sr-120777-11fSanta Monica, California, December 7, 1977
To; Mayor and City Council
From: City Staff r
Subject: Developer-Operator Skate Park DEC 1 3 1977
Introduction:
This report presents the process followed in selecting a developer
and operator for the skatepark to be located on the Deauville property.
It also recommends the approval of that developer and operator and.
presents`. the terms o.f the lease to be signed.
Background:
Invitations to attend a bidders briefing concerning the project were
sent to thirty-four organizations.. This conference Baas held on
September 19, 1977. Twenty representatives attended this meeting. The
proposed lease, site limitations, city minimum standards :were sent to
bidders in letters dated September 2nd and October 19th. Thev are
attached for Council review. These standards were among the items
discussed at this meeting.. The bidders were requested to submit a
preliminary proposal from which finalists would be selected to submit
more detailed proposals, from which the developer-operator would be
.selected, Seven proposals were submitted.
Six were selected for final review and deemed meeting the staff's
minimum standards. These six developers were then asked to present
their detailed proposals to a review committee composed of the Director
of General Services, Director of Planning, Director of Recreation and
Parks, City Treasurer, Recreation Superintendent and a Skateboarder.
The following firms submitted detailed proposals for review; Spariks,
~1
DEC l 3 497
To: Mayor and City Council
-2- December 7, 1977
Inc.; Sport Structures, Inc..; Skatercross Ltd.; Specialty Restaurants
Corp.; Mac Arthur Leasing Co,; and .Recreational Systems Inc. Each
of the presentations were rated by the following standards:
1. Compliance with City requirements.
2. Experience in operation of skate parks.
3. Financial capabilities.
4. Design of skateboard runs.
5. Construction experience.
6. Thoroughness o€ presentation.
Based upon these criteria the presentations were ranked independently,
without consultation, by each review committee member. SKATERCROSS, Ltd.
of Reseda was ranked first. The committee then discussed each proposal's
differences and as a result of these two processes, SKATERCROSS, Ltd.
is considered to be the best proposal for the City of Santa Monica.
Terms of the Lease:
The lease requires the developer-operator to post bond to insure
returning the site to the original state in case of abandonment and
also to insure performance, The amount of the bond will be determined
after the project has been constructed. A contractor's estimate will
determine the costs. to demolish, clear and clean up the site at five
years from the construction date.
Rental: :Minimum flat rental of 518,000 per year and 12% of the gross.
Projected revenue to the City is $37,-000 to $59,000 annually.
Length: 30 years - 5 years plus 5 with 5 year options,
To: Mayor and City Council
-3- December 7, 1977
Recommendation:
Staff recommends that the City Council authorize the City Manager to
enter into the lease agreement with SKATERCROSS, Ltd. on the terms
presented in the accompanying lease,
Prepared by: Donald T. Arnett
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625,000 20 yr
Sparks 5 10 12 10 10 14 61 2.25/ ? $346,000 10 yr No
2 hrs. + Arcade
75,000 10 yr
option
532,000 No
S. ct 5 12 9 5 12 10 53 2.50/ 3.00 $400,000 Negoti Arcade
Structures 2 hrs, able
107,000 Tenni;
25 yr
Recreational 304,800 5 yr
Systems 7 19 9 21 19 17 92 2.00/ ? $325
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MacArthur . 104
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Specialty 1.00/hr 479,000 10 yr ArcadE
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Skatercress 5 6 12 6 6 6 41 or 4.00 $350
000 308,516 5 yr Arcade
3.00/2h , 52,900 +
37,000 5-5yr
option
CITY OF
SANTA
MONICA
CALIFORNIA
DEPARTMENT OF RECREATION AND PARKS
City Hall, 1685 Main Street
Santa Monica, California 90401
September 2, 1977
of a year-round Skateboard Park facility for the City of
Santa Monica, to be located north of the Santa Monica Pier,
adjacent to the Promenade in the vicini*_y of 1500 Ocean
Front.
We have been informed of your interest in the development
of a high-quality first class Skateboard Park in the City
of Santa P4onica. This is a Request for Proposal for the
type of program that you would anticipate for the operation
Deadline:
A11 Program Proposals must be submitted to the Director of
Recreation and Parks, Room 202, 1685 Main Street, Santa
Monica, Ga 90401, before 5:00 p.m., October 10, 1977.
All proposals will be inspected by a Review Committee who,
by October 17, 1977, will select a minimum of five developers
wilo will be invited to proceed with the bid competition.
Oral presentations and review of preliminary development
plans of the proposed Skateboard Park will be reviewed by
the Committee on Monday, November 28, 1977. Recommendations
to award the contract will be submitted to the City Council
for their December 13th meeting.
Bidder's Conference:
of answering any questions. Please do not request advance
information or other data from this agency, as all infor-
mation will be given to all prospective developers equally
A conference of all interested bidders will be held on
September 19, 1977, at 10:00 am in Room 201-B, City Ha11,
1685 Main Street, Santa Monica, Ca 90401, for the purpose
-2-
at this conference. It will be held informally, aiming to
achieve mutual understanding between the City Administration
and those interested in submitting proposals. At this con-
ference a time table of expected approvals and deadlines
will be available for the assistance of developers pertaining
to the Architectural Review Board, Recreation and Parks
Commission, Coastal Commission, and City Council.
Sample Lease:
A copy of a sample lease is included for your information
The winning bidder shall be expected to sign a similar lease
as adopted by the Santa Monica City Council.
Minimum Rent and Percentage:
A minimum annual rental of $18,000 has been established based
~~c on an estimated gross sales to the operator of $150,000, and
a twelve percent (12%) of gross sales rent to the City.
Performance Bond:
A Performance Bond shall be required of the developer selected
adequate to return the land to its original state upon the
abandonment of the. facility.
Minimum Program Requirements:
The Program Proposal submitted shall include, but is not
limited to, the following items: (No proposal shall be con-
sidered adequate which omits any of the following items)
1. Snack bar for use of Skatepark patrons and general public.
2. Skateboard repair shop facilities for use of patrons.
3. Bicycle rental shop open to the general public.
4. Shop facilities for the sale and rental of skateboards
and safety equipment.
5. Type of Skateboard facility planned (to include a
description of the type of construction materials and
methods of surfacing to be used).
6. Description of the type of program, hours of operation
and possible fees to be charged.
7. Realistic estimate of amount of money to be invested in
the development of the Skateboard Park. (Minimum of
$150,000)
-3-
8. All program proposals must be accompanied with a
financial statement pertaining to the proposed developer
of the Skateboard Park.
Reminder
Deadline for submitting program proposals is 5:00 p.m.,
October 10, 1977
Minimum Development Requirements:
Plans and specifications for the proposed Skatepark shall
include, but are not limited to the .following items:
1. Promenade re-routing around the Skatepark.
2. Landscaping. suitable to the beach environment.
3. Fencing adequate to protect the facility.
4. Public restrooms to serve the facility and the beach.
5. Skateboard runs for the beginner, intermediate and
advanced, plus freestyle and slalom area.
6. Pdight lighting of the facility.
Other Considerations:
The developer shall agree to handle all forms and appearances
before the Coastal Commission, Arthitectural Review Board,
Recreation and Parks Commission, and City Council, including
but not limited to preparation and submission of an Environ-
mental Impact Report, if necessary.
The projected time in which the Skatepark can be approved
and developed is May/June of 1978. The term of the lease
shall be negotiable, dependent upon the amount of investment.
The City of Santa Monica reserves the right to reject any
and all proposals, and to waive all minor irregularities.
Both the initial Program Proposal and the final working
drawings and engineering specifications are subject to the
approval of the Director of Recreation and Parks, City of
Santa Monica.
Very truly yours,
~'ti~L~ ( ,~--~
Donald T. Arnett, Director
DTA:11
attachments
DEPARTMENT OF RECREATION AND PARKS
City xall, Isss Main street OctobeY 19 , 1977
Santa Monica, California 90401
The Santa Mcnica Skateboard Park review col:lmittee has
selected your proposal as one of the six authorized
to >roceed in the final selection process.
As outlined in our. letter of September 2, 1977, the
oral presentations and review of preliminary development
plans will be held on P•4onday, TIovember 28, 1977, in Room
201-A, City Hall, 16II5 Main Street, Santa Monica.
Your presentation should be limited to one hour, which
would include time for questions and answers. Your
presentation has been scheduled for Tf
you decide to withdraw from making a formal presentation,
please inform this office as soon as possible.
All presentations should he based upon the previously
outlined City specifications. There has been no deviation
authorized to any proposed developer.
At the time of your presentation, six (6} copies of all
written rlaterial.s should be provided. At a mini_rmml_ your
presentation should include: i
1. Preliminary plans and specifications of the proposed
Skatepark facility, including schematic dracai.ngs and
engineering estimates of development costs.
2. Detailed operational plan, including a list of
services to be provided with expected revenues
and operating costs.
Page 2 October 19, 1977
3. A detailed financial statement, certified by a public
accountant, of the principals to be involved.
4. Preliminary evidence of financing available, .including
name and source of credit.
5. Suggested length of lease and rationale for such length
and the annual gross sales percentage.
6. A detailed resume showing relevant experience of the
principals involved.
7. Proposed time schedule for the skatepark development.
I will be looking forward to seeing you on November 28th.
~~V~e~ry truly-yours,
Donald T. Arnett
Director
EA:11
10-19-77
copy sent to:
Sports Structures Inc
MacArthur Leasing Co.
Recreational Systems
Sparks,: Inc.
Skatercross Ltd.
Specialty Restaurants Corp/
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Santa Monica, California, December 7, 1977
~ ®'~'d
To: Mayor and City Council
From: Director Recreation and Parks ~'
~r,~x . ', .f .
Subject: Skateboard Parks - ,
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Attached is a copy of the staff report with recommendations from i s.°
the staff as to who should be selected to develop a Skateboard Park:;., ~~:
at the City owned Deauville property. ='-''-"
=~ ~
Since the selection process began there has been considerable comments,
discussion and actions taken by various individuals and developers
who are interested in seeing a skate park developed, Based on this
interest it could be anticipated that whoever the Staff Review
Committee selected, their decision would be challenged by other
interested parties, The reasons are quite simple: 1) there
appears to be a good return on the investment; 2) the area of
skateboard park development is so new that their really are not any
experts with ears of experience; 3) skateboarding is changing as
new challenges are being conquered; 4) evaluating skateboard park
design is subject to the background and experience of the viewer,
Tt should also be pointed out that all of the prospective developers
have the ability to develop a skateboard park, That is why initial
screening of some thirty plus interested parties was done. The six
finalists then submitted more detailed information about their proposed
operation, Basically all the City requirements were met by all the
developers. Because of the review process i.e., Coastal Commission,
Architectual Review Committee, minor changes will occur in the location
and design of the building,
To: Mayor and City Council
~.2n December 7, 1977
The Revie~r and Se ection Committee-did not: deal with the emotions of
the developer or the general public, They simply listened, asked
questions and. evaluated, based on their experience, the proposals
that were. being presented,
The Citg Council, unfortunately, will be faced with the problem of
emotional reactions. and considerations when this matter comes before
the Council, Tt is quite apparent that the recommendation of the
Selection Committee will be challenged. These challenges will be made
by other developers not selected and also by youth from the community
which may support those not selected.
The Review Committee has based its recommendations om which proposal
offered the City the soundest program from all aspects evaluted.
Revenue projections and estimates were not made an important part
of the selection process as 12% of gross was considered a fair amount
of return by all parties.. The Review Committee felt that this project
should not be turned into a bidding war, but rather the City should
have a sound developer and operator to help insure the success of the
project,
It is the opinion of all of the prospective developers and staff that
this is an excellent site for such a development and offers good revenue
potenti~rl, .That is why the project: has developed the interest which
r_he City Council will be confronted with,
Santa Monica, California, December 7, 1977
f~DpiT! o
To: City Manager '~'® ~'
From: Director of Recreation .and Parks
Subject: Comments Regarding P4r. Hechinger's Remarks - Skatepark Development
Mr. Al Hechinger, representing Recreational Systems, has discussed with
you his opinion related to the selection of Skatercross, Ltd. by the
Review Committee as the developer of the Santa Monica Skateboard Park.
The following are my comments relative to his specific statements:
Present Stua ion:
1. Subjective opinion by T~[r, Al Hechinger, He was not at the presenta-
Lion nor did he have access to all the material presented at the
time of his comment.
Fact: Recreational Systems made a poor presentation - probably
rated lowest on basis of presentations made.
2. Correct statements: This does not justify .??.ecreational
Systems as above others since they have no operating experience.
3. Thee. total amount of investor's worth was not the case - only the
ability to finance the amount necessary to develop. A11 bidders had
that potential.
4. :Design o~ runs are not the only cxztera used, AS each new park
is designed it will gain support from various skaters as something new.
Peralta's design has proven to be successful. It also includes large
runs and more varied than those at his Reseda site.
5. Mr. Keating's background is similar to many others in-partnership,:.
experience in management, or in other areas, Even Mr. Hechinger
has no practical operating experience nor does N?r. Terry. The fact
To: City Manager =2n December 7, 1977
that Mr. Peralta's ranking was not the highest in each category
does not mean he wasn't the best overall. He represented more
experience then Recreational Systems indicated.
6. Mr. Peralta's presentation was second Sport's Structures had
the best presentations
7. Design and location of restroom was considered minor and could be
changed. Mr. Peralta''s proposals for an alternate pro-forma
percentage does not mean it will be accepted by the City. He,
as with other developers, suggested other alternatives but knew that
the 12% was the City's figure, Each bidder was allowed to suggest
different lease terms as .indicated in the letter dated October 19, 1977.
8, Mr, Mur's experience and comments were taken into consideration and
put into the overall rating by the Committee, Mr. Watanabe, City
Treasurer, also looked at the programs presented to evaluate the
financial considerations of each proposal. Each member of the
Review Committee offered a certain degree o.f expertise from various
professions. The ranking was a result of this review and experience.