EXECUTIVE SUMMARY

The purpose of this business plan is to request a $2,000,000, twenty-year non-profit bond to enhance the capital campaign for the newly acquired building by Vallejo Music Theatre (VMT) in Vallejo, California. The Vallejo Music Theatre is a 501 (c) (3) Public Benefit Corporation and the building that is to be retro-fitted and renovated is located at 823 Marin Street in Vallejo, California. The Vallejo Music Theatre's total goal for the capital campaign is $5,000,000.

The building will be a one-of-a-kind performing arts venue and will house rehearsal and performance spaces for the Vallejo Music Theatre. It will be available to rent to other groups that desire space for their organization's needs. The budget projections show the stability and expansion of this organization in the first five years of operation in the new building.

It is anticipated that Vallejo Music Theatre's new building will firmly establish this performing arts group in the Vallejo community and within five years will become an anchor for a community center for the performing arts and other related businesses in the downtown area. This new building, although outside of the Redevelopment District boundary by one-half block, is still adjacent to the area designated in the redevelopment plans for the city as an Arts & Entertainment District. Developers Triad Communities, LLC, and the City fully envision that the arts and entertainment core of the Downtown will flow over and around the district's “official” borders. This will allow nearby businesses and venues, including the Marin Street Building, to benefit from the increased pedestrian traffic and overall draw that will be created by the revitalization of Downtown Vallejo. The plan will foster cafes, restaurants and other satellite businesses to flourish and revitalize the Downtown area.

The Managing Director of the Vallejo Music Theatre, Judith H. Brown, has been with the organization since 1969. She has served as a member of the Board of Directors of the Solano County Arts Alliance, a Commissioner on the Vallejo Cultural Commission, a Trustee for the Vallejo Community Arts Foundation and a Founding Board Member of the Napa Valley Opera House restoration project.

I - MISSION STATEMENT

Vallejo Music Theatre Mission Statement

Current Mission:

• Preserve and renovate the Vallejo Federal Building as a Performing Arts Center and Historic Landmark;

• Produce a minimum of three full-scale Broadway musicals a year;

• Provide Arts Educational Programs, Outreach Programs to Underserved Vallejo Students and Families.

Future Mission:

• Showcase excellence in the performing arts;

• Provide Educational Outreach Programs for Vallejo Students and Families;

• Provide a venue for rental by local non-profit organizations, for-profit community organizations and businesses;

• Encourage, sponsor and produce new playwrights works;

• Maintain and Preserve an Historic 20th Century Landmark.

II - THE BUSINESS DESCRIPTION

The Vallejo Music Theatre is a 501(c)(3) non-profit organization founded in 1967 and currently has a seventeen member board. It is one of the oldest and largest arts organizations in Solano County and the only company solely dedicated to musical theater. The company produces three full-scale musicals a year and is committed to having professionals mentor students on each production.

Judith H. Brown, the current Managing Director, has been with the company since 1969 and has served as the Managing Director since1990. The business has grown from an operating budget of $5,000 in 1967 to $115,922 in 2003. From 2003 to 2004, the business grew 25%. Unrestricted net assets for 2003 were $92,203. The ratio of earned to contributed revenue is a healthy 55/45.

The organization has strong relationships with the community. Their education programming works with schools in the area instructing students in theater arts. The organization receives funding from the city of Vallejo, corporations, service organizations, individuals, and community foundations for their programming. Several of the board and staff members of the theater serve on Commissions and Boards for the City of Vallejo.

From 2000 to 2004, the audience has increased an outstanding 81% mirroring the expanding Vallejo community. The ticket buyers for Vallejo Music Theatre come from a very diverse background with an estimated 75% white, 8% African-American, 6% Asian/Pacific-Islander and 9% Hispanic. The average household income as of 2004 for Solano County is $70,200 and VMT estimates that their audiences are middle to upper in income range for Solano County and that the average audience age 35 to 45.

Currently VMT is operated by two full-time and seven part-time volunteers and a board of seventeen. They currently perform in the Fetterly Playhouse for the Arts, which comfortably seats 150. They have reached capacity for audience attendance for the size of the theater. In order to increase revenue VMT would have to add additional programming and increase the number of performances per show. Since the Fetterly is rented by many other groups in the area, scheduling is a challenge. In 2002, the Federal Building on Marin Street was released for sale and the board of directors for VMT approved a resolution to bid on the building. VMT won the bidding at $532,222 in January 2003.

III - MARKET ANALYSIS

Non-profit theaters are an established business in the United States which generates over $1.4 billion annually in the U.S. economy. These theaters are firmly recognized in their areas and help cultivate community involvement and local growth.

Theatre Communications Group (TCG) in New York City gathers information from hundreds of non-profit theaters across the country and releases an annual report on the state of theater in America. TCG reports that non-profit theaters' income grew by 15% in 2003 and is expected to increase as the national economy improves in 2004 and 2005. Audience attendance was also up in 2003 by 4.2%. VMT is Vallejo's only musical theater company and therefore they have a monopoly on the resident entertainment theater dollar. The median age of the city of Vallejo is 35, which is the prime theater-going age range.

The population of Vallejo is growing rapidly due to less expensive housing relative to San Francisco and other towns surrounding San Francisco and due to general growth in the Bay Area. From 1990 to 2000, Vallejo's population grew by 7% and is expected to rise again by the next census in 2010.

Population Change, 1990 - 2009 estimated

Source:

a) U. S. Census; Dept of Finance
b) Claritas (July 2004)

Exhibit 1

Employment is expected to grow in Vallejo as well by 11% between 2002 and 2006. The increase is expected in the retail, manufacturing, and service industries.

A. Vallejo Planning Area: Employment

Source: Association of Bay Area Governments Projects 2003

Exhibit 2

Historically, when a new building for a theater company opens in the community it generates excitement, which in turn causes subscription and ticket sales. According to a prominent theater in the South Bay, when they opened their new building in 1998, they experienced an increase in ticket revenue by 32%. It is anticipated that VMT will have a similar expansion in audience when their new building is opened.

Urban planners recognize that a Downtown Cultural District is one of the best ways to build viable economic community centers. “Twenty years ago, urban economic development was aimed at preserving and attracting manufacturing industries. Today, the tables have turned. Local governments are finding that commerce and tourism drive their local economies. In addition, in this new economic climate, arts and culture are making an important difference.

Cultural attractions - art museums, historic sites, cultural districts, theaters, performing arts centers, galleries, cinemas, and zoos - always have been important quality-of-life amenities. Today, these have become much more. In the hands of farsighted local government managers, cultural organizations can become cultural assets useful in spurring downtown development, attracting

new residents and businesses, and transforming a community into a thriving tourist destination”

Over the past year, the City of Vallejo along with Triad Communities, Inc. has been developing a Plan for Revitalization of the Downtown area of Vallejo. The draft of the Plan was presented to the City Council appointed Downtown Advisory Group which in turn recommended revisions. Currently there is an Environmental Impact Report being prepared that should be completed in the summer of 2005. After the Environmental Impact Report is presented to the City Council, public hearings will be held to discuss the Plan. The Revitalization Plan is a priority for the citizens of Vallejo to improve the Downtown area for growth in commerce and the standard of living for the city. The Plan will construct improved walkways, streets, landscaping and mixed retail/housing units for the Downtown area of the city thus enhancing VMT's building.

As Vallejo grows as a community, establishing an arts center in the Downtown area is a prime opportunity to capitalize on the available entertainment dollars of the residents. VMT has the history and clout to emerge as the leading musical-theater for the blossoming Vallejo area. With an addition of the new building, VMT will become a focus for downtown revitalization in Vallejo.

IV - THE BUILDING

VMT purchased through a website auction conducted by the General Services Administration the historic Old U.S. Post Office building at 823 Marin Street in Vallejo on January 27, 2003 for $532,222. VMT prepared a preliminary Feasibility Architectural Study in March of 2003 outlining the scope of the renovations needed to the building to make the two theaters, rehearsal space, offices, costume shop, scene shop, full height fly system, box office, small bookstore/costume museum, concessions area, dressing rooms, green room, orchestra pit and a lobby area. Estimated cost of this project is in the $4,000,000 to $5,000,000 range. In February of 2004, Bradley Associates Consultants prepared a Capital Campaign Study Report, which recommended raising $3,000,000 of the project through the community and the remaining $2,000,000 to be loaned by a commercial banking operation through a public bonding program issuing tax-exempt non-profit bonds.

The following is from a report prepared by Paul Roberts + Partners, an architectural firm in Vallejo, CA. This report evaluates the existing condition of the building and the feasibility of converting its original function as a Post Office to a non-profit theatre.

A. Vallejo Post Office Existing Condition

The building is located at the southwest corner of Marin and Carolina Streets. The style of the building is referred to as Streamline Moderne or Stripped Classicism characterized by simple concrete with terra cotta ornamentation and a granite base.

The Post Office was constructed in 1932. It originally consisted of a basement of about 5,000 square feet, a first floor of about 10,200 square feet, and a mezzanine floor that has subsequently been demolished.

The basement floor is a concrete slab on grade. The first floor framing system is one-half concrete slab on grade and one-half reinforced concrete floor. The roof framing system is a reinforced concrete slab supported on concrete encased steel framing. Steel trusses spanning 60 feet provide a large, column free area within the building. The perimeter walls are unreinforced masonry walls punched with door and window openings. Interior partitions include hollow clay tile walls.

The building was remodeled in 1968 when it was converted from a Post Office to other Federal Government functions. The interior was largely gutted during this remodel with the exception being the lobby which was substantially altered. The east wall of the rectangular shaped lobby is in the most original condition with its black marble pilasters and marble desks under the original aluminum framed exterior windows. The other lobby walls were largely removed and rebuilt. An original mosaic mural was saved and relocated from the west wall to the south wall and several pilasters remain on the west wall. An elaborate lobby floor constructed of marble mosaic tiles is thought to exist under the current floor covering. A stairway was cut through the floor to provide access to the basement. The coffered redwood lobby ceiling is the most in tact element of the original lobby design

The mezzanine floor was removed during the 1968 renovation and new partitions and suspended ceilings were constructed to accommodate the changed use. The mechanical/electrical systems were extensively updated. Three skylight monitors that illuminated the central mail handling space were covered over. The exterior was left almost completely intact except for an addition of a metal stairway to the roof located at the southwest corner of the building and a cooling tower located on the site adjacent to the stairway. New automatic glass doors with aluminum frames replaced the original doors and frames. A wheelchair accessible entrance was constructed at the north east corner of the building that had minimal visual impact.

A building assessment of the Post Office was prepared by Forell/Elsesser Engineers (F/E) and Page & Turnbull, Historic Preservation Architects, in 1991. This was in response to the building being identified by the City of Vallejo as a potential seismic hazard in accordance with Ordinance 1075. The general condition of the building was deemed very good. The ability of the building to withstand a significant seismic event however, did not meet current design standards.

Extensive seismic upgrades were recommended by F/E to bring the building into compliance with “updated GSA Seismic Standards” per their mandate at the time the report was prepared. Briefly, a concrete shear wall scheme as the primary lateral force resisting system was proposed.

Major components are as follows: Caisson piers are to be drilled around the exterior perimeter of the building and connected to new grade beams running under the building. Reinforced concrete walls are to be applied to the four interior corners of the building from grade to roof. New steel columns and girts are proposed on the interior of the four exterior walls between the new concrete walls to provide out-of-plane bracing for the walls and parapets. The advantage of this approach is that it is least disruptive to the historic character of the exterior of the building.

Interior upgrades require the removal of hollow clay tile walls and the lath and plaster light wells connected to the roof skylights for safety reasons. Special consideration must be given to upgrading structural deficiencies associated with the walls and ceilings of the lobby while preserving and restoring its historic integrity. Seismic issues associated with the mechanical system are relatively minor, mostly consisting of updating anchorages. Most interior partitions, floor coverings, suspended ceilings, doors and windows and casework constructed in the sixties will be demolished.

The estimated cost in 1991 dollars to make the recommended seismic upgrades was approximately $2,200,000. It is assumed the VMT will not be held to the same, presumably stricter standards required to meet GSA requirements.

The building is a city landmark and registered on the California State Historic Register and should be eligible for the National Register of Historic Places per the 1991 Page and Turnbull findings. The structure is important because it was a significant product of Franklin Roosevelt's WPA financed work relief program which provided work for architects, contractors and artists. The WPA Moderne style is distinctive in that it shares an aesthetic value with similar buildings built during this time throughout the country that had a significant and lasting impact on their communities, architecturally as well as civically. The “over engineered and over built” Depression-era WPA-funded Post Office is Vallejo's best Moderne style public building.

B. Proposed Use for Vallejo Music Theatre

Studies prepared by PR+P and others demonstrate the Post Office building is remarkably suitable for an adaptive reuse as a medium size theatre. The location on the edge of Downtown Vallejo is thought to be ideal and will have the added advantage of contributing to and taking advantage of the renaissance currently occurring in the area. The opportunity to provide a vital, new use that will largely preserve the historic character of the exterior of the building and restore the lobby is a plus for both VMT and the community. (See renderings and plans in the addendum).

Key elements of the design of the VMT are as follows for the first floor: The historic lobby is ideally suited to continue as a public lobby, in this case for theater productions, in place of its former use as a post office lobby. There is adequate space for ancillary theater lobby functions such as a box office and refreshment area. Two theaters are proposed, on a traditional stage with seating for 283 patrons and the other a more unconventional black box theater for 78 patrons. Both theaters will provide accessible seating.

The main theater fits ideally in the column free space in the middle of the first floor mentioned above. The two story existing volume accommodates ideally sloped seating for sight lines and lighting projection as well as a generous proscenium height above a raised stage (platform). A small orchestra area is provided in front of the stage. Removable seating in the first row will allow for a larger orchestra when the need arises.

New construction is proposed to provide a forty foot high fly-loft above the stage and a back stage scene shop in place of the existing loading dock. These additions will be minimally obtrusive additions to the building being located above the existing roof structure and at the back (west) of the building. The back stage, fly-loft and back stage additions will be constructed with modern materials that are compatible with the original exterior materials while not attempting to mimic them.

The black box theater fits in a narrow space on the north of the first floor that has excellent access to the lobby and good proximity to back stage functions. It is intended to be a very flexile space with movable, bleacher style platforms, facilitating several possible configurations. Options include pre-performance dining space and additional rehearsal space when the bleachers are in the closed position.

Backstage functions for the performers flank both sides of the main theater providing green rooms on both sides of the stage as well as separate dressing and toilet rooms for men and women. Corridors for the performers around the stage provide excellent circulation during rehearsals and performances as well as a sound lock space. Adequate toilet facilities for the public are conveniently provided off the lobby.

The basement will house the costume shop which will be open for retail rentals during the day and has a separate entrance on the south side of the building adjacent to on-site parking. Various theater storage and mechanical/electrical systems functions round out the balance of this floor.

The administrative mezzanine will be reconstructed essentially in its historic location and will primarily consist of administrative spaces, storage, and rehearsal and meeting rooms. A new elevator and stairs will connect the three floors and provide accessibility to all floors as well as access through a hatch to the roof. This will enable the unsightly metal stairs to the roof added in the 1968 remodel to be removed. Additionally, the stair removal and adjacent cooling tower relocation will free up useful exterior space required for the backstage functions such as a loading dock and access from the on site parking lot to the west.

On site parking is planned to be reconfigured to provide parking for approximately 30 cars on the west and east sides of the building. Accessible parking and access will be provided to the building from the parking lot and the current location at the northeast corner of the site. Currently landscaped areas to the north and east of the site will be enhanced.

The exterior of the building will largely be left intact as stated before. New exterior lobby doors, historically appropriate, will replace the automatic aluminum doors added in the sixties. The existing original windows will be refurbished. The exterior granite, brick, and terra cotta surfaces will be repaired as needed (minimal) and cleaned.

A preliminary building code prepared by PR+P demonstrates the new theater occupancy will fit well within the existing building with negligible code driven changes required for how the space is to be used. The A-3 occupancy allows Type V, 1 Hour construction within the existing square footages per floor. Separation on four sides of the building would allow area increases for this occupancy but they are not needed. Two exits are required from each theater which is easily achievable within the existing building configuration and penetrations. The renovated building will be completely accessible in terms of current standards for access, toilets, seating and the hearing impaired.

Sustainable design concepts will be incorporated into the rehabilitation and new use of the building. Local resources in terms of materials and manpower will be encouraged. Water efficient landscapes design and efficient, low water usage plumbing fixtures will be specified. The existing building materials will be restored and reused to the greatest extent possible. Indoor environmental design will account for the large spectrum of use associated with a theater. A design goal will be to use 20% less energy for the mechanical and electrical design than that allowed by code.

V. Summary

The intention of the VMT to inhabit the old Post Office is an adaptive reuse for the building that will serve the needs of the VMT in an excellent manner and the larger Vallejo community as well. There are costs associated with the seismic upgrade of the building which would be the case for any potential user of the building. The opportunity offered to save a significant, historic building and promote a group valued by the community for many years should be supported by all interested parties. Please see appendix 4 for Code Analysis of the building. **

As stated above, the building is 15,000 square feet and the renovation would be for all three floors of the building, including earthquake retrofitting. A $2,000,000 loan tax-free bond through a commercial banking institution with a 20 year term limit would require monthly payments of $12,119.61. This number assumes a fixed interest rate of 4%. As of May 31, 2005 the community has already raised over $300,000 for the purchase and renovation of the building. This is money raised before any public announcement or campaign for the building.

The building is located in the heart of historic Downtown Vallejo, which is being redeveloped through a City Plan. The Empress Theatre, which is part of the Redevelopment Plan, is currently undergoing a major renovation and is expected to open in June 2007D The Downtown Plan includes mixed-use spaces, street and landscaping, public art, street lighting and public paseos. VMT believes that this is a perfect opportunity to take advantage of the Downtown renovation by establishing themselves as an arts center and capitalizing on the increased foot-traffic from a bustling new Downtown Vallejo.

VI - VISION STATEMENT

Five years after the new VMT building opens on 823 Marin Street in Vallejo, the building will be a beehive of energy. As VMT produces a show on the main stage a rental group will be in the rehearsal area and another rental group will be in the black box theater. Because of the increase in ticket, rental, concessions and costume shop revenue, VMT will be performing more frequently with shows achieving a new level of professionalism. This in turn will spur more ticket and grant revenue and the company will be expanding at a phenomenal rate. As the Downtown Vallejo area is gentrified, audiences will have retail and dinner options before and after the performances, which will help the local economy. A new coffee shop and arts venue has already established itself across the street from the building in anticipation of the audience drawn to the new theater. VMT has been in contact with the owners readying a cooperative plan to benefit both the coffee house and the theater.

VIII - BUSINESS OBJECTIVES

VMT will have these business objectives in its first five years of operations in its new building:

1. Increase budget size by 31% by year 5

2. Increase rental income by $104% by year 5

3. Increase audiences size by 16% by year 5

4. Increase contributed income by 26% by year 5

5. Increase ticket revenue by 35% by year 5

A. BUSINESS OPERATIONS

As part of the enhanced programming in the new building, VMT envisions expanding their current three-play season to a six-musical season, increasing their rental income based on the new theater, rehearsal space availability and costume shop rentals and storage for other organizations in the area. VMT also plans to create a Children's Performing Arts Conservatory, which will train children in the theater arts culminating in a performance for the parents at the end of the conservatory. VMT projects that the new programming will increase the earned revenue of the organization by 614% from the 2005 fiscal budget to the projected budget in the first year of the new building.

VMT expects to hire five full-time and five part-time employees for facility maintenance and management of rental programs for the new building. The new positions that VMT are planning on hiring full-time are for Managing Director, Development Director, Artistic/Program Director, Facility Manager and Costume Shop Manager. The five part-time employees would fill maintenance, secretarial and technical positions for the building.

VMT has a 38 year history of producing musical theater and being a cornerstone in the Vallejo community. The new building will have 361 seats between the two theaters, which will provide an estimated $300,000 of revenue over the 150 seat Fetterly Playhouse for the Arts (based upon a six play season in the new building). In addition, the new building is located in the downtown Vallejo area, which is experiencing a gentrification process focusing on increased arts and retail businesses and creating an Arts and Entertainment District. The increased foot traffic in this area will spur the development not only of VMT but the restaurants and retail businesses of this downtown area.

B. PROGRAMMING

The largest percentage of earned and contributed revenue for the VMT is from programming. VMT currently produces at least three major musicals each season. VMT will expand this current three-musical season to a six musical-season once occupation of the new building takes place and the theater will start a subscription program to retain its audience base. VMT will implement a new ticketing price structure policy for the theater. Ticket prices will have a range from $18 to $23 based on the night or the afternoon of the week of the performance. The current ticket price has a range of $13 to $19. VMT modeled this change in ticketing structure on practices by other similar theaters in the bay area (see Exhibit 4). Historically, when non-profit theater companies have purchased buildings the subscription and single ticket revenue has increased substantially within the first year of operations in the building. The increase in programming will have a domino effect for concession and program advertising sales. By year four in the new building VMT will increase its programming to a seven play season, which will also increase concession and related income sales.

C. RENTALS

With the addition of the new building, VMT will be able to capitalize on renting the performance, rehearsal, costumes and storage spaces to local groups. There is a dearth of rehearsal and performance spaces in Vallejo for both for-profit and non-profit arts and business groups. Although the Empress is expected to open in June 2007 and will also provide rental space, the Empress seats up to 500, which is too large for many business and arts groups in the area. Other spaces that are available for rent either are over 500 seats, for exclusive domain use, do not have adequate technical space for productions or are occupied with renters. With the addition of this building VMT will be able to fill a need in the community for space that is in the 100-250 seat range as well as provide rehearsal room and storage space. VMT has already received commitment letters from the Vallejo Naval and Historical Museum, the Harbor-Solano College Youth Conservatory, and Combs' Costume Closet for rental and storage leases in the new building. Prices for rental will depend on the amount of space needed for the storage clients and the length of rental time for the rehearsal/performance space clients. An average amount to be charged for rehearsal/performance space rental is $20/hour.

Exhibit 3

D. EDUCATION

In year two of the occupation of the new building, VMT will start a Children's Performing Arts Conservatory. This program will provide six weeks of theatrical instruction for children throughout Solano County. The curriculum will teach children acting, singing, and technical theater arts. The session will end with a performance for the parents and a DVD of the show as a keepsake. VMT will charge $700 per student for the first three years of the summer conservatory for a six week session. The price will increase to $1000 per student in year four.

Exhibit 4

E. CONTRIBUTED REVENUE

With the move into the new building, VMT will increase its contributed revenue significantly mainly through the individual, foundations and corporate sponsorship areas. VMT will track similarly to other non-profit theaters that have opened new

buildings and will expect to increase contributed revenue by at least 127%. Corporate sponsorships will increase at a projected 100% due to greater opportunities for corporations to exploit their image through season sponsorship and naming of auditoriums as VMT has a larger presence in the community. Individual donations will increase as more patrons visit the theater and in the increase in press and visibility the theater will have in the community when the building opens. Foundation support will increase over the five year period because of the educational opportunities the theater will provide in its children's theater programs and summer conservatories.

In conclusion, VMT feels that with increased ticket prices, the boost in audience size, and the expansion to a six show season, the children's conservatory and the rental income that the VMT will grow at a substantial pace to pay back the loan with interest.

F. PROMOTION

VMT will promote themselves with the new building in the following ways:

1. With the inception of the capital campaign, VMT will automatically be advertising the new building to the community.

2. Publication of marketing materials that will promote the renovation of the new building. This publication will be sent to the ticket buyers of the theater as well as the general public

3. Include the new VMT building as part of the efforts of the City of Vallejo in promoting the downtown renovation.

4. Open house for the community once the building is finished that will provide tours and lectures on the building and how the costume shop, scene shop, fly space etc. work together in the theater.

5. Have an opening Gala that will promote the first season in the new building and will include important city V.I.P's such as the Mayor, State and Federal Representatives, City Council and other community leaders.

6. Commence a subscription program that will entail subscription brochures and advertising that promotes the building.

7. Design a new logo and image for all materials that displays the excitement of the new building as well as the increased professionalism of the theater.

G. COMPETITIVE ANALYSIS

As noted before, VMT is the only musical theater organization in Vallejo. Vallejo does have a new theater company named Lively Oakes that performs educational programming for schools, the long-running MIRA Theatre Guild, which produces only plays, Darkroom Productions, which produces experimental and environmental based theater and some high school performing arts groups. Vallejo also has a symphony, which performs four times a year for the community. Lively Oakes performs primarily for school aged children and although the symphony draws from a similar entertainment community as musical theater, coordination of dates keeps these respective organizations from competing for audiences.

The following five theaters are comparable to VMT in size and scope in the Bay Area.

Exhibit 5

Note: Since 1966 Solano College has had a theater program. However, the Harbor Theater in Suisun was built around 16 years ago and has become a part of the College Campus Theaters.

H. LEGAL STRUCTURE

VMT is a 501(c)(3) non-profit organization. This type of non-profit is a charitable organization that does not pay state, county, property or federal taxes.

I. MANAGEMENT EXPERTISE

Judith H. Brown has worked with VMT since 1969 and has been its Managing Director for more than ten years. She has served on the Solano County Arts Alliance as a board member and as its Executive Director; as a Commissioner and Consultant for the

Vallejo Cultural Commission and is a founding member of the Napa Valley Opera House, Inc. She has also served on the board of directors of the Napa/Solano Big Brothers, Big Sisters and as a Commissioner for the Mohave County Planning Commission in Kingman, AZ.

Suzanne Blakeley is a graduate of Evergreen State College, University of Puget Sound Law School and attended Harvard University. She currently is the Manager of Human Resources and General Administration at Kikkoman International, Inc., San Francisco. She serves as the Vice President on the board of directors.

Loy Marie Morgan has 23 years experience as an accountant and currently works as the Court Accounting Technician for the Superior Court of California-County of Napa. She serves on the board of directors and works with the Director of Education on the Young Audiences Program.

Joyce Johansen has worked for Hughes Aircraft Company and the Space Technology Laboratory (now TRW). She currently works for the Good Shepard Lutheran Church. She serves on many boards throughout Vallejo including the Lutheran Woman's Missionary Society where she is the Treasurer. For VMT she is the Secretary on the Board of Directors.

Lynn L. Combs is a graduate of CSU Sonoma and is the owner of Combs' Costume Closet. She is a commissioner for the City of Vallejo on the Commission on Culture and the Arts. She has been Chair since 1993. She is the Technical Director of VMT.

Scott Hanes serves as President of the Board of Directors for VMT. He attended Solano Community College. He has worked for Lucky's, Union 76, Buck Stoves and currently serves as Administrative Assistant to the Executive of Wendy's in the Bay Area. He is a trustee for the Harvest Baptist Church.

Robert Wilson attended Los Medano Community College and The Western Institute where he earned his certificate as an Emergency Medical Technician. He has obtained the degree of Master at the Springbrook Masonic Temple and will serve in that capacity for a year. He has been a member of the Board of Directors for VMT for the past six years.

Marilyn Armstrong previously worked as the Operations Officer at Wells Fargo Bank. She has also worked at American Bank and Steltzner Vineyards. She attended Solano Community College and is the Treasurer on the Board of Directors for VMT.

J. SUPPORT PERSONNEL

VMT hires professional directors and designers from around the bay area for its productions. The actors are local community members. Once the building opens, VMT will be hiring five full-time employees and five part-time employees.

K. ACTION PLAN

o Architectural Feasibility Study under way

o Capital Campaign Feasibility Study has been completed

o Grant writer has been hired to begin fundraising for capital campaign

o Phase I of capital campaign has begun with outreach to immediate theater community

o Board and management are completing three year growth plan for theater to increase operating budgets and input infrastructure to grow theater.

o Company is interviewing consultants to implement Phase II of capital campaign for massive fundraising effort through marketing, special events and promotion to Vallejo and Solano County community.

L. SWOT ANALYSIS

VIII. FINANCIAL INFORMATION

Five Year Projected Income & Expense Budget for VMT for a $2 million dollar loan:

Please see Appendix 1.

In year one, ticket revenue has increased due to increase in ticket price, the increase from 3 shows to 6 shows and the extension of 14 performances per show at 75% capacity. Revenue and expense items have increased based on a six show season from a three show season.

Contributions released from restriction are the community donations restricted to the building of the new theater. Net profit/loss

and unrestricted net assets are modest year to year in keeping with the notion that use of funds for this non-profit be applied to the mission of the organization. In year two of the occupation in the building the company begins the summer children's theatre conservatory. In year three of the new building ticket prices are raised and in year four a seventh show is added to the season.

Balance Sheet Projections: Please see Appendix 2.

Other unearned revenue is subscription series for theater that is advertised in previous fiscal year. Funds are released as earned revenue when the show closes. Debt to net assets remains under 4% for all five years of the projected balance sheet. The liability to operating budget ratio is under 17% for all five years of the budget and the net assets to the operating budget is robust.

Cash Flow Projections: Please see Appendix 3.

Cash flow is flush for the projected five years of this plan.

Five Year Projected Income & Expense Budget for VMT for a $4 million dollar loan:

Please see Appendix 4.

All contributed revenue from individuals, corporations and foundations were increased from profit & loss projections for a two million dollar loan in order to provide revenue for the increase in debt. Other projections have stayed the same.

Balance Sheet Projections: Please see Contact VMT..

The temporarily restricted net assets are the $535,000 raised by VMT to pay down the mortgage on the building. The liability to operating budget ratio is under 24% for all five years of the budget and the net assets to the operating budget is healthy.

Cash Flow Projections: Please see Contact VMT..

Cash flow for year one is tight due to move into new building, the adjustment to a six play season, and to new cycles of receiving and spending cash. In years following the cash flow is flush.

Five Year Projected Income & Expense Budget for VMT for a $5 million dollar loan:

Please see Contact VMT..

All contributed revenue from individuals, corporations and foundations were increased from the profit & loss projections for a four million dollar loan in order to provide revenue for the increase in debt. Other projections have stayed the same.

Balance Sheet Projections: Please see Contact VMT..

There are no temporarily restricted net assets since the entire loan is being financed by the bank. Debt to net assets is low for all five years of the plan. The ratio of liabilities to operating budget is under 25% for all five years of the plan.

Cash Flow Projections: Please see Contact VMT.

Cash flow is flush for the projected five years of this plan.

IX. SUMMARY

With the renovation of the Marin Street building, the Vallejo Music Theatre will be part of the exciting gentrification of Downtown Vallejo that will bring in shoppers, audience members, retail businesses and tourists. VMT fills a need in the Vallejo community by being the only musical theater in Vallejo. They have been a part of the Vallejo community since 1967 and have a strong presence and great relations with local community groups. As the Bay Area expands in the next few years, Vallejo is primed to have a larger population because of its affordable housing and close proximity to San Francisco, which in turn will create growth locally and VMT, as the established non-profit theater in the area, will attract a larger clientele through its exciting