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SR-12-17-2013-8C - 307-002-01City Council Meeting: December 17, 2013 To: Mayor and City Council From: Karen Ginsberg, Director of Community and Cultural Services Subject: Resolutions Establishing Interim Uses and Interim Rental Fees for the Santa Monica Civic Auditorium Recommended Action Staff recommends that the City Council: 1. Adopt the attached resolution establishing interim uses for the Santa Monica Civic Auditorium (Civic); 2. Adopt the attached resolution setting forth interim rental fees for interim use rentals at the Civic; and 3. Rescind Resolution No. 3579. Executive Summary The proposed Resolutions establish interim uses and fees associated with rental of the Civic, including the authority vested in City staff. An opportunity for the City to host the media launch of BMW's hybrid vehicle at the Civic in April and May 2014 underscores the need to establish these policies at this time. Background The City suspended regular operation of the Santa Monica Civic Auditorium (Civic) on June 30, 2013, approximately one year after the loss of redevelopment funds for the rehabilitation of the facility. Now in its interim use phase, with nominal staff resources and a significantly reduced budget, the Civic is available for rent on a limited basis. The regulations and rental fees currently in effect for the Civic, established in 1967 via Resolution No. 3579, no longer reflect the current circumstances. n June, .._11,, 2013. Council approved the proposed interim use of the Civic and an estimated budget. Council approved and modified the Civic operating budget on ,Ame 25, 0 1 3, and October 22, 2012, respectively, for a current FY 2013 -15 operating budget of $528,742 in expenses and $154,800 in revenue In November 2013, BMW approached the City regarding the possibility of renting the Civic venue for five weeks, during April and May 2014, to host an international hybrid electric vehicle media launch. BMW's rental of the Civic could earn the City substantial income to offset the Civic's interim operating costs and would positively impact the local economy. The proposed rental is estimated to generate approximately $300,000 in unanticipated revenue for the Civic. The Santa Monica Convention and Visitors Bureau estimates that hosting this media launch in Santa Monica could result in approximately 1,500 hotel room nights from international journalists and generate local restaurant and retail patronage. Additionally, BMW's hybrid car promotes clean energy and is aligned with the City's sustainability goals. Staff is working with BMW to finalize the terms of the agreement. Formally establishing interim uses and associated rental fees at this time would provide staff with applicable guidelines to complete a Civic rental permit with BMW. Discussion The purpose of the proposed interim use and fee resolutions are to establish an interim operating model for the Civic that will partially offset the cost of operations while meeting City, community, and market needs. Interim Use Resolution The proposed interim use resolution establishes the Civic's interim operating management structure, the venue locations of interim events and uses. The Community and Cultural Services Department would continue to manage the Civic. Subject to the supervision and oversight of the City Manager and the Department Director, the Cultural Affairs Manager would serve as the Acting Manager of the Civic Auditorium and would have the authority to supervise and manage the Civic, its rules, regulations and permits as defined in the Resolution. Event locations and uses would be as follows: 1. East Wing Meeting Room and Patio: available for City recruitment, meetings and workshops, film and photo shoots, community, school and non - profit events and meetings as defined in the resolution. E 2. Main Hall, Stage and Lobby: available for non - public assembly events such as commercial photography and filming, closed rehearsals, theatrical technical production work, product displays and demonstrations not open to the general public and storage or staging associated with other Civic events as in the resolution. 3. Other Exterior Event Spaces including the Canopy, Front Lawn, East and West Patios and West Lawn may be available for events in conjunction with and in support of any authorized rental of either the Main Hall or the East Wing Meeting Room. 4. Civic Center Surface Parking Lot: given the resources at hand and limited staffing the parking lot would be available in conjunction with a rental of either the East Wing Meeting Room or the Main Hall for up to 12 events per year, including City sponsored or co- sponsored events. Any rental of the parking lot would be approved by the Acting Manager as well as City staff managing City parking resources. Policies and fees outlined in this Resolution are applicable to situations where the parking lot is rented in conjunction with rental of the Civic and do not apply to stand -alone parking lot rental requests. Staff will return to Council at a later date so that parameters can be established for stand -alone parking lot event rentals. Interim Fee Resolution For these four identified venue areas, interim rental fees are proposed as described in Attachment B. The proposed fees are based on initial market research and are generally lower than previous fees charged by the Civic. Consistent with the existing Civic operating resolution, the proposed interim fees include special rental rates for non- profit organizations and the Santa Monica - Malibu Unified School District. Under this interim operating model, City Departments would not be charged for hosting municipal events at the Civic. As the interim operating model evolves, staff will assess the number of municipal events held and the cost- benefits associated with them to determine if internal fees may be advisable. BMW Rental The potential BMW rental includes the following three components: 1) the interior of the Civic would be used to store and detail vehicles; 2) periodic test drives for journalists would depart from beneath the canopy and 3) placement of a 1,400 square foot cube display `pavilion' on the Civic front lawn. As a condition of the rental permit, BMW would be required to obtain all necessary permits for a temporary structure, such as permits K from the Building & Safety Division and the Fire Department. A conceptual rendering of the pavilion and canopy test drive staging area is provided in Attachment C. Alternatives Council could decide not to approve these Resolutions. In this case, staff would proceed with interim operations under the existing policies which, while flexible, may not always apply to the current operating model. Council could also recommend alternative policies and fees, which may require additional staff assessment to identify possible operating and financial impacts. If further assessment is needed, staff would return to Council with revised recommendations at a later date. BMW is investigating the Civic among other Southern California venues. Additional time that the City spends devising interim policies may result in the loss of this potential client. Financial Impacts & Budget Actions The proposed rate changes in the Civic interim use rental fees will facilitate staff's ability to achieve FY 2013 -14 revenue goals. Revenues in the amount of $154,800 have been included in the FY 2013 -14 adopted budget at 015601.401700. Prepared by: Jessica Cusick, Cultural Affairs Manager Approved: Forwarded to Council: Karen Ginsber Director Rod Gould Community and ultura Servi es Director City Manager Attachments: A. Resolution Establishing Interim Uses B. Resolution Establishing Interim Fees C. BMW Pavilion and Canopy Staging Area Concept IS Attachment C — BMW Pavilion and Canopy Test Drive Staging Area Placing the pavilion on the Civic lawn is central to BMW's media launch marketing strategy at this site. The contemporary white structure will mirror the Civic's modernist architectural style and would include three transparent sides. BMW envisions the pavilion as a place where the public would view the car and where the company could brief journalists prior to their test drives. Hybrid vehicles would be parked under the canopy area and journalists would depart for test drives from this location. C -1 Reference: Resolution No. 10791 (CCS) & Resolution No. 107292 (CCS)