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SR-07082008-1BCity Of Clt~/.V®Ut1Cfl ^\Gp®~ Santa Monica City Council Meeting: July 8, 2008 Agenda Item: i-~ To: Mayor and City Council From: Andy Agle, Director of Housing and Economic Development Subject: Cinema planning and development consulting services Recommended Action Staff recommends that the City Council authorize the City Manager to negotiate and execute an amendment to the agreement with IJM Enterprises for consulting services related to the potential redevelopment of cinemas in the Bayside District, in an amount not-to-exceed $50,000, for a new total of $120,000. Executive Summary In its review of the appropriate mix of retail, restaurant and entertainment uses on the Promenade and in the Bayside District, the Promenade Uses Task Force recognized that redevelopment of the Bayside District cinemas is critical to the long-term health and vitality of the District. In .its review of the Task Force recommendations, the City Council identified cinema redevelopment as a top priority for the area. Following Council review, the City hired IJM. Enterprises to provide expert advice regarding cinema planning and development. With IJM's assistance, in January 2008, the City distributed an RFP soliciting proposals for the development of a mixed-use cinema development project. Staff is seeking an amendment to IJM's contract, in an amount not-to-exceed $50,000 to assist with reviewing the submitted proposals, and, if appropriate, assisting with. negotiations with the selected developer. Background The Promenade Uses Task Force was established by the City Council in 2001 to understand how best to enhance the vitality and maintain the proper balance of uses on the Third Street Promenade and in the Bayside District. The Task Force studied the then-current mix of retail, restaurant, and entertainment uses and concluded that the existing cinemas in the District. are outdated and likely will become less competitive in the near future unless they can provide appropriate amenities such as stadium seating, state-of-the-art technology, and other amenities that new theaters offer. 1 Entertainment, in addition to retail and restaurants uses, is seen as a key element of the Promenade's success and it is viewed as a draw to help support other uses. The current cinema sites are generally too small to provide for these modern amenities, however, encouraging cinema development outside of the Third Street Promenade could exparid the vitality of the District while maintaining this critical element in the mix of uses. Discussion Staff executed a professional services agreement contract with IJM Enterprises on March 12, 2004. Staff proposes to modify the professional services agreement by an amount. not-to-exceed $50,000, for a total maximum compensation not-to-exceed $120,000. The City; with the assistance of ,IJM Enterprises, issued an RFP in January 2008 soliciting proposals for the development of a mixed-use cinema project on the 30,000- square foot parcel of Parking Structure No. 3 located at 1320 4th Street. It is anticipated that the mixed-use development project will include state-of-the-art cinema, ground-floor retail and may include subterranean parking. An amendment to the existing contract is proposed to allow IJM Enterprises to continue to assist the City with review of proposals, and, if appropriate, negotiations with the selected developer. The proposed development of a mixed-use cinema project on the site of Parking Structure No. 3 would address the Promenade Uses Task Force objective to support the upgrading of cinemas in Downtown Santa Monica to ensure- their continued operational viability to serve residents and to attract patrons to the district: Previous Council Actions In considering the recommendations of the Promenade Uses Task Force, Council identified upgraded cinemas as a top priority for the Downtown. 2 On November 13, 2007, the City Council authorized staff to solicit proposals for a new cinema development at the site of Parking Structure No. 3, located at 1320 4th Street that would include ground floor retail and subterranean parking. Contractor/Consultant Selection Given the specialized nature of the theater industry, IJM Enterprises was selected in 2004 based upon its unique experience. Ira Mitchell, principal of IJM Enterprises, has over 30 years experience in cinema and real estate development. Financial Impacts & Budget Actions Funds for the contract amendment are available in account no. 01268.555060. Prepared by: Erika Cavicante; Senior Administrative Analyst Approved: Forwarded to Council: Andy Agle, Director U Housing and Economic Development ~rSiont Ewell Manager 3 Reference Contract No. 8943 (CCS).