SR 04-24-2018 3G
City Council
Report
City Council Meeting: April 24, 2018
Agenda Item: 3.G
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To: Mayor and City Council
From: Andy Agle, Director, Housing and Economic Development, Economic
Development Division
Subject: Pilot-Program License Agreement with Downtown Santa Monica, Inc. for the
Third Street Promenade to provide public-serving programs and amenities
Recommended Action
Staff recommends that the City Council authorize the City Manager to negotiate and
execute a pilot-program license agreement with Downtown Santa Monica, Inc. for the
Third Street Promenade to provide public-serving programs and amenities for an initial
term of one year with four, one-year renewal options with no license fee.
Executive Summary
Changing consumer preferences and increased competition in the retail environment
are impacting the iconic Third Street Promenade (Promenade) in Downtown Santa
Monica, as reflected by increased store vacancies and the closing of many retail
operations, including the Barnes & Noble store, which was an anchor on the north end
of the Promenade. To promote community, encourage public visitation and use, and
help ensure that the Promenade (including in particular its northernmost block) remains
vibrant, inviting, and safe, staff recommends that the City enter into a pilot -program
license agreement with Downtown Santa Monica, Inc. (DTSM) to provide public-serving
programs and amenities on the Promenade, with a focus on its 1200 block between
Arizona Avenue and Wilshire Boulevard. The duration of the pilot -program license
agreement would be for an initial term of one year with up to four one-year renewal
options on the same terms and conditions, for a total license term of up to five years,
without a license fee.
Background
The Third Street Promenade’s public spaces have become important community
gathering places and a significant contributor to the success of the Promenade and
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Santa Monica’s Downtown. In 1989, the City and downtown property owners had the
foresight to invest in creating enhanced public spaces, which included the renovation of
the public right-of-way and the addition of a variety of streetscape elements. Residents
and visitors have been drawn to the Promenade’s unique urban setting, which features
street performers, restaurants and outdoor dining, specialty merchandise, entertainment
venues, flexible plazas, welcoming ambassadors, and enhanced maintenance services.
The bustling, colorful scene along the Promenade provides a safe place for community
gathering that encourages repeat visitation and supports a healthy mix of retail,
restaurant, and entertainment uses. Research and experience in Santa Monica and
nationally demonstrate the value of “placemaking” to promote community gathering
spaces that are shared and welcoming, and that as a result are also safer.
The most northern of the three blocks, the 1200 block of the Promenade located
between Arizona Avenue and Wilshire Boulevard, has traditionally not generated the
same level of visitation and pedestrian activity as the Promenade’s other two blocks for
a variety of reasons, including its distance from the Santa Monica Pier, Santa Monica
Place, and key transportation access points such as the I -10 Freeway and more
recently, the Expo light-rail terminus. Additionally, the Barnes & Noble bookstore at the
southeast corner of Third Street and Wilshire Boulevard, which served a s an anchor for
the 1200 block of the Promenade for over 20 years, closed in January 2018, citing the
need to downsize their store space and seek a more affordable location. Given the
recent trends in retail and increasing competition from online retailers, the closing was
unfortunate for downtown, though not unexpected. Other retail closings have occurred
throughout the Promenade, and these, coupled with a growing movement towards e -
commerce, have contributed to decreased visitation and pedestrian activit y in the
Promenade as a whole.
DTSM has prioritized business retention and recruitment to address changing consumer
preferences and the continued competition of online sales. DTSM’s Board of Directors
created the Promenade Tenancy Committee in 2017 for the purpose of vetting
proposed programs, strategies, and tactics designed to support downtown’s retail,
restaurant, entertainment, and other active uses. DTSM has also identified the need to
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expand the level of public-serving amenities to increase visitation and pedestrian activity
and attract patrons to support the area’s businesses. As Promenade businesses
compete with internet commerce, as well as other retail destinations like The Grove and
the newly renovated Westfield Century City, DTSM has sought to differentiate
Downtown Santa Monica and the Promenade. One element of differentiation is creating
interactive, people-focused experiences that are not available elsewhere, and which
buttress the Promenade’s identification by the public as a safe and enter taining
community gathering space. DTSM has enhanced the Promenade’s public spaces by
creating engaging activities and installations, such as the Picnic on the Promenade
summer activities and December’s holiday pop-up art installation.
The City has a history of sensitivity to concerns about privatizing public space. While
traditional malls and newer “lifestyle centers” like the Grove exert private property rights
over their circulation and gathering spaces, historic commercial areas in revitalized
urban areas are genuinely public spaces. Working in partnership with a non-profit,
stakeholder-based organization like DTSM offers an opportunity to animate and
manage public spaces while ensuring public access and, indeed, increasing their
attractiveness as community gathering spaces. DTSM has been granted other licenses
to activate the City’s public spaces such as the very successful ice rink at 5th Street and
Arizona Avenue. DTSM has also entered into pilot -program license agreements to
provide public-serving amenities along Ocean Avenue near Tongva Park and public art
installations at Triangle Square adjacent to the Colorado Esplanade.
The Ocean Avenue activation is being permitted and is expected to begin by early
summer. The downtown public art installation programming, in partnership with
Community and Cultural Services, is planned to continue through Labor Day 2018. The
City also entered into a pilot program to establish DTSM ambassador services in
Tongva and Palisades Parks to provide hospitality services, assist with monitoring and
maintenance of the spaces, and address quality of life issues. The initial success of
these programs have created a positive impact on visitors’ perception of safety and
cleanliness, and demonstrated the value of “placemaking” to promote shared,
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welcoming environments, which in turn enhances safety and helps to create more
vibrant public spaces.
Discussion
With the continued growth of online shopping, customers who have traditionally been
lured by brand names and new products are seeking more of an "experience" in a
commercial district, rather than simply a place to shop. In an effort to keep the
Promenade competitive and fresh in the public’s perception, to continue to offer a
unique and attractive public community experience to both residents and visitors in one
of the City’s key public spaces, and to help sustain one of the City’s economic engines,
DTSM proposes to activate the Promenade (particularly its 1200 block) by offering
public-serving amenities and other interactive experiences that enhance the sense of
place and engage the community. The City has initiated the process of developing a
strategy to sustain Santa Monica’s vibrant economy as technology and globalism rapidly
change the way we live and work. One possible focus of the strategy is to address how
e-commerce is impacting the retail environment. Even though the full extent of the
impact to the retail environment is unknown at this time, studies and experiential efforts
have shown that consumers are increasingly adopting the convenience of online
shopping while seeking personal experiences such as dining or interactive retail
experiences. To curate a great downtown environment and to continue to support a
vibrant public space for community engagement, there is a growing need to provide an
engaging environment that heightens the public’s experience.
Based on DTSM’s experience and success with programming activities and events,
staff recommends entering into a pilot-program license agreement with DTSM to assist
with increasing pedestrian experiences on the Promenade, with a focus on its north
block. The proposed pilot-program license agreement would allow DTSM to provide
pedestrian-oriented services and amenities within the Promenade, with a focus on the
approximately 4,800-square-foot public plaza of the 1200 block of the Promenade,
exclusive of any existing outdoor-dining license areas. Activation of the area with
pedestrian-oriented amenities, experiential activities, and event programming is
intended to help create connections between the north and south ends of the
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Promenade, increase overall public visitation (including in particular increased
pedestrian activity at the north end of the Promenade), develop a greater sense of
place, and build community. The goals and objectives align with the guiding principles of
the Downtown Community Plan.
The terms of the license agreement are recommended to allow DTSM to program the
Promenade daily from approximately 7 AM until 10 PM. DTSM staff and ambassadors
would be allowed to set up the following, all of which would be available to the public for
use:
Tables, chairs, umbrellas, and other moveable furniture
Games and interactive displays such as pianos and ping-pong tables
Dog treats and water bowls
Audio system and staging (for use by musicians, DJs, and performers who have
obtained required permits, with scheduling as necessary by DTSM)
Additional trashcans and recycle bins
The terms of the recommended license agreement would also permit DTSM, during the
same hours and in the same space, to have ambassadors or staff available to assist
public use of the provided amenities. DTSM would also be allowed to post signage,
bearing both DTSM’s and the City’s logos, promoting the Promenade as a public
gathering space.
As part of the pilot program, staff recommends that DTSM be provided with the flexibility
and creativity to adjust the types of programs and uses within the license area that are
most impactful to enhancing the public’s experience and attracting increased public
visitation. In turn, DTSM would provide regular reports to the City detailing the success
of various programs and uses in increasing foot traffic and community engagement.
DTSM would also study the use of temporary seating by observing the way people
interact with moveable furniture. Staff seeks administrative discretion to modify the
scope of DTSM services within the license agreement to respond to the success of
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programs and uses in enhancing community engagement and promoting a unique
downtown public environment.
DTSM will also continue to obtain event permits pursuant to the generally applicable
events permitting process to provide additional public community engagement activities,
at times co-sponsored by local businesses. As DTSM learns the relative success of
various programs, DTSM may seek to enter into a memorandum of understanding
(MOU) with the City to present additional events outside of that process to further the
City’s goals. Staff anticipates presenting any such MOU to the Council for approval.
General License Agreement Terms
The proposed terms of the license agreement are as follows:
A one-year term with up to four one-year renewal options for a total license term
of up to five years, without a license fee.
Either party may terminate the license agreement with 30 days’ notice.
Tentative hours for the license area would be daily from approximately 7 AM to
10 PM, with an ability to adjust the hours based on seasonality and program
activity.
Rules and regulations may be developed, posted, and enforced by the City.
DTSM would be responsible for providing adequate staffing to ensure consistent
monitoring within the license area while maintaining public access.
DTSM would ensure that any sub-licensee or subcontracted vendors maintain
and provide adequate insurance coverage and comply with all rules, regulations,
and laws, while maintaining public access.
DTSM would be responsible for providing, maintaining, and securing any tables,
chairs, or other furniture or improvements installed within the license area.
At the termination of the license agreement, DTSM would be responsible for the
removal of any improvements installed and any repairs required to the license
areas as a result of the installation of improvements.
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All improvements or installations within the license area would be coordinated in
advance with Public Works, Planning, and Building and Safety to ensure
adherence with administrative policies and municipal code requirements.
Commencement of the services is estimated to occur in early summer 2018,
following execution of the license agreement.
The City would continue to provide the same level of routine maintenance
services and repairs for the licensed right-of-way area.
Financial Impacts and Budget Actions
There is no immediate financial impact or budget action necessary as a result of the
recommended action.
Prepared By: Kriss Casanova, Senior Development Analyst
Approved
Forwarded to Council
REFERENCE:
Agreement No. 10668
(CCS)