SR-308-002-02 (2)
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3CJ 1--- 002- 02 JUL 1 7 '990
Santa Monica, California
JUL 3 1 1990
AUG i 1990
CM:LCB:dvm
City Council Mtg. 7/l7/90
(pchuse)
TO:
Mayor and City council
IW8 ';' 1990_
FROM:
City staff
SUBJECT:
Information Regarding Termination of
the Sand and Sea Club Concession Agreement
Introduction
At the July 10 City Council meeting, Staff was requested to
provide information regarding the impact of termination of the
month-to-month concession agreement with the Sand and Sea Club in
order to open the site for public access.
FOllowing is a
response to various questions raised by Councilmembers.
Date of Eviction
The suggestion by Councilmember Katz of Club closure to members
immediately following Labor Day represents the end of the summer
peak usage season. As the Club has been on a month-month status
for several years, the possibility of imminent eviction has been
well-understood by both the operator and the members. It might,
however, be reasonable to provide the operator one additional
month in which to vacate the premises after closure to members.
The september-october closure timeframe would also provide city
staff adequate time to prepare for re-opening of the facility
prior to the peak of the following season.
Potential Interim Uses
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July 17 agenda
""Z-A990
JUl.. 11 1990
rt l~gl1 JUl 3 (;990
The staff report prepared for Item 11 - C on the
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(p. 31 - 36 attached) discusses the - option of a city-operated
public beach facility utilizing the existing buildings and
parking lots for both day-use beach-related activities and
meeting space. The assumptions utilized in that analysis
projected a minimal entrance fee of $2.00 plus parking. To bring
the operation into a break-even position, daily use fees would
have to be approximately $9/per person plus $5.00 parking. In
order to provide the city with the existing level of revenue from
the site, daily use fees would need to rise to nearly $12 per
person.
It is important to note that it would be necessary to refine some
of the assumptions if interim implementation were to proceed.
For example, the capital improvement estimates would most likely
be reduced and special event rental revenues might be added.
However, these refinements should not be expected to
significantly change the conclusions of the analysis. The result
is that interim operation would be feasible but the costs to
users would be high.
It is recommended that if this option is desired by Council, that
staff pursue operation of the facility both by city staff or
awarding of a professional service agreement to an outside
operator.
Budget/Fiscal Impact
As indicated, it is potentially possible to provide a break-even
operation~ however, that would be dependent on aggressive
marketing of the facility to produce a substantial revenue flow.
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This marketing would need to reflect a balance between high use
fees and preserving the economic diversity of users.
State Budget Language
The Council also requested information on the status of state
budget language regarding this sLte.
Senator Rosenthal and
Assemblyman Hayden have introduced the following language into
the proposed 1990 - 91 state budget:
Notwithstanding any other provLsLon of law the
Department of Parks and Recreation or the City of Santa
Monica acting on behalf of the department, shall not
require the current concessionaire located at 415
Pacific Coast Highway to vacate the property until all
zoning and other required permits have been obtained for
converting the property to a new use in accordance with
the final agreement between the city of Santa Monica,
the state Department of Parks and Recreation, and the
new concessionaire chosen to operate said new use.
If the current concessionaire remains past December 31,
1989, the concessionaire shall pay rent of $20,833 per
month beginning January 1, 1990 and shall be prepared to
immediately vacate the property when final zoning and
other permits are obtained to avoid delays in
constructing new facilities.
This language is identical to language proposed in 1989 - 90
which was vetoed by the Governor who stated:
I am deleting provision l, which restricts the right of
City of Santa Monica to evict the current
concessionaire from 415 Pacific Coast Highway, because
it contravenes the city's authority as a state agent to
expedite development of the site for the purpose of
increasing public access.
The proposed language has been approved by both budget committees
and is anticipated to be before the Governor in the next week.
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It should also be noted that the city Attorney has expressed some
question regarding the applicability of this type of language to
the City.
Prepared by: Lynne C. Barrette, Assistant City Manager
Attachment
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Public Beach Facility Comparative Analysis
On May 30th, the Planning Commission asked the City Council to
examine more closely a project alternative that would convert the
existing site i~provements to a public beach facility. The
commission requested a comparative analysis between the proposed
project and this alternative in the following areas:
o potential revenue to City
o City operating costs
o capital cost (to City)
o net income to City
o number of "public" visitors to site
o traffic/parking
o overall public benefits
To perform this comparative analysis, staff developed a series of
working assumptions about the potential number of visitors,
operating costs and net revenue that might be realized at a
City-run public beach facility at 415 Pacific Coast Highway.
These assumptions are based upon a physical conversion of the
facilities currently on site. No programming efforts or City
sponsored events are included in the calculations. In all
cases, staff assumed that the public demand for the physical
facilities and access to the site/beach would be quite high.
potential Revenue Source.
Based upon the existing facilities on site, staff identified four
potential revenue sources: community room rental rates in the
North House, daily visitor use fees, cabana daily use fees, and
parking. It was assumed that any food service would be operated
as a break-even operation in order to maintain affordability to
public.
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Hourly Meetinq Room Rates
Based upon discussions with the city's Cultural and Recreation
services Department, staff projected a high demand for the North
House community rooms. staff estimated that North House could
provide two community meeting rooms that could be reserved for
two hour blocks, three times every weekday, and four times a day
every saturday and sunday. Based on maximum occupancy 365 days a
year and room rental rates of $20 for 2 hours, the annual gross
revenue would be $47, 840.
Oaily Use Fees
The existing Sand & Sea Club facilities were desiqned to
accommodate a private beach facility that would generate revenue
from annual membership dues. Conversion to a public beach
facility eliminates this membership fee revenue stream, currently
estimated to be over $1 million annually. In an attempt to
recover this revenue at a public beach facility, staff looked at
Charging a daily per person use or admission fee. A survey of
Southern California cities found none that had comparable public
peach clubs; however, of the public facilities located on the
beach, none charge a daily use fee other than hourly meeting room
rental rates and court/field reservation fees.
To help offset facility maintenance and operating costs,
could charge a minimal daily use fee of $2 per person.
would allow visitors access to the eXisting showers,
pool and paddle tennis courts.
the City
This fee
lockers,
staff estimates that as many as 85,042 persons would visit a
public beach facility at the site every year. This number
reflects the average parking space occupancy rates of 3 north
beach parking lots (#530, #810 and #930) and the #1550 lot
located just north of the Pier. The north lots were chosen for
their relative proximity to the project site. The average space
occupancy tor the #1550 lot was also used because it is a high
turnover (high income) lot due to its location next to the Pier
as a destination attraction in addition to the beach. Using
these per space averages, staff estimates that 34,017 cars would
park in the 276 space lot every year.