SR 09-09-2014 8ACity Council Meeting: September 9, 2014
Agenda Item: 8A
To: Mayor and City Council
From: Andy Agle, Director of Housing and Economic Development
Subject: Bergamot Station Arts Center Policy and Process
Recommended Action
Staff requests that the City Council:
1. Affirm or identify modifications to the current vision and plan for the Bergamot
Station Arts Center; and
2. If Council affirms the current vision, authorize the City Manager to negotiate and
execute an Exclusive Negotiating Agreement (ENA) with 26Street TOD Partners
LLC to implement the vision for the City -owned property located at
2525 Michigan Avenue, home to the Bergamot Station Arts Center.
Executive Summary
On February 25, 2014, Council directed staff to gather feedback from the Arts
Commission and arts community on the three proposals submitted to a Request for
Proposals (RFP) for the City -owned portion of Bergamot Station Arts Center ( "Arts
Center "), an approximately five -acre, City -owned site located at 2525 Michigan Avenue
(the "Site "). During the course of gathering additional stakeholder feedback, including a
hearing with the Santa Monica Arts Commission, significant policy questions have been
raised. Some of the questions require affirmation or new direction from Council,
including the long -term vision for the Arts Center, Big Blue Bus (BBB) revenue
requirements, and a potential commitment to allow private parking on City Yards
property. In addition, there are interim operational issues to be addressed, including
parking management, way- finding and arts center management/marketing support to
the Bergamot tenants. Staff seeks Council confirmation of the current plan or direction
regarding modifications to the plan for the Arts Center. If Council affirms the current
approach, staff recommends that Council authorize staff to enter into exclusive
negotiations with 26Street TOD Partners LLC to implement the vision for the Arts
Center. The ENA process would include extensive community outreach and would
refine the proposed project's plan to address tenant retention, construction phasing, and
parking.
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Background
The Site, which is the City -owned portion of the "Bergamot Station Arts Center," is
located at 2525 Michigan Avenue and consists of approximately five acres with five
buildings totaling approximately 62,000 square feet. There is an additional two -acre
portion of Bergamot Station Arts Center that is privately owned. In 1989, the City
purchased the Site with transit funds with the goal of serving future transit needs in
Santa Monica and providing a source of revenue for the Big Blue Bus. The Exposition
( "Expo ") light rail line is scheduled to open in early 2016, with a stop immediately
adjacent to the Site, at the corner of Olympic and 26th Street. The City Council
committed $6.7 million towards betterments to enhance the pedestrian experience at
the Expo light rail station. The light rail, which is projected to serve over 3,000 riders per
day, will bring significant new activity to the Site and the area. These changes, coupled
with the desire to protect and enhance the area's arts and creative uses, informed the
development of the RFP criteria for the City -owned property, and the development of
the broader Bergamot Area Plan.
The City -owned portion of the Arts Center is currently occupied by approximately
27 small, creative business tenants, including art galleries, designers, a non - profit
theatre company, and a cafe. These tenants sublease from Bergamot Station Ltd.,
which leases the Site from the City for $528,000 per year. The current lease, with
options, expires on December 31, 2017. The principal of Bergamot Station Ltd. also
owns 1.3 acres of land adjacent to the City -owned portion of the Arts Center, which
contains additional art galleries and the Santa Monica Museum of Art.
Another proposing development team member (The Lionstone Group on the 26Street
TOD Partners LLC team) owns property to the west in immediate proximity to the Site
as well. The RFP sought proposals for only the City -owned portion of the Arts Center.
Community Visioning and Planning
In anticipation of the operation of the Expo light rail's Bergamot station, City staff began
conducting extensive public outreach regarding the Site and the surrounding area
in 2011. Staff solicited community input on both the future of the City -owned Site and on
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a community vision for the area within the larger context of the Bergamot Area Plan.
The planning effort was guided by community participation, which has included over
1,000 individuals who participated in stakeholder interviews, focus groups, online
surveys, community workshops, neighborhood meetings, and public hearings before the
City Council, Planning Commission, and other City boards and commissions.
The Bergamot Area Plan identified the City -owned Site as the Conservation Art Center
District (CAC). The Plan limits the intensity of development to a floor -to -area ratio (FAR)
of 1.0 on the City -owned Site, and a maximum 2.5 FAR on the two adjacent, privately
owned parcels. Heights of up to 86 feet are permitted. On the City -owned Site,
the maximum allowed height was paired with a low FAR to encourage preservation of
the Site's open feeling by encouraging new buildings to have a small footprint.
The vision for Bergamot Station's future emerged from this extensive community
outreach process and was informed by preliminary economic feasibility analysis of
development alternatives conducted through the Bergamot Area Plan process.
Members of the Arts Commission, Landmarks Commission, Planning Commission, and
Architectural Review Board, as well as neighborhood groups, individual gallery owners,
artists and arts professionals, and individual residents and members of the broader
community expressed strong support for preserving Bergamot Station Arts Center.
Participants acknowledged its importance as a cultural destination and its unusually
long -lived concentration of small arts businesses. There was also general consensus
on the importance of building upon Bergamot Station's success as the heart of the
emerging creative district by fostering a greater variety of arts options and cultural
offerings that could function during the day and evening, including non - profit arts
organizations and performing arts activities. Residents of adjacent neighborhoods
expressed support for expanding arts activities beyond fine -art sales in order to better
engage neighbors of all ages and incomes.
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The Bergamot Station Arts Center Preferred Concept
The community input culminated in the development of the Bergamot Station Arts
Center Preferred Concept ( "Preferred Concept "). The Preferred Concept, which was
endorsed by Council on March 20. 2012, establishes an overarching vision for the Site
in accordance with the principles, policies and recommendations set forth in the
adopted Land Use and Circulation Element (LUCE), in the City's Creative Capital
strategy, and in the adopted Bergamot Area Plan.
In addition to expanding cultural opportunities in the Arts Center, the Preferred Concept
includes other complementary components of the vision for the Arts Center's future.
These components include expanding dining opportunities for tenants and visitors and
balancing the "funky" nature of existing warehouse buildings with a new, state -of -the art
museum placed adjacent to the Expo station to welcome visitors to the cultural
amenities of the Arts Center. The Preferred Concept includes the retention of the art
galleries and envisions a boutique- sized, mid -price hotel and the addition of creative
workspace to complement area uses and to further enhance the visibility of the Arts
Center. The hotel and potential creative office uses are also critical to the overall
economic feasibility of the Preferred Concept, particularly in light of the need to continue
to support Big Blue Bus operations while ensuring below- market rents for cultural uses,
ample open space, and a low -level of overall development intensity.
Public Solicitation Process for a Development Team
On March 20. 2012, Council endorsed the Preferred Concept and authorized staff to
prepare and release a Request for Qualifications (RFQ) to solicit qualifications from
potential partners to design and implement the Preferred Concept. Five development
teams responded to the RFQ in July 2012. On November 27 2012, Council directed
staff to issue an RFP to the top three teams that were selected through the RFQ
process.
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In February 2013, staff issued the RFP to solicit proposals from teams led by 26Street
TOD Partners LLC (formerly referenced as The Lionstone Group /Industry Ltd.),
Bergamot Station Ltd.Mlorthe Real Estate Group, and REthink Development/Kor
Group. The RFP also included the opportunity for the teams to propose developing a
shared -use parking structure on the adjacent City Yards site, and required them to
outline the pricing and management of the parking operation, if proposed. Proposals
were received on May 1, 2013. The proposals, staff reports, supporting documents and
additional information related to the planning initiatives are available for review or can
be downloaded at, ww smgov.net/Bergamot.
The RFP's stated option for the teams to propose developing a shared -use parking
structure on the City Yards site extended the due diligence process involved in
recommending a development team. Two of the teams proposed developing a shared
parking structure on the City Yards to accommodate their project's parking
requirements, while the third team proposed on -site parking. Both of the off -site, shared
parking proposals would necessitate that the City identify the requisite financial
resources for the City Yards' share of the parking structure.
As part of the due diligence process, staff evaluated the City's financial capacity and
timing potential to partner in the creation of a shared parking structure at the City Yards
as a part of proposed Site development. Staff determined that the City's ability to
commit to a coordinated construction timeline was not feasible, particularly if the
proposals depended on the City's ability to financially facilitate at least a portion of the
parking structure. Additionally, Public Works staff responsible for the management and
operation of the City Yards and the City Yards Master Plan has expressed concern in
encumbering the City Yards with long -term, contractual commitments that would limit
operational opportunities. In light of concern regarding the timing of and financing for a
shared parking structure, as well as the operational constraints of long -term contractual
commitments on City Yards land, staff requested that the two teams that proposed
shared parking on the City Yards property modify their proposals to accommodate
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project parking on Site and indicate how that would impact their proposed ground -lease
payment, open space, and building retention.
In late 2013, staff issued follow -up questions to the three teams and sought
clarifications and statements of commitment regarding their proposals. All three teams
were asked questions about their proposals related to building preservation, parking,
financial estimates, open space and art center management and marketing budgets.
Staff received the teams' responses on January 10, 2014. The evaluation panel
reconvened to review the responses, and the City's real estate development financial
consultant, Keyser Marston Associates (KMA), reviewed the additional information from
the teams with an emphasis on the proposals' economic feasibility and financial impacts
to the City.
On February 25 2014, staff recommended that Council authorize the City Manager to
negotiate and execute an Exclusive Negotiating Agreement with 26Street TOD Partners
LLC. Council directed staff to gather feedback from the Arts Commission and arts
community on the three proposals submitted in response to the RFP.
Discussion
The discussion section below provides an overview of the community feedback received
during the latest outreach process, and the direction that staff is seeking from Council in
light of feedback received and due diligence conducted to date.
Santa Monica Arts Commission Input
On August 23 2014, the Santa Monica Arts Commission held a special meeting to
review and discuss the Bergamot Station Arts Center proposals. Over seventy people
attended the meeting with public comment provided by representatives of the Bergamot
galleries (both from those located on the privately held portion of Bergamot, as well as
the City -owned site), City Garage Theatre, UCLA Boethius Institute, Santa Monica
Museum of Art, Santa Monica Neighborhood Council/ North of Montana Association
/Wilmont/Pico Neighborhood Association /Ocean Park Association, Jacaranda Music
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Inc., Santa Monica Architects for a Responsible Tomorrow (SMART), and Santa Monica
Coalition for a Livable City, as well as representatives of the three development teams
and individual residents and artists.
In total, 43 people spoke during the public comment period, speaking passionately
about their particular gallery, arts organization or last visitor experience and why
Bergamot is important to them. Some expressed concern about the lengthy City
entitlement process and how uncertainty over the future of the Site may impact
business. Others expressed unease about the amount of proposed commercial
development on the Site, particularly the creative office use and to a lesser extent, the
hotel use. Conversely, others anticipated that the Arts Center could provide more
community arts and cultural activities to more people if it had additional space created
on the Site that could support a broader spectrum of arts. Parking was also identified
as a serious concern, both in terms of how constructing the proposed on -site, below -
grade parking may negatively impact existing businesses, and in terms of the quantity
of proposed parking, which was perceived as insufficient to address transit riders and
potential public demand. Neighborhood representatives expressed strong
neighborhood support for building preservation and sensitive design, with an
expectation that future arts development would keep the scale of the current Arts
Center.
Following public testimony, the Commission had a substantive discussion, and made
clear that they view Bergamot Station Arts Center as essential to the future of arts and
culture in Santa Monica. There were some commission members that stated a
preference for the Worthe team's proposal while there were others that spoke in favor of
the 26Street team's proposal and its incorporation of Cal Arts, UCLA and other
community arts uses. The Commission discussed parking at length and determined that
it was a concern, but not an insurmountable problem, and an issue that could be solved
through collaboration among staff, tenants, the selected development team, and the
Commission's proposed Bergamot Arts Center Advisory Committee.
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The Commission took the following actions:
® They voted to affirm the staff recommendation of the selection of the 26Street
TOD development team. The Commission's motion included a recommendation
to Council that if and when Council proceeds with developer selection, that an
advisory group be assembled with representatives of the Bergamot Station
Gallery and Cultural Association (BSGCA), the Santa Monica Arts Commission,
and residents. The motion passed on a vote of 4 to 3 with one Commissioner
abstaining.
• The Commission also discussed priority issues for Bergamot that should be
addressed as part of both the interim operations and the long -term revitalization
and renewal process, including tenant retention, construction phasing, and
parking. The Commission unanimously voted to recommend that Council
consider advancing several Commission priorities, including:
• affirming the City's Preferred Concept,
• maintaining a certain amount of open space,
• retaining the existing galleries,
• expanding the arts uses at the Arts Center,
• reexamining the amount of collateral uses, such as the hotel and creative
office,
• continuing to explore various parking options,
• continuing to promote affordable spaces for arts uses — i.e. to provide rent
subsidies; and
• reinforcing the importance of an ongoing arts management component.
Additional Community Input
Since February 2014, in response to Council's direction, staff has also met with
Bergamot Station tenants, held a community /stakeholder meeting, provided
opportunities for input and feedback, and worked broadly to disseminate information
about the process and proposals.
Bergamot Station Tenants
In 2014, the tenants at Bergamot Station Arts Center formed the Bergamot Station
Gallery and Cultural Association (BSGCA), a coalition of representatives of the
42 businesses located within the publicly and privately owned portions of Bergamot
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Station Arts Center, including 34 art galleries, SMMoA, City Garage Theater, and the
Bergamot Cafe. Staff met with the BSGCA on March 28, April 11, and August 19, 2014,
to discuss the status of the proposal process, present the February 25, 2014 City
Council staff report and presentation, answer questions, and gather feedback.
In those meetings, the businesses expressed interest in working with the three
development teams to understand each proposal and to seek clarification on the
proposed mix of uses, parking solutions, and business retention efforts. They asked
detailed questions about the proposals and queried why the shared parking structure at
the City Yards was not being incorporated in the proposed projects. They also
expressed serious concern about the viability of continued business operations during
construction, parking quantity and location, as well as uncertainty as to the long -term
future of the entire Site (publicly and privately owned) and the implications for their
individual businesses /organizations. The BSGCA has also subsequently met with each
development team independently over the past five months.
Community Meeting and Written Community Feedback
City staff held a community meeting on May 6, 2014 at the Writers Bootcamp at
Bergamot Station. In order to facilitate outreach to the Bergamot tenants and the arts
community per Council direction, staff held the meeting at Bergamot Station, invited Arts
Commissioners, and promoted the public meeting in The Palette and through social
media. Over 170 people attended, including Santa Monica residents, artists,
representatives of Bergamot Station galleries and businesses, representatives of the
Arts and Recreation and Parks commissions, and other interested parties.
Staff provided an overview of the proposal process illustrated below (Figure 1),
reviewed the community planning and visioning process which led to the Bergamot
Station Arts Center Preferred Concept, and outlined the opportunities for community
input throughout the overall process, including the community dialogue that would occur
during the process of developing and refining project plans once an ENA has been
executed. In addition, each of the three development teams gave a short presentation of
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their team's vision and proposal for the Site. The meeting provided an opportunity for
the attendees to provide input and feedback on the proposals and ask questions of the
teams and City staff. The questions generally involved parking, the types of uses that
were proposed and how the proposals would engage various types of visitors and the
community. The meeting was recorded by City TV with the link posted on the project
website, www smaov net/bergamot.
Figure 1. Bergamot Station RFP Process + Next Steps
INPUT
0 AN OPPORTUNITY FOR
Spring Spring
2012 2013
ffam
A survey was handed out at the meeting and was made available on the project website
during the month of May for the public to complete and submit. The survey posed nine
questions regarding:
• individuals' interest/affiliation with the Arts Center,
• frequency of visits and reasons for visiting the Arts Center,
• types of activities /services they would like to see at the Arts Center in the future,
and
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feedback on modes of transport currently used and likely to be used in the future
to visit the Arts Center.
The survey allowed respondents the flexibility of indicating a preference or answering
more than one choice for the questions, thus indicating a range of preference instead of
having to choose only one option. A total of 44 people responded to the survey.
The relatively small sample size makes it difficult to draw strong conclusions from the
survey instrument. Of the 44 survey responses that were completed (Attachment A),
the majority of survey responders (66 %) indicated that they were Santa Monica
residents and roughly one - quarter were also Santa Monica business owners,
employees, artists, or art professionals (note: the categories were not mutually
exclusive). Fifteen percent of the respondents indicated that they were Bergamot
tenants.
Survey respondents tended to visit the Arts Center several times a year for purposes of
enjoying the arts and social events. When broken into subgroups of Santa Monica
business owners /non- tenants and artist/non- tenants, many also cited the Bergamot
Cafe as a frequent destination. The majority access Bergamot by car, planned to visit
Bergamot Station either the same amount or more frequently once the Light Rail opens
and supported the concept for a variety of art activities at Bergamot, including gallery
openings, public art, outdoor events, and dining options.
In addition to the survey, at the May 6th meeting and during the month of May 2014,
participants and the broader community were asked to provide overall comments on the
three proposals with respect to:
• proposed Arts Center activities
• the proposed mix of uses
• overall design approach
• balance of preserving existing buildings vs. new infrastructure
• proposed open space
• access and parking
• community context and approach, and
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® Site connectivity to the Light Rail Station and BBB lines.
The link to the Bergamot Arts Center Development Feedback Form was also posted on
the City's project website alongside the video of the May community meeting and each
team's proposal. For a full list of comments submitted by 24 individuals, please see
Attachment B. The feedback received can be summarized as follows:
® Proposed Arts Center Activities: There was generally support expressed for the
proposed diversity of arts activities and tenants, ranging from gallery openings
and museum shows to arts education, music, and events. Concern was
expressed regarding the right balance of activities and a desire to avoid
overwhelming the current focus on galleries.
® Mix of Uses and Community Approach: Comments favored ensuring a mix of art
uses with recognition that some level of revenue generation on -site made sense;
however, there was disagreement on whether hotel or creative office uses should
be included on the Site, and the appropriate amount of restaurant and retail
options. Several comments were made in support of the museum and other non-
profit art organizations proposed to be housed at the Arts Center in order to
serve the needs of the surrounding community and broaden the Center's focus,
which is currently perceived to be on fine -arts sales.
• Design Approach and Infrastructure: Many expressed support for preserving the
industrial character of Bergamot as well as introducing green open space.
There were positive comments on the value of integrating some new buildings on
site in a sensitive way, and balancing preservation with high - quality, new design.
Several commented on the importance of walkability and overall space flow.
There was sensitivity expressed with respect to overdeveloping the Site, and
concern about whether a hotel could feel "plunked down" and potentially detract
from keeping the focus on the arts.
• Access and Parking: There were strong comments made both in favor of
providing significantly more parking on or near the Site, and in favor of shifting
focus to public transit and efforts to minimize traffic congestion. Many expressed
a preference for off -site parking.
Additional Community Activity and Discussion
Given the overall importance of the future of the Arts Center to the arts community,
opinion has been divided about its future. A portion of the arts community feels very
strongly that the existing galleries should be the primary priority for the future of
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Bergamot Station. The Santa Monica Arts Commission and other members of the arts
community have argued that the Site is a public resource that should be reinvigorated
and serve a broader cross - section of the community with an array of arts uses rather
than the focus being on galleries only, which are predominately for - profit businesses.
While there is extensive support for retention of the existing galleries, there is also
interest in seeing the Site serve as a potential safe harbor for key Santa Monica arts
non - profit organizations, as well as an opportunity for youth to become engaged in the
arts. Many in the arts community do not see these goals and uses as mutually exclusive
and would like to see the Bergamot Station Arts Center accommodate the existing
galleries and the SMMoA, while including other non - profit arts and educational activities.
Amidst the ongoing community dialogue regarding proposals for the City -owned Site,
there have been press releases, letter- writing campaigns, and online petitions regarding
participation in development teams, appropriate development on the Site, short -term
and long -term parking solutions, and gallery rents. During this period, SMMoA has
received notice of a dramatic increase in its rent, which puts the long -term viability of the
museum at immediate risk.
Updated Proposal Information
Concurrently with the community outreach efforts, staff sought additional clarification
from the teams regarding on -site parking, open space, museum core and shell
construction costs, proposed building retention, and Arts Center Management Plan
budgets. Staff also requested information regarding the project proposal pro - formas to
address any inconsistencies in the development teams' self - reported public revenue
projections. In addition, Bergamot Station Ltd., the company that currently leases the
Site and operates Bergamot Station Arts Center, and that had partnered with and
submitted a joint proposal with Worthe Real Estate Group has recently withdrawn from
the team. The Worthe Real Estate Group will be referenced as the Worthe team in the
remainder of the staff report. The City's real estate development financial advisors,
Keyser Marston Associates, Inc. (KMA), also conducted a final review of the estimated
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annual public revenue generated by each proposal. Upon staff direction, KMA reviewed
each team's final pro -forma and financial statements and standardized the annual
economic impact data. The previous economic impact/public revenue information
submitted to Council was self - reported information submitted by the development teams
and varied in baseline assumptions. A matrix outlining the three proposals' project
specifics, the standardized economic impacts, and the projected public revenues of
each proposal are attached (Attachment C). The proposal updates are summarized
below.
As originally stated in their proposals, the three development teams' total amount of
open space and on -site parking was not clearly or uniformly defined. Through follow -up
questions from staff and the community input received, the teams updated their parking
and open space information. The table below delineates the updated amounts of
proposed dedicated open space and flexible open space as well as the amount of
below -grade and surface parking.
All three teams report similar numbers for total amount of open space and were able to
respond to community feedback about the need to increase the amount of dedicated
open space on the Site by further quantifying space allocated to outdoor performance
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WORTHE
26STREET TOD
PARTNERS LLC
RETHINK / KOR
Open Space
131,000 sq.ft.
125,679 sq.ft.
110,847 sq.ft.
Dedicated Open Space
116,000 sq.ft.
110,148 sq.ft.
105,912 sq.ft.
Additional "Flexible'
Open Space (e.g.
surface parking/ delivery
area /special events)
15,000 sq.ft.
15,531 sq.ft.
4,935 sq.ft.
Total On -Site Parking
383
442
380
Surface Parking
27
55
0
Subterranean Parking
356
387
380
All three teams report similar numbers for total amount of open space and were able to
respond to community feedback about the need to increase the amount of dedicated
open space on the Site by further quantifying space allocated to outdoor performance
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areas, public plazas and landscaped walkways. In each case, the amount of dedicated
open space covers roughly 50 percent of the total site, consistent with the Conservation
Area zoning that caps the overall allowable development on this Site. Across the three
teams, the total amount of parking did not change; however, each team clarified the
breakdown of surface versus subterranean parking.
The three teams were also asked to clarify their estimated Arts Center Management
budget. The table below lists the updated figures. The biggest change was made to
the Worthe team's annual arts center management and marketing budget. It has been
updated to reflect administrative costs for a dedicated marketing team, which increased
it from an initial $70,000 per year to $207,000 annually with the potential to increase up
to $600,000 per year under a revenue - sharing model. The 26Street TOD team
confirmed an annual arts center management and marketing budget of $180,000 per
year plus revenue sharing from future sponsorships projected to net a total of $800,000
per year. They were also the only team to propose Cultural Arts Trust seed funding,
equating to an initial funding commitment of $200,000 in Year One to help support the
existing tenants with marketing, events and promotion in the interim prior to the overall
development stabilization. The REthink/KOR team also reported a slight increase in the
annual budget, from $295,000 per year to $302,000 annually with the potential to
increase up to $700,000 per year with revenue share and sponsorships. All three
proposals anticipate the need for private event revenue, sponsorships, or naming rights
to cover programming costs, and the appropriate scope of those activities would be
defined as the entitlement process progresses through community input and Council
approval. All three teams propose to invest additional profit back into the Arts Center
Management to ensure the on -going future success of the Arts Center.
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26STREET TOD
WORTHE
PARTNERS LLC
RETHINK/KOR
Arts Center
$207,000
$180,000
$302,000
Management (at
up to $600,000
up to $800,000
up to $700,000
stabilization)
Museum Costs
$2,870,000 (core
$7,000,000
$12,740,190
and shell
(turnkey)
(core and shell)
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In addition, the REthink/KOR team revised their proposal to address the RFP
requirement to provide a core and shell building to the SMMoA. The team committed to
fund $12.7 million of construction costs for the museum at $637 per square foot towards
the 20,000 square feet of museum core and shell space, and to lease the facility to the
museum rent -free for the base ground -lease term of 55 years. The team expects the
museum to contribute $500,000 or $25 per square foot to finance tenant improvements
and fixtures, furniture and equipment in the facility. REthink /KOR's estimated budget for
the museum is based on a sophisticated, technically complex design, which explains
the construction cost. The Bergamot Station LtdMorthe team budgeted approximately
$2.9 million for museum core and shell costs. The 26Street TOD team budgeted
$7 million for museum core and shell, tenant improvements, and HE costs, thus
delivering the museum a turnkey project. The Bergamot Station Ltd/Worthe and
26Street TOD teams plan to charge SMMoA non - profit rents ($1.25 - $1.60 per square
foot per month).
The teams were also asked to confirm the total gross building area and number of
buildings to be preserved. The REthink/KOR team made the greatest amount of
changes to their original proposal, revising the size of each proposed use except the
museum square footage. The gross building area for galleries decreased by 26 percent
from the initial proposal from 54,000 sq. ft. to 40,000 sq. ft., space for other cultural
non - profits jumped from 3,500 sq. ft. to 17,000 sq. ft., and space for restaurant use was
increased from 13,000 sq. ft. to 16,656 sq. ft.
As referenced in Attachment C, all three proposals are proposing nearly the same
amount of total development, which falls within the allowable 1.0 FAR. The Worthe
team reports the highest amount of space dedicated to art galleries but also proposes
the greatest amount of hotel and creative office development of the three teams.
26Street TOD proposes the lowest amount of commercial development with the
smallest hotel (93 rooms versus 120 -125 rooms) and the least amount of creative office.
The 26Street team has the largest amount of retail among the three teams, though they
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clarified that the retail will be dedicated to art, design, gallery and showroom, thus
providing an extension of the gallery space but at non - subsidized rates. 26Street TOD
confirmed that they plan to retain four of the five buildings. As a result, all three teams
propose similar amounts of building preservation, with at least four of the five buildings
projected to be preserved in each proposal. When standardized by KMA, projected
public revenues from the three proposals are similar (Attachment C, Table 2).
Policy Issues
Staff requests that Council either affirm or identify modifications to the current vision and
plan for the Bergamot Station Arts Center in addressing key policy questions related to
development of the Site. The discussion below provides an overview of the policy
issues impacting the Site and leads into the evaluation panel's recommendation.
During the course of gathering stakeholder feedback in the past few months, three
significant policy questions were raised that require the Council's direction regarding:
• the Preferred Concept for the Arts Center and implications for BBB revenue
expectations for the Arts Center,
• long -term parking commitments within the future City Yards Parking Structure,
and
® interim operational concerns.
Council may also wish to address private property that is adjacent to the Site and
owned by two of the development teams that submitted proposals and whether that
property should be considered as part of the overall development of the Site, and
whether any of the new parking developed should address transit - serving parking for
the Expo light rail.
Affirming Bergamot Station Preferred Concept
A variety of questions and concerns were raised through the recent stakeholder
feedback process that question previously approved elements of the Bergamot Station
Art Center Preferred Concept. Namely, there were questions regarding the mix of
cultural uses proposed, other uses proposed for the Site, the amount of new building
area proposed, and the rationale for making any changes to Bergamot Station Art
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Center as it currently exists. As outlined earlier in the report, a significant community
visioning and public outreach process commenced in 2011 that led to the City Council
adopting the Preferred Concept which balances the City's three primary goals for the
Site: 1) support the arts; 2) deliver a transit - oriented project that encourages ridership
and engages the Expo station and 3) generate revenue for the Big Blue Bus operations.
The Preferred Concept emphasizes retaining the concentration of art galleries and other
cultural uses, providing space for a museum in a location that welcomes visitors to the
Arts Center, creating revenue - producing and visitor - serving uses that activate the
community space during the day and evening, including a hotel and restaurants, and
delivering infrastructure improvements to complement the Arts Center and the
taxpayer's investment in the new Expo station. Staff seeks Council affirmation or
modification of key elements of the plan discussed below.
Mix of cultural uses: The Preferred Concept seeks to maintain and build upon the
existing concentration of arts uses, primarily for - profit art galleries, by expanding the
variety of cultural uses on the Site. Additional cultural amenities include an expanded
home for SMMoA and the incorporation of community- based, non - profit cultural
institutions. If no changes are made to the existing Arts Center, there would not be
room, physically or financially, to accommodate community -based arts uses on the Site,
including SMMoA, which currently rents space on adjacent private property.
Other uses proposed for Site: The Preferred Concept allows for value- creating
elements, including a hotel and creative office, in order to create revenue sources.to
support the Big Blue Bus operations, as well as to underwrite other public objectives for
the Site such as the museum building, open space, transit amenities, community arts
and cultural programming, and the ability to continue to provide below- market rents for
galleries and cultural uses while investing necessary improvements in the Site. In the
current market, creating value to underwrite other public objectives for the Site could be
created by residential, hospitality or office uses.
im
The planning process for the Site determined that a boutique- sized, mid - priced hotel
would not only create necessary financial value to support other public objectives for the
Site, it would also create synergies with the cultural uses and serve a need for the
overall Bergamot Area, as well as potentially providing additional customer base for the
Arts Center. Hotels also generate relatively low traffic levels in an area that can be very
congested, particularly at peak commute times. In addition, hotels produce significant
transient -tax revenues that could be used to offset the relatively lower lease revenues
that the Big Blue Bus is expected to receive under the Preferred Concept. (See below
for more discussion of Big Blue Bus Revenues from the Site.)
The creation of new housing on the Site also could be expected to generate traffic
patterns that are largely different from commute patterns in the area. However, housing
was not expected to provide the same synergy with the cultural uses, could create
conflicts with the adjacent City Yards, and would not provide other City revenues that
could support Big Blue Bus operations. Creative office uses could create potential
synergies with the cultural uses, although given the overall traffic patterns in the area
and the other project revenues, the creative office use is limited in the Preferred
Concept.
Big Blue Bus Revenues: Understanding the relationship between current and future
lease revenues and their support for Big Blue Bus operations is critical to understanding
the Preferred Concept. The Site was purchased in 1989 with transit funds with the goal
of serving future transit needs in Santa Monica and providing a source of revenue for
the Big Blue Bus (BBB). The Arts Center currently generates approximately $528,000
annually in ground rent payments to BBB to help support the on -going operations of
public transit in Santa Monica. Prior to Expo's purchase of a portion of the Site, the Arts
Center was generating over $620,000 annually in lease payments to the BBB.
On May 25 2010, Council approved an increase in BBB base fares from $0.75 to $1.00,
voting not to increase base fares to $1.25 out of concern for the impacts on bus riders,
particularly low- income, transit - dependent riders. At the hearing, Council committed to
19
identify funds to fill the deficit, including utilizing real property assets to produce
on -going revenue to support BBB operations. Ground -lease payments from real
properties such as the Arts Center have proven to be a reliable, steady source of
funding for BBB operations. Until there was certainty about light rail and its needs
relative to the Site, leasing the Site was necessarily considered an interim activity that
could provide revenue to BBB while ensuring active use of the Site.
The interim activity has proven to be popular and successful, forming the basis of the
Preferred Concept. However, were the City to place top priority on enhancing lease
revenues to the BBB, the proposed development concept could be very different in its
form and financial outcomes. For example, if the Site were valued comparably to other
properties in the area, and if the City expected a market -rate return on its property, the
property could generate several million dollars per year to the BBB. From this
perspective, the Preferred Concept represents a compromise whereby the BBB
receives a lower return in order to promote other public objectives (such as cultural
uses, open space, building preservation, and low- intensity development).
Absent intervention and an expected continued increase in BBB operating costs, a
failure to capitalize on the value of Bergamot Station could result in increased pressure
on bus fares or reduced public transit services to the community. However, the
inclusion of a hotel at the Arts Center provides an opportunity to help address bus
revenues. For example, the Council could contribute City revenues, supported by the
increased TOT revenues from the Arts Center hotel, into a special fund that could help
stabilize bus fares.
Amount of New Building Area: The floor- area -ratio (FAR) of 1.0 that was adopted in the
Bergamot Area Plan for the City -owned portion of the Arts Center is one of the lowest of
any commercial area in Santa Monica and was designed to encourage preservation of
the historic scale of the Site, as well as many existing buildings. Heights up to 86 feet
were intended to complement the FAR as a means to reduce building footprints, thereby
preserving a great deal of the Site for public open space. If the FAR were to be further
20
reduced, the ability of the Preferred Concept to achieve the public objectives for the Arts
Center would be severely compromised.
Staff seeks Council direction regarding affirming the Preferred Concept's balancing of
public objectives for the Site. If the Council determines that the Preferred Concept no
longer represents the appropriate balance of public objectives, staff seeks general
direction regarding how best to strike the appropriate balance. However, delaying the
selection of a development team extends the uncertainty of tenancy for the art galleries,
City Garage theatre, and other tenants. Additionally, further delay in the selection
process also hampers SMMoA's ability to raise funds for their new museum and puts
the future of the museum in jeopardy. Necessary infrastructure improvements and
investments to the Site will be delayed until long -term certainty on the operations is
confirmed. There are no guarantees to the tenants that their rent levels will remain at
the current, lower- than - market rent levels. These delays also present a higher
likelihood of losing the interest of the existing proposal teams and may discourage
future interest from other development teams in responding to a prolonged and
uncertain selection process.
Parking
Parking has proven to be a critical point of discussion with respect to the Arts Center.
The Bergamot Station Gallery and Cultural Association ( BSGCA) has expressed strong
disagreement with any proposal to develop on -site, below -grade parking due to fear of
extensive construction disruption to their ongoing business operations. Temporary
relocation plans have also met resistance in that many galleries fear that if businesses
are relocated, they may not survive in the interim and /or may permanently relocate
outside of Santa Monica. As such, the BSGCA has formally advocated for the City to
incorporate the Arts Center parking requirements within the City Yards parking structure
that is to be built in the future. This approach would effectively delay the redevelopment
of the Site for many
years. There was also
stakeholder concern
that the parking
requirements for the
Arts Center development
may be insufficient
in meeting future
21
parking demand. Some stakeholders also expressed interest in building parking on or
near the Site to serve users of the Expo light rail. The Santa Monica Arts Commission
also weighed in on the parking issue and requested that further analysis be done of
various parking options during the ENA process, including evaluation of an above -grade
parking structure on the Site as well as the potential utilization of other off -site shared
parking options. The following provides more detail regarding the parking issues.
off -Site Parking at the City Yards: In accordance with the City Yards Master Plan, the
development of a City employee parking structure at the City Yards is part of a phased
implementation plan that will proceed as funding is available. Early phases of the
Master Plan are just beginning feasibility and concept design analysis. The City Yards
parking structure is in Phase 3a of the Master Plan, which has not received CIP funding
for design or construction. Funding for implementation of the Master Plan is anticipated
to come from the City's General Fund and various enterprise funds housed at the
Yards, as funding becomes available over the years. The developed phasing plan
involves construction of new facilities in order to accommodate relocation of uses that
exist currently within the footprint of the proposed City Yards parking structure. The
phasing must also allow for continuous operation of City services during the City Yards
Master Plan build -out. As a result, the earliest a shared parking facility could begin
construction is FY 21 -22, at least five years after the Expo light rail line is in operation,
presuming funding can be identified. Construction would not be complete for
approximately two years thereafter.
In addition, the Public Works Department, which is charged with managing the City
Yards as a multipurpose municipal maintenance campus, has expressed concern about
encumbering the property or a City Yards parking structure with a long -term, private
use. Encumbrance to a private entity would limit the City's ability to reposition the uses,
activity, and ongoing operations conducted within the structure. Flexibility may be
needed to provide critical services such as water treatment facilities in the near future.
For these reasons, staff requested that the proposing teams evaluate building parking
22
on -site at the Arts Center. It is anticipated that when the City Yard parking structure is
built, it could accommodate shared parking during off -peak City Yards operating hours
(e.g. evenings, weekends) which could supplement Bergamot Station's on -site parking,
rather than serving as the primary source of parking supply.
The City Yards Parking structure, per the Master Plan, is proposed to be four stories
and to include 350 parking spaces. The total projected parking as required by code is
approximately 400 spaces for the proposed 221,000 square feet of uses in the
Bergamot Arts Center proposals. Incorporating 400 private spaces into the City Yards
Parking Structure would involve doubling the height of the currently projected four -story
parking structure, or building some levels below grade at a substantially higher cost. In
accordance with the LUCE, the height limit at the City Yards is 45 feet (4 stories) and
the FAR is 2.25. Anything larger may require an amendment to the LUCE and also a
Development Agreement.
The estimated budget for the 350 spaces needed for the City Yards parking structures
is $16 million. Currently there are no funding sources identified for the structure. To help
address and better evaluate the economics and financing of a City Yards parking
structure, staff has issued a request for proposals for professional consultant services to
review the financing options, economics, and demand. A final report is not expected
until mid -2015. In response to proposals submitted by the development teams, staff is
also directing the parking consultant to review robotic parking and other parking
efficiency operation models that may help add to the parking supply at the City Yards if
it is deemed a viable option.
Staff will keep Council apprised of results of the financial feasibility of a shared parking
structure. However, regardless of the financial feasibility, the primary concern with the
shared parking structure option relates to timing. As described above, it may be up to
ten years before a shared parking structure could be financed and built on City Yards
property. This prolonged wait would significantly delay the enhancement of the transit
23
arrival experience at Bergamot Station, would create concern regarding the long -term
viability of SMMoA, may risk losing the opportunity to advance the development
proposal as currently envisioned, and would delay opportunities to reduce fare
pressures on the Big Blue Bus.
Other Parking Options: In order to minimize impacts from constructing underground
parking on the existing galleries, other parking options have been considered.
One option is to increase the private value that is created on the Site so that the hotel,
for example, could support additional underground parking. Achieving such an outcome
while maintaining limited footprints would likely require increased building heights, which
would not align with the Bergamot Area Plan. Another option would be to encourage
above -grade parking on site, which many tenants felt may be less impactful than
subterranean. The issue with this is that it would count towards the overall FAR for the
Site and may result in loss of open space and/or limit the amount of new, infill uses that
would help make the overall operations and development financially feasible.
Another approach is to allow adjacent property owners who have responded to the RFP
to include their properties as part of the overall solution to address parking and interim
space needs. Such an approach could create an integrated development plan for a
larger area, though it would likely also translate into a larger overall development
envelope associated with one development project.
Parking for On -Site Uses: Some stakeholders have expressed concern that the
minimum zoning parking requirements may not be sufficient to serve the needs of the
proposed development. The existing surface parking at the Site accommodates
approximately 275 parking spaces and is encumbered with parking uses not associated
with Bergamot Station Arts Center with the primary sublessee being Agensys Inc., a
biotech company located at 1800 Stewart Street, who leases 75 parking spaces on the
Site.
24
These parking leases utilize the limited supply and constrain the parking supply from
turning over during the day to service visitors and customers of the Site. This condition
may create the perception that a large supply of parking is needed at the Site. However,
proactive parking management may be a better approach than building an over - supply
of parking. The parking sublease arrangement between Agensys and Bergamot Station
Ltd. will terminate once Bergamot Station Ltd.'s existing lease with the City expires in
2017. Agensys is aware that they will be responsible for finding alternative parking and
transportation solutions for their employees. From 2016 onwards, it is anticipated that
some of Agensys' and other area employees will utilize the light rail to commute to and
from work.
Transit - Serving Parking: Some stakeholders have expressed a desire to create parking
resources to serve light -rail users. Given that there are thousands of commercially
available parking spaces within a few blocks of the transit station, parking that is
specifically targeted toward light -rail users would likely need to be subsidized to a price
level that is well below that of adjacent commercial uses. The City has traditionally not
favored subsidized parking adjacent to the light rail stations because the stations are
located in areas that already experience heavy traffic and subsidized parking would
likely exacerbate traffic challenges. There is also no clear path to finance subsidized,
transit - serving parking.
Evaluation Panel Review
In light of the community input received over the past six months, the evaluation panel
reviewed the updated proposal information submitted by the three teams according to
the selection criteria listed in the RFP and outlined below:
® Development Strategy — understanding of the potential market demand, the
existing development context, and the development review process; preliminary
selection of land uses and product types; integration of public benefits; creation
of an iconic, compelling and synergistic arts center development.
Design Approach - architectural excellence; responsiveness to the City's design,
sustainability, and circulation objectives.
25
• Community Approach — how the development team would promote community
involvement in the project development stage; tenanting; community /cultural
events programming; open /event space programming.
• Financial Analysis and Capacity — project's economic vitality; anticipated ability to
get financing; financial benefit to the City as the property owner.
The evaluation panel also reviewed the proposals, updated information and how well
they addressed the development objectives approved by Council and listed in the RFP.
The development objectives were based on community input received prior to issuing
the RFP and are aimed at implementing the Council- endorsed Preferred Concept for
Bergamot. They are summarized as follows:
1. Inclusion of at least 75,000 square feet of arts- related space that is affordable to
non - profit cultural organizations and for - profit art galleries, and provision of space
for the Santa Monica Museum of Art (SMMoA);
2. Provision of open space, infrastructure and other amenities to support public
access to the light rail station and improvement of the environment and
functionality of the Site;
3. Preservation of existing buildings, where feasible;
4. Inclusion of a mix of uses such as hotel, restaurant and bar, and other creative
office and cultural uses to create a vibrant development;
5. Provision of parking in accordance with LUCE guidelines with an emphasis on
shared parking opportunities;
6. Payment of ground lease based upon fair market values (at a minimum, provide
$610,000 per year in ground rent to the City);
7. Exceptional architecture and sustainable design with a focused transit - oriented
development approach; and
8. Coordination with the Bergamot Area Plan.
The panel also discussed the various policy issues highlighted earlier in this report.
Given updated community input, updated proposal information, and the consideration of
policy issues outlined, the panel recommends that investment in the Site should
proceed in accordance with the Bergamot Area Plan and the light rail investment.
The panel concluded that the 26Street TOD Partners LLC best responded to the
Council's adopted development objectives and the RFP selection criteria through their
26
original proposal and their responses to staff's follow -up questions. KMA reconfirmed
that the 26Street TOD Partners has the financial resources and development approach
to complete the project. The proposal offered a project strategy that demonstrates the
team's capability to successfully deliver the project. KMA has expressed concern that
the REthink/KOR proposal exhibits a lower- than - typical rate of return for this type of
investment. The lower- than - typical return rate, coupled with the unique nature of the
proposed project, and that fact that neither SMMoA nor City Garage Theater will be
required to pay rent, may limit the financing opportunities for the project.
The evaluation panel believes the proposal's site plan, mix of uses, project design and
architecture best engaged the Expo light rail station and Bergamot Area. The evaluation
panel appreciated the attention given to integrating the arts throughout the Site,
providing affordable space for emerging and existing artists, and creating a thoughtful
program to use the public open space for community and neighborhood cultural events.
Community feedback solicited from the recent public meeting and surveys also
achieved favorable comments on this team's overall vision for the future of Bergamot,
which is to help support a vibrant, community- focused cultural arts center that meets the
needs of residents, area employees, and future transit users. As reflected in
Attachment B, there were many favorable comments in regards to the team's arts
center activities, proposed mix of uses and community approach. The panel also
valued the inclusion of experienced cultural programming partners and a robust,
sustainable budget for cultural programming.
Although the 26Street TOD team would not offer the highest economic return to the
City, the evaluation panel expressed confidence that the proposed project was
economically sustainable, and would balance economic return to the City with achieving
public objectives. In addressing community concerns regarding overdevelopment, this
team's approach with the smallest hotel and least amount of new, creative office has
been most sensitive to ensuring the future success of the Site as an Arts Center.
The overall proposal provides a diverse mix of uses that responds to Council's adopted
development objectives. The design approach offers iconic architecture, sustainable
MA
design and construction, and blends building preservation objectives with sensitive new,
but modest, infill development and innovative cultural programming.
Staff Recommendation
Staff recommends that the Council affirm or identify modifications to the current vision
and plan for the Bergamot Station Arts Center. If affirming the current vision, staff
recommends that Council authorize the selection of the 26Street TOD team and
authorize staff to enter into an ENA. Acknowledging the City Yards financing and time
limitations, staff recommends moving forward without a City Yards shared parking
structure as a component of the proposals to avoid delaying the Bergamot Station Arts
Center project. During the ENA period, many of the issues raised will be studied and
addressed by the 26Street TOD team and can be incorporated into the project
development process as further community input will be solicited with the public and
Bergamot Station tenants.
As referenced in the illustration below in Figure 2, staff would require the selected
developer to provide a construction mitigation and phasing plan, an executed labor
peace agreement, a tenant retention plan, and an interim Arts Center Management Plan
as deliverables of the ENA. In accordance with the Arts Commission recommendation,
the Council may also choose to require the creation of a Bergamot Station Advisory
Committee to participate in the ENA and longer -term development plan negotiations.
The Council and community, in partnership with the development team, could consider
measures to provide parking that minimizes impacts on existing tenants. All of these
items would be vetted with the Bergamot Station tenants association to help ensure on-
going viability of the Arts Center, and would be presented to Council along with the
project's conceptual design for approval as a condition of proceeding toward the formal
entitlement and business term negotiation process.
W
Figure 2. Exclusive Negotiated Agreement Process
REFINING PRELIMINARY CONCEPTS WITH
DEVELOPMENT PARTNER
Alternatives
There are four primary alternative approaches that Council could pursue:
1. Affirm the primary elements of the Preferred Concept but direct staff to enter into
exclusive negotiations with one of the other development teams.
2. Affirm the primary elements of the Preferred Concept but postpone developer
selection until the City Yards parking structure financial analysis and City Yards
Master Plan timing and funding approach are completed.
3. Affirm the primary elements of the Preferred Concept but direct staff to solicit
additional information and community feedback regarding the development
teams' proposals.
4. Terminate he RFP process with plans to initiatmodifying
a new RFP process once a new
Preferred Concept has been approved.
Alternative 1 is not expected to create significant time delay. Alternatives 2, 3 and 4
prolong the status quo of Bergamot Station, continue the reduced revenue - generating
potential for the Big Blue Bus, and extend the uncertainty of tenancy for the existing art
29
galleries, City Garage theatre, and other tenants. Delays to the process also hamper
SMMoA's ability to raise funds for their new museum and put the future of the museum
in jeopardy. Necessary infrastructure improvements and investments to the Site will be
delayed until long -term certainty on the operations is confirmed.
Addressing Interim Operational Issues
Recognizing that the Expo light rail is estimated to begin operations in early 2016 and
that the lease term with Bergamot Station Ltd. is set to expire at the end of 2017, there
is concern as to the current condition of the property, and its near -term role as a
gateway to Santa Monica once the Expo light rail station is open and forms an integral
part of an important regional public transit system. In 2016, up to 3,000 people each
day will be coming and going from the Bergamot Station Expo light rail station. The City
invested $6.7 million in "betterments' to the Bergamot station, however, if there are
minimal amenities and infrastructure improvements at the Site when the public exits the
station and enters the Arts Center, transit users will encounter a surface parking lot with
no clear public pedestrian right -of -way or Site way- finding or other amenities and public
infrastructure.
To date, there have been no adjacent Site -area improvements to address the future
pedestrian activity that will be generated by the Expo light rail, and the five City -owned
buildings are all in need of upgrades and investment. For pedestrians accessing the
Expo station from the neighborhood and workplaces to the east, they will be able to
walk through the newly created 1800 Stewart Street public art walkway with signage, a
cafe and outdoor seating, and into the surface parking lot in the center of the Arts
Center. The visibility of the Arts Center from the Olympic Boulevard/ 26th Street
junction (e.g. the future gateway to the light rail) does not reflect the Site's potential as
an signature gateway and anchor for the emerging Bergamot Transit Village and Mixed -
Use Creative Districts.
Further, there are a number of existing issues associated with the current availability of
parking at Bergamot Station Arts Center and how parking will be controlled and
go
managed once Expo light rail is in operation. Staff will be in discussions with the
leaseholder, Bergamot Station Ltd., as to these property management issues, including:
• development of a parking management plan,
• marketing and community outreach to help retain existing businesses, and
® on -going property maintenance.
There is also on -going discussion regarding interim property improvements that will
improve pedestrian accessibility, security, public way- finding and existing building
conditions. In 2013, staff secured a $75,000 grant from the National Endowment for the
Arts (NEA) to help support way- finding, public art, and interim marketing efforts and is
working with the BSBCA to reach consensus on the use of these funds.
Environmental Analysis
Authorization to negotiate and execute an ENA is exempt from CEQA. Consideration of
the project eventually will require additional environmental review and may include a
project EIR.
Next Steps
If Council authorizes exclusive negotiations, the Development Team would begin
community outreach efforts on the project design and open space programming, and
incorporate feedback from the community and from Council, boards, and commissions
gleaned during initial float -up presentations. A disposition and development agreement
and environmental analysis would follow, in accordance with the Bergamot Area Plan.
A development agreement application would not likely be submitted until sometime in
2015 and construction would not be expected to commence until 2017 at the earliest.
31
Financial Impacts & Budget Actions
There is no immediate financial impact or budget action necessary as a result of the
recommended action.
Prepared by: Jason Harris, Economic Development Manager
Jennifer Taylor, Economic Development Administrator
Approved:
Andy Agle, Director`
Housing and Economic Development
Forwarded to Council:
Rod Gould
City Manager
Attachments:
A. Bergamot Station Community Survey Results
B. Bergamot Station Community Feedback Comments Sept. 9, 2014
C. Development Proposal and Public Revenue Matrix
32
Attachment A m Bergamot Station Community Survey Results
(_)i What is your interest or affiliation with
Bergamot Station Arts Center? (Check all
that apply)
Mrsvere J: 90 Sld"vd:4
Answer Choices
Responses
7436%
29
Santa Monies Readout
Bergamot Tenant.....
15.38%
6
28.21%
11
SM Busamaue Owned Employee
SM Artist I Ads Professorial
028.21%
11
Victor
12.82%
5
Other (plan. sporty)
15.38%
6_.
Tom[ Respondents: 39...
Q2 On average, how frequently have you
visited Bergamot Station Arts Center over
the past five years?
Answered: 40 Slopped:3
Answer Choices
i Responses
27.50%. .....
11.
20.00%
8
Coca a Month
Several Timesa Vear
40.00%
16
10.00%
4
Once a Year
_. _..
2.50%
_.. 1..
Total._..
_.... _.
40
C13 Why do you currently visit Bergamot
Station? (check all that apply)
Answered: 42 Sklpped:l
Answer Choices.
Responses
A
_..
Social Events
_ _ 59.52%
25._
...Cafe _..
_. 38.10% __.. _...
_.. 16
Other(Pleace specify)
11.90%
5
Total Respondents: 42...
04 On average, how do you currently
access Bergamot Station Arts Center?
(check all that apply)
Ausvcmdr41 5kIPPetl:2
Answer Choices
Responses
85.37%
35
Drive
Bike _
_... _ _.... L. 1951%
_...
_. _... _... _... 4.88%
2
Bus
17.07%
7
Welk
_...
TaxllDam Off
2.44%
_. _..
_ 1..
Total Respondents: 41...
1
Z
G!5 By the end of 2015, the Expo Line is
scheduled to begin operation, and the Big
to Bergamot (light rail, BBB, bike), do you
Blue Bus will adjust its routes accordingly.
Given these new transit options, do you
plan to visit Bergamot Station Arts Center:
the proposals is sufficient?
Ans•+ered di SI<ipped:2
Answer Choices
Ans'wemd:39 SM,prd:4
_. ..
Rosponses
More frequently
Responses
46.34% 19
Loafrequeney
12.82%....
2.44% 1
Same
74.36%
51.22%.. �.. 21
Total
f
- 1282%
.
41
Z
06 With the improved transit connectivity
to Bergamot (light rail, BBB, bike), do you
think the amount of parking presented by
the proposals is sufficient?
Ans'wemd:39 SM,prd:4
_. ..
Answer Choices
Responses
Yes
12.82%....
,...
No
74.36%
29
Unwre
f
- 1282%
5
Total......
39..
Z
Q7 The following activities and services
have been proposed for inclusion at the
Bergamot Station Arts Center by all three
potential development partners. Please
indicate how likely you would be to utilize
these services or what is most important
to you?
Ansverod:43 SkipPad'.0
3
1 =Least
2, Not very
3 = Somewhat
4
5= Very
Total
Imin.dru Vnol
Importan9not v dry ",
Impodaghn.y ''.
Imported011kely
Importan Avill
likely to use or
Ilkleyto use cd
use or attend
to use or
definitely
!
attend j
attend
attend li
or attend
Gallery Openings
0.00%
4,65% j
6.98%
13.95%
�'i
74.42%
Museum Exhibits+
0
2 ''
3
6
32
43
Cuddled Ad Events
Ali
!
i
Events +Performances
2,44%
4.80%
14.63%
36.59%
41.46%
(Indoor)
i
2
6
15
17
41
Public Ad, Events+
2.331/6 li
0,00%
11.63%
30.23%
55.81%
Performances (Outdoor) I
1
0
B
13
24
43
Community -0denled
9.30%
13.95%
_
25.58%
30.23%
20,93% I
Ads +Educall.ard
4 1
5
11
13
9
43
Activiliesfor Adults
Community -0ddnlad
!
30.95%
21.43%
14.29%
1439 ° ° /a !
19.05%
Ads+Etlucalional
13
9 '',
6
8
42
Activiliesfor
VouihlChildran
Oiningf Cafad
1163%
2093%
1820%
27.91%..._..
23.26%
Raoauranis
5 1
9
7
12
10
43
Hotel Services(HOtel
76.19%
7.14%
4.76%
8.52%
2.38%
Roomy Meeting Rooms
32
3 j
2
4
1
42
and Event Venue)
'
8ociol Gathering Space
12.50%
12.513% 'i
20.00% i
27.50% t
27.50%
+Plazal Outdoor
5
6
8
11 4
11
40
Amphilheaier
Public Parking
14.63%
488%
4.80%
21.95%
53.66%
ICI
22
41
...Bike Padan9 /Bike_...
40.48%
_.
11.90 %
11,910
19.05%
....16.67%
Station (Radials, Bite �
17
, i
`
5 {
8
7 ii
42
Shaver lot- Commuting, f
etc.)
!
Big Blue BUSEnhanced
26.83%
12.20%
7.32% '',
31,71%
21.95%
Wrld South Candor
ii
,
3
13 %
9
41
Service to Bergamot
IncubalolAfforda0le,
39.02%
21,95%
14.63% i
14.63% t
0.76%
Works. for Leea1
I6
9 I
6
6(
4
41
knvneS£Snnd Nod
profits
3
08 Did you participate in the multi -year
City of Santa Monica Planning effort for the
re- imagination of the Bergamot Arts Center
and the Council- adopted Bergamot Area
Plan (www.bergamotplan.net)?
Answered: 42 SH,ped :1
Answer Chaises Responses
Yes 54.76% 23
No _. __ _.... _... 45.24%..... _....
Total..... 42..
09 If yes, what forums did you participate
in?
AnswoeeA: 23 Shipped 20
Answer Choices
Responses
Worldrops
100.00% 23
Focus Groups
26.09°%= 5
Slakzhoider interviews
17.39% 4
Total Respondents: 23
'.
0210 Where did you live?
Answered: 35 Skipped:9
Answer Choices
..90405
Responses
20.57%...
10
90404
20.57%
10
90403 _
17.14 %_... _....
5.
90402
17.14%
6
8.57%
3
90401
I
Total
35
4
44 0. nrrrr - t9tio �, •
-••. • Sept, "f
Flift,wil'iffi W_
® 26`h St. TOD makes a firm commitment to the
sustainable arts management plan "in perpetuity"
Excellent. Museum is essential to the identity of the
site.
Restaurant and bar would be a great asset — IF —
people have a place to park. Gallery openings are
the most essential aspect.
® Fine if site can support it.
® Rethink — great team. Most articulate and
substantive plan. Worthe most "natural" approach —
passive.
® Music, art, events, family spaces all sound great.
® Free classes for kids /adults /seniors.
® Strongly support the City Council recommendation
for 26 Street team.
® It seems that all three proposals are well - intentioned
in maintaining the Art Center activities. For the area
to become a real hub, it needs a greater variety of
tenants.
® Media lab — great idea!
® 26th St. is most articulate and thought out ideas and
good support of the museum and the galleries. Good
• Art galleries, arts education
• Family education.
• Community art classes for this part of town —
® Great to increase arts organizations so that it is not
only an arts business - focused center (galleries only).
O Low service hotel sounds like a really good way to
support new business growth.
® No chain restaurants, no chain fast food places. I'd
rather have interesting.
9 SM Museum most important then galleries. Museum
is doing the BEST job at Bergamot to attract people.
6 1 like the 26'h TOD team's idea to feature food and
beverage throughout not just in one of the two
restaurants.
® As many as possible.
a Needs to be carefully proportioned to put focus on
galleries. Certainly restaurants and even hotel (if
properly placed) would be ok. I prefer hotel off to the
side.
® The best proposal by far.
I. ® Will the developers (i.e. 26 h St.) really stay involved
enough to continue the money each year for 55
years to keep the art center activities going or will
they disappear in a few years?
® I am concerned that the activities could overwhelm
the galleries. The galleries should remain the focus.
• Does not need a hotel. Retail of art is not nonprofit.
• Overdeveloped and overcrowded.
• Not important. Keep the site the way it is.
• If it ain't broke, don't "fix" it. There is plenty of office
space and retail in other areas of Santa Monica — it's
not needed at Bergamot "Arts" Center.
• The combined impact of the planned developments
is not conducive to the neighbors.
• Keep it the same. It's unique — no hotel!
• Overdeveloped — add a restaurant and transit
parking and that is all.
• Creative office makes sense, a hotel does not.
eral Comments
• Children's garden walk. Museum of broadcast performance with studios for children and local artists to produce radio
shows, video, and drama.
• TOD. How to bring tenants into hotel spaced — is i an events space Need flush out hotel!
• Galleries need to far outwei h retail or creative office in order to mai ntain the e character of the site.
Hotel should be built last and lim-----------------
ited in size - appropriate to area and history of area. Restaurants /bars should not be
000M
® V Very good to put hotel to the side (26'" St. TOD) to
keep the noise considerate for guests. Open space is
beautiful.
Prefer Bergamot/Worthe idea and team member
authorship. Like the idea of a hotel in the middle that
has a ground floor to inspire plan throughout.
• Rethink clearest by far.
• Open and connected is a great vision. I'm less
worried about preserving the grit of the place.
• Large green spaces. Nothing crazy looking.
Something attractive, timeless, quality to last 100+
years.
• Simple story approach is best -front door for all
businesses. Hotel should be low key - amenities
distributed throughout site.
1 believe present galleries should be able to continue
as they are currently. I am in favor of parking at the
City Yard to begin with before demolishing current
lot. I like the open space /park approach with some
new structures strategically placed so that the site is
not too dense (like the Grove is too dense).
® None of the design approaches will work. The
existing businesses will be forced out.
® I did not hear any of the teams articulate a
meaningful design approach. The Worthe group's
proposal seemed to offer nothing new; no
acknowledgement of its potential to be greater than it
is when the train arrives.
® No hotel, less retail and restaurants. There is much
said about respecting the gallery tenants but little
about the impact of the surrounding neighborhood.
® Planting a hotel here changes the real purpose and
uniqueness of this area.
® Works great if Santa Monica was a bustling
metropolis, but it is not and should not become one.
® Prefer no retail. If a hotel, keep it boutique.
Maintain the industrial feel. The Bergamot Station /Ltd /Worthe Real Estate presentation focused on the goals and
shared preservation of current businesses /buildings, low rents, and open space.
a Keep what is - add the new as needed - keep space for restaurants limited so Bergamot does not become
Balance of Preserving Existing Buildings vs. Building New IVffrastructure
It's good to keep the soul and identity of Bergamot,
but it is important to envision an evolved and
improved version with more amenities, features, and
resources for the greater community (not just art
collections!)
Rethink /KOR and Bergamot Worthe seem to get it.
Preserve as much as possible - however new
construction will be just as good - the existing
galleries need to be "good enough" to service - SM
should not be in the business of supporting non-
viable business - other galleries (in the city of LA)
relocate - open and close depending on their
success.
Fred Fisher's group (Worthe) did the best
presentation in terms of keeping the existing building
and tenants here.
I do want to preserve existing buildings. The galleries
have a wonderful feeling arty (not too designed).
They could fit within limited new construction. The
newly created open space in the center would be
1-n. the riPnsity of new buildings is kept
ai
Can't maintain existing buildings if new buildings
come in.
® Do not over develop - treat as historic site and
refurbish.
® Yes, preservation. Think of neighborhood and plan
the minimum. No six story hotel.
® If it looks unrecognizable, it is. Two of the three
designs fail from a preservation approach.
® There is no reason to build a hotel on City Yard. If
this is an available use in the Bergamot area, let
developers build on their own land.
in check.
® Yes they are preserving most of the buildings and
propose the hotel in the right space.
® Preserving old buildings, most important limit parking
for picking up and delivering art. Walkways and
garden paths.
® Maintain the existing buildings and open space.
Further develop it as an art center.
eral Comments
® New buildings will work better and safer. Is the room we're in even sprinklered? How safe will these buildings be in
an earthquake?
® All do this IF no parking underground.
1 don't really care about this except as it affects current gallery /artist residents.
The existing buildings have created the ambiance that has made Bergamot Station so successful.
® Should preserve as much as possible.
This may be important to gallery owners, but it is low on my list as a resident of Santa Monica. I'm more concerned
about preserving the industrial nature of the site not individual buildings.
n
liv
• Its beautiful. It's essential. Bergamot's industrial
nature would be beautiful with greenlgarden
elements. It would be symbolic of beauty.
• Love this idea. KOR /Rethink has great ideas, also
Worthe in terms of preservation of space and flow.
• Very important. Must maintain.
• Park — YES!
• Very important. Even better if its energized by cafes,
performances, and people.
• Gallery space, walking space, but cars do need
access to move art in and out.
• Very important. Shade, shade, shade. No chain
restaurants or fast food. Full bar(s) — YES! but only if
they stay safe.
• In the service of supporting gallery /museum. Not a
park.
• Yes — but green and walkable with places to eat as
Mr. White would support.
• As much as possible.
• Very important not to try and squeeze too much into
this space. Park -like grounds, amphitheater, and
museum will be great, though.
• Excellent idea in front center and connectivity.
® The only presentation that really showed a big plan
for open space was the 26th TOD plan.
M Y
uvc
Imperative to maintain access and parking for
existing businesses to survive.
® KOR group only presenter that showed multi -level
parking off Michigan Ave. Good idea. Underground
parking — only adds 140 spaces. Not enough for
® Keep it open. Do not build more on it!
® This property belongs to our city and should not be
developed to increase the money it will make for the
"city" government.
Figure out the parking. It is completely insane to
move forward with development without creating a
realistic plan for this.
Gallery customers are not going to carry their
purchases home by bicycle, bus, or light rail.
Anensys is already using parking space at Bed
I love the idea of underground parking to get people
® out of their cars and stay on the site longer.
® Building parking at the City Yards seems like a good
idea — should have easy access off 24 1h St. and
freeway. Need places for people to park for the train.
Park and ride like other cities.
® We must be able to park close to the galleries!
Parking is ypjry important to the life of the galleries. I
think we should have a structure at the City Yard
right awa for as many cars as possible. After that
we can put in underground parking.
The underground parking is a good idea.
® If the galleries are worth getting to, people will come
— Sawtelle Blvd. is a good example — zero parking.
® Parking area needs to be on site for convenience of
shoppers and those with difficulty walking.
® Except for commercial, handicapped, ed, exacerbates etc the re
should be no parking, parking
existing road congestion. The mass transit and Expo
line was built in lieu of using cars.
because they're not meeting their AVR goal (1.5
rather than 2.0), so their EIR and the Bergamot area
plan's dependence on the LUCE EIR have proved to
be unrealistic.
Parking is a major problem in this area — Bergamot
area plan did not plan for parking or a park. This will
be a continuing problem for almost all development!
Poorly, poorly conceived. City planning lacks
foresight and requires a reality check. The city
officials, by and large, seem ignorant to the life's
breath of Bergamot.
1000 cars too many!!! Reduce project!!I There will be
parking close to downtown station. People can park
there and take train.
Parking off -site
• More the better.
• Off site — adjacent.
• OFFSITE — Essential. 1000 spaces — use automated parking.
• Public transport and adjacent parking with freeway ramp access and other access for locals. Use parking as
incentive for transition to public transportation.
• Consider parking structure closer to freeway on /off ramp to keep parking less densely located. Minimum 1000
parking spaces.
Community Context and
261h TOD Partners has a great approach that has
community awareness — brings in amenities for the
public. KCRW /CALARTS Media /Open air
auditorium /Museum — helps raise awareness for the
arts for all communities.
The idea of arts management is great. Rethink /KOR
has the best ideas about this. They seem to have
thought about this in a thoughtful and inclusive
manner.
Good ideas in bringing mature and known entities to
match the programs.
Cl ql wnu n... •.
• Keep the current character as much as possible.
• Porous to community. Police station on site. A^
C!
auvc
Very poor. Public doesn't want a hotel. Public told
take your pick of the 3 contractors. Public really
doesn't matter. This is just a fagade and sham.
® Bergamot Station has an industrial aspect, an
authentic aspect based on the history of the site. The
idea of plunking down a "boutique hotel" in the
middle of this area seems so incongruous. The city is
already adding hundreds and hundreds of hotel
rooms. Why here?
® Neighborhood was not asked if they want such a big
development. We do not need another hotel. PNA is
a stakeholder but was not noted to leave say.
Community was confronted with City wanting hotel,
also Wayne Blank wanted a hotel!!!
City failed to involve public at the onset of this
concept. Gathering data over an extended period of
time doesn't mean a free for all from a concept
standpoint for those in city government ^
• Should involve neighborhood as much as possible.
• Keeping the community involved is great, but they often lack vision without guidance. Sometimes, the vision has to
fire+ W ,rtha.'s idea of presenting with no vision besides reserve and listen is very lost on me.
Site Connectivity to the Light Rail Station /Big Blue Bus
urvc
® Good. Need parking for the demand of new users of
the site.
® 1 don't understand the plan — but like the idea of the
museum right next to the train stop.
a A great opportunity for the existing tenants. All the
new people will bring new energy and sales.
® The 26th St. team was the only one to address the
train station. The KOR team's idea of linking it to a
Big Blue Bus station is a great idea to encourage
more mass transit use within Santa Monica.
® Excellent.
® Important.
® A given.
Leave the site as is. It works and will continue to do
so. Let the train come. Watch what transpires and
stop, stop, stop driving from the backseat.
® Not as important as keeping access and parking on
site. Otherwise, existing businesses won't survive.
• Metro has taken care of this.
• Connect the Expo platforms to the Arts Center. Add a Big Blue Bus route on Stewart/28'h to connect the Expo Light
Rail with the Santa Monica Bus Park on Ocean Park Blvd. between 28`h and Centinela.
• Hub for circulation to major drop off centers around the commu lily.
In Order to Ensure a Vibrant Art Center into the Future,
1,r�
• Vital public space. Mix of public /private. Creative
galleries.
• Energy, diversity, events, family, media.
• Increased parking — many times over. Keeping
current galleries and attracting more.
• The art, the closeness of galleries, the walkability,
the lack of overcrowding — 2 of the plans would
overcrowd the space — keep the scale appropriate for
the scope and scale of the place.
• Easy community access. Late night, if safe. Close
late night if it proves not to be.
• Flexible space that can be leased differently over
time. Industrial model is a good one.
• Affordable gallery seats. Additional types of tenants
to activate the area at other times of day.
• Preservation of existing buildings and affordable
rents for the gallery owners. Without the galleries,
there is no Bergamot Arts Center.
• Theater, gallery events.
• Space for art galleries that are affordable so current
galleries are able to stay.
• Creating a community center that is serving more
than a few buyers of art. Needs to support
community programming.
• Present and enhance the site to grow it as a center
for residents and visitors alike.
• All that exists currently, a restaurant, and transit
1►
• Preserve the existing businesses. We don't need a
hotel and new retail.
• Rethink it!!!
General Comments
• Parking — right away, now, need
• Parking parking, parking
{
Positive
Negative
Negative
C
Best is 2615 TOD Partners' vision. Can't just be
® There are already non - profit theaters all over the city.
evolve. The site is desolate in the evening and the
galleries — galleries are only for an affluent sector of
There is no point in putting them all is on place that's
and access, existing businesses will be killed and
the community. They should be aided to stay, but
difficult to access at night by bus or bike.
change. Isn't part of the point of art to be able to
they cannot control Bergamot for the demands and
® For profit businesses leave to foot the bill for the
But more to the point, how many more cars per day
needs of the community.
nonprofit. What is the mix ? ?? 1000 sf office
®
Galleries, theater, museum — great. KCRW +
space ? ??
almost next door?
CALARTS — not so interesting. Rethink /KOR has
® Stop trying to change what isn't broken.
• Stay the course with Staff recommendation —
great ideas.
® No ambitions — stick to art related.
a
Fine but keep it in existing structures.
center. Please do NOT choose 2eh Street group.
®
Good!
Bergamot is not considered to be as reluctant as
®
Like the idea of KCRW as another cultural actor.
on a temporary basis. When the LUCE update
Culver City — those areas are passing Bergamot.
Their music programming is very well known.
• Let this be one of many cultural hubs with
between Uptown /Downtown (with Bergamot as
Imagine the events they could help to host. And all
the new "Uptown"), Q grand boulevards, or
the media they would provide, just by announcing
"KCRW for Bergamot Station." It would help put the
place on the cultural map of LA.
®
Same or better i.e. more galleries.
®
Art tenants — emphasize.
®
1 love the idea of a small theater and an outdoor
amphitheater. Outdoor Shakespeare in the summer
would be a winner!
®
Good for all.
®
All of the above.
®
The core of BAC is the galleries, all the rest should
be of lesser importance to keep current character.
Museum space is second followed by theater, etc.
®
Excellent and important mix.
.5T0 q.+iT T`.
Positive
Negative
• Bergamot Station can be so much more than it is
Maintain the existing businesses and buildings. The
now. The galleries should stay. Bergamot needs to
site can't support a hotel and new businesses e.g.
evolve. The site is desolate in the evening and the
retail or more commercial. If you lose on -site parking
weekends.
and access, existing businesses will be killed and
• I'm surprised how afraid the existing tenants are of
driven out.
change. Isn't part of the point of art to be able to
® 1 am concerned not just about parking availability.
share it with others? They should see this as a great
But more to the point, how many more cars per day
opportunity for them. The train and change are
will be clogging our streets? Has consideration been
coming. Their schemes (not Worthe) are a great way
given to the Hines project, which if passed will be
to grow into the new reality. I liked the 261h St. TOD
almost next door?
approach the best.
® Please keep the area from being overdeveloped for
• Stay the course with Staff recommendation —
the space. We want an art center not a Disneyland of
everyone complains about parking — don't let that
restaurants and cars. Keep art and museum as
rule the design. The gallery owners need to get a
center. Please do NOT choose 2eh Street group.
grip — things change — they need to change too.
6 Bergamot Station has been successful for many
Bergamot is not considered to be as reluctant as
years. Do not ruin it by moving the galleries out, even
other parts of LA, Sawtelle, Downtown, La Cienega,
on a temporary basis. When the LUCE update
Culver City — those areas are passing Bergamot.
process began, residents were asked to choose
• Let this be one of many cultural hubs with
between Uptown /Downtown (with Bergamot as
transportation available to get from one to the other.
the new "Uptown"), Q grand boulevards, or
Regional access to Expo parking and Santa Monica
40neighborhood activity centers. As it turns out, with
centric public transport.
this "grand vision" for Bergamot Station, we're going
to end up with all three! We were misled, and we
have to live with the "too much density" result.
a The RFP is flawed. The teams need a better RFP!
a Neighborhood has been cheated 2x. Once
Maintenance Yard was moved into community not on
Bergamot. The proposed development is too big for
the neighborhood. Impact of traffic will be
unbearable. Too commercial!!
® City Council, Planning, and Manager best prepare for
a battle this year. Your direction of greed doesn't
serve you or your public whom you were hired to
serve. The city coffers are flush. Stop infuriating us
with these developments!
General Comments
• It seems like the City Staff recommended the team who would alter the site the most, but who don't really understand
it. How odd.
• Have to provide parking first before project construction.
• Parking — Adjacent.
• "Retail" is being mentioned in the discussion and not really described.
ATTACHMENT C
BERGAMOT STATION ARTS CENTER DEVELOPMENT SUMMARY TABLE 1
DEVELOPER - REPORTED FIGURES
SANTA MONICA, CALIFORNIA
1A The museum costs include core and shell. The museum tenant will be required to pay for tenant improvements and FF &E.
18 This space is for art and design - related space, gallery space and showroom space. It is assumed these uses will generate sales tax and be non -
subsidized.
2B The museum will be delivered turnkey. The museum costs include: core, shell, tenant improvements and FF &E costs.
30 The Developer's cash flow escalates the ground rent payments on an annual basis. The ground rent equals $795,675 in 2019 (stabilized year). This
ground rent payment was used to calculate the return on cost (After Ground Lease Payment).
lc The museum costs include core and shell. The museum tenant will be required to pay for tenant improvements and FF &E.
2c The museum tenant will not be charged rent.
Prepared by: Keyser Marston Associates, Inc.
Filename: Bergamot Financial Evaluation _82014.xlsx; KMA Normalization; trb
26 STREET TOD
WORTHE
PARTNERS LLC
KOR /RETHINK
I.
Gross Building Area (GBA) ISFI
Museum
21,100
20,000
20,000
Gallery
61,600
45,000
40,000
Hotel
80,000
68,777
75,298
Creative Office
44,000
41,222
54,546
Restaurants /Bars
5,000
16,265
16,656
Retail
2,000
20,00010
0
Other Cultural
77,600
10 000
17,500
Total Gross Building Area
221,300
221,264
224,000
FAR
0.99
0.99
1.00
II.
Parking Space Allocation
Surface Parking Spaces
27
55
0
Podium Parking Spaces
0
0
0
Subterranean Parking Spaces
356
- 387
380
Total Parking Spaces
383
442
380
III.
Total Development Costs
$84,165,350
$92,032,617
$110,020,376
Per SF GBA
$380.32
$415.94
$491.16
IV.
Museum Construction Costs
$2,870,174 1A
$7,000,000 ]B
$12,740,190 tc
V.
Stabilized Lease Rates 1 /SF /Month) (2014 Dollars)
Assumed Market Rate Rent
$3.09
$4.00
$3.90
Museum (40% Market Rate)
$1.24
$1.60
$0.00 1C
Cultural Uses
Non -Profit (40% of Market Rate)
$1.24
$1.60
$1.56
For - Profit (65% of Market Rate)
$2.01
$2.60
$2.54
Theatre (40% of Market Rate)
$1.24
$1.60
$0.00
Creative Office
$4.00
$4.00
$3.90
Retail
$2.01
$4.25
N/A
Restaurant /Bar
$2.01
$4.25
$4.92
VI.
Hotel Assumptions
Number of Rooms
120
93
125
Stabilized Average Daily Rate (2014 Dollars)
$208
$293
$248
Stabilized Occupancy Rate
75%
72%
83%
Hotel Class
Upscale Redbury
Select Service
3 -4 star lifestyle hotel
VII.
Developer Return Assumptions
First Stabilized Year
2020
2019
2021
Total Development Costs
$84,165,350
$92,032,617
$110,020,376
Stabilized Net Operating Income (After Ground Lease Pont)
$6,305,477
$7,372,388
$7,969,743
Estimated Return on Cost (After Ground Lease Pmt)
7.49%
8.01% 3B
7.24%
1A The museum costs include core and shell. The museum tenant will be required to pay for tenant improvements and FF &E.
18 This space is for art and design - related space, gallery space and showroom space. It is assumed these uses will generate sales tax and be non -
subsidized.
2B The museum will be delivered turnkey. The museum costs include: core, shell, tenant improvements and FF &E costs.
30 The Developer's cash flow escalates the ground rent payments on an annual basis. The ground rent equals $795,675 in 2019 (stabilized year). This
ground rent payment was used to calculate the return on cost (After Ground Lease Payment).
lc The museum costs include core and shell. The museum tenant will be required to pay for tenant improvements and FF &E.
2c The museum tenant will not be charged rent.
Prepared by: Keyser Marston Associates, Inc.
Filename: Bergamot Financial Evaluation _82014.xlsx; KMA Normalization; trb
TABLE 2
ICMA- STANDARDIZED PUBLIC REVENUE ESTIMATES
SANTA MONICA, CALIFORNIA
26 STREET TOD
WORTHE PARTNERS LLC KOR /RETHINK
1. Proposed Ground Rent
Base Ground Rent
$700,0001 $750,000 $1,000,000
11. Transient Occupancy Tax Revenue
Number of Rooms
120
93
125
RevPAR z
$215
$215
$215
Transient Occupancy Tax Rate
14.0%
14.0%
14.0%
Estimated TOT Revenue
$1,318,380
$1,021,745
$1,373,313
III. Sales Tax Revenue
$5.00
$5.00
$5.00
Gallery SF
61,600
45,000
40,000
Gallery Sales Per SF
$200
$200
$200
Restaurant SF
5,000
16,265
16,656
Restaurant Sales Per SF
$600
$600
$600
Retail SF
2,000
20,000
0
Retail Sales Per SF
$300
$300
$300
City Sales Tax Share
1.25%
1.25%
1.25%
Estimated Sales Tax Revenue
$199,000
$309,488
$224,920
IV. Posessory Interest Tax Revenue
Ground Lease Payment
$700,000
$750,000
$1,000,000
Capitalized Value @ 7.50%
$9,333,000
$10,000,000
$13,333,000
City Share of Property Taxes
0.14%
0.14%
0.14%
Estimated Possessory Interest Revenue
$13,001
$13,930 .
$18,573
V. Property Tax Revenue
Estimated Assessed Value
$84,165,350
$92,032,617
$110,020,376
City Share of Property Taxes
0.14%
0.14%
0.14%
Estimated Property Tax Revenue
$117,242
$128,201
$153,258
VI. Utility User Tax Revenue
Number of Resident Equivalents
226
241
263
Utility User Tax Per Resident Equivalent
$265
$265
$265
Estimated Utility User Tax Revenue
$59,797
$63,985
$69,589
VII. Business License Revenue
Retail /Gallery Gross Receipts
$15,920,000
$24,759,000
.$17,993,600
Retail Business License Rate Per $1,000
$1.25
$1.25
$1.25
Estimated Retail /Gallery Business License Revenue
$19,900
$30,949
$22,492
Creative Office Gross Receipts
$26,400,000
$24,733,200
$32,727,600
Professional Business License Rate
$5.00
$5.00
$5.00
Estimated Creative Office Business License Revenue
- $132,000
$123,666
$163,638
VIII. ITotal Estimated Annual Public Revenue
$2,559,320
$2,441,963
$3,025,782
' The Developer offers to share 50% of any retail and restaurant rents that are above $2.01 per square foot of gross building area. If the
retail /restaurant rents are set at $4.00 per square foot of gross building area, this would result in an additional $84,000 annually.
z RevPAR equates to the revenue generated per available room. This estimate takes into account the occupancy rate and average daily rate.
Prepared by: Keyser Marston Associates, Inc.
2 Filename: Bergamot Financial Evaluation _82014.xlsx; KMA Normalization; trb
Reference:
Agreement No. 9967
(CCS)