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SR-07-23-2013-8Admm a City Council Report City Santa Monica' City Council Meeting: July 23, 2013 Agenda Item: 8 -A To: Mayor and City Council From: Rod Merl, Pier Manager Subject: Update Report on Santa Monica Pier and Proposed Extension of Corporation Services Agreement Recommended Action Staff recommends that the City Council: 1. Receive and file the Pier Update report 2. Authorize the City Manager to negotiate and execute an amendment to the current Santa Monica Pier Corporation Services Agreement to extend the term to June 30, 2015 3. Set February 11, 2014 for Consideration of Board Appointments for a term ending June 30, 2015 4. Receive and File the Santa Monica Pier Corporation FY 2013/14 Budget and Work Plan Executive Summary This report provides an update on the activities of the Office of Pier Management (OPM) and the Santa Monica Pier Corporation (SMPC) since Council action in the fall of 2011, which authorized a new governance structure for the Pier. On February 28 2012 the City Council approved a two year Service Agreement with the Santa Monica Pier Corporation and appointed the current SMPC interim Board for a two -year term. The SMPC has been expanding Pier events and activities programming, advancing marketing efforts, and assisting the City with the development of operational guidelines, vision statements and planning documents to guide the Pier's development. Extension of the current service agreement would allow the SMPC to enter into multiyear sponsorships and event programing arrangements, maintain Pier Corporation staffing commitments and continue to provide public outreach for Pier related projects. Staff recommends that Council extend the Santa Monica Pier Corporation Services Agreement to June 30, 2015; set February 11, 2014 to appoint Board members for the new extended term; and receive and file the Pier update report and the SMPC FY2013- 14 budget and work plan. Background At its November 22, 2011, December 6, 2011, and February 28, 2012, meetings, the Council approved a series of changes to the governance and management of the Santa Monica Pier. The Pier Restoration Corporation (PRC) board was dissolved in favor of an interim board renamed the Santa Monica Pier Corporation which was refocused to a core mission of Pier events, marketing and fundraising. Council also set out several specific tasks for the new board to accomplish within the interim two -year term: the development for City Council consideration of Pier Marketing, Sponsorship, Events and Leasing Guidelines; a vision (guiding principles) statement; recommendations on Pier governance; and assisting the City with a Pier planning process and public outreach. The SMPC Board is working on the development of a Pier Enhancement Plan which will be presented to Council along with the above mentioned guidelines prior to February 2014. The SMPC has also provided the forum for public outreach and discussion on large Pier related public works projects. Discussion As part of its December 6, 2011 discussion, Council requested staff return during the term of the interim board to provide a Pier update report and assessment of the new governance structure, activities and operations Office of Pier Management Activities since January 2012 The Office of Pier Management was established in January 2012 and serves as the City's on -site coordinator of Pier services and programs as well as being responsible for community, tenant and visitor relations. Primary focus areas for OPM coordination and support are Pier maintenance, facilities, capital improvements, policing and safety, planning, and outreach. OPM has also taken over the responsibility for leasing and PAI licenses on the Pier as well as all contract services, such as the Carousel. OPM additionally administers the Service Agreement with the SMPC and works in partnership with the SMPC Pier Administrator who is staff to the SMPC Board. The presence of OPM on the Pier allows for frequent interaction with the public and tenants, regular inspections, and consistent monitoring of operations and activities on the Pier. During the past 15 months the following activities or projects have occurred at the Pier: • Establishment of the OPM website, Pier newsletter. Additionally, since March of 2013 a team lead by OPM in concert with Engineering and Pier Corporation staff has met with neighborhood and service organizations, business districts and City Boards and Commissions providing information about the Pier operations, programs and events as well as requesting comments regarding the Pier and possible improvements. More than 20 such meetings have already occurred and will be on- going. • Installation of an energy saving LED light system for the Pier, including "necklace" lighting around the Pier perimeter. • Enhanced maintenance program including increased deck board replacement, replacement of western wall under the bikeway, increased benches and bicycle parking and the removal of unnecessary obstructions. • Enhanced Pier bridge safety through the removal of curbs and creation of a protected pedestrian lane; coordination of Pier Bridge Design effort for the replacement of the existing Pier Bridge through federal and state grants in 2016. • Negotiated and executed licenses for 9 vending carts, the trolley kiosk, and new coin operated telescopes and binoculars. • Planning coordination with Downtown Specific Plan, Esplanade, the Expo Light Rail and Santa Monica State Beach. • Outreach and support for Phase IV Pier Infrastructure Reconstruction. This project replaces 360 feet of the middle section of the Municipal Pier (the portion K, currently covered with metal plates and asphalt). The project replaces the 93 year old wood pilings and substructure with concrete matching the west end of the Pier and restores the deck surface to a wooden boardwalk. ® Staff support for the SMPC operation guidelines development and enhancement planning. Santa Monica Pier Corporation Accomplishments since March 2012 The new Pier Corporation Board took office in March 2012. It meets twice each month. Over the last year the Pier Corporation has renamed itself, hired an administrator who is an expert in marketing, and has worked to establish a strong program of community outreach. The outreach program works to advise the community of projects and events on the Pier; gets input on what works and what needs improvement at the Pier; and defines the unique character and role of the Pier. The outreach and community forum function has become very important with the advent of Phase IV Pier Reconstruction Project, the Pier Bridge pedestrian safety enhancements, and the start of the Pier Bridge Replacement design effort. The Board held two working sessions with Daniel Icafano of MIG, Inc. to develop a sense of the Pier, its opportunities and challenges and to define guiding principles and goals. The Board has established a number of study groups within its membership to work with OPM and Pier Corporation staff on the development of the specified deliverables before February of next year. The Board and its staff have greatly increased both the number and range of events and activities and have begun to install on -going mechanisms to ensure the long term provision of diverse year round programing for the Pier. The Pier Corporation has defined five strategic categories for its events and activities programing and has established curators for each. They are music, film, arts, education and active lifestyle. A variety of projects in each of these categories is currently being developed. Among the additions are a spring concert program which is intended to complement the Twilight 11 Concert Series and the Newport Folk Festival which has been added to the October schedule. A Saturday morning program of yoga and running is already in place as well as a December craft and gift fair. Additionally, the Pier Corporation has opened its visitor center and store in the Carousel building, providing visitor information, historical presentations, a gift shop and a place to book Carousel parties. Allied with the above efforts has been the substantial improvement in marketing and fundraising. For example, for the first time the 2012 Twilight Concert Series raised enough money and donated services through sponsorships to cover its costs. The SMPC has greatly increased the frequency and quality of its outreach. This includes creative use of social media. Last year the Pier Corporation increased it Facebook regular friends from 15,000 to over 85,000, a number that continues to grow. The SMPC Board at its April 3, 2013 meeting approved a Working Draft Vision Statement, Operating Guidelines, Goals and Strategies (Attachment C.) which provide the core values, criteria and operating framework for its development of the marketing, sponsorship, event and leasing guidelines, the enhancement plan as well as an evaluative tool for Board reviews and actions. Extension of Services Agreement The stability and long -term operations of the Pier Corporation are challenged by the term limit in the current Services Agreement. The current Agreement expires on June 28, 2014. The Corporation is constrained in making commitments in developing its schedule beyond next winter, including for the 2014 Twilight Concert Series and in much of five curated areas events. This situation prevents multiyear agreements for other events and activities or for any contractual services or programs and has become a fundamental problem for carrying forward a key mandated focus areas. Staff recommends extending the term of the Services agreement to June 30, 2015 to allow the SMPC to enter into multiyear sponsorships and event programing arrangements. 5 The Pier Board has become a valuable public outreach mechanism for the City on planning issues and major capital improvement projects related to the Pier. The Board is now primarily providing a public forum for the City on the associated issues of the next five years — which span the Phase IV Pier Reconstruction project to the Pier Bridge Replacement. The extension of the Services Agreement would allow the Board to continue to provide recommendations with a longer term perspective. Staff also recommends the extension in order to better correspond with the City's existing two year budget cycle. As it stands, the Service Agreement will expire on June 28, 2014, which is two thirds of the way through a fiscal year. The services provided by the Pier Corporation will need to continue through at least that year and ideally through the end of the City's biennial budget cycle. The Pier Board has found that the assigned roles, responsibilities and coordination between OPM and the Pier Corporation are working well and recommends continuance of the agreement through the proposed extension period. New Board Appointments The SMPC Service Agreement approved in February 2012 provides a two year term appointment to the Pier Board. Board terms will end on February 25, 2014. If the Service Agreement extension to June 30, 2015 is approved, Council would need to appoint new members or reappoint existing Board members. An extensive recruitment and review process was undertaken for the original appointments prioritizing candidate expertise and experience. Staff recommends that consistent with the provisions of the Bylaws Council approve posting the vacancies this fall with the same criteria and inviting the current Board to reapply. Appointment of Board members for the new term of March 2014 to June 30, 2015 should be set for the first City Council meeting of February 11, 2014. C SMPC Proposed Work Plan for FY 2013/14 Subject to Council approval, the attached Work Plan describes in detail the activities SMPC will perform in the upcoming fiscal year (Attachment A). The Work Plan is consistent with the focus of the Pier Corporation on the expansion and diversification of events and activities, marketing, sponsorships and outreach. SMPC Proposed Budget for FY2013/14 SMPC presents a FY 2013/14 budget with total revenues in the amount of $ 1,502,983 and expenditures in the amount of $1,500,500 (Attachment B) Budgeted revenues of $1,502,983 include City's base grant funding of $481,983. Non - City funded revenue includes $451,000 in anticipated revenue generated from event deck rental, film permits, carousel rental, corporate promotions, the new visitor center and merchandise sales. An additional $570,000 is anticipated to be generated from program sponsorships including $400,000 from music events such as the Twilight Concert Series. The base grant from the City has decreased by 5 percent from the previous year while revenue from non -City sources is projected to increase by $193,060 or 23 percent from the previous year's budget primarily as a result of enhanced marketing, sponsorships and the new visitor center. Staff recommends that in future years the SMPC proposed budget be submitted to be reviewed and considered within the same time frame and manner as City departments and agencies. SMPC Board Action The SMPC FY 2013/14 work plan and budget were approved by the SMPC Board on April 3, 2013. The Board also approved a motion noting the success of the current governance structure at the Pier and supporting the extension of the current service 7 agreement until June 30, 2015 to ensure on -going planning, programming marketing and multi -year sponsorship commitments. Financial Impacts & Budget Actions Fiscal year 2013 -14 City funding for the Santa Monica Pier Corporation is included in the FY 2013 -15 proposed biennial budget in the amount of $482,000. Approval of the work plan and budget for FY 2013 -14 has no additional budget or financial impact on the City. Prepared by: Rod Merl, Pier Manager Approved: Rod Merl, / Pier Manager Attachment: Forwarded to Council: u Rod Gould City Manager A. SMPC Proposed Work Plan FY 2013/14 B. SMPC Proposed Budget FY 2013/14 C. Pier Corporation Working Vision Statement, Guiding Principles, Goals and Strategies D. Pier Corporation Board Letter to Council 0 Attachment A: SMPC Workplan Santa Monica Pier Corporation 2013 -2014 Work Plan Goal of the SMPC To elevate the visitor experience of the Pier for all audiences Goal of the 2013 -2014 Work Plan To continue the momentum of 2012 -13 in starting to elevate the Pier experience through expansion of programming, updating of Pier branding and communications, and working with the Office of Pier Management (OPM) in communicating key capital improvement projects to the public, SMPC Areas of Focus 1. Branding & Communications 2. Pier Shop & Visitor Center 3. Cultural Events & Programming SMPC + OPM Areas of Focus 1. Communicating Capital Improvement Projects 2. Facilitating Board deliverables & Enhancement Planning SMPC Areas of Focus Branding & Communications Why: With the redesign of the website, email and social media platforms, people are starting to look at the Pier in a new way. We need to continue the momentum by moving to the next phase of digital and physical communications upgrades. How: On -site design upgrades and mobile development. Target date of Spring '14 for launch of phase 2 redesigns. 1. Mobile Development: The next phase of the digital communications redesign is the development of a mobile app, used for way- finding, self- guided historic tours, programs and promotions. 2. Pier Map, Brochure & Kiosk Signage: With new businesses joining the Pier, and a fresh new look, the fundamental information pieces need to be updated since they haven't been redesigned for 12 years. 3. Audience Growth: To create a relationship with a broader community, we hope to grow the Facebook audience to 100,000 and the email subscribers to 25,000 by the end of the year. Attachment A: SMPC Workplan 4. Promoting Pier -wide Upgrades: Leverage the marketing channels of the Pier to help encourage and promote upgrades by Pier businesses that enhance the Pier brand and visitor experience. Pier Shop & Visitor Center Wh y: As the first point -of- contact for many visitors walking down the ramp, the Pier Shop & Visitor Center should embody the Pier brand as a welcoming blend of contemporary design and celebrated history. How: Historic displays, walking tours, contemporary merchandise & well - informed staff. Target date of Sept '13 to test viability of Docent program. 1. Merchandise & Systems Testing: The first six months of operations will serve as testing grounds for both merchandise assortment, POS systems and inventory management. 2. Docent Tours & Concierge Services: The Pier Shop & Visitor Center can also serve as a hub for both docent -led historic tours and concierge services like surf lessons, tour booking, and event tickets. 3. Well- informed staff: As brand ambassadors of the Pier, staff needs to be not only knowledgeable of Pier history and products, but all of its offerings. 4. Unique offerings: As part of positioning the Pier as a unique cultural experience, the merchandise and offerings shouldn't be run -of- the -mill. Cultural Events & Programming Why: Creating diverse and year -round traditions at the Pier is the start of making it relevant to the broadest audience possible. How: Harnessing programming talent and fine- tuning for the environment 1. Curators Program: In 2013, we started the Curators Program, drawing regional programming experts to develop and enhance programs across 5 categories: Music, Film, Arts, Education and Active Lifestyle. a. Music - Music has a long tradition at the Pier, and can serve an even broader audience through supplemental off - season programming. b. Film - Film also has historical roots and can be enhanced through leveraging key talent in the Los Angeles region. c. Arts - Developing Arts programming will help reframe the Pier as a cultural destination as well as a tourist destination. d. Education - For both children and adults, the Pier should combine learning and wonder. e. Active Lifestyle - Santa Monica is a haven for health, fitness and sport, and the Pier should be part of that tradition as well. Attachment A: SMPC Workplan 2. Program Development and Fine- Tuning: This year will start the experiment in year -round programming, which will then be fine -tuned to an annual programming calendar of successful traditions. SMPC + OPM Areas of Focus 1. Communicating Capital Improvement Projects: Work with the OPM to develop messaging and facilitate awareness of planned capital improvement projects around the Pier to minimize impact to the visitor experience. 2. Facilitating Board Deliverables & Enhancement Planning: Work with Board, OPM and relevant entities to facilitate Board Deliverables that meet the current and future conditions of the Pier. These include, but are not limited to, the marketing /events /sponsorships guidelines and policies that reduce hurdles to programming the pier and adjacent areas. SANTA MONICA PIER CORP FY 2013/2014 Income Expenses ATTACHMENT B. Approved Budget Actual Budget as Forecast End of Proposed FY 13/14 FY 12/13 of 2.18.13 Year 6.30.13 City Funding $507,350 $507,350 $507,350 $481,983 Facilities - Merchandise $10,000 $4,005 $5,000 $0 Facilities - Event Deck Rental $100,000 $90,859 $170,000 $160,000 Facilities - Film Permits $110,000 $95,340 $120,000 $125,000 Facilities - Carousel Rental $100,000 $58,388 $78,000 $90,000 Facilities - Corporate Promotions $75,000 $83,600 $90,000 $40,000 Facilities - Pier Shop &Visitor Center $60,000 $0 $10,000 $36,000 Programming - Music $300,000 $313,049 $320,000 $400,000 Programming - Film $5,000 $59,948 $75,000 $75,000 Programming - Active Lifestyle $60,000 $1,500 $65,000 $75,000 Programming - Arts $0 $0 $10,000 $10,000 Programming - Education $8,000 $0 $10,000 $10,000 Total Income $1,335,350 $1,214,039 $1,460,350 $1,502,983 Facilities - City Refund - Carousel $38,000 $20,413 $32,000 $40,000 Facilities -City Refund - Pier Deck $45,000 $42,514 $85,000 $85,000 Facilities- staffing, security, & supplies $17,500 $12,820 $16,000 $17,500 Facilities - Visitor Centerset -up costs $30,000 $18,232 $32,000 $0 Facilities - Vistitor Center on -going costs $60,000 $0 $10,000 $36,000 People - Wages &Salaries $490,000 $325,867 $485,000 $500,000 People - Benefits $92,000 $73,931 $102,000 $100,000 People - Office Supplies, Services, Audit, Insurance $83,000 $55,182 $80,000 $90,000 Marketing - Media Kit &B -to -B outreach $15,000 $3,873 $12,000 $12,000 Marketing - Web& Communications Update $30,000 $2,207 $4,000 $20,000 Marketing - General PR & Advertising $10,000 $91 $5,000 $10,000 Programming -Music $320,000 $313,487 $320,000 $400,000 Programming -Film $5,000 $59,433 $75,000 $75,000 Programming - Active Lifestyle $60,000 $2,000 $65,000 $75,000 Programming - Arts $0 $3,996 $13,996 $20,000 Programming - Education $0 $9,753 $19,753 $20,000 Total Expense $1,295,500 $943,799 $1,356,749 $1,500,500 Net Income $2,483 Attachment C A WORKING DRAFT: PIER VISON, GUIDING PRINCIPLES, GOALS AND STRATEGIES Vision: A Santa Monica Pier that provides an historic platform and a legacy of colorful visitor experience to showcase contemporary events. A community asset that attracts, welcomes and entertains local, regional, national and international visitors of all incomes and abilities. A beloved landmark that offers an enticing and changing array of site - appropriate active and passive experiences and attractions. Guiding Principles: ➢ The Pier will be a signature attraction of the City of Santa Monica, known and recognized world -wide and enjoying a broad base of local community support. ➢ The Pier will bean easily accessible and visually prominent destination within the City. ➢ The Pier will provide enticing year -round experiences and attractions for visitors. ➢ The Pier will attract and engage visitors of all ages and incomes. ➢ The historic fabric and character, as well as the environmental sustainability and structural integrity of the Pier will be documented, celebrated, maintained and improved. ➢ Pier programming will include both traditional and cutting edge entertainment, athletic and educational experiences. ➢ Promotions, sponsorships and private and public revenue - producing events, will largely off -set the cost of popular and free public programming. Guiding Principles with Goals and Strategies ➢ The Pier will be a signature attraction of the City of Santa Monica, known and recognized world - ii�>ag Attachment C ITIOU—M • I •' • I . I • F • MIN community support. Goal: of the Pier • •i. brand identity o Strategies: • Maintain and enforce copyright protections of the Pier sign and evaluate other available protections. • Sustain a compelling web and social media presence. • Cross - promote actively with Santa Monica, Los Angeles and California tourism bureaus. • Make brand identity a factor in every programming and design decision. • Encourage tenant upgrades and improvements that enhance the Pier identity. • Implement public improvements that enhance the Pier and its surroundings. • Goal: Enhance the local community's awareness of and attendance at Pier programs. o Strategies: • Program the Pier with both the local community and wider audiences in mind, in ways that support and promote pier tenants and attractions. 2 1Pago Attachment C . Routinely inform local leaders of Pier events and promotions and invite them to attend a Board meeting Ensure that local media are included in Pier promotions and sponsorships. The Pier will be easily •' and visually prominent destination within the • Goal: Retain, preserve and enhance the historic character and eclectic, thematic appearance of the Pier and its aesthetic elements. o Strategy Employ the 1987 Pier Design Guidelines as an architectural criteria standard for the Pier. Review all public and private improvements for consistency with the goals and intent of the Design Guidelines • Goal: Provide and maintain pedestrian -and bicycle- friendly access to the Pier, making the public boardwalk of the municipal Pier the primary pedestrian corridor for visitors. o Strategies: - Work closely with Pier bridge design firm and City engineering to ensure that practical access solutions are prioritized and that access is preserved throughout construction. Repair and /or add stairways to the Pier and sign them effectively at the beach and beach parking lot level so that visitors are aware of the easiest route to the Pier deck. 3111 agc, Attachment C ® Add signage that assists in locating Pier services and attractions from the 1550 lot and the Pier deck. o Strategies: ® Evaluate limiting Pier deck parking to service vehicles and the disabled. ® Evaluate alternative access strategies for the disabled including shuttles, elevators and other people moving technologies. • Goal: Reduce reliance on individual automobiles to reach the Pier. o Strategies: ® Use the web -site and social media to encourage the use of transit and bicycles. Include such advice in publicity for events on the Pier and require that event producers do the same. ® Facilitate arrangements for group tour operators, including bus drop -off and pick -up zones • Goal: Maintain clear sightlines and pathways to the Pier sign and Pier entrance from Colorado Boulevard, the Esplanade, the Metro station and Tongva Park lookout. 41Po-age Attachment C o Strategies: . Ensure Pier Board and staff participation in design processes and construction decisions for these major projects. ® Encourage way- finding solutions that effectively direct visitors to the Pier and throughout the Pier area. Ed • Goal: Develop and publicize off - season programs and promotions to attract visitors. o Strategies: Update web presence and social media frequently to encourage followers /friends to visit repeatedly throughout the year. Actively entertain appealing off - season promotions which should also support/strengthen pier tenants and attractions. Make off - season program success a criteria in the evaluation of "curators" Host civic meetings, workshops and events on the Pier to encourage local workers and residents to spend more time on the Pier. Encourage tenants to offer a local shopper /diner incentive program similar to that provided by Downtown Santa Monica and publicize the program. • Goal: Develop strategies for adding multi- purpose, flexible use space to the Pier to accommodate events and programs and provide 5 IPage Attachment C additional visitor opportunities for active and passive enjoyment. o Strategies: ® Evaluate alternatives to providing parking on the Pier deck and include recommendations in Pier visioning report. ® Determine market requirements for meeting and event space and incorporate findings in planning and design of such spaces. The Pier will attract and engage Visitors of all ages and incomes. • Goal: Pier restaurants, food services and retail merchants will provide high - quality, site - appropriate offerings at a wide range of price points. o Strategies: ® Develop and adhere to leasing guidelines that encourage quality competitors for leaseholds and include quality and pricing standards and metrics. (without losing sight of the business need to have Quality match needs of existing pier demographics) ® Evaluate opportunities for changes in short -term leaseholds and cart contracts to expand and improve food and merchandise choices. 6 1Pagc Attachment C Goal: Develop programming which appeals to diverse age and income groups, arriving at a mix that encourages • - c • . • appeal and o Strategies: o Monitor demographic and social trends and adjust programming to respond. o Work with Pier tenants to encourage similar awareness and response. ➢ The historic fabric and character, as well as the environmental sustainability and structural integrity of the Pier will be documented, celebrated, maintained and improved. • Goal: Ensure that visitors have attractive and easy access to information on the significance of the Pier and its history. o Strategies: Create a Pier Visitor Center offering information and tours that highlight the history of the Pier. Develop merchandise for the Visitor Center that celebrates the unique Pier history and experience. Encourage Pier lessees to provide training and information to employees so that they can become ambassadors for the Pier and the City. 7113aSe, Attachment C Appreciate, promote and preserve elements of the historic significance of the pier and surrounding beachfront. attractions and businesses. o Strategies: Ensure that construction management understands the needs of Pier tenants and works to accommodate them without unduly jeopardizing project timeliness and cost. - Balance the preservation of historic fabric with the need to enhance sustainability and structural integrity. ® Achieve LEED ratings for new construction and ensure that maintenance and operations achieve a high standard of sustainability. ➢ Pier programming will include both traditional and cutting edge entertainment, athletic and educational experiences. ® Goal: Maintain and refresh the appeal of popular programs of long- standing to audiences and sponsors, "tweaking" them as appropriate to ensure their continued viability. 81Pago, Attachment C o Strategies: ® Collect and evaluate visitor and sponsor feedback to inform programming decisions. ® Stay closely attuned to demographic trends, consumer tastes and entertainment appeal. ® Consider the effect on pier businesses • Goal: Encourage experimentation with new programming ideas. o Strategies: o Evaluate success of the use of curators and refine that program as necessary to drive programming excellence. o Identify barriers to program innovation and work to eliminate or modify them. • Goal: Establish the Pier as a model venue for well- executed, revenue producing events and filming o Strategies: - Establish a one -stop filming permit administered on -site at the Pier. 91Pag0, Attachment C • Provide web information on the Pier as a venue and encourage personal contact. ® Maintain presence /membership in appropriate organizations and groups that can help with the promotion of the Pier. • • • • o Strategies: • Facilitate multi -year contracts with sponsors. • Encourage designation of a new Pier and Beach Promotional and Recreational Zone with its own modified event and promotion regulations. • Develop sponsorship guidelines that reflect contemporary industry practice while respecting community standards and complementing Pier businesses. 101page N F g ys July 23, 2013 Mayor O'Connor and City Council Members 1685 Main Street PO Box 2200 Santa Monica, CA 90407 -2200 Dear Mayor and Council Members: The Interim Pier Corporation Board has developed a working draft of Guiding Principles, Goals and Strategies (attached to the City's staff report) to inform the leasing, sponsorship and promotional guidelines we will submit for your consideration this fall. While we continue to seek community input on this draft, it represents our current thinking on the best approach to the challenges ahead and we welcome your feedback. In reviewing the draft, you will note that we are determined to secure a vibrant, sustainable future for the Santa Monica Pier. This necessitates development of a funding model that will support year -round activities on the Pier, including free public programming, traditional events and activities that draw new audiences. Two key recommendations of the Board require your timely action: 1) We recommend that you extend the service agreement with the Pier Corporation and the tern of office of Board members through June 30, 2015 to facilitate multi-year programming and sponsorships. This action will enhance both staff efficiency and revenue generation. In a short time, the Pier Corporation has been able to attract new program partners and sponsors but uncertainty about Pier governance in the near future limits our outreach and leverage. Continuity of leadership at least through adoption of the next budget will benefit ongoing negotiations with potential partners and hence the City's bottom line. Your action will bring the term of the service agreement in line with the City's two year budget cycle and allow an experienced board to assist in mitigating the effects of capital improvement projects on Pier operations and visitors. 2) We recommend that you direct staff to designate a special Pier and Beach Recreation and Entertainment Promotional Zone to facilitate revenue generation. Designation of the zone would retain protections for the Pier's Landmark status while carving out exceptions to regulations that restrict event and promotional activity on the Pier and immediately adjacent beach. The strategic and limited area of the proposed zone maximizes revenue generating potential while leaving the vast majority of the beach with current restrictions in place. Zone - specific guidelines for ticketed events and for the use of banners, signage, displays and other promotional measures encourage sponsorships and facilitate production of a limited number of high visibility, zone - appropriate, revenue generating events. Operation of the zone would be a cooperative effort of Pier and Beach management. The Pier and Beach funds would continue to be administered separately, with revenues and expenditures allocated in accordance with governing regulations and policy. With your direction, the City's management and legal staff can proceed expeditiously to craft measures necessary to realize the considerable benefits of the zone. We note that The Little Hoover Commission, in recent criticism of the State's management of its parks and beaches, expressed confidence that local jurisdictions are more able and likely to employ creative management and revenue generation techniques than the State of California. Your actions on these recommendations can help prove the Commission correct. In our work to -date the Board of the Pier Corporation has benefited from the creative energy of our staff, the responsiveness of the Office of Pier Management, the Engineering Division and the Community and Cultural Services Department, the active interest of the Pier lessees and the willingness of many community organizations to give input. We thank all who have participated thus far and can assure you that outreach will continue as we proceed. Sincerely, Judy Abdo Chair Reference: Contract No. 9566 (CCS)