A new funding agreement between the City of Mandurah and the Mandurah Performing Arts Centre has been set up despite fears the city is “limiting” the centre’s potential by subsidising it.
The council voted 7-4 at its September 22 meeting to endorse the new agreement, which replaces a previous five-year agreement which expired on June 30 this year.
A council report said the memorandum was no longer “appropriate” and the new funding agreement had been supported by the ManPAC board.
The city leases Mandurah Performing Arts Centre Incorporated a 3229sqm lot at 9 Ormsby Terrace, Mandurah.
The new agreement was for five-year term to 2031, followed by another five-year term to June 30, 2036.
Features of it include creating multiple funding reserves rather than a straight financial contribution lump sum, a review of the financial contribution every three years, and greater acknowledgement of the city as ManPAC’s main funding partner.
ManPAC is also expected to put on events to complement other major events in the city, such as Crab Fest and Christmas.
The city will pay ManPAC $844,295 per annum under the new agreement.
As part of the agreement, ManPAC will put any surplus into a reserve and transfer income from hires and bookings into another reserve to reduce the reliance on city funds.
“The purpose of setting funds aside incrementally over time will ensure when renewal or replacement of components of ManPAC are required to be completed, the users at the time have contributed towards the works,” the report said.
“This will ensure future users or ratepayers will not have to fund the complete works.”
Cr Owen Mulder asked if similar reserves would be set up for other city assets.
City CEO Casey Miholovich said there were none at the moment because the arrangement with ManPAC was a different situation.
“We have obligations and we have another entity running our infrastructure, our major performing arts centre,” she said.
“So there is an expectation that while we require them to maintain a reserve, we want to be transparent in showing them that we are also maintaining a separate reserve so they can see how much is in that reserve.”
Cr Jacob Cumberworth said while he “adored” the arts centre and welcomed it being open during events, he did not support the new agreement.
He believed subsidising it would limit its potential, citing ticket prices to a show in Mandurah which were cheaper than the same show in Bunbury.
“By giving these massive subsidies — close to a million dollars in subsidies to a centre which draws in 100,000 people a year and is always booked out — something doesn’t add up for me,” Cr Cumberworth said.
“I think that the Mandurah Performing Arts Centre needs a bit of a push or it needs someone in there to say ‘How can we get this place a bit closer to being profitable?’.
“I’m not saying that it needs to be completely profitable but for such an amazing venue, $850,000 a year in subsidies is a bit excessive, and I think they need to find ways to get more profit and more business and open their doors and get the place happening.”
City director of place and community Jude Thomas said it was “very difficult” to compare one performing arts centre to another.
“The example given, for a local government that’s further away from the CBD, it’s quite likely that a touring show may charge further to get further away from the Perth CBD,” she said.
“It also depends on the arts centre itself and the sorts of assets and support that it can provide. The Mandurah Performing Arts Centre has worked really hard over a few years to ensure that it’s got really good sound, really good lighting, the opportunity for touring shows to bring in less equipment for themselves, which means that there may be less costs to recoup through the pricing.”
She said the centre had also been successful in seeking grants and other funding which enabled it to put on free events.
Ms Miholovich said the city subsidised some events at the centre but it could discuss ticket prices with ManPAC’s administration.
Cr Daniel Wilkins, who is a ManPAC board member, said he was pleased the new agreement would require it to try be open during major events.
“It’s a world-class performing arts venue that continues to bring high-end shows and entertainment to Mandurah while also being a venue that so many local community events and groups call home,” he said.
“More than 100,000 people have come through the doors in the last financial year.
“One of the common pieces of feedback we hear is that when Mandurah is absolutely buzzing during these major events, the ManPAC doesn’t seem to be open. If we’re bringing thousands of people to the city, it makes sense to look at how we can make the most of that opportunity and showcase one of our major cultural assets.”