On Monday I continued my series on the steps that the Waco Performing Arts Company needs to take in order to renovate the Hippodrome Theatre, reorganize themselves, and revitalize the Arts in Waco. The first step was envisioning the end goal and the second step was to organize. The next step is to define the arrangement that will exist between the WPAC and the various Arts organizations in Waco.

The name of the game when structuring an arrangement between all of the different organizations and the WPAC is barrier removal. There are some obvious impediments to arranging such a dream scenario as having all of Waco's Arts organizations performing together under one roof. Here are my thoughts on it.

The first barrier is cost. The reason that this idea is valuable in the first place is that it removes the most important barrier facing all of the different groups: the cost of renting a venue. So we began with the premise that such a barrier must be removed. The venue has to be provided free in order for the arrangement to be attractive. Of course, the WPAC has built-in costs as well. It can't just completely surrender profit from events that require the time and resources of the theatre and its staff. So the basic proposal is twofold: shift the cost to the back-end of the deal and reduce income expectations.

To the former, in lieu of charging the organizations a fixed rental fee, the WPAC will charge ticket fees. It should come in the form of a per-ticket fee and a percentage of the ticket price. Exactly what those numbers should be will need to be negotiated between the WPAC and the organizations. I think variation in fees and percentages should be tied to ticket price rather than to the type of show or which organization is presenting. This structure should allow the WPAC to collect an approximate amount to a conventional rental contract, but it doesn't require the Waco Arts organizations to front that money or bear any risk in it.

For a quick mathematical example, let's say that Organization X is having an event. They price their tickets at $10 each and anticipate an audience of 500 people. Just for the sake of this example, we'll say that the agreement is that the WPAC takes $2 per ticket and 25% of ticket revenue. (We'll assume that Organization X is actually only taking $8 per ticket so that after the fee the total ticket price rounds out at $10.) If 500 tickets are sold, that's $2000 for the WPAC and $3000 for Organization X. $2000 is close to what the WPAC could make on a conventional rental contract and $3000 profit after renting a facility is more than most Arts organizations in Waco could currently anticipate. Of course, if only 200 ticket sell, that's $800 for the WPAC and $1200 for Organization X. Bear in mind that the WPAC still gave up its space for rehearsal, provided technical support, sold tickets, and ran the event. They bear the risk in this and stand to make less than the value of their commitment. Of course, both organizations make more money when more tickets are sold. That kind of upside is shared by both and provides a nice incentive for collaboration. And I would imagine that the percentage that the WPAC takes could go down if the ticket price was higher. But again, my numbers were just for the sake of this example. What they will actually be will have to be worked out when the organizations meet as I detailed in Step Two.

The latter concession that the WPAC is making is reducing income expectations. This comes in a few forms. First of all, the WPAC will have to allow the organizations to use the space next door, which will be renovated as rehearsal space, for their rehearsals a reasonable amount of time. (I'll detail the physical changes to come in a later post.) And a dress rehearsal will have to be provided in the theatre. Since the WPAC is taking all of its compensation on the back-end of the deal, this usage won't be paid for. And it likely won't be compensated as much as it would be under a conventional rental agreement. But the hope is that it will make up for such losses with an increase in volume of performances and increased sales to its own shows due to greater exposure to all of the new audiences who will be brought to the Hippodrome. That's a pretty long-viewed approach to income, and frankly it's one that most theatres don't risk taking. I think it makes sense in this situation, and it's one that will pay dividends in the long run. And short-term thinking has been at the root of many problems with the Arts.

The final component in this step of defining the agreement is what I'll call the application process. Use of the Hippodrome isn't automatic nor is it perpetual for any Arts group in Waco. Parameters must be established and an application must be renewed annually. This is a way to ensure dedication and quality and provide dependable information on an ongoing basis.

What exactly will qualify someone to submit an application will have to be decided by the interested parties and the WPAC. I would propose that sensible beginning parameters might be registered 501(c)3 organizations, active in Waco for at least 3 years, with at least two public events performed within the past 12 months, and which serves an average of more than 1000 people per year. But that, of course, will also have to be determined by the interested parties.

The application will require each organization to describe themselves, their projects, and performances with respect to the following categories: merit, collaborations, educational commitment, local resources used, a description of the performance(s), sponsors, their marketing plan, and other sensible information. This is not only informational to make sure that everyone is on the same page. First of all, it ensures that all of the organizations are taking these points to heart. Requiring them to enunciate their marketing plan ensures that they have a marketing plan. Everyone needs to conduct themselves as professionally as possible since the sustainability of the whole relationship hangs on the quality of the performances, the frequency of the performances, and the size of the audiences.

But maybe more importantly than coordination and quality control is that having the above information can help the WPAC to write grants. This kind of city-wide partnership is rare and unique. It is definitely grant-worthy since so many foundations place a premium on sharing resources and collaborative efforts. The hope would be that by drawing all of these groups together under one roof, encouraging them to collaborate in some ways and forcing them to in others, and requiring that they all take ideas such as resource sharing to heart that you would have a dynamic environment that fostered creative ways to save money, combine administrative necessities, align programming, and reduce redundancy. By being the conduit through which these kinds of efforts were made, the WPAC could apply for grant assistance to help fund this project. That assistance would go a long way to help cover any shortage caused by committing time and resources to bringing this vision into reality.

So Step Three was defining the arrangement between the WPAC and the various Arts groups. In order to offer the Hippodrome for free to them, there will have to be a back-end agreement to help bring in funds for the WPAC. Each group will have to go through an application process in which they must enunciate their plans and qualifications for using the space. This will help to make them a partner with the WPAC and the other groups in the space so that coordinated efforts can be made in programming, scheduling, marketing, and administration. These efforts will hopefully result in increased grant support for the WPAC which is making them possible.

Next up, we'll take a look at how these changes will affect the WPAC. Obviously, these are some pretty fundamental changes, so we'll want to examine how the WPAC will adapt to handle them. I hope you can appreciate that this is becoming a pretty big project! But I also hope that you are starting to see that it can be handled one step at a time.