SR-308-003 (26)
City Council Meeting: September 13, 2005 Santa Monica, California
TO: Mayor and City Council
FROM: City Staff
SUBJECT: Recommendation to Modify Policy and Guidelines for Extended
Licensing of a Portion of the 1550 Lot During the Off-Season to
Generate Revenue
Introduction
This report recommends modifying the policy and guidelines that Council
adopted in 2004 authorizing licensing of a portion of the 1550 beach parking lot
for extended periods during the off-season to generate revenue. Staff
recommends extending the time period beyond fall and winter months,
calculating the available portions of the lot in parking spaces rather than in
square feet, and limiting the maximum space for extended licensing to one
quarter of the parking spaces.
Background
Last year, Council approved a policy and guidelines that allowed for the extended
licensing of a portion of the 1550 lot during the period of November through
February. The intent of this policy was to generate substantial net revenue to the
Beach Fund by licensing part of the lot for entertainment/cultural shows when
parking demand is seasonally low. The guidelines specified that up to half of the
1550 lot may be licensed for events which protected public use of the remainder
of that lot. The guidelines also called for charging market rate rent for use of the
lot. Council asked staff to return in one year with an evaluation of the guidelines.
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Staff has assessed the current guidelines in regard to revenue generation for the
Beach Fund and effectiveness in managing extended use of the lot.
Revenues to the Beach Fund pay for the cost of operating and maintaining the
beach. These costs include grooming the sand, maintaining the restrooms,
maintaining beach parking lots, and paying for beach capital improvement
projects such as renovating older restrooms, upgrading parking lot equipment
and renovating the lifeguard headquarters. Costs have increased over the last
several years reflecting increases in utilities, insurance, and materials. Although
revenues from the Beach Fund still support these expenditures, it is becoming
increasingly difficult to cover costs without increasing fees. Staff’s
recommendation to modify the current guidelines to include the shoulder season
of March through May should generate additional revenue for the Beach Fund.
Discussion
The current guidelines for licensing of a portion of the 1550 lot for extended use
by appropriate commercial activities require that the event generate substantial
net revenue, that the licensee pay all City costs, and that the licensee comply
with all standard City requirements. Events are permitted in the off-season,
which is defined in the guidelines as November through February. The licensee
is required to provide a traffic, off-site parking and shuttle plan, and the event
must consist of primarily entertainment or cultural enrichment open to the public
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and suitable for all ages. The licensed area within the lot can encompass
between ¼ and ½ of the lot.
Modification to Rental Area
During the 2004-05 season, when half of the lot was occupied by a licensed
event, parking was generally available in the 1550 lot for beach and event
visitors. There were a total of 11 days when the lot filled to capacity. These
were all Saturdays and Sundays. Overflow parking was available in the south
beach parking lots and the event producer operated a shuttle that transported
visitors between the Pier and the south lots. However, there was not enough
capacity in the 1550 lot during the period of the licensed event to accommodate
filming base camp parking and other community events. From November
through February 2004-05, there was one community event and there were no
film base camps in the 1550 lot compared to a three year average of 2
community events and 9 film base camps during the same time period
Filming is an important revenue source to both the Beach Fund and to the Pier
and its tenants. In FY 2004-05, the Beach Fund experienced a 21% reduction in
parking revenue from filming and events the previous year during the occupation
of the lot by the licensed event. Pacific Park, the amusement park on the Pier,
also realized a reduction in revenue because film companies wanting to film at
the amusement park could not be accommodated in the lot at the same time as
the licensed event.
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Because the 1550 lot provides a critical parking resource to Pier businesses, the
use of the lot for extended licensing must remain compatible with the regular
operation of the Pier and must continue to meet the parking demand from beach
visitors and other community events. If the portion of the lot for licensed events
is reduced from ½ to ¼, 1/8 of the lot is left available for events and filming and
the remainder of the lot for regular parking. For these reasons, staff is
recommending that the guidelines be changed to provide that the maximum
portion of the lot that can be used for extended licensing be limited to ¼ of the
lot.
Modification of Time Period for Licensed Events
Staff has received several inquiries from event producers regarding licensing
beyond the November through February timeframe at market rent. The period
between March and May is considered a shoulder season for the beach.
Although spring break occurs during this period and is a busy time at the Pier, it
is generally not considered peak beach season.
Staff has contacted both California State Parks and the California Coastal
Commission to inquire whether they have any issues related to an extended time
period in the lot. Both agencies would permit the use as long as the event
concluded by the Friday before the Memorial Day weekend. These parameters
ensure that the lot can be used as a limited forum for expressive activities and
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also for commercial benefit to the City and the public it serves. Staff has also
met with the Pier Restoration Board of Directors and the Pier Lessees
Association and they are supportive of these modifications. It is therefore
recommended that the timeframe for licensed events be extended to a period of
November through May.
Recalculation of Available Portion
In 2004, staff entered into a license agreement for use of 160,000 square feet of
the lot. Although the footprint of the event did not exceed the approved square
footage, it consumed more than half of the available parking spaces. The
resulting configuration resulted in fewer spaces available for parking and other
community events. Staff proposes to address this issue by calculating the event
portions of the lot based on number of parking spaces rather than square feet.
One quarter of the lot would equal 241 spaces. This allows for more efficient use
of the lot and maximizes the remaining space for beach/event parking, filming
base camps and community events.
Budget/Financial Impact
In FY 2004-05, the licensing of the 1550 lot for 13 weeks generated $240,500 in
rent. The rental revenue to the Beach Fund in FY 2005-06 is projected at
$450,000 based on current market rates.
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If Council approves the proposed modification, there will be additional space
available in the lot to accommodate other events and small to medium filming
base camps. In FY 2004-05, the Beach Fund experienced a 21% reduction in
parking revenue from filming and events from the previous year during the
occupation of the lot by the licensed event. This coincided with one of the
rainiest periods on record. Based on the number of events and base camps
utilizing 1/8 of the lot over the last two years, staff anticipates that approximately
12 events/base camps can be accommodated going forward resulting in
approximately $21,800 in revenue.
In FY 2004-05, general parking revenue in the 1550 lot was down by $162,431
during the 13 weeks of the event. General parking revenue from the south beach
parking lot (2030 Barnard Way) increased by $27,000 during that same time
period reflecting 13 weeks of overflow parking. General beach parking revenue
was down by $127,582 in all lots last year. This significant decrease can be
attributed in large part to last winter’s record rains. If the time period for licensed
events is extended through May and if weather is generally good, staff assumes
general parking counts will be positive and, coupled with the increase in overflow
parking in the 2030 Barnard Way, will offset the decrease in the 1550 lot related
to the extended event.
No additional appropriation is needed at this time however the department will
monitor usage and if necessary include a budget adjustment at mid-year.
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Recommendation
Staff recommends that the City Council modify the policy and guidelines for
licensing of the 1550 lot to generate additional revenue to the Beach Fund by:
?
Limiting the available portion of the parking lot for extended licensed
events to a maximum of ¼ of the lot
?
Re-calculating the available portion of the lot in parking spaces rather
than in square feet.
?
Extending the time period for licensed events to the Friday before
Memorial Day weekend
PREPARED BY: Barbara Stinchfield, Director, Community & Cultural Services
Elaine Polachek, Open Space Manager
Marsha Moutrie, City Attorney
Barry Rosenbaum, Senior Land Use Attorney
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