VII.1. Hopkins Center for the Arts and Stages Theatre Company Lease Agreement; Lenz
CITY OF HOPKINS
City Council Report 2023-089
To: Honorable Mayor and Council Members
Mike Mornson, City Manager
From: Ari Lenz, Assistant City Manager
Lynn Anderson, HCA Executive Director
Date: September 12, 2023
Subject: Hopkins Center for the Arts and Stages Theatre Company Lease
Agreement
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RECOMMENDED ACTION
MOTION TO approve lease agreement with Stages Theatre Company.
OVERVIEW
The attached agreement would enter into a lease agreement with Stages Theatre
Company for use of portions of the Hopkins Center for the Arts from September 1, 2023
to August 31, 2028 with an optional 5 year extension to 2032.
The recommended agreement comes after a year of negotiations with Stages regarding
lease renewal. The lease is similar to previous leases between the partners but
recognizes a change in market value, capital and operational costs associated with the
facility since the last negotiations in 2011. Major revisions to the lease include:
• Reduction of the number of weeks in the theatre from 40 to 36 weeks starting in
2024 (Stages has agreed to pay the same amount annually despite the reduction
of hours). This will allow the Center more opportunity to rent the theatre (the most
valuable rental space in the facility) to the public and estimated market value of
up to $35,000- $50,000 per year;
• Adjusting the inflation rate to 3.0% for the first five years and then 3.25% in
optional extension years.
• Adding a percentage ticket fee starting in 2025 of 3.0% and increasing the fee to
4.0% in the optional extension years. A conservative estimate of annual ticket
sales at the 3.0% amount for $750,000, which would $22,500 per year.
The City currently supports the Hopkins Center for the Arts, similar to all of our other
facilities. The negotiated revisions to the lease are an improvement and should allow for
a reduced level of subsidy going forward. The exact amounts of the subsidy over the
next 10 years are not currently definable due to the unknown of the ticket fee revenue
and capital costs. Staff expects them to stay in line with the current subsidy the Center
works under for operations (with inflationary increases) and capital costs for larger
projects such as the roof will need to be paid for as part of the City’s Capital
Improvement Plan.
Administration
Background of the Hopkins Center for the Arts
Since the inception of the Hopkins Center for the Arts, the City of Hopkins and Stages
Theatre Company (then Child’s Play Theatre) have partnered along side the Hopkins
School District on creating a space to:
• Provide people of all ages and diverse backgrounds with opportunities to
participate in the arts;
• Using the arts for community development, economic growth and bringing vitality
to Mainstreet;
• Offering an opportunity for community groups to host space for events and
activities.
In 2017 New Creative Minnesota did a study reviewing the economic impact of arts on
the local economy and found arts and culture organizations contribute over $11 million
annually to Hopkins and served over 250,000 people, a large portion of the economic
impact comes from our partnership with Stages.
The original lease agreement with Stages (Child’s Play Theatre) was signed in 1997,
with a renewal in 2011. The City currently has an additional lease agreement with
Hopkins Public Schools renewed in 2017 to 2027.
Representatives from Stages will be present at the meeting and give a brief update to
Council about their work.
SUPPORTING INFORMATION
• Proposed Lease Agreement