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SR-07-14-2015-8ACity Council Meeting: 14 July 2015 Agenda Item: ---A To: Mayor and City Council From: Elaine M. Polachek, Assistant City Manager Subject: Santa Monica Pier Governance Recommendations, Board Appointment Schedule and Proposed New Corporation Services Agreement Recommended Action Staff recommends that the City Council: 1. Receive and file the Santa Monica Pier Board Governance Recommendation; 2. Extend the terms of the existing interim Board of the Santa Monica Pier Corporation until December 31, 2015; 3. Authorize the City Manager to negotiate and execute a new Service Agreement with the Santa Monica Pier Corporation; 4. Set November 10, 2015 for Consideration of Pier Board Appointments for terms beginning January 1, 2016. Executive Summary At its November 22, 2011, December 6, 2011, and February 28, 2012, meetings, the Council approved a series of changes to the governance and management of the Santa Monica Pier. The Pier Restoration Corporation board was dissolved in favor of an interim board renamed the Santa Monica Pier Corporation (SMPC) which was refocused to a core mission of Pier events, marketing, and fundraising and provided the new Board a two -year term. Several specific tasks were set for the interim board: Prepare a Pier Vision Statement and Guiding Principles; Make recommendations on Pier governance; Prepare Pier Leasing Guidelines, Pier Marketing, Sponsorship, Event Guidelines; and Assist the City with a Pier planning process and public outreach. The Vision Statement and Guiding Principles were reviewed and accepted by Council July 23, 2013. Pier Leasing Guidelines were accepted on April 8, 2014. At its July 23, 2013 meeting, Council extended the term of the SMPC service agreement and Board Members to June 30, 2015. The SMPC recommends the current governance structure for the operation of the Pier be maintained under a new Services Agreement, and the current Board's terms be extended until December 31, 2015 (attachment A). If Council approves the continuance of the existing governance structure under a new Services Agreement a new Pier Corporation Board would be scheduled to be appointed. The Board is recommending staggered terms for Board Members and the reappointment of five of the seven existing Board to provide continuity. Members of the Santa Monica Pier Lessees Association have requested that the new Board also include a tenant member (attachment D). If Council approves this request it could designate one regular position to be a tenant member or could add an Ex Officio member. The Pier Board is currently working with Housing and Economic Development Department staff on a Pier economic and use study that is anticipated to be completed by September of this year. Included in the study is an examination of Pier requirements and opportunities related to the Expo line, the Esplanade, the replacement of the Pier Bridge and event activities, including Twilight Concert Series and strategies for sustainability. The Board drafted and approved Events, Marketing and Sponsorship Guidelines last fall but would like to incorporate any pertinent findings from the study before presenting the Guidelines for Council's consideration. The Board is requesting that Council extend the Board terms to December 31, 2015 to allow for completion of the study and a revised Events, Marketing and Sponsorship Guidelines (attachment B). Background In 2011 the City of Santa Monica, with the cooperation of the Santa Monica Pier Restoration Corporation (PRC), initiated a study to evaluate the governance and management of the Santa Monica Pier in order to maximize organizational and budgetary effectiveness. Recommendations outlined in the Study called for changes to both the City's and PRC's roles and responsibilities. The study identified the need for the City to take a stronger role in the management of this major public resource, and recommended the establishment of an on -site Office of Pier Management to consolidate and better coordinate the City's many Pier - related functions. Recommended changes included modifying the PRC Boards size (from 11 members to 7) and composition to enhance decision - making while broadening representation, as well as renaming and refocusing the PRC from an organization whose original mission was to restore the Pier to an organization with a renewed focus on marketing, promotions, the production of community events and as a forum for public outreach on Pier related projects. Leasing was transferred to the Office of Pier Management. ►J The Office of Pier Management began operation on January 2, 2012. On February 28, 2012 Council approved a Service Agreement with the newly reconstituted Santa Monica Pier Corporation and appointed the current SMPC interim Board (attachment C). The division of responsibilities recognizes the inherent City legal and fiscal responsibility for the management, maintenance and uses of public property. The non - profit Pier Corporation provides a complementary entity to oversee event production and management, marketing, sponsorships and to assist the City with community outreach for matters involving the Pier. Discussion Office of Pier Management The Office of Pier Management (OPM) serves as the City's on -site coordinator of Pier services and programs as well as being responsible for community, tenant, and visitor relations. Primary focus areas for OPM coordination and support are Pier maintenance, facilities, capital improvements, policing and safety, planning, and outreach. OPM, in cooperation with the Housing and Economic Development Department (HED), has responsibility for leasing and licenses on the Pier and oversight of the Pier Fund. OPM also oversees contract services at the Pier, such as the Carousel and administration of the Service Agreement with the SMPC. The Pier Manager, in partnership with the SMPC Pier Administrator, is staff to the SMPC Board. The presence of OPM on the Pier allows for frequent interaction with the public and tenants, regular inspections, and consistent monitoring of operations and activities on the Pier. Santa Monica Pier Corporation The currant Pier Corporation Board took office in March 2012. The Corporation has 3 renamed itself, hired an administrator who is an expert in marketing, and has worked to establish a strong program of community outreach. The outreach program works to advise the community of projects and events on the Pier; gets input on what works and what needs improvement at the Pier; and defines the unique character and role of the Pier. The outreach and community forum function was very important to the Phase IV Pier Reconstruction Project and to the development of the Pier Vision Statement and Guiding Principles. Board outreach continues to be very important to the Pier Bridge Replacement project and ongoing capital improvement discussions. The Board has established a number of study groups within its membership to work with OPM and Pier Corporation staff on the development of the specified deliverables for City Council including the Vision Statement and Guiding Principles; Leasing Guidelines; Governance Recommendations; Event, Sponsorship and Marketing Guidelines and an Economic and Uses Study. The Board and its staff have increased both the number and range of events and activities and have sought to ensure the long term provision of diverse year round programing for the Pier. The Pier Corporation has defined five strategic categories for its events and activities programing and has established curators for each. They are music, film, arts, education, and active lifestyle. Additionally, the Pier Corporation has opened its visitor center and store in the Carousel building, providing visitor information, historical presentations, a gift shop and a place to book Carousel parties. Allied with these efforts have been substantial efforts in marketing and fundraising. The Board is currently working with City staff on an examination of the Pier's economic sustainability and use mix to set forth a strategy for the Pier's continued success in light of the opportunities and challenges associated with the construction and completion of the Expo line, the Colorado Esplanade, and the Pier Bridge reconstruction. The Board intends to revise the draft Events, Marketing, and Sponsorship Guidelines it had earlier prepared to incorporate recommendations from the study. Results of the study and the revised D guidelines are anticipated to be presented to Council in November. Approval of a New Services Agreement The current interim Services Agreement will terminate on January 1, 2016. The Corporation is constrained in making commitments in developing its schedule beyond next winter. This situation prevents multiyear agreements for events and activities or for any contractual services or programs. The proposed action is to direct the City Manager to enter into negotiations for a new multiyear Service Agreement with annual renewals at the City's option. The agreement shall be consistent with the existing division of governance responsibilities. Pier Corporation Responsibilities In the Existing Service Agreement The 2012 Service Agreement between the City and the Pier Corporation set out the responsibilities of the Corporation as follows: "SMPC shall use commercially reasonable best efforts in performing the following specific functions:" • Sponsorships and Event Underwriting Programs • Marketing and Promotion • Special Events • Filming at the Pier • Marks (Licensing of Pier sign trademark) • Street Performer Monitoring (Lottery) • Community Outreach • Carousel Special Event Rental New Board Appointments The Pier Board has recommended staying with seven members as it has been an effective size. It is also consistent with the size of many other City Boards and Commissions. They also recommend that terms be for staggered four years, again as is the case with other Boards and Commission. They suggest however that in this one instance some terms be set for four years and some for two years so that in the future not all members' terms 9 would come up at the same time. Council, in making their appointment, could designate three seats to be for four year terms and four to be for two year terms. Subsequent appointments would all be for four year terms ensuring an ongoing diversity of Board member term lengths. The Board asks that Council consider reappointing at least five of the current members to provide for continuity associated with Pier Corporation operations, and the public process currently underway for Expo planning and the Pier Bridge replacement project. The Santa Monica Pier Lessees Association has requested in an attached letter that the Council also provide for the inclusion of a Pier tenant on the Pier Board (attachment D). The Council if it concurred could designate one of the seven positions for a Pier tenant or add a non- voting - Ex Officio - eighth member to Pier Board. Staff Recommendation Staff recommends that Council extend the current terms of the interim Pier Corporation Board until December 31, 2015; direct the City Manager to enter negotiations for a new multi -year Service Agreement with the Santa Monica Pier Corporation with annual renewals at the City's option; set November 10, 2015 to appoint seven Santa Monica Pier Corporation Board members for the new terms that will commence January 1, 2016 (four of two years and three of four years) and consider the request of the SMPLA for the appointment process to include a designated Board member or ex officio member from the Santa Monica Pier Tenants Association. SMPC Board Action The Pier Corporation Board approved its attached Governance recommendations at its December 15, 2014 meeting. The Pier Corporation, at its March 16, 2015 meeting, approved a request to Council to extend Board Member terms until December 31, 2015. Financial Impacts & Budget Actions Funds in the amount of $494,257 for the Santa Monica Pier Corporation Service Agreement are included in the FY 2015 -16 Budget in the City Manager's Department. C. The agreement will be charged to account 30209.577300. Future year funding is contingent on Council budget approval. Prepared by: Rod Merl, Pier Manager Elaine M. Polachek Assistant City Manager Attachments: Rick Cole City Manager A. Pier Corporation Board Letter to Council on Governance B. Pier Corporation Board Letter Requesting Extension of Board Member Terms. C. Current Interim SMPC Board of Directors D. Santa Monica Pier Lessees Association Letter VA Attachment A DATE: December 15, 20,14 TO: Mayor and City Council VROM: Santa Monica Pier Corporation Board SUBJECT: Pier Governance recommendations BACKGROUND In the fail of 2011, the City Council reviewed the governance structure for the Santa Monica Pier. In December of 2012 the Council approved a new shared governance structure by creating the City Office of Pier Management to coordinate all City departments, manage the Pier Fund, and oversee capital project Implementation and operational activities oil the Fier. The Council in tandern renamed and reehartered the Pier Restoration Corporation with an emphasis on programming public events and activities, marketing, sponsorships, developing event, sponsorship and leasing guidelines for the Pier and being the public forum for pier related projects and Issues. The Council also emphasized the need for a public process to Pita" for future Pier enhancements, Including visitor uses, and for an economic analysis of strategies to generete revenues to support the Pier as a premier public venue. In February of 2012, the City Council appointed a new seven member interim Pier Board after interviews and recommendations by the City Manager. A revised service agreement between the City and the Corporation was approved, The original Board appointments and service agreement were for two years. Since then, the City Council extended the term of the Pier Board and reconfirmed the activities to be completed by the Board. The terms of Board members were extended to June 80, 2015, The Council directed at that time that governance recommendations be brought back in February of 2015 along with consideration of a process to select Board members to follow the existing terms. In the meantime, the City Council approved the Pier Board's overarching Goals, Objectives and Strategies (see attached) as well as the Pier teasing Guidelines. The recommended Pier Event and Sponsorship Guidelines have been completed and are being reviewed by City staff. The Pier enhancement planning process is underway to fulfill the remaining major responsibility of the interim Board. This planning effort brings with it the expertise of City staff as well as of the existing Board rnerabers who were selected to lend their experience and perspectives to this Important endeavor. In evFluatirig the current governance structure, the Board reviewed current responsibilities of the Banta Monica bier Corporation and the City's Office of Pier Management: The current governance structure is aligned as follows; SMPC Marketing and Communications Filming Permit and Shoot Coordination Programming Development and Execution Event Management for hock and Carousel Corporate Promotions Visitor Center and Merchandise jtreat Performer Management Public t` �utreach/Forurn for Pler Projects and activities Cat {P>fi kl +aintonanco, Facilities and Infrastructure Leasing, Contracting and Tenant Support Safety, Security, legal and Insurance Coordination of City Departments Capital Improvement Projects Intergovernmental Coordination Pier f=und Management The Board evaluated the effectiveness of this governance structure, using the following criteria: (1) the lack of duplication of duties, (2) the completion of deliverables, (3) the development of creative branding and tarketing, (4) an increase in Visitor uses, (5) the ability to respond quickly to new variables in planning such as the new Pier Bridge, the Esplanade and the coming of Expo, (6) increased transparency of Fier operations through reports and agendized iterns at Fier Corporation Board meetings, (7) increased communication and constructive relationships with icier lessees, (H) ongoing communication with the Landmarks Commission to ensure coordinated planning, and (9) ongoing and supportive relationships with both the Pier Corporation and City staff. RECOMMENDATIONS The evaluation of and recommendations for an ongoing governance structure were discussed at the Board's November 17, 2014 meeting and acted upon at its December 165, 2014 meeting. Public comment was also heard as input to the Board's deliberations, the following are recommendations for Council consideration. (1) Based on the evaluation criteria noted above, the Board recommends that the current governance structure remain in place. hoard members especially noted the Increased communication and positive relationships with Fier lessees, the ability to produce deliverables with minimal consultant support, the ability to innovate and provide compelling public events, and the ability of each entity to deliver services based on staff expertise without an overlap in responsibilities. It is the experience of board members that recruitment of innovative marketing professionals is most successful in smaller organizations that allow for a high degree of creativity. (2) The Board also recommends that as an operational plan be developed for performers on the Esplanade, consideration be given to a unified management structure for the Pier, Esplanade: and Promenade performers districts that would be overseen by the relevant a vity'departments and that at that time the performer oversight role of the Pier Corporation be eliminated or diminished due to the absence of the Pier Corporation's enforcement capabilities. (3) The Pier Board has benefited from its members' unique r.* of expertise. The importance of this was established by the City Council in its selection through the City Manager's interview process to ensure this broad expertise, stressing relevant knowledge and experience, The Board noted that this range of expertise strengthens both operational and enhancement planning activilies and that the City Council adopt a similar process for the future Board. The seven member board has worked well, something remarked an by community members and lessee,, seven seem, s to be the optimum size for effectiveness and the size of the Board was one of the key changes made ire 2012 by the Council and should be retained. (4) The importance of Institutional memory and continuity should also be noted and It is recommended that a number of current Board members be considered for reappointment, while rotating in at most two new members with relevant skill sets in July 2015. The appointments would have initial staggered terms ®- such as four for two years and three for four years, with all subsequent appointments being for four years. The expertise of new appointees should complement the reappointed board members and reflect diverse community perspectives. (v) The Board recommends that, under this governance structure, the Fier enhancement planning process continue. The focus should be on short -term, mid -temp and long terry visitor enhancements, including,: strategies for the coming of Expo, the Esplanade rn rd Pier Bridge, with OPM and Public Works, identifying needed capital improvements over time, ,ind conducting periodic economic analyses of revenue generating opportunities to support pier operations. (G) The Board should also focus on the revenue generating capabilities to minimize public supports costs on an ongoing basis. MO r Z4 w.. PIER -3 March 16, 2015 Dear Council, k...y_... ...f_ The Pier Board is currently embarking on a visitor enhancement planning process - a major deliverable identified by the City Council upon appointment of the interim Pier Board in February 2012. With support from the City's Economic Development Division, a planning /economic consultant team is currently being retained to assist in implementing a focused public planning process, resulting in the identification of short -, intermediate -, and long -term strategies to enhance the visitor experience on the Pier. This is especially critical given the coming of Expo, the development of the Esplanade, and the replacement of the Pier Bridge. Beginning in April, the Pier Board is scheduled to meet twice monthly to hear from project consultants, engage community stakeholders and identify enhancement strategies. It is anticipated that this study will be completed in October or November 2015. The current Board terms expire on June 30, 2015. A change in Board membership at this point would be disruptive to the planning process and much needed continuity would be lost. Therefore, the Pier Board requests City Council consideration of an extension of Board terms until December 31, 2015 in order to give adequate time for the study process, including community input, to take place. " g t Judy Abdo, Board Chair Attachment C Santa Monica Pier Corporation Current Interim Board of Directors Board Members: Judy Abdo (Chair) John Catoe (Vice Chair) Barbara Stinchfield Susan McCarthy Ray Braun Rae Archibald Misti Kerns 1M_ M July 1, 2015 Mayor Kevin McKeown City of Santa Monica 848 -E 16th Street Santa Monica, CA 90403 Dear Mayor McKeown, I hope this letter finds you well. As I know you.are aware, Pier Governance is on your Council agenda for discussion and approval in July of 2015. On behalf of the Pier tenants, I am reaching out to you directly to request the Pier Governance dedicate one board seat to be filled by a member in good standing of the Santa Monica Pier Lessees Association ( "Pier tenant"). It is the SMPLA's position that there are many times when Pier tenant Insight would benefit the Pier Corporation Board's dialogue. A tenant Hoard member would inform the board from a "boots on the ground" perspective and assist the Board to make better informed decisions. We envision that a tenant Hoard member would be selected by the tenants. This process would also promote a cohesive message from the Pier tenant group. We believe that the addition of a Pier tenant would greatly facilitate achieving the goals the Board has articulated for the operation of the Piet. For example; ® PC Goal: Retain, preserve and enhance the historic character and eclectic, thematic appearance of the Pier and Its aesthetic elements, o Pier tenants make annual capital decisions that affect existing buildings and thus the overall appearance of the Pier. PC Goal: Enhance access to the Pier for the disabled. o The majority of activities on the Pier are tenant operated. The Pier would be more attractive and accommodating to guests with disabilities if tenants coordinate with the PC and each other. PC Goal: Pier restaurants, food services and retail merchants will provide high- quality, site appropriate offerings at a wide range of price points. o Clearly, the stakeholders that can make the greatest positive impact on this goal are the existing restaurants on the Pier. 19:MPO gym: E ® PC Goal Encourage exporimentaLion with new programming ideas.. The more the tenants are aligned with other stakeholders, the Board, the City and each other; the. more fluid the engagement will be to experiment with new programming. As always, I sincerely appreciate your willingness to listen to our ideas and your support of the Pier. I can be reached anytime on my cell at 310 - 4150414. Sincerely, b Chris Volaski Gf , President Santa Monica Pier Lessees Association Cc: Rod Merl Reference: Agreement No. 10101 (CCS)