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SR-08-14-2012-3OID tar �.. City of City Council Report Santa Monica' City Council Meeting: August 14, 2012 Agenda Item: 3-<-j To: Mayor and City Council From: Rod Gould, City Manager Subject: License Agreement for Visitor Center in the Carousel Building Recommended Action Staff recommends that the City Council authorize the City Manager to negotiate and execute a license agreement with the Santa Monica Pier Corporation (SMPC) to operate a visitor center and gift shop in the Santa Monica Pier Carousel Building under the terms and conditions specified in this report. Executive Summary SMPC FY 2012/13 work plan, on the August 14, 2012 agenda, calls for the establishment of a visitor center. The northwest corner of the Santa Monica Carousel building has been identified as an appropriate location. The visitor center would include rotating museum exhibits and gift shop where visitors can find historical information, guided tours, and purchase Santa Monica Pier and Carousel related memorabilia. The visitor center would replace the current tenant, a gift shop operating under a month to month tenancy cancellable on 30 day notice. The visitor center would pay a monthly license fee to the City commensurate with the gift shop's rent ($10,479 annual rent in FY 2011 -12) so there would be no loss in revenue to the Pier Fund. Additional revenue from the visitor center and gift shop would help support SMPC's operations. Background The Carousel Building also known as Loof Hippodrome is listed on the National Historic Register, and serves as the Santa Monica Pier's principal stylistic and historic element as well as an important focal point for the Santa Monica community. In addition to the vintage wooden Carousel, the building's first floor houses an `old fashion' soda fountain and a gift shop. 1 The SMPC, a nonprofit organization, operates under a Services Agreement approved by Council on February 28, 2012, and is charged with developing and implementing marketing and community programing on behalf of the City for the benefit of the residents and the millions of annual visitors to the Pier. The SMPC believes a visitor center at this location would have a positive impact on the visitor experience, deepen residents and tourists' appreciation of the Santa Monica Pier, and generate revenue through the sale of Pier and Carousel related merchandise. Discussion The Santa Monica Pier Leasing Guidelines approved by Council on February 28, 2012, establishes the preferred uses for each commercial area on the Pier. The Guidelines designates the preferred use for the retail space inside the Carousel Building for "Carousel- related and general souvenir, gift items and books featuring local history and themes ". The proposed visitor center and gift shop would be open seven days a week year -round from 11:00 AM to 5:00 PM weekdays and 7:00 PM weekends, with later closing times during the summer months. Visitors would view historical exhibits, artifacts, and artworks curated by the SMPC's Pier historian and find a selection of high quality gifts and souvenirs for purchase. In addition, the SMPC would use the center as the starting point for volunteer docent -lead and self - guided tours, and for other services currently offered by the SMPC such as booking children's birthday parties at the carousel and sale of commemorative plaques. The SMPC would at its cost make internal improvements, add new signage and reorient the entry point to make the center more easily identified and inviting. In the FY 2012/13 proposed budget SMPC has allocated $30,000 for the visitor center set up costs and $60,000 for ongoing costs. Exterior modifications including signage would be subject to Landmark Commission approval. 2 Staff recommends that Council authorize the City Manager to negotiate and execute a license in accordance with the following major terms conditions: Premises: 200 Santa Monica Pier (260 square feet). Term: One -year term commencing upon execution of license. Term Option: Two six -month extensions. Licensee Fee /Rent: The greater of monthly base rent or 9% of monthly gross receipts. Base rent schedule shall be: $582 per month for Jan, Feb., March; $873 per month for April, May, June, Oct., Nov., Dec.; $1,165 per month for July, August, September. Early Termination: If for budgetary or operational reasons SMPC is unable to maintain the Center, SMPC or City may terminate the agreement with 60 days written notice. Commission Action The SMPC FY 2012/13 work plan and budget approved by the SMPC Board on May 21, 2012 includes the operation of a visitor center. 3 Financial Impacts & Budget Actions Staff projects minimum annual revenue of $10,479 from the visitor center and gift shop base rent; the City could receive additional revenue should monthly gross receipts return a higher number. This revenue is included in the FY 2012 -13 adopted budget at account 30626.401830 —Vendor Rent. Prepared by: Elana Buegoff, Sr. Development Analyst Approved: Forwarded to Council: Rod Gould Rod Gould City Manager Attachments: City Manager Attachment A. SMPC Visitor Center Business Plan 11 Santa Monica Pier Corporation April 2012 With well over 6 million visitors per year from around the globe, the Santa Monica Pier is a major tourist destination. However, there is no central place for visitors to go for historical information, insightful way - finding, guided tours, or to purchase unique, collectible Santa Monica Pier - specific memorabilia. The Pier Comer Visitor Center will serve as a much - needed one -stop information center, museum, and gift shop for Pier and Merry -Go -Round patrons. As the recent Centennial Celebration and the book Santa Monica Pier: A Century on the Last Great Pleasure Pier demonstrated, there is a definite and growing public yearning for acknowledgement of the past and present relevance of the Pier. The Visitor Center will satisfy that yearning through its offering of historical tours, its display of museum - quality memorabilia, and its tasteful selection of gifts and art. Owned and operated by the Santa Monica Pier Corporation (formerly Santa Monica Pier Restoration Corporation, or PRC), the Visitor Center will serve as the Santa Monica Pier service provider, museum, and gift shop for Pier- and Merry -Go- Round - specific events and memorabilia. Pier Corner will be the "go -to" source for planning private or semi - private events in the Merry- Go- Round or on the Pier, from birthday parties to promotional activities. The management, booking, and planning of events in the Merry -Go -Round and on the Pier will be handled by PRC staff through the Visitor Center. Visitor Center staff will be on hand to assist in execution of events, from setup to breakdown. The PRC is developing an ambassador program as well as docent -led and self - guided historical Pier tours. Those interested in leaming more about the Pier's history will be able to purchase a docent - led tour at the Visitor Center. Those wanting to see the Pier at their own pace can purchase headset rentals for a pre- recorded self - guided tour. The Visitor Center will also act as a home base for volunteer ambassadors to store uniforms and equipment. Unique retail items such as Pier- and Merry -Go- Round - related books, clothing, historic photographs and postcards, art, and gift items will be sold in the Visitor Center. Customized gifts will also be available. The PRC will develop community -wide artist contests to generate distinctive pieces of artwork that are reflective of the Pier, or incorporate physical pieces of it, such as used plank boards, that will be for sale in the Visitor Center. The Santa Monica Pier has a long and rich history, yet no museum space to display historical memorabilia or inform visitors of its past. A Visitor Center with historical items will cater to curious first -time visitors as well as local residents who want to reflect on their past experiences at the Pier. By offering historical tours and displaying memorabilia, visitors will have a chance to learn about the history of the Pier; this experience is offered nowhere else and is something only PRC staff and volunteers can provide. The Pier is a unique and extremely popular public space, yet there is currently no retail outlet for purchasing quality, unique Pier and Merry -Go -Round gifts and artwork. The Visitor Center will occupy a niche market for visitors and patrons wanting to take a "piece of the Pier" home with them. The target market is the dedicated Santa Monica Pier enthusiast. This applies to locals and tourists alike. The shop is not in direct competition with other shops on the Pier in that its focus is not on everyday beach and tourist items such as towels, toys, suntan lotion, and disposable cameras. Instead, the Visitor Center appeals to the person who wishes to find unique and collectible items dedicated to this popular and special destination. Al 1r,14 REV I The comer of the Merry -Go -Round building is an ideal location for a welcoming Visitor Center, attracting visitors both as they arrive on the Pier and as they leave at the end of the day. This high visibility location will be a large part of the Visitor Center's marketing strategy; other aspects include press releases and public relations efforts, especially related to artist competitions, and integration with the Pier digital media outlets such as its website, social media networks, and e- newsletters. The PRC has long been a part of preserving the Pier; it recently produced a history book, entitled The Santa Monica Pier: A Century on the Last Great Pleasure Pier (Angel City Press, 2009), and has throughout the years collected historical Pier memorabilia. As part of the annual Santa Monica Pier Paddleboard Race & Ocean Festival, the PRC coordinated a "pop -up museum" that drew strong interest from Pier visitors. Historical tours are currently offered on a limited basis and staff is knowledgeable not only in the history of the physical structure of the Pier, but also in the significant events that have taken place here. The PRC has been successful in retail sales both at events and online, and has efficiently and professionally coordinated events on the Pier and in the Merry- Go -Round building. Staff is knowledgeable in Pier operations and history and is well- connected to the community. PRC staff also has extensive experience in promoting and marketing special events for private promoters as well as community groups and individuals. The Visitor Center is a natural extension of the Santa Monica Pier Corporation's current responsibilities and would greatly benefit patrons who wish to enrich their experience on the Pier. Reference Contract No. 9630 (CCS)