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SR-307-005 e .- ~CitYOf Santa Moniea~ City Council Report City Council Meeting: November 14,2006 Agenda Item: .-1..8 To: Mayor and City Council From: Barbara Stinchfield Director of Community and Cultural Services Subject: Proposed Policy for Short-Term Leasing of Property in the Civic Center for Cultural Events to Generate Revenue for Permanent Park Improvements; Authorization to Issue a "Request for Proposals" to Solicit Proposals from Private Event Producers; and Approval of Proposal Selection Criteria Recommended Action Staff recommends that the City Council: 1) Adopt a policy permitting the short-term leasing of property in the Civic Center as specified in this staff report for cultural events, in order to generate revenue for the permanent park improvements as outlined in the Civic Center Specific Plan; 2) Authorize City staff to issue a "Request for Proposals" to private event producers for use of said property, returning to City Council with short-term leasing recommendations; and 3) Approve the selection criteria to be used for evaluating lease proposals. Executive Summary In an effort to generate funds to support the planning and construction of a public park in the Civic Center as envisioned in the Civic Center Specific Plan, City staff proposes a 1 policy that permits the leasing of certain portions of the former RAND site to private event producers on a short-term, interim basis. The proposed site includes the 4-acre site identified in the Civic Center Specific Plan as Palisades Garden Walk for the actual event venue (see Attachment 1, location 6). The sole purpose of leasing this site would be to generate revenue to support the planning and design of the permanent park envisioned by the Civic Center Specific Plan. The property would be leased to the City by the City's Redevelopment Agency, the owner of the site, and subsequently subleased at market rate to a private event producer. The site would be available for a lease term between July 16 and November 15, 2007, inclusive of site preparation, the event itself and site dismantling. Staff proposes to issue a "Request for Proposals" (RFP) and, similar to the policy for extended events in the 1550 north beach parking lot, any approved lessee would be required to meet a number of conditions including that: the event/activity generate substantial net revenue for the City; the event/activity be open to the pubic (free or ticketed); the nature of the event/activity be entertainment or cultural; and a comprehensive event and traffic management plan, neighborhood communications strategies and cross-marketing strategies with local businesses be implemented. Events or activities that have as a significant component merchandise sales or exhibits, business promotions, or product or service launches and/or sampling would not be considered. 2 Discussion Backqround Santa Monica continues to be a popular venue for cultural events and performances offered to the public by private event producers who desire to take advantage of Santa Monica's beachfront location and vital downtown environment. Staff receives an average of 2-3 inquiries per week from private event producers seeking event space for cultural and entertainment activities and events. In order to meet some of this demand, the City Council previously authorized use of the 1550 north beach parking lot for exhibits and performances. As a result, Cavalia and Ashes and Snow generated additional net revenue to the City's Beach Fund. This site continues to generate considerable interest from event promoters and exhibit curators; however its availability is limited to periods of lower beach use by the public. The Pier Bridge Widening Project, is projected to begin in FY 2007-08, further limiting the site's availability. Recently, representatives from Cirque du Soleil contacted the City and the Santa Monica Conventions and Visitors Bureau expressing an interest in bringing their show to Santa Monica during the late summer/fall of 2007. In response, staff has reviewed a range of possible event sites, considering such factors as site availability, the ability to generate additional net revenue to the City for public purposes, and the impacts of events on the adjacent neighborhood including traffic and parking impacts. The 3 proposed site was seen as the most viable when considering the above criteria. It would be made available through a competitive process. The Proposed Site The proposed site is located in the Civic Center and includes approximately 4 acres of the former RAND site, identified in the Civic Center Specific Plan as the future Palisades Garden Walk. This area is bounded by Main Street to the east, Ocean Avenue to the west, the extended Olympic Drive to the south, and the Santa Monica freeway to the north. Site Availability. Currently the RAND Corporation is completing the necessary close-out items with the City's Redevelopment Agency as part of the turnover of the site to the Agency. The site will be available for the proposed interim use during the specified time period. There are no planned public uses for the site until staging is needed for the City Sewer Project in late 2007. Ability to Generate Net Revenue to the City for Public Purposes. In the public workshops leading to the development of the Civic Center Specific Plan, community participants consistently expressed a desire to develop a showcase park that extended the experience of Palisades Park into the Civic Center area and provided significant cultural and recreational opportunities. To the public. This sentiment was recently confirmed by participants in the Civic Village design workshops who emphasized the 4 need to plan for and develop this important new open space to serve the new residential neighborhood to the south as well as the entire community. As there are currently no revenue-generating uses on the proposed site that would be displaced by the proposed events and no identified City funds to initiate the design and construction of Palisades Garden Walk, the site represents a significant opportunity to generate revenue for future park improvements. The recent successful Ashes and Snow event in the 1550 north beach parking lot generated significant net revenue to the City's Beach Fund as well as documented economic benefits to Pier and other local businesses. It is projected that a comparable or greater return would be generated by events at the proposed location. Neighborhood Impact. The surrounding neighborhood is comprised of civic buildings to the east, the RAND Corporation headquarters to the south, a motel and restaurant immediately to the west, and visitor serving businesses along Ocean and Colorado Avenues and on the Pier. There are also a number of multi-family residences across Ocean Avenue and Pico Boulevard. The proposed use of the site represents both the possibility of economic benefits for local businesses and the need to carefully manage impacts on these same businesses and on those residents living near the site. The implementation of effective, ongoing neighborhood communication strategies that keep residents and businesses informed of event schedules and provide opportunities for complaint resolution would be required. Additionally, cross-marketing strategies with local businesses would be required to ensure local economic benefit. 5 The availability of event parking that significantly reduces traffic circulation and congestion impacts in the surrounding neighborhoods and downtown area is also critical. An initial parking inventmy indicates that in addition to private sites with shuttle services that may be required of a selected event producer, the estimated capacity of City parking venues that would be available for the proposed interim uses includes: the Civic Auditorium surface parking lot (100-500 spaces weekdays, 850 spaces weekends); the new Civic Center Parking Structure (500 spaces); and beach parking (1500 spaces available after Labor Day). Parking availability would depend upon the specific event schedules being proposed. A detailed parking and traffic management plan would be required that realistically estimates the parking demand to be generated by the event and proposes specific shuttling, parking and traffic circulation strategies based on the parking demand and specific event schedules. Staff believes that with the available public and private parking resources, adequate event parking can be accommodated. Proposed Policy City staff proposes that the Council approve a policy that makes available the identified Civic Center site for cultural events on an interim basis, between July 16 and November 15, 2007, inclusive of site preparation, the event/activity itself and site dismantling. Upon Council approval of the policy, staff will publish an RFP including the City's requirements and a clear description of the criteria that will be used to evaluate and respond to proposals. In subsequent actions in December 2006 and January 2007, the 6 City's Redevelopment Agency and the City Council would authorize the execution of a short-term lease from the Agency to the City and the City Council would then authorize a short-term sublease making the site available for the proposed specific interim, cultural use. Proposal Selection Criteria Staff proposes that the following selection criteria be used for evaluating responses to the RFP: . The event/activity generates substantial net revenues to the City to support Civic Center park improvements with a minimum lease payment of $500,000 plus additional City participation in the realized revenue generated by the event, the method to be included in the proposal to the City. . The required traffic and off-site parking plan clearly describes the proposed event schedule, the corresponding projected parking demand and outlines an off-site parking/shuttle program that will be implemented to address the parking and traffic impacts of the event. . The proposed lease term is between July 16 and November 16, 2007, inclusive of site preparation, the event itself, and site dismantling. . The event/activity is entertainment or cultural. Proposals that have as a significant component merchandise sales or exhibits, business promotions, or product or service launches or sampling will not be considered. . The event/activity is open to the public (free or ticketed) and intended for diverse age groups. . The event/activity involves opportunities for participation by local schools and community programs. . The proposed leased area does not exceed the footprint of the Civic Center area identified in the Civic Center Specific Plan as Palisades Garden Walk (location 6). . A detailed site plan identifies the location of all temporary structures, access points, and site improvements. 7 . The proposal confirms that the event producer will pay for all City costs and services associated with the event/activity in addition to the lease payment. . The required event management plan clearly articulates how the event/activity will comply with standard City requirements for insurance, indemnification, security, police, Building and Safety, Fire Department, business licenses, recycling, clean-up, waste disposal, neighbor notices, accessibility and other governmental approvals. . The proposal provides clearly articulated strategies for neighborhood communication and complaint resolution. . The proposal provides clearly articulated cross-marketing strategies to ensure collaboration with local hotels, restaurants and Pier businesses. · The event/activity does not offer concessions or services that are In direct competition with adjacent businesses. Previous Council Action In September 2004, Council approved a policy for similar events in the 1550 north beach parking lot during the "off season" as a way to support the City's commitment to culture and the arts while generating revenue for the City's Beach Fund. Commission Action During the City's FY 2006-07 budget process, the City's Recreation and Parks Commission unanimously supported the "greening" of the proposed Palisades Garden Walk site in the Civic Center and recommended to the City Council that funding be an immediate funding priority. The Commission recently received information notifying them of the proposal outlined in this staff report and will agendize the item for discussion at its November 2006 meeting. 8 Alternatives In response to event inquiries, staff has explored other possible City venues for cultural events, including parking lots in the south beach area and the Civic Auditorium. The proximity of residents to an event in either of the large south beach parking lots makes these locations unsuitable for the proposed event uses. The Civic Auditorium is already committed to events during the proposed period. Environmental Analysis The California Environmental Quality Act (CEQA), Section 15034, establishes an exemption for minor alterations in the condition of land which do not involve removal of healthy, mature, scenic trees - CEQA Guideline Section 15304. One example listed therein is the minor, temporary use of land having negligible or no permanent effects on the environment, including carnivals, sales of Christmas trees, etc. This exemption could be applied to this proposed temporary use of the Civic Center site. However, it would not be available if there is a reasonable possibility that the event would have a significant effect on the environment due to unusual circumstance. The circumstances of the proposed project must not differ from the general circumstances of projects covered by the exemption and create environmental risks that do not exist for the general class of exempt projects. Since it might be claimed that the volume of traffic generated by attendees, potential noise impacts, and possible view obstruction are unusual circumstances, it is essential that parking and traffic impacts be addressed and that the site plan for any event be carefully crafted. 9 Public Outreach In the past several weeks, City staff has discussed the viability of the proposed interim use concept with representatives of the Santa Monica Convention and Visitors Bureau (CVB), the Pier Restoration Corporation (PRC), the Bayside District Corporation, the Santa Monica Chamber of Commerce, and the Ocean Park Association. In turn, these organizations have extended information to potentially impacted residents and businesses. Staff of the CVB and PRC report that they have received favorable comments on the proposal. An information mailing was sent by the City to approximately 450 residents and businesses that are located within close proximity to the proposed site. No unfavorable responses have been received by City staff to date. BudQeUFinanciallmpacts Based on comparable market rates for similar venues, the City expects to generate a minimum of $500,000 in rental income plus additional participation revenue, the method to be determined by the City and the successful proposer. The approved lessee will be required to pay for all direct City services and required licenses/permits and to collaborate with adjacent restaurants, hotels and Pier merchants in an effort to help these businesses realize increased sales during the time the evenUactivity is taking place. Prepared by: Elaine Polachek, Open Space Manager Trinie Garcia-Valdez, Community Use Administrator 10 Approved: tf()~ ?Jt:~ . 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