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SR 06-25-2019 3K City Council Report City Council Meeting: June 25, 2019 Agenda Item: 3.K 1 of 3 To: Mayor and City Council From: Andy Agle, Director, Housing and Economic Development, Economic Development Division Subject: Santa Monica Pier Corporation Fiscal Year 2019-20 Budget and Work Plan Recommended Action Staff recommends that the City Council approve the Santa Monica Pier Corporation Fiscal Year 2019-20 Budget and Work Plan. Summary The Santa Monica Pier is an iconic local, regional, and international landmark that draws millions of visitors per year. While Pier maintenance and leasing is directly conducted by the City, the City contracts with the Santa Monica Pier Corporation (SMPC), through a Services Agreement, to manage programs, services, and operations at the Pier. Staff recommends that Council approve the SMPC FY 2019-20 budget and work plan describing the activities and programs SMPC plans to undertake in the upcoming fiscal year. Discussion Santa Monica Pier Corporation’s (SMPC) mission is to preserve and enhance the Pier experience for people of all ages and for future generation s. Established by the City with a board appointed by the City Council, under the terms of the current Services Agreement between SMPC and the City, SMPC is charged with the development of programs and activities for the Santa Monica Pier including: community event production; marketing and promotion of the Pier; management of sponsorship and licensing programs; development of leasing, events, and marketing guidelines for approval by Council; and preparation of an annual budget and work plan setting forth goals and objectives. In accordance with the Services Agreement, SMPC has prepared an operating budget and work plan for FY 2019-20, subject to Council approval. 2 of 3 Budget: SMPC’s FY 2019-20 Budget (Attachment A) projects total revenues in the amount of $2,586,402 and estimated total expenditures in the amount of $2,545,500, resulting in a projected net income of $40,902. Anticipated revenues include: funding from the City in the amount of $746,402 which consists of a base grant of $546,402 plus a $200,000 grant enhancement to support the 2019 Twilight on the Pier concert series; facility rental revenues (deck, carousel, filming, corporate promotions, and gift shop/merchandising) in the amount of $1,020,000; partnership revenues in the amount of $725,000, and other miscellaneous revenues (food/beverage, licensing, and registration fees) in the amount of $95,000. Projected expenditures include: $1,058,000 for personnel expenses comprised of salaries, benefits, supplies and services; $910,000 for Pier-Corp produced programming (Twilight, ROGA, Pier 360, Wonderland, PRIDE, etc.); $377,500 for costs associated with facility rentals; $80,000 for marketing; and $120,000 for planning contingency. Work Plan: The attached FY 2019-20 Work Plan (Attachment B) describes in detail the following six strategic priorities and the associated activities SMPC plans to perform during the fiscal year: Revenue Stream Development; Programing and Curation Refinement; Pier Brand Positioning and Opportunities; Pier Campaign Development; Organizational Growth; and Development of City-Wide Programs. Commission Action: The SMPC Board of Directors approved the FY 2019-20 Budget and Work Plan on May 20, 2019. Past Council Actions 2/12/2019 (Attachment C) Following a recap of the 2018 Twilight Season, Council approved modifications and funding enhancements for 2019 Twilight Season 7/14/2015 (Attachment D) Council authorized Services Agreement with the SMPC Financial Impacts and Budget Actions 3 of 3 Funds of $746,402 for the Services Agreement with the Santa Monica Pier Corporation are included in the proposed FY 2019-20 budget in the Housing and Economic Development Department at account 53160001.540150. There is no additional financial impact or budget action necessary as a result of the recommended action. Prepared By: Elana Buegoff, Pier Administrator Approved Forwarded to Council Attachments: A. SMPC FY2019-2020 Budget B. SMPC FY 2019-2020 Work Plan C. Staff Report 2/12/2019 D. Staff Report 7/14/2015 Santa Monica Pier Corporation Annual Budget 2019‐2020 Proposed Proposed FY2018/2019 2019/2020 Expenses Facilities ‐ City Refund ‐ Merry Go‐Round $50,000 $55,000 Facilities ‐ City Refund ‐ Pier Deck $175,000 $245,000 Facilities ‐ Event Staffing, Security & Supplies $45,000 $60,000 Facilities ‐ Pier Shop Ongoing Expenses $30,000 $17,500 People ‐ Wages & Salaries $785,000 $785,000 People ‐ Benefits $110,000 $198,000 People: Meetings, Office Supplies, Retreat $25,000 People ‐  Services, Audit, Insurance,$75,000 $50,000 Marketing Creative $30,000 Marketing Promotions $70,000 $50,000 Pier Produced Programming: Twilight, ROGA, Pier 360, Wonderland, PRIDE, Wake up with the Waves, Pier Tours $1,041,000 $910,000  Planning Contingency $125,000 $120,000 Total Expense $2,506,000 $2,545,500 Income City Funding $746,402 $746,402 Facilities ‐ Event Deck Rental $450,000 $550,000 Facilities ‐ Film Permits $175,000 $175,000 Facilities ‐ Merry Go‐Round Rental $110,000 $110,000 Facilities ‐ Corporate Promotions $100,000 $170,000 Facilities ‐ Pier Shop and Merchandising $42,000 $15,000 Partnerships $900,000 $725,000 Food and Beverage Sales $40,000 $40,000 Licensing and New Revenue $30,000 $40,000 Registration Fees $15,000 $15,000 Total Income $2,608,402 $2,586,402 Net Income $102,402 $40,902       2019/2020 Work Plan  This document lays out our strategic work plan for Fiscal Year 2019-2020, the results of which  will continue the Santa Monica Pier’s reputation as an iconic public destination in Southern  California. By creating world-class free and open to the public programming, amplifying our  efforts through key partnerships locally and globally, and investing in daily operations,  sustainability and infrastructure, we will continue to strengthen and solidify the Pier’s future.     The Pier is approximately the size of a 3 block city street - it houses a theme park, an aquarium, a  trapeze school, an arcade, 8 restaurants, 6 stores, 13 vendor carts, fishing, a 97-year-old merry  go-round and 20+ street performers that rotate four times a day. Add to this year-round  free-and-open-to-the-public programming, major branded activations, art installations and more,  and it’s easy to see why the Pier is home to approximately 10-12 million tourists a year, and why  it’s needs are unique and specialized.     To successfully serve all of the above, we’ll be focused on the following strategic priorities:    1.Revenue Stream Development  2.Programming and Curation Refinement  3.Pier Brand Positioning and Opportunities   4.Pier Campaign Development  5.Organizational Growth  6.Development of City-Wide Programs      This document serves to act as a high level blueprint for the above priorities, breaking them  down into goals and action items.     2018-2019 was a highly successful year for the Santa Monica Pier Corporation, which was heavily  steered by our team (many of whom were new to the organization), and our new board. We were  able to navigate through our vulnerabilities by identifying our weaknesses and swiftly focusing on  solutions that put our work in the right direction. It was a record year for many of our revenue  goals, Twilight on the Pier was successfully reimagined, and new city-wide campaigns were born.     If last year was about short term solutions that got the Pier on the right track, then this year is  about following that track through and charging ahead to our long-term goals.    1    2  Board Members             3    SMPC Organization Chart    4  STRATEGIC PRIORITIES    1.Revenue Stream Development    GOAL: ​To diversify and develop our revenue streams so that we can sustainably grow our  operations and programming without relying heavily on one-off corporate partnerships and city  grants.     This will be achieved by:    a.Multi-Year/Campaign-Wide Corporate Partnerships: Increase our sponsorship efforts on  partners who sign multi-year deals, or who can partner on campaign-focused programs  like PRIDE, Wonderland by the Water, Valentines Day, and more. This lessens the  pressure on a single event to deliver all the ROI and creates a deeper relationship  between SMPC and our partners.     b.Growing our Rental Business by 25%: Last fiscal year, we refocused our efforts around  our rental business by giving our staff clear goals, customer service guidelines, and  exploring the expansion of our rental offerings (specifically the West End of the Pier and  the Merry Go-Round Deck.) We developed a rental handbook in the final fiscal quarter,  which will be heavily employed during 2019-2020. We’ll also be investing in more rental  marketing materials, conferences with potential clients and sales personnel who can  multiply our efforts.     c.Creating Passive Revenue Streams: We’re currently working with top immersive game  designers to develop a game-ified, app-based tour of the Santa Monica Pier, set to launch  on our 110th anniversary. The revenue potential of this program could have a huge impact  on our budgets in the next 1-3 years. Additionally, with the growth of our social media and  newsletter base, we’ve expanded our marketing-only offerings for clients, which our team  can service quickly and with minimal effort.     d.Explore Alternative models with City of Santa Monica: We have begun discussing what  alternative models of partnership between SMPC and the City of Santa Monica could look  like (examples: taking on more leasable space, re-evaluating our revenue splits with the  city, streamlining permit processes, etc). This fiscal year we’ll continue to explore how the  SMPC can grow into a fully sustainable and thriving organization befitting today’s needs.                 5  2. Programming and Curation Refinement    GOAL: ​To re-invest in key cornerstone programs with high ROI and build major followings and  brands for all Pier-produced and Co-produced events.     This will be achieved by:     a.Cutting one-off programs with low ROI: this year, we’ll be saying goodbye to  Pier-produced programs like Front Porch Cinema, ProCon and Steam Machines. Though  these programs served their small communities well, they were extremely difficult to find  sponsorships for, needed high touch-efforts from our team and spread our marketing  efforts too thin.     b.Reinvesting in Pier-produced Programs that Work: Our star events: ROGA, Pier 360,  Twilight on the Pier, Smorgasburg and Wake up with the Waves have built strong  followings and were all fully funded by partners in 2018-2019. We will reinvest the money  from our cut programs into the above by expanding them, adding more targeted  marketing, and refining aesthetics so they can fit within our developing masterbrand.     c.Partnering with Regionally Recognized Events: 2019-2020 will see the return of events  like Unique LA, LA Opera, Jacob Jonas Dance Company, Happy Hour Agency and more.  Our team is currently courting many new events like these to make their home at the  Santa Monica Pier, which both eases the burden of programming on our small team while  raising the profile and brand of the Pier.     d.Beautification and Historic Displays: We are working with partners and vendors to provide  more sculptures that can be repainted and placed during seasonal campaigns, as well as  developing more opportunities for the Merry Go-Round window painting, murals, historic  displays, aesthetically pleasing recycling programs, and more.                               6  3. Brand Positioning and Opportunities    GOAL: ​Take the Pier brand from regionally recognized to nationally recognized with a strong  message, visuals, and more.     This will be achieved by:     a.Create a brand bible that is widely implemented: our current brand has organically  developed over the last few years, but now it is time to gather all of our best visual assets  and do a brand audit, which will lead to the creation of a relevant brand bible​. ​This will be  used by our digital team, producers, vendors, and more to create a cohesive and  recognizable masterbrand aesthetic and cohesive messaging through our marketing and  events.     b.More Offsite Engagements: we’ll be exploring ways to activate at other relevant events  nationwide, creating movable experiences that educate and excite new audiences about  the Santa Monica Pier and our offerings. We’ll also be positioning the leaders in our team  to speak on panels, do interviews, and more at other events to encourage new producers,  sponsors, media partners and more to engage.     c.Streamline our Digital Content: last year was all about content gathering, this year it’s  about telling a cohesive story through the content. We’re working with agencies like  Department 4 to create evergreen, unique branded content such as “A Day at the Pier”  which captures the energy and breadth of opportunity on the Pier on any single day.  We’re also working to create curated digital guides that fit the needs of different  demographics (Foodies Guide to the Pier, Family Guide to the Pier, etc.)     d.Digital Marketing Investment: we’ve taken a hard look at our marketing spends from  year’s past (SMDP guides, trailers at the Laemmle theaters, etc) , and have decided to  reallocate the bulk of our 2019-2020 marketing spend on digital platforms that can reach  a targeted, measurable audience with the exact messages we want to send. We’re also  working on large annual media trades with brands like Los Angeles Magazine, Los  Angeles Times, LA Metro and more, moving away from the event-by-event spend.                       7  4. Pier Campaign Development     GOAL: ​2018-2019 introduced Wonderland by the Water for the Holidays, Dear Pier for Valentines  Day, and SaMo PRIDE. It is our goal to expand these programs and create sustainable funding  around these campaigns, and add one more: Halloween on the Pier.     This will be achieved by:    a.Tenant and Community participation: Now that our tenants have experienced the first  round of what these campaigns look and feel like, there is a strong interest in participating  and amplifying our efforts. We’re also working with organizations like Downtown Santa  Monica, Santa Monica Travel and Tourism, Cultural Affairs and more to participate and  further the reach of the campaign, the end product of which will be a unified Santa Monica  experience for locals and tourists.     b.Accurately Measuring our Growth and Success for Each Campaign: In order to receive  funding, we need to be able to measure the campaign’s digital and physical presence.  We’ll be investing in digital and physical surveys for attendees, collecting data-driven  feedback from tenants and community partners, and tracking attendance and  demographics with much greater focus.     c.Adding Event Partners to Each Campaign: The campaigns serve as an umbrella brand to  attract event producers, brands, and activations alike to come create under the brand.  Last year, since it was our first year, we supplemented most of our programming with  Pier-Produced events. Now that we have visuals, press, and some metrics of success,  we’re able to do the outreach needed to build out these campaign seasons and create a  larger impact.     d.Adding Halloween: Every major landmark and entertainment venue in the region activates  for the Halloween season, which we believe is a perfect opportunity for the Pier’s brand.  Pending funding, we’ll be developing a one-of-a-kind experiential installation on and  around our Merry Go-Round Deck, which will serve as the centerpoint for our Halloween  Campaign.                        8  5. Organizational Growth    GOAL: ​Our current team is optimized and working with purpose and focus. It is our goal to  expand the responsibilities and capabilities of our office by assisting our team in key ways.     This will be achieved by:     a.Part-Time Assistance: we do not currently have the funding to add full time assistants and  managers for our team just yet, but we do have room for part time contractors to come in  and take some of the busy work off our Director’s desks so they can focus on more  strategic tasks. For example: we will bring on a part time marketing manager who will  handle our PR listings, tenant event participation and sales pipeline.     b.Strengthen Relationships with our Key Vendors and Labor Force: The Pier has developed  some loyal and trustworthy vendors to serve our events and give us the best quality for  the best price. We need to further invest in these relationships while solidifying new ones  so we can have a tighter handle on quality control, budget expectations, and customer  service at our events.     c.Internship Opportunities: We have a high interest from local and UC students who have  new interest in our developing brand and want to participate. We’ll be exploring new  internship opportunities that will benefit the pier during peak season and give invaluable  knowledge to early-career professionals and students.     d.Team and Board Retreats: We held our first team retreat in 10 years in Fall 2018, which  had a profound impact on aligning our team goals, vision, mission and culture. We want to  expand to two annual retreats, one that invites the board to participate as well so we can  further develop staff and Board work flows.     e.Conferences and Learning Opportunities: Some of our team members were able to attend  and/or speak at large regional and national events like SXSW, Immersive Design Summit,  NYTimes Travel Conference and more. Outside of the learning and inspiration that  happens at these events, we’ve been able to form important partnerships and  sponsorships through networking at these events.                     9  Development of Infastructure and City-Wide Programs    Goal: ​As the relationship between the pier and our City Partners develops, we see major  opportunities for collaboration that would not only lead to a better pier experience, but to a better  Santa Monica in total.     This will be achieved by:    a.Continuing to work with Parking, Traffic Management, and Santa Monica Police  Department to reorganize how traffic flows at the top and bottom of the pier bridge  (designated pick up and drop off areas, pedestrian safety, and more.)    b.Partner with the City Manager’s Office and other respective departments to create an  “Esplanade Market” - a unique opportunity for street vendors to conduct business in an  organized, marketable way.     c.Unify SMPC staff, Board, SMPLA, and others around critical issues involving safety and  security on the Pier and actively advocate for needs: Increased Fire Department presence  on the Pier, Pier Bridge plan advancement, ambassador programs logistics, street  performer organization, and more.     d.Continue to build strong relationships with Santa Monica Business Improvement Districts,  bringing them into our larger campaigns and goals and learning about their needs so that  we can help strengthen their communities.     e.Create a robust plan around building up the Merry-Go-Round Deck area, especially as  construction on Ocean Front Walk comes to an end and Starbucks Coffee opens. We see  this area as very underdeveloped and deactivated, attracting anti-social behavior and  litter. With a few key investments, this area could be a beautiful and lively space that  could have programming all on its own.                             10                          SMPC PRODUCED/CO-PRODUCED EVENT DESCRIPTIONS:     ROGA: ​Run + Yoga = ROGA. ROGA is the ultimate lifestyle event for the mind, body and soul. This fitness  combo brings participants together for a warm-up run along the beach and around the Pier followed by  yoga, flowing breath to movement with the sound of the waves. Now offered 18 consecutive Saturdays in  the spring and summer (by popular demand), and with more special programming like live DJs, sound  baths, puppy yoga, mindfulness seminars and more, ROGA is a beloved event that encourages healthy  living for people of all levels.   ●Spring/Summer 2020    Pier 360: ​The world-famous Santa Monica Pier presents Pier 360 Ocean Sport and Beach Festival, the  ultimate celebration of SoCal beach life. Formerly known as the Paddleboard Race & Ocean Festival, Pier  360 will continue the tradition of the elite paddleboard races, ocean swim and beach life museum, and  infuse it with beach volleyball, surfing, skating, street art, polynesian dancing and more – creating a  one-of-a-kind festival for the whole family. It’s the ultimate party to kick-off summers in Santa Monica!  ●June 2020    Twilight on the Pier: ​A weekly festival as iconic as the Pier itself. The beloved Twilight on the Pier concert  series is back for the 35th consecutive year! Summer extends through September, continuing the  long-standing tradition of celebrating emerging and established artists across a variety of genres. Twilight  spotlights the best and brightest artists SoCal has to offer and the unique sounds from around the world - a  truly "Local Meets Global" event. The premier, free outdoor concert series is like a festival every week -  complete with immersive art, food offerings, a wine and beer garden, games and interactive activations.   ●August/September 2020       Wake up with the Waves:​ The beloved children’s experience offers an unforgettable Saturday morning  experience and fresh air fun at the Pier. Geared to entertain families and friends with kids ages 2-10, Wake  up with the Waves includes interactive storytime with the Story Pirates, music, dancing, playing and more!  It’s a perfect way to start the day.   ●May 2020    Smorgasburg: ​Smorgasburg is “The Woodstock of Eating” and one of the largest open-air food markets in  the country. With more than 90 food and shopping vendors, a beer garden, live DJs and more,  Smorgasburg welcomes 8-12K guests per week year round at the row in DTLA, and nearly that may when  they come to the Pier twice a year. Smorgasburg kicked off the first-ever SaMo PRIDE month and was a  beloved event during Wonderland by the Water.   ●Seasonal  11    Campaigns:    Wonderland by the Water: ​It’s the newest Santa Monica holiday tradition: Wonderland by the Water. We  created a six-week-long campaign full of art, events and holiday magic, featuring a magical “Seadragons  Village” illuminating the windows of our historic Merry Go-Round building and best-in-class programming  throughout the month of December. We invited some of LA’s best event producers to host holiday events  all season long, including Smorgasburg food festival, Unique LA artisan gift market, Bob Baker Marionette  Theater puppet show, story time, photo ops, holiday mermaids and more, making it an unforgettable  experience for locals and tourists alike.   ●November/December 2020    Dear Pier: ​The Pier is for first-loves, best friends, "I Do's" and millions of memories. We celebrate all types  of love with a ​month of love at the Pier ​and our Dear Pier campaign. Whether it was a first date watching  sunset at the West End, proposing to the love of your life at the Carousel or sharing an ice cream cone with  a special friend, visitors from around the world have incredible love-on-the-Pier moments to share. These  moments are what give the Pier it’s sense of magic and we compile them for an amazing art installation  that fills our historic Merry-Go-Round windows.  ●February 2020    SaMo PRIDE:​ Santa Monica Pier, Downtown Santa Monica, and Santa Monica Place, in collaboration with  the City of Santa Monica, present the first ever SaMo PRIDE: an entire month of festivities to raise  awareness and celebrate the LGBTQ+ community, individuality, inclusiveness and acceptance.     The Pier, Santa Monica Place, Third-Street Promenade and surrounding businesses will celebrate Pride  month with an incredible light installation that spans miles of city streets and lights up the sky with a  rainbow of colors. The installation, dubbed “Miles of Pride”, will serve as a backdrop for a full calendar of  events that bring together community, families and supporters from around the world. With a focus on  family-friendly art, events and community connection, City partners will host food festivals, happy hours,  story hours, silent discos and so much more to help us celebrate love in every color.  ●June 2020    Halloween (New!): ​The Pier is set to become the ultimate Halloween destination in 2019 with a weeks-long  celebration featuring a pop-up haunted house, ghost stories, costume parade, Dia de Los Muertos event,  and more! We’re taking LA Halloween to a new level of spooky.  ●October 15 - 31 2020  12