Hirshhorn Seasonal Inflatable Structure (SIS) Project Assessment April 2013 (draft - 04182013) Susan Ades (NZP) Jay Kaveeshwar (OPMB) Christopher Lethbridge (OFEO) Amy Van Allen (NMAI) DRAFT 1 Team Charter Richard Kurin, the Under Secretary for History, Art and Culture, convened a four-person Smithsonian team to: o examine various scenarios for the annual operations of the proposed Hirshhorn seasonable inflatable structure (SIS) o describe and analyze revenues and expenditures as well as staffing and other related matters given those scenarios o include analysis of risks and benefits, sustainability, and impacts of possible or proposed SIS annual programs, activities, and operations upon the Hirshhorn and the Smithsonian o gather data through interviews with key HMSG, TSA, Special Events, and OFEO staff; analysis of prior reports; and benchmarking with Smithsonian, related DC, national, and international organizations o produce a brief but analytic report with findings 2 Team Charter The team was NOT charged with: o assessing fundraising prospects and strategy o analyzing design, fabrication, construction, and installation costs o critiquing the proposed Center for Creative Dialogue programming 3 Baseline Assumptions o The Seasonal Inflatable Structure (SIS) would be an architectural landmark for the Smithsonian on the Mall o Recent exhibitions have raised the profile of the Hirshhorn and brought in new audiences o Program and cost analyses are based on one, eight-week season per year in either the spring or the fall o The SIS is projected to have a ten-year lifespan o Construction of the SIS is contingent on raising the full project budget o Existing project construction budget does not include costs for programming and event operations o Based on project cost of ~$12.3M for build-out of the full SIS concept, with seated audience capacity for programs of 500 o The SIS design does not include restrooms, caf?, storage, or loading facilities 4 Three Scenarios o Scenario 1: Center for Creative Dialogue (proposed Hirshhorn plan) Centerpiece is three, 3-day "conferences" o Scenario 2: Special Events Venue Revenue-generating events only o Scenario 3: Public Program Venue Mixed schedule of public programming and special events 5 Scenario 1: Center for Creative Dialogue Annual Full Operating Budget HMSG Estimate Team Estimate $500,000 $497,200 $167,500 $475,000 $400,000 $2,039,700 $300,000 $497,200 $105,000 $300,000 $400,000 $1,602,200 Revenue / Funding Sources Corporate/Institutional Sponsorship [1] Ticketing Revenue [2] Special Events Revenue (Co-hosted donations) [3] Gala [4] Smithsonian Contribution [5] Total Funding Sources Programmatic Expenses ($142,450) ($957,605) ($202,500) $0 ($142,450) ($1,134,355) ($568,662) ($20,000) Total Expenses ($958,000) ($107,000) ($73,000) ($2,440,555) ($958,000) ($107,000) ($73,000) ($3,003,467) Net Gain / (Loss) ($400,855) ($1,401,267) Gala Conference Expenses Conference / Special Events Staffing [6] Public Art Programs Operational Expenses Installation/De-installation [7] Yearly Storage [5] [7] Security, Maintenance, Operations and Utilities [5] [1] Smithsonian benchmarking provided funding levels for comparable programs: "Lead/Major Donor" category is $100K for the Folklife Festival, $125K for Congressional Night, and other comparable SI events garner $10K to $50K. [2] No change to Hirshhorn estimate. Ticket comps ranged from $25 for TSA events to $5,000 for TEDMED and $8,000 for Aspen. The closest comparable was $590 for a 3-day, Tate Modern conference with 400 attendees including meals. [3] Smithsonian and non-SI Washington, DC benchmarking priced the SIS at $15K for evening events and $5K for daytime events. Team estimate maintained the 4 evening and 9 daytime events projected by HMSG. [4] Benchmarking against comparable SI galas led to a revision in estimated Gala revenue to $300K or two times expenses. This figure exceeds what was raised by the Ai Weiwei gala. [5] The Smithsonian will contribute $200K in in-kind federal OFEO support to cover yearly storage, security, maintenance and utilities and $200K in trust support for programmatic expenses. [6] Benchmarking data led to a revised staffing estimate of 1 full-time IS14 conference director, 1 full-time IS13 conference mgr., 2 full-time IS9 program assistants, 1 full-time IS11 special events mgr., 4 contract program assistants (4 mos. at $20K), 1 contract stage mgr. (3 wks. at $15K), and 1 contract stage designer (3 wks. at $7.5K). [7] The $12.3M construction cost estimate does not include two years of installation/de-installation and one year of storage. 6 Scenario 1: Center for Creative Dialogue Discussion Details o Program as described in HMSG proposal October 2012 o Special event revenue based on nine daytime and four evening events Strengths o This type of arts/culture dialogue does not exist in DC o Facilitating the arts/culture dialogue is important o Association with the Smithsonian is compelling o Program would heighten the visibility of the Hirshhorn and foster new partnerships and global audiences o The SIS would be a unique and special program venue o DC is a destination city o Access to government and thought leaders strengthens programming 7 Scenario 1: Center for Creative Dialogue Discussion Challenges o Significant impact on current Hirshhorn programming, fundraising, and staff o Additional staffing required to execute the CCD program o Venue competition (plug-and-play, open space, size limitation, seasonal nature) o Development time for program o Competition with other SI programs/events o Complexity and cost of scheduling and managing high-level participants/retinues o Unknowns of establishing an audience (price points, comps, students) o Competitive sponsorship market (season, location) o Smithsonian limitations on sponsor benefits o Need for break-out spaces, networking areas, lounges o Community-building among speakers and participants (in DC social culture) o Infrastructure costs and logistics (a/v, restrooms, catering, loading dock, accessibility) o DC is an expensive city (hotels, transportation, food) o Limited public access to the SIS 8 Scenario 2: Special Events Venue Annual Full Operating Budget Team Estimate Revenue / Funding Sources Corporate/Institutional Sponsorship [1] Special Events Revenue (Co-hosted donations) [2] Gala [3] Smithsonian Contribution [4] Total Funding Sources $50,000 $360,000 $300,000 $200,000 $910,000 Operational Expenses Gala Special Events Staffing [5] Installation/De-installation [6] Yearly Storage [4] [6] Security, Maintenance, Operations and Utilities [4] ($142,450) ($80,895) ($958,000) ($107,000) ($73,000) Total Expenses ($1,361,345) Net Gain / (Loss) ($451,345) [1] Smithsonian benchmarking provided funding levels for comparable programs. However, without programming, the value to sponsors is reduced significantly. [2] SI and non-SI Washington, DC benchmarking priced the SIS at $15K for evening events and $5K for daytime events. SI experts estimated a maximum of 20 evening and 12 daytime events over an 8-week period. [3] Benchmarking against comparable SI galas led to a revision in estimated Gala revenue to $300K or two times expenses. This figure exceeds what was raised by the Ai Weiwei gala. [4] The Smithsonian will contribute $200K in in-kind federal OFEO support to cover yearly storage, security, maintenance and utilities. As there is no programmatic component, there is no trust contribution. [5] Benchmarking data led to a staffing estimate of 1 full-time IS11 special events manager. [6] The $12.3M construction cost estimate does not include two years of installation/de-installation and one year of storage. 9 Scenario 2: Special Events Venue Discussion Details (estimate based on) o Maximum of 12 daytime events and 20 evening events over the eight-week season o Revenue of $5K for daytime event and $15K for evening event o Seating of 250 for seated dinner; up to 600 for standing reception o Total revenue of $360K Strengths o Minimal additional staffing requirements (One special events manager) Challenges o No educational value or connection to Hirshhorn or Smithsonian mission o Limited public access to the SIS o Revenue stream limited by lack of access to restrooms, loading dock, kitchen/cooking facilities, a/v, ambient conditions o Competition with other venues 10 Scenario 3: Public Program Venue Annual Full Operating Budget Team Estimate Revenue / Funding Sources Corporate/Institutional Sponsorship [1] Special Events Revenue (Co-hosted donations) [2] Gala [3] Smithsonian Contribution [4] Total Funding Sources $200,000 $105,000 $300,000 $400,000 $1,005,000 Programmatic Expenses Gala Programmatic Expenses Pub. Program / Special Events Staffing [5] ($142,450) ($443,205) ($242,684) Operational Expenses Installation/De-installation [6] Yearly Storage [4] [6] Security, Maintenance, Operations and Utilities [4] Total Expenses Net Gain / (Loss) ($958,000) ($107,000) ($73,000) ($1,966,339) ($961,339) [1] Smithsonian benchmarking provided funding levels for comparable programs: "Lead/Major Donor" category is $100K for the Folklife Festival, $125K for Congressional Night, and other comparable SI events garner $10K to $50K. However, this type of programming is less valuable to sponsors than the CCD in Option 1. [2] Smithsonian and non-SI Washington, DC benchmarking priced the SIS at $15K for evening events and $5K for daytime events. Assuming a full programming schedule, team estimate maintained the 4 evening and 9 daytime events projected by HMSG in Option 1. [3] Benchmarking against comparable SI galas led to a revision in estimated Gala revenue to $300K or two times expenses. This figure exceeds what was raised by the Ai Weiwei gala. [4] The Smithsonian will contribute $200K in in-kind federal OFEO support to cover yearly storage, security, maintenance and utilities and $200K in trust support for programmatic expenses. [5] Benchmarking data led to a staffing estimate of 2 full-time IS11 Program Specialists and 1 full-time IS11 special events manager. [6] The $12.3M construction cost estimate does not include two years of installation/de-installation and one year of storage. 11 Scenario 3: Public Program Venue Discussion Details o Every program is free and open to the public o Programming based on 30 invited presenters over the eight-week season (three to five public programs per week) o Special event revenue based on nine daytime and four evening events Strengths o Significant public access o Flexible mix of public programs including dialogues, art installations, and performance; allows for revenuegenerating private events o Limited additional staffing requirements 12 Scenario 3: Public Program Venue Discussion Challenges o Impact on current Hirshhorn programming, fundraising, and staff o Venue competition (plug-and-play, open space, size limitation, seasonal nature) o Development time for program o Competition with other SI programs/events o Scheduling of and costs for participants o Infrastructure costs and logistics (a/v, restrooms, catering, loading dock, accessibility) 13 Three Scenario Comparison Scenario 1 CCD Scenario 2 Spec. Events Scenario 3 Pub. Program Total Revenue $1,602,200 $910,000 $1,005,000 Total Expenses ($3,003,467) ($1,361,345) ($1,966,339) Net Gain / (Loss) ($1,401,267) ($451,345) ($961,339) Scenario Strength Challenge Scenario 1: Center for Creative Dialogue This type of arts/culture dialogue does not exist in DC Significant impact on current Hirshhorn programming, fundraising, and staff Scenario 2: Special Events Venue Minimal additional No educational value staffing or connection to requirements Hirshhorn or Smithsonian mission Scenario 3: Public Program Venue Significant public access Impact on current Hirshhorn programming, fundraising, and staff 14 Benchmarking o Organizations spend one to two years planning a program like the CCD. o It can take up to five years to become established and recognized. o Organizations have at least three full-time people working on programs of this scale for at least one year in advance; they augment that core team with up to 30 additional people in the months prior. o All organizations said the greatest costs are in participant accommodation (including retinue) and high-tech audiovisual. o All organizations liked the concept immensely and felt that there is room in the increasingly competitive "ideas market." o All organizations felt that DC is a challenging venue for an "ideas" event. o All organizations suggested "starting small" with the dialogue concept and providing "proof of concept" before rolling it out on a big scale. o All organizations acknowledge that a significant percentage (at least 20%) of seats go to comps for sponsors, participants, press, and event "friends." 15 Museum Context o The Hirshhorn is facing budgetary challenges, including erosion of its trust accounts, declining federal appropriations, decreased Board giving, and base fundraising results below historical levels. o Hirshhorn has lost key staff in critical areas, including advancement, finance, public affairs, and education/programming. o Staff are carrying additional roles and duties. o Staff morale has been affected by the ongoing uncertainty surrounding the SIS. o The exhibition program has been reduced by recent staff and budgetary constraints. o 2014 marks several important milestones for the Smithsonian in DC: the Hirshhorn's 40th anniversary, the reopening of the Arts & Industries Building, the 10th anniversary of the National Museum of the American Indian, and the 125th anniversary of the National Zoo. 16 Questions to Consider o What is the state of the highly competitive "ideas market," and what niche would the Center for Creative Dialogue (CCD) fill? o How will HMSG ensure a large, paying audience at an appropriate price point for the CCD? o Does the size and location of the venue place limitations on the program? o How does the CCD integrate with current HMSG or SI programming? o What is the impact of raising funds for the SIS/CCD on the ability to raise funds for ongoing HMSG exhibits and programs? o How does the CCD meet HMSG and SI mission goals including broadening access? o Can the CCD exist outside of the SIS? o Is there consensus that the CCD reflects the long-term vision of the Hirshhorn and its role in the contemporary arts arena? 17 Study Resources Hirshhorn Staff o Richard Koshalek, Director o Jennifer Barrett, Director of Development o Jean Belitsky, Executive Assistant o Kerry Brougher, Deputy Director and Chief Curator o Erica Clark, Associate Director for Program Partnerships o Jessica Dawson, Director of Identity and Outreach o Milena Kalinovska, Director of Public Programs and Education o Chris Wailoo, Director of Administration, Finance and Communications Hirshhorn Trustees o Connie Kaplan, Acting Board Chair o Dan Sallick, Technology and Communication Committee Chair o Paul Schorr, SIS Committee Chair Smithsonian Staff o Michael Dunagan, Director of Development, Assistant Secretary for Education and Access o Patti Dwyer, Associate Director of Finance, The Smithsonian Associates o Lori Dynan, Product Manager, Smithsonian Enterprises (formerly National Geographic) o Penne Kirkpatrick, Assistant Director of Programming, Office of Advancement o Richard Kurin, Under Secretary for History, Art and Culture o Christopher Liedel, President, Smithsonian Enterprises o Barbara Strickland, Center for Folklife and Cultural Heritage o Barbara Tuceling, Director (Former), The Smithsonian Associates External Consultants o Mark Benerofe, TED o Kitty Boone, Vice President and Director of Public Programs, Aspen Institute o Anna Cutler, Tate Modern 18