Proposal for Lease of Next 50 Pavilion
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1 Academy of Interactive Entertainment (AIE WA) 1 Proposal for Lease of Next 50 Pavilion 305 Harrison Street Armory Suite 405 Seattle, WA October 1, 2015
2 2 5A. General Overview The Academy of Interactive Entertainment, a non-profit corporation established a Seattle campus, AIE Seattle, in November 2010 to provide affordable quality education in the Seattle area, preparing graduates of its programs for career opportunities in game development, 3D animation, visual effects for film and related industries. Full-time students at the Academy of Interactive Entertainment earn an Advanced Diploma of Professional Game Development, specializing in Game Programming or Game Art & Animation, OR an Advanced Diploma of Screen and Media, specializing in 3D Animation & VFX for Film. Programs are licensed by The Academy of Interactive Entertainment Limited (AIE Australia) a non-profit company based in Australia. Established in 1996 in Canberra Australia, AIE is arguably the first educator in the world focused on delivering interactive entertainment courses and has gained much recognition as Australia s leading educator for the Computer Game Development and 3D Digital industries. AIE Australia has grown from its original Canberra campus to additional campuses throughout Australia which include campuses in Sydney, Melbourne, and Adelaide. In the U.S., besides the Seattle campus, AIE also has a campus in Lafayette, LA, and a dedicated online campus. The AIE Seattle campus provides students a unique niche, boutique, affordable option to other training providers in the Seattle area. AIE Seattle is able to draw on the support of AIE Australia s teaching and management staff. Courses are strictly monitored by AIE Australia s compliance and teaching staff to ensure all procedural obligations meet AIE Australia s Registered Training Organization responsibilities. AIE Australia has a reputation for unique industry links and an enviable employment record that Seattle students can benefit from. A report by the Australian Government Innovation and Business Skills Australia (IBSA) said Nationally the Academy of Interactive Entertainment rates highest as a respected provider with the most relevant courses, (Page 29, ISBA 2009). As a home to hundreds of computer game development and 3D animation companies, graduates of the AIE Seattle campus are likely to find a variety of available jobs and career paths. The Board of Directors believes that AIE Seattle will be able to compete quite effectively in the marketplace, following the 19 year example of The AIE, Ltd of competing with wellfunded universities offering 2 and 4-year degree programs. The key to this achievement has
3 3 simply been that 2 and 4-year degree programs are an expensive, unfocused investment, whereas the AIE Advanced Diploma courses are 100% focused on training students for the interactive entertainment industry. As a result, AIE graduates are much sought after by industry. AIE Australia is at the forefront of educational practice, winning numerous Australian State and National Training Awards. It is expected that AIE Seattle will experience the same recognition as a result of cross campus cooperation, collaboration and management support. Also, it is envisaged that with AIE Australia s global and local industry connections established by its founders, staff, and advisory committee members, that AIE Seattle will enjoy similar success. To date, AIE Seattle already has many of its first graduates placed in local industry jobs. AIE training is characterized by: The Latest 3D Animation and Game Design Technologies. First-class, hands-on education. A close relationship with Games and 3D Animation Industries. A high rate of graduate employment. A high level of student satisfaction. Industry-focused education. State-of-the-art studio-style classrooms. Flexible pathways to University and Employment AIE was incorporated in the State of Washington as a Non-Profit Corporation, organized exclusively for charitable purposes within the meaning of Section 501(c)(3) of the internal Revenue Code of 1986, as amended, including without limitation, educational purposes on the November 1 st It has a membership structure with the two founding members John and Victoria (Vicki) De Margheriti as its members and Directors. Edward Haberek Jr. Ph.D. is the Head of School in Seattle and works collaboratively with 11 staff members. Additionally, Australian management resources such as Karin Thompson, CFO; Katy Thomas, Director of HR; Neil Boyd, Director of Marketing; and others are provided at no charge to support and ensure the success of AIE Seattle.
4 4 5B Plan of Proposed Use AIE Seattle proposes to lease both Site A & Site B of the Next 50 Pavilion & Annex at Seattle Center for five years January 2016 through January This will allow to continue the growth of the college and needed space. The Next 50 Pavilion would provide: 1. Additional Classrooms 2. Laboratory 3. Technology Skills Center (collaboration with Seattle Schools System) 4. Incubation Program Additional Classrooms The classroom space that AIE is already leasing from Seattle Center is operating at full capacity. Additional classroom space is needed for AIE so it may include more programs, innovative incubation program and return the Skills Center from an alternate location where it is currently operating. The proposed lease space would provide a number of additional classrooms which could be utilized for both day and possible evening programs. Laboratory Space is needed to provide area for VFX filming and Game Art laboratory opportunities. The proposed lease space would provide area to create these educational opportunities and potential for commercial collaboration. Technology Skills Center AIE Seattle is proud to partner with Seattle Public Schools to offer a Skills Center course in Digital Animation & Game Design. The course introduces students to the principles, tools, and concepts used in 2D and 3D animation, video game programming, and video game production. It also covers a variety of 21st Century Skills ("soft skills") essential to a student's transition into the professional world. Currently, the program is being housed at West Seattle High School as space is not available at Seattle Center. The proposed lease space would provide area to return this program back to campus. Juniors and seniors attending a Seattle Public Schools high school may apply to participate in Skills Center courses to earn high school credit. Enrollment in Skills Center courses must be completed through the school district.
5 5 Incubation Program The proposed lease space would provide us the opportunity to also launch an Incubation Program. The Graduate Diploma of Management (learning) is a one year course intended to equip students with the skills needed to develop and establish a sustainable independent studio specializing in games, simulations, or animation and VFX. Students will also learn the skills necessary to build and establish an independent digital production studio, and to promote their own company and products. This will continue to foster innovation and economic development by transforming the Next 50 Pavilion into a technology entrepreneurial services hub and space for start-up game companies working with students, faculty and the community. Capital & Alterations Related to the Facility, AIE will underwrite initial capitalization, equipment and in-kind costs, including the cost of build-out of the facility. A liaison will be provided to work closely with the selected contractor, maintaining oversight of the facility work, receiving and approving required reports and actively assuring maintenance of facility integrity. Items to be provided include: Furnishings & Equipment A fully furnished facility, which includes furnishings and equipment for core functions and for college functions (classrooms, offices, restrooms, computers, etc.) Security System Key-card access security system including security cameras. Utilities Basic utility services including telephone, servers, etc. Facility Description The Next 50 Pavilion & Annex is located in the heart of the Seattle Center campus, on the east side of the Armory, just south of Memorial Stadium. It is adjacent to the Seattle Center Monorail terminal, EMP Museum, and Artists at Play, the new children s playground that opened in May of It is most easily accessed by the Harrison Street and Thomas Street walkways from 5 th The site is comprised of one facility, with two separate areas. Area A: Next 50 Annex the west portion of the building; approximately 1,600 square feet and Area B: Next 50 Pavilion the east portion of the building; approximately 3,120 square feet.
6 6 AIE will underwrite initial capitalization, equipment and costs, including the cost of renovation of the facility. Depending on classroom configuration these costs were too varied to document but estimated to over $500,000. This will include a fully furnished facility, which includes furnishings and equipment for college instruction (tables, desks and chairs); for core functions (restrooms, administration, staff and reception areas); and for college functions (labs). A Keycard access security system including security cameras with be implemented. Basic utility services including telephone, Wi-Fi and server access will be implemented also. As consistent with our current leasing arrangement, staff will exercise due care to maintain the facilities in a state of good repair and promptly report any facility maintenance issues for resolution. 5C Facility Management Facility Operations Facility Business Policies and Procedures: Maintain current AIE Business Policies and Procedures and ensure its implementation. Facility Financial Requirements: Maintain auditable financial records in accordance with financial accounting standards. File all government-required forms in a timely manner. Produce, maintain and provide such financial reports as are requested so that it may ensure proper business operation of the facility. Facility Program Operations Goals and Objectives for the Program: Continue to develop and implement goals and objectives for the facility, including curricula, activities, programs and other activities as necessary and appropriate for the successful operation of the facility. Regulatory Compliance: Maintain regulatory compliance with the State of Washington Department of Education and other regulatory agencies. Maintain required program records and respond to requests from regulatory agents. Adhere to modifications in regulatory requirements. Accreditation: Obtain and maintain College of Occupational Education (COE) accreditation for the facility. Preparedness: Work with Seattle Center representative, as appropriate, to develop and maintain written emergency and disaster plans and keep a current copy of written plans on file. These plans shall be reviewed and updated annually. Emergency Preparedness kits shall be maintained
7 7 and be available conveniently located in the building. Required Permits: Obtain all required permits, licenses and insurance, and keep these current, to comply with federal, state and local laws and regulations. Program Hours: The facility is planned to operate similar to our current college schedule: Monday through Friday from 9:00 am to 6:00 pm, with the exception of certain holidays, special events and any other days that may be required based on contracted arrangements. 5D Financial Terms Academy of Interactive Entertainment (AIE) has been a tenant of the Seattle Center Armory for approximately 5 years thus far. AIE has recently renewed its lease with the Armory until July 2018 with an option to extension to July We would like to work to replicate the lease of the Next 50 Building similar to our current lease as a tenant and would look forward to working with Seattle Center to accomplish this. 5E Purpose Statement AIE looks to contribute to the Seattle Center Purpose Statement as a collaborative partner by creating exceptional events, experiences, and environments that delight and inspire the human spirit to build stronger communities. We feel the education of young entrepreneurs along with our inspiring activities including ifest, Game Jams, and educational events will contribute to your mission. In addition we look to inspire the economic development perspective of your mission. Being a non-profit educator established in 1996 to grow and support the game industry, our unique curriculum provides students with the training needed to join our other graduates as entrepreneurs, leaders, and innovators in the video game and film industries. Our focus and mission is to connect passionate students with the skills they need to be successful in their chosen career.
8 8 5F Working with Seattle Center AIE looks to work with Seattle Center, as we have, including branding and distinction of the location in our college material. We look to continue and even increase collaboration in creating exceptional events, experiences, and environments with Seattle Center. We would continue to promote the site and attractions as we do in our literature and marketing opportunities. We would look to continue to be included in such opportunities that Seattle Center would provide 5G Implementation Timeline Design 2-3 month s (Jan. Mar._2016) Space Planning Design Development Construction Drawings Construction Administration Construction 6-16 Weeks (May July 2016) Budgeting Bidding Proposal/Contract Negotiations Construction Closeout Opening August 2016 Ready for Semester
9 9 5H Financial Condition Academy of Interactive Entertainment (AIE) has been a tenant of the Seattle Center Armory for approximately 5 years thus far. AIE has recently renewed its lease with the Armory until July 2018 with an option of extension to July During its tenancy, AIE has not been late on any rents and views this as top priority. That said, independently and with support from its affiliate organization The Academy of Interactive Entertainment, LTD., AIE has produced a net gain during the last 4 years. AIE s student body is increasing steadily, making this year s student body the largest thus far with 106 students enrolled and attending. AIE estimates a net gain of approximately $350,000 to $400,000 for the fiscal year ending June 30, Additionally, AIE estimates its student body will approach 150 for the school year. Assuming 150 students, AIE estimates a net gain of approximately $650,000 for fiscal year ended June 30, To finance the project, AIE is likely to use a combination of fund resources, including: 1. Cash earned from operations, 2. Cash received from The AIE, Ltd., 3. A loan to be obtained from Washington Community Reinvestment Association (WCRA). AIE can show past experience for generating cash from operations and cash gifts from The AIE, Ltd. It can also show experience of borrowing from the WCRA. Recently AIE obtained an equipment loan in the amount of $300,000 from the WCRA with a 3-year repayment term. AIE estimates that a current loan payoff could be expedited if needed in order to obtain a new real estate development loan. Additionally, the WCRA expressed interest in investing in city owned property as part of its mission. We believe that the WCRA will be open to lending additional funds for this project as needed. WACRA real estate loans cap at $500,000 and equipment loans cap at $100,000. However, AIE was able to secure a $300,000 equipment loan due to its stable financial performance. AIE will likely approach the WCRA to finance all or part of the project, depending on pro-forma cost estimates. AIE estimates that with the additional space made available in the next 50 building it could accommodate approximately 300 students. AIE would be able to add 2-3 programs which are currently offered at The AIE, Ltd., and host the Seattle Publics School s Skill Center on site rather than its current location at West Seattle High School. If selected for the short list, AIE will
10 10 produce a pro-forma reflecting necessary investment funds and a positive cash flow from operations.
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