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SR-9-A (62) 9A CCS JM F \CCSADMN\SHARE\BEACH\415_PCH\ccrecuse wpd Council Meeting July 13, 1999 '. 0 1UuG "".J.!.. L '.."I"'..,J Santa MOnica, California TO Mayor and City Council FROM City Staff SUBJ ECT Recommendation to Approve the Preferred SIte Use Alternative for 415 Pacific Coast Highway and Direct Staff to Initiate Next Steps Including Preparation of Environmental Impact Report, Documentation Drawings and Demolition Plan, AnalysIs of Operating Options, Negotiation of Beach Operating Agreement Extension with State, and Authorization of Mayor to Submit Letters of Support for Potential Funding OpportunitIes INTRODUCTION ThiS report provides informatIon about the 415 Pacific Coast Highway (PC H) planning process and requests City CounCil approval of the recommended site use as detailed In AttachmentA, "Recommended Site Use for 415 Pacific Coast Highway" The report further seeks authOrization to initIate the next steps In the planning and Implementation process which Include the preparation of an Environmental I mpact Report, documentation d rawmgs and demolition plan, analYSIS of operating and management optIons for the Site, authOrization for the City Manager to negotiate the extension of the Beach Operating Agreement With the State Department of Parks and Recreation, and authOrization for the Mayor to submit letters on behalf of the City CounCil In support of funding opportunltles BACKGROUND The project site IS a five acre beach parcel located north of the Santa MOnica Pier at 415 1 ... -. -""o~"" 9A PacifiC Coast Highway Designed by the noted architect Julia Morgan, the anginal structures were constructed c 1928 as the beachslde estate of actress Manon Davies The site consisted of a large main house. several guest houses, pool and court areas and seaside cabanas and dressmg rooms The only ongmal structures remammg are the fencelretalnlng wall adjacent to Pacific Coast Highway, the tiled sWimming pool, and the "North House" which was a guest house Vanous structures and amenities added by subsequent owners and operators Include cabanas, shower and locker rooms, reception and banquet room, commercial kitchen, paddle tenn IS, basketball and volleyball courts, restroom faCIlities and adjacent parking lots The North House was deSignated a City landmark In 1980. the entire site was recognized a Site of Hlstonc Interest In 1987 With particular mterest Cited m the North House, the pool, and the front fence The property was sold In the 1940's to a pnvate party and converted to a hotel and beach club The State purchased the property In 1960 Under the Beach Operating Agreement With the State, the City of Santa Monica operated the property and leased It to a beach club, the Sand and Sea Club A proposal In the late 1980's for a hotel With some community faCIlities was defeated In a CitYWide referendum, and PropOSition S was passed, limiting hotel and restaurant development In a new beach overlay dlstnct, which Includes th IS site When the City assumed responsibility for the site m 1991 r the faCIlity was suffenng from 2 deferred maintenance and did not meet a number of bUilding and safety codes The City made capItal Improvements and repaIrs to the facllrtyto ensure access for the dIsabled and code compliance In public use areas The cabanas and the North House were closed due to code Violations and disrepair For two years the City operated the site as a public use summer beach faCIlity and rented the banquet and receptIon areas to private parties and groups on a year-round baSIS A long term plannmg process for the site was set to begin In January of 1994 The Northndge Earthquake on January 17, 1994, changed the course of events as the faCIlity suffered extensive damage Emergency repairs have been made to secure the roof of the North House and the retaining wall along PaCific Coast Highway The entire faCIlity has been 'red tagged" and IS currently closed to the public Working Group Planning Process In July 1997, the City Council establishing a Workmg Group to develop a Viable use for the use The Working Group Includes City Councllmembers Ken Genser and Michael Feinstein, who serve as co-chairs, and representatives of Landmarks Commission (Margot Alofsln), Planning Commission (Ken Breisch). Architectural ReView Board (Sergio Zeballos), and Recreation and Parks Commission (Susan Wilson) The City Council also approved a contract With the urban deSIgn fIrm of Moule & PolyzOJdes for planmng services The Working Group met on a biweekly baSIS from September 1997 through May 1998 -. .J Working Group meetings were well attended by the public and provided opportunity for public comment dunng each step of the process The following summary bnefly descnbes the steps taken to develop the recommended use for the site . EXlstlnq Conditions and Site AnalysIs The Working Group was briefed on the EXisting Condition Report prepared by the architectural firm Hardy Holtzman Pfeiffer Associates which evaluated the eXisting site and bUilding conditions for feasibility of renovation or reuse The site analysIs Included diSCUSSions of topography, land use, access, Views, and restoration . I nltlal Working Assumptions The site analysIs led to the development of the preliminary objectives for the site In terms of economiCS, regulatory framework, use, and design of the site These Imtlal Workmg Assumptions, which have gUided the evaluation process, are Included In Attachment A . Potential Uses The Working Group developed a set of potential uses for the site which Included many of the Ideas which had been proposed over the years ThiS matnx of uses IS Included as Attachment B . Community Open House - November 15,1997 ApprOXimately 50 people attended the open house at which the site hiStOry, constraints and opportumtles were presented and comments were proVided on the working assumptions and types of uses 4 . Principal Site Use Alternatives Following the open house, four conceptual alternatives were developed to focus on the public benefit. program, and site elements of each alternative These alternatives Include (1) a Beach Park, (2) Beach Recreation Area, (3) Family Beach Center, and (4) Meeting/Education Center A description and site plan of each alternative IS Included In Attachment A . Community Workshop - February 1, 1998 The four pnnclpal use alternatives were presented to approximately 30 people at a workshop and also shown on City TV Comments and Issues raised at the workshop Included the Importance of public access, need for a focus on children and families, incorporating a connection to the blkepath, establishing a banquet facIlity, mlnlmlzmg parking on the Site, and recognrzmg Its Importance as a preservation project . Parking and Economic Feasibility AnalysIs A parking demand and supply analysIs and an economic analysIs of the capital and operating costs and revenues were conducted for each of the four alternatives Based upon these analyses, several alternatives were Judged as mfeaslble or did not meet the Initial Working Assumptions For example, to meet the parking requirement for the Beach Family Center, a parking structure would be needed The Beach Recreation Area, without a revenue generating 5 component, would require a significant City subsidy . Consideration of "Hybrid" Use Alternatives Several "hybrid" alternatives were then developed that combined several of the public use components (Beach Park, Beach Recreation Area) with a revenue generating use (Meetmg/Banquet Center) This analysIs has led to the development of the recommended site use which IS described below . Review by Boards and CommisSions The Planning, Landmarks, and RecreatIon and Parks CommiSSions all unanimously endorsed the recommended site use A summary of comments from each of these commiSSions and adVISOry review comments from the Architectural Review Board are Included as Attachment C DISCUSSION Recommended Site Use The recommended sIte use, more fully desCribed m Attachment A, IS a "hybrid scheme" that combines several of the public use components of the alternatives (Beach Park, Beach Recreation) With a revenue generating use (Banquet Center) ThIS alternative meets many of the objectives established by the Working Group It preserves the history of the Site, It creates a community-oriented destmatlon and Increases pUblic access to the beach, It creates a range of year-round uses and encourages diverse users, and It links 6 the site with regional open spaces The recommended alternative restores the Significant hlstonc elements of the site the North House will be restored as a meeting faCility With a focus on community and non- profit actiVities The Main Building (not part of the onglnal estate but one of the earliest additions after conversion to hotel use - c 1948) will be rehabilitated as a two-story banquet and meeting faCIlity Gardens and an outdoor terrace will enhance and functionally enclose thiS portion of the site The pool, one of the few remaining pools designed by Julia Morgan, will be restored for recreational sWim and a changing and shower faCIlity will be added The pool deck and adjacent park Will serve as a gathenng place for families The beach square, adjacent to the existmg restaurant, Will establish an Informal meetmg place that draws from the beach path and volleyball courts, and the beach greens Approximately 300 parking spaces Will be prOVided In the north and south lots wh Ich Will be connected by an access road Since peak use of the site Will occur dunng the day an summer weekends, the banquet and meeting faCility Will not be programmed atthattlme, banquets Will be permitted dunng summer weekdays and at mght an the weekends Concession stands Will offer beach eqUipment rentals and refreshments. ThiS alternative Includes the potential for an InterpretiveNlsitor Center for the National Park Service to serve as a gateway to the Santa MOnica Mountams National Recreation Area which Includes Santa Manica State Beach DISCUSSions With National Park Service 7 and State Department of Recreation and Parks staff have indicated Interest In establishing Interpretive exhibits and education programs that would promote Santa Monica's natural environment This use IS consistent with the Council adopted Recreation and Parks Master Plan recommendation to develop a link to the Santa MOnica Mountains National Recreation Area Parking and Traffic Analysis As indicated above. a parking demand and supply analysIs was prepared for each alternative and the recommended plan, determining the number of spaces required for each use component The analysIs for the recommended plan use IS Included as Attachment D The eXisting 168 spaces which currently serve beach goers and the restaurant are assumed to remain available for these public uses as well as the additional recreation amenities such as the pool and park space The maximum number of spaces available on the site IS about 300 With the exception of peak summer weekend days, the vanatlon In use patterns proVides for shared parking dunng most of the year since the beach/recreational parking spaces would be available for banquet and meeting users dunng non-peak penods Smce there IS a projected shortfall of about 118 spaces If all uses were programmed Simultaneously, It IS recommended that no banquets be scheduled dunng summer weekend days All other uses can be accommodated dunng the peak penod Parking IS prOVided In two lots connected by the eXisting frontage road Parkmg management Will allow for effiCient use of spaces by directing Banquet and North House 8 users and employees to the north lot and beach goers, recreation, and VISItor Center VIsitors to the south lot A key pOint raised by the Workmg Group, boards and commiSSions, and the public IS the Importance of bringing VIsitors to the site by means other than personal vehicles Several connections to the beach bIke path are provided and the development of shuttle service from other parking lots and between VISitor destrnatlons such as the Santa MOnlca Pier and Third Street Promenade are viable strategies The recommended site use plan calls for the Installation of a traffic Signal or half slg nal on PacifiC Coast HIghway The City has initiated diSCUSSions with CAL TRANS about the need for traffic Signal control along PGH at several locations, including 415 PGH Over the past year, the PGH Task Force, convened by Assembly Member Sheila Kuehl and comprised of representatives from GAL TRANS and other state and local agencies and governments from Los Angeles, Mallbu, Santa Monica, and Topanga, has been workmg to solve many of the problems along PCH, Including Improving safety conditions At a public meeting of the PCH Task Force held on June 10, 1999, the City presented information about the planning for a future public recreational faCIlity at 415 PCH and subsequent preparatron of an Environmental Impact Report that Will Include traffiC Signal warrants analYSIS Next Steps To Implement the recommended site use plan, there are a number of activities that would be undertaken over the next year to move the project forward Staff would Inltlate the preparation of an Environmental Impact Report, documentation draWings and a demolition 9 plan In light of the continuing detenoratlon of the Main BUilding, staff Will undertake temporary repairs to the roof of the Main BUilding, Similar to what was done to the North House roof after the 1994 Northndge Earthquake ThiS work, which consists of removing the eXisting roof and Installing a roof membrane, would be done In compliance with CEQA and would protect thiS element from further detenoratlon Staff seeks authorization from the Council to begin formal negotiations with the State Department of Parks and Recreation to extend the State Beach Operatmg Agreement, which covers the operation of all of Santa Monica State Beach Includmg the 415 PCH Site, and IS due to expire In 2006 State Department of Parks and Recreation staff have participated In the Working Group process and have Indicated support for the recommended site use plan, and extension of the Agreement The plan IS m compliance with the State Resources Plan adopted by the State Parks and RecreatIon Commission In 1984 The extension of the Beach Operating Agreement IS Critical to the City's Willingness to direct resources to developing the site Staff Will return to the City Council at a later date for approval of the terms of the Agreement BUDGETlFINANCIAllMPACT A comprehensive economic analysIs has been conducted as part of the planning study The analysIs conSidered the total project capital cost and the operating costs and revenues of each program component to determine the total net operating revenue available to fmance the project ThiS was done for each of the conSidered alternatives and 10 IS summarized for the recommended site use alternative In Attachment A As the Working Group studied various alternatives, a key consideration was f[ndlng a balance of maximum public access and financial self-sufficiency While several alternatives maximized pubic access, I e Beach Park and Beach Recreation, the absence of a strong revenue generating component reqUired a high level of City subSidy The Meeting and Banquet Center alternative provided strong revenue generation but at a much lower level of public access The Public Beach Club alternative presented revenue generating uncertainties since there are few public beach club models and the high construction costs for the parking structure needed to accommodate the peak summer parking demand Increased the overall project cost The hybrid developed by the Working Group Includes a strong revenue generator (banquet and meeting center) to partially SUbSidize park and recreation uses which are usually fully subSidized by the City The total capital cost for the recommended alternative site use, including hard construction costs, furniture, fixtures, and equipment. soft costs such as deSign, permits, legal fees, and contingency IS estimated at $9,527,128 Net operating revenues ( gross revenues minus expenses) have been estimated for each program component These revenue and expense assumptions are based on the City's experience With Similar faCIlitIes and on data prOVided by private companies operating Similar faCIlities The net operating revenue, estimated to range from $$505,782 to $551,657, IS the amount that would be available to cover the annual debt service The economic analYSIS assumes a one-time capital contribution of $2 5 million from the City The balance of the capital cost 11 ($7.807,919 mcludlng financing costs) would be financed by either a revenue bond or othertax-exemptfl,nanclng As the economic analysIs shows, there IS an annual operating shortfall estimated to range from $198,948 to $224,510 The reason there IS a range In the required annual operating subsidy IS that the analysIs has conSidered three different operating scenarios for the Main Building's banquet and meeting operation, each with a different net revenue result These Include (a) City Operation whereby City staff handles all operations, (b) For-Profit Lessee whereby the City leases the Main BUlldmg to a professional banquet operator under a minimum annual rent agreement and one-time capital contribution, and (c) Professional Management Contract whereby the City hires a profeSSional banquet manager for an annual fee In all of these scenanos, the City directly manages the North House and all recreation uses Each operating scenario has a different net revenue result based on staffing costs and anticipated performance The expected capital contribution from the For-Profit Lessee reduces the City's annual debt service In thiS scenario A recommendation on management structure Will be presented to the Council at a later date follOWing an analysIs of the benefits and risks of each operating scenario There are several factors that might affect the range of subSidy required The use of the North House IS focused on non-profit and community uses, assuming that 40% of meetings Will be at a lower non-profit rate By shifting the rate structure to reflect more for- profit meetmgs, the subSidy could be reduced by about $30,000, to $167,748 If the rate structure for the North House IS oriented to more non-profit rates or If parking revenues are 12 lower than expected, the subsidy might Increase to as much $278,801 per year Another means to reduce or eliminate the annual subsIdy IS to seek grants and State or federal funding The project could break-even on an annual basIs with a total capital contnbutlon of between $5 2 and $5 7 million In order to act qUickly If outside funding opportunities anse over the next year, staff seeks authorrzatlon for the Mayor to submit letters to fundmg agencies on behalf of the project There are several possible revenue sources that might cover the operatmg subSidy and/or construction costs There are currently two State Park Bond Acts under consideration by the State Legislature While the proposed bills do not specify projects, the 415 PCH plan appears to meet fundmg eligibility requirements Staff Will mOnitor progress on the legislation Looking to Internal funding sources, It may be possible to cover a portion of the subSidy by the Beach Fund If revenues contrnue at current levels, however avaIlability of the Beach Fund Will depend on other capital project needs If consideration IS given to ralsmg the Transient Occupancy Tax (TOT), a portion of the Increase might be dedicated to covenng the annual operating subSidy No budget action IS reqUired at this time There are suffiCient funds currently approprrated In Accounts 11-740-511-20094-8900-99520 and 11-740-522-20099-8900-99520 to cover the costs for preparation ofthe Environmental Impact Report ($100,000), documentation draWings and demol1tlon plan ($75,000), and temporary repairs to the Main BUlldmg ($50,000) Accordmg to a projected time line for the project, funds for the deSign and 13 construction documents and demolition would be required In FY 2000-01, with constructIon fundmg anticipated m FY 2001-02 RECOMMENDA TION Staff recommends that the City Council 1 Approve the recommended site use alternative far 415 PaCific Coast Highway, 2 Direct staff to Initiate the next steps In the planning and Implementation process Includmg the preparation of an Environmental Impact Report, documentation drawmg and demolition plan, temporary repairs to the Main BUilding, and analYSIS of operating and management options, 3 Authonze the City Manager to negotiate the extenSion of the Beach Operating Agreement With the State Department of Parks and RecreatIon and, 4 Authonze the Mayor to submit letters on behalf of the City Council In support of funding opportunities for the 415 PCH project Attachments A Recommended Site Use for 415 PaCific Coast Highway B Matnx of Potential Uses C Summary of Board and Commission Comments D Parking Demand and Supply AnalYSIS Prepared by Barbara Stmchfield, Director Judith Meister, Beach Manager Community and Cultural Services Department 14 ~ r :3 '" > - - - - - - - - - - - - - - - c - - ,;; )- I, ~- .. l- ; ~ U 1. ,--- "l.J - I- l' .,.. ~ IY - () J ""l ( - O/~ - ['1.1- ..., ,~ l. 1 ;,. 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"'" "2: :v ~ :: >-;:;... =~~ ~ ~ I-WV '" 8 ..;::- Oe ~Q..~ ~ ~.; ~;: Z 5 S:! - .:::: -~~ -' ::::: - = ~ ;> -- =- ...:::: - - - ~ ... 7 . :,,:- ~ > ::..:.. ~ ;., :> ~ ~ .... >~- =- 3: :: ~ 0. - -= c c.c QJ ... "0 .-I ~ -3 <-:: 0... ""l '- ,-. --- ""l ..:J < ~ - Attachment C Summary of Board and Commission Comments landmarks Commission (Apnl 13, 1998) · Unanimously endorsed preferred sIte use alternative . Excellent proposal that maXimizes on-site uses and preserves eXisting hlstonc features, especially with regard to the North House and pool · Concerns raised about parking availability when site IS used to ItS full capacity · Encourage pedestnan access from both the beach and PCH, Include adequate area for loading and unloading of public transportation . Public square should be enhanced and more fully developed Planning Commission (April 15, 1998) . Unanimous motion to support the preferred site use alternative as presented · It maintains hlstonc character of portions of the site With a mix of public uses and revenue generation that supports publiC access to the site · Issues to consider · Sustalnablllty - can we reuse wood of bJdg that are demolished · forms of access - pedestnan, beach, parking, mass transit · tie to bike path . finance With minimum City contribution · look at feasibility of bUilding a larger pool · retain operator and pricing fit of eXisting restaurant but allow beach use to expand · encourage creative uses of Site, I e amenities such as lockers, chairs, umbrellas . consider boardwalk for accessibility to beach . Include In Interpretive center the history of Manon DaVies and the Hollywood era Recreation and Parks Commission (Apnl 16, 1998) . Unanimous motion to endorse plan as submitted . ConSider adding wading pool, concern about sand blOWing Into pool . ConSider prOViding paddle tennis courts Architectural Review Board Advisory Review ( May 18, 1998) . Concern about parkmg availability . Tradeoff between increasing public access through a larger pool and the Impact on parking needs . Consider a vehicular drop-off with an acoustical barner and better definition of the eastern border . Types of trees to be planted In the coastal zone are limited en en -... It) N <0 ... 0 UJ '(1) 0_ 0:(1) a.. > >....1 <<( 3:Z I: :I:<( tll ..... a:: ... (!)O in -Z tll :I:<( I: J: I-:!: Il. >< UJw ;:: w <(0 tll 8<!> ... C o~ -~ !:!:o: 0<( eta.. a.. It) ..... ~ (/) Q) ro (3 o VI VI <( ~ x. ro ~ ATTACHMENT D eo CD o'<:t 0 It) I,{) M I,{) eo 0 00 co V LO II) II) N N 0> N ..- .-- ....... M I N ....... V ro ..... 0 I- eo N a a 0 0 N a II) LO 0 LO co '<:t LO LO '<t ..- N lXl 0 co VI .,.. ....... M I N ..... M ... G) C/) ::l VI 0 v 0 '<t 0 LO M M 0 M a M G) "...- ..... ....... 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E .E (I) Iii LO :;: S"2? <"> l\J '0 "0 c: 0 (1J a. ~ 0 .9 ~ V1~ s: N $ f?"x<nw <ll l\:l (I) (I) <II (I) E ::l ::J 0. ::l OJ o a VJ 0 a I,{) VJ 0 ..........<(N ~~~~L[)ro Kaku Associates 06/25/99 EXHIBIT 2 415 PACIFIC COAST HIGHWAY PROJECT PARKING DEMAND AND SUPPLY ANALYSIS Parking Demand Ratios Land Use Parking Demand Ratio Conference & Meeting Rooms(a) Restaurant(a) 1 per 80 SF 1 per 300 SF of support area 1 per 75 SF of customer area 1 per 50 SF of separate bar area VIsitor CenterCb) 1 per 3 VISitOrs + 1 per employee Concession Stand(c) 2 per stand (err.;:>loyee) North House & Recreation Employees(C) 1 per employee Recreation POOI(d} 1 per 2 users Banquet(e) 1 per 2 guests + 1 per 10 guests (employee) Notes (a) City of Santa Monica Parking Code Requirement (b) Assumes Average Vehicle Occupancy of 3 vIsitors/vehicle per National Park Service (c) Number of employees provided by the City of Santa MOnica (d) Assumes Average Vehicle Oc.v.Jpancy of 2 users/vehIcle (e) Assumes 1 employee per 10 guests and Averz..",,_ _ cle Occupancy of 2 guests/vehicle