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El Cajon authorizes amendment to Live Nation management deal, delays profit sharing until break-even
Summary
Council authorized a third amendment to Live Nation’s Magnolia management agreement that redefines profit-sharing so the operator earns incentive bonuses only after the city reaches a break-even adjusted operating income and raised the management fee to about $400,000 with a 3% annual adjustment.
City staff and Live Nation representatives presented a proposed amendment to the Magnolia management agreement that will change how adjusted operating income (AOI) is calculated and when Live Nation becomes eligible for incentive bonuses. The council authorized the city manager to execute the third amendment by unanimous vote.
Staff explained the new AOI formula will include the management fee so the city will begin sharing incentive bonuses only after the facility covers the management fee and reaches a true break-even. Under the existing formula staff said the city currently owed roughly $720,000 to Live Nation under the incentive structure; the amendment would adjust those balances to the new break-even point and eliminate that prior sharing until profitability is achieved under the revised AOI definition.
Live Nation’s local representative described the Magnolia’s recent performance — about 80 shows last year and 89 shows projected this year — and emphasized the venue’s role in drawing visitors to downtown El Cajon and generating feedback that has produced high satisfaction scores. The company requested a management‑fee increase to account for inflation: staff described a proposed annual fee of about $400,000 for the next fiscal year with a 3% ongoing adjustment.
Council members praised the partnership and moved to authorize the city manager to execute the amendment. The motion carried unanimously.
