After rolling up their sleeves — twice, as the mayor pointed out — Centerstage Theatre and city of Federal Way officials reached a tentative contract agreement on Friday.

“We started on the footing: How can we come out of this in a win-win situation,” said Centerstage Theatre’s board of directors President Bob Dockstader, the lead negotiator for the theatre. “How can we find a way that works for both of us to do that? From the get-go, it was pretty much, each quickly came to understand what the two needs were.”

Pending City Council approval on Aug. 11, the city agreed to pay Centerstage a management fee of $82,000 a year from October 2015 through April 2016. Starting May 2016 and running through June 2018, that fee will increase to $100,000 a year.

The management fee goes towards the upkeep of the Knutzen Family Theatre at Dumas Bay Centre, which Centerstage has operated since 2009.

In turn, the city will acquire the ability to rent out the space in front of the theatre area, the rehearsal hall and lobby area of Dumas Bay Centre to generate revenue and save money for future capital expenses, such as a new heating and air conditioning system for the center.

However, Centerstage will keep rental income from current tenants until April 2016. Then in May 2016, the city will manage and retain rental income from non-performance based renters.

The deal between the regionally-acclaimed theater production company and the city took nearly three months to reach after a 90-day contract extension was granted in June.

But this round of negotiations was different from the first.

On May 20, city officials told Centerstage they made the decision to let their current contract expire on June 30, and, when it did, Centerstage would need to vacate the city-owned Knutzen Family Theatre.

However, Centerstage supporters, even some from around the world, made it clear that could not happen.

“We heard from literally hundreds of residents and non-residents about how important Centerstage was to them,” Federal Way Mayor Jim Ferrell said of the 800 emails that were sent to the city in May. “I’m not sure we recognized, initially, how important this contract was to Centerstage’s ongoing ability to move forward as an entity.”

Dockstader, Centerstage’s artistic director Alan Bryce, the city’s director of Parks, Recreation and Cultural Services Department John Hutton and Dumas Bay Centre’s manager Rob Ettinger had met twice in the spring to negotiate the terms of the agreement.

Centerstage was getting $75,000 a year from the city to maintain the theatre, in addition to a tourism enhancement grant a couple of times a year, about $3,000, as well as a third source of funds from production.

But, according to Bryce, throughout the six years of maintaining and operating the space, the city never took into account inflation. So, they asked for $8,900 more a year. Hutton countered with a request that Centerstage take on more maintenance responsibilities.

Not knowing what that would entail, as they already had many responsibilities, Dockstader asked for a comprehensive list and that they would meet again in two weeks. After some miscommunication about whether Centerstage would or would not take on extra maintenance responsibilities, a request of an additional $15,000 extra a year from Centerstage is what made Hutton close the deal after consulting the mayor, Chief of Staff Brian Wilson and Finance Director Ade Ariwoola.

Instead, the city would manage the Knutzen Family Theatre and bring in more money.

It was Bryce and Dockstader’s understanding they were still negotiating when the city made that decision. They had even drafted a new proposal that asked for $10,000 more a year with the caveat they would pay $3,000 to the city each year to help repay any maintenance costs they incur.

They thought it was over until the emails flooded City Council and staff inboxes.

“In a sense, it was a blessing in disguise because I think neither side had really thought it through,” Bryce said. “The impasse required both sides to think about it in much more detail.”

Bryce likens the situation to a time when Coca Cola decided to try a new recipe.

“What happened as a result, the new Coke bombed,” he said. “Nobody bought it and sales of the last Coke [increased] and they decided to hell with that and stayed with the same recipe.”

Bryce said people asked the CEO of Coca Cola if this was his plan all along.

“He said, ‘I’m neither so smart nor so stupid,’” Bryce said. “It was to both sides advantageous.”

Ferrell said it’s important to listen when the people government represents reach out.

Having initially underestimated the commitment Centerstage would bring to making this agreement work, Ferrell said “once we heard their full-throated assurances that this was important to them, then it was just about working out the logistics of what we need to get out of it.”

“In the end, I know we got there in an initial clumsy way, this really is a win-win-win,” Ferrell said. “A win for the city, a win for Centerstage and a win for the public.”

Ferrell said he followed wise words spoken by his position coach Chris Tormey when he played for the University of Washington Huskies: “The definition of commitment is removing the option to quit.”

“I think that once we realized how important it was to get a good facility operation from us and how important this was to Centerstage, there was a mutual commitment,” he said. “We removed the option to quit.”

Dockstader said, alternatively, he believes city officials came to appreciate how valuable Centerstage is to the city through its economic benefits as its shows attract audiences from beyond Federal Way.

“We are pleased that Centerstage and the city were able to reach agreement on a new contract,” Dockstader said in a news release. “The negotiations were conducted in a courteous and cooperative manner, and we believe that the new agreement will provide great benefits to both the city and Centerstage.”

The agreement will be presented to the City Council for ratification at 7 p.m. on Aug. 11 at the regular council meeting at City Hall.