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C/ED:EDU:EF:AP:mb
CouncIl MeetIng July 23, 1985
Santa MonIca, CalIfornIa
TO:
Mayor and CIty CouncIl
FROM:
CIty Staff
SUBJECT: AIrport ReSIdual Land Development OptIons
INTRODUCTION
A maJor component of the A~rport Res~dual Land work program IS
the Identlflcat10n of development opt~ons for reVIew by CIty
CouncIl prIor to the draftIng of a formal Request for Proposal.
ThIS report summarIzes two general development scenarIOS prepared
by Clty staff and the consult1ng team of the Arroyo Group, James
Felt Realty ServIces and PlannIng Research Corporatlon. The pur-
pose of the report IS to prov1de an early opportunIty for CouncIl
to reVIew and comment on the development optIons as presented In
th1S report and 1n the accompanY1ng slIde presentatlon.
BACKGROUND
In a staff report presented to CIty CounCIl on February 19, 1985,
CIty CounCIl approved the ResIdual Land work program, and au-
thorlzed staff to proceed wIth the draftlng of a Request for Pro-
posal to prIvate developers for the eventual dISpOSItIon and
development of the Alrport ReSIdual Land.
The maJor components
~'": A
JUt 2 3 1985
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of the work program ~nclude the need to draft a Request for Pro-
posal (RFP), sol~c~t publ~c rev~ew and Counc~l approval to ~ssue
an RFP, and f~nally, to evaluate and select a development pro-
posal for the A~rport Res~dual Land.
Durlng the past four months Clty Staff have been work~ng With a
team of consultants to exam~ne the development parameters atten-
dant to the s~te. The purpose of th~s exerc~se was to ldent~fy
constralnts and/or opportunitles for use of the parcel. MaJor
conslderations included:
o a traff iC analysis, to determ~ne the max imum allowable
square footage WhiCh may be bUilt with~n antlcipated
trafflc constralnts;
o a land use analysis, to establlsh general development
standards ~ncluding the bUl1d~ng envelope, lot coverage
for bUlldlngs, parking, landscaping, access roads and so
forth;
o an economlC analyslS, to determine the economlC viablll-
ty and the revenue and employment lmpllcatlons of
varlOUS development scenarlOS.
Together thiS lnformatlon, along w~th l~mltatlons lmposed by the
Clty'S agreement With tne Federal Av~ation Adminlstratlon, create
the framework for two generic scenariOS for oevelopment of the
resldual land. These two scenarlOS have been developed as proto-
types for ~nformational purposes only, and are not posited as
recommendat~ons at thlS t~me; rather, they have been des~gned to
prov~de information to Council as to the impact var~ous plann~ng
assumptions mat have on the s~te. Each def~ne a different future
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for the A~rport Res~dual Land. The follow~ng d~scuss~on h~gh-
l~ghts the des~gn and econom~c features of each scenar~o. Tables
A and B summar~ze the~r land use character~st~cs.
A. Development of an "lndustr~al Park".
Th~s scenar~o prov~des for the development of an ~ndustr~al park
on the A~rport Res~dual Land. The park would conta~n approx~-
mately 731,750 square feet of leaseable space, of wh~ch 75 per-
cent would be dedlcated to l~ght ~ndustr~al and research &
development uses. The remaln~ng port~on would be ded~cated to
support offlce use (See Attachment A).
The Industr~al Park Scenar~o ~s character1zed by fourteen I-story
~ndustr~al bu~1(hngs consunnng approx ~mately 28 percent of the
s~te. An add~t~onal 8 percent of the slte 1S dedlcated to seven
2-story research & development bU1ld1ngs and related reta1l uses.
Slnce structured or subterranean park~ng ~s not econom1cally com-
pat~ble w~th an lndustrlal park development, ~t has been assumed
that surface park~ng would be prov~ded wh~ch would cover 34 per-
cent of the s~te.
To enhance the aesthetlc qualltles of the development, an aggres-
Slve landscap1ng plan would be undertaken and spread over 20 per-
cent of the s~te. Landscaplng would be used on the slte's north-
ern boundary to buffer the development from the aIrport no~se and
on the southern boundary to m~nlmlze the development's vlsual
Impact on the adJacent resldentIal area. The lnternal road net-
work would compr~se the remaInIng 10 percent of the s~te.
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The IndustrIal park, once completed and about 95 percent occu-
pIed, would have an appraIsed value of approxImately $90,760,000.
Total development cost IS estImated to be $44,040,000. Subtract-
Ing total development cost from the proJected appraIsed value,
YIelds a value for the AIrport ReSIdual Land of $46,720,000. The
potentIal annual ground lease to the CIty would be $4,670,000,
assumIng a ground lease amount eqUIvalent to 10 percent of the
land value. AccordIng to Its square footage and standard em-
ployee densIty ratIOS for IndustrIal parks, ScenarIO A IS e~pec-
ted ta prOVIde Jobs far appra~lmately 1,980 employees.
B. Development of an "OffIce Park".
Th1S scenarIO 1S characterIzed by a serIes of twelve 3-story gar-
den offIce bU1ldlngs evenly dlstrlbutea over the SIte. The of-
fIce park would contaIn approx1mately 552,500 square feet of
leaseable space all of WhICh would be dedIcated to offIce use and
consume 13 percent of the SIte (See Attachment B). The lease
rate S
that are tYP1cally assOCIated WIth garden offIce parks prohIbIt
the bU1ld1ng of eIther structured or subterranean parkIng; there-
fore, surface park1ng has been assumed. The net effect would be
that 50 percent of the SIte would be covered WIth surface park-
Ing. However, the parkIng would be Interspersed throughout the
development, thus aVOIdIng the "sea of asphalt" effect that IS
SImIlar to the Santa MonIca BUSIness Park. To further reduce the
Impact of surface park1ng and enhance the overall aesthetIC ap-
peal of the development, a correspondIng amount, 27 percent of
the SIte, would be ded1cated to open space, and landscapIng. The
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~nterna1 road network would cons~st of the rema~n~ng 10 percent
of the s~te.
ThIS development, once completed and about 95 percent occup~ed
would have an appra~sed value of approx~mately $120,780,000. To-
tal development cost ~s est~mated to be $61,770,000. Us~ng the
same apprd~sal technlque as descrlbed above y~elds a value for
tne A~rport Resldual Land of ;;59,010,000. The potentlal annual
ground lease to the Clty lS est~mated to be $5,900,000. Accord-
~ng to ~ts square footage and standard employee denslty rat~os
for suburban off~ce parks, ScenarlO B lS expected to provlde Jobs
for approx~mately 2,420 employees.
NEx'r STEPS
Followlng Councll reVlew and comment on the development scenar~os
presented at th~s Counc~l meetlng, staff w~ll draft an RFP
reflectlng general development standards for the slte. The draft
RFP w~ll be presented for reVlew to the Alrport and Plannlng Com-
m~sslons, the Archltecture Rev~ew Board and the Clty Counc~l.
After recelv~ng the commentary of these bod~es and any ~nterested
members of the publlC, staff w~ll prepare a rev~sed RFP for Coun-
c~l approval. Staff ant~c1pates returnlng to Counc~l wlth the
rev~sed RFP ln October.
BUDGET/FINANCIAL ANALYSIS
Because no act10n by the C~ ty Councl.l 1S requ1red at thlS t~me,
tnere ~s no budget lmpact assoclated w~tn thlS report.
RECOMMENDATION
The Clty Councll ~s respectfully requested to rev~ew and comment
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on the materlal presented ln thlS report and the accompanYlng
sllde presentatlon.
Staff wlll pursue the development of the
Request for Proposals, pursuant to the Feoruary 19, 1985 Clty
Councll dlrectlve, ~ncorporatlng any commentary recelved. The
RFP wl11 be brought before the Councll for approval prlor to ltS
antlclpated release ln October.
Prepared by: Peggy Curran, Actlng Dlrector
Allen Perry, ProJect Manager
Department of Communlty and EconomlC Development
Attachments: A - Summary of Land Use Denslty Calculat~ons - In-
dustrlal Park
B - Summary of Land Use Denslty Calculatlons -
Off lce Park
C - Summary of Flnanclal Characterlstlcs - Indust-
rlal Park
D - Summary of Flnanclal Characterlstlcs - Offlce
Park
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A'I"rACHMENT C
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SUMMARY OF FiNANCIAL CHARACrERISTICS - INDUSrRIAL PARK
DEVELOPMENr PRO-FORMA
ProJect Net OperatIng Income
Total ProJect Value
Developer Costs and ProfIt
R2sIdual Land Value
ANNUAL CiTY REVENUE~
Ground Lease Revenue
Property Taxes
BusIness LIcense Taxes
RetaIl Sales Taxes
Total MaJor Revenues
On-SIte Employment Generated
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S 8,849,000
$ 90,760,000
.!? (44,040,U00)
$ 46,720,000
$
$
$
$
$
4,670,000
113,000
139,000
53,000
4,975,000
1,980 Employees
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ArTACrlMENT 0
SUMMARY OF FINANCIAL CHARACTERISTICS - OFFICE PARK
DEVELOPMENT PRO-FORMA
ProJect Net Operat~ng Income
Total ProJect Value
Developer Costs and Prof~t
Res~dual Land Value
$ 11,474,000
S 120,780,000
S (61,770,OOO)
$ 59,010,000
ANNUAL CITi REVENOES
Ground Lease Revenue
Property Taxes
Bus~ness L~cense Taxes
Reta11 Sales Taxes
Total ~aJor Revenues
$
$
$
$
:;;
5,900,000
151,000
102,000
41,000
6,194,000
On-S1te Employment Generated
2,420 Employees
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