On July 21, the city council heard results confirming that a performing arts, cultural and conference center could prosper in Federal Way.

Webb Management Services Inc. of New York was hired to present a picture of how a performing arts and cultural center (PACC), with an adjoining or adjacent conference center and hotel, would fit into Federal Way’s economic development plans. The consultants demonstrated how well Federal Way and its regional neighbor’s would respond, the possible uses, long-standing operational structures and a pro-forma operating budget for such a venue.

“(The consultants) felt there is definitely a niche that is not being fulfilled in the greater Federal Way market,” said Patrick Doherty, Federal Way economic development director.

The city council instructed staff to pursue a feasibility study on a PACC and hotel in January. A 2008 study, performed by C.H. Johnson Consulting Inc., illustrated that a performance hall is needed and would drive the city’s economy. It suggested a conference facility, and possibly hotel, would pair well with the performance and cultural center. That study, unlike Webb Management’s, did not present a business plan or propose operational costs for the venue.

Favorable market:

Regional competition for a 500- to 700-seat facility is fierce, but Federal Way has several local performance groups to sustain interest in a facility this size. A performance center in Federal Way would appeal to the Seattle/Tacoma/Bellevue region, said Duncan Webb, president of Webb Management Services.

The level of schooling and the median household income of Federal Way’s PACC market were used in predicting the success of a performance center, Webb said. Studies show the more schooling a person receives, the more likely he or she is to attend performance events, he said. Twenty-six percent of Federal Way’s population age 25 and older hold a bachelor’s degree or higher, he said. Forty percent of King County’s same population holds at least a bachelor’s degree, he said. The median annual household income of the market is $64,239, according to the study.

Wide-range appeal:

The center should offer a diverse mix of activities, appeal to a young crowd and be flexible with its space, according to the Webb Management study. Its success will come with the ability to accommodate Federal Way arts groups, occasionally attract regional organizations and have a small but targeted presenting series, according to the study. Marketing must be aggressive, and people of all ages and backgrounds should feel welcome to the center, he said.

“The world we’re working in, the world of arts facilities, is undergoing a lot of changes,” Webb said.

An adjoined or nearby conference center would fill a void in the city. It could also draw attention to the performance venue. Federal Way facilities currently used for conferences lack ample space, amenities, media technology and production staff, according to the study. A 14,000-square-foot conference center could accommodate 300 to 400 people, Webb said. An additional 2,000 square feet in the PACC could also be used for meetings. Mayor Jack Dovey expressed concern that more space may be needed.

Governance of a PACC:

Webb Management suggested governance of a PACC is best left to a non-profit, independent managing team or other organization with experience operating such a venue. The consultants preferred non-profit management for Federal Way’s facility. This would encourage fundraising opportunities, reduce the risks that accompany the facility and establish operating policies and procedures, according to the study. Partnerships are essential, Webb told the city council.

“Your ear should perk up there; we want to stress partnerships,” he said.

Management structure:

Assuming the city does not operate the PACC, Webb Management presented a business model in which a board controls operations and an executive director oversees a handful of full- and part-time employees, according to the study. The city would contribute $200,000 annually the first two years toward operations, based on Webb Management’s model and assuming the center is constructed by 2012. This amount would decrease 5 percent each subsequent year, according to the same study. Fundraising, state and federal support would round out the budget. Within four years, the center’s earned income stream could outweigh its operating expenses by nearly $40,000, based on the study’s business model.

The city council’s next likely step is to determine how to use state funding it secured for the PACC in the past two years, Doherty said. The city does not have to determine the operating structure of the facility before construction begins, he said. Several operating structures exist and the city has not dedicated itself to any specific one, he said. Webb Management simply presented information it perceives as being the most beneficial for the city, Doherty said.

“We didn’t hear last night that you can only do this particular structure with a non-profit,” he said.

The city council has not announced when it will next discuss the PACC.