Hastings
District Council: Performance & Monitoring Committee Meeting
Te Rārangi Take
Report to Performance and Monitoring Committee
|
Nā:
From:
|
Lee Neville, Economic
Development Manager
|
|
Te Take:
Subject:
|
Regional Economic
Development Agency 1-year update : REDA establishment 12 May 2023
|
1.0 Purpose and summary - Te Kaupapa Me Te Whakarāpopototanga
This paper updates the Performance and Monitoring
Committee on the establishment of the Regional Economic Development Agency
(REDA), coming up to 1-year into funding for the establishment and operation of
the organisation. The paper covers:
· Economic
leadership in cyclone recovery
· REDA’s priority
areas of work
· Council’s
funding and relationship with REDA including:
· Funding agreement
and engagement/reporting cycles
· Annual key
performance indicators (KPIs)
· Shareholding in
REDA entity
· Progress with
establishing REDA
· REDA financial
update
· Current activity
and next steps
2.0 Background
2.1 Councils resolved to
fund REDA in late 2021 after two reviews over 18 months into economic
development and industry support in the region. The organisation was to be
formed as a tri-party partnership between business, iwi/hapū
and local government.
2.2 The establishment
process started in earnest in March 2022 led by an Establishment Group
comprised of representatives from the three partners. Project support reported
to council chief executives (CEs) and had input from council economic
development leads.
2.3 Following legal
advice, the legal structure for REDA was confirmed to be a
non-council-controlled organisation, limited liability company and governed by
an independent skills-based board. Shareholding in the REDA company was agreed
by council CEs and Matariki Governance Group (MGG) to be in equal thirds
between business, iwi/hapū and local government.
2.4 The project had
significant engagement and guidance from the MGG. MGG assumed responsibility
for board member appointments and after an extensive search and selection
process, appointed the Board in December 2022.
2.5 Board members are
· Alasdair
MacLeod (Chair)
· Shayne
Walker
· Caren
Rangi
· Erin
Simpson
· Rawinia
Kamau
2.6 MGG, as the
overarching co-governance framework for the region, also assumed responsibility
for REDA accountability and strategic direction via an accountability framework
involving an annual letter of expectation, consultation on strategic planning,
6-monthly reporting and periodic updates, and visibility of annual accounts.
2.7 The following figure
illustrates REDA’s framework of shareholding, funding and KPIs, and
strategic accountability.
Economic leadership in cyclone recovery
2.8 REDA has played a vital
role in the wake of the cyclone in being a primary connector and leading
extensive engagement with business leaders and regional stakeholders. It has
held periodic economic recovery orientated hui with relevant agencies to share
intelligence on the economic impact of the cyclone, understand what short-term support
is required and what refocused activity is needed to build back a better and
more resilient economy.
2.9 REDA is working with
the Regional Recovery Agency to clarify REDA’s role and responsibilities
for supporting the regional recovery framework through leading the Economic
Growth pou. This work will be further informed as local recovery plans are
reviewed to ensure REDA supports appropriate local priorities.
2.10 In this context, REDA will support MGG
and the Recovery Agency to apply a recovery lens and focus on the regional development
priorities that MGG lodged with the Minister for Economic Development in 2021,
as listed below:
· Increasing
regional productivity through technology and innovation – doing more with
less given we are a slower population growth area and cannot continue to rely
on immigration or skills coming in from overseas
· Primary
sector and food production – existing farm gate to export, capitalising
on opportunities throughout the supply chain where there is a clear gap and
growing expertise or infrastructure in new areas
· Land
diversification, utilisation and water security
· Housing,
construction and infrastructure
· Skills
and talent – existing growth and attraction
· Māori
economic development – with the Hawke’s Bay Māori economy
worth over half a billion dollars and significant land holdings across our
PSGEs
· Export,
logistics and supply chain challenges
· Waste
and sustainability
REDA priority
areas of work
2.11 As part of sharpening the focus of the
regional development priorities described above, and through discussions with
the Recovery Agency and other stakeholders, the REDA Board is reviewing
REDA’s vision, purpose, objectives and areas of focus in the context of
regional recovery. REDA’s vision statement and areas of focus are
summarised below.
A sustainable, accessible
and resilient Hawke’s Bay economy
where every whānau and household benefits
· Regional
economic leadership – collaboration and coordination
· A
more inclusive economy – local engagement and progressive procurement
· Intelligence
and insights – identify needs and future orientated opportunities
· Short-term
focus on local housing and labour market solutions
· Key
sector initiatives – Hort/primary, Food/fibre, Construction
· Labour
market utilisation and long-term resilience
· Core
infrastructure – using a long-term view
· Advocate for
robust infrastructure for commercial and community hubs
2.12 The vision and areas of focus will
populate sections of the REDA Charter and performance and accountability
framework that will be considered for endorsement by MGG at a future hui.
2.13 Attachment 1: draft REDA Charter
is attached for your reference as agreed by MGG at its October 2022 meeting
with the addition of the REDA vision.
Council funding and
relationship with REDA
Funding agreement
2.14 REDA’s formal relationship and
reporting/engagement framework with councils is through a funding agreement and
associated KPIs. It was drafted in mid-2022 with oversight from council CEs.
2.15 Key points in the funding agreement
are:
· The funding
agreement is between REDA and five councils signed by the mayors/chair and
chief executives.
· The term is for
the period to 30 June 2025 and funding is paid in 6-monthly instalments in July
and January of each year.
· The agreement
notes the REDA vision and priority areas of focus.
· The funding
agreement has a schedule of KPIs agreed annually with councils via a
partnership committee comprising chief executives of councils and REDA, and the
Matariki Executive Leadership Group co-chairs.
· REDA must report
to councils every 6-months in respect of delivery of areas of focus, progress
against KPIs and general state of the Hawke’s Bay economy.
· REDA must provide
council CEs business plan and financials every 6-months in July and January.
· The agreement
references that MGG has accountability and sets direction for REDA.
2.16 The funding committed by councils in
December 2021 is allocated between councils as outlined in the table below.
|
Council
|
Split
|
Year 1
|
Year 2
|
Year 3+
|
|
HBRC
|
29%
|
454,572
|
461,899
|
500,000
|
|
HDC
|
29%
|
454,572
|
461,899
|
500,000
|
|
NCC
|
29%
|
454,572
|
461,899
|
500,000
|
|
CHB
|
8%
|
122,844
|
124,824
|
135,120
|
|
WDC
|
4%
|
64,440
|
65,479
|
70,880
|
|
|
|
1,551,000
|
1,576,000
|
1,706,000
|
2.17 Whilst MGG has strategic accountability
for REDA that will identify strategic areas of focus through an annual letter
of intent, REDA’s responsibility to councils is through the funding
agreement and annual schedule of delivery orientated KPIs.
2.18 CEs have delegated authority to execute
funding agreements (with associated KPIs) through council resolutions to fund
and establish REDA in December 2021.
REDA
KPIs 2023 to 2024
2.19 The schedule of KPIs has recently been
developed alongside developing REDA’s role and responsibilities as part
of economic recovery and the focus areas of work described above. The KPIs were
presented to the recent Council Collaboration Day on 1 May 2023.
2.20 REDA has discussed the positioning of
KPIs with council CEs, MGG and other key stakeholders. REDA will have minimal
people resource as it becomes operational and its role and responsibilities in
relation to the Recovery Framework and regional/local recovery frameworks are
still evolving. Accordingly, the 2023/24 KPIs are not prescriptive and
primarily focus on operationalising the organisation, building relationships
and initiating activity on REDA areas of focus.
2.21 Attachment 2: Schedule of KPIs 2023
– 2024 contains the draft KPIs that will be appended to the funding
agreement with councils. The KPIs are listed below for ease of reference.
KPIs focus on
operationalising the organisation and developing relationships
A) Operationalise
organisation
Legal
function established
Financial
systems operational
Key
policies developed
Operations
of the Business Hub transferred
B) Demonstrate
regional economic leadership
Collaborate
and celebrate achievements of others
Be
the go-to voice for regional economic issues
C) Develop
trusted stakeholder relationships
Deliver
on stakeholder engagement
Develop
locally enabled solutions
D) Initiate
activity on REDA areas of focus
2.22 Councillors are invited to review and
provide feedback on the 2023 – 2024 KPIs ahead of CEs signing the funding
agreement once REDA has been incorporated.
Shareholding in REDA entity
2.23 The Establishment Group with CE
oversight, sort legal advice from Hugh Kettle, Barrister, about legal structure
options including its status as a council-controlled organisation, shareholding
and funding arrangements.
2.24 The format of the constitution is based
on a relatively standard template. Decision making and control sit with the
Board of REDA. Councils’ influence over REDA is through the funding
agreement with associated engagement, reporting, monitoring and KPI framework
as described above.
2.25 The constitution provides several
rights to council shareholders that differ from the rights of business and iwi/hapū shareholders as summarised following:
· Dividends are
payable only to council shareholders
· Surplus assets on
liquidation will be shared between council shareholders
· The Board must
appoint a liquidator if directed to do so by council shareholders
2.26 The equal thirds shareholding in REDA
between business, iwi/hapū and local government is
more specifically described in the table below. Council shareholding in REDA is
split pro-rata in relation to funding contribution.
|
Party
|
Portion
of shareholding
|
Number
of shares total 600
|
|
Iwi/hapū
|
One-third
|
200
|
|
Hineuru Iwi Trust
|
100% of
one-third
|
200
|
|
Councils
|
One-third
|
200
|
|
HBRC
|
29% of
one-third
|
58
|
|
HDC
|
29% of
one-third
|
58
|
|
NCC
|
29% of
one-third
|
58
|
|
CHBDC
|
8% of
one-third
|
17
|
|
WDC
|
4% of
one-third
|
9
|
|
Business
|
One-third
|
200
|
|
HB Chamber
|
50% of
one-third
|
100
|
|
HB Māori Business Network
|
50% of one-third
|
100
|
|
Total
shares
|
Total
being 100% of ownership
|
600
600
|
2.27 Incorporation documents are being
prepared and will be circulated to shareholders in the next month. CEs have the
delegated authority to complete shareholder consent forms and other
incorporation requirements through council resolutions to fund and establish
REDA in December 2021.
Progress with establishing REDA
2.28 The REDA Board initiated the
recruitment process for the Chief Executive in late March 2023 with the
application period closing at the end of April. The process of interviews,
reference checking, selection and workout period will continue over the coming
months.
2.29 Once the REDA entity has been
incorporated, the Board will work with councils to execute funding agreements
and initiate the transfer of Business Hub operations.
2.30 The relocation of the Business Hub from
Ahuriri to 101 Queen Street East in Hastings progressed with Stage 1 fitout
completion at the end of January 2023 allowing tenants to relocate to the new
premises from February. The building consent for Stage 2 fitout comprising
meeting and conference rooms has been lodged with completion to be confirmed
once costing, scheduling and procurement have been finalised with the
construction company.
REDA financial update
2.31 HBRC is holding year-1 REDA funding on
behalf of councils. It maintains the supplier and staffing arrangements for
operation of the Business Hub and is funding the REDA establishment process and
operational support to the Board. Separately, HDC is project managing and
funding the Business Hub fitout and has funded some early REDA establishment
costs which will be reimbursed from HBRC.
2.32 The HBRC finance team has provided the
following summarised financial update for REDA expenditure. The figures
incorporate actual expenditure to the end of March and forecasted expenditure
to the end of the financial year. There may be a large variance to the
forecasted figures below subject to timing of expenditure, particularly for the
Distribution Network Strategy and other activity that REDA may initiate in
support of the Regional Recovery Agency in its leadership of the Economic
Growth pou.
2.33 Estimated year-end opex expenditure is
in the order of $950,000 after Business Hub income is accounted for and subject
to additional activity that REDA initiates before financial year-end.
2.34 REDA is funding the fitout costs for
the Business Hub estimated to be circa $500,000. A portion of this cost will be
recouped from tenants over the 9-year lease period. The fitout costs are
forecast to be incurred early in the 2023/24 financial year and will become a
capital asset in the REDA balance sheet.
2.35 Financing the fitout costs will consume
a majority of the year-1 cash surplus. The funding agreement between REDA and
councils discussed earlier in this paper allows REDA to invoice councils for 50%
of year-2 funding in July 2023, which will provide liquidity to operationalise
REDA and activate its work programme.
Current activity and next steps
2.36 Following are listed the current
activity for REDA and next steps that are underway:
· In partnership with Napier Port, continue to engage
with stakeholders (including Waka Kotahi and the Regional Transport Committee)
on the draft Hawke’s Bay Distribution Network Strategy as one of the
foundation documents to guide decision making for priorities and funding
allocations for the Infrastructure pou in the regional recovery framework.
· Continue to expand engagement and collaboration with
regional economic development ecosystem players including council economic
development leads.
· Continue to work with Regional Recovery Agency and
local recovery frameworks to confirm roles and responsibilities for REDA and
activity within the Economic Growth pou.
· Gain endorsement from MGG for REDA Charter,
accountability framework and annual letter of expectation.
· Progress incorporation of REDA with shareholders.
· Execute funding agreement with councils and confirm
associated annual schedule of KPIs.
· Work with selected banking and accountancy providers
to establish bank accounts and prepare for transition of REDA finances –
this activity is expected to flow into the new financial year.
|
3.0 Recommendations -
Ngā Tūtohunga
That the
Performance and Monitoring Committee receive the report titled Regional
Economic Development Agency 1-year update : REDA establishment 12 May 2023
dated 20 July 2023.
|
Attachments:
|
1⇩
|
HB REDA Charter Discussion
|
PRJ23-4-0027
|
|
|
2⇩
|
HBREDA Schedule of KPI 2023-24
|
PRJ23-4-0028
|
|
Hastings
District Council: Performance & Monitoring Committee Meeting
Te Rārangi Take
Report to Performance and Monitoring Committee
|
Nā:
From:
|
Megan Peacock-Coyle,
Manager - Arts & Culture
Rebekah Dinwoodie, Group
Manager: Community Wellbeing & Services
|
|
Te Take:
Subject:
|
Toitoi Operational
Review
|
1.0 Purpose and summary - Te Kaupapa Me Te Whakarāpopototanga
1.1 The purpose of this
report is update the Performance and Monitoring Committee on the operational
budgets and performance of Toitoi - Hawke’s Bay Arts & Events Centre.
1.2 Toitoi - Hawke’s
Bay Arts & Events Centre, the Opera House and Functions on Hastings opened
on 29 February 2020, with the Municipal Building and tenancies following in
August 2022. To date, Toitoi has not had a full financial year in operation
without a National Emergency (COVID-19, Cyclone Gabrielle) impacting hirers and
audience attendance. Despite this revenue expectations have still been met and
surpassed, however, operational expenditure has exceeded budget. Expenditure is
detailed in this report and it is evident that the budgeted costs of operating
this new facility were underestimated and could not have foreseen the loss of
revenue caused by COVID-19 and Cyclone Gabrielle interruptions to the business.
1.3 Utilisation of Toitoi
spaces could be increased to further improve revenue, however, operational
expenditure and resources will also continue to increase proportionately.
1.4 Efficiencies have been
made by centralising functions across both Toitoi and the Hastings City Art
Gallery, to ensure high output and consistency. This has also increased
cultural competency, created career pathways and development opportunities, and
future-proofed facility and operational management across the Arts facilities.
2.0 Background
2.1 The current
operational model is based on the Strategic Plan that was adopted by Council in
2019.
2.2 Strategic Plan Vision:
The most vibrant and significant arts, culture and events facility in New
Zealand.
2.3 Strategic Plan
Mission: Service, facilities and experiences that:
· Are
relevant, diverse and inspiring
· Provide
a leading customer experience
· Enrich
people’s daily lives
· Grow
a sense of community, a gathering place for residents and visitors
2.4 Strategic
Plan Objectives: The objectives of the Strategic Plan were developed
through several community and business working groups and a feasibility study.
They are used as Key Performance Indicators (KPI’s) to measure the
success of the project as below.
1. Heritage
buildings to be retained and enhanced
· The
Opera House and Municipal Building have both won local and national Heritage
and architectural awards.
· Won
the NZ Heritage Award 2022 and the Resene Total Colour Award 2021.
2. Performing
arts – enhancing and show casing
· Toitoi
has showcased many local organisations, artists, and schools, i.e. Waiata
Māori Music Awards, Hawke’s Bay Arts Festival, Edible Fashion
Awards, National Youth Drama School, Big Sing, Rezpect Dance.
· On
a national level, Toitoi is recognised as an industry leader, presenting works
from the Auckland Theatre Company and Nightsong, and working in collaboration
with PANNZ/Tour Makers to bring nationally accessible professional theatre to
Hawke’s Bay and other regions.
3. Events
and conference spaces
· Toitoi
has a mix of eight unique spaces available for hire: Functions on Hastings,
Cushing Foyer, Opera House, Assembly Room, Shakespeare Room, Te Mata Room, Tama
Tūrunga Huata Room and Cedric’s.
· Toitoi
spaces have been utilised 694 times in a variety of combinations to deliver 494
events over the three years in operation.
Usage data:
o Te
Mata - 70
o Shakespeare
- 63
o Assembly
- 50
o Opera
House - 125
o Cushing
Foyer - 163
o Functions
on Hastings - 175
o Tama
Turanga Huata – 27
o Cedrics
– 21
· Toitoi
won the EVANZ Small Venue of the Year 2021
4. Pathways
for youth – performing arts, hospitality, event management etc.
· Toitoi
developed programmes and initiatives which give youth a deeper understanding of
the creative industries, while also developing pathways and career
opportunities. These have included Creative Leaders 2020 – 2022, Aumaunga
Project 2020 – 2023, Connected Project 2021 – 2023 and Massive
Workshops 2020 – 2023.
· The
team worked with a number of secondary schools (Hastings Girls’, Hastings
Boys’, Karamu, St John’s, Havelock North High and Central Hawke’s
Bay College) through the Gateway programme, to develop onsite training
alongside industry professionals. Two students from this programme are now
full-time employees at Toitoi. Approximately nine students have participated in
the full Gateway programme. An additional 12 students have participated in
Gateway programmes via the Creative Leaders programmes.
· Toitoi’s
annual Creative Leaders programme sees 50 young people participating in all
aspects of performing arts, including performance, production and producing, as
well as participating in programmes during the Hawke's Bay Arts Festival,
Fringe in the Stings and other significant Hastings events. Many of these
students transition into casual hospitality and front of house roles at Toitoi
and go on to higher education opportunities within the creative industries.
Currently there are eight casual staff who were Creative Leaders and an
additional 21 were staff members but have since moved on.
5. Showcasing
Ngāti Kahungunu/ Takitimu
· Toitoi
has an MOU with Takitimu Performing Arts and Kahurangi Dance Company. The
purpose of this MOU is to deliver collaborative educational programmes, and
Māori cultural leadership programmes, alongside production and event
management, and with employment pathway opportunities.
o Out
of this partnership Te Whawhewhawhe and Te Mārama - a Theatre in Education
programme was created and was delivered to 20 schools.
o Free
of charge Matariki events are held in the Opera House for the community.
o Ongoing
production and event management training was delivered to Takitimu Performing
Arts students.
o Toitoi
also host Kahurangi events such as the Rangitahi and Kaumātua balls booked
for 2023 so there is an event-based return to this relationship also.
6. Operational
sustainability and impact on rates
· To
date, the journey toward operational sustainability and reducing the impact on
ratepayers has been challenging. Toitoi has not had a full year in operation,
however it has achieved revenue targets despite these challenges. Operational
sustainability and impact on rates are discussed in sections 1.2, 1.3 and 1.5
of this report.
7. Maximising
external funding
· Due
to the pandemic and, subsequently, Cyclone Gabrielle, the viability of pursuing
sponsorship and wider funding opportunities has been limited. With diminished
resources, alongside reduced sponsorship and funding pools, Toitoi has instead
focused on supporting local events and organisations to retain and develop
these opportunities. As the industry stabilises over the coming year, Toitoi staff
will pursue these opportunities where appropriate.
8. Enhancing
user experiences – hospitality, events etc
· Toitoi
staff are extensively trained in customer service, host responsibility and
conflict resolution.
· Toitoi
bars are serving premium and affordable Hawke’s Bay wines and offering
quality products.
· The
Event and Technical Team are trained and excel in excellence in customer
service.
· HDC’s
arts facilities have highly skilled management teams, with strong industry
relationships, who can provide environments which support professional
development, ensuring high staff retention and therefore consistent user
experiences.
· In
Toitoi’s annual customer satisfaction survey, 98.7% of 883 respondents
were satisfied or very satisfied with their overall experience at Toitoi.
Nearly half (49.3%) of respondents felt Toitoi contributed to their personal
and cultural wellbeing.
· A
Toitoi staff member won the EVANZ Leader of the Year 2020 and Toitoi won the
LGNZ Excellence Award for Cultural Wellbeing 2021.
· Toitoi
staff represent HDC on the national and international stage through board
membership of PANNZ (Performing Arts Network of NZ), membership of Te
Rōpū Mana Toi (Advisory board for Creative New Zealand in arts
advocacy), membership of the Presenter Training Programme (PAC Australia &
Auckland Live), mentoring for BEIA (Business Events Industry Aotearoa) and
EVANZ (Entertainment Venues Association of New Zealand) and membership of the
International Arts Cohort (NZ, Australia and Canada).
· The
venue achieved GOLD status through Qualmark with following feedback:
9. CBD
integration – CBD revitalisation strategy
· HDC
won the Taituarā New Zealand Placemaking Award 2023, with Toitoi as the
anchor of its entry where judges said it ‘brought in mana whenua and
local identities within the performing arts to further contribute to place
memory’.
· Toitoi
staff are involved in the development of the CBD revitalisation strategy.
· The
impact of the hospitality and tourism tenants has seen increase public use the
building, which has created a vibrant and activated part of town, particularly
when Toitoi also has multiple events occurring.
10. Flexible
and adaptable spaces
· Toitoi
spaces are all flexible and adaptable. They have been utilised in many
different ways - from ghost fright tour experiences to wine auctions,
conference breakouts and rehearsal spaces, AGM board meetings, fringe
productions, wine and cocktail tastings, to kapa haka competitions, weddings,
school productions, and preshow hospitality and hosting spaces.
· Shared
spaces and toilets service five tenants and their customers.
2.5 Toitoi staff have had
had multiple learnings, throughout the last year especially, as they have
developed their operational processes and management of the new venue.
Challenges and opportunities identified from operations to date are discussed
in section 1.4.
3.0 Key Cost Drivers
3.1 To date, Toitoi -
Hawke’s Bay Arts & Events Centre has not had a full financial year in
operation without a National Emergency (COVID-19, Cyclone Gabrielle) impacting
hirers and audience attendance. Despite this revenue expectations have still been
met and surpassed, however operational expenditure has exceeded budget.
3.2 It is evident that the
budgeted costs of operating this new facility were underestimated originally and
that budgeting at the time could not have foreseen the loss of revenue caused
by COVID-19 and Cyclone Gabrielle interruptions to the business. For example:
· An
incorrect assumption was made around temporary staffing costs due to
uncertainty of utilisation of the venue. There were also increased costs in the
first year of operations as a full team of staff were recruited and trained.
Further the COVID-19 lockdowns from 2020 to 2022 and Cyclone Gabrielle related
event cancellations in 2023 were costly as an organisational decision was made
to continue paying temporary staff during these times.
· There
was unbudgeted building maintenance spend. The budget assumed that a new space would
not require the maintenance /changes that were required.
· There
was an underestimation of the cleaning budget needed to service public spaces
associated with hospitality tenancies including the toilets.
· There
were unbudgeted expenses associated with the opening of the Municipal Building.
3.3 Tenancy rental income
is not included in the above and in 2022/23 was $123,402 versus a budget of
$102,900.
4.0 A More Sustainable Model
4.1 Pricing Strategy:
· Market
analysis was completed by Toitoi for EVANZ in February 2023 and the results
showed Toitoi commercial hire rates could increase, alongside a CPI increase,
for the FY 2023/24.
o As
many bookings have already been made for this year the impact of the increases
may not be immediately seen as only new bookings will incur the new rates.
o Market
analysis showed the three comparison venues/cities, Napier, New Plymouth and
Rotorua, are all in the mid-high $3k for theatre hire. With a CPI increase on
Toitoi’s current venue hire rate, which has not been applied since
opening in 2020, this market range will be met.
o A
12% of takings for theatre shows when a promoter sells over $2,700 tickets has
also been introduced.
· In
June 2023, Toitoi attended Business Events Industry Aotearoa (BEIA) Meetings
Tradeshow bringing its full offering of venues and services to a national and
international audience for the first time. Thirty prescheduled sales
appointments over two days have yielded five opportunities to quote for
business worth over $180,000 dollars in venue and technical revenue
combined.
· Market
analysis and subsequent pricing changes, if appropriate, of both commercial and
community rates will be carried out annually.
· Operational
continuity and appropriate resourcing are critical success factors for
continued revenue growth at Toitoi. Developing conferencing business while
strengthening the Toitoi brand within the C&I market will take time and
investment.
4.2 Bar Revenue and
Opportunities:
· Food
& Beverage – a net profit of $60,000 was made during the 2022/23
financial year. New initiatives taken to increase revenue, to add to the
efficient bar service, include:
o A
slushy machine introduced in 2022 has increased revenue across several shows
and events and it is anticipated that it will be more popular in summer.
o Taking
ice creams into the theatre at half time to sell to people in their seats has
proven popular.
o A
new half bottle of champagne has been added and double pours of wine serves are
now available.
· Toitoi
staff will continue to trial and implement new initiatives to increase revenue
whilst adding options for clients.
4.3 Community
vs Commercial Hireage:
· Over
the last three years, from 29 February 2020 to 30 June 2023, Toitoi has seen
494 performances and/or events and functions, with 121,270 people in
attendance.
· Based
on the community rate (40-50% of commercial rate) vs commercial rate our
percentage of utilisation is approximately 60/40 community/commercial use,
noting that 40% of the community rate users are HDC hires.
· When
Toitoi reopened for the second time in October 2020 post lockdown, the events
market was heavily restricted due to ongoing travel and gathering restrictions.
· Toitoi
made a strategic decision to focus on local event opportunities and
relationships within Hawke’s Bay.
· Post
pandemic Toitoi is well positioned to access and increase its market share of
national events with a financial foundation built on local relationships and
Toitoi’s community Kaupapa.
· Community
and commercial based opportunities are equally valuable in a financial context.
Commercial opportunities can yield higher one-off revenue, but community
relationships also yield commercial opportunities. The Hawke’s Bay
Primary Health care Symposium and Manioro conference are both examples with a
combined value close to $60,000 and hosted annually, comfortably eclipsing the
value of a single corporate conference hosted once on a 10-year cycle throughout
New Zealand’s main centres and regions.
· A
strategic direction could be taken to pursue a greater proportion of commercial
hires noting that this may not be in alignment with the aspiration in the
Strategic Plan endorsed to operate Toitoi as a 4th generation venue.
That is, a facility that creates new experiences to encourage participation in
the arts, enhances cultural awareness and competency, considers different
viewpoints and encourages cultural expression, encourages exploration,
innovation and growth in performing arts and facilitates employment pathways by
providing a learning environment.
4.4 The
mix of commercial and community activity is shown below:
4.5 The graph below
illustrates attendance, revenue and expenditure actuals from February 2020,
with two years of revenue predictions for 2023/24 and 2024/25.
|
Toitoi Events
|
Community Hire
|
Commercial Hire
|
|
2019/20
|
78
|
47
|
|
2021/22
|
63
|
41
|
|
2022/23
|
157
|
108
|
|
TOTAL
|
298
|
196
|
|
Toitoi
|
Attendance
|
|
2019/20
|
36853
|
|
2021/22
|
21371
|
|
2022/23
|
63046
|
|
TOTAL
|
121270
|
5.0 Challenges and Opportunities
5.1 Signage
Wayfinding
is an issue for many users of the space based on its size and positioning.
Toitoi is looking at a
wayfinding strategy to ensure that visitors and locals can find their events
with ease.
5.2 Managing
tenants’ expectations and operational requirements
Monthly operational meetings occur
between the Toitoi team and tenants to discuss challenges and opportunities.
There is an expectation from tenants that
the laneway is activated to increase foot traffic for the lessees, although HDC
work towards making this happen on occasion through, for example, Santa’s
Grotto, FAWC, there is currently not the budget nor capacity to do this
continually.
Council’s expectation is for the
Municipal Building and tenants to be open seven days a week. The tenants are
finding their way and have had challenges due to weather impacts and staffing
so have changed their days/hours of operating.
In response to the Akina Gallery recently vacating their
space, Insight Equity have been commissioned to actively identify potential
tenants while conducting a feasibility study around utilising the space as a
pop up until a longer-term lease is secured. Research points to retailers being
resistant to committing to leases at this time and a ‘pop-up’ gives
them a chance to trial the space and the city. It will also create a
destination as people will be curious as to what is ‘popping up’
next.
Officers have also accepted a proposal from Insight Equity
to manage the lease aspects of the tenancies on behalf of HDC, something they
already undertake for Council with the Cityfitness tenancy.
5.3 Smoking/Vaping
Many Toitoi guests
either smoke or vape and there is currently no area that these guests can be
directed to which is creating antisocial behaviour within Toitoi venues.
Council has
determined there should not be any smoking or vaping within 10 meters of Council
facilities. Toitoi staff must direct guests across the road, often at night,
without shelter and after consuming alcohol. This is a health and safety
concern as Toitoi has a duty of care/responsibility for its guests to ensure
they are safe whilst also adhering to HDC policy and procedures.
Toitoi staff are
currently awaiting advice following a Council workshop held on 22 June 2023.
5.4 Parking
Car parking and the lack of dedicated client parking
continues to be a challenge. Toitoi staff are working with the parking team to
put a solution in place for parking permits for Toitoi hirers and producers to
access pay and display parking. The outcome of these discussions will be a risk
mitigation rather than a solution.
In a recent survey with 883 respondents, 100 respondents
(12.3%) said parking stops them from attending shows and events at Toitoi.
5.5 Other Key Risks
· Unexpected
national disasters that close the venue.
· Ability
to retain casual staff given the current market in hospitality.
· Unexpected
building maintenance/technical equipment costs
· Lack
of accommodation for growing conferencing at Toitoi. Accommodation capacity is
still an issue with larger conference groups needing to accommodate over
multiple sites between Hastings and Havelock North. There is a very small
appetite to make this accommodation model work among larger potential Toitoi conference
clients.
6.0 Future Projections, Strategic Focus and
Aspirations
6.1 The strategic focus is
to develop a new Arts, Culture and Creativity Strategy as a document to guide
HDC to serve its arts community. This will be based on the recently completed
Toi Tu Framework, which is a regional strategic framework to support creatives
and creativity in Hawke’s Bay. Specific areas of Toi Tu that HDC
Arts & Culture can deliver on are:
· Celebrate
Identity
· Recognise
Value
· Enhance
the environment
· Ensure
Access
· Build
Connections
· Future-proof
the Sector
6.2 Based
on the existing objectives for Toitoi, the team will continue to focus on the following:
Local Pride
Working with schools, local
arts organisations and iwi to ensure opportunities and pathways for our youth. Ensuring
diversity and inclusion – ensure the whole community can continue to
visit the venue and engage with performing arts, events and functions.
Vibrant
Hub
Activate and enhance the unique and flexible spaces in
the venue. Work closely with the Municipal Building tenants to activate the
Laneway off bookings and events. Develop and continue to grow conferencing and
events to encourage visitors to Hastings. Continue to engage nationally and
internationally to ensure Toitoi is on the touring circuit.
Operational
Sustainability
Grow revenue and audience participation opportunities
through continued utilisation, raising hire prices based on market research,
CPI increases, presenting touring shows, small festival offerings, bar revenue
opportunities, collaborations and partnerships with business, corporates and
local organisations and continue to provide excellence in customer service to
ensure repeat business.
6.3 Predicted Revenue
- 2022/23 Actual $948,094
- 2023/24 Predicted $1,100,000
- 2024/25 Predicted $1,300,000
6.4 Alternative
Operational Models: The Toitoi team are continually reviewing their
operational processes to ensure efficiencies and the effective spend of rate
payer funding whilst also meeting the community wellbeing aspects of the
strategy adopted by Council in 2019. If the direction from Council is to
investigate an alternative operating model for Toitoi Hawke’s Bay Arts
& Events Centre to focus on greater revenue and less rate payer
contribution, a s17a or similar review can be conducted. A workshop with
Councillors in the first instance would be recommended.
|
7.0 Recommendations -
Ngā Tūtohunga
A) That
the Performance and Monitoring Committee receive the report titled Toitoi
Operational Review dated 20 July 2023
B) That the
Committee direct Officers to arrange a workshop in preparation to conduct a
s17a review or similar, with results to be reported back to Council.
|
Attachments:
|
1⇩
|
Toitoi Feedback and Endorsements
|
CG-17-4-00039
|
|
