event (not including the price of admission).
• Arts organizations are invaluable to cultural tourism, which is an increasingly
important component of tourism to local communities. Research by the Travel
Industry Association of America and Partners in Tourism indicates that 65 percent
of all adult travelers included a cultural event while on a trip of 50 miles or more
away from home, and 32 percent of those travelers extended the duration of their
trip because of that event. Cultural travelers are more likely to spend more, have
a graduate degree, travel longer, and shop.
• The economic impact of cultural organizations extends beyond the spending, as
they also garner a tremendous amount of volunteerism and in-kind donations.
While the volunteers may not have an economic impact as traditionally defined,
they clearly play an important role in keeping arts organizations functioning as a
viable industry.
• Arts organizations support a broad diversity of jobs beyond artists, including
builders, plumbers, accountants, educators, and printers.

Olympia Community Arts Center Feasibility Study Facility Usage and Financial Analysis
ERA Project No. 16504 Page V-19
ATTACHMENT I

SECTION VI: CAPITAL COST ESTIMATE

This section presents an estimate of potential capital cost for the proposed community art
center in Olympia. The analysis was conducted by Oppenheim Lewis, a cost consulting
firm specializing in cultural projects.

As discussed in the introduction to this report, one of the goals for this study is provide a
framework for analyzing any opportunities that the City may be presented with in the
future rather than analyzing the feasibility of an already planned art center in a specific
building or site location. However, in order to estimate potential development costs, it
was necessary to make some assumptions. For purposes of analysis only, the
construction costs presented in this section assume new construction. Yet it is extremely
important to note that other options such as renovation of an existing building, joint
development, or co-location with another facility may also be viable options and are
discussed later in this section. Costs for these options may be more or less depending
upon the specific nature of the site, building, and/or type of joint tenant.

ASSUMPTIONS

This estimate of capital cost is preliminary in nature and based on several key
assumptions. Once an actual site and/or building opportunity is identified, more detailed
design and cost analysis should be undertaken. These assumptions are for purposes of
analysis only and may change once an actual project is defined. Key assumptions are as
follows:

• ERA’s preliminary concept for the art center recommends a facility of between
12,000 and 19,000 square feet. Subsequent financial analysis and sensitivity
testing found that a 14,000 square foot art center (including 12,000 square feet for
art center uses and a 2,000 square foot restaurant or café) would be the most
financially sustainable concept. However, the capital cost model prepared in this
section is based on a 16,000 square foot building, reflecting the midpoint of the
initially recommended size range. It also assumes a site of one acre with no
parking.
• This budget includes both construction costs as well as non-construction costs
(soft costs) associated with the development of the project.
• Land costs are not included, nor are any financing or operational endowment
costs.
• The cost of the project was estimated in October 2006 and reflects costs at that
time. While escalation can be difficult to predict depending on the cost of
materials and state of the construction industry at the time of construction, capital
costs have typically escalated at a rate of between two and four percent during the
past few years. However, during this past year, the cost of materials has increased
nearly 10 percent due to short supply.

Olympia Community Arts Center Feasibility Study Capital Cost Estimate


ERA Project No. 16504 Page VI-1
ATTACHMENT I

• Escalation to a future project start date has not been included in this budget,
although escalation in these costs is to be expected in future years.
• At present, no specific information exists about the site or timeframe of the
development. It should therefore be expected that the capital cost included in this
report may vary when this information becomes known.
• The assumed basis for the construction cost of the project is a flexible but generic
design for the facility. The building systems and materials are strong on
infrastructure and durability, but do not include any specialized systems or
equipment.
• The budget is based on new construction in downtown Olympia.
• The building will meet a minimum level of sustainable development in terms of
materials used and assumed building systems and would qualify as LEED
certified.
Finally, the costs set forth in this estimate reflect a fairly conservative approach and have
been projected to allow for some consideration of risk associated with the uncertainty of
the site, building, and time frame.

PROJECT COST

Capital costs for this project based on the assumptions described above are shown in
Table VI-1. Additional detail for these costs can be found in Appendix A at the end of
this section.

Table VI-1: SUMMARY OF CAPITAL COSTS

Item Amount

Building Construction Cost $5,819,738

Site Construction Cost $1,228,415

Design & Management Fees $1,281,482

Other Soft Costs and Contingency $1,779,815

Land & Financing $0

Estimated Total Cost $10,109,450


Source: Oppenheim Lewis.

Specific components are described as follows:

Olympia Community Arts Center Feasibility Study Capital Cost Estimate


ERA Project No. 16504 Page VI-2
ATTACHMENT I

• The building construction cost includes the direct cost of the building.
• Site construction cost includes the cost for development of the site (demolition of
existing structures, new utilities) as well as the cost of the finish work (paving,
landscaping, etc.) for an assumed site area of one acre.
• Design and management fees represent the costs for all consultants required for
the project.
• Other soft costs and contingency include the remaining project development costs
such as furnishings, permits and fees, City representation on the project, and
contingency. The cost of furnishings is based on a modest program of art and
community. Items such as office furniture, kitchen equipment, computers and
telephones are included. However, kilns, furnaces, and more specific or intensive
art related equipment are not included.

Items Excluded

Three types of costs are excluded from the cost model:

1. The cost to procure land - There is no site selected at this time, and as such it is
not known whether land will be made available for the project or have to be
acquired.
2. Fundraising and financing - These are variable costs and it is not known at this
time what the delivery mechanism will be for the project.
3. Endowment – Funds needed for operational endowment or initial operating
contingency are also excluded from this budget, but are recommended.

OTHER CAPITAL COST ISSUES

There are other direct development cost considerations for the project that have not been
addressed in the capital cost budget.

Parking

Parking has not been included in the analysis, but it is a consideration that will need to be
investigated during site selection. Depending upon the site selected, parking may or may
not be required; and if it is required, its cost is dependent upon whether it is built or
leased, and whether it is surface parking or structured parking. The cost of parking
spaces can range from $5,000 to $30,000, depending on the type of parking. Off-street
parking is required by the Olympia Municipal Code. While an art center is not a
specified use, the requirement for libraries and museums is 3.3 stalls per 1,000 square
feet, and for government buildings is 3.5 stalls per 1,000 square feet. Thus, an art center
facility between 12,000 and 19,000 square feet could require between 40 and 70 parking

Olympia Community Arts Center Feasibility Study Capital Cost Estimate


ERA Project No. 16504 Page VI-3
ATTACHMENT I

spaces. Given a range of between $5,000 and $30,000 per space (depending upon the
type of parking), the cost to construct parking, based upon a mid-point facility size, could
be in somewhere between $300,000 and $1.7 million.

New Construction versus Renovation of an Existing Building

This cost model is based on new construction for the center. It is possible that an existing
building could be found which would be suitable for the program. In comparing the cost
of new construction versus renovation of an existing structure, it can be noted that a
renovated building could cost more (up to 50 percent) or less than new construction
depending on the site; the historic nature of the existing building; the structural condition
of the existing building; the desire to change the architectural character of the building or
the decision to work with existing character; and the actual size and efficiency of the
existing building compared with the new program.

Co-Location

Another consideration is cohabitation of a building (new or existing) with other


institutions. The ability to co-develop property, or share in the expense of renovating a
larger existing building may present new opportunities. Sharing the development costs
may result in higher or lower costs depending upon the goals/program of the other
institution(s) and upon the site itself. The nature of the relationship between the
institutions, and the site itself will have a similar effect on operating costs.

Environmental Sustainability

LEED and sustainability are desired goals for many projects currently in the marketplace,
particularly for cities demonstrating good stewardship of their resources. This is
particularly true in the Pacific Northwest. The cost model assumes a minimum level of
LEED rating that can be achieved through good design without any great cost premium.
However, no specialized systems are included such as onsite energy generation, green
roof assemblies, or reclaimed water. These specialized systems could be added to the
project design for a cost premium. Should the owner wish to have a more highly rated
LEED building, a program would need to be developed. Depending upon the site
selected, the cost to have a highly rated LEED building (e.g. platinum rating) could have
a premium of a widely varying degree (5 to 25 percent). Excluding demonstration
projects where scope is the goal and not cost, the key to creating a sustainable project
which makes good economic sense is early investigation of goals, design ideas, and solid
economic analysis. From that basis, sustainability becomes an imbedded part of the basic
program. Sustainable measures can be easily designed into a project early on, but they
become more expensive add-ons later in design or in construction.

Olympia Community Arts Center Feasibility Study Capital Cost Estimate


ERA Project No. 16504 Page VI-4
ATTACHMENT I

APPENDIX A
CAPITAL COST ESTIMATE
SUPPORTING DETAIL

Prepared by:

Oppenheim Lewis, Inc.


October 24, 2006
ATTACHMENT I

Olympia Community Arts Center Feasibility Study


Preliminary Budget Estimate

TOTAL PROJECT BUDGET - SUMMARY LEVEL

Project Construction Cost


Building & Site Construction Cost $6,407,411

Escalation from Project Start to Construction Start 640,741


Construction Contingency 704,815

Total Project Construction Cost $7,752,967

Soft Cost
Design & Management Fees (estimated at 20% of building & site cost) $1,281,482
Fixtures, Furnishings & Equipment 425,000
Other Fees & Services & Permits 350,000

Subtotal Soft Cost $2,056,482

Contingency for Soft Cost 300,000

Total Project Soft Cost $2,356,482

Other Project Cost


Financing & Fundraising $0
Endowment Contribution 0
Land Acquisition 0

Total Other Project Costs $0

Total Project Cost $10,109,450

OLI 05031 Page A-1


ATTACHMENT I

Olympia Community Arts Center Feasibility Study


Preliminary Budget Estimate

BUILDING AND SITE CONSTRUCTION COST BUDGET ITEMS BY MAJOR CATEGORY

Cost Cost/SF

1.0 Site Preparation $275,000 $17.19


2.0 Structural Systems 1,059,250 66.20
3.0 Exterior Closure 950,000 59.38

4.0 Roofing & Waterproofing 421,000 26.31


5.0 Interior Construction 503,625 31.48
6.0 Equipment & Specialties 63,100 3.94

7.0 Conveying Systems 0 0.00


8.0 Mechanical Systems 713,425 44.59
9.0 Electrical Systems 435,000 27.19
10.0 Sitework Finish 600,000 37.50
Subtotal $5,020,400 $313.78

General Conditions 10.5% 527,142


Contractor's Fee 5.0% 277,377
Subtotal $5,824,919 $364.06

Design Contingency 10.0% 582,492


Total Construction Cost in October 2006 Dollars $6,407,411 $400.46

Notes: Estimate excludes escalation, construction contingency, hazardous materials abatement,


artwork and soft costs.

OLI 05031 Page A-2


ATTACHMENT I

Olympia Community Arts Center Feasibility Study


Preliminary Budget Estimate

BUILDING AND SITE CONSTRUCTION COST BUDGET DETAILS

Quantity Unit Price Extension Subtotal


1.0 Site Preparation
Demolition Allow $50,000
Earthwork Allow 25,000
Site Utilities Allow 200,000
Subtotal 1.0 Site Preparation $275,000

2.0 Structural Systems


Substructure
Foundations 165 CY 400.00 $66,000
Slab on Grade 17000 SF 7.75 131,750

Superstructure
Shear Walls 6000 SF 15.00 90,000
Roof Structure 17000 SF 37.00 629,000

Miscellaneous
Canopy and Trellis 2000 SF 40.00 80,000
Pads & Curbs 1 LS 7,500
Program Specific Structure Allow 40,000
Miscellaneous Detailing 1 LS 15,000
Subtotal 2.0 Structural Systems $1,059,250

3.0 Exterior Closure


Exterior Wall Assembly
Plaster/Siding Quality Wall Finish 15000 SF 40.00 $600,000
Cornice/Parapet Cap/Fascia 650 LF 35.00 22,750

Window & Glazing 2000 SF 65.00 130,000

Exterior Doors
Single 8 Ea 2,000 16,000
Double 8 Pr 4,000 32,000
Rollup Door 2 Ea 15,000 30,000
Security Gates 2 Pr 15,000 30,000

Louvres 600 SF 60.00 36,000


Display Boards 4 Ea 2,000 8,000
Soffits - Paint Exposed 1000 SF 4.00 4,000

Paint Trellis/Canopy 2000 SF 5.00 10,000


Miscellaneous Trim 650 LF 25.00 16,250
Exterior Signage Included in FF&E
Miscellaneous Detailing 1 LS 15,000
Subtotal 3.0 Exterior Closure $950,000

OLI 05031 Page A-3


ATTACHMENT I
4.0 Roofing & Waterproofing
Metal Roofing - Standing Seam 17000 SF 23.00 $391,000
Green Roof System None
Waterproofing None
Skylights None
Sheet Metal 1000 LF 30.00 30,000
Subtotal 4.0 Roofing & Waterproofing $421,000

5.0 Interior Construction


Partitions 8800 SF 11.00 $96,800
Furring 500 SF 6.50 3,250
Miscellaneous Fascia & Soffits 1 LS 10,000

Interior Glazing 500 SF 45.00 22,500


Interior Doors, Frames, Hardware
Single 15 Ea 1,500 22,500
Double 4 Ea 3,000 12,000
Sliding 2 Ea 1,500 3,000

Floor Finishes
Epoxy 4000 SF 8.00 32,000
Stained Concrete 5300 SF 7.00 37,100
Carpet 4000 SF 5.00 20,000
Ceramic Tile 400 SF 12.00 4,800
Linoleum 2300 SF 5.50 12,650
Sealed Concrete 7300 SF 1.25 9,125

Wall Finishes
Ceramic Tile 600 SF 12.00 7,200
Allow for Acoustical 1000 SF 12.00 12,000
Other Allow 10,000

Ceiling Finishes
GWB 3200 SF 9.00 28,800
Acoustical - Allow 8800 SF 8.00 70,400
Paint Exposed 4000 SF 4.00 16,000

Millwork
Lavatory Countertop 8 LF 250.00 2,000
Office Work Area 40 LF 250.00 10,000
Public Areas 50 LF 350.00 17,500
Display Cases Allow 25,000
Offices Included in FF&E
Kitchen 20 LF 450.00 9,000

Storage Rooms None


Retail Buildout Included in FF&E
Miscellaneous Other Millwork 1 LS 5,000
Misc Backing & Blocking 1 LS 5,000
Subtotal 5.0 Interior Construction $503,625

OLI 05031 Page A-4


6.0 Equipment & Specialties ATTACHMENT I
Toilet Rooms
Partitions 6 Ea 1,000 $6,000
Accessories 12 Ea 400.00 4,800
Other Fixture Accessories 2 Ea 400.00 800

Kitchen Equipment Included in FF&E


Audio Visual Equipment Included in FF&E
Office System Furniture Included in FF&E
Projection Screens Included in FF&E

Window Blinds 600 SF 25.00 15,000


Whiteboards & Tackboards Included in FF&E
Railings None
Signage & Graphics Allow 5,000
Entry Mats 4 Ea 3,000 12,000

Lockers None
Painting Not Incl w/ Assemblies 1 LS 4,500
Cash Room None
Div 10.0 Miscellaneous 1 LS 15,000
Subtotal 6.0 Equipment & Specialties $63,100

7.0 Conveying Systems None

8.0 Mechanical Systems


Plumbing
Fixtures & Equipment
Hot Water Heater-Inst. Elect. 4 Ea 1,250 $5,000
WC-Wall w/Rough In w/Auto Sensor 6 Ea 1,600 9,600
Lavatory - Wall w/Auto Sensor 4 Ea 1,500 6,000
Other Sinks 6 Ea 1,500 9,000

Drain-Floor 8 Ea 265.00 2,120


Drinking Fountain 2 Ea 4,550 9,100
Connect to RWL 6 Ea 300.00 1,800
Misc Equip & Fixtures 1 LS 5,000

Pipework & Accessories


Pipe-Waste & Vent 500 LF 32.00 16,000
Pipe-Storm 150 LF 33.00 4,950
Pipe-CW w/Insl 225 LF 30.00 6,750
Pipe-DHW w/Insl 100 LF 24.00 2,400
Pipe-Recycled Water None
Pipe-Drains Etc. 50 LF 30.00 1,500

Heat Trace Pipes in Outside Walls 150 LF 15.00 2,250


Valves, Etc. 15 Ea 200.00 3,000
Hose Bibb-Interior 2 Ea 100.00 200
-Exterior 2 Ea 350.00 700

Access Door 8 Ea 285.00 2,280


T.Primer/Sh.Abs./Therm/PG 5 Ea 200.00 1,000
Access Door/T.Primer/Sh.Abs./Therm/PG 15 Ea 200.00 3,000
Cleanouts 3 Ea 325.00 975
Roofjacks 2 Ea 325.00 650

OLI 05031 Page A-5


ATTACHMENT I
Mechanical Systems, Plumbing, Pipework & Accessories (Continued)
Kitchen Rough-In 1 LS 15,000
Program Specific Systems 1 LS 15,000
Miscellaneous Accessories 1 LS 2,500
Firestopping 1 LS 3,000
Test & Clean 1 LS 2,200

HVAC
Equipment - Wet
Boiler 1 Ea 25,000 25,000
Chiller 1 Ea 100,000 100,000

Equipment Air
AHU 2 Ea 65,000 130,000
Fan-Exh. 000cfm:0hp 4 Ea 2,000 8,000
Miscellaneous Equipment 1 LS 2,500

Ductwork & Accessories


Duct-GSM 12000 # 12.00 144,000
Registers & Grills 80 Ea 200.00 16,000
Roof Cap 2 Ea 350.00 700
Firestopping 1 LS 1,000
Misc. Duct & Accessories 1 LS 1,250

Pipework & Accessories


Radiant Heat & Cool Underfloor System None
Pipe-HW/CHW w/ Insl. 500 LF 35.00 17,500
Misc. Valves & Accessories 1 LS 7,000

Controls & Testing 1 LS 20,000


Test & Balance 1 LS 7,500

Fire Sprinklers
Sprinklers-Wet 16000 SF 6.00 96,000
Sprinklers-Dry/Overhangs/Canopy 1000 SF 6.00 6,000
Subtotal 8.0 Mechanical Systems $713,425

9.0 Electrical Systems


Primary Power
Switchboard 1 Ea 17,000 $17,000
Transformers 1 Ea 8,000 8,000
Distribution Panels None
Panelboards 6 Ea 3,250 19,500
Building Grounding 1 LS 4,000
TVSS 1 LS 5,000

Emergency Power None


Feeder Conduit & Wire 200 LF 40.00 8,000
Equipment Power 20 Ea 700.00 14,000

User Convenience Power


Receptacles 120 Ea 150.00 18,000
Floor Boxes 30 Ea 250.00 7,500
Furniture Connections 8 Ea 250.00 2,000
Conduit & Wire 3000 LF 7.50 22,500

OLI 05031 Page A-6


ATTACHMENT I

Electrical Systems (Continued)


Lighting 16000 SF 10.00 160,000
Allow for Additional Retail Lighting 1 LS 7,500

Signal & Communications


Fire Alarm 16000 SF 2.50 40,000

Telecommunications
Telecommunications Room 1 LS 4,000
Telephone/Data Outlets 60 Ea 150.00 9,000
Furniture Connections 8 Ea 250.00 2,000
Cabling 68 Ea 600.00 40,800
Equipment Included in FF&E
POS Rough In 4 Ea 150.00 600

Audio Visual Rough-In 1 LS 10,000


Security 16000 SF 1.50 24,000
Public Address System - Allowance 1 LS 10,000
Cable TV Outlets 4 Ea 400.00 1,600
Subtotal 9.0 Electrical Systems $435,000

10.0 Sitework Finish


Entry Plaza - Allow 5000 SF 40.00 $200,000
Courtyard - Allow 5000 SF 40.00 200,000
Parking None
Remaining Site - Allow 10000 SF 20.00 200,000
Subtotal 10.0 Sitework Finish $600,000

OLI 05031 Page A-7

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