HomeMy WebLinkAboutStaff Report 2403-2797CITY OF PALO ALTO
Finance Committee
Regular Meeting
Tuesday, May 07, 2024
Agenda Item
7.Review and provide feedback on the Palo Alto Junior Museum and Zoo Operational and
Business Analysis Report, recommend FY 2025 staffing adjustments, and ticket fee
structure (6:00 PM – 7:00 PM)
Finance Committee
Staff Report
From: City Manager
Report Type: ACTION ITEMS
Lead Department: Community Services
Meeting Date: May 7, 2024
Report #:2403-2797
TITLE
Review and provide feedback on the Palo Alto Junior Museum and Zoo Operational and
Business Analysis Report, recommend FY 2025 staffing adjustments, and ticket fee structure
RECOMMENDATION
Staff recommends that the Finance Committee review and discuss the Operational Business
Analysis Report for the Palo Alto Junior Museum & Zoo, provide recommendation to the City
Council on ticketing fee structure and staffing adjustments for adoption in the Fiscal Year 2025
Operating Budget. (CEQA Status – Not a project)
EXECUTIVE SUMMARY
An operational analysis of the newly opened Palo Alto Junior Museum & Zoo (JMZ) was
completed by Museum Management Consultants (MMC) and AECOM and provide
recommendations to inform ongoing operational and budgetary decisions. The final Operational
Business Analysis Report (Report) is included as Attachment A.
The key recommendations from the Report are as follows:
•Staffing: Staffing levels were identified as the most critical issue to be addressed. Several
staffing recommendations were given including increasing staff capacity in the animal
care / zoo area through conversion of hourly positions to full-time, adding staff positions
to guest services, adding a business/revenue manager position, and adding more
education and program staff.
•Increased Revenue: Three major opportunities for increased revenue include: 1) increased
admissions and membership prices; 2) revenue from birthday parties, summer camps,
educational programs, public programming, special events and upcharges; and 3) the
contributed income for operations beyond the City of Palo Alto General Fund, led by the
Friends of the JMZ.
•Admissions/Ticketing: Revisit membership levels and benefits; and consider increasing
ticket prices to be in alignment with the local market.
These recommendations are described in more detail in the Analysis and Fiscal/Resource Impacts
sections of this report. Staff recommend that some operational investments occur in Fiscal Year
2025 with incremental adjustments in subsequent years.
BACKGROUND
Since 1934, the Palo Alto Junior Museum & Zoo (JMZ) has been dedicated to enriching the lives
of young children, ages 0-11, and their caregivers through hands-on exploration of the natural
world. Their mission is to engage a child’s curiosity for science and nature, and their mission is
furthered through hands-on science exhibits; a children’s zoo with six habitats where children
lead the adventure to find animals in the landscape – underground, up in a tree, or underwater;
developmentally appropriate science classes and camps for children, families, and schools; a
volunteer program and a robust program of community outreach. These offerings serve kids and
their adults from all over the Bay Area, and most significantly from the mid-Peninsula
communities of Palo Alto, East Palo Alto, Menlo Park, Redwood City, Los Altos, Mountain View,
and Sunnyvale.
After a multi-year fundraising campaign by the Friends of the Junior Museum & Zoo and a
significant contribution from the City of Palo Alto, a new facility was designed to improve the
visitor experience, expand and optimize space, and make science programming scalable and
relevant for future generations. The JMZ construction project began in Summer 2018 and the
facility reopened in November 2021. The opening, during the global COVID-19 pandemic, initially
was on a limited schedule of three days per week; in December 2021, the JMZ opened Tuesday
through Sunday with a ticketed reservation of two sessions per day. In July 2022, another session
was added each day. For the first time, the reopened JMZ charged visitors an entry fee with
options for daily tickets, discounts, and memberships.
The new JMZ experience includes animal interactions in the Loose-in-the-Zoo exhibit where
children lead their families to find animals where they would in nature; on a pond, in a log, in a
tree stump, underground, underwater, and in the trees. Animal care takers introduce children to
animals in the Wildlife Circle, including the many birds that are loose in the zoo, such as ibises,
flamingos, spoonbills and many more. In 2023, the JMZ opened a permanent exhibit about the
dinosaurs that lived in California. The California Dinosaur Garden includes live cretaceous-era
plants, geologic specimens, a fossil dig, and life-size models of several types of dinosaurs from
California.
The new JMZ experience has been designed to accommodate people of all abilities. The
interactive science exhibits were developed by City exhibit staff who designed, prototyped, and
tested exhibits in collaboration with an accessibility advisory committee made up of people
representing a variety of disabilities.
Additional background information on the JMZ, including previous presentations to the Finance
Committee and the Council can be found in the footnotes below.1,2,3,4
ANALYSIS
After operating the facility for over a year, the City has data to inform the development of
ongoing attendance projections, ticketing prices, a reservation structure, and additional revenue
opportunities. An informal procurement process selected a consultant that would be able to
perform an operational analysis of the newly opened Palo Alto Junior Museum and Zoo and
prepare and provide a business plan to inform ongoing operational and budgetary decisions.
With Museum Management Consultants (MMC) in partnership with AECOM, the project
launched on July 21, 2023.
The goal of this effort was to obtain guidance and answers from industry experts on realistic
projections of attendance, ideal staffing levels, correct daily ticket and membership pricing, and
recommendations on operational and facility adjustments to provide the best possible guest
experience and ensure animal safety. The following key operational objectives for the JMZ were
provided to the consultant to help inform their methodology and analyses.
•Provide the highest standard of animal care using Association of Zoos and Aquariums
(AZA) accreditation standards
•Provide a high quality, safe and accessible customer experience
•Fill and retain 100% of staff positions
•Maintain a robust volunteer program
•Balance capacity limits with guest experience
•Establish a ticketing structure that balances throughput with a great visitor experience
•Maintain a consistent schedule for the public
•Identify operational investments opportunities to generate more revenue
•Identify capital investments to improve operational cost recovery
1 City Council, February 5, 2018; Agenda Item #9; Staff Report #8851,
www.cityofpaloalto.org/files/assets/public/v/1/agendas-minutes-reports/reports/city-manager-reports-
cmrs/year-archive/2018/id-8851-jmz.pdf
2 City Council, May 29, 2018; Agenda Item #9; Staff Report #9245,
www.cityofpaloalto.org/files/assets/public/v/1/agendas-minutes-reports/reports/city-manager-reports-
cmrs/year-archive/2018/9245.pdf
3 City Council, May 12, 2020; Agenda Item #1; Staff Report 11222,
www.cityofpaloalto.org/files/assets/public/v/1/agendas-minutes-reports/reports/city-manager-reports-
cmrs/year-archive/2020/id-11222.pdf
4 Finance Committee, September 6, 2022, Agenda Item #1; Staff Report #14584,
https://www.cityofpaloalto.org/files/assets/public/v/2/agendas-minutes-reports/agendas-minutes/finance-
committee/2022/20220906/20220906pfcs.pdf
Operational Business Analysis Report Summary
The Report presents key findings and recommendations based on an analysis of historic
operations, available markets and benchmarking against other local children’s and family
attractions. Analysis and projection of attendance levels, as well as financial and operational
analyses were completed. The following summarizes key findings and recommendations as
described in the Report.
Key Findings
Attendance: Using standard methodology for projecting attendance, the Report includes three
scenarios for estimated attendance. These three scenarios are based on 1) no operational or
capital investments, 2) additional investments in operations, and 3) additional capital
investments. The Report recommendations assume the mid-level scenario in which some
operational investments are made and projects 127,000 visitors annually.
Price for Admission and Membership: The current ticket price of $10 is considered under market
based on a review of available markets and benchmarking against other local family attractions.
The JMZ has one of the lowest adult admission prices of paid children’s and family attractions in
the Bay Area with the average being $23. Memberships are typically priced using a multiplier of
admission price. Since the admission price is considered below market the membership price
reflects this as well.
Staffing Levels: The Report concluded that operations and staffing did not receive a level of
investment that would support the scale of the capital reinvestment, and identified staffing levels
as the most critical issue to be addressed. The two priority areas for staffing investment are
animal care and guest services, which are identified as critically understaffed. This can result in a
decline in attendance due to negative impacts on the guest experience, reduced safety for visitors
and animals, and staff burnout and turnover.
Recommendations
Revenue Opportunities: Opportunities for increased revenue include more facility rentals,
increasing ticket and membership prices, and increased operational funding from the Friends of
the JMZ.
The greatest opportunity for facility rentals is birthday parties, which are in high demand. The
current staffing levels at the JMZ cannot keep up with this demand. The analysis assumes the
JMZ can double the number of birthday parties with increased staffing, resulting in increased
revenue. Revenue from programs will remain relatively consistent. Demand for JMZ summer
camps is high, which can only be satisfied with additional space and staffing.
also requires additional staff.
Admissions and Ticketing: The Report recommends an increase in ticket fee from $10 to $14 or
$15, which could be incrementally increased over two years. The JMZ is procuring a new ticketing
system used for attractions and ideally would have staffing to accommodate sales at the door.
The analysis does not recommend dynamic pricing; however, a peak pricing model by either time
of day, year, or day of week could be considered.
The average cost per membership is between $135 and $140 annually and using a standard
membership price multiplier of 3 for children’s museums the Report recommends a membership
price of $168 annually for a household membership.
Staffing Adjustments: Staff capacity is a significant limiting factor. Several staffing
recommendations were given including increasing staff capacity in the animal care/zoo area
through conversion of hourly positions to full-time, adding staff positions to guest services,
adding a business/revenue manager position, and adding more education and program staff.
Specifically, the Report recommends adding 2 full-time guest services positions and adjusting
animal care specialists from 8 part-time employees to 4 part-time employees and 4 full-time
employees. This staffing structure will increase customer service, provide better oversight of
memberships, allow for more birthday party reservations, and ensure proper levels of animal
care. It will also contribute to requirements for accreditation from an organization such as the
Association of Zoos and Aquariums (AZA). An additional part-time business/revenue manager
and volunteer coordinator are also recommended. The JMZ currently has a 0.48 FTE volunteer
coordinator on staff.
FISCAL/RESOURCE IMPACT
The analysis contains multiple recommendations with budget implications, summarized in the
table below. It should be noted that the total increase in staffing costs in the table below are high
estimates and total $646,000. The Report also estimated staffing costs, but at a slightly lower
rate and assumes an increase in staffing costs of $560,000. These values should be considered
the range of staffing cost increases if the recommended staffing levels were fulfilled.
Recommendation Expense
Convert four 0.48 FTE animal care positions to four 1.0 FTE animal care positions $336,000
Add two 1.0 FTE Guest Services positions $234,000
Add a 0.48 FTE business/revenue manager $76,000
Add marketing budget $90,000
Add programming budget $50,000
Total $786,000
The highest priority is increasing staffing for guest services and animal care. Staff recommends
some staffing additions and adjustments in FY 2025 to ensure the JMZ is operating at the highest
level for animal care and customer safety, and to provide support and stability for overburdened
staff. Ideally, the priority staffing recommendation of converting four animal care positions to
full time and adding two full time guest services positions would occur in Fiscal Year 2025. As
noted above, this would increase operating expenses by $570,000. Other recommended
proposals such as adding a business/revenue manager and increasing the marketing budget and
adding a programming budget could be phased in during subsequent years.
Some of these costs would be offset by a ticket fee increase from $10 to $14 per ticket, an
increase in membership fees, and earned income from facility rentals. Overall, the Report
indicates that earned revenue can increase from $2.1M (FY23) to $2.7M if ticket prices and
memberships increase, facility rentals increase, and with investments in staffing. Fiscal Year 2023
was used as a baseline, as it was the most recently completed fiscal year when the data was
submitted.
Additional costs not reflected in this Report are a result of the new JMZ ticketing system that will
come to Council as a consent item in May 2024. The estimated annual cost of the ticketing system
is $150,000 including a transaction fee of $0.30 per transaction and a merchant processing fee of
2.9%. For example, a $14 ticket would have a transaction fee of $0.70.
Staff recognizes that the addition of six new full-time positions in Fiscal Year 2025 is not currently
reflected in the Fiscal Year 2025 Proposed Operating Budget and presents challenges in balancing
these priorities against other budget proposals. The 2025-2034 Long-Range Financial Forecast5
base case indicated a $6.0 million deficit in FY 2025 followed by gaps of $5.4 million in FY 2026
and $3.4 million in FY 2023. The FY 2025 Proposed Operating Budget is scheduled to be
transmitted at a City Council May 6th study session and will update these numbers, but ongoing
gaps between revenues and expenditures should be considered when evaluating this request
with other service priorities.
Staff feel strongly that the addition of critical priority positions is necessary to avoid staff burnout
and reduce turnover, and to ensure that the safety of all visitors and animals is maintained at the
highest level. An alternative approach to the full staffing increases would be a two-year phased
approach where two guest services positions and two animal care positions are added in Fiscal
Year 2025 and the remainder in Fiscal Year 2026. In this scenario, the overall cost to the General
Fund in FY 2025 is estimated to be $175,000 and ongoing $508,000, as shown in the table below.
Recommendation FY 2025
FY 2026 and
Ongoing
Expenses
Convert four 0.48 FTE animal care positions to four 1.0 FTE
animal care positions
$168,000 $336,000
Add two 1.0 FTE Guest Services positions $234,000 $234,000
Add a 0.48 FTE business/revenue manager $ -$76,000
Add marketing budget $ -$90,000
Add programming budget $ -$50,000
Ticketing System (Purchase and Ongoing costs)$211,000 $160,000
5 January 12, 2024 City Council Meeting Item #12
(https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=13333)
Total Expenses $613,000 $946,000
Revenues $438,000 $438,000
Net cost/(Savings)$175,000 $508,000
STAKEHOLDER ENGAGEMENT
MMC, in partnership with AECOM, conducted the analysis of the Palo Alto Junior Museum in
coordination with the Community Services Department. The analysis involved an extensive
review into financial and other records for the JMZ as well as 14, one-on-one interviews with City
staff as well as Board Members from the Friends of the Palo Alto Junior Museum & Zoo. Staff
conferred with the Friends of the JMZ to understand their level of comfort with the Report
recommendations, specifically the proposed $4 per ticket increase. The Friends felt that based
on the explanation presented in the Report, a daily ticket price of $14 is reasonable and
opportunities should be explored to increase access for low-income families regardless of the
ticket price.
ENVIRONMENTAL REVIEW
Council action on this item is not a project as defined by CEQA because the business and
operational analysis activities do not involve any commitment to any specific project which may
result in a potentially significant physical impact on the environment. CEQA Guidelines section
15378(b)(4).
ATTACHMENTS
Attachment A: Operational Business Analysis Report for the Palo Alto Junior Museum & Zoo
APPROVED BY:
Kristen O'Kane, Community Services Director
Palo Alto Junior Museum and Zoo
Operational and Business
Analysis
Final Report
March 2024
Table of Contents
1 Introduction and Methodology
2 Review of JMZ Visitor Experience and Historic Operations
3 Available Markets and Site Analysis
4 Benchmarking
5 Attendance Analysis and Physical Planning Parameters
6 Financial Analysis
7 Operational Analysis
8 Summary of Key Findings and Recommendations
March 2024Final Report Page 3
AECOM devoted the level of effort consistent with (i) the level of diligence ordinarily exercised by competent professionals practicing in the area under the same or similar circumstances, and (ii)
consistent with the time and budget available for the Services to develop the Deliverables. The Deliverables are based on estimates, assumptions, information developed by AECOM from its
independent research effort, general knowledge of the industry, and information provided by and consultations with Client and Client's representatives. No responsibility is assumed for inaccuracies in
data provided by the Client, the Client's representatives, or any third-party data source used in preparing or presenting the Deliverables. AECOM assumes no duty to update the information contained
in the Deliverables unless such additional services are separately retained pursuant to a written agreement signed by AECOM and Client.
AECOM’s findings represent its professional judgment. Neither AECOM nor its parent corporations, nor their respective affiliates or subsidiaries (“AECOM Entities”) make any warranty or guarantee,
expressed or implied, with respect to any information or methods contained in or used to produce the Deliverables.
The Deliverables shall not to be used in conjunction with any public or private offering of securities, debt, equity, or other similar purpose where it may be relied upon to any degree by any person other
than the Client. The Deliverables shall not be used for purposes other than those for which they were prepared or for which prior written consent has been obtained from AECOM.
Possession of the Deliverables does not carry with it any right of publication or the right to use the name of "AECOM" in any manner without the prior express written consent of AECOM. No party may
reference AECOM with regard to any abstract, excerpt or summarization of the Deliverables without the prior written consent of AECOM. AECOM has served solely in the capacity of consultant and has
not rendered any expert opinions in connection with the subject matter hereof. Any changes made to the Deliverables, or any use of the Deliverables not specifically identified in the Agreement
between the Client and AECOM or otherwise expressly approved in writing by AECOM, shall be at the sole risk of the party making such changes or use.
The Deliverables were prepared solely for the use by the Client. No third party may rely on the Deliverables unless expressly authorized by AECOM in writing (including, without limitation, in the form of a
formal reliance letter. Any third party expressly authorized by AECOM in writing to rely on the Deliverables may do so only on the Deliverable in its entirety and not on any abstract, excerpt or summary.
Entitlement to rely upon the Deliverables is conditioned upon the entitled party accepting full responsibility for such use, strict compliance with this Agreement and not holding AECOM liable in any way
for any impacts on the forecasts or the earnings resulting from changes in "external" factors such as changes in government policy, in the pricing of commodities and materials, changes in market
conditions, price levels generally, competitive alternatives to the project, the behavior of consumers or competitors and changes in the Client’s policies affecting the operation of their projects.
The Deliverables may include “forward-looking statements”. These statements relate to AECOM’s expectations, beliefs, intentions or strategies regarding the future. These statements may be
identified by the use of words like “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “project,” “will,” “should,” “seek,” and similar expressions. The forward-looking statements reflect
AECOM’s views and assumptions with respect to future events as of the date of the Deliverables and are subject to future economic conditions, and other risks and uncertainties. Actual and future
results and trends could differ materially from those set forth in such statements due to various factors, including, without limitation, those discussed in the Deliverables. These factors are beyond
AECOM’s ability to control or predict. Accordingly, AECOM makes no warranty or representation that any of the projected values or results contained in the Deliverables will actually occur or be
achieved. The Deliverables are qualified in their entirety by, and should be considered in light of, these limitations, conditions and considerations.
General Limiting Conditions
Introduction and
Methodology
March 2024Final Report Page 5
The Palo Alto Junior Museum and Zoo (JMZ) is a treasured community cultural attraction located
in Palo Alto, California. Considered one of the first children’s museums west of the Mississippi, it
originally opened in 1934, and in 1941 moved to its current location in Rinconada Park.
The facility includes both children’s museum and zoo experiences and exhibits, with a mission to
“engage a child’s curiosity for science and nature.” This mission is accomplished through hands-
on science exhibits, a children’s zoo with six habitats and play areas, science classes and camps
for children, educational programs, a volunteer program, and public programming. The target
audience is children under nine years old and their families and caregivers.
The JMZ is owned and operated by the City of Palo Alto, housed within the Community Services
Department. It is supported by a nonprofit organization, the Friends of the Palo Alto Junior
Museum and Zoo (“Friends of the JMZ” or “Friends”). The Friends of the JMZ is a nonprofit
fundraising and advisory body whose board is comprised of business and community leaders.
The organization formed in 1962 to fund the gap between the JMZ’s operating costs and the
support it receives from the City of Palo Alto. The Friends sponsor and finance science
education outreach to underserved schools and contribute funding for new exhibits, new
teaching tools, and major capital projects.
After a multi-year fundraising campaign by the Friends of the Junior Museum & Zoo and a
significant contribution from the City of Palo Alto, a new facility was designed to improve and
expand the visitor experience, accommodate visitors of all abilities, and create more optimized
spaces. The JMZ renovation project began in summer 2018, and the facility reopened in
November 2021, during the Covid-19 pandemic. Upon opening, an admission fee was instituted
for the first time in the attraction’s history.
Introduction
Overview
Source: paloaltozoo.org
March 2024Final Report Page 6
Since re-opening, there have been questions by City of Palo Alto staff and elected officials about how to define a sustainable business model for the JMZ. Evaluating
performance within the pandemic recovery context has been challenging. While there were some initial attendance and financial projections developed in 2021 when
the facility opened, these were the result of a fiscal budgeting scenario analysis process rather than an evaluation of market demand. As a result, there are several
questions related to achievable attendance, suitable pricing, revenue strategies, staffing levels, costs, and operating issues.
In order to address these questions, the City of Palo Alto retained a consultant team including Museum Management Consultants (MMC) and AECOM’s Leisure &
Culture Economics practice to conduct a demand driven attendance analysis and business planning assessment for the JMZ. The purpose of our assignment is to
address the following key questions:
•Attendance: What is a reasonable range of attendance to plan for given the available markets, site, visitor experience, competitive environment, and other relevant
factors? How has the pandemic impacted attendance potential during the first years of operation since re-opening?
•Pricing and membership: What price for admission and membership is suitable given market conditions?
•Additional earned revenue: How can additional revenue be generated without negatively impacting attendance? Is there greater demand for earned revenue
categories such as birthday parties and facility rentals?
•Staffing: What is the appropriate level of staffing? What functions can be accomplished using volunteers?
•Operating costs: What is the appropriate level of spending on other operating costs, such as marketing and advertising?
•Capital investments:Are there additional capital investments that would improve operational cost recovery?
•Strategies for economic sustainability and overall performance: What other factors should be considered to enhance economic sustainability? Are there
opportunities to improve performance, as measured by attendance, revenues, and cost recovery, or is current performance within the range of reasonableness
given market conditions? What is a reasonable range of cost recovery for the Palo Alto JMZ?
Introduction
Purpose of Assignment
March 2024Final Report Page 7
Introduction
Overall Methodology
Our analysis was completed in four different phases, as described below.
Determination of
Attendance and
Financial Potential
Comparison to JMZ
Performance
Assessment of
Operations Identification of
Strategies, Priorities,
and Recommendations
March 2024Final Report Page 8
Introduction
Economic Analysis Scope
As part of this assignment, the AECOM team completed the following tasks:
Met with City and JMZ
staff and leadership to
understand museum
strengths, challenges,
and vision
Examined the visitor
experience, including
the scale and type of
exhibits
Assessed historic
operations and
performance
Examined relevant
population and
demographic trends of
the resident market
Conducted a site
analysis to understand
implications on
attendance and
revenue potential
Conducted national
benchmarking and
reviewed the local
competitive environment
Estimated future attendance potential for the 3 scenarios and compared to JMZ performance
Developed a financial
model with potential
revenue strategies and
operating cost
requirements
Recommended
strategies and priorities
to maximize economic
sustainability
Assessed physical
planning parameters
based upon
attendance potential to
assess capacity
constraints
March 2024Final Report Page 9
AECOM evaluates several factors as part of its attendance and market
potential analysis. These factors drive demand and revenue for all types of
attractions and include:
•Historic operations;
•Scale and quality of the visitor experience;
•Size and characteristics of resident and (as relevant) tourist markets;
•Site location and market conditions;
•Performance of comparable attractions nationally;
•Local and regional competitive environment; and
•Professional judgment based upon decades of experience advising
attractions of all types.
Based upon these factors, we developed penetration rates for the Palo Alto
JMZ. Penetration rate methodology is the “gold standard” in the industry
with respect to attendance estimation.
Physical planning parameters required to accommodate demand are
developed based on these market factors, and the combination of
attendance potential and physical planning drives earned revenue and
overall financial performance.
This process represents a demand-driven approach to attendance
estimation, budgeting, and physical planning.
Introduction
Attendance Estimation: Penetration Rate Methodology
Attendance and
Financial
Potential
Historic
Operations
and Visitor
Experience
Local &
Regional
Competitive
Environment
Size & Quality
of Resident &
Tourist
Markets
Performance
of
Comparable
Attractions
Physical Planning
Parameters
Site Location
and
Conditions
Professional
Judgment
March 2024Final Report Page 10
Introduction
Attendance Estimation: Other Factors
In addition to penetration rate methodology, discussed in the previous slide, there are several other metrics relevant to the performance of museums and cultural attractions,
including the relationship of attendance to scale of visitor experience area. For example, the average ratio of visitors to exhibit square foot across all cultural attraction categories is
5. This ratio tends to be lower for history museums, and higher for science centers, children’s museums, and for museums with more immersive entertainment experiences. It should
be noted that this ratio applies to indoor space, as outdoor space is often not available or desirable year-round and tends to have experiences that are less densely organized. The
ratio is affected by factors such as:
•Attraction power
•Quality of visitor experience and presence of
signature experiences
•Interactivity, digital content
•Brand / marketing power
•Physical size of exhibits (e.g., children’s museum versus
flight museum)
•Programming
•Museum site and location
Immersive
Experiences
Science &
Technology
Centers
Ratio of Visitors to Exhibit Area for Indoor Visitor Attractions
1 12
History
Museums
and Large
Object
Museums
Average for All
Cultural
Attractions
Children’s
Museums
Review of JMZ Visitor Experience and
Historic Operations
March 2024Final Report Page 12
Visitor Experience and Operations
Governance and Operating Structure
•Overview:The Palo Alto Junior Museum & Zoo is owned and operated by the City of Palo
Alto. It is housed within the Community Services Department, which also oversees the Art
Center, Children’s Theatre, three community centers, golf course, parks, aquatics, and
recreational classes and activities. It is a broad department that incorporates arts and
science, parks and recreation, and human service functions.
•Staffing: All staff are City of Palo Alto employees and are hired through the City human
resources process (this includes full-term regular employees and hourly staff).
•Funding:JMZ operations are primarily supported by the Palo Alto General Fund. In
addition, the JMZ receives funding for capital projects and some operating support from
The Friends of the JMZ.
•Supporting nonprofit model: It is a relatively common model to have a supporting
nonprofit organization for publicly owned and operated cultural attractions. There are
numerous examples of zoos, museums, botanical gardens, cultural centers, and other
cultural facility categories that have public ownership and/or management with the
involvement of a nonprofit organization. There is a continuum of nonprofit involvement
from fundraising only to directly hiring staff involved in attraction operations to operating
agreements for management responsibility.
•Friends of the JMZ priorities: The Friends raised $25 million to rebuild the JMZ. The
Friends also supports educational and outreach activities to ensure access to the JMZ,
regardless of physical or cognitive ability or the ability to pay admission. The Friends
organization also raises funds for new exhibits.
•Housed in the Palo Alto
Community Services Department
•All staff are City employees
•Gap between earned revenue and
operating costs covered by Palo
Alto General Fund
•Funds most operations and
partners with Friends of the JMZ
for capital projects
City of Palo Alto
•Nonprofit organization created to
support the Palo Alto JMZ
•Focus is on supporting capital
projects -raised $25 million for
recent JMZ renovation
•Contributes towards some
operations including science
education fees for underserved
schools, community outreach
focused on access, and some
exhibits
Friends of the Palo Alto Junior Museum
& Zoo
March 2024Final Report Page 13
Visitor Experience and Operations
Exhibit Area and Scale
•Overview and Scale:There is a strong relationship between the amount of exhibit or visitor experience area and attendance.
The JMZ includes both outdoor and indoor spaces. The outdoor areas include a 13,000 square foot zoo and children’s play
area, in addition to a newly added 4,500 square foot Dinosaur Garden. The indoor area with children’s museum exhibits is
relatively modest in size at 3,400 square feet. Additionally, there are “limited public access areas”, such as classrooms and a lab
that are used for events, educational and public programs, birthday parties, research, and other functions. Some of the
classrooms, when not being used for programs, can be used for pop-up exhibits or activities to expand indoor space capacity.
•Indoor versus Outdoor Space: The amount of indoor space is a capacity constraint for the overall JMZ attraction. Due to the
configuration of the entry sequence, visitors must go through the indoor area in order to reach the outdoor exhibits and play
areas. The children’s museum exhibits are highly interactive and play-based, and therefore very popular. Using typical design
day capacity calculations (discussed later in the attendance analysis section), this area can only support a relatively low
attendance of 30,000 on an annual basis. Although the outdoor areas have greater capacity and benefits from good weather
most of the year, days with rain or inclement weather typically limit year-round attendance demand and/or capacity for outdoor
attractions. As such, we typically discount outdoor space in our calculation of exhibit area used for the purposes of
benchmarking and attendance estimation.
Space Square Footage
Zoo 12,990 sf
Indoor Museum 3,400 sf
Lobby/Front Desk Area 495 sf
California Dinosaur Garden 4,470 sf
Total 21,335 sf
Visitor Areas
Space Square Footage
Classroom 1 830 sf
Classroom 2 850 sf
Stanford Lab 125 sf
Outdoor classroom 1,775 sf
Total 3,580 sf
Limited Public Access Areas
Space Square Footage
Building 15,190 sf
Zoo 12,990 sf
Back of house for zoo 4,460 sf
Back of house for whole
facility 2,220 sf
Outdoor classroom 1,775 sf
Grounds around facility 17,720 sf
Total 54,355 sf
Entire Facility
Space Square
Footage
%
Allocated
Zoo 12,990 sf 50%
California Dinosaur Garden 4,470 sf 80%
Indoor Museum 3,400 sf 100%
Total 20,860 sf
Calculated Outdoor Space 10,100 sf
Calculated Indoor Space 3,400 sf
Calculated Exhibit Area for
Analysis Purposes 13,500 sf
Exhibit Area Calculation for Analysis Purposes•Unique attraction: Overall, the scale of the JMZ is more similar to a
children’s museum than a zoo. However, its ratio of outdoor exhibit
space to total exhibit space is opposite of most children’s museums.
Therefore, for benchmarking we evaluated children’s museums,
nature centers, and small zoos.
•Calculation of Exhibit Area for Analysis: To avoid overestimating
the exhibit area and to ensure a more accurate comparison to
benchmarks, AECOM applied a rough percentage estimate to the
outdoor spaces to account for closures due to weather and space
that is generally not accessible to visitors (animal habitats). Taking
this into account, the total exhibit area used for analysis purposes is
approximately 13,500 square feet,
March 2024Final Report Page 14
The JMZ experience includes a mix of indoor children’s museum and science exhibits,
animal interactions in the Loose-in-the-Zoo exhibit where children lead their families to
find animals where they would in nature, and outdoor play areas.
Key exhibits include:
•Outdoor animal exhibits: The Tree House, Meerkat Desert, Racoon Creek, Cichlid
Lake, Rabbit Meadow, Tortoise Savannah, and Wildlife Circle, where visitors can
meet animals and talk with zookeepers. It should be noted that due to staff capacity
limitations in animal care, there are fewer opportunities for informal animal
interactions curated by zookeepers after the renovation.
•Treehouse and climbing areas: The treehouse offers a place for parents to let their
kids roam freely and climb. It has stairs and an elevator to ensure that people of all
ages and abilities can explore the treehouse for themselves. Additionally, within the
netted outdoor area, children can see flamingos, macaws, ducks, and many unique
birds.
•Indoor science exhibits: Children can playfully explore natural phenomena like
gravity, inertia, force, motion, balance, energy, states of matter, electricity, and
magnetism. Kids can play with simple machines, make a time-lapsed movie,
cooperate with other kids to move balls through a giant ball machine, or make a ball
machine of their own. They can also explore objects in the Museum’s extensive
natural history collection, and there is a special place just for babies.
•California Dinosaur Garden: This children’s play area opened in the fall of 2023 and
was specifically designed to reduce congestion in key visitor areas and spread
visitors more evenly throughout the facility. It includes life-size dinosaur and animal
sculptures, prehistoric plants, and interactive exhibits including a fossil dig.
Visitor Experience and Operations
Key Exhibits
March 2024Final Report Page 15
•Program types: JMZ offers a wide variety of educational programs, summer camps, and other programming. In addition, they offer birthday parties to the public. Demand for summer
camps is strong, with camps selling out within a short time of registration opening and waitlists for zoo camps. The ability to increase summer camps has been somewhat limited by
space and staff capacity. Birthday party demand is strong, but there has been insufficient staff capacity to run the parties as well as the coordination and sales process.
•Animal experiences: Since the opening, zoo and animal care specialists have had less time to interact with guests to create animal interactions, which was previously an important
part of the visitor experience. With the JMZ expansion, zoo staff have had limited capacity to take on guest services and interactions and instead have had to prioritize animal care
and facility needs that are typically more immediate in nature. Ultimately, this capacity limitation may have a negative impact on attendance. There is a trend in the cultural attractions
industry towards increased demand for special, unique, or personalized experiences and programs, and programming generally driving a greater share of attendance than
historically.
Visitor Experience and Operations
Public and Educational Programming
Programs Description
Science Outreach
This program brings hour-long science lessons to pre-K through 5th Grade in 60
schools, serving 20,000 children. The program also includes field trips to the Baylands,
delivering inquiry-based lessons to meet Next Generation Science Standards (NGSS).
Science with a
Twist
This is a science afterschool program delivered in local elementary schools and the
Boys and Girls Club.
Family Programs These are one hour science programs offered at the museum for pre-K through 5th
grade students and a caretaker.
Discovery
Volunteers
The volunteer program has been constrained due to a vacancy in the role of Volunteer
Coordinator (has been filled recently), but Discovery Volunteers can deliver short
museum and zoo programs to engage visitors and enhance the guest experience in
the museum and zoo such as “learn through play” and “real objects” activities.
Wildlife Circle This is a location within the Zoo where regularly scheduled programs by animal care
staff facilitate close encounters with a sloth, eagle, or help guests feed a flamingo.
Feeding Demonstrations Feedings include the tortoise, turtle and cichlid, raccoon, and meerkat.
Education and Public Programs
March 2024Final Report Page 16
5,980
96,900
7.2 visitors per exhibit sf
117,900
8.7 visitors per exhibit sf
-
50,000
100,000
150,000
2021 2022 2023
•Attendance trends: In JMZ’s initial full year operating with a ticket-selling model instead of free admission, the facility received just under100,000 guests. It is important to note that
the opening occurred at the end of 2021, during the Covid-19 pandemic when many museums nationally were still experiencing significantly lower attendance than pre-pandemic
levels. This period was marked by limited operating days, capacity constraints, and mask requirements. The first Omicron surge, which severely impacted staffing and attendance at
cultural attractions nationally, occurred in January and February 2022. In the first half of 2023, the museum outperformed its attendance from the same period in 2022. Specifically,
there was an increase of 18,000 visitors in these six months, representing a growth of 46%. This likely reflects a pandemic recovery as well as muted attendance in early 2022 due to
the Omicron surge. Attendance for the second part of 2023 was similar to the second half of 2022, with a modest increase of 2,500 visitors. The JMZ reported attendance in 2023 at
118,000 visits, a 22% increase over 2022.
•Ticketing system and booking model: The museum opened with a limit of two sessions per day to manage capacity issues and has since increased to three sessions per day. This
model, in addition to other timed ticketing models with capacity limitations built-in, has been used by other children’s museums during and after the pandemic to ensure guest
comfort, prevent overcrowding, and address operational concerns. The entry sequence to the museum, not allowing direct access to outdoor areas, and limited indoor space likely
necessitated this ticketing model. While necessary during the pandemic, in the long term, this model can constrain attendance due to its lack of flexibility. Furthermore, JMZ did not
open with an industry standard ticketing system and instead relied on the City of Palo Alto Rec1 system, the same one used for recreation classes and activities, requiring visitors to
register for an account to sign up for a session. These operational issues related to the ticketing and booking process are attendance constraints. The JMZ has just completed the
City procurement process to bring on a new ticketing system vendor that is more standard for attractions.
Visitor Experience and Operations
Trends in Annual Attendance
JMZ Annual Attendance
Source: JMZ, AECOM Analysis 2023
Opened in November 2021
March 2024Final Report Page 17
1,670
4,290
5,130
6,040
7,480 7,170 6,460
8,190
9,060
11,810
9,290
8,210
9,410 8,610
9,920
5,730
9,400
12,160
9,530
12,240
10,100 10,040 9,340 8,770
10,570 10,100
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
Historic Operations
Trends in Monthly Attendance
Source: JMZ, AECOM Analysis 2023
May 2023
•Introducing
Luna, the Sloth
August – November 2022
•Bird Flu
•Flamingo feedings
resumed 11/22/23
February 2023
•Flooding and
issues with
ticketing system
An analysis of monthly attendance indicates an upward trend each month in 2022 and then stabilization in the second half of 2023.
Exhibits at Grand Opening
November 2021
•Outside in the Zoo
•Indoor science exhibits
•Wildlife Circle
•The Tree House
•Curious By Nature
•Collections Corner
•Dawn Redwood Courtyard
Historic Monthly Visits (Nov 2021 - Dec 2023)
November 2021: The World Health
Organization identified the Omicron Covid-
19 variant, marking the start of a pandemic
wave that lasted through February 2022.
March 2024Final Report Page 18
•Because 2022 was the JMZ’s first full year, it is difficult to conclude trends in seasonality as attendance was still ramping up month to month. The year 2023 can offer some insight
into seasonality trends, but monthly visitation in 2024 will likely be more representative of typical seasonality curves going forward.
•In April 2023, visitation exceeded the top monthly record set in 2022. The all-time peak monthly visitation was 12,242 visitors.In 2023, April and June recorded the greatest share
of visits. After June, there was a decline in monthly visitation for 4 consecutive months until November and December.
•The peaking shown below is very low, with the highest month accounting for only 10.4% of visits. It is likely that over time,peaking may increase slightly. Seasonality curves are
important as they are a key assumption in the calculation of the amount of visitor experience and exhibit area required to accommodate demand.
Historic Operations
Seasonality
Share of Visitors by Month (2023)
Month 2021 2022 2023
January 5,133 9,918
February 6,040 5,731
March 7,477 9,402
April 7,171 12,162
May 6,455 9,532
June 8,188 12,242
July 9,063 10,095
August 11,808 10,039
September 9,290 9,336
October 8,214 8,767
November 1,665 9,411 10,566
December 4,286 8,608 10,099
Total 5,980 96,900 117,900
Historical Monthly Attendance
8.4%
4.9%*
8.0%
10.3%
8.1%
10.4%
8.6%8.5%7.9%7.4%
9.0%8.6%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
*Feb 2023
Flooding and issues with
ticketing system
March 2024Final Report Page 19
0
500
1,000
1,500
2,000
2,500
3,000
2021 2022 2023
Basic Family Supporting
•Approximately two-thirds of attendance is accounted for by general admission, with just under one-third comprised of membership visits. The remaining visitors include school
groups, summer camps, birthday parties, and rentals.
•Memberships pose a challenge for the museum in balancing a robust membership package with limited capacity. The facility can accommodate roughly 350 guests each session,
with three sessions daily. Due to these capacity limitations, the museum has set a limit of 100 tickets per session for members, which has led to some frustration from members.
Additionally, staff have noted that members will often sign up to reserve a space and not attend, which has led to some frustration as that these spots could go to general admission
visitors).
Historic Operations
Historic Visitation by Category
Historic Visitation by Ticket Sales Category
Source: JMZ, AECOM Analysis 2023
Category 2022 (Calendar)2023 (Calendar)
Birthday Parties 3,500 (3.6%)1,900 (1.6%)
Corporate Events 2,700 (2.8%)150 (0.2%)
Membership Visits 31,100 (32.1%)34,900 (29.6%)
School Groups 1,200 (1.2%)1,400 (1.2%)
Summer Camps 800 (0.9%)1,000 (0.8%)
General Admission 57,600 (59.8%)78,500 66.6%)
Total Visits 96,900 117,900
All Visits By Category 2023
Birthday Parties,
1.6%Corporate Events,
0.2%
Membership
Visits, 29.6%
School Groups,
1.2%
Summer Camps,
0.8%
General
Admission, 66.6%
Count of Active Memberships
900 Memberships 3,250 Memberships 2,850 Memberships
March 2024Final Report Page 20
•Visitor origin: JMZ draws the vast majority of its visitors (92 percent) , from within a one-
hour drive time. Close to 75 percent of those visitors come from within a 30-minute drive
time. This is a very typical visitor origin pattern for children’s museums.
•Overlap with other children’s cultural attractions: It should be noted that the markets
from which JMZ draw overlaps significantly with many other children’s cultural attractions.
Historic Operations
Visitor Origin and Resident Market Penetration Rate
Source: JMZ, AECOM Analysis 2023
Penetration Rates (2023)
County Visitor
Origin
Market
Size
Penetration
Rate
Primary Market (0 to 30-minutes drive time)73%2.1M 4.1%
Secondary Market (30-to-60-minute drive time)18%3.2M 0.7%
Outside resident market 8%--
Total Resident Market 92%5.3M 2.0%
Visitor Origin Map by Zip Code (2023)
1 –150
151 –325
326 –750
751 –1,500
1,501 –2,500
Legend
Tickets Per Zip Code
Visitor Origin Percentages are based off a sample set of data
March 2024Final Report Page 21
•Overall staffing and mix of full-time and part-time: The JMZ has approximately 23 full-time equivalent (FTE) employees,
of which the vast majority are part-time employees. This has been identified as a challenge particularly in areas of animal
care.
•Lengthy hiring process and impact on attendance: The pandemic has created a significant amount of staff turnover in
many industries, including museums and cultural attractions. Many cultural attractions are still struggling with finding staff
with suitable skills for key positions at all levels. The JMZ has had staff vacancies since opening, and filling these positions
has been slow, likely due to a combination of factors including pandemic staffing challenges, suitability, part-time status of
some positions, salaries for cultural attractions relative to cost of living, and insufficient capacity in the City HR
department. While a lengthy hiring process is not unusual for public agencies, staffing shortages at cultural attractions can
have negative impacts on visitor experience, ultimately causing a decline in attendance.
Historic Operations
Staffing and Organization Chart Position FTE -FY22 FTE -FY23
Arts & Science Professional I -H 0.48 0.48
Arts & Science Professional II -H 0.78 0.78
Arts & Sciences Technician -H 2.32 2.32
Clerical Assistant -H 0.48 0.48
Manager Community Services
Senior Program 1.00 1.00
Custodial Assistant 0.45 0.45
Instructor I 0.18 0.18
Instructor I -H 0.94 0.94
Instructor II 0.49 0.49
Instructor II -H 0.46 0.46
Junior Museum & Zoo Educator 2.60 2.60
Producer Arts/Science Program 4.00 4.00
Program Assistant II 1.00 1.00
Recreation Leader I 0.82 0.82
Recreation Leader II 0.10 0.10
Recreation Leader III 1.57 1.57
Recreation Leader III -H 0.36 0.36
Staff Specialist -H 0.48 0.48
Theater Specialist 1.00 1.00
Zoological Assistant -H 2.83 3.68
Total 22.34 23.19
March 2024Final Report Page 22
Historic Operations
Earned Revenue by Category and Per Capita Admission Revenue
Ticket Prices (2021-2023)
Ticket Category Ticket Price
General Admission $10
ACM / JMZ Members $7
Museums for All $3
School Field Trip $5
Membership $0
•Earned revenue sources: In FY23, earned revenue was close to $2.1 million, with admission revenue and membership accounting for nearly two-third of this, which is fairly standard for
cultural attractions. Revenue from camps, educational programs, and public programs is very strong, with nearly $500,000 from this category. Birthday party revenue is relatively low
given the market due to space and staff capacity.
•Ticket price:The $10 admission fee is below market rate and was selected to promote inclusion and access and perhaps allow for a transition from free admission. While historically
museums have used admission price as a strategy to increase access for underserved communities, the industry is moving towards more strategic initiatives to increase access and
participation, recognizing the need for earned revenue to support equity programs and the many barriers to participation beyond ticket price.
Admission Per Caps & Yield
Category FY2023
Admissions $917,416
Attendance 115,400
Admission Per Cap $7.95
General Admission Price $10
Admission Yield 79%
AECOM Category FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023
Admissions $0 $0 $0 $0 $0 $0 $626,337 $917,416
Historic School Program Income $233,875 $227,021 $242,987 $232,959 $39,934 $0 $0 $0
Historic Rev from Field Trips $8,325 $9,377 $7,926 $2,482 $1,401 $0 $0 $0
Membership $0 $0 $0 $0 $0 $0 $262,822 $361,228
Facility Rentals / Birthday Parties $5,428 $3,440 $5,896 $3,215 $1,666 $0 $33,533 $76,328
Facility Rental Attendant $407 $542 $374 $472 $165 $0 $0 $0
Programs
JMZ Sciences Camps $0 $0 $0 $0 $0 $112,306 $223,492 $346,888
JMZ Science Classes $28,206 $16,025 $24,422 $33,707 $39,943 $20,142 $57,210 $66,461Interpretive Program $0 $0 $0 $0 $0 $8,232 $38,074 $66,932
JMZ Outreach $0 $0 $0 $0 $0 $71,050 $133,548 $223,724
Reimbursement for EPA Classes $55,630 $0 $0 $0 $0 $0 $0 $0
Other Program Rev $0 $0 $0 $0 $0 $100,964 $101,693 $2,145
Child Regist-Audience $40,694 $39,739 $36,819 $33,960 $1,443 $0 $0 $0
Historical Class Program Fee $251,156 $313,143 $283,233 $308,346 $214,262
Total Earned Revenue $623,722 $609,287 $601,657 $615,141 $298,815 $312,694 $1,476,708 $2,061,122
March 2024Final Report Page 23
Expenses FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023
Payroll
Regular Salaries $563,270 $601,662 $590,766 $654,962 $737,181 $649,680 $733,000 $722,600
Temporary Salaries $311,342 $313,944 $374,324 $364,149 $361,534 $365,605 $580,071 $760,437
Pensions $180,331 $204,200 $226,020 $233,050 $289,582 $288,587 $350,258 $368,053
Benefits $286,836 $308,789 $333,585 $352,530 $435,070 $418,978 $485,847 $550,383
Paid Leave $134,811 $128,022 $177,496 $150,411 $133,939 $140,831 $177,436 $219,188
Other Payroll $9,592 $7,596 $9,516 $13,813 $9,475 $11,106 $53,951 $62,671
Total Payroll $1,486,183 $1,564,214 $1,711,707 $1,768,914 $1,966,781 $1,874,787 $2,380,564 $2,683,332
Payroll % of Expenses 91%92%90%91%94%92%90%86%
Payroll % W/o Pensions 80%80%78%79%80%77%77%75%
Exhibits $41,132 $21,926 $38,367 $31,743 $5,739 $47,695 $38,529 $52,202
Supplies & Services $94,243 $95,341 $109,466 $95,412 $69,870 $96,112 $150,726 $234,923
Administrative $13,439 $12,708 $31,214 $45,746 $42,035 $24,951 $47,722 $36,545
Program Expenses $0 $0 $0 $0 $0 $3,173 $0 $0
Marketing $6,453 $3,140 $7,225 $7,116 $640 $0 $27,018 $95,594
Grant Expenses $0 $0 $0 $0 $0 $1,235 $0 $0
Others/Misc. Expenses $0 $885 $14,037 $0 $350 $100 $32 $0
Special Projects $0 $0 $0 $0 $0 $0 $0 $0
Non-Payroll Expenses $155,268 $133,999 $200,309 $180,017 $118,634 $173,265 $264,026 $419,264
Total Expenses $1,641,451 $1,698,213 $1,912,016 $1,948,931 $2,085,415 $2,048,052 $2,644,590 $3,102,596
Earned Revenue Percent 38%36%31%32%14%15%56%66%
Historic Operations
Operating Expenses
•In FY23, operating expenses were $3.1 million, or $27 per visitor. Payroll typically accounts for around half of all operating expenses, but for JMZ accounts for 86 to 90 percent of
expenses. This is due to two factors: 1) The burden on salaries being higher than for nonprofit-operated attractions; and 2) Additional costs that are assumed by the City, such as
finance and accounting, insurance, utilities, and others that are not reported in the cost centers.
•The earned revenue percentage has increased from 30 to 35 percent prior to the renovation to 66 percent in FY23. This is relatively strong and within industry standards for
children’s museums and zoos.
Category FY2022 FY2023
Attendance 46,419 115,381
Expenses $2,644,590 $3,102,596
Expenses Per
Visitor $57 $27
OPEX per sf*$48 $57
Expenses Per Visitor
Source: JMZ, AECOM Analysis 2023
*Total Facility Square Footage: 54,355 sf
March 2024Final Report Page 24
Historic Operations
Fiscal Year Financial Summary
Source: JMZ, AECOM Analysis 2023
$624K $609K $602K $615K
$299K $313K
$1.5M
$2.1M
$1.6M $1.7M
$1.9M $1.9M $2.1M $2.0M
$2.6M
$3.1M
38%36%
31%32%
14%15%
56%
66%
0%
10%
20%
30%
40%
50%
60%
70%
$0K
$500K
$1000K
$1500K
$2000K
$2500K
$3000K
$3500K
2016 2017 2018 2019 2020 2021 2022 2023
Earned Revenue, Expenses, and Earned Revenue Percentage
Earned Revenue Operating Expenses Percent Earned Revenue
March 2024Final Report Page 25
Historic Operations Review
Summary of Strengths and Considerations
Strengths and Opportunities
•The Palo Alto JMZ is a beloved community cultural attraction that has recently completed a major expansion and renovation, updating exhibits,
adding new visitor experiences, and increasing capacity to serve the community. The renovation has allowed the JMZ to institute an admission
price, which has led to a substantial increase in earned revenue, building a foundation for a more sustainable business model.
•The facility includes a mix of children’s museum, science, nature, and animal exhibits and a mix of indoor and outdoor experiences. The visitor
experience includes areas where parents can actively play with their children and where they can allow their kids to roam freely, such as the
treehouse. It also includes a mix of more interactive, passive, and immersive experiences, along with a good balance of education and
entertainment.
•The California Dinosaur Garden is a good example of reinvestment required to maintain attendance. It also has a benefit of increasing outdoor
capacity and expanding visitor flow areas.
•Most of the key metrics related to performance appear to be within industry standards. Attendance is relatively strong with 118,000 visitors in
2023, and the earned revenue of just over 65 percent is within an expected range for children’s museums and zoos. The percentage of operating
budget accounted for by staff costs is high, but not unexpected given the publicly-operated management model, and the admission price is lower
than market rate.
•The space features sizable classroom areas and a large storage room which can be used to expand indoor pop-up and temporary exhibits and
indoor capacity overall.
•There may be additional opportunities for birthday party rental, summer camp revenue, and other categories with additional staffing and space.
•The Friends of the JMZ has provided significant support for the organization, particularly for capital projects, in addition to operating support to
ensure accessible science education.
March 2024Final Report Page 26
Historic Operations Review
Summary of Challenges and Considerations
Challenges and Considerations
•The JMZ has struggled with staff capacity issues, particular in the areas of animal care and guest services, two critical areas that can negatively
impact the guest experience and ultimately lead to attendance declines over time. This is likely a result of several factors, including: 1) Insufficient
budget allocated for staffing (not uncommon with a major capital reinvestment); 2) Pandemic hiring and staffing challenges; 3) Length of public
agency hiring process (also not uncommon); and 4) Substantial number of part-time employees in positions that are typically full-time.
•The museum industry overall is struggling to compete with intense competition for leisure spending and time from a wide range of entertainment,
attractions, and “edutainment” activities. Programming and unique and personalized experiences have been an important attendance driver for
many cultural attractions as they compete in this environment.
•The facility is modest in size, with a very small amount of indoor exhibit area, likely undersized given attendance. This is compounded by the
configuration of the facility and visitor entry sequence, which requires all visitors to queue in a small area and walk through the indoor exhibits to
reach the outdoor areas.
•The reliance on defined-time sessions as the operating model for attendance and the existing ticketing system which uses the City’s recreation
system and requires visitors to create an account to purchase a ticket (which is actively being changed) has likely had some negative impact on
attendance potential.
•There are challenges around membership, likely from a mix of relatively low membership fees, inability to meet demand for member attendance,
capacity constraints, the ticketing system and sessions attendance model, and inability to staff member hours.
•Staff capacity has limited the number of birthday parties and associated revenue. This includes staff to lead birthday parties and staff to respond
to inquiries and handle bookings and planning.
Available Markets and Site
Analysis
March 2024Final Report Page 28
Site Analysis
Neighborhood Context
•The site characteristics of a cultural attraction can have an
impact on attendance potential. Characteristics such as visibility,
access, parking, space capacity, and presence of
complementary surrounding uses can all be important.
•The Palo Alto JMZ is located in a very strong site for a museum.
•The adjacent map identifies key uses around the JMZ. As shown,
it is located in Rinconada Park, a high-use City park with a number
of complementary attractions, including other cultural facilities,
schools, playgrounds, a popular swimming / aquatic facility, and
sports facilities.
The following locations are identified on the map:
ID Location
1 Palo Alto Junior Museum
2 Rinconada park playground
3 Lucie Stern Theatre
4 Children’s Library
5 Palo Alto Children’s Theatre
6 Walter Hays Elementary School
7 Rinconada Pool
Palo Alto Junior Museum (Aerial View)
1
Source: Google Earth Pro
2
3
45
6
7
March 2024Final Report Page 29
Site Analysis
Regional Access
Palo Alto Regional Map
•The Palo Alto JMZ is located on Middlefield Road and is
very accessible to Palo Alto and surrounding
community residents.
•However, high traffic volume on the 101 freeway can
be a limiting factor for attendance from other regional
locations during peak traffic hours and is a challenge
for employee retention due to long commutes,
particularly for part-time employees who need to travel
to other jobs.
ID Location
1 Palo Alto Junior Museum
2 Stanford University
ID Road
A Middlefield Rd
B Embarcadero Rd
C Bayshore Freeway
D El Camino Real
1 B
C
A
D
2
Source: ESRI
March 2024Final Report Page 30
Available Markets Review
Resident Market Definition
•The propensity to attend an attraction of any type is generally based
upon the distance from which markets are located.
•For cultural attractions, the core resident market is typically defined as
those living within a one-hour drive time of the facility. Children’s
museums, depending on their scale and visitor experience, typically draw
most market support from within a 30-minute drive time.
•The JMZ market is categorized into two sub-markets:
•Primary: 0 to 30-minute drive time area from the site
•Secondary: 30 to 60-minute drive time area from the site
•The primary market extends to San Mateo to the north, the northern part
of San Jose to the south, and part of Fremont to the east. The secondary
market extends to San Francisco to the north, Livermore to the East, and
Santa Cruz to the south.
Resident Market Segments
SECONDARY MARKETPRIMARY MARKET
Junior Museum
March 2024Final Report Page 31
1,802,000 1,892,000 2,101,000 2,133,000
2,834,000 2,952,000 3,228,000 3,246,000
4,636,000 4,844,000
5,329,000 5,379,000
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
2000 2010 2023 2028
Primary Market Secondary Market
Primary
Market: 39%
Secondary
Market: 61%
Available Markets Review
Resident Market –Population Density and Growth
Source: Census, Esri
•The Palo Alto JMZ draws attendance from both the primary and secondary resident markets.
•The primary residential market has a household population of slightly over 2.1 million.
•The total resident market includes a combined population of 5.3 million people in 2023.
•From 2023 to 2028 the household population is expected to stay rather constant, showing a compound annual growth rate of only 0.19%.
Resident Market Household Population 2023 Resident Market Household Population
March 2024Final Report Page 32
$153,800
$120,600
$72,400
$89,500
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$160,000
$180,000
Primary Market Secondary Market United States California
Available Markets Review
Resident Market –Income Characteristics
Attendance to cultural facilities is highly correlated with income and education
demographics.
Income Characteristics
•The primary resident market, which is the most important for children's museums,
has an extremely high median household income of $153,800, which is more than
double the United States average and approximately 65 percent greater than the
California average. It is also 25 percent higher than the secondary market.
•Moreover, the JMZ is located in one of the highest-earning census tracts, which
has an average median income which exceeds that of the primary market.
Source: ESRI
Median Household Income (2023)
Median Household Income By Census Tract (2023)
$0
$200,000
Site
March 2024Final Report Page 33
16%17%
28%
38%
22%20%
29%30%
20%19%
28%
33%35%
29%
25%
10%
28%26%
29%
17%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
<$50,000 $50,000 -$99,999 $100,000 -$199,999 $200,000+
Primary Market Secondary Market Total Resident Market United States California
Available Markets Review
Resident Market –Income Distribution
Income Distribution
•The primary market exhibits a higher level of income disparity relative to state and national averages and the secondary market. The primary market has a smaller share of
households earning less than $50,000 annually and significantly larger share of high-income households (over $100,000) than seen nationally.
•In the primary market, 38 percent of the population has a median household income of more than $200,000, compared to only 10 percent in the United States and 17 percent in
California. Still, 16 percent of households in the primary market have a median household income of less than $50,000.
Source: ESRI
March 2024Final Report Page 34
8%
68%
10%
61%
9%
63%
10%
45%
14%
46%
0%
10%
20%
30%
40%
50%
60%
70%
80%
No High School Degree College Degree
Primary Market Secondary Market Total Resident Market United States California
Available Markets Review
Resident Market –Educational Attainment
•Educational attainment is another indicator that is highly correlated with likelihood to attend cultural attractions.
•The primary market has higher levels of educational attainment compared to national and state averages, with 68 percent of the population over 25 having at least a
college degree in comparison to 45 percent nationally and 46 percent statewide. The secondary market has strong levels as well, though slightly lower with 61 percent of
the population over 25 having at least a college degree.
Source: ESRI
Educational Attainment (2023)
March 2024Final Report Page 35
11
.
9
%
19
.
0
%
21
.
0
%
20
.
4
%
21
.
0
%
6.6
%
10
.
2
%
17
.
7
%
23
.
1
%
19
.
9
%
22
.
3
%
6.8
%
10
.
9
%
18
.
2
%
22
.
3
%
20
.
1
%
21
.
8
%
6.7
%
11
.
8
%
19
.
1
%
20
.
4
%
18
.
3
%
23
.
2
%
7.2
%
12
.
3
%
19
.
7
%
22
.
2
%
18
.
3
%
21
.
0
%
6.4
%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
Under 10 (Gen Alpha)10-24 (Gen Z)25-39 (Millennial)40-54 (Gen X)55 to 74 (Baby Boomer)75+ (Silent/Greatest Generation)
Primary Market Secondary Market Total Resident Market United States California
•The age distribution of the resident market is similar to national trends, with some minor differences.
•The primary market has a slightly higher share of children under 10 than the secondary market and is similar to California and the United States averages.
Source: ESRI
2023 Age Profile by Generation (Approximate Brackets)
Available Markets Review
Resident Market –Age Demographics
March 2024Final Report Page 36
•The resident market varies considerably from national and state demographic characteristics. In the primary and secondary markets, no one race or ethnicity has a majority. The
Asian population accounts for the largest percentage, 41 percent of the primary resident market. The White population is 29 percent, Latino(x)/Hispanic population is 22 percent,
and Black / African American population is 2 percent of the primary resident market.
•The resident market in Palo Alto is more similar to California than the national benchmark. However, the resident market in Palo Alto has smaller White, Black/African American, and
Latino(x)/Hispanic populations, and a significantly larger Asian population than California.
•Given the large percentage of the primary market accounted for by Asian and Latino(x)/Hispanic residents, there should be consideration given to multilingual signage, outreach,
and marketing materials, in addition to cultural programming.
Source: ESRI
Available Markets Review
Resident Market –Race and Ethnicity
Race & Ethnicity (2023)
29%
2%0%
41%
1%1%4%
22%
31%
6%
0%
32%
1%1%
5%
24%
30%
5%
0%
35%
1%1%
5%
23%
57%
12%
1%
6%
0%1%4%
19%
33%
5%
0%
16%
0%1%4%
41%
0%
10%
20%
30%
40%
50%
60%
White Black/African American American Indian Asian Pacific Islander Other 2+ Races Latino(x)/Hispanic
Primary Market Secondary Market Total Resident Market United States California
March 2024Final Report Page 37
Available Markets Review
Summary
Source: ESRI, AECOM
Summary of Available Markets 2023 2024 2025 2026 2027 2028
Resident Market Household Population
Primary (0-30 minutes)2,101,000 2,107,400 2,113,700 2,120,100 2,126,600 2,133,000
Secondary (30-60 minutes)3,228,000 3,231,600 3,235,200 3,238,800 3,242,400 3,246,000
Total Resident Market 5,329,000 5,339,000 5,348,900 5,358,900 5,369,000 5,379,000
United States 325,140,000 326,168,500 327,200,200 328,235,200 329,273,500 330,315,000
California 38,957,000 39,009,300 39,061,600 39,114,000 39,166,500 39,219,000
•We quantified the size of each market segment available to the JMZ and then projected market size through 2028 based on historic growth patterns and reasonable
expectations.
•The total available market in 2023 is 5.3 million, with just over 2.1 million people in the primary resident market and 3.2 million people in the secondary resident market.
March 2024Final Report Page 38
Available Markets and Site Review
Summary of Market Characteristics
Key Takeaways
•The site is located in Rinconada Park in Palo Alto, in a location with many synergies with surrounding uses such as other cultural institutions, the library, popular swimming / aquatic facilities, and playgrounds.
•The site has strong local access but can be challenging for employees and visitors who live further away in the region due to traffic
congestion during peak times.
•The market is large, with a household population of 2.1 million within a 30-minute drive time and another 3.2 million people within a 30-to 60-minute drive time. The resident market is expected to remain fairly stable, with limited growth projected.
•The market in which JMZ is located is one of the highest income and well-educated markets in the United States. Still, there are
income disparities within the market, with households in the primary market with incomes below $50,000.
•The primary market (within a 30-minute drive time) has a large Asian and to Latino(x)/Hispanic population, with no one racial or ethnic group comprising a majority. Multilingual marketing and signage and cultural programming may be considered.
•The site is near Stanford University, which allows for programming and partnerships with the institution.
•There is a need for a comprehensive strategy to balance a sustainable business model with the importance of serving lower income, higher-need populations who may not have a tradition of attending museums. There has been significant research around this topic in the Bay Area among cultural institutions.
•Overall, the resident market demographics are exceptionally strong for cultural attraction attendance potential.
Benchmarking
March 2024Final Report Page 40
Local Competitive Environment:
Children and Family Attractions
National Benchmarking:
Children’s Museums
National Benchmarking:
Small Zoos
Attendance estimation relies on the evaluation of a number of factors, including benchmarking.
•Local competitive environment: Cultural attractions compete with a variety of leisure and cultural activities for resident and tourist leisure time and spending.The JMZ is in
one of the most competitive markets in the country for children and family attractions specifically.
•National benchmarking: In this section, we review comparable children’s museums and small zoos nationally, focusing on metrics such as annual attendance, resident market
penetration rates (evaluating how they perform in their own markets), the relationship of attendance to size of exhibit areas, and other key market characteristics. It should be
noted that as discussed previously, the JMZ is a unique facility. It is most similar in scale and operating characteristics to a children’s museum, but the mix of indoor and
outdoor space is opposite of most children’s museums, and the outdoor areas have animals, which have greater attraction power than typical outdoor play areas found in
children’s museums (and higher costs due to animal care requirements). On the other hand, zoos may have some comparative relevance due to the presence of animals, but
typically even small zoos are substantially larger than the JMZ footprint.
Benchmarking
Overview of Categories
March 2024Final Report Page 41
Children’s
Discovery Museum
Benchmarking
Local Children and Family Attractions
•AECOM analyzed performance factors for a wide array of attractions in the local
competitive market. The San Francisco Bay Area is well-served with a wide variety
of attractions, including many cultural attractions, historic landmarks, recreational
assets, sports events and facilities, commercial attractions, and pop-up, Instagram,
and immersive, IP-based temporary experiences.
•In addition, the Bay Area includes an exceptionally large number of family and
children’s attractions, including large science and natural history museums,
aquariums, zoos, smaller specialty attractions, amusement and theme parks, and
children's focused art programming.
•While the JMZ market demographics are very strong, the level of competition is
very high. The 30-minute and 60-minute drive time markets (primary and
secondary) overlap with markets for nearly 20 other children and family cultural
attractions. It is rare to see this level of competition, which affects the ability of JMZ
to capture market share.
Chabot Space & Science Center
Lawrence Hall of Science
Oakland Museum
Bay Area Discovery
Cal Academy
The Tech
Children’s Creativity
Museum
CuriOdyssey
Children’s Museum
Science Center
Happy Hollow
Zoo
Computer History Museum
JMZ
Children’s Natural History Museum
Exploratorium
Museum of Children’s Art
Children’s FairylandWalt Disney Family Museum
Randell Museum
SF Zoo
Legion of Honor
Other Family Attractions
March 2024Final Report Page 42
Benchmarking: Local Children's and Family Attractions
Annual Attendance
•Annual attendance ranges from over 30,000 to nearly 2 million for
Bay Area children and family attractions. For confidentiality
reasons, we masked the benchmark names in the adjacent chart.
•In 2023, attendance in the Bay Area was roughly 75% of 2019
levels, with just a few attractions exceeding pre-pandemic
attendance levels, despite there being a similar number of days
open in 2023 compared to 2019.
•The competitive environment can generally be divided into three
categories: 1) Large scale, major science centers, aquariums, and
zoos, all with attendance over 500,000 and a mix of resident and
tourist attendance and generally in San Francisco; 2) Cultural
attractions between 100,000 and 300,000 in attendance, which
generally include larger attractions outside of San Francisco or
smaller specialty museums in San Francisco, and 3) Smaller
specialty museums in suburban areas outside of San Francisco or
San Jose, all with attendance under 100,000.
•The Palo Alto JMZ would typically be defined in the third category
given its small scale, but due to its mix of children’s museum and
zoo exhibits, site, market conditions, and other factors, has
attendance towards the bottom of the medium category.
33,000
82,000
83,000
87,000
92,000
99,000
99,000
120,000
150,000
170,000
180,000
180,000
240,000
240,000
300,000
350,000
600,000
800,000
1,240,000
1,930,000
0 500,000 1,000,000 1,500,000 2,000,000 2,500,000
Benchmark
Benchmark
Benchmark
Benchmark
Benchmark
Benchmark
Benchmark
Palo Alto Junior Museum
Benchmark
Benchmark
Benchmark
Benchmark
Benchmark
Benchmark
Benchmark
Benchmark
Benchmark
Benchmark
Benchmark
Benchmark
Local Children’s and Family Attractions: Annual Attendance
(2023)
March 2024Final Report Page 43
Benchmarking: Local Children's and Family Attractions
Admission Price
Metric Pricing
JMZ $10
Average $23
Median $20
Minimum $5.00
Maximum $59.95
Pricing for Local Paid Attractions
•The adjacent chart shows the range of ticket prices for
attractions in the Bay Area. We have used the topline adult
admission price for purposes of comparison, since children’s
museums do not typically discount for children.
•JMZ has one of the lowest adult admission prices ($10) among
the paid attractions within the Bay Area.
•Some museums in the region have implemented dynamic
ticket pricing models or peak / off-peak pricing models.
$0.00
$0.00
$5.00
$10.00
$12.00
$15.00
$16.00
$16.00
$18.00
$18.00
$19.00
$19.50
$19.50
$20.00
$20.00
$20.00
$20.00
$20.00
$20.00
$24.00
$25.00
$27.00
$30.00
$31.00
$32.75
$39.95
$45.50
$59.95
$0.00 $10.00 $20.00 $30.00 $40.00 $50.00 $60.00 $70.00
Museum of Children's Art
Randall Museum
Petaluma Wildlife Museum
Palo Alto Junior Museum
Charles Schulz
Lindsay Wildlife Experience
Children's Fairyland
Sonoma County Children's Museum
Children’s Discovery Museum of San Jose
Happy Hollow Zoo
Oakland Museum
Computer History Museum
CuriOdyssey
Asian Art Museum
Bay Area Discovery Museum
Children's Creativity Museum
De Young
Lawrence Hall of Science
Legion of Honor
Chabot Space & Science Center
Walt Disney Family Museum
Tech Museum of Innovation
SFMOMA
SF Zoo
Aquarium of The Bay
The Exploratorium
California Academy of Sciences
Monterey Bay Aquarium
Local Attraction Adult Pricing (2023)
March 2024Final Report Page 44
Benchmarking: Local Children's and Family Attractions
Membership Pricing Multiplier
Metric Multiple
JMZ (Resident Price)3.13
Average 2.04
Median 1.80
Minimum 1.22
Maximum 3.13
Pricing for Local Paid Attractions
•The membership multiplier is a ratio that is typically used to
evaluate the price-value relationship between membership pricing
and admission pricing. It is defined as the number of times
required to visit to cover the cost of a membership for a given
number of people.
•We analyzed the membership multiplier for a family pass for
attractions within the Bay Area. Among those studied, JMZ had the
highest multiplier, which may provide additional support for a price
increase. Children's museums can have higher multipliers due to
the frequency of visitation. If there is greater demand than
capacity / supply for memberships, it would be reasonable to
maintain a higher multiplier.
•One strategy that has been used to increase access to lower
income communities has been to give away free memberships.
Evaluation of this strategy has found very positive outcomes.
0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50
Aquarium of The Bay
Monterey Bay Aquarium
The Exploratorium
SF Zoo
Asian Art Museum
SFMOMA
California Academy of Sciences
Tech Museum of Innovation
Charles Schulz Museum
Lindsay Wildlife Experience
Sonoma County Children's Museum
Oakland Museum
Chabot Space & Science Center
Lawrence Hall of Science
Curiodyssey
Walt Disney Family Museum
Children's Fairyland
Bay Area Discovery Museum
Children's Creativity Museum
Children’s Discovery Museum Of San Jose
De Young
Legion of Honor
Happy Hollow Zoo
Palo Alto Junior Museum
Membership Multiple (for a 4 person family)
March 2024Final Report Page 45
Benchmarking: Local Children's and Family Attractions
Resident Market Penetration Rates
0%
2%
4%
6%
8%
10%
12%
14%
0 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000
Resident Market Penetration Rate (2023)•The scatterplot on the right shows the relationship between
resident market size and resident market penetration rate (total
number of resident attendees as a percentage of resident
market size) for each of the local benchmarks.
•Resident market penetration rates among the entire set of
benchmarks range from 0.3 percent to 13 percent, with an average
of 3.2 percent and a median of 2.2 percent. JMZ’s resident market
penetration rate is very close to the median rate of 2.2 percent.
Average
Median
JMZ
March 2024Final Report Page 46
Benchmarking: Small Footprint Zoos
Scale of Facility and Market Size
•In addition to local attractions, AECOM analyzed small-size zoos, with a focus on zoos with the AZA designation. This analysis further revealed the unique nature of JMZ as there
are very few benchmarks that compare in terms of physical size and market size.
•Among the benchmarks analyzed, JMZ is the smallest and is situated in one of the larger markets. The chart on the bottom right shows household population within a 60-minute
drive time.
1.25
3
5
5
7
7
8
10
11
12
15
20
20
20
21
0.00 5.00 10.00 15.00 20.00 25.00
Palo Alto Junior Museum
CuriOdyssey
Boonshoft Museum of Discovery
Brandywine Zoo
Capron Park Zoo
Cosley Zoo
Tracy Aviary
Bergen County Zoological Park
Greenville Zoo
Queens Zoo
Happy Hollow Zoo
Palm Beach Zoo
Potter Park Zoological Gardens
Santa Ana Zoo
Virginia Living Museum
Zoo Developed Acres
0 5,000,000 10,000,000 15,000,000 20,000,000
Greenville Zoo
Potter Park Zoological Gardens
Virginia Living Museum
Boonshoft Museum of Discovery
Tracy Aviary
Palm Beach Zoo
Capron Park Zoo
Randall Museum
Chatahoochee Nature Center
Happy Hollow Zoo
Brandywine Zoo
Palo Alto Junior Museum
CuriOdyssey
Lindsay Wildlife Experience
Cosley Zoo
Orange County Zoo
Santa Ana Zoo
Bergen County Zoological Park
Queens Zoo
HH Population (60-Minute Drive Time)
0-30-Minute 30-60 Mins
March 2024Final Report Page 47
Benchmarking: Small Footprint Zoos
Annual Attendance
•Zoo attendance is affected by a variety of factors, including scale and quality of the visitor experience (including number of “charismatic animals”), site location, market size,
competitive environment, and other factors. While compared to the comps set, JMZ has relatively lower attendance, and on a per acre basis it is exponentially higher.
0 100,000 200,000 300,000 400,000
Brandywine Zoo
Capron Park Zoo
Palo Alto Junior Museum
CuriOdyssey
Cosley Zoo
Tracy Aviary
Boonshoft Museum of Discovery
Potter Park Zoological Gardens
Virginia Living Museum
Queens Zoo
Bergen County Zoological Park
Happy Hollow Zoo
Greenville Zoo
Palm Beach Zoo
Smaller Zoos Annual Attendance
0 20,000 40,000 60,000 80,000 100,000
Brandywine Zoo
Virginia Living Museum
Tracy Aviary
Potter Park Zoological Gardens
Palm Beach Zoo
Capron Park Zoo
Queens Zoo
Cosley Zoo
Bergen County Zoological Park
Happy Hollow Zoo
Greenville Zoo
CuriOdyssey
Boonshoft Museum of Discovery
Palo Alto Junior Museum
Attendance Per Acre
March 2024Final Report Page 48
0%
2%
4%
6%
8%
10%
12%
0 2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 12,000,000 14,000,000 16,000,000
Resident Market Penetration Rate (2023)
Benchmarking: Small Footprint Zoos
Resident Market Penetration Rate
•Larger markets can be harder to penetrate than smaller
markets, typically due to significantly higher levels of
competition, marketing costs required to reach a
broader audience, and other factors.
•As shown, zoos in smaller markets generally have higher
penetration rates and attractions in larger markets
generally exhibit lower penetration rates.
•Although many of these comps are larger in size, JMZ’s
penetration rate is near the median of the dataset.
Average
Median
JMZ
March 2024Final Report Page 49
Benchmarking: Small Footprint Zoos
Admission Price
•Pricing for the zoo benchmarks show a large range with some benchmarks having free admission and the highest comp charging $27.75 (Palm Beach Zoo).
•The average and median for the membership multiplier is 2.59 and 2.12, respectively.
$0 $5 $10 $15 $20 $25 $30
Randall Museum
Cosley Zoo (Resident Price)
Orange County Zoo
Bergen County Zoological Park (Resident Price)
Potter Park Zoological Gardens (Resident Price)
Brandywine Zoo
Queens Zoo
Palo Alto Junior Museum
Capron Park Zoo
Greenville Zoo
Tracy Aviary
Santa Ana Zoo
Boonshoft Museum of Discovery
Lindsay Wildlife Experience
Happy Hollow Zoo
Chatahoochee Nature Center
CuriOdyssey
Virginia Living Museum
Palm Beach Zoo
Adult Admission Price
0.00 1.00 2.00 3.00 4.00 5.00 6.00
Virginia Living Museum
Chatahoochee Nature Center
Lindsay Wildlife Experience
Palm Beach Zoo
Capron Park Zoo
Cosley Zoo
Greenville Zoo
Brandywine Zoo
Tracy Aviary
CuriOdyssey
Potter Park Zoological Gardens (Resident Price)
Boonshoft Museum of Discovery
Santa Ana Zoo
Palo Alto Junior Museum
Happy Hollow Zoo
Bergen County Zoological Park (Resident Price)
Queens Zoo
Membership Multiplier (for a 4 person family)
March 2024Final Report Page 50
Benchmarking: Children’s Museums
Physical Scale of Facility and Market Size
•Because zoos are much larger in size, JMZ has a scale more similar to children’s museums. AECOM looked for children's museums with similar indoor and outdoor space with a
similar market size. Because children’s museums have most of their attendance from a local market, AECOM used a 30-minute drive time as the basis for resident market size. In
AECOM’s total indoor and outdoor space calculation, AECOM discounted the outdoor space by 50% as a measure to equalize the benchmarks and to not overcount exhibit area.
•Similar to the zoo benchmarks, the JMZ is extremely unique relative to the benchmarks as JMZ has a small indoor space and the majority of its exhibit space is outdoor space.
0 5,000 10,000 15,000 20,000 25,000
Chesapeake Children's Museum
Children's Science Center
Wonder Works Children's Museum
Kidzu Children's Museum
The Children's Museum of Cleveland
WOW! Children's Museum
Bucks County Children's Museum
Exploration Station...a children's museum
Kidcity Children's Museum
Betty Brinn Children's Museum
Palo Alto Junior Museum
Discovery Place Kids-Huntersville
Pretend City Children's Museum
McKenna Children's Museum
Staten Island Children's Museum
Children's Museum of Manhattan
Interactive Neighborhood for Kids
Total Indoor & Outdoor Calculated Exhibit Area
0 2,000,000 4,000,000 6,000,000
Exploration Station...a children's museum
Bucks County Children's Museum
Interactive Neighborhood for Kids
McKenna Children's Museum
Kidzu Children's Museum
Chesapeake Children's Museum
Kidcity Children's Museum
WOW! Children's Museum
Discovery Place Kids-Huntersville
Staten Island Children's Museum
Betty Brinn Children's Museum
The Children's Museum of Cleveland
Children's Science Center
Palo Alto Junior Museum
Pretend City Children's Museum
Wonder Works Children's Museum
Children's Museum of Manhattan
HH Population (0-30 Mininute Drive Time)
March 2024Final Report Page 51
Benchmarking
Children’s Museums Attendance Per Exhibit Sf
•AECOM’s comparison of children’s museums indicate
that JMZ’s attendance per exhibit square foot is within a
reasonable range of the comps.
•There are some outliers that indicate likely overcrowded
and constrained capacity at the top of the chart.
•Generally, visitors per exhibit square foot for children’s
museums is between 6 and 12. This is a factor of
capacity and attraction / drawing power.
0.0 5.0 10.0 15.0 20.0 25.0
Chesapeake Children's Museum
Interactive Neighborhood for Kids
Schoolhouse Children's Museum & Learning Center
McKenna Children's Museum
Bucks County Children's Museum
Exploration Station...a children's museum
Children's Science Center
Palo Alto Junior Museum
Staten Island Children's Museum
Kidcity Children's Museum
Discovery Place Kids-Huntersville
Wonder Works Childrne's Museum
WOW! Children's Museum
Kidzu Children's Museum
The Children's Museum of Cleveland
Pretend City Children's Museum
Betty Brinn Children's Museum
Children's Museum of Manhattan
Children's Museums Attendance Per Exhibit Sf
Attendance Analysis and
Physical Planning
Parameters
March 2024Final Report Page 53
Attendance Analysis
Methodology Overview
As described in the beginning of this report, we use a penetration rate methodology to evaluate attendance potential. This is the “gold standard” for attendance estimation for
attractions of all types and is based on reviewing quantitative and qualitative data to understand impact on attendance. We use other key metrics to test reasonableness of the
projected attendance, including absolute attendance, comparison to local competitors, visitors per exhibit square foot, and others.
Key factors relevant to attendance analysis include:
•Historic operations
•Visitor experience
•Site characteristics
•Available markets
•Competitive environment
•Performance of comparable children's museums, local attractions, and small-scale zoos
•Professional judgment
Because of the unique nature of JMZ, we cross-examined penetration rates, attendance potential, visitors per square foot, visitors per acre, along with other metrics from children’s
museums, the local market, and small zoos to arrive at the attendance projection. A limiting factor for increased attendance is capacity, especially as it relates to indoor space. To
factor this in we tested physical planning under various assumptions.
Finally, we have reviewed two broader attendance trends that were likely impacting JMZ attendance since re-opening:
•Pandemic recovery trends
•The initial year surge effect
These two attendance dynamics are discussed in the following slides.
March 2024Final Report Page 54
AECOM's tracking of attendance within the industry sheds light on the recovery
trajectory following the onset of the Covid-19 pandemic. Notably, in the first full year
of operations for JMZ after its expansion, attendance industry-wide was
approximately 75% of pre-pandemic levels (2019), with Bay Area attractions at 65%
of 2019 levels. It's worth noting that outdoor attractions generally have had a faster
recovery than indoor ones, though they were still impacted by capacity restrictions
in 2021 and staff shortages in early 2022 due to the Omicron surge.
By 2023, the industry-wide attendance rebounded to 95%, with Bay Area attractions
reaching 80% of pre-pandemic levels. This is likely due to lower tourism levels
impacting some of the larger cultural attractions in San Francisco. These figures
underscore the pandemic's impact on attendance, a factor likely influencing JMZ's
numbers, given that it opened during a time of pandemic constraints and safety
protocols.
Attendance Analysis
Pandemic Recovery Curve for Cultural Attractions
Cultural Attractions: Attendance as a Percent of 2019
20%
55%
75%
95%
19%
37%
65%
80%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2020 2021 2022 2023
National Attendance Covid Recovery Bay Area Recovery
*JMZ opens
Nov 2021
March 2024Final Report Page 55
Attendance Analysis
Initial Year Surge and Attendance Erosion Curve
While the pandemic recovery curve would imply that there is greater attendance potential for JMZ coming out of the pandemic, there is another attendance trajectory for
attractions following significant investments. Typically, upon opening there is an initial surge where attendance peaks 10 to 30 percent above stabilized year. This is particularly true
in resident market-based attractions, as the tourist market can take longer to react to a new investment. It usually takes three years to reach stabilized attendance. In the absence of
the pandemic, we would expect attendance to decline over the first three years post-opening and then stabilize.
Since JMZ opened during the pandemic, its initial surge was diminished due to pandemic restrictions (including self-imposed restrictions for visitor comfort) related to both supply /
capacity and demand / audience hesitancy.
With only 2 full years of data, it remains uncertain if the full extent of this surge or potential erosion is yet to be realized. It is likely another full year of data is needed to draw some
meaningful trends and conclusions. Nevertheless, AECOM factored in the pandemic recovery and initial year surge implications within this attendance analysis.
Attendance Initial Year Surge and Natural Erosion
March 2024Final Report Page 56
Attendance Analysis
Attendance Projection
•AECOM has developed an attendance analysis for 2026. This analysis presents attendance scenarios: 1) Existing or base case, for comparison purposes and based on 2023;
2) The “do nothing” scenario, which assumes that no changes are made to operations or physical spaces; 3) An estimate of attendance with operational adjustments,
including the addition of staff capacity; and 4) Attendance with operational adjustments and improvements to the physical facility to expand indoor capacity. The attendance
analysis relies on several assumptions, including the scale of the actions taken, economic conditions, the stability of markets, and sufficient funding for operations, including
marketing, programming, and maintenance.
•If no actions are taken, we anticipate attendance to decline over time. With changes, AECOM estimates a range from a medium estimate of 127,000 to a high estimate of
138,000. The mid-range scenario reflects operational adjustments, including rightsizing staffing to ensure the quality of the visitor experience. The high end of the range
reflects a scenario where there is increased indoor capacity and new investments.
FY: 115,400
Calendar Year: ~118,000
104,000
127,000 138,000
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
Base Case (FY)Decline (10%)Medium High
Attendance Estimate Scenarios
*Attendance assuming no
changes occur.
*Attendance assuming
operational adjustments.
*Attendance assuming
capital investments.
Penetration Rate Attendance
Market Segment 2026 Base Mid High Base Mid High
30-Minute Market Segment 2,120,100 5.61%6.00%6.50%118,000 127,000 138,000
March 2024Final Report Page 57
Physical Planning Parameters
Design Day Capacity & Exhibit Area
%Base Medium High
Estimated Annual Attendance 118,000 127,000 138,000
Peak Month Attendance (% of total)14.00%16,660 17,780 19,320
Weekly Attendance in Peak Month (% of peak month)22.50%3,749 4,001 4,347
Design Day Attendance (% of week)20.00%750 800 869
Peak In-Attraction Attendance (% of design day)40.00%300 320 348
Assumed Exhibit Sq. Ft. per Person 40 40 40
Minimum Exhibit Sq. Ft. Required 12,000 12,800 13,900
Capacity Analysis
Source: AECOM
The amount of exhibit area needs to be sufficient to accommodate attendance
potential. Insufficient exhibit or visitor experience areas, low throughput
experiences, and/or suboptimal visitor area design can all contribute to a
constrained attendance scenario, in which a cultural attraction can not achieve
its attendance potential due to capacity limitations.
“Design Day” Analysis
•“Design day” or average high attendance day is used as a key determinant of
capacity requirements needed to adequately handle expected crowd levels.
•For all types of visitor attractions, it is neither necessary nor economically
desirable to size facilities for absolute peak periods of on-site patronage, as
some degree of crowding on special holidays or other major attendance
times will be accepted by the visiting public.
•However, the facility must comfortably accommodate peak crowd loads on a
normal high day of attendance, or lasting negative effects on visitation
performance will result.
The design day analysis suggest that JMZ is operating close to a constrained
attendance scenario. While more detailed analysis related to arrival and
departure patterns would help inform this further, the JMZ is likely too crowded
on peak days, particularly given the mix of indoor and outdoor exhibits. Generally
speaking, there can be some gains in visitor capacity made through operational
adjustments, usually up to 10 percent in additional attendance. Beyond this,
physical changes must be made.
Space Square Footage % Allocated
Zoo 12,990 sf 50%
California Dinosaur Garden 4,470 sf 80%
Indoor Museum 3,400 sf 100%
Total 20,860 sf
Calculated Outdoor Space 10,100 sf
Calculated Indoor Space 3,400 sf
Calculated Exhibit Area for Analysis
Purposes 13,500 sf
Exhibit Area Calculation for Analysis Purposes
Financial Analysis
March 2024Final Report Page 59
Financial Analysis
Business and Revenue Model for Cultural Attractions
Earned Income
•Admission fees
•Program fees
•Retail spending
•F&B spending
•Facility rentals/ birthday parties
•Licensing
Hybrid / Other
•Endowment
•Membership
Contributed Income
•Public funding
•Foundation grants
•Individual contributions
•Corporate donations
•Museums, zoos, and cultural attractions of all types constantly balance mission-driven activities versus the need to generate earned revenue. They fill multiple roles as educational
institutions, community assets, and visitor attractions. Cultural attractions generate two types of revenue and rely on a mix of these revenue streams. Museums that are traditional,
static experiences with large research or conservation departments tend to have a higher percentage of contributed income, while more entertaining experiences focused more on
the visitor attraction component of their operations will have higher ratios of earned income. Most attractions similar to JMZ average an earned revenue of 50 to 75 percent.
•In this section, we analyze each category of earned revenue and suggest opportunities for revenue enhancement. We also review operating costs and recommend categories which
may need to be adjusted. Finally, we have developed an illustrative pro forma for the medium attendance scenario, which assumes some operational adjustments at the JMZ.
•In this analysis, all numbers are in 2024 constant dollars.
March 2024Final Report Page 60
Financial Analysis
Earned Revenue Categories for Cultural Attractions
Admissions
•Often between 50 and 80 percent of
total earned revenue
•Determined by attendance, admission
price, and yield
•Key factors include mix of residents and tourists, museum type, pricing at
other local attractions, memberships, etc.
In-Museum Visitor Expenditures
•Includes visitor spending on retail, food
and beverage, programs, upcharges,
etc.
•Generally has much lower margins and
is based on length of stay, quality and
scale of offerings, and other factors
•Volume of attendance can be required to justify costs
Facility Generated Income
•Birthday parties, facility rentals,
tenants, filming fees
•Ancillary source of revenue that can be
independent of visitors and therefore
diversify earned revenue
•Birthday parties and rentals can compete with internal programming and events and require sufficient staff and marketing budgets
Business to Business
•Consulting for other museums,
traveling exhibits, curriculum
development, research, royalties
•Typically requires investment first into
new business line
•Not typical for smaller museums
Earned revenue at cultural attractions generally falls into one of four major categories, described below.
March 2024Final Report Page 61
Financial Analysis
Earned Revenue Estimates: Admissions Revenue
Estimate: Admissions revenue for JMZ could grow from
$917,000 to slightly over $1.3 million constant 2024 dollars
based upon a price increase to $14.
Peak pricing: We would also recommend exploring peak
pricing to allow for increases to admission pricing at JMZ
which will also help balance capacity issues throughout the
day.
Quality of the visitor experience: Finally, this attendance
scenario and price increase assumes that the quality of the
visitor experience is maintained. This will require some
changes to staffing, particularly in the animal care and guest
services areas.
Line Items Base (FY23)Medium
Estimated Annual Attendance 115,400 127,000
Admission Price $10 $14
Admission Yield 79%75%
Total Admission Revenue $917,000 $1,334,000
Admissions revenue is typically the largest single category of earned revenue for any museum or cultural
attraction, typically accounting for at least half of all earned revenue, although this can range from 30 to 80
percent. Revenue generated from admissions is calculated using three major factors: attendance, topline adult
admission price and admission yield. Below we have listed key assumptions for JMZ.
•Attendance: Attendance was estimated based upon the market analysis. A range of attendance was
projected for a stabilized year of operations (2026). We used the medium estimate of 127,000 visitors to
estimate admissions revenue.
•Admission price. The topline admission price is based upon market characteristics, including local market
income and demographic characteristics, prices at comparable museums, small scale zoos, visitor
destinations, the nature of the visitor experience relative to others in the market, estimated length of stay,
and other mission related considerations. The current adult admission price for JMZ is $10, which is near the
lower end of pricing for attractions in the Bay Area, including smaller specialty museums outside of San
Francisco. Based upon a review of pricing at local attractions, we recommend that the price be increased to
$14 or $15. It should be noted that there is also a relationship between price and length of stay, and a price
of $14 or $15 would be consistent with hourly rates for entertainment. The price could be increased over two
years. Ideally, JMZ will offer sales online using a more industry standard ticketing system and have staffing to
accommodate sales at the door. This analysis does not reflect any dynamic or peak pricing. Dynamic pricing
can be complicated and expensive to implement so AECOM recommends considering a peak pricing model
by either time of day, year, or day of week.
•Admissions yield. The admissions yield is a percentage that reflects the average admissions fee per capita
divided by the topline adult admission price. Mission driven objectives, such as discounting to allow access
for surrounding neighborhoods or lower income communities through special programs, and school groups
can also affect the yield. Currently, the admission yield for JMZ is just below 80 percent. We decreased this
to 75 percent for our projected scenario in 2026.
March 2024Final Report Page 62
Illustrative Financial Analysis
Earned Revenue Estimates: Membership Revenue
•Memberships for museums historically have been considered the first step in donor cultivation. However,
more recently and especially for children’s museums, membership tends to function more like annual
passes than charitable donations and are treated as earned revenue.
•Membership revenue is influenced by several factors, including the mix of residents versus tourists, local
market size, characteristics such as household income and age profile, museum type, value proposition,
number, type, and frequency of temporary exhibits, as well as member benefits.
•JMZ has a membership to attendees ratio of approximately 2.3%, which is within industry standards.
•Average revenue per membership is between $135 and $140.
•The average membership price multiplier across the industry falls between 2.4 and 2.5, and this should be
linked to the admission price. Children’s museums tend to have a higher multiplier due to increased visit
frequency. Therefore, AECOM projects a multiplier of 3 for household memberships to be reasonable for
JMZ. Using a multiplier of 3 and considering a membership for a family of four, the projected average
membership revenue price is $168.
•We also analyzed membership attendance as a percentage of overall attendance, and JMZ is in line with
comps, with the average ranging from 30 to 35 percent.
*JMZ’s overall multiplier is 3.45 which is high for the industry and due
to the low admission price of $10.
Line Items Base (FY23)Medium
Estimated Annual Attendance 115,400 127,000
Ratio of Members to Attendees 2.3%2.3%
Average Membership Revenue $135-$140 $168
Multiplier (assumes a 4-person
family)3.45*3.0
Total Membership Revenue $316,000 $487,000
Membership revenue attributable to JMZ is estimated to grow
from $316,000 to $487,000 in constant 2024 dollars.
Increased staff capacity to allow for members hours or
premium member experiences (even if they have an upcharge)
should be incorporated.
The recommended multiplier for a family membership is 3.0,
which is comparable to comps.
March 2024Final Report Page 63
Financial Analysis
Earned Revenue Estimates: Birthday Parties and Facility Rentals
Birthday party and facility rental income has potential to
increase from $76,000 to $134,000, reflecting an increase in
the number of events.
Additional staff capacity will need to be added to manage the
marketing, booking, and client service / planning functions as
well as to facilitate the birthday parties.
•The revenue potential for birthday parties and facility rentals depends on several factors: the size of the
space, the extent to which the space is dedicated event space and can be operated when other operations
are open, as well as other factors such as marketing, staff capacity, local market characteristics, and space
capacity.
•For children’s museums, facility rentals mainly consist of birthday parties and are not ideal venues for other
types of rentals. However, the outdoor areas and zoo exhibits provide additional potential beyond what is
typical for most children’s museums. Approximately 70 percent of JMZ’s event revenue is from birthday
parties, with 30 percent from other facility rentals.
•We examined the history of birthday parties and corporate events at JMZ, including the number, type,
revenue, and revenue per event by category. Key findings and considerations for our analysis are as
follows:
•The local market characteristics are highly favorable, with demand for more birthday parties. In fact,
our financial analysis assumes that JMZ can double the amount of birthday parties based upon
industry standards and market research. Slightly shorter birthday party duration may also be possible
based upon local benchmarking.
•JMZ can utilize its existing classrooms for birthday parties, so has sufficient space. However,
sometimes classrooms are used for temporary or pop-up exhibits to increase indoor capacity, so if
birthday parties increase, there may be tradeoffs between general admissions capacity versus
birthday party capacity.
•Staff capacity is a significant limiting factor. In some cases, it has been reported that it can take up to
two weeks to respond to a birthday party request due to insufficient staffing, and at one point,
requests were put on hold. A robust birthday party program requires dedicated staff time, and
currently, one person handles admissions, memberships, guest services, and birthday parties.
•The pricing for birthday parties is within a reasonable range given comparable pricing locally.
Line Items Base (FY23)Medium
Birthday Parties
Total Admission Revenue $917,000 $1,300,000
Birthday Parties % of Admission Rev 5.58%7.52%
Number of Birthday Parties 85 165
Birthday Party Revenue $51,000 $99,000
Other Events
Number of Events 7 10
Revenue Per Event $3,590 $3,500
Other Event Revenue $25,100 $35,000
Total Facility Rental Revenue $76,000 $134,000
March 2024Final Report Page 64
Financial Analysis
Earned Revenue Estimates: Programs and Other Revenue Generators
Museums generate revenue from a wide variety of upcharges, user fees, and program fees, in addition to admission
fees. JMZ's current operations include several revenue generators: camps, classes, programming, education
outreach, and others.
•Summer Camps: JMZ has been extremely successful in its camp offerings, running around 60 per year with an
average attendance of 15 people each. These camps sell out quickly and generate nearly half of all programming
revenue. However, factors such as limited space and staff capacity constrain the expansion of camp offerings.
Therefore, our financial model assumes a similar camp offering to what has historically been achieved.
•Education: Similar to camps, education has been very successful for JMZ, serving around 60 schools and
reaching 20,000 students annually. Price increases are limited by schools' set budgets, and expanding education
beyond current locations would require additional time commitments from staff, particularly for driving. Thus, our
financial model assumes a similar offering to what has historically been achieved. This category accounts for one-
third of program revenue.
•Interactive Programming and Science Classes: The remainder of programming falls within this category,
including paid experiences and classes at the museum. Without expansion in staff, we would not anticipate the
ability to increase revenue in this category.
•Food and Beverage and Retail: While JMZ currently lacks food and beverage offerings, we recommend
considering a simple coffee cart approach or using pop-up vendors, such as an ice cream truck in the summer, to
enhance the visitor experience, sustain attendance, and improve the facilities amenities. Food and beverage is not
typically a signficiant source of revenue for most museums due to the business model structure. Food and
beverage can enhance the guest experience, so we do recommend exploring partnerships. We do not
recommend incorporating retail, unless tied to a specific exhibit or experience. In publicly operated attractions, it
is not uncommon for the nonprofit partner to take some responsibility for these types of partnerships.
•Additional upcharges typical for cultural attractions include seasonal or holiday events, themed events with food
and beverages, festivals, or specialty evening events. Premium programming, which could include more
immersive or exclusive visitor experiences, as well as classic upcharges like photos or audio guides.
We have projected that income from programs and
upcharges will remain relatively consistent.
There is additional demand for summer camps and likely
all types of educational and public programs, but
increased space and staff will be required. Given the
priority of funding animal care and guest services
positions, we have not assumed an increase in revenue
from JMZ programming.
Finally, there are opportunities for increased upcharges
for unique programs, festivals, seasonal events, or more
immersive visitor experiences. This also requires
additional staff.
Line Items Base (FY23)Medium
Summer Camps $345,000 $345,000
Education Outreach $225,000 $225,000
Interactive Programming and
Science Classes $135,000 $135,000
Total Programming Revenue $704,000 $704,000
March 2024Final Report Page 65
Financial Analysis
Operating Costs: Overall Approach
Detailed Approach by Category
•Estimate changes in operating costs by category based upon a mix of
industry standards, the proposed
visitor experience, and historic operations.
•Develop planning level assumptions for each major category.
Macro-level Strategic Estimates
•Utilize high-level, strategic operating cost estimates, including earned
revenue ratios, percentage of labor
to overall cost, cost per visitor, and cost per square foot where
appropriate.
Reconciliation
•Compare results and key metrics from “top down” and “bottom up”
approaches with comparable
facilities and industry averages to confirm reasonableness and develop
final estimates.
•We have developed illustrative operating costs based upon the projected revenue enhancements and attendance scenario. We have utilized a mix of industry benchmarks and
ratios, information about the visitor experience, reasonable assumptions related to levels of service, historic operations analysis, and other factors when developing these
estimates.
•The operating costs are not based on detailed operational planning. Furthermore, the financials do not reflect some additional costs associated with running this facility. These
costs, referred to as "hidden costs," are assumed by the City and can include line items such as utilities, groundskeeping, finance and accounting, etc.
•Similar to revenue, amounts are shown in 2024 constant dollars.
March 2024Final Report Page 66
Financial Analysis
Operating Costs: Payroll Costs
Analysis and recommendations for major budget categories are summarized on the next two slides.
Staffing and Payroll Costs
•Insufficient staff capacity in animal care and guest services: Payroll costs for JMZ account for the vast majority of the operating budget that is tracked through the City’s
accounting system. We have analyzed the organizational chart and mix of full-time and part-time staff. As a City-operated facility, JMZ full-time salaries have a higher burden
percentage than nonprofit managed cultural attractions. While there are a few areas which could benefit from increased staffing, there are two priority areas, animal care and guest
services, which are critically under capacity and can have a negative impact on the guest experience, eventually leading to declines in attendance. Other areas such as education
could also benefit from increased staff support.
•Full-time positions: We understand the tremendous cost associated with full-time positions in a public agency setting, and in any attraction, there is certainly a role for part-time
employees. However, there are positions that would typically be full-time positions for seasoned professionals that are structured as part-time positions at the JMZ, which has
created numerous operational challenges. These challenges include: 1) Inefficiencies in management due to the time required to onboard and supervise a greater number of staff
positions (including a lengthy hiring process to replace employees), 2) Difficulty hiring experienced professionals, who may look instead for full-time positions; 3) Staff retention; and
4) Staff burnout, particularly from specialized animal care staff who need to assemble two or more part-time jobs and travel long commutes across the Bay Area.
•Recommendation: We have developed a illustrative payroll budget that includes an extra 2 FTE for guest services, adjusts animal care specialists from 8 part-time employees to 4
part-time employees and 4 full-time employees. This will help bolster the ability to better serve guests, ensure proper levels of animal care, and build the foundation for accreditation
from an organization such as the Association of Zoos and Aquariums (AZA). We have also added a part-time (though this may be considered for full-time) business / revenue manager.
These are the highest priorities for staffing in the short term that have a direct impact on the largest categories of earned revenue – admission and membership.
•Role of Volunteers: While volunteers can be part of the operational plan, they should not be relied upon to consistently deliver a quality visitor experience, and their most beneficial
role is expected to be in the guest services department. Volunteers also require a staff member to coordinate, a position that was vacant for close to a year.
•Hybrid staffing model. There are many examples of publicly owned and operated cultural attractions that are supported by nonprofit organizations who employ staff to cover certain
operational areas, typically around earned revenue generation. This is something to consider in the longer term.
Line Items Base (FY23)Medium
Total Payroll Cost $2,680,000 $3,240,000
The total payroll cost is expected to increase
from $2.7M to just under $3.24M (in
constant 2024 dollars).
March 2024Final Report Page 67
Financial Analysis
Operating Costs: Key Assumptions
Other Cost Assumptions
We have evaluated other cost categories and made some refinements based upon a combination of existing
programming, visitor levels, industry standards, level of activity, and other relevant factors. Similar to payroll
costs, these operating expenses are meant to indicate the general level of operating support required and do
not reflect a detailed accounting level budget.
We have kept costs as similar as possible to existing City cost categories, although we would also recommend
that the categories be better aligned with cultural attraction cost categories to allow for more streamlined
analysis in the future.
•Exhibits: Exhibits exist in the cost center description of building materials. We have generally kept the
exhibits budget, assuming that the Friends of the JMZ continues to play a role in the required reinvestment
into maintaining and creating new visitor experiences periodically. Without reinvestment, attendance will
decline. We also assume that the regular maintenance of exhibits is covered in other line items.
•Supplies & Services: The supplies and services includes the cost center descriptions of recreation and
housekeeping, other contracts, and non-capital tools. Our model assumes the ratio of supplies and
services to total operating cost remains relatively constant around 8 percent of operating costs.
•Administrative: Administrative costs are 1.2 percent of total operating costs, consistent with historical
operations.
•Marketing: We have developed a marketing budget based upon industry standards, estimating 7% of
earned revenue, resulting in a budget of $185,000.
•Programming: An additional budget of $50,000 has been included for programming, which can include a
broad array of events, seasonal activities, festivals, and other programming that may allow for upcharge
experiences.
Line Items Base (FY23)Medium
Total Payroll Cost $2,700,000 $3,100,000
Exhibits $52,200 $60,000
Supplies & Services $234,900 $312,000
Administrative $36,500 $47,000
Marketing $95,600 $185,000
Programs and Events -$50,000
Total Other Costs $419,000 $654,000
Total Operating Costs 3,100,000 3,900,000
Overall operating costs allocated to JMZ are expected to
increase from $3.1 million to $3.9 million (in constant 2024
dollars).
March 2024Final Report Page 68
Financial Analysis
Stabilized Year Operating Pro Forma
We have prepared an illustrative financial analysis for 2026. It should be noted that this budget uses a
combination of specific market factors, industry standards, and professional judgment to determine reasonable
revenues and expenses for overall planning purposes. Detailed budgeting will be required, particularly for
specific staff positions. We recommend that the City of Palo Alto refine its cost centers and categories to be
more in line with industry standards for cultural attractions to allow for efficient and streamlined evaluation of
revenues and costs. Highlights of the financial analysis are as follows:
•Earned Revenues: With an investment in operations to ensure the quality of the visitor experience, earned
revenues can increase to nearly $2.7 million, with admission revenue comprising 50% of earned revenues.
Other key categories include membership, facility rentals, and programs and upcharges. This increase is
primarily driven by adjusting admission fees to market rate standards, which will require an investment in
expanding staff capacity.
•Operating Budget: We estimate operating costs to be approximately $3.9 million.
•Earned Income Ratio and Cost Recovery: The resulting earned income ratio is 68 percent, slightly higher
than the current ratio and within industry standards for children’s museums. The estimated cost recovery
percentage is 73 percent in the medium scenario, relative to 70 percent now.
•Friends Contribution and Other Contributed Income: The Friends Group has historically contributed
around $100,000 for science education and outreach to expand access to the JMZ, focusing most of their
fundraising efforts on major capital projects. An additional $75,000 has been allocated for a new community
outreach position. Their overall contribution is currently less than 5 percent of total operating costs. There
are examples of cultural attractions regionally and nationally with nonprofit partners that are more involved in
operational funding. There is an opportunity to diversify and increase non-City of Palo Alto contributed
income, though it would require a strategic shift in funding priorities and increasing capacity of the Friends of
the JMZ organization to raise more money on an annual basis. Most cultural attractions benefit on an
operational basis from a wide variety of contributed income, including individual donors, corporation
donations, foundation grants, and public agency funding. Some nonprofit partners also hire staff for key
revenue stream operational areas.
Financial Analysis for Stabilized Operating Year
in constant 2024 dollars
Category Base
(FY23)
Medium
Scenario
Estimated Annual Attendance 115,400 127,000
Earned Revenue
Admissions $917,000 $1,334,000
Membership $361,000 $487,000
Facility Rentals $76,000 $134,000
Programs $704,000 $704,000
Total Earned Revenue $2,060,000 $2,659,000
Operating Costs
Payroll $2,680,000 $3,240,000
Exhibits $52,200 $60,000
Supplies & Services $234,900 $312,000
Administrative $36,500 $47,000
Marketing $95,600 $185,000
Programs and Events $0 $50,000
Total Operating Costs $3,100,000 $3,890,000
Friends of the JMZ / Contributed
Income (science education access)$100,000 $175,000
Net Amount Requiring City of Palo
Alto Funds $942,000 $1,056,000
Percent Earned Income 66%68%
Cost Recovery Ratio 70%73%
March 2024Final Report Page 69
Financial Analysis
JMZ Attendance and Financial Potential
The Palo Alto JMZ is operating within industry standards and has demonstrated relatively strong performance based upon key operating ratios and metrics for cultural attractions and
in consideration of its scale, competitive environment, location, visitor experience, and other market factors.
However, there are some staff capacity issues that must be addressed in order to maintain attendance and earned revenue. Without addressing these areas, the quality of the visitor
experience may decline, leading to decreases in attendance. As a facility that is experiencing capacity constraints on peak days due to market demand relative to space, staff capacity
to proactively manage operations is essential.
There are opportunities for increased attendance and earned revenue, which will require some investment in operations and staff capacity.
Category Pre-Expansion
(FY19)Historical Financials
Post-Expansion
(FY23)Historical
Financials
Future Scenario
(medium)Illustrative Budget
Attendance -115,400 127,000
Earned Revenue $615,000 $2,060,000 $2,660,000
Operating Expenses $1,950,000 $3,100,000 $3,890,000
Friends of the JMZ & Other Contributed
Income (science education access)$100,000 $100,000 $175,000
Net Amount Requiring City of Palo
Alto Funds $1,235,000 $942,000 $1,056,000
Earned Revenue Ratio 32%66%68%
Cost Recovery 37%70%73%
Earned
Income, 68%
Friends of the
JMZ and Other
Contributed
Income, 4%
Funded By City
of Palo Alto,
27%
Revenue Distribution Future Scenario (Medium)
March 2024Final Report Page 70
Financial Analysis
JMZ Operating Plan Review
•We compared the financial projections developed as
part of this business plan to those from the “Revisiting
The Operating Plan for The JMZ FY 2021-2022” FCM
meeting on 5/4/21, which shows operating scenarios
for the new JMZ.
•As measured by net impact, our scenario is similar to
Scenario 3 of the city operating plan.
Assumptions in City of Palo Alto
Original Budget Planning for JMZ
•Annual visitation is 185k
•25% of visitors are members
•10% of ticket sales are discounted
•Discounted ticket increased to $3
•Increase in class/camp prices
Category Base (FY19)Historical Financials Base (FY23)Historical Financials Medium ScenarioIllustrative Budget
Attendance -115,400 127,000
Earned Revenue $615,000 $2,060,000 $2,660,000
Operating Expenses $1,950,000 $3,100,000 $3,890,000
Friends of the JMZ & Other
Contributed Income ($100,000 $100,000 $175,000
Net Amount Requiring City of Palo
Alto Funds 1,235,000 $942,000 $1,056,000
Earned Revenue Ratio 32%66%68%
Cost Recovery 37%70%73%
Operational Analysis
March 2024Final Report Page 72
Operational Analysis
Staffing Issues
•Implications for operations and visitor experience: The Palo Alto JMZ is understaffed post-expansion in key categories that relate to attendance and financial potential. While
there are multiple operational areas that could benefit from additional staff, the highest priority areas include guest services and animal care. In addition, the education program will
likely require additional support to continue serving the community. The limitations on staff capacity in guest services and animal care can negatively affect the guest experience,
ultimately leading to declines in attendance and revenue. In addition, there are negative impacts on staff morale and possible safety issues. Animal care is important for two
reasons: 1) Animal care in cultural attractions with live animals has become an issue of paramount importance nationally, with great public attention paid to this issue; and
2) Appropriate staffing in this category creates unique and valued visitor experiences. Animals require specialized care that takes expertise and time. With so few staff, there is
limited time for zookeepers to interact with the public, which impacts the visitor’s overall experience at JMZ and limits the addition of future animals. The current number of animals
is estimated to be at approximately half of full capacity. Increased staff capacity will also be required to expand revenue in the category of birthday parties, camps, and other public
programming. A guest services floater position could help with front desk and facilitated experiences that will lure visitors out of the main exhibit area.
•Backlog for positions within the City: There have been lengthy delays in filling approved positions for multiple reasons, including post-pandemic staffing and hiring challenges and
a backlog in the City’s HR process. While a lengthy hiring process is not unusual for public agencies, staffing shortages at cultural attractions can have negative impacts on visitor
experience, ultimately causing a decline in attendance.
•Volunteers: JMZ’s volunteer coordinator left a year ago, and without this position, JMZ lacks the ability to build and maintain a strong volunteer corp that can support paid staff.
This in turn impacts JMZ’s ability to interact with the community and visitors. Additionally, while volunteers are helpful, they should not be relied upon to consistently deliver a visitor
experience.
•Challenges with part-time staffing model: The prevalence of part-time staff results from a well-intentioned strategy to maximize the number of positions that can be funded within
the allocated budget, given the higher cost burden of full-time positions. Approximately 15 percent of JMZ’s staff is full-time, with the remaining 85 percent part-time (JMZ has
approximately 8 full-time and 45 part-time staff). However, this has made it challenging to hire seasoned professionals who can be fully dedicated to the JMZ and has contributed
to high level of turnover and burnout. It also creates inefficiencies in management, requiring a greater than typical amount of time spent on hiring and HR processes. Particularly for
animal care positions which rely on specialists, part-time staff have multiple jobs with long commutes in order to secure adequate pay and benefits. Staff have worked beyond their
maximum number of hours in the short term to meet the demands of the new facility, but this will not be sustainable in the long term. Guest services is another severely
understaffed area, which will directly result in decreased attendance and revenues if not addressed.
Staffing Visitor Experience Admissions / Ticketing Financial Management
and Revenue
Generation
Friends of the JMZ
March 2024Final Report Page 73
Operational Analysis
Visitor Experience
•Capacity constraints: JMZ’s indoor space is small and can regularly reach capacity limitations. This is particularly true on
rainy days and peak days. There is a need to increase visitor dwell time in outdoor spaces to relieve crowding indoors.
Meanwhile, there is an opportunity to increase indoor exhibit area through continued use of pop-up exhibits and science
activities and programming in the classrooms when they are not used for birthday parties or other educational programs.
Capacity constrained attractions require proactive management and operational measures to avoid guest discontent, which
generally requires higher levels of staffing. As noted, guest services is an area of operations that is severely understaffed.
•Crowding and entry sequence: At the front door, lines of visitors can accumulate. The session-based ticketing model
combined with the entry sequence creates strong peaks in the arrival curve. JMZ lacks sufficient staff to adequately manage
and provide customer service to visitors.
•Unique experiences and programming: Programming and unique experiences with upcharges have become more
significant drivers of attendance and earned revenue for many cultural attractions. With increased staff capacity, there is an
opportunity to increase earned revenue from these categories. This is particularly true given the wide range of exhibit types
and visitor experiences offered at the JMZ.
•Reinvestment: Without reinvestment in exhibits and programs, attendance will decline. It is a best practice to plan
strategically for future capital investments. The Friends of the JMZ has provided substantial support for continued
reinvestment. Programming and special exhibits can also help stave off declines in attendance that occur as the result of
natural attendance erosion.
Staffing Visitor Experience Admissions / Ticketing Financial Management
and Revenue
Generation
Friends of the JMZ
March 2024Final Report Page 74
Operational Analysis
Admissions and Ticketing
•Attendance: Attendance was around 115,400 in FY23. With investment into key operational positions, we believe that there is some opportunity for increased attendance up to
127,000. With investments into additional indoor exhibit area, attendance potential would be even higher. Note that without expanding staff capacity, attendance and/or market
share will likely erode over time.
•Admission fee: The new JMZ is charging an admission fee of $10 for the first time after decades of being free. The $10 admission fee is under market rate. Based on a review of
pricing at local attractions and other benchmarks, we recommend an increase to $14 (in 2024 dollars), which should continue to increase periodically. In addition, peak pricing
should be considered based upon a more detailed analysis of arrival and departure patterns and hourly, daily, weekly, and monthly attendance patterns.
•Ticketing system and model: The online ticketing system is a barrier for attendance as it is a ticketing system designed for City recreation classes. It requires visitors to create a
profile and account to reserve a ticket. The system is cumbersome and limits the potential for casual, drop-in visits and may discourage visitors who are not as tech savvy. The City
has identified a ticketing system and is currently working with the selected vendor to implement the system. In addition, the session model, which was implemented to address
post-pandemic capacity, space, and safety issues, may be unnecessary and should be closely examined when the new ticketing system is in place. A timed-ticketing system would
likely allow for fewer throughput issues and smooth out the peaking in the arrival and departure curves.
•Membership: The JMZ membership offers free admission. Each of the three daily sessions at JMZ sets aside tickets for members (100 member slots, 250 non-member slots). Due
to the limited capacity, particularly in the most popular session times, members tend to reserve spaces quickly, and there is a high rate of no shows among members. There are a
number of strategies that can be implemented to address this, including the addition of member hours, moving away from the sessions model to timed ticketing, and emails to
members who book but do not attend. Membership pricing should also be carefully examined to ensure that the multiplier between membership and admission price is high enough
to cover anticipated member visitation. Premium member experiences and programming should be added. Many of these strategies will require additional staff capacity to
implement.
Staffing Visitor Experience Admissions / Ticketing Financial Management
and Revenue
Generation
Friends of the JMZ
March 2024Final Report Page 75
Operational Analysis
Business Operations and Revenue Generation
•Data tracking: Currently, no specific individual manages earned revenue, nor the business operations of the JMZ. Those operating the museum are often separated from the data
around market and financial performance, which makes it challenging to measure performance. Moreover, data is not consistent across different platforms, and it can be
challenging to quickly interpret numbers due to the complexity of the City accounting system. Cost and revenue categories do not have clear, industry standard definitions and are
not grouped in ways that allow for efficient analysis of key earned revenue category performance. We would recommend the addition of a business and revenue manager to track
key performance indicators and focus on earned revenue generation.
•Birthday parties: The local market characteristics are highly favorable, with a demand for more birthday parties. In fact, our financial analysis assumes that JMZ can double the
amount of birthday parties. Staff capacity is a limiting factor. In some cases, it has been reported that it can take up to two weeks to respond to a birthday party request due to
insufficient staffing, and at one point, requests were put on hold. The pricing for birthday parties is adequate.
•Marketing: The current marketing spend is too low. We suggest a budget of 7 percent of earned revenue which is within industry standards.
•Additional opportunities for upcharges: Some of the ideas mentioned in interviews include behind-the-scenes tours, events, more birthday parties, peak pricing, and membership
fee increases.
•Contributed income: With the exception of admission price being lower than market rate, most financial metrics are within reasonable standards. However, there is a major
opportunity to expand and diversify the mix of contributed income used to fund operations. This would require a strategic shift or expansion of the Friends of the JMZ role with
respect to operational funding.
Staffing Visitor Experience Admissions / Ticketing Financial Management
and Revenue
Generation
Friends of the JMZ
March 2024Final Report Page 76
Operational Analysis
Governance and Operating Model
•Overall Model: The Friends of the JMZ includes highly dedicated community and business leaders who have raised substantial funds for major reinvestment of the JMZ, which is
critical to maintaining a sustainable business model. Palo Alto JMZ leadership and the Friends of the JMZ have a strong partnership and good relationship.
•Contributions from the Friends: The Friends raised $25 million over 10 years for the capital campaign that funded the new JMZ. Subsequently, they raised $300,000 for the
California Dinosaur Garden exhibit. While most funding has been for new exhibits or capital projects, they also fund specific operational categories such as science outreach and
inclusion initiatives. The contribution to operations has been under 5 percent of operations.
•Governance and Operating Models: There are numerous models for operating publicly owned cultural attractions. Hybrid models that incorporate nonprofit partners typically
operate on a continuum of involvement, from models such as the Friends of the JMZ where the nonprofit primarily contributes funding for capital projects to operating or lease
agreements where the nonprofit organization manages the facility. There are many hybrid models in between, and in some cases, supporting nonprofit organizations fund staff who
work at the cultural attraction. Typically, the public agency will manage the grounds, facility, and (for zoos) the animals, and the nonprofit will focus on marketing, earned revenue
generating activities, programming, and education. There are numerous examples where public agency staff and nonprofit staff work together. While this can create its own set of
challenges, it also allows for more flexibility and efficiency in procurement, hiring, programming, and visitor experience offerings. In other cases, nonprofit organizations are
contracted to operate the facility with a guaranteed subsidy from the public agency.
•Future Role of Friends of the JMZ: The possibility of turning over operations and governance of JMZ to the Friends has been a point of discussion for 20 years. In building the new
JMZ, an assumption at one point was that the Friends would take over five years after re-opening. This is not currently part of the Friends of the JMZ future plans, and fundraising
would need to increase significantly to fund the operation. Regardless of this issue, increased involvement of the Friends of the JMZ in operational funding is an opportunity that
should be explored.
Staffing Visitor Experience Admissions / Ticketing Financial Management
and Revenue
Generation
Friends of the JMZ
Summary of Key Findings
and Recommendations
March 2024Final Report Page 78
Key Findings and Recommendations
Summary of Key Findings
The Big Picture: Palo Alto JMZ Context
The Palo Alto Junior Museum & Zoo is a beloved community cultural attraction located in the heart of Palo Alto in Rinconada Park. Surrounded by many other synergistic family and
children’s attractions, it has recently been rebuilt with a unique mix of visitor experiences, including hands on science and children’s museum exhibits, live animals, adventure play areas,
and immersive environments. It has a mix of indoor and outdoor space, with the vast majority of the visitor experience located outdoors, and a small area for indoor exhibits. It is smaller
than most zoos in large metropolitan areas but has live animal experiences that set it apart from typical children’s museums. It operates in a market that has some of the strongest
income and education demographics in the country but is also one of the most highly competitive environments for children’s attractions in the Untied States, with nearly 20 family and
children’s attractions located within a one-hour drive time of the JMZ.
With a relatively modest size facility, high quality and new visitor experience, and large market with demographics favorable for attendance, the JMZ has experienced strong demand
and must address capacity issues on a regular basis, particularly in the post-pandemic context. The attendance volume and relatively modest size of the facility, in addition to the need
to care for live animals, requires active management by staff on a daily basis.
As is typical of many cultural attractions that undergo major reinvestments in the visitor experience, the physical planning for exhibits and capital improvements were the focus of
planning efforts leading up to opening. While there were some increases in staffing and operating costs implemented, operations and staffing did not receive a level of investment
commensurate with the scale of the reinvestment. The addition of an admission fee and membership allowed for substantially greater amounts of earned revenue and a higher level of
cost recovery, but there was no investment in new systems that were suitable for the operations of a full-scale cultural attraction.
Upon opening, the JMZ had to limit capacity due to the pandemic, implement a “sessions” model of entry (not uncommon during this time among children’s museums), utilize a ticketing
system that was designed to accommodate City recreation activities rather than a public visitor attraction, operate with insufficient staffing in key areas, and deal with staff turnover and
shortages that affected the entire attractions industry nationally. Additionally, operating as part of a public agency department provides many benefits, such as economies of scale for
certain functions, the ability to have some costs not allocated to the JMZ (e.g., utilities), and subsidy from the general fund. However, it also creates backlogs in hiring and extended the
procurement process for a much-needed new ticketing system.
It is not uncommon for operations to take a few years to stabilize after a major reinvestment in the visitor experience at a cultural attraction, particularly for publicly operated agencies
where processes can take longer to change and staff increases are implemented. As the JMZ enters its third full year of operations, which would typically be the first stabilized year of
operations, it is a good time to research, analyze, and understand its performance relative to market demand and identify areas for improvement. Based upon all of the preceding
research, in the next few pages we answer the key questions identified by the City, define reasonable budget targets, and recommend strategies to enhance revenue opportunities, with
the goal of creating a sustainable business model that will allow the Palo Alto JMZ to continue to serve the community.
March 2024Final Report Page 79
Key Findings and Recommendations
Key Questions and Answers
Attendance: What is a reasonable range of attendance to plan for? How has the pandemic impacted attendance potential during the first years of operation since
re-opening?
•The Palo Alto JMZ has attracted approximately 97,000 visitors in its first full year of operations (2022) and nearly 118,000 visitors in 2023, its second full year of operations.
•These attendance metrics are likely being affected by two very different attendance trends. First, a pandemic recovery curve, with major cultural attractions nationally recovering on
average to 75 percent of 2019 attendance in 2022 and 90 to 95 percent in 2023. This number was lower for Bay Area museums, at 65 percent and 80 percent respectively, likely
attributable to declines in international and overall tourism levels in San Francisco. Second, when cultural attractions undergo major expansions or reinvestments, they typically
experience an initial year surge in attendance that can be anywhere between 10 to 30 percent higher than a stabilized year of operations, which usually occurs by the third year. These
competing attendance curves along with only two years of data after re-opening are not useful from a predictive standpoint but are important trends to consider.
•Using the “gold standard” for attendance estimation, penetration rate analysis, combined with an analysis of other key attendance ratios, we developed attendance estimates for three
scenarios for the Palo Alto JMZ. This methodology relies on the analysis of quantitative data and qualitative factors, including the quality and scale of the visitor experience, site
characteristics, size and characteristics of available markets, the competitive environment, national benchmarking, and professional judgment.
•There are important aspects of JMZ operations to be addressed. With no changes, attendance will decline over time, as some of these operational issues will ultimately impact the
quality of the visitor experience and lead to erosion in attendance/market share. However, with some operational improvements, we estimate that there is potential for slightly greater
attendance around 127,000. With capital investments into the expansion of indoor space, we estimate that attendance can be even higher, shown below as 138,000, although this could
vary depending on the nature of the improvements.
FY: 115,400
Calendar Year: ~118,000 104,000
127,000 138,000
0
50,000
100,000
150,000
Base Case (FY)Decline (10%)Medium High
Attendance Estimate Scenarios
*Attendance assuming no
changes occur
*Attendance assuming
operational investments *Attendance assuming
capital investments
March 2024Final Report Page 80
Key Findings and Recommendations
Key Questions and Answers
Pricing and Membership: What price for admission and membership is suitable given market conditions?
•The current price has been set at $10. This price is under market rate and was intended to ensure access to all regardless of income to the JMZ. Museums regularly balance
“mission and money” and need to make difficult decisions related to all types of tradeoffs.
•We recommend increasing the admission price to $14, which we believe to be closer to market rate. In addition, JMZ and City staff can continue working closely with the Friends of
the JMZ to fund additional strategies to expand access to lower income and underserved communities. Recent research indicates that there are many complex factors related to
consistent inequities in attendance to cultural attractions, and that setting price just below market rate is unlikely to make a signficiant impact in access (i.e. $10 for a family of 4 is
still relatively expensive for a lower income household, and there are additional barriers that prevent families who have not historically attended cultural attractions from attending).
There are examples nationally of strategies to diversity and increase access for cultural attractions which can be implemented with appropriate funding.
•Membership pricing should be adjusted to maintain industry standard multipliers between admission and membership pricing. We would recommend considering increasing the
multiplier slightly given the frequency of visit among members. The JMZ is currently exploring a new membership model which may have some interesting opportunities and should
be further analyzed.
•Finally, and most importantly, in order to maintain market rate pricing, staffing needs to be bolstered across at least two areas – animal care and guest / visitor services. These are
two essential areas that currently are understaffed and underfunded that have a direct impact on the visitor experience and can lead to attendance and revenue declines. In addition,
membership benefits should be enhanced including member hours and access to special experiences (even with upcharges). This will require additional staffing. Finally, operational
issues that negatively impact guest experience need to be addressed. Admissions and membership revenue is by far the greatest source of earned revenue for all types of
attractions, accounting for between 50 and 80 percent of earned revenue, and the quality of the visitor experience is an important factor that drives both of these revenue sources.
Additional Earned Revenue: How can additional revenue be generated without negatively impacting attendance? Is there greater demand for additional earned
revenue categories?
•There is additional demand in the market for many additional earned revenue sources, including birthday parties, summer camps, educational and public programming, upcharge
experiences, and special events. For example, we estimate that the number of birthday parties could double assuming sufficient staff capacity to both facilitate birthday parties and
manage the marketing, booking, and planning requirements associated with each event. The education program and summer camps at Palo Alto JMZ are very strong in quality and
revenue, with strong indicators of unmet demand. These types of activities play a dual role of marketing the museum to a broader audience.
•Increasing revenue from these categories will require an increase in staffing and, in some cases, physical space.
March 2024Final Report Page 81
Key Findings and Recommendations
Key Questions and Answers
Staffing: What is the appropriate level of staffing? What functions can be accomplished using volunteers?
•Staffing is perhaps the most critical issue to be addressed at the JMZ. Increasing staff to handle the volume of paid visitors, manage capacity, care for the animals, and create a high
quality guest experience is of utmost importance and is directly related to the ability to attract visitors and generate earned revenue.
•We have made several recommendations related to staff. These should be considered strategic recommendations rather than detailed, accounting level planning. Priority staffing
recommendations are as follows:
✓Increase the staff capacity in the animal care / zoo area through additional full-time positions. This will help bring the animal care coverage up to the standard set by industry
associations. It will also help the zoo specialists create meaningful animal interactions. Industrywide, programming and unique and curated experiences are increasingly driving
attendance.
✓Add staff capacity to guest services. This is also of critical importance to leveraging the capital investment made in the JMZ. The quality of the visitor experience is negatively
impacted by limited guest services staff, and attendance benefits from the investment will decline without increasing guest services staff.
✓Add a business / revenue manager position. Currently, the accounting system, cost centers, and cost categories used are not consistent with industry standards for evaluating
the performance of cultural attractions. For this assignment, it required substantial effort on the part of numerous City and JMZ staff to piece together the performance of the
facility over two years. Additionally, the accounting and finance functions are generally separated from the operations of the JMZ. A revenue or business manager position
could help organize data, create better cost center and detailed revenue and expenditure categories, and attach an operational perspective to the data, which would then allow
for better evaluation of KPIs.
✓Generally, consider ways to retain more full-time staff for selected positions where professional expertise and/or specialized experience is most important. The 2023
organizational chart included 8 full-time and 45 part-time staff for just over 20 FTE employees.
✓In the future, consider adding more education and program staff. In publicly operated cultural attractions, these positions are sometimes funded and hired by the supporting
nonprofit organization. Models for this that could work in the City of Palo Alto context should be explored.
✓The volunteer program should be re-established. Volunteers can be helpful in supplementing guest services, educational / interpretive activities, and other areas. However, they
do not replace the need to appropriately staff animal care and guest services functions.
March 2024Final Report Page 82
Key Findings and Recommendations
Key Questions and Answers
Operating Costs: What is the appropriate level of spending on other operating costs?
•In the illustrative financial model that we created for the “medium” attendance scenario (i.e. operational improvements are made), we made some adjustments to other operating
costs. For example, marketing was increased to 7% of earned revenue, more consistent with industry standards. A budget was also added for programming.
•Overall, the major issue is not the current non-staff budget. We realize that there are a number of costs which are not fully allocated to the JMZ. Rather, the ability to be more nimble
and flexible in purchasing is important. As an example, the new ticketing system took an extremely lengthy time to get through the City procurement process. Many publicly
operated cultural attractions have addressed some of these challenges through greater involvement of the nonprofit supporting organization in operations. The potential for the
Friends of the JMZ to expand operational funding and increase their role in operations should be explored further.
Capital Investments: Are there additional capital investments that would improve operational cost recovery?
•The Palo Alto JMZ has just undergone a $33 million expansion which doubled its space and added several new exhibits. In addition, the California Dinosaur Garden was opened at
the end of 2023. Still, the indoor area and overall scale of the facility are constraining factors. There are ideas for increasing capacity through utilization of classrooms and other
indoor spaces for pop-up activities, something which staff has already implemented. While investments in the visitor experience will be required on an ongoing basis in order to
prevent natural attendance erosion, this can include smaller investments such as the Dinosaur Garden, specialized programming, seasonal events, new activities, and meaningful
animal experiences.
•The earned revenue ratio for the Palo Alto JMZ is currently 66 percent, and our illustrative pro forma for the “medium” attendance scenario where operational investments are made
increases the earned revenue ratio to 68 percent. The cost recovery ratio is slightly higher around 73% due to the Friends of the JMZ contributions. These ratios reflect very strong
performance for a cultural attraction. There would be additional gains in earned revenue with the expansion of indoor space, although the overall cost recovery ratio is not likely to
change without a structural shift in the role of the Friends of the JMZ with respect to general operating support.
March 2024Final Report Page 83
Key Findings and Recommendations
Key Questions and Answers
Strategies for economic sustainability and overall performance: What other factors should be considered to enhance economic sustainability? Are there
opportunities to improve performance, as measured by attendance, revenues, and cost recovery, or is current performance within the range of reasonableness
given market conditions?
•Current performance is within a range of reasonableness given market conditions and all the factors we have discussed previously in this report. Cost recovery is relatively strong. It
would be unrealistic and unusual to expect a children’s museum and zoo-based attraction to recover 100 percent of its costs.
•While there were estimates that pre-expansion attendance at JMZ exceeded150,000 visitors annually, visitor counts for free attractions are typically less reliable, not indicative of
intentional visits with a meaningful length of stay, and not relevant to current market demand. These estimates were also prior to the pandemic, which has established new
standards around visitor capacity.
•There are three major categories of opportunities for increased revenue for the Palo Alto JMZ:
➢Admissions and membership revenue can be enhanced through increasing the admission price to market rate, which must also come with an investment in animal care and
guest services staff at a minimum. Increased staff capacity, better guest services, incorporating member hours and enhancing member benefits, the expansion of more
meaningful, informal animal experiences with zoo specialists, a better ticketing system, the ability to move to a more continuous arrival and departure pattern, and other
operational investments can also lead to modest gains in attendance.
➢Revenue from birthday parties, summer camps, educational programs, public programming, special events, and upcharges has strong potential, although the increases are
more modest in scale relative to admissions revenue and additional staff capacity will be required to achieve these.
➢The amount of contributed income for operations can be increased and diversified to help offset the contribution from the City of Palo Alto general fund. This would require a
shift in priorities and expansion of the role of the Friends of the JMZ organization, which has traditionally focused its efforts on major capital projects and strategic operational
investments, generally accounting for 3 to 5 percent of total operating budget. There are examples of public agency operated cultural attractions with supporting nonprofit
organizations that have greater responsibility for aspects of operations tied to education, programming, and earned revenue streams. These hybrid operational relationships
can be complicated and create other challenges, but they can also result in increased operational funding. In some cases, cities have developed operating or lease agreements
with nonprofit organizations to manage museums, zoos, and other cultural facilities, sometimes with publicly funded operational support that may or may no decline over time
as the nonprofit builds fundraising capacity. These are generally longer-term strategic options that should be evaluated once operations at the JMZ have fully stabilized in the
next year or two. In the short term, the City, JMZ staff, and the Friends of the JMZ should consider identifying strategic priorities that would be suitable for increased operational
funding from the Friends organization.