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sr-081065-8e-~: n` ~ - '. ~~~ V r~i r. i•.i~ .r ~ _ ~. j _... CITY OF SANTA MONIGA. - b5-G-30 vf-,i~~.y I J ~ ~r~ -"~ T0: FROM: SUBJECT: August 2, 1865 The Honorable City Gouncil Perry Scott, City Manager Exhibit Hall and Hotel Feasibility Study :, s =~'T~e ~~ ~~ta ~a T~~<; L~ ~ ~ $ Ml~ ~ ~ ~ } ~ ' s 3 §, The City Council included in the 1965-66 budget the sum of $10,000 for the purpose of obtaining the services of a qualified consultant to conduct the subject study. Pursuant to this implicit authorization this office has contacted the firm which originally proposed, and was recommended therefor, to perform the exhibit hall study. This firm, Economics Research Associates, has agreed to reactivate and conduct the exhibit hall study in accordance with the original criteria for $7,500, the same fee as initially requested. For an additional fee of $1,500 they will include as an integral part of the exhibit hall study the necessary research to determine the market support for hotel development at our Pico and Ocean Avenue site, following the guide lines set forth on page 4 of the attached proposal. It is the recommendation of the administrative staff that this proposal, £or a total fee cf not to exceed $9,000, be accepted. ^ `,, ;,, i f' ,~' ~ f;~. ~ ~"~, PERRY ~OT'P ` City I~lanager PS: ob Attach. cCOiVO;'s1lCS 2~SEA3C'ri :.SSOCiS:7ES ~ Bll$aahFillSrze ~ icsAngeles,California9CC:3 ~ td;Adison4-E666 HARRiSON A. PRICE Presidon4 July 21, 1965 Mr. W. A. :iard Director of i finance City of Santa Monica 1635 Main Street Santa Monica, California Dear Mr. Hard: On December Z0, 1963, Economics Research Associates submitted its Proposal No. 1035 concerning the eccro~ric feasibility of a.n exhibit l;all to be associated with tie existing civic auditorium. Our budget at that time was $7, 500 and by you-r letter of January 23, 1964, you advised us '°aat we were recommended to conduct the study after review- ing competitive proposals from several other firms. the purpose of this letter is to reactivate that proposal and to add to it a study of market demand for hotel develcpmerit at an adjacent site at Main Street, Pico'Boulevard, and Ocean Avenue. We are delighted to have the opportunity to out"tine this work for you. Since the original proposal, E. R. A. has carried oui hotel market studies in Santa Monica at the International Airport and for the new 1800 unit Sheraton'riotel at Universal City. We have aiso studied auditorium and exhibit space demands in Redondo, Torrance, Elysian Park, and Universal City. In other words, the state of ou-r knew-how and background on your specific problem is that much farther along and we hope to be able to do an outstanding job for you. We are passing on to you in our budget structure substantial benefit from related work. Please let me know if I can be of any assistance in explaining or adjusting the precise statement of work. S~ncerely yours, ~ ~- -- , ~ ~. 44. - ~~'' Harrison A. Price HAP:hlm President ~o1ta ~o . ECONOMICS R'eSEARCH ASSOCIATES • 417 South Hill Street HARRISON A. PRICE Pr•sitl•nt , • Los Angeles, California 90013 MAdison 4.8665 July 21, 1965 Mr. W. A. Hard Director of Finance City of Santa Monica 1685 Main Street Santa Monica, California Proposal No. 1035 Revised A Proposal for Research Introduction The Santa Monica Givic Auditorium is amulti-purpose, theatre-type auditorium capable of accommodating a wide range of events, from theatrical productions to professional tennis and boxing matches. Although the auditorium is basically a theatre structure, its tilting flbor makes possible its use for a number of events requiring flat floors. While this multi-purpose design can accommodate a wide variety of events, the very high usage of the auditorium (among the highest in the West) has made it necessary to constantly be changing the facility from a theatre arrangement to a flat-floor arrangement. This has tended to increase operating costs sharply, In addition, the auditorium has had a number of requests for more exhibit space than can at present be made available, and for space for more flat-floor events. As a result, the city is now considering the addition of an exhibit building to the present auditorium structure. It is reasoned that this exhibit building could accommodate the potential as well as many flat-floor events that now take place in the auditorium. The purpose of the additional building would be (1) to free the present auditorium so that it can be used primarily for theatre events, (2) to reduce the very costly labor charges in changing from one setup to another, (3) to increase the revenue potential to the auditorium and to the city with exhibition events which usually are very profitable, and -2- (4) to attract convention and trade show activity to Santa Monica, along with complementary economic benefit to the city's hotels and motels, restaurants, and retail businesses. In this latter connection, a supple- mentary task in this research is to evaluate the market for hotel develop- ment on city-owned property across the street from the auditorium on a 1. 7 acre site bounded by Main Street, Pico Boulevard, and Ocean Avenue. Research Objective The initial objective of the research is to determine whether there is sufficient market demand for a new exhibition hall in conjunction with the existing civic auditorium. If it is found that there is sufficient market demand,. the objectives will be to determine how large the exhi- bition hall should be, how much it will cost to construct, what are its operating revenue and expense potentials, and what other economic benefits to the community would it provide. An additional objective of the work is to evaluate market support and site suitability for hotel development lon city-owned property bounded by Main Street, Pico Boulevard, and Ocean :!lvenue. Market support is to be defined in terms of its constituent elements, including that generated by the convention center and exhibit hall, and local and transient demand derived from the trading area of 'the site. Scope and Method of Approach In meeting the objectives of the study, the research will include but not necessarily be limited to the following lines of inquiry: Exhibit Hall 1. Analysis of the exhibit events and other flat-floor events now being held in the civic auditorium in order to determine how many of these would be logical candidates for a new separate exhibition hall. Z. Analysis of the types of exhibit events now being held in other facilities in the West Los Angeles area to determine how many of these events might be logical candidates for a new exhibition hall at the Santa Monica Civic Auditorium site. 3. Analysis of the usage of other auditoriums in Southern California that have a theatre facility and an exhibition hall, for the purpose ®_ of developing additional potential uses. -3- 4. Analysis of space requirements of conventions held in the Santa Monica area, as well as potential conventions and trade shows that might be held if suitable exhibit facilities were available. S. Analysis of savings in labor costs from cutting down on the setup- teardown time needed to change from event to event in the existing auditorium. n. Investigation of the possibilities of using an exhibition hall, rather than the present auditorium, for events such as boxing, tennis, and basketball. 7. Contacting groups that offer a potential use for an exhibit hall for consumer and trade 'shows, dances, etc. 8. Determination of the amount of user-days and types of use that could reasonably be expected for an exhibition hall in conjunction with the Civic Auditorium. 9. Based on the analysis of potential user groups, determination of the optimum size of an exhibition hall facility in conjunction with the existing auditorium. Also included would be recommendations as to particular features that should be incorporated in the structure. 10. Evaluation of additional parking requirements as a result of an added convention-exhibit facility. 11. Based on the size of the hail and the features required, determin- anon of the approximate cost of the facility. 12. Projection of the revenues and expenses of the proposed facilities in order to determine whether the exhibition hall would be self- supporting from direct charges and rentals. Projections would be made for the combination of the existing auditorium and the proposed exhibition hall, as well as the incremental effect of the addition of the exhibition hall. This information would be drawn from our experience in working with operators of exhibition buildings and auditoriums in other cities and on the operating experience of the present facility. Hotel Demand ~ Thus phase of the research effort is concerned with deterrnining the market support for hotel development at the city site adjacent to the convention -4- center. The specific program will include the following elements: 1, Establishing the trading area of a hotel development on this site. 2. Estimating market demand derived from industrial use, educational institutions, local population, and transient traffic within this trading area. Market support derived from activities at the audi- torium and the proposed exhibit center will be specifically estimated. 3. Assessing competitive influences prevailing within the trading area, including space availability, pricing, and vacancy levels affecting hotel operation. 4. Evaluating the dynamic factors of growth and timing on the market outlook at this site. 5. Assessing the physical quality level of the site for hotel development considering access, traffic conditions, present and future land use in adjacent areas,- and other site factors. Close liaison will be maintained with the city throughout the research program. Oral progress reports will be supplied to city management as desired by the client. At the conclusion of the research, a formal written report will be prepared and tiae client supplied with 25 copies of the formal report. A formal oral presentation will be made at that time if requested. Additional copies can be obtained at the cost of report reproduction. Time and Cost The estimated time to complete this study is 10 to 12 weeks. Work can begin within two weeks after receipt of project authorization. Estimated costs, including staff time, overhead, direct costs and expenses, and report preparation, are $9, 000. Progress billings are submitted twice monthly as costs are incurred. Acceptance This proposal shay be accepted by returning one copy signed and accompanied by the required deposit. .Work will be scheduled within one week thereafter. Respectfully submitted, 6% d+°' i°~~rison A. Price - HAP:hlm President ACCEPTED BY: r .~ ~ ~~~~~ ~il South 9i1~ Street o ies k~3el~s, Ca~itornia S0013 ~ YiAdison 4-3065 HARn^:SON A. P~':C~ r~residas: July 21, 1965 Mr. W. A. '_-lard Director of finance City oP Santa Monica 1685 Main Street Santa Monica, Caliio-rnia Dear Mr. :ard: ~~9 q ¢ '~i~Y N'C ~ ~ dj$ AUC~ ~ 19h5 ~~u Cn December 20, 1963, Economics 2esearch Associates subrr.itted its Proposal \o. 1035 concerning the eccnomic feasibility of an exhibit hall to be associa±ed with the existing civic auditori,~m. Our budget at that time was $7, 500 and by your letter a.Jar_ua=y 23, 1904, you advised us that we were recorrmei~ded to cer_d:zci the study of±er review- ing competitive proposals =-rom several other i_rms. The purpOSe Oi t'f1iS letter 1J' i;0 rea Ctivatc ti'lat le rOpO Sal grid t0 add t0 it a study of market demand for hotel developme ± at an adjacent site at Main Street, Pico Boulevard, and Ocean Avenue. 'Ne a-re delighted to have the onpo'rtunity io cutline this work for ycu. Since the original proposal, E. R. A. has carried out hotel mar:cet studies ir_ Sa-r~ta Monica at the International Airport and -tor the new 1800 u_~it Sheraton Hotel at Universal City. ti~Te have also studied auditorium and exhibit space demands in Redondo, Torrance, Elysian Park, and Universal City. in other words, the state of on-r know-hose and background on your specific problem is that much ~a-riher along and we hope to be able to O do an outstanding job zo-r you. tNe are passing on to you in cur budget structure substantial benefit from related work. Please let me know ii I can be of any assistance in explaining or adjusting the precise statement of work. Si:2cerely ycurs, Grrison A. Price HAP:hlm President ~~o o~ ~oJlo ~So EC®~JOaw13CS RESE&RCta ASSOCIATES • 417 South Hill Street Los Angeles, California 90013 • MAdison48665 HARRISON A. PRICE PresitlenY July 21, 1965 Mr. W. A. Hard Director of Finance City of Santa Monica 1685 Main Street Santa Monica, California Proposal No. 1035 Revised A Proposal for Research Introduction The Santa Monica Givic Auditorium is amulti-purpose, theatre-type auditorium capable of accommodating a wide range of events, from theatrical productions to professional tennis and boxing matches. Although the auditorium is basically a theatre structure, its tilting floor makes possible its use for a number of events requiring flat floors. While this multi-purpose design can accommodate a wide variety of events, the very high usage of the auditorium (among the highest in the West) has made it necessary to constantly be changing the facility from a theatre arrangement to a flat-floor arrangement. This has tended to increase operating costs sharply. In addition, the auditorium has had a number of requests for more exhibit space than can at present be made available, and for space £or more flat-floor events. As a result, the city is now considering . the addition of an exhibit building to the present auditorium structure. It is reasoned that this exhibit building could accommodate the potential as well as many flat-floor events that now take place in the auditorium. The purpose of the additional building would be (1) to free the present auditorium so that it can be used primarily for theatre events, (2) to reduce the very costly labor charges in changing from one setup to another, (3) to increase the revenue potential to the auditorium and to the city with exhibition events which usually are very profitable, and -2- (4) to attract convention and trade show activity to Santa Monica, along with complementary economic benefit to the city's hotels and motels, restaurants, and retail businesses. In this latter connection, a supple- mentary task in this research is to,evaluate the market for hotel develop- ment on city-owned property across the street from the auditorium on a 1. 7 acre site bounded by Main Street, Pico ,Boulevard, and Ocean Avenue. Research Objective The initial objective of the research is to determine whether there is sufficient market demand for a new exhibition hall in conjunction with the existing civic auditorium. If it is found that there is sufficient market demand, the objectives will be to determine how large the exhi- bition hall should be, how much it will cost to construct, what are its operating revenue and expense potentials, and what other economic benefits to the community would it provide. An additional objective of the work is to evaluate market support and site suitability for hotel development on city-owned property bounded by Main Street, Pico Boulevard, and Ocean Avenue.. Market support is to be defined in terms of its constituent elements, including that generated by the convention center and exhibit hall, and local and transient demand derived from the trading area of the site. Scope and Method of Approach In meeting the objectives of the study, the research will include but not necessarily be limited to the following lines of inquiry: Exhibit Hall 1. Analysis of the exhibit events and other flat-floor events now being held in the civic auditorium in order to determine how many of these would be logical candidates for a ne~v separate exhibition hall. 2. Analysis of the types of exhibit events now being held in other facilities in the West Los Angeles area to determine how many of these events might be logical candidates for a new exhibition hall at the Santa Monica Civic Auditorium site. 3. Analysis of the.. usage of other auditoriums in Southern California that have a theatre facility and an exhibition hall, for the purpose of developing additional potential uses. -3- 4. Analysis of space requirements of conventions held in the Santa Monica area, as well as potential conventions and trade shows that might be held if suitable exhibit facilities were available. 5. Analysis of savings in labor costs from cutting down on the setup- teardown time needed to change from event to event in the existing auditorium. 6. Investigation of the possibilities of using an exhibition hall, rather than the present auditorium, for events such as boxing, tennis, and basketball. 7. Contacting groups that offer a potential use £or an exhibit hall for consumer and trade shows, dances, etc. 8. Determination of the amount of user-days and types of use that could reasonably be expected for an exhibition hall in conjunction with the Civic Auditorium. 9. Based on the analysis of potential user groups, determination of the optimum size of an exhibition hall facility in conjunction with the existing auditorium. .Also included would be recommendations as to particular features that should be incorporated in the structure. 10. Evaluation of additional parking requirements as a result of an added convention-exhibit facility. 11. Based on the size of the hall and the features required, determin- ation of the approximate cost of the facility. 12. Projection of the revenues and expenses of the proposed facilities in order to determine whether the exhibition hall would be self- supporting from direct charges and rentals. Projections would be made for the combination of the existing auditorium and the proposed exhibition hall, as well as the incremental effect of the addition of the exhibition hall. This information would be drawn from our experience in working with operators of exhibition buildings and auditoriums in other cities and on the operating experience of the present facility. Hotel Demand This phase of the research effort is concerned with determining the market support for hotel development at the city site adjacent to the convention -4- center. The specific program will include the following elements: 1. Establishing the trading area of a hotel development on this site. 2. Estimating market demand derived from industrial use, educational institutions, local population, and transient traffic within this trading area. Market support derived from activities at the audi- torium and the proposed exhibit center will be specifically estimated. 3. Assessing competitive influences prevailing within the trading area, including space availability, pricing, and vacancy levels affecting hotel operation. 4. Evaluating the dynamic factors of growth and timing on the market outlook at this site. 5. Assessing the physical quality level of the site for hotel development considering access, traffic conditions, present and future land use in adjacent areas, and other site factors. Close liaison will be maintained with the city throughout the research program. Oral progress reports will be supplied to city management as desired by the client: At the conclusion of the research, a formal written report will be prepared and the client supplied with 25 copies of the formal report. A formal oral presentation, will be made at that time if requested. Additional copies can be obtained at the cost of report reproduction. Time and Cost The estimated time to complete this study is 10 to 12 weeks. Work can begin within two weeks after receipt of project authorization. Estimated costs, including staff time, overhead, direct costs and expenses, and report preparation, are $9, 000. Progress billings are submitted twice monthly as costs are incurred. Acceptance This proposal may be accepted by returning one copy signed and accompanied by the required deposit. Work will be scheduled within one week thereafter. HAP:hlm Respectfully submitted, Harrison A. Price President ACCEPTED BY: .