revised February 6, 2008

FISCAL NOTE FOR NON-CAPITAL PROJECTS

Department:	Contact Person/Phone:	DOF Analyst/Phone:
Seattle Center	Karin Butler, 684-7153 Ned Dunn, 684-7212 Helaine Honig, Law, 684-8222	Amy Williams, 233-2651

Legislation Title:

AN ORDINANCE relating to the Seattle Center Department; authorizing execution of a lease with the Seattle International Film Festival Group for space in the Northwest Rooms at Seattle Center.

· Summary of the Legislation:

This legislation authorizes execution of a lease agreement with the Seattle International Film Festival Group (SIFF) to operate and maintain a film center in the Alki Room of the Seattle Center Northwest Rooms.  The film center will include lecture space, a screening room, a reference library, and administrative office space. 

· Background: (Include brief description of the purpose and context of legislation and include record of previous legislation and funding history, if applicable):

Description:

SIFF celebrates the culture and art of the moving image through filmmaking and filmgoing experiences of exceptional merit and diversity that inform, educate and entertain.  Established in 1976, SIFF produces the largest and most highly attended film festival in the United States.  The 25-day festival presents approximately 300 features and 150 shorts from more than 60 countries.  With extensive local, national and international media coverage the festival is one of Seattle’s most accessible and highly publicized cultural events, drawing an audience of over 160,000 annually.

In addition to the annual festival, SIFF began year-round programming in 2007 through its establishment of SIFF Cinema at the Nesholm Family Lecture Hall at Seattle Center’s McCaw Hall.    Film programming at SIFF Cinema includes film series, archival presentations, and theatrical runs of films.  Award winning directors, such as Ang Lee and Julian Schnabel, visit SIFF Cinema to screen their latest films and participate in Q&A sessions with the audience.  SIFF’s programming also includes community outreach to and co-presentations with other organizations including the AJC/Jewish Film Festival, LifeLong AIDS Alliance, Northwest Folklife Festival and the Seattle Art Museum.

History:

Since July 2005, Seattle Center, the Mayor’s Office of Film and Music, and SIFF have been working closely on the relocation of SIFF to Seattle Center, which would be done in two phases. The first phase was accomplished in 2006 when SIFF relocated to the Nesholm Family Lecture Hall and opened “SIFF Cinema” to its patrons.   SIFF signed a three-year agreement for use of this space.   As part of the agreement, the City of Seattle committed $150,000 in building improvements to make the Lecture Hall auditorium work for the presentation of films.  SIFF provided the state-of-the-art projection and sound equipment.  In its first year, SIFF Cinema was a great success using the facility more than 250 days and offering over 500 general and festival film screenings to the public. 

This legislation includes the second phase of SIFF’s move to Seattle Center, which involves the relocation of their operations to the Alki Room to create a film center.  SIFF’s current lease for office space in South Lake Union expires in 2008 and will not be renewed.  Moving into the Alki Room fulfills SIFF’s long-term goal of having a permanent year-round home.  The film center will include a lecture space, screening room, reference library, administrative offices, box office and space for other related activities.  In addition to allowing SIFF to expand year-round programming, the film center will also enable SIFF to host events by other film organizations, thus further activating the space.  As an example, The Film School, which counts among its founders actor Tom Skerritt and directors John Jacobsen and Rick Stevenson, will move its classes to SIFF’s new film center.  Having SIFF join the Seattle Center campus also provides joint programming and cross promotion opportunities among SIFF, in-house programs such as Festàl, and other Seattle Center resident organizations. 

The initial term of the lease agreement is for 10 years.  The annual rent is $35,000 per year for the first five years.  Beginning in year six of the agreement, lease payments increase annually by $3,000 plus CPI capping at $50,000 plus CPI in year ten.  SIFF will pay all utility expenses and maintain the interior of the space. 

The lease agreement also requires SIFF to make tenant improvement in the Alki Room.  Improvements are estimated to cost approximately $1,000,000, and SIFF is expected to fund the majority of the project.  The City will provide a maximum of $200,000, which was budgeted in  Seattle Center’s 2007-2012 Capital Improvement Program budget for this purpose.  SIFF is currently in the process of raising the remaining resources necessary to fund construction. If SIFF has not raised the additional funds and obtained a building permit by December 31, 2008, the lease agreement can be terminated.  SIFF may not begin construction of tenant improvements until they have demonstrated to the Seattle Center Director and the City’s Finance Director that they have sufficient funds committed to pay for the project.

The Alki Room is one of the Northwest Rooms, a suite of seven rooms at Seattle Center rented individually or in a variety of combinations serving a range of clients.  The rooms provide space for meetings, parties, consumer and exhibit shows and other miscellaneous functions.  Annual rental revenues for the Alki Room typically range from $25,000 to $30,000 per year.  Net revenues for the space have ranged from $13,700 to $19,500 per year.  The rent that SIFF will pay exceeds the net revenue that the Alki Room currently generates.  Current users of the Alki Room will be relocated to an alternative room in the Northwest Rooms or may use the Seattle Center Pavilion Room B.  As part of the lease agreement with SIFF, the major festivals including Bumbershoot, Folklife, the Bite of Seattle, and the International Children’s Festival will continue to use the Alki Room during their festivals.  The Seattle Center Academy will also continue to use the space.  As such, no loss of revenue or loss of events is expected due to SIFF’s use.  

· Please check one of the following:

____ This legislation does not have any financial implications.  (Stop here and delete the remainder of this document prior to saving and printing.)

__X_ This legislation has financial implications.  (Please complete all relevant sections that follow.)

Appropriations:  This table should reflect appropriations that are a direct result of this legislation.  In the event that the project/programs associated with this ordinance had, or will have, appropriations in other legislation, please provide details in the Notes section below.

Fund Name and Number	Department	Budget Control Level*	2008 Appropriation	2009 Anticipated Appropriation
TOTAL

*See budget book to obtain the appropriate Budget Control Level for your department.

Notes: 

Ordinance 122298 appropriated $200,000 in the 2007 Seattle Center Capital Improvement Program for work in the Alki Room. These funds would be used to match SIFF’s estimated $800,000 contribution to the project. 

Anticipated Revenue/Reimbursement: Resulting From This Legislation: This table should reflect revenues/reimbursements that are a direct result of this legislation.  In the event that the issues/projects associated with this ordinance/resolution have revenues or reimbursements that were, or will be, received because of previous or future legislation or budget actions, please provide details in the Notes section below the table.

Fund Name and Number	Department	Revenue Source	2008 Revenue	2009 Revenue
			$4,376	$35,000
TOTAL			$4,376	$35,000

Notes:

Assumes the lease commencement date is October 1, 2008 and that the first three months rent paid by SIFF are at a reduced rate during construction, with full rent commencing January 1, 2009.

Total Regular Positions Created, Modified, Or Abrogated Through This Legislation, Including FTE Impact:  This table should only reflect the actual number of positions affected by this legislation.   In the event that positions have been, or will be, created as a result of other legislation, please provide details in the Notes section below the table.

Position Title and Department	Position # for Existing Positions	Fund Name & #	PT/FT	2008 Positions	2008 FTE	2009 Positions*	2009 FTE*
TOTAL

* 2009 positions and FTE are total 2009 position changes resulting from this legislation, not incremental changes.  Therefore, under 2009, please be sure to include any continuing positions from 2008.

Notes:

NA

· Do positions sunset in the future?  (If yes, identify sunset date):

Spending/Cash Flow: This table should be completed only in those cases where part or all of the funds authorized by this legislation will be spent in a different year than when they were appropriated (e.g., as in the case of certain grants and capital projects).  Details surrounding spending that will occur in future years should be provided in the Notes section below the table.

Fund Name & #	Department	Budget Control Level*	2008 Expenditures	2009 Anticipated Expenditures
TOTAL

* See budget book to obtain the appropriate Budget Control Level for your department.

Notes:

· What is the financial cost of not implementing the legislation? (Estimate the costs to the City of not implementing the legislation, including estimated costs to maintain or expand an existing facility or the cost avoidance due to replacement of an existing facility, potential conflicts with regulatory requirements, or other potential costs if the legislation is not implemented.)

If this legislation is not implemented, the City would loose the opportunity to secure a lease with a major cultural institution resulting in a loss of facility rental revenue of approximately $35,000-$50,000 annually. 

· What are the possible alternatives to the legislation that could achieve the same or similar objectives? (Include any potential alternatives to the proposed legislation, such as reducing fee-supported activities, identifying outside funding sources for fee-supported activities, etc.)

While it would eliminate an opportunity to establish a film center at Seattle Center, draw new audiences to Seattle Center, and otherwise augment Seattle Center’s mission, SIFF could find an alternative film center venue.

· Is the legislation subject to public hearing requirements:  (If yes, what public hearings have been held to date, and/or what plans are in place to hold a public hearing(s) in the future.)

No.

· Other Issues (including long-term implications of the legislation):

NA

Please list attachments to the fiscal note below: