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SR-906-000 (26) ~E CCS: Admin: share:\staffrep:\415PCH12-16-03 Council Meeting: December 16, 2003 DEe 1 6 2003 Santa Monica, California TO: Mayor and City Council FROM: City Staff SUBJECT: Approval of Next Steps for the Redevelopment of 415 Pacific Coast Highway, Approval of the Use of State Grant Funds For Planning and Design Services and Authorization to Execute Related Professional Services Agreements with Rincon Associates and Historic Resources Group Introduction This report summarizes the status of planning activities for the redevelopment and adaptive reuse of the historically significant public property at 415 Pacific Coast Highway, proposes the next steps to be undertaken in order to implement a viable project, and requests authorization to negotiate and execute professional services agreements with environmental and historic preservation consultants to further the planning process, using currently available State grant funding. Backqround The property at 415 Pacific Coast Highway (415 PCH) is a five-acre beach parcel owned by the State of California The City of Santa Monica is responsible for its oversight pursuant to the City's Operating Agreement with the State of California to manage the Santa Monica State Beach. Unlike the open space recreational areas that are the responsibility of the City under this Agreement, this site includes an array of large structures and facilities - several of which are noted for their historical significance as part of the original 1920's beachfront estate built by William Randolph Hearst for 1 E. DEe 1 6 2003 actress Marion Davies and designed by noted California architect Julia Morgan. Other structures were added incrementally over the next forty years as the property experienced life as a privately owned hotel and, when sold to the State of California, leased as a private beach club. For a short time in the early 1990's until the devastating Northridge Earthquake seriously damaged all structures on the site, the City operated 415 PCH as a seasonal public beach facility. Due to the site's historical significance, its compelling beachfront location, and its potential as an active public resource, in 1997 the City embarked on an intensive community-based planning process to establish the policy framework for future redevelopment and adaptive reuse of the site. This effort culminated in City Council approval of a recommended Site Use Plan in July of 1999 as well as a direction to proceed with further planning activities, the targeted demolition of severely damaged non-contributing structures and pursuit of grant funding opportunities. Preliminary environmental work and historical documentation have been completed and $759,000 in State and Federal grant funds have been awarded. After receiving all required State and local regulatory approvals, selective demolition and stabilization of historic elements of the site began in October of 2003 with a current projected completion date of January 2004 2 Discussion Policy Framework. The Site Use Plan approved by the City Council in 1999 (see Attachment 1) contains a number of policy objectives intended to strike a balance between maximizing public access and generating adequate revenues to support the redevelopment and continued operation of the site. The recommended site use combines several public open space components with a revenue-generating component (a banquet and meeting center). The important historical buildings and elements are retained, and there is an emphasis on thoughtfully designed, linked public open spaces and beach access. The plan identifies physical planning, programming and economics as inherently connected Issues. Financial Realities. In 2001, the City's Engineering Division completed a revised cost estimate for the preferred site use. This estimate projects hard construction costs of approximately $12.5 million (in 2004 dollars) as opposed to the estimate of approximately $9.5 million (in 1998 dollars) used in developing the Site Use Plan. Significant cost components include: site work ($2.8 million), historic rehabilitation and adaptive reuse of the North House ($2.6 million), banquet facility ($3 million), recreational pool area ($1.4 million), open space and recreational improvements ($2.1 million), and furnishings and equipment ($.6 million). In addition, project design, construction management and project contingencies were estimated at approximately $4.2 million for a total capital cost of $16.7 million 3 The City has successfully competed for $759,000 Federal and State funding to address targeted aspects of the redevelopment of the site and has additionally allocated $506,000 from the Beach Fund to support required environmental work, targeted demolition and historic structures stabilization. The City plans to apply for State Proposition 40 grant funding ($267 million will soon be available for competitive grants for cultural and historical projects). Through grant allocations awarded to date, the State and Federal governments have shown interest in the project and willingness to partner with the City to achieve the goals of the Site Use Plan. However, the financial limitations of available grant funding sources, the City's inability to contribute significant levels of funding from its Beach Fund as well as the magnitude of the required capital investment constrain achieving the adaptive reuse of the site. Given these financial realities, involvement of the private sector in the project will be necessary to generate sufficient revenues to rehabilitate the site and preserve its historical elements while successfully balancing proposed commercial and civic uses. This eventuality was included in the Site Use Plan's working assumptions, which provided for the involvement of the private sector within the regulatory and use parameters outlined in the report. Next Steps. Solicitation of Private Sector Interest. Staff recommends that in January of 2004, a Request for Qualifications (RFQ) be issued to solicit interest from potential private sector partners in the redevelopment of the site. This partnership would involve leasing all or part of the site to the successful developer/operator under a concession 4 agreement as required by the State. Interested parties will be asked to describe: the proposed development team and its qualifications, the structure of the proposed public/private partnership, a conceptual use plan for the site, and a preliminary financing strategy. Submittals will be evaluated based on the strength of the team's professional expertise, the experience of the team in developing financially viable projects, the degree of commitment to historic preservation and innovative site design, the team's ability to enter into a vital and economically sustainable public/private partnership, and the extent to which the proposed conceptual uses address the policy objectives of the City's 1998 Site Use Plan as well as the State of California's Santa Monica State Beach General Plan (see Attachment II). Proposal Development. The most qualified and viable teams will be asked to submit detailed proposals by April 2004. City staff will review proposals using the above criteria with emphasis on financial viability and the balance of commercial uses with public access. Recommendations will be transmitted to the City Council regarding the preferred project direction and staff will then request authorization to refine the preferred proposal and negotiate with the identified development team. Adequate time and outreach will be provided to ensure public input. City staff will work closely with staff of the State Department of Parks and Recreation throughout to ensure that State requirements are met. Santa Monica State Beach Operatinq Aqreement. Concurrently and as authorized by the City Council in July of 1999, City staff will continue negotiations to renew the long- term Operating Agreement with the State of California for the operation of Santa Monica 5 State Beach which expires in 2006. This process is currently underway and no commitments regarding 415 PCH should be made by the City until the extension of the Agreement is assured. It is projected that negotiations regarding specific terms for the extension of the Operating Agreement will occur in the coming calendar year. Environmental Review and Site Guidelines. Staff will continue to work with currently contracted project consultants to prepare additional baseline environmental data and historic preservation documentation and design guidelines. This work includes preparation of a Phase environmental site assessment and a Historic Structures Report for the North House to analyze the original features and alterations to the house and identify conditions, maintenance guidelines and rehabilitation plans including an evaluation of the mechanical and structural systems and recommendations for upgrades. The North House will also be documented in drawings and photographs in accordance with the Historic American Buildings Survey (HABS) standards, a Condition Assessment will be completed for the historic swimming pool and an interpretation plan will be prepared to highlight historical themes of the former estate and provide guidelines for design firms who will be involved in developing architectural plans for the property's reuse. These planning activities will be funded by State Proposition 12 funds. Grant FundinQ. City staff will continue to identify possible grant funding sources to support the public aspects of the project. As noted previously, State historical and cultural project funding will become available in the near future and State officials have confirmed that 415 PCH is an eligible project. 6 Budqet/Financiallmpact An amendment to the current professional services agreement with Rincon is required in the amount of $2,450 for the Phase I site assessment and an award in the amount of $155,375 including $14,125 in contingency funds to Historic Resources Group is needed for further historic preservation related tasks. Funds in the amount of $155,375 are available in account number C20052002.589000. No additional budget action is required at this time. Recommendations Staft recommends that the City Council: (1) Direct staft to initiate the next steps in the planning and implementation process for the redevelopment and adaptive reuse of 415 Pacific Coast Highway as noted in this report, (2) Approve the use of State grant funds for professional planning and design services, and (3) authorize the City Manager to negotiate and execute an amendment to the current agreement with Rincon for $2,450 and an agreement with Historic Resources Group for $155,375 plus $14,125 in contingency funds. Prepared by: Barbara Stinchfield, Director Karen Ginsberg, Assistant Director Department of Community and Cultural Services Attachment I: Attachment II: 415 PCH Site Use Plan State General Plan Guidelines ., LLj LLj LL] '~; k.J;.,1 L1-., ~l r..-..~ - IJ.. 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'';:; ::J ::J Q) m (J) (f) ro c ro ,~ ro ::J c ..D .... (1) '';:; If) CO ;t:: '0 (1) C ro "0 E (f) $9 (f) ~ if) (!) 0 ::s::! ~ () c Q) Q) .... -;; E > ro C E '(jj (l) ui ro J::: (l) C ::J g CO if) 0 (l) (l) '0 CO u > :2 0 '0 J::: -0 (f) 0::: 0 0 C ::l '';:; :p ..Cl C ro I 'oJ) c (J) c +:i 3: to :2 u ro 4- (!) C U C J:: ro (l) ro Q) ~ U (j) (f) (l) (l) C :Q (f) (j) Q) Cl. 0 u E E ..Cl 'c (j) (l) E C (j) ::l (j) 3: E ro 0 ::l +...J Q) C 0 (J) l!) +-" if) E .x. +-' 0 -0 (!) Q) 0 0 0 0 J:; ::J 0 ..... J:: ::J (l) M (l) ..Cl U If) D- C J::. ~ f- ::l C ..D U <( (f) ..Cl -0 ct '<f (Excerpt from State General Plan Amendment) 3.3.1 Recreation Activities and Facilities a) The beach should be considered a regional recreational facility and part of a local and state-wide beach recreation system. b) The beach should be viewed as an urban facility. c) All activities at the beachfront must be compatible with beach recreation, the primary activity, and related to it. Activities which should be planned for are: Beach recreation: bathing, swimming, strolling and wading, also surfing, body-surfing and water skiing. - Active outdoor recreation: volleyball, gymnastics, and various games. Passive recreation: social gatherings, family outings, and peer groupings. Biking and skating Pier related activities: fishing, strolling, amusements and eating. d) Extensive boating should not exceed capabilities of the existing breakwater. e) Compatible wintertime uses are swimming, wading, walking, picnicking, biking, fishing, surfing, active outdoor sports. f) The following recreation facilities should be considered: Recreation service areas - incorporating facilities for sanitation (restrooms), changing room, food and beach concessions, outdoor showers, and drinking fountains. Promenade and walkway incorporating lighting. Outdoor recreation areas incorporating children's playgrounds and facilities for active outdoor sports. A bikeway extending the length of the beachfront whose placement and design minimizes conflict between the pedestrian and bicyclist. g) Generally appropriate activities and facilities on public property at 415 Pacific Coast Highway, Santa Monica State Beach include, but are not limited to those listed above, and other activities and facilities such as: Picnic areas for families, organized recreation groups and other persons. 1 Attachment II A variety of restaurants and other food-service establishments ranging from simple, low cost "take-out" stands to sophisticated "sit-down" restaurants. Museums and displays which preserve or present historic, architectural, or cultural features of the beachfront and coastal area. Small theaters and other group gathering places which enrich the mix of uses at the beach and that do not disturb the quiet ambience of the beach and surrounding areas. Parking areas for automobiles, buses, motorcycles, bicycles and other vehicles to facilitate access to the beach area. Lodging facilities such as cabanas, and youth hostels which provide an added dimension of visitor access to the beach area. Recreational facilities that may include passes for specific time periods, with a high degree of access to the general public, including single-day use memberships and open annual memberships, which provide regular access to non-member recreation groups, and facilities, activities and services which assist in the provision of beach access to all persons, including special populations such as disabled persons, senior citizens, and economically disadvantaged persons. Beach maintenance and public safety facilities to maintain a high-quality and safe beach environment. Public physical fitness areas, programs and activities. Listing of the above uses as generally appropriate does not constitute approval of any particular development proposal, and does not affect applicable local or environmental review or any applicable development permits which would be required. h) The broadest array of facilities and services must be available at the beach in order to reflect the socio-economic needs of the regional population. 2 Attachment II