Key West amphitheater projects loss for first year



The long-awaited preliminary business plan for the new Truman Waterfront amphitheater projects an operating loss for at least the first year and possibly beyond, depending on the number of events booked at the 3,000-seat venue.

Sustainability Coordinator Alison was tasked by City Manager Jim Scholl to draw up the entertainment venue business plan requested by city commissioners. After speaking to at least two dozen similar venues around the country, Higgins drew up projections for the first year of operation. The $4 million amphitheater is currently under construction and is expected to be completed in September.

Higgins estimated 32 to 54 events being held annually at the amphitheater. That includes three to four national “big name” concerts, six to ten medium events with an estimated audience of 1,000, and 12 to 24 local events such as graduations, movies and plays.

“It sounds like a lot, 32 to 54 events annually. But that’s two to five events a month and half of those are small and three-quarters of those are family friendly,” Higgins told commissioners at their June 20 meeting. “But we’re not going to start here. We’re going to be lucky to get about 20 events in that first year.”

The slow start up, plus low venue rental prices set initially to encourage use, will lead to an estimated $33,000 loss in the first year. If the number of events doesn’t pick up and the rental fees cannot be increased, that loss could continue into subsequent years.

“I’m proposing this in our first couple of years because we don’t want people to not try because we have our costs too high,” Higgins said about the initial venue rental prices.

Higgins is proposing that rental prices range from $250 charged to a local non-profit organization for a small event of 500 people or less, to $1,000 for a non-Keys private event of the same size. That private event could be a concert sponsored by a local promoter, a wedding or birthday celebration.

Rental prices for a medium-sized event of 500 to 1,000 people would be $500 for a local non-profit and $1,500 for a non-Keys private event. Rents for a major event such as a concert by a well-known national band would be $3,000 for an event sponsored by a local non-profit up to $8,000 for a non-local promoter.

Other ways for the city to raise revenue would include food and beverage sales, parking fees and a percentage of the ticket price, Higgins said.

“This is the scale of what could be when we’re fully operational,” she said.

The business plan calls for the city to hire a professional staff to manage the amphitheater, its finances and marketing. An outside venue management firm costing approximately $5,000 a month would handle the venue bookings. A new city staff position, special events coordinator, would be created at an annual salary of $29,925. Grounds maintenance would be done by the city public works department and cost another approximately $30,000 a year in extra staff time. Other issues to be dealt with are the sound level, trash collection, traffic and communication, Higgins said.

“This is a draft work in progress,” said City Manager Scholl. “It’s all scalable here and that’s our goal.”

Commissioner Margaret Romero, who has raised objections to building the amphitheater in the past, said she had 169 annotations and questions on the draft business plan.

“I personally see this [amphitheater] as being fire, ready, aim. We’re got a lot to do before we start getting anything booked because we have a lot of things that need addressing,” she said. “I’m happy to work with you but we’ve got a long way to go.”

The current design for the amphitheater has a seating capacity of 3,000, which would include 500 removable chairs nearest the stage and the rest of the seating on a grass berm behind. The stage will be oriented towards the water so that sound will be projected towards the harbor instead of residents in Truman Annex and Bahama Village. The city construction budget for the amphitheater is $4.47 million. The Tourist Development Council will pay for 50 percent of the amphitheater’s cost up to $2 million. The city will contribute the rest of the money to finish construction.