SR-04-08-2014-3KCity Council Meeting: 8 April 2014
Agenda Item: �5 K
To: Mayor and City Council
From: Rod Merl, Pier Manager
Subject: Update of Santa Monica Pier Leasing Guidelines
Recommended Action
Staff recommends that the City Council approve the attached updated policy guidelines
for the leasehold and license management of City -owned properties on the Santa
Monica Pier.
Executive Summary
The Santa Monica Pier Leasing Guidelines (Guidelines) set forth the general policy
objectives and practices for leasing and licensing of City -owned commercial properties
on the Pier. The parameters provided are intended to promote standardized, equitable,
efficient and transparent management of the tenant recruitment, selection and
negotiation process, as well as to identify the standards of performance that are
expected of Pier tenants.
The proposed Guidelines include new policies as well as refine existing policies and
practices. Substantive updates to the Guidelines from the previous versions are detailed
in the Discussion section. The proposed revisions are intended to provide an approach
to leasing that more closely resembles what occurs in the commercial leasing sectors
while at the same time recognize the Pier's role as a community and public resource.
Background
The framework for the development and leasing of commercial opportunities on the
Santa Monica Pier was presented originally in the 1988 Development Program prepared
by the Pier Restoration Corporation (PRC) and adopted by the City Council on February
9, 1988. A primary objective of the development program was to revitalize the Pier in a
manner that preserved its unique character, served the needs of the community, and
recognized the fiscal requirements of the City. Subsequent guidelines for leasing have
been subject to periodic review and modification by the PRC Board and City Council.
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The most recent revision of the Guidelines was approved by the City Council on
February 28 2012.
The Pier presently has approximately 130,000 square feet of leasable commercial
space comprised of buildings, kiosks, carts and deck area. The 1988 Development
Program supported a development program that consisted of approximately 150,000
square feet of commercial area. An upcoming study effort by the City with the
assistance of the SMPC, may explore potential expansion of existing activities, and new
commercial and civic opportunities on the Pier.
Discussion
The revised Guidelines contain new policies as well as refine existing policies and
practices for leasing and licensing of City -owned commercial properties on the Pier. The
proposed Guidelines (Exhibit A) if approved would supersede the previous Guidelines
and become effective upon the date of adoption by Council. New leases and licenses
entered into after the date of adoption by Council would be subject to the revised
Guidelines. Major updates are summarized below:
A. Leasing Authority. The City Manager has authority to enter and execute
leases or licenses of 36 months or less on the basis of written agreements
prepared and approved as to form by the City Attorney. Leases or Licenses
exceeding 36 months in duration would require City Council approval.
B. Protest Procedures. Establishes procedures on how an applicant that is
not selected as the preferred respondent by an evaluation panel may submit a
notice of protest and appeal. The final decision on appeal rests with the Director
of Housing and Economic Development.
C. Sustainability. Requires Tenants and License Holders to incorporate
sustainable practices into their operations, consistent with current City practice.
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D. Landlord's Licensing Program. Documents in the Guidelines an existing
lease provision that allows the City and the Pier Corporation to engage with Pier
tenants to consider revenue generating licensing programs for the benefit the
Pier. The lease provision requires tenants to participate in and be subject to such
a program so long as the terms of the sponsor products, goods and /or services
are at least as favorable to the tenant as the terms of an agreements applicable
to the same products, goods and /or services supplied to the tenant and provided
such sponsorship program does not violate any contractual agreements entered
into by tenant.
E. Tenant Performance Standards. Incorporates customer - focused
performance standards and expectations into leases and licenses to help ensure
tenants will maintain high operating standards throughout the term of their
agreement and remedy any deficiencies in a timely manner. Recommended
performance standards include, but are not limited to, the following:
I. Periodically, Landlord or Tenant may engage a third party "mystery
shopper" to visit and evaluate Pier businesses. Tenant will provide an action
plan for improvement if so requested by the Landlord.
ii. Tenant shall respond to Landlord's written inquiries regarding any
complaints or issues, including postings on social media sites related to Tenant's
operations. Tenant will provide an action plan for improvement if so requested by
the Landlord
iii. Food operations that receive a designation from the Los Angeles
County Department of Health of less than an "A" more than three times during
the term of the lease or license, except to the extent that any such rating is
restored to an "A" within 30 days of receiving the lower grade, will be in default
and breach of the lease /license. Landlord recognizes that third party action may
require additional time to reinstate an "A" rating and may request tenant to
provide an action plan for improvement.
iv. Landlord may establish an annual review process to evaluate
certain criteria utilizing a standardized rating scale. Office of Pier Management
staff may follow a similar rating procedure currently used by Community and
Cultural Services Department to evaluate its beach concessions.
V. Lease extension option, if provided, will be conditioned upon
Tenant's economic performance. For example, Tenants with a percentage rent
clause should have reached rent levels requiring percentage rent payments to
City for at least two of the four rental years immediately prior to the expiration of
the lease.
F. Market Value Rents. The majority of Pier revenue is derived from rents
and fees charged through leases and licenses. To help support the Pier's fiscal
self - sufficiency the City will seek market rates (fair market value) on leases and
licenses and where appropriate also may require the payment of rent based on a
percentage of gross revenues. Leaseholds for research and public educational
purposes may be maintained without application of fair market rental rates as is
currently the case with the Santa Monica Pier Aquarium.
G. Open and Competitive Solicitation. City policy is to ensure that public sites
periodically become available for a public competitive process. The Pier is public
property and therefore leases and licenses will be subject to an open and
competitive process. The City may employ a real estate broker to market and
encourage quality competitors for leasing and licensing opportunities. Existing
tenants operating in an exemplary manner as defined in the Guidelines will
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continue to receive additional bonus points in the tenant evaluation and selection
process.
H. Ownership Diversity. The award of multiple leaseholds /licenses to an
individual tenant, licensee, or operator generally is discouraged, but may be
considered in limited circumstances. The Guidelines contain criteria that would
warrant the consideration of multiple leases with the same lessee, including
Section 7.5. "Modifications Based on Findings of Exceptional Community
Benefit."
I. Length of Term. Lease and license terms should be commensurate with
the use and size of the space and the time reasonably required for amortization
of capital investment. In addition the City should maintain a variety of lease and
license timeframes to provide the ability to address the mix of uses and activities
on the Pier over time. Proposed terms for the following uses are:
I. Vending carts - 6 months to 1 year.
II. Kiosks (fixed location) - 3 to 5 years.
III. Deck space rental - 1 day to 2 years.
IV. Viewers and transmitters - 1 to 5 years.
V. Retail Shops, Restaurants, Amusements and Aquarium - 5 years to 25
years. Additional options to extend beyond 25 years may be considered
based upon the amortization of significant capital investment and findings
of benefit to the City as described in Section 7.5 of the Guidelines.
VI. Development Agreements. Some Leaseholds may be subject to a
Development Agreement. Such agreements would be negotiated with the
City based upon current practice, which includes requiring the developer
to provide significant community benefits.
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Commission Action
The Santa Monica Pier Corporation Board of Directors approved the Guidelines on
February 5, 2014.
Financial Impacts & Budget Actions
There is no immediate financial impact or budget action necessary as a result of the
recommended action.
Prepared by: Elana Buegoff, Sr. Development Analyst
Approved:
Rod Merl
Pier Manager, Office of Fier
Management
Forwarded to Council:
Rod Gould .
City Manager
Attachment:
A. Santa Monica Pier Leasing Guidelines
0
Exhibit A.
M11 LIN r-AkTA10111EE "-I
Approved by the SMPC: 2/5/2014
Approved by City Council:
These Santa Monica Pier Leasing Guidelines ( "Guidelines ") provide the framework for
fair and consistent leasing and licensing of City -owned property on the Santa Monica
Pier. The Guidelines provide parameters and general policy on mix of uses, standards
and terms, and tenant recruitment and selection. They reflect the general intent and
goals of the City of Santa Monica ( "City ") at the time they were approved and do not
convey any right upon anyone, or impose any obligation on the City. The City may from
time -to -time change these Guidelines or depart from these Guidelines without liability to
anyone.
1. INTRODUCTION
1.1. Background
The Santa Monica Pier began in 1909 with the construction of the Municipal Pier —the
straight portion that begins at the base of the bridge from Ocean Avenue and continues
for more than 1,500 feet over the beach and Santa Monica Bay. Santa Monica Pier's
ability to attract large crowds impressed Charles Looff, an amusement park pioneer who
had built Coney Island's first carousel in New York. In 1916, after negotiations with the
City of Santa Monica, Looff constructed his "Pleasure Pier" alongside the Municipal Pier
(now known as the Newcomb Pier). The Pleasure Pier featured the landmark Looff
Hippodrome building, which now is listed on the National Register of Historic
Places and houses an operating vintage wooden merry -go- round.
Today, the Santa Monica Pier ( "Pier ") is known as one of the region's premier
recreational and entertainment destinations, attracting over six million visitors annually.
The Pier offers spectacular ocean vistas, year round events and attractions, and is
home to a changing collection of restaurants, shops, activities and experiences.
1.2. Unique Character of Pier and Pier Environment
The Santa Monica Pier has been an icon for both the local community and Southern
California for over a century. Over this time it has provided a broad variety of
entertainment and experiences that directly relate to its beach and ocean setting. These
activities and services are predominately specific to the Pier's on -going "microculture ",
history and surrounding community rather than a replication of things at other piers and
places. The maintenance of the Pier's own "personality" is a core value of the Santa
Monica community and central to the recruitment and selection of tenants and licensees.
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2. LEASING GOALS AND OBJECTIVES
The Pier is a valuable historic resource of the City to be developed, used and preserved
as a public resource for the enjoyment by the general public. The commercial leasing
and licensing program on the Pier is to be managed for the benefit of the general public
and in a manner consistent with the following goals and objectives:
I. Promote and maintain the compatible uses of City -owned property available for
lease and license located on the Pier in a manner supporting an attractive, safe and
accessible environment for visitors and the residential community;
II. Provide for a diversity of business, entertainment, event, educational, and cultural
activities as well as active and passive recreational opportunities on the Pier;
III. Promote quality and value of goods, food and services provided by the commercial
operators on the Pier;
IV. Establish pricing of leasehold and license occupancies that reflects fair market value
to help support the fiscal self- sufficiency of the Pier;
V. Assure access to and use of City -owned properties by the general public through a
leasing and licensing program that promotes the orderly and equitable management
of tenancies and licenses;
VI. Preserve and promote the unique, eclectic and community recreational character
of the Pier;
VII. Preserve and build on the historic elements and character of the Pier while
ensuring its relevance and vitality to current and future generations;
VIII. Achieve fiscal, social and environmental sustainability;
IX. Enhance access and encourage both local and distant visitors to visit and enjoy the
Pier;
Harmonize with the surrounding beach and downtown community;
XI. Take an incremental but continuous approach to change to advance
commercial, cultural and civic opportunities on the pier; and
XII. Seek a mix of uses and tenants that will contribute to the animation of the Pier.
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3. MANAGEMENT STRUCTURE
Leasing and licensing on the Pier is the responsibility of the City of Santa Monica
through its Office of Pier Management ( "OPM ") in coordination with the City's Economic
Development Division. OPM also oversees Pier maintenance and operations. Pier
events, filming and marketing are managed by the Non - Profit Santa Monica Pier
Corporation ( "SMPC ") in accordance with Event and Marketing Guidelines developed by
the SMPC and subject to Council approval.
4.1. Vision Statement
A Santa Monica Pier that provides an historic platform and a legacy of colorful visitor
experiences to showcase contemporary events; a community asset that attracts,
welcomes and entertains local, regional, national and international visitors of all
incomes, abilities and interests; a landmark that offers an enticing and changing array of
site - appropriate active and passive experiences and attractions.
4.2. Pier 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.
II. The Pier will be an easily accessible and visually prominent destination within the
City.
III. The Pier will provide enticing year -round experiences and attractions for visitors.
IV. The Pier will attract and engage visitors of all ages and incomes.
V. The historic fabric and character, as well as the environmental sustainability and
structural integrity of the Pier will be documented, celebrated, maintained and
improved.
VI. Pier programming will include both traditional and cutting edge entertainment,
cultural, athletic and educational experiences.
VII. Promotions, sponsorships and private and public revenue - producing events, will
largely off -set the cost of popular and free public programming.
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S. SUB AREAS AND USES
5.1. Areas
The Pier is approximately 9 acres in size and consists of two adjoining piers:
I. Municipal Pier. The Municipal Pier is the primary walkway of the Pier. It is
approximately 2.5 acres in size and 1,500 feet in length. This public strolling corridor
provides the main access to restaurants, shops, amusement (e.g. carousel, Pacific Park)
and recreation (fishing, walking, viewing) areas, vending carts and performers.
II. Newcomb Pier. Located south of and adjacent to the Municipal Pier, the Newcomb
Pier (also known as the Pleasure Pier) is approximately 6.6 acres, of which 2.2 acres is
currently used for public parking and special event space.
Most merchants, facilities, and events are on the Newcomb Pier while vending carts,
kiosks and fishing activities are primarily on the Municipal Pier.
5.2. Commercial and Public Areas
The Pier presently has approximately 130,000 square feet of leasable commercial
space comprised of buildings, kiosks, carts and deck area. The current Pier tenant mix is
approximately 70 percent amusement, 25 percent dining, four percent educational and
one percent retail.
Public facilities and service areas on the Pier include the Carousel building which houses
City and SMPC offices; a Harbor Guards station; a Police Sub - Station; a Pier Maintenance
workshop; and a second floor public observation deck. In addition there are central and
west end public restroom facilities, a central trash & recycling shed, and a 270 space
public parking lot.
The "Santa Monica Pier Development Program" approved by Council on February 9,
1988, supported a development program that consisted of approximately 150,000 square
feet of commercial area. A new planning effort under development by the City with the
assistance of the SMPC, will explore access enhancements, potential expansion of existing
activities, and new commercial and civic opportunities. This enhancement effort, and
future efforts, may alter the overall mix of activities and uses on the Pier over time to
reflect the needs of the Pier and public and changing market conditions.
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6. GENERAL LEASING STANDARDS
Leases and licenses shall be consistent with the Pier Leasing Goals and Objectives.
I. The Santa Monica Pier is public property; therefore all leases and licenses will be
subject to an open and competitive public process.
II. Lease renewals will not be automatically offered to tenants. As vacancies arise either
by lease expiration or earlier termination, recruitment for occupancy will be
conducted in accordance with the Leasing Guidelines.
III. Preferred Uses include, but are not limited to, a range of entertainment and
commercial products and services that will appeal to and serve both the residential
community and area visitors. The City may change uses as leases expire in order to
attract a tenant mix consistent with the Guideline's goals and objectives.
IV. In order to promote merchant diversity on the Pier the award of multiple
leaseholds and /or licenses to an individual tenant, licensee or operator is
discouraged but may be allowed subject to conditions provided under Section
7.5.
V. All prospective tenants must provide evidence of economic viability and
appropriateness to the Pier of their proposed uses and business plan, as well as their
capacity and ability to develop and maintain their operation.
VI. Tenants and licensees will be expected to provide quality, visitor- supporting services
or activities throughout the term of their lease or license, including sustained high
levels of maintenance and cleanliness. Leases and Licenses will contain performance
standards to ensure on -going quality and service. Failure to maintain performance
standards will be considered a material breech and subject the lease or license to
termination.
VII. Tenants and licensees are expected to be active members of the Pier community,
participating in its operational life and working together with the City and other
tenants to enhance the Pier visitor experience.
VIII. Assignment or subletting of leases is prohibited without the written consent of the
Landlord. Landlord's consent will be subject to express standards and conditions set
forth in the lease. Assignment or subletting of licenses is prohibited without
exception.
IX. Operation and improvements to lease and license areas are subject to the City's
standard regulatory review and approval process.
7. MINIMUM /BASIC LEASE TERMS AND CONDITIONS
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7.1. Diversity & Permitted Uses
The City will seek operators who offer creative, imaginative and unique merchandise,
food options and activities that are thematically compatible with the Pier yet not overly
duplicative of the products and services already offered on the Pier.
In order to maintain an appropriate tenant mix consisting of distinct and diverse
merchandise, food and services the City will endeavor to limit the number of merchants
who carry the same or similar types of offerings. A `Permitted Use' clause shall be
included in every lease and license to describe the type of business that will be operated
within the leased premises or license area. The Permitted Use description should clearly
describe the type of business the tenant or licensee intends to operate and the
merchandise, food or service the tenant intends to offer for sale.
The purpose of the Permitted Use clause is to regulate the duplication of merchandise or
services; however, it does not grant any tenant or licensee an exclusive right to sell any
item or service. Exclusivity rights shall not be granted to any merchant on the Pier.
7.2. Term
Rental lease terms for commercial space on the Pier shall be negotiated based on the
level of capital investment, use, size of the space (leases for larger footprints are normally
for longer terms) and complementary character of the operation with the Pier Leasing
Goals and Objectives. These factors also will be balanced against the City's policy of
ensuring that public sites periodically do become available for a public competitive
process.
To maintain the vitality of the Pier the City needs to insure its ability to address the mix of
uses and activities on the Pier over time. Therefore, it needs to have a variety of lease and
license timeframes and not have the majority of licenses or leases with very long terms
or the majority of leases ending simultaneously -- thus limiting the City's ability to deal with
evolutionary changes in Pier visitor needs.
7.2.1. Recommended Terms for Leases and Licenses
I. Portable Vending Carts
The recommended term for vending cart licenses is from 6 months to 1 year.
These licenses should be subject regularly to a public process to accommodate uses that
meet contemporary Pier needs and to allow frequent opportunities for businesses
interested in operating on the Pier.
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II. Fixed Location Kiosks
The recommended term for fixed location kiosk licenses and concessions is
from 3 years to 5 years.
III. Deck Space Rental
The recommended term for the commercial license of deck space is from 1 day
to 2 years, depending upon use and circumstances.
IV. Viewers and Transmitters
The recommended term for license and concession of cameras, antennas, and
coin - operated telescopes and binoculars range is from 1 to 5 years depending on use
and circumstances.
V. Retail Shops, Restaurants, Amusements and Aquarium
The recommended terms of leases for retail shops, restaurant, attractions
and t h e aquarium range from 5 years to 25 years -- inclusive of any option periods.
Generally, terms of five years will be granted if there is no substantial new
capital investment in structures, structural improvements or equipment. If a tenant is
required to make substantial new capital investment in structures, structural
improvements or equipment then terms of ten years to twenty -five years may be
considered. Additional options to extend the term provided under Section 7.5, may be
offered contingent upon the amortization and financial requirements of new
investment and findings of benefit to the City.
VI. Leaseholds Subject to Development Agreements
Terms of leaseholds that are subject to a Development Agreement will be
negotiated with the City of Santa Monica. A Development Agreement is a negotiated
contract with the City that includes a developer's contribution of significant community
benefits and requires review by the Planning Commission and the Landmarks
Commission, and final approval by the City Council.
7.3. Rates
Rents, fees and charges on the Pier are expected to reflect fair market value.
Adjustments can be made to provide for diverse uses consistent with the Pier Leasing
Goals and Objectives or significant offsetting capital investment that provides the Pier
permanent benefits also consistent with the Goals and Objectives.
In addition to a base rent, the City may elect to require that a lease include a percentage
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rent provision, which can be differentiated by categories of sales. The City, as Landlord,
shall have the right to audit tenant's financial records to ascertain that the gross sales
figures reported by the tenant are accurate.
Leaseholds with preferred uses for research and public educational purposes (e.g. Santa
Monica Pier Aquarium) may be maintained at other than fair market rental rates.
The City will seek to reasonably minimize its costs associated with these activities by
participating in ancillary gross receipts from commercial activities at educational
facilities.
7.4. Hours of Operation
The Santa Monica Pier is a public venue open 365 days per year 24 hours per day. Pier
merchants will be encouraged to remain open for business with adjustments related to
the time of year and type of business. Minimum business hours when all businesses are
expected to be in operation, unless otherwise specified, shall be daily between the
hours of 11 am and 9 pm. Tenants will not be required to operate on Christmas Day and
Thanksgiving.
7.5. Modifications Based on Findings of Exceptional Community Benefit
Diversity of ownership in Section 6. IV and the length of term in Subsection 7.2.1. V may
be modified if all four of the following findings can be made and documented:
I. The proposed project will provide an exceptional opportunity to fulfill a goal or
objective of the Pier Guiding Principles and will enhance the unique character
and the viability of the Pier.
II. The proposed project will require substantial capital investment and provide an
exceptional return opportunity to the City.
III. The proposed project will enhance the mix of uses on the Pier while still being
consistent with the Pier's unique character.
IV. The proposed project will provide a significant enhancement to the visitor
experience at the Pier.
7.6. Triple Net Lease
Unless otherwise specified, Tenant shall pay all property taxes and assessments
(including Possessory Interest Tax), insurance, utilities and Common Area Maintenance
Fees - -as defined below - -as well as any duly- enacted future assessment or fee that the
City may elect to institute.
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7.7. Common Area Maintenance Fees
As a condition of occupancy of a Pier building, Leasehold tenants shall pay a
proportionate share of the City's Common Area Maintenance ( "CAM ") cost to manage,
maintain and provide security to Santa Monica Pier. On January 1, 2000, the applied
Common Area Maintenance cost was modified to provide for a fixed CAM payment with
biennial increases of not less than three percent (3%) and no greater than six percent
(6 %) per annum. Currently the CAM fee is $7.65 per square foot per year.
7.8. General Operational and Performance Standards
Tenants must maintain high quality and uniform standards of operation and service to
sustain and increase demand for their business, maintain positive customer experience,
and enhance the overall reputation of the Santa Monica Pier. In order to achieve the
highest standards of operations the following standards may be incorporated into each
lease and license:
I. Tenants are expected to staff and operate their businesses in a first -class and
reputable manner, commensurate with transacting a high volume of business on the
Pier.
II. Periodically, Landlord or Tenant may engage a third party "mystery shopper" to
visit and evaluate Pier businesses. Tenant will provide an action plan for improvement if so
requested by the Landlord.
III. Tenants shall respond to Landlord's written inquiries regarding any complaints or
issues, including postings on social media sites related to Tenant's operations. Tenant will
provide an action plan for improvement if so requested by the Landlord.
IV. Food operations that receive a designation from the Los Angeles County
Department of Health of less than an "A" more than three times during the term of the
lease or license, except to the extent that any such rating is restored to an "A" within 30
days of receiving the lower grade, will be in default and breach of the lease /license.
Landlord recognizes that third party action may require additional time to reinstate "A"
rating and may request tenant to provide an action plan for improvement.
V. Any Lease extension option will be conditioned upon Tenant's economic
performance. For example, Tenants with a percentage rent clause should have reached
rent levels requiring percentage rent payments to City for at least two of the four rental
years immediately prior to the expiration of the lease.
VI. Landlord may establish an annual review process to be performed by Office of
Pier Management Staff to evaluate key criteria utilizing a standardized rating scale.
VII. Each Lease or License may have additional operational and performance
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standards applicable to the particular Tenant's operation.
7.9. Maintenance and Environmental Responsibilities
Lessees and Licensees shall be responsible for maintaining their facilities in attractive
and safe condition, in compliance with applicable building codes and all applicable
environmental laws, ordinances, regulations and standards. This includes all areas
under their lease, the facades and exterior presentations, and appurtenance's of their
facility or operation.
8. CITY POLICY PROVISIONS
8.1. Labor Peace
The City owns the Pier and has a financial or proprietary interest in Pier businesses
engaged in visitor - serving commercial activities. Some of these businesses are in
industries that have a history of labor /management conflict. Risk of interruption of
rental revenue and common area maintenance fees received by the City from Pier
businesses would be minimized if such businesses were assured of labor peace. An
appropriate labor peace provision would minimize the City's exposure to revenue
interruption and disruption of public recreational enjoyment of the Pier.
Therefore, new or substantially amended agreements for leasehold operation shall
provide that the tenant will not engage in practices that impede employees' ability to
organize and contract with a labor organization for the purpose of collective bargaining.
Such prohibited practices include harassment, intimidation, "captive audience" anti-
union meetings or illegal terminations of workers in retaliation for organizing. A
substantial amendment is defined as a change of use of the property, an increase in
seating or square footage of more than 25 %, or an extension of lease duration. Tenant
engagement in prohibited practices shall constitute an event of default under the terms
of lease. Affected leases would be those businesses having five or more full or part -time
employees that engage in restaurant or visitor - serving entertainment activities such as
arcades, amusement parks and nightclubs.
8.2. Sustainability
The City of Santa Monica is committed to meeting its existing needs without
compromising the ability of future generations to meet their own needs. Therefore in
order to conserve and enhance local resources, safeguard human health and the
environment, maintain a healthy and diverse economy, and improve the livability and
quality of life for all community members in Santa Monica, each new or substantially
amended agreement for leasehold operation shall include provisions that require
sustainable practices including:
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A. Carbon Foot Print Reduction. Tenant shall use best efforts to help meet City -wide
carbon footprint reduction goals by minimizing unnecessary use of electricity and water,
minimizing or eliminating use of hazardous or toxic materials, and minimizing single -
occupancy vehicle trips by facilitating employee use of alternative transportation modes
such as carpools, buses, vanpools, and bicycles. A list of green business best practices is
available at: www.sustainableworks.org
B. Healthy Food /Sustainable Food Provision. Tenant shall exercise best efforts to
procure and promote healthy and sustainable food practices on the Premises.
Approaches include utilizing locally and sustainably grown, organic foods from
California; offering meatless menu options and food that has been minimally processed;
and reducing food packaging waste. Tenant is expected to participate in recycling and
composting programs offered by the City. Information on the City's Sustainable Food
Commitment is available at: www.sustainablesm.org /food.
C. Non - Recyclable Food Service Container Ban. Tenant shall comply with the City of
Santa Monica Ordinance (S.M.C.C. 5.44) banning non - recyclable plastic disposable food
service containers. Information on the Non - Recyclable Food Service Container Ban is
available a:t www.sustainablesm.org /container.
D. Single Use Carryout Bag Ban. Tenant shall comply with the City of Santa Monica
Ordinance (S.M.C.C. 5.45) banning the use of single -use plastic carry -out bags.
Information on the Single -Use Carryout Bag Ban is available
at: www.sustainablesm.org /bag.
A. Forest Stewardship Council Approved Products. Tenant is expected to follow the
recommendations of the Forest Stewardship Council recommended products list in
procurement of supplies.
8.3. Landlord's Licensing Program
The Landlord and The Santa Monica Pier Corporation may engage in sponsorship
programs applicable to all tenants on the Santa Monica Pier. Tenant shall agree to
participate in and be subject to such sponsorship program(s) so long as the terms of
sponsor products, goods and /or services are at least as favorable to Tenant as the terms
of agreements applicable to the same products, goods and /or services supplied to
Tenant for use on the Premises at the time of Landlord's or Pier Corporation's request
for Tenant participation -- provided that such sponsorship program does not violate any
contractual agreements entered into by Tenant.
8.4. City Policy on Doing Business with Arizona Firms
The Santa Monica City Council adopted Resolution No. 10479 (CCS) on May 25, 2010,
which requires a review of all current and likely future agreements and contracts with
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Arizona -based businesses to examine the feasibility of acquiring such products and
services elsewhere. Tenants and vendors who do not have headquarters in the State of
Arizona and those who will not be working with Arizona - headquartered subcontractors
to provide goods and /or services will take priority when considering available Pier leases
and licenses.
� r
The Santa Monica Pier 1987 Design Guidelines remain the primary reference regarding
structures on the Pier, encouraging a balanced respect for the historic architectural
elements and unique character of Pier with the intent to advance the range of activities
and services to enhance the visitor experience and success of Pier operations and
businesses. All public and private structural modifications and other improvements
proposed on the Pier will be subject to review for consistency with the Design
Guidelines, without exception.
The City's Economic Development Division in its proprietary capacity as Landlord must
review and approve in writing all proposed modifications before any regulatory action,
including submission of applications to Planning or Building and Safety. The regulatory
permit and entitlement process involves the City as regulator, not as Landlord. These
are entirely separate roles and approval of one does not mean approval by the other.
10. TENANCY RELATIONSHIPS
All City -owned buildings and deck areas on Santa Monica Pier appropriate and suitable
for leasing or licensing by the City to individual tenancies or licensees will be in
accordance with agreements prepared by the City. Each tenant or licensee will be
responsible for interior maintenance and repair and utility consumption at its sole
expense, and the City generally will retain responsibility for maintenance and repair of
roofs and exterior of City buildings, and of the Pier deck and substructure unless
otherwise specified in the lease or license. Structures constructed by tenants are subject
to interior and exterior maintenance and repair by the tenant at its sole expense. The
City shall have a right to inspect all tenant improvements, including fixed assets that
will revert to the City at the end of the lease term, for the purpose of determining
maintenance and repair needs. If necessary, Tenant is responsible for making repairs to,
or replacing, such fixed assets at its sole expense.
11. TENANT RECRUITMENT
All City -owned buildings and deck areas on Santa Monica Pier appropriate and suitable
for leasing or licensing will be subject to a public procurement and solicitation process
to identify prospective tenants and licensees whose financial and professional
experience, and products and /or services are consistent with the Leasing Goals and
Objectives set forth herein.
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Prospective tenants will be sought by publicly noticing the availability of a leasing
opportunity on the City's web site and through other appropriate forms of
communication designed to reach the intended audience. This may include printed and
electronic advertisements in appropriate trade journals or newspapers; display banners
on the property; and other forms of outreach to potential operators. In addition, the
City may retain a qualified commercial real estate brokerage firm or listing agent to
market the leasing opportunity, identify prospective tenants, and cooperate with other
realtors.
All prospective tenants must submit a Lease or License Application to the City.
Information contained in the Lease or License Application shall describe the proposed
use for the available space; provide information about the respondents' experience;
provide references; describe in detail the financial capability of the respondent to
perform; and set forth preliminary terms and conditions.
12. EVALUATIVE CRITERIA AND SELECTION
Leasing opportunities at the Pier are very limited. Therefore, each lease is vital in order
to maintain a vibrant mix of uses and sustainable Pier business environment. This
requires an extensive outreach effort and a thorough review and selection process.
The Pier Manager will appoint an evaluation panel to review all applications submitted
to the City. The panel will include representatives from the Office of Pier Management;
the Economic Development Division; the Pier Corporation; and other City staff and other
organizations and consultants as appropriate.
The panel will review and evaluate applications based on uniform criteria that may
include but are not limited to the following: (i) character, reputation, training, and
experience of the prospective tenant or licensee; (ii) ability, capacity, and skill of the
prospective tenant or licensee to perform; (iii) quality and price of the services or goods
to be provided; (iv) uniqueness and compatibility of proposed product or service with
the Santa Monica Pier, (v) financial capability; and (vi) length of tenure in an Exemplary
Manner (see below) on the Pier.
The selection process will include additional bonus points for existing Pier tenants and
licensees who are deemed to have operated in an Exemplary Manner. The term
"Exemplary Manner" will mean and refer to those Pier tenant or licensees who meet all
of the following criteria: Merchants that throughout the term of their lease or license
have: (i) provided consumers with relevant and quality merchandise, food and activities,
(ii) demonstrated a track record of good customer service, (iii) regularly updated and
invested in their operation and premises; (iv) demonstrated increasing sales volume
overtime; (iv) have been productive and active members of the Pier Community; and
(vi) complied with all lease or license provisions, as well as all applicable local, state and
federal laws and regulations.
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Proposers may be asked by the panel to participate in an oral interview in order to
clarify or elaborate on their proposal and to demonstrate samples of products or
services. The panel also may request verification of credit history and may contact
references.
The evaluation panel will provide to the Pier Manager its analysis and recommendation
of a preferred respondent or respondents, inclusive of appropriate bonus points. The
panel's recommendation also may be to reject all responses, solicit additional
information from one or more respondents, or to enter into exclusive lease or license
negotiations with a preferred respondent.
13. LEASE APPROVALS & DELEGATION OF AUTHORITY
The City Manager has the authority to negotiate and execute leases and licenses with
terms of three years or less for uses in accordance with this Leasing Guideline, and on
the basis of written agreements prepared and approved as to form by the City
Attorney. Leases and licenses for terms of occupancy greater than three years will be
negotiated by the City Manager and approved by the City Council.
For Leases and licenses with terms greater than three years the Council may authorize
staff to enter into a lease or license with the preferred respondent subject to specific
terms and conditions, authorize entering into exclusive negotiations with a preferred
respondent, reject the recommendation, or direct that additional information be
solicited prior to making a determination.
The City Attorney will prepare and approve as to form all lease and license agreements
for review and execution by the prospective tenant or licensee. The executed lease or
license agreement will be submitted to the City Manager for review in terms of
consistency with the Leasing Guidelines and Council authorization. If determined to be
in accordance with the Leasing Guidelines and Council authorization the City Manager
will execute the agreement.
14. PROTEST /APPEAL PROCESS
Applicants not selected as the preferred respondent by the evaluation panel will be
informed by letter or email. Protestant may file a written protest with the City's
Economic Development Manager no more than seven (7) calendar days following the
notification. The written protest must set forth, in detail, all grounds for the protest,
including without limitation all facts, supporting documentation, legal authorities and
arguments in support of the grounds for the protest. All factual contentions must be
supported by competent, admissible and credible evidence. Any matters not set forth in
the written protest shall be deemed waived. Any protest not conforming to this
procedure shall be rejected as invalid. The protest must include the name, address, and
telephone number of the person representing the protesting party.
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The Economic Development Manager shall review the merits and timeliness of the
protest and issue a written decision to the Protestant within ten (10) calendar days of
receipt of the protest.
The decision of the Economic Development Manager may be appealed to the City's
Housing and Economic Development Director by filing a letter appeal within ten (10)
calendar days of the date of the Economic Development Manager's decision. The letter
of appeal shall set forth, in detail, all grounds for the appeal, including without limitation
all facts, supporting documentation, legal authorities and arguments in support of the
grounds for the appeal. All factual contentions must be supported by competent,
admissible and credible evidence. Any matters not set forth in the letter of appeal shall
be deemed waived. Any letter of appeal not conforming to this procedure shall be
rejected as invalid.
The City's Housing and Economic Development Director shall review the merits and
timeliness of the letter of appeal and issue a written decision to the Protestant within
seven (7) calendar days of receipt of the letter of appeal. The decision of the Director is
final.
Attachment A. Santa Monica Pier Lease and License Inventory
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ATTACHMENT A.
SANTA MONICA PIER LEASE AND LICENSE INVENTORY (updated Dec. 2013)
As of the date of adoption of these Guidelines, the buildings and areas on the Santa Monica Pier available
for lease or license consists of (but are not be limited to) the following:
Address
Current User /Use
Square
Current Term
Footage
Expiration
1600 Oceanfront Walk
Santa Monica Pier Aquarium/Marine research
4,533 sf.
June 2018
_
and educational facility.
200 -A Santa Monica Pier
Pier Shop /Retail shop offering souvenir items
260 sf.
April 2014
and books featuring local history and themes.
200 -B Santa Monica Pier
Soda Jerks /'Old Fashion' Soda Fountain.
400 sf.
July 2025
250 Santa Monica Pier
Ristorante Al Mare /Full Service Restaurant with
6,069 sf. +1,033
December 2038
alcohol and ancillary entertainment.
patios
256 Santa Monica Pier
Rusty's Surf Ranch /Full service restaurant with
3,035 sf. +
September 2029
alcohol service, and with evening music and
1,073 sf. patios
entertainment.
258 Santa Monica Pier
_
The Albright (SM Pier Seafood) /Full service
2,557 sf. +
June 2020
restaurant with alcohol service.
1,392 sf. patio
301 Santa Monica Pier
Bubba Gump Shrimp Co. /Full service restaurant
8,955 sf.
May 2027
with alcohol service.
310 Santa Monica Pier
Blazing Saddles /Bicycle rentals, with ancillary
1,292 sf.
Oct 2003
sales of bicycle - related merchandise.
month -to -month
321 Santa Monica Pier
Oatman Rock Shop /Retail shop offering
_
135 sf.
April 2013
souvenir items and gifts.
month -to -month
322 Santa Monica Pier
Starline Tours /Tour sales, visitor info services.
250 sf.
April 2016
330 Santa Monica Pier
Pier Burger /Limited service convenience
1,525 sf. +
Sept 2023
restaurant without alcohol service.
584 sf. patio
350 Santa Monica Pier
Playland Arcade /Arcade with ancillary retail
8,603 sf. +
June 2031
sales.
641 sf. patios
350 -B Santa Monica Pier
Marlene's Beachcomber /Retail sales of beach
375 sf
July 2009
related items.
month -to -month
370 Santa Monica Pier
Trapeze School NY/ Trapeze school.
10,985 sf. gross
April 2015
deck area _
..
380 Santa Monica Pier
Pacific Park /Amusement park with rides, games
70,000 sf. gross
May 2046
and ancillary retail and food service.
deck area
_
401 Santa Monica Pier
_
Mariasol Cucina /Full service restaurant with
6,204 sf. + 2,217
March 2028
alcohol service.
sf. patios
404 Santa Monica Pier
SM Bait and Tackle /Fishing bait and tackle with
292 sf.
June 2004
ancillary retail and food sales.
month -to -month
Trolley Kiosk
66 to Cali /Pier related souvenir and sundries.
85 sf
June 2016
Mobile Vending Carts
Pier and /or beach - oriented retail and food that
Aprox 25 sf. each
varies
is not otherwise available on the Pier.
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