SR-04-23-2013-3BID
City ouncil and
City of Redevelopment ency Report
Santa Monica,
City Council Meeting: April 23, 2013
Agenda Item: 5—
To: Mayor and City Council
From: Karen Ginsberg, Community and Cultural Services Director
Subject: License Agreement with Cirque du Soleil for Use of a Portion of the 1550
PCH Parking Lot
Recommended Action
Staff recommends that the City Council authorize the City Manager to negotiate and
execute a proposed License Agreement with Cirque du Soleil, a Delaware based
company, for use of a portion of the 1550 PCH parking lot for theatrical performances
from January 2 through March 29, 2014.
Executive Summary
In accordance with the 1550 PCH Parking Lot Cultural /Entertainment Event Policy,
following a competitive process, staff recommends Cirque du Soleil (CDS) for the 2013-
2014 Event Season. CDS would present "Totem" beginning January 2014. The total
occupation period, including move in and tear down, would be from January 2 through
March 29, 2014. The proposed rental fee to the Beach Fund for the portion of the 1550
lot for this period is $1,088,808. Additional anticipated economic benefits to the City
include patron parking revenues at the Civic Center parking structure, purchase of local
supplies and services by CDS for its operation, and collateral spending by CDS visitors
in local restaurants and businesses. This third return of CDS would incorporate
mitigations, proven practices, and lessons learned from previous performances to
reduce impacts on Pier businesses and nearby residents.
Background
Council first approved a policy to allow commercial events in the 1550 PCH parking lot
(1550 lot) on tbGr 14 <;a 0 The purpose of allowing commercial events is
threefold: (1) to provide much needed revenue to the Beach Fund to support ongoing
operations and capital improvements, (2) to meet the community's demand for
increased cultural offerings, and (3) to provide economic benefits to the cultural tourism
sectors of the community. The policy has been modified over time to provide greater
flexibility in the review process and evaluation criteria, and to incorporate concerns of
the Santa Monica Pier Corporation (SMPC), formerly the Pier Restoration Corporation.
CDS returned to the 1550 lot in 2009 and again in 2012. Prior to each visit, efforts were
made to identify and address concerns of the SMPC and Pier lessees about reduced
parking availability in the 1550 lot for Pier visitors and the potential negative impacts on
Pier businesses. The license agreement for each of the prior visits included a full range
of conditions and mitigations to address these concerns. These mitigations included
incorporating prepaid discounted parking for CDS patrons with their online ticket
purchase at offsite parking lots, providing a free shuttle service to and from the offsite
parking as well as a weekend shuttle for Pier visitors from the 2030 Beach lot, offering
cross promotion opportunities to Pier merchants, and providing direct financial and in-
kind partnership support to the SMPC and the Santa Monica Pier Lessees Association
(SMPLA).
Council directed staff to prepare an economic impact analysis during the 2009 visit to
examine the impacts and benefits of CDS. Staff reported on Octobei _.?6_ =20! 0 clear
economic gains to the City as a whole from commercial events through spending by
visitors in restaurants, hotels, shopping, parking and transportation, as well creating
additional employment opportunities during the period of the event. The impacts to Pier
businesses are more mixed and differ depending on the specific types of business, with
restaurants generally benefitting more than entertainment businesses. The timing
change in 2012 from a Fall run to the January to March window is viewed by the Pier
lessees as a positive move and there is general agreement that the 2012 visit was more
favorably received by the Pier businesses.
Discussion
Vendor Selection
In September 2012, staff issued a Request for Event Proposals (RFP) for the 2013-
2014 Event Season, The RFP was posted on the City's online bidding website and was
sent to the list of event producers who had expressed an interest in staging an event in
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the 1550 lot over the past several years. Staff received proposals from CDS and
Cavalia in response to the RFP.
The Extended Events Review Committee, which includes representatives from the
Santa Monica Pier Corporation, Convention and Visitors Bureau, and City staff,
reviewed both proposals. Each was evaluated based upon criteria established in the
1550 PCH Parking Lot Cultural /Entertainment Event Policy, including the degree to
which the event offers a unique cultural or entertainment experience, demonstrates
clear measurable economic benefit to the City and local businesses, including Pier
lessees, contributes to the Beach Fund, addresses traffic and parking impacts, and
minimizes environmental impacts. Based upon these criteria and the demonstrated
commitment of CDS to satisfy all City requirements, the committee recommends
selection of CDS as the best bidder to provide theatrical performances for the 2013 -14
event season. The Cavalia proposal included a larger footprint than CDS, required a
longer set up and tear down period, and provided a much lower financial offer.
Cirque du Soleil Proposal
The CDS proposal builds on the successful performance plan of their prior two visits,
Highlights of CDS' proposal are as follows:
® CDS would present "Totem ", a visual and acrobatic exploration of the
evolutionary progress of the human species.
• The Occupation Period would run from January 2 to March 29, 2014.
• The Performance Period would be from January 17 to March 16, 2014, with one
show per day on Tuesdays through Fridays, two shows on Saturdays, and
Sundays, with an option to add six additional Thursday or Friday shows at the
discretion of the Cirque. This represents a one week reduction in the
performance period and a reduction in the number of shows on Fridays from the
2012 visit.
• CDS would occupy the same footprint as in 2012, using 719 of the 1,173 spaces
in the 1550 lot, as shown in Attachment A. The base rental for the site is
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$1,088,808 for the 2.9 month period. This reflects a CPI increase in the $1.28 per
square foot rate from 2012.
• CDS would follow the Parking and Traffic Management Plan, first prepared in
2009 and updated in 2012 to reflect the removal of the temporary parking lot that
had been installed by CDS in 2009 in the location now known as Tongva Park.
Efforts to better manage the overall supply of spaces in the beach lots to the
north and south of the Pier and in the Civic Center, and nearby private lots in
2012 helped to minimize parking and traffic impacts would be implemented.
• CDS would provide a free Pier shuttle on Friday, Saturday, and Sunday from the
2030 Beach lot for visitors to the Pier and the beach.
• CDS proposes to build on and strengthen prior cross promotions with the SMPC,
Pier tenants, and Convention and Visitors Bureau (CVB) and integrate special
Pier /local partner offers onto the CDS website. CDS is also committed to joint
packaging and initiatives with the Santa Monica Pier Lessees' Association
(SMPLA) to direct CDS patrons to the Pier before and after the performances.
• GDS would continue to provide financial and in -kind sponsorship to the SMPC for
the Twilight Concert Series as well as support to the SMPLA, CVB, and other
business groups.
• CDS would continue its educational outreach to the Police Athletic League (PAL)
with the Cirque du Monde program and to the Santa Monica Malibu Unified
School District.
• CDS proposes to work with the SMPC and SMPLA to relocate Pier employees to
adjacent beach lots and /or explore arrangements at nearby private lots.
• Sustainability practices would include a recycling program in public areas and
employee work space, composting of food residue in the employee cafeteria,
replacement of plastic souvenir gift bags with oxi- biodegradable bags, products
made with organic cotton and bamboo, booklets printed on 100% recycled paper
and CD releases made with compostable product.
• CDS proposes to pay all City costs and services associated with the event
including but not limited to police services for crowd /traffic control, fire safety
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officers, event licensing/liaison and location supervision, parking staff, utility
charges, sanitation services, and custodial /maintenance services.
Public Outreach
Following the 2012 visit, staff held a Community Meeting on March 14, 2012 to gain
feedback about the CDS visit and events, in general. Although postcards were mailed to
over 150 residents and businesses in the area, only five people attended the meeting.
The discussion focused on traffic and parking impacts on residents, who rely on parking
in the Appian Way lots. One of the suggested improvements was for the installation of
electric gates to control access to these lots for residents with overnight permits. This
improvement is scheduled for completion this spring.
Staff attended the SMPLA meeting on April 3, 2013 to review the CDS proposal. There
is general agreement among the Pier lessees that the January to March time frame is
better for Pier businesses and the group acknowledged the commitments CDS has
shown in the past. The main concerns relate to parking and the impacts of Pier
construction. The lessees asked if the weekend shuttle hours might be extended and
expressed interest in working with CDS on promotion partnerships.
The SMPC discussed the CDS proposal at the April 3 Board meeting and heard from
Pier lessees in attendance. Hearing no objections, the SMPC voted unanimously and
enthusiastically to welcome back CDS and encourage staff and the SMPLA to work
together to make the CDS visit successful for all visitors to the Pier.
the license agreement is approved by Council, CDS will seek approval from the
California Coastal Commission for the event.
Environmental Analysis
The License Agreement with CDS for use of a portion of the 1550 Lot is categorically
exempt from environmental review pursuant to the California Environmental Quality Act
(CEQA) Guidelines, Section 15304(e), as these actions constitute minor temporary use
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of land having negligible effects on the environment. CEQA Guidelines specifically
include uses such as carnivals and circuses.
Financial Impacts & Budget Actions
Approval of CDS's proposal will generate $1,088,808 in Special Event revenue to the
Beach Fund. A portion of this revenue will offset the estimated loss in parking revenue
due to spaces occupied by the CDS in the 1550 Lot. Based on a three —year review of
the parking revenues in the 1550 Lot, the average revenue per space per month has
been calculated at $193.78 for the 2.9 month long occupation period. The estimated
total parking revenue loss is $444,807. Reduction in other revenues related to the 1550
Lot, such as staging for filming on the Pier or the beach, is expected to be minimal since
alternative staging locations may be provided at the 1640 Appian Way or the 1150 PCH
lots.
Parking revenues to the General Fund for the Civic Center Parking Structure are
expected to increase by $60,000, which is the additional amount generated in 2012. If
the license agreement is approved by the City Council, the revised revenue projections
for the Beach and General Fund will be included in the City's FY 2013 -15 proposed
Budget.
The 2009 economic impact study reported $200,000 in sales and transient tax
increases to the General Fund, which is anticipated again in 2014. All direct City staff
time and expenses will be reimbursed by CDS to achieve full cost recovery by the City.
Prepared by: Judith Meister, Beach Administrator
Approved:
C.
Karen Ginsberg
Director, Department
Forwarded to Council:
Rod Gould
City Manager
Attachment A: Proposed Cirque du Soleil Site Plan
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