SR 12-13-2022 5I
City Council
Report
City Council Meeting: December 13, 2022
Agenda Item: 5.I
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To: Mayor and City Council
From: David Martin, Director, Administration
Subject: Approval of an Amended and Restated Lease for Heal the Bay Aquarium at
1600 Ocean Front Walk and Short-term License for a Heal the Bay Gift Shop
at 322 Santa Monica Pier
Recommended Action
Staff recommends that the City Council:
1. Make a determination that the actions to execute an Amended and Restated
Lease and License and waiver of certain Pier Leasing Guidelines as set forth in
recommended actions #2 and #3 are exempt under CEQA guideline 15061(b)(3)
and 15302.
2. Authorize the City Manager to negotiate and execute an Amended and Restated
Lease and short-term License with Heal the Bay (Tenant) doing business as Heal
the Bay Aquarium to incorporate provisions negotiated by the parties; and
3. Waive the Pier Leasing Guidelines competitive procurement requirement in
granting the Lease and License.
Summary
Heal the Bay Aquarium (Aquarium) located at 1600 Ocean Front Walk is an aquarium
and marine education center under the Santa Monica Pier. The upcoming demolition
and replacement of the Pier Bridge will impact the Aquarium. To avoid further delay to
the bridge reconstruction timeline and a closure or permanent relocation of the
Aquarium, the City as Landlord and Heal the Bay as Tenant have discussed a
conceptual agreement on measures to mitigate and substantially lessen the impacts on
the Aquarium and costs to the City through an Amended and Restated Lease
Agreement for its current facility under the pier, and a short-term License Agreement for
a retail kiosk atop the pier. An Amended and Restated Lease would provide the
Aquarium with a 5-year term and two 5-year extension options; expansion of its
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premises to incorporate an area for the Aquarium’s life support equipment and backup
generator; and other mitigations measures during the Pier Bridge reconstruction work.
In addition, the Aquarium’s lease rate would remain unchanged from current lease of $1
per year and 10% of gross sales from retail operations, excluding admission charges.
The City would also provide a short-term License Agreement to allow the Aquarium to
relocate its gift shop to a vacant retail kiosk on the Pier at a monthly lease rate of
$3,572.
Discussion
Originally established by UCLA in 1998, known then as the UCLA Ocean Discovery
Center, Heal the Bay has operated the Aquarium since 2003. Home to approximately
900 aquatic animals that come directly from the Santa Monica Bay, the facility provides
public programming, research, and educational activities dedicated to marine
conservation, pollution prevention and educating the public to the urgent issues
affecting the Bay’s ecosystem. Annually, the Aquarium hosts over 10,000 students as
part of its field trip programming, over two thirds are from Title 1 schools, and attracts an
additional 100,000 general visitors.
The Aquarium’s lease has been on a month-to-month holdover since 2018 in
anticipation of the Pier Bridge Replacement Project, a Federally funded major capital
improvement project. The Pier Bridge is located above and adjacent to the Aquarium.
The demolition and replacement of the Pier Bridge which connects Ocean and Colorado
Avenues to the Santa Monica Pier will greatly impact the Aquarium. To avoid further
delay to the bridge reconstruction timeline and a closure or permanent relocation of the
Aquarium, the parties commenced good faith negotiations to identify alternatives and
mitigation measures to substantially lessen the disruptions to the Tenant and costs to
the City.
The major terms and conditions for Council’s consideration are summarized below.
1. Term/Extension: Initial 5-year term with two additional 5-year options to extend.
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2. Premises: Expansion of the leased premises under the Pier to include
approximately 3,405 sq ft under the Pier to incorporate areas Tenant has
installed aquatic life support equipment consisting of pumps, filtration systems,
etc. The City and Tenant also agree to an additional non-contiguous expansion
of the leased premises for the Tenant’s backup generator, at the City’s discretion,
within parking lot 1N at 1550 Pacific Coast Highway, directly north of the Pier.
Tenant will strive in good faith to relocate the generator prior to June 2023.
3. Procurement of Permits: Tenant at its sole cost will be required to procure all
required permits, including Building & Safety permits and Coastal Development
Permit(s) and all new and existing improvements shall meet applicable Codes.
4. Operations during Pier Bridge Reconstruction: Tenant may remain in place
during construction. In addition to intermittent closures, it is anticipated the
following areas may be closed in part or entirely during construction: office area,
retail area, and patio. Construction is estimated to occur between 2025 and
2027.
a. If Tenant elects to maintain the aquarium animals in place, subject to as-is
conditions both prior to and during construction. Tenant is responsible for
the health and welfare of their animals and the City does not assume any
responsibility for the animals.
b. City will accommodate the relocation of the Tenant’s office area to Suite I
of the Carousel Building. No additional rent for the office space will be
charged.
c. City will accommodate the relocation of the Tenant’s retail area to a
vacant retail kiosk located at 322 Santa Monica Pier. Rent charged to
Tenant for the retail area will be at the discretion of the City, but no less
than the prior tenant’s rent.
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5. Waiver of Liability: Tenant will provide waiver of liability for the premises
presently and during construction, except as to the negligent or willfully wrongful
acts of the City and its contractors.
6. Temporary Wayfinding: During Pier Bridge reconstruction the City will provide
temporary wayfinding to assist visitors to locate the Aquarium.
7. Mitigation During Construction: City will comply with any construction mitigation
requirements in the Final Environmental Impact Report (EIR) for the Pier Bridge
reconstruction project. The City will prepare an Adjacent Structure Monitoring
Plan to mitigate vibration impacts during construction of the Pier Bridge.
If the Amended and Restated Lease and Short-Term License is approved and
executed, Tenant anticipates they will make a minimum capital investment of $200,000
in addition to the $100,000 recently spent in leasehold improvements to the Aquarium.
Tenant also anticipates they will make a minimum capital investment of $50,000 -
$75,000 for the temporary retail kiosk for facade upgrades and retail merchandising.
Deviation from Pier Leasing Guidelines
The Council-approved Pier Leasing Guidelines (Appendix A) provide the framework for
fair and consistent leasing and licensing of City-owned property on the Santa Monica
Pier. The Guidelines provide parameters and general policy on mix of uses, standards
and terms, and tenant recruitment and selection. When substantive terms or process
deviate from the Guidelines, Council has the authority to grant exceptions.
Two substantive elements deviate from the Guidelines:
1. Section 6-I and II of the Guidelines require leasing opportunities be subject to a
competitive process, and
2. Section 6-IV advises that given there are so few leasing opportunities on the Pier,
merchant diversity should be promoted and the award of multiple leaseholds and/or
licenses to an individual tenant should be discouraged.
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Staff concluded that waiving the competitive procurement process by extending the
lease term for the Aquarium should be balanced against the City’s need to not delay the
Pier Bridge reconstruction project. A competitive bid process, such as a Request for
Proposal (RFP) can be a lengthy process which could negatively impact the timeline of
the Pier Bridge Reconstruction and deadlines set by CalTrans. In this case, a
competitive process would not necessarily result in a different tenant given the limited
number of organizations with the technical and financial ability to run an aquarium of
this size, nor would it result in additional revenue to the City as the lease rate for an
aquarium and education facility for this location is $1 a year.
Section 6-IV calls for merchant diversity and discourages the award of multiple
leaseholds and licenses to an individual tenant. In this case, Heal the Bay’s proposed
second location would be a short-term license intended to replace the retail space that
will be temporarily eliminated during the Pier Bridge reconstruction project. Following
the reconstruction of the Pier Bridge, estimated to occur in 2027, the retail kiosk space
will be made available for lease through an open and competitive process.
Commission Action
At the Pier Corporation board meeting on September 19, 2022, the Pier Corporation
Board supported the proposal and approved forwarding to Council
staff’s recommendation for approval.
Environmental Review
CEQA applies only to projects that have the potential for causing a significant effect on
the environment. A project is not subject to CEQA under CEQA Guidelines Section
15061(b)(3) “where it can be seen with certainty that there is no possibility that the
activity in question may have a significant effect on the environment.” The proposed
extension of the lease or license would not result in a physical environmental effect on
the environment.
In addition, Section 15302 exempts Class 1 projects from CEQA, which include the
“operation, repair, maintenance, permitting, leasing, licensing, or minor alteration of
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existing public or private structures [or] facilities, including streets, sidewalks,
bicycle and pedestrian trails, and similar facilities”. The project consists of the extension
of the Heal the Bay Aquarium lease and to expand the premises to incorporate existing
life support equipment and generator outside of the current premises lease line. This
lease extension would allow for continued operation of the Aquarium and would not
necessitate the construction of new buildings or facilities that would result in a physical
impact. Therefore, the project qualifies as a Class 1 exemption.
Financial Impacts and Budget Actions
There is no financial impact or budget action necessary as a result of the recommended
actions for FY 2022-23. However, it is anticipated that the proposed License for the
vacant kiosk will result in revenues in future years in the amount of $3,572/mo. Staff will
adjust revenue budgets accordingly as part of the FY 2023-25 biennial budget process.
Prepared By: Elana Buegoff, Pier Administrator
Approved
Forwarded to Council
Attachments:
A. Appendix A. Pier Leasing Guidelines
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Approved by the SMPC: May 15, 2017
Approved by City Council: June 13, 2017
SANTA MONICA PIER LEASING GUIDELINES
These Santa Monica Pier Leasing Guidelines (“Guidelines”) provide the framework for
fair and consistent leasing and licensing of City‐owned property on the Santa Monica
Pier. The Guidelines provide parameters and general policy on mix of uses, standards
and terms, and tenant recruitment and selection. They reflect the general intent and
goals of the City of Santa Monica (“City”) at the time they were approved and do not
convey any right upon anyone, or impose any obligation on the City. The City may from
time‐to‐time change these Guidelines or depart from these Guidelines without liability to
anyone.
1. INTRODUCTION
1.1. Background
The Santa Monica Pier began in 1909 with the construction of the Municipal Pier – the
straight portion that begins at the base of the bridge from Ocean Avenue and continues
for more than 1,500 feet over the beach and Santa Monica Bay. Santa Monica Pier’s
ability to attract large crowds impressed Charles Looff, an amusement park pioneer who
had built Coney Island’s first carousel in New York. In 1916, after negotiations with the
City of Santa Monica, Looff constructed his “Pleasure Pier” alongside the Municipal Pier
(now known as the Newcomb Pier). The Pleasure Pier featured the landmark Looff
Hippodrome building, which now is listed on the National Register of Historic Places
and houses an operating vintage wooden merry‐go‐round.
Today, the Santa Monica Pier (“Pier”) is known as one of the region’s premier
recreational and entertainment destinations, attracting over six million visitors annually.
The Pier offers spectacular ocean vistas, year round events and attractions, and is home
to a changing collection of restaurants, shops, activities and experiences.
1.2. Unique Character of Pier and Pier Environment
The Santa Monica Pier has been an icon for both the local community and Southern
California for over a century. Over this time it has provided a broad variety of
entertainment and experiences that directly relate to its beach and ocean setting. These
activities and services are predominately specific to the Pier’s on‐going “microculture”,
history and surrounding community rather than a replication of things at other piers and
places. The maintenance of the Pier’s own “personality” is a core value of the Santa
Monica community and central to the recruitment and selection of tenants and licensees.
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2. LEASING GOALS AND OBJECTIVES
The Pier is a valuable historic resource of the City to be developed, used and preserved
as a public resource for the enjoyment by the general public. The commercial leasing
and licensing program on the Pier is to be managed for the benefit of the general public
and in a manner consistent with the following goals and objectives:
I. Promote and maintain the compatible uses of City‐owned property available for
lease and license located on the Pier in a manner supporting an attractive, safe and
accessible environment for visitors and the residential community;
II. Provide for a diversity of business, entertainment, event, educational, and cultural
activities as well as active and passive recreational opportunities on the Pier;
III. Promote quality and value of goods, food and services provided by the commercial
operators on the Pier;
IV. Establish pricing of leasehold and license occupancies that reflects fair market value
to help support the fiscal self‐sufficiency of the Pier;
V. Assure access to and use of City‐owned properties by the general public through a
leasing and licensing program that promotes the orderly and equitable management
of tenancies and licenses;
VI. Preserve and promote the unique, eclectic and community recreational character
of the Pier;
VII. Preserve and build on the historic elements and character of the Pier while
ensuring its relevance and vitality to current and future generations;
VIII. Achieve fiscal, social and environmental sustainability;
IX. Enhance access and encourage both local and distant visitors to visit and enjoy the
Pier;
X. Harmonize with the surrounding beach and downtown community;
XI. Take an incremental but continuous approach to change to advance
commercial, cultural and civic opportunities on the pier; and
XII. Seek a mix of uses and tenants that will contribute to the animation of the Pier.
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3. MANAGEMENT STRUCTURE
Leasing and licensing on the Pier is the responsibility of the City of Santa Monica through
its Office of Pier Management (“OPM”) in coordination with the City’s Economic
Development Division. OPM also oversees Pier maintenance and operations. Pier
events, filming and marketing are managed by the Non‐Profit Santa Monica Pier
Corporation (“SMPC”) in accordance with Event and Marketing Guidelines developed by
the SMPC and subject to Council approval.
4. VISION FOR THE PIER AND GUIDING PRINCIPLES
4.1. Vision Statement
A Santa Monica Pier that provides an historic platform and a legacy of colorful visitor
experiences to showcase contemporary events; a community asset that attracts,
welcomes and entertains local, regional, national and international visitors of all
incomes, abilities and interests; a landmark that offers an enticing and changing array of
site‐appropriate active and passive experiences and attractions.
4.2. Pier Guiding Principles
I. The Pier will be a signature attraction of the City of Santa Monica, known and
recognized world‐wide and enjoying a broad base of local community support.
II. The Pier will be an easily accessible and visually prominent destination within the
City.
III. The Pier will provide enticing year‐round experiences and attractions for visitors.
IV. The Pier will attract and engage visitors of all ages and incomes.
V. The historic fabric and character, as well as the environmental sustainability and
structural integrity of the Pier will be documented, celebrated, maintained and
improved.
VI. Pier programming will include both traditional and cutting edge entertainment,
cultural, athletic and educational experiences.
VII. Promotions, sponsorships and private and public revenue‐producing events, will
largely off‐set the cost of popular and free public programming.
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5. SUB AREAS AND USES
5.1. Areas
The Pier is approximately 9 acres in size and consists of two adjoining piers:
I. Municipal Pier. The Municipal Pier is the primary walkway of the Pier. It is
approximately 2.5 acres in size and 1,500 feet in length. This public strolling corridor
provides the main access to restaurants, shops, amusement (e.g. carousel, Pacific Park) and
recreation (fishing, walking, viewing) areas, vending carts and performers.
II. Newcomb Pier. Located south of and adjacent to the Municipal Pier, the Newcomb Pier
(also known as the Pleasure Pier) is approximately 6.6 acres, of which 2.2 acres is currently
used for public parking and special event space.
Most merchants, facilities, and events are on the Newcomb Pier while vending carts,
kiosks and fishing activities are primarily on the Municipal Pier.
5.2. Commercial and Public Areas
The Pier presently has approximately 130,000 square feet of leasable commercial space
comprised of buildings, kiosks, carts and deck area. The current Pier tenant mix is
approximately 70 percent amusement, 25 percent dining, four percent educational and one
percent retail.
Public facilities and service areas on the Pier include the Carousel building which houses City
and SMPC offices; a Harbor Guards station; a Police Sub‐Station; a Pier Maintenance
workshop; and a second floor public observation deck. In addition there are central and
west end public restroom facilities, a central trash & recycling shed, and a 270 space public
parking lot.
The “Santa Monica Pier Development Program” approved by Council on February 9,
1988, supported a development program that consisted of approximately 150,000 square
feet of commercial area. A new planning effort under development by the City with the
assistance of the SMPC, will explore access enhancements, potential expansion of existing
activities, and new commercial and civic opportunities. This enhancement effort, and
future efforts, may alter the overall mix of activities and uses on the Pier over time to
reflect the needs of the Pier and public and changing market conditions.
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6. GENERAL LEASING STANDARDS
Leases and licenses shall be consistent with the Pier Leasing Goals and Objectives.
I. The Santa Monica Pier is public property; therefore all leases and licenses will be
subject to an open and competitive public process.
II. Lease renewals will not be automatically offered to tenants. As vacancies arise either
by lease expiration or earlier termination, recruitment for occupancy will be conducted
in accordance with the Leasing Guidelines.
III. Preferred Uses include, but are not limited to, a range of entertainment and
commercial products and services that will appeal to and serve both the residential
community and area visitors. The City may change uses as leases expire in order to
attract a tenant mix consistent with the Guideline’s goals and objectives.
IV. In order to promote merchant diversity on the Pier the award of multiple
leaseholds and/or licenses to an individual tenant, licensee or operator is
discouraged but may be allowed subject to conditions provided under Section
7.5.
V. All prospective tenants must provide evidence of economic viability and
appropriateness to the Pier of their proposed uses and business plan, as well as their
capacity and ability to develop and maintain their operation.
VI. Tenants and licensees will be expected to provide quality, visitor‐ supporting services
or activities throughout the term of their lease or license, including sustained high
levels of maintenance and cleanliness. Leases and Licenses will contain performance
standards to ensure on‐going quality and service. Failure to maintain performance
standards will be considered a material breech and subject the lease or license to
termination.
VII. Tenants and licensees are expected to be active members of the Pier community,
participating in its operational life and working together with the City and other
tenants to enhance the Pier visitor experience.
VIII. Assignment or subletting of leases is prohibited without the written consent of the
Landlord. Landlord’s consent will be subject to express standards and conditions set
forth in the lease. Assignment or subletting of licenses is prohibited without
exception.
IX. Operation and improvements to lease and license areas are subject to the City’s
standard regulatory review and approval process.
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7. MINIMUM/BASIC LEASE TERMS AND CONDITIONS
7.1. Diversity & Permitted Uses
The City will seek operators who offer creative, imaginative and unique merchandise, food
options and activities that are thematically compatible with the Pier yet not overly
duplicative of the products and services already offered on the Pier.
In order to maintain an appropriate tenant mix consisting of distinct and diverse
merchandise, food and services the City will endeavor to limit the number of merchants who
carry the same or similar types of offerings. A ‘Permitted Use’ clause shall be included in
every lease and license to describe the type of business that will be operated within the
leased premises or license area. The Permitted Use description should clearly describe the
type of business the tenant or licensee intends to operate and the merchandise, food or
service the tenant intends to offer for sale.
The purpose of the Permitted Use clause is to regulate the duplication of merchandise or
services; however, it does not grant any tenant or licensee an exclusive right to sell any
item or service. Exclusivity rights shall not be granted to any merchant on the Pier.
7.2. Term
Rental lease terms for commercial space on the Pier shall be negotiated based on the level
of capital investment, use, size of the space (leases for larger footprints are normally for
longer terms) and complementary character of the operation with the Pier Leasing Goals
and Objectives. These factors also will be balanced against the City’s policy of ensuring
that public sites periodically do become available for a public competitive process.
To maintain the vitality of the Pier the City needs to insure its ability to address the mix of
uses and activities on the Pier over time. Therefore, it needs to have a variety of lease and
license timeframes and not have the majority of licenses or leases with very long terms
or the majority of leases ending simultaneously‐‐ thus limiting the City’s ability to deal with
evolutionary changes in Pier visitor needs.
7.2.1. Recommended Terms for Leases and Licenses
I. Portable Vending Carts
The recommended term for vending cart licenses is from 6 months to 1 year.
These licenses should be subject regularly to a public process to accommodate uses that
meet contemporary Pier needs and to allow frequent opportunities for businesses interested
in operating on the Pier.
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II. Fixed Location Kiosks
The recommended term for fixed location kiosk licenses and concessions is
from 3 years to 5 years.
III. Deck Space Rental
The recommended term for the commercial license of deck space is from 1 day
to 2 years, depending upon use and circumstances.
IV. Viewers and Transmitters
The recommended term for license and concession of cameras, antennas, and
coin‐operated telescopes and binoculars range is from 1 to 5 years depending on use
and circumstances.
V. Retail Shops, Restaurants, Amusements and Aquarium
The recommended terms of leases for retail shops, restaurant, attractions and
the aquarium range from 5 years to 25 years ‐‐ inclusive of any option periods.
Generally, terms of five years will be granted if there is no substantial new
capital investment in structures, structural improvements or equipment. If a tenant is
required to make substantial new capital investment in structures, structural
improvements or equipment then terms of ten years to twenty‐five years may be
considered. Additional options to extend the term provided under Section 7.5, may be
offered contingent upon the amortization and financial requirements of new investment
and findings of benefit to the City.
VI. Leaseholds Subject to Development Agreements
Terms of leaseholds that are subject to a Development Agreement will be
negotiated with the City of Santa Monica. A Development Agreement is a negotiated
contract with the City that includes a developer’s contribution of significant community
benefits and requires review by the Planning Commission and the Landmarks
Commission, and final approval by the City Council.
7.3. Rates
Rents, fees and charges on the Pier are expected to reflect fair market value.
Adjustments can be made to provide for diverse uses consistent with the Pier Leasing
Goals and Objectives or significant offsetting capital investment that provides the Pier
permanent benefits also consistent with the Goals and Objectives.
In addition to a base rent, the City may elect to require that a lease include a percentage
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rent provision, which can be differentiated by categories of sales. The City, as Landlord,
shall have the right to audit tenant's financial records to ascertain that the gross sales
figures reported by the tenant are accurate.
Leaseholds with preferred uses for research and public educational purposes (e.g. Santa
Monica Pier Aquarium) may be maintained at other than fair market rental rates. The
City will seek to reasonably minimize its costs associated with these activities by
participating in ancillary gross receipts from commercial activities at educational
facilities.
7.4. Hours of Operation
The Santa Monica Pier is a public venue open 365 days per year 24 hours per day. Pier
merchants will be encouraged to remain open for business with adjustments related to
the time of year and type of business. Minimum business hours when all businesses are
expected to be in operation, unless otherwise specified, shall be daily between the
hours of 11 am and 9 pm. Tenants will not be required to operate on Christmas Day and
Thanksgiving.
7.5. Modifications Based on Findings of Exceptional Community Benefit
Diversity of ownership in Section 6. IV and the length of term in Subsection 7.2.1. V may
be modified if all four of the following findings can be made and documented:
I. The proposed project will provide an exceptional opportunity to fulfill a goal or
objective of the Pier Guiding Principles and will enhance the unique character
and the viability of the Pier.
II. The proposed project will require substantial capital investment and provide an
exceptional return opportunity to the City.
III. The proposed project will enhance the mix of uses on the Pier while still being
consistent with the Pier’s unique character.
IV. The proposed project will provide a significant enhancement to the visitor
experience at the Pier.
7.6. Triple Net Lease
Unless otherwise specified, Tenant shall pay all property taxes and assessments
(including Possessory Interest Tax), insurance, utilities and Common Area Maintenance
Fees‐‐as defined below‐‐as well as any duly‐enacted future assessment or fee that the
City may elect to institute.
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7.7. Common Area Maintenance Fees
As a condition of occupancy of a Pier building, Leasehold tenants shall pay a
proportionate share of the City’s Common Area Maintenance (“CAM”) cost to manage,
maintain and provide security to Santa Monica Pier. On January 1, 2000, the applied
Common Area Maintenance cost was modified to provide for a fixed CAM payment with
biennial increases of not less than three percent (3%) and no greater than six percent
(6%) per annum. Currently the CAM fee is $7.65 per square foot per year.
7.8. General Operational and Performance Standards
Tenants must maintain high quality and uniform standards of operation and service to
sustain and increase demand for their business, maintain positive customer experience,
and enhance the overall reputation of the Santa Monica Pier. In order to achieve the
highest standards of operations the following standards may be incorporated into each
lease and license:
I. Tenants are expected to staff and operate their businesses in a first‐class and
reputable manner, commensurate with transacting a high volume of business on the
Pier.
II. Periodically, Landlord or Tenant may engage a third party “mystery shopper” to
visit and evaluate Pier businesses. Tenant will provide an action plan for improvement if
so requested by the Landlord.
III. Tenants shall respond to Landlord’s written inquiries regarding any complaints
or issues, including postings on social media sites related to Tenant’s operations. Tenant
will provide an action plan for improvement if so requested by the Landlord.
IV. Food operations that receive a designation from the Los Angeles County
Department of Health of less than an “A” more than three times during the term of the
lease or license, except to the extent that any such rating is restored to an “A” within 30
days of receiving the lower grade, will be in default and breach of the lease/license.
Landlord recognizes that third party action may require additional time to reinstate “A”
rating and may request tenant to provide an action plan for improvement.
V. Any Lease extension option will be conditioned upon Tenant’s economic
performance. For example, Tenants with a percentage rent clause should have reached
rent levels requiring percentage rent payments to City for at least two of the four rental
years immediately prior to the expiration of the lease.
VI. Landlord may establish an annual review process to be performed by Office of
Pier Management Staff to evaluate key criteria utilizing a standardized rating scale.
VII. Each Lease or License may have additional operational and performance
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standards applicable to the particular Tenant’s operation.
7.9. Maintenance and Environmental Responsibilities
Lessees and Licensees shall be responsible for maintaining their facilities in
attractive and safe condition, in compliance with applicable building codes and all
applicable environmental laws, ordinances, regulations and standards. This
includes all areas under their lease, the facades and exterior presentations, and
appurtenance’s of their facility or operation.
8. CITY POLICY PROVISIONS
8.1. Labor Peace
The City owns the Pier and has a financial or proprietary interest in Pier businesses
engaged in visitor‐serving commercial activities. Some of these businesses are in
industries that have a history of labor/management conflict. Risk of interruption
of rental revenue and common area maintenance fees received by the City from
Pier businesses would be minimized if such businesses were assured of labor
peace. An appropriate labor peace provision would minimize the City’s exposure to
revenue interruption and disruption of public recreational enjoyment of the Pier.
Therefore, new or substantially amended agreements for leasehold operation shall
provide that the tenant will not engage in practices that impede employees’ ability
to organize and contract with a labor organization for the purpose of collective
bargaining. Such prohibited practices include harassment, intimidation, “captive
audience” anti‐ union meetings or illegal terminations of workers in retaliation for
organizing. A substantial amendment is defined as a change of use of the property,
an increase in seating or square footage of more than 25%, or an extension of lease
duration. Tenant engagement in prohibited practices shall constitute an event of
default under the terms of lease. Affected leases would be those businesses having
five or more full or part‐time employees that engage in restaurant or visitor‐serving
entertainment activities such as arcades, amusement parks and nightclubs.
8.2. Sustainability
The City of Santa Monica is committed to meeting its existing needs without
compromising the ability of future generations to meet their own needs. Therefore
in order to conserve and enhance local resources, safeguard human health and the
environment, maintain a healthy and diverse economy, and improve the livability
and quality of life for all community members in Santa Monica, each new or
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substantially amended agreement for leasehold operation shall include provisions
that require sustainable practices including:
A. Carbon Foot Print Reduction. Tenant shall use best efforts to help meet City‐wide
carbon footprint reduction goals by minimizing unnecessary use of electricity and water,
minimizing or eliminating use of hazardous or toxic materials, and minimizing single‐
occupancy vehicle trips by facilitating employee use of alternative transportation modes
such as carpools, buses, vanpools, and bicycles. A list of green business best practices is
available at: www.sustainableworks.org
B. Healthy Food/Sustainable Food Provision. Tenant shall exercise best efforts to
procure and promote healthy and sustainable food practices on the Premises.
Approaches include utilizing locally and sustainably grown, organic foods from California;
offering meatless menu options and food that has been minimally processed; and
reducing food packaging waste. Tenant is expected to participate in recycling and
composting programs offered by the City. Information on the City’s Sustainable Food
Commitment is available at: www.sustainablesm.org/food.
C. Non‐Recyclable Food Service Container Ban. Tenant shall comply with the City of
Santa Monica Ordinance (S.M.C.C. 5.44) banning non‐recyclable plastic disposable food
service containers. Information on the Non‐Recyclable Food Service Container Ban is
available at: www.sustainablesm.org/container.
D. Single Use Carryout Bag Ban. Tenant shall comply with the City of Santa Monica
Ordinance (S.M.C.C. 5.45) banning the use of single‐use plastic carry‐out bags.
Information on the Single‐Use Carryout Bag Ban is available
at: www.sustainablesm.org/bag.
A. Forest Stewardship Council Approved Products. Tenant is expected to follow the
recommendations of the Forest Stewardship Council recommended products list in
procurement of supplies.
8.3. Landlord’s Licensing Program
The Landlord and The Santa Monica Pier Corporation may engage in sponsorship
programs applicable to all tenants on the Santa Monica Pier. Tenant shall agree to
participate in and be subject to such sponsorship program(s) so long as the terms of
sponsor products, goods and/or services are at least as favorable to Tenant as the terms
of agreements applicable to the same products, goods and/or services supplied to Tenant
for use on the Premises at the time of Landlord’s or Pier Corporation’s request for
Tenant participation‐‐provided that such sponsorship program does not violate any
contractual agreements entered into by Tenant.
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9. DESIGN GUIDELINES
The Santa Monica Pier 1987 Design Guidelines remain the primary reference
regarding structures on the Pier, encouraging a balanced respect for the historic
architectural elements and unique character of Pier with the intent to advance the
range of activities and services to enhance the visitor experience and success of Pier
operations and businesses. All public and private structural modifications and other
improvements proposed on the Pier will be subject to review for consistency with
the Design Guidelines, without exception.
The City’s Economic Development Division in its proprietary capacity as Landlord
must review and approve in writing all proposed modifications before any regulatory
action, including submission of applications to Planning or Building and Safety. The
regulatory permit and entitlement process involves the City as regulator, not as
Landlord. These are entirely separate roles and approval of one does not mean
approval by the other.
10. TENANCY RELATIONSHIPS
All City‐owned buildings and deck areas on Santa Monica Pier appropriate and
suitable for leasing or licensing by the City to individual tenancies or licensees will
be in accordance with agreements prepared by the City. Each tenant or licensee
will be responsible for interior maintenance and repair and utility consumption at its
sole expense, and the City generally will retain responsibility for maintenance and
repair of roofs and exterior of City buildings, and of the Pier deck and substructure
unless otherwise specified in the lease or license. Structures constructed by tenants
are subject to interior and exterior maintenance and repair by the tenant at its sole
expense. The City shall have a right to inspect all tenant improvements, including
fixed assets that will revert to the City at the end of the lease term, for the purpose
of determining maintenance and repair needs. If necessary, Tenant is responsible for
making repairs to, or replacing, such fixed assets at its sole expense.
11. TENANT RECRUITMENT
All City‐owned buildings and deck areas on Santa Monica Pier appropriate and
suitable for leasing or licensing will be subject to a public procurement and
solicitation process to identify prospective tenants and licensees whose financial and
professional experience, and products and/or services are consistent with the
Leasing Goals and Objectives set forth herein.
Prospective tenants will be sought by publicly noticing the availability of a leasing
opportunity on the City’s web site and through other appropriate forms of
communication designed to reach the intended audience. This may include printed
and electronic advertisements in appropriate trade journals or newspapers; display
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banners on the property; and other forms of outreach to potential operators. In
addition, the City may retain a qualified commercial real estate brokerage firm or
listing agent to market the leasing opportunity, identify prospective tenants, and
cooperate with other realtors.
All prospective tenants must submit a Lease or License Application to the City.
Information contained in the Lease or License Application shall describe the
proposed use for the available space; provide information about the respondents’
experience; provide references; describe in detail the financial capability of the
respondent to perform; and set forth preliminary terms and conditions.
12. EVALUATIVE CRITERIA AND SELECTION
Leasing opportunities at the Pier are very limited. Therefore, each lease is vital in
order to maintain a vibrant mix of uses and sustainable Pier business environment.
This requires an extensive outreach effort and a thorough review and selection
process.
The Pier Manager will appoint an evaluation panel to review all applications
submitted to the City. The panel will include representatives from the Office of Pier
Management; the Economic Development Division; the Pier Corporation; and other
City staff and other organizations and consultants as appropriate.
The panel will review and evaluate applications based on uniform criteria that may
include but are not limited to the following: (i) character, reputation, training, and
experience of the prospective tenant or licensee; (ii) ability, capacity, and skill of the
prospective tenant or licensee to perform; (iii) quality and price of the services or
goods to be provided; (iv) uniqueness and compatibility of proposed product or
service with the Santa Monica Pier, (v) financial capability; and (vi) length of tenure
in an Exemplary Manner (see below) on the Pier.
The selection process will include additional bonus points for existing Pier tenants
and licensees who are deemed to have operated in an Exemplary Manner. The term
“Exemplary Manner” will mean and refer to those Pier tenant or licensees who meet
all of the following criteria: Merchants that throughout the term of their lease or
license have:
(i) provided consumers with relevant and quality merchandise, food and
activities,
(ii) demonstrated a track record of good customer service,
(iii) regularly updated and invested in their operation and premises;
(iv) demonstrated increasing sales volume over time;
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(v) have been productive and active members of the Pier Community; and
(vi) complied with all lease or license provisions, as well as all applicable local,
state and federal laws and regulations.
Proposers may be asked by the panel to participate in an oral interview in order to
clarify or elaborate on their proposal and to demonstrate samples of products or
services. The panel also may request verification of credit history and may contact
references.
The evaluation panel will provide to the Pier Manager its analysis and
recommendation of a preferred respondent or respondents, inclusive of
appropriate bonus points. The panel’s recommendation also may be to reject all
responses, solicit additional information from one or more respondents, or to enter
into exclusive lease or license negotiations with a preferred respondent.
13. LEASE APPROVALS & DELEGATION OF AUTHORITY
The City Manager has the authority to negotiate and execute leases and licenses
with terms of three years or less for uses in accordance with this Leasing Guideline,
and on the basis of written agreements prepared and approved as to form by the
City Attorney.
Leases and licenses with terms of occupancy greater than three years and less than
twenty‐five years, shall require a recommendation of the Pier Corporation Board to the
City Manager to enter into a lease or license with the preferred respondent subject
to specific terms and conditions; enter into exclusive negotiations with a preferred
respondent; reject the recommendation; or direct that additional information be
solicited prior to making a determination. In negotiating leases, staff will refer to any
suggestions or recommendations of the board.
Negotiation of leases and licenses with terms of occupancy greater than twenty‐
five years shall require authorization by Council following a recommendation from
the Pier Corporation Board.
The City Attorney will prepare and approve as to form all lease and license
agreements for review and execution by the prospective tenant or licensee. The
executed lease or license agreement will be submitted to the City Manager If
determined to be in accordance with the Leasing Guidelines, Pier Corporation
Board recommendation, and Council authorization if required, the City Manager
will execute the agreement.
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14. PROTEST/APPEAL PROCESS
Applicants not selected as the preferred respondent by the evaluation panel will be
informed by letter or email. Protestant may file a written protest with the City’s
Economic Development Manager no more than seven (7) calendar days following
the notification. The written protest must set forth, in detail, all grounds for the
protest, including without limitation all facts, supporting documentation, legal
authorities and arguments in support of the grounds for the protest. All factual
contentions must be supported by competent, admissible and credible evidence.
Any matters not set forth in the written protest shall be deemed waived. Any
protest not conforming to this procedure shall be rejected as invalid. The protest
must include the name, address, and telephone number of the person representing
the protesting party.
The Economic Development Manager shall review the merits and timeliness of the
protest and issue a written decision to the Protestant within ten (10) calendar days of
receipt of the protest.
The decision of the Economic Development Manager may be appealed to the City’s
Housing and Economic Development Director by filing a letter appeal within ten (10)
calendar days of the date of the Economic Development Manager’s decision. The letter
of appeal shall set forth, in detail, all grounds for the appeal, including without limitation
all facts, supporting documentation, legal authorities and arguments in support of the
grounds for the appeal. All factual contentions must be supported by competent,
admissible and credible evidence. Any matters not set forth in the letter of appeal shall
be deemed waived. Any letter of appeal not conforming to this procedure shall be
rejected as invalid.
The City’s Housing and Economic Development Director shall review the merits and
timeliness of the letter of appeal and issue a written decision to the Protestant within
seven (7) calendar days of receipt of the letter of appeal. The decision of the Director is
final.
Attachment A. Santa Monica Pier Lease and License Inventory
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ATTACHMENT A.
SANTA MONICA PIER LEASE AND LICENSE INVENTORY (Updated Dec. 2013)
As of the date of adoption of these Guidelines, the buildings and areas on the Santa Monica Pier available
for lease or license consists of (but are not be limited to) the following:
Address Current User/Use Square
Footage
Current Term
Expiration
1600 Oceanfront Walk Santa Monica Pier Aquarium/Marine research
and educational facility.
4,533 sf. June 2018
200‐A Santa Monica Pier Pier Shop/Retail shop offering souvenir items
and books featuring local history and themes.
260 sf. April 2014
200‐B Santa Monica Pier Soda Jerks/‘Old Fashion’ Soda Fountain. 400 sf. July 2025
250 Santa Monica Pier Ristorante Al Mare/Full Service Restaurant with
alcohol and ancillary entertainment.
6,069 sf. +1,033
patios
December 2038
256 Santa Monica Pier Rusty’s Surf Ranch/Full service restaurant with
alcohol service, and with evening music and
entertainment.
3,035 sf. +
1,073 sf. patios
September 2029
258 Santa Monica Pier The Albright (SM Pier Seafood)/Full service
restaurant with alcohol service.
2,557 sf. +
1,392 sf. patio
June 2020
301 Santa Monica Pier Bubba Gump Shrimp Co./Full service restaurant
with alcohol service.
8,955 sf. May 2027
310 Santa Monica Pier Blazing Saddles/Bicycle rentals, with ancillary
sales of bicycle‐related merchandise.
1,292 sf. Oct 2003
month‐to‐month
321 Santa Monica Pier Oatman Rock Shop/Retail shop offering
souvenir items and gifts.
135 sf. April 2013
month‐to‐month
322 Santa Monica Pier Starline Tours/Tour sales, visitor info services. 250 sf. April 2016
330 Santa Monica Pier Pier Burger/Limited service convenience
restaurant without alcohol service.
1,525 sf. +
584 sf. patio
Sept 2023
350 Santa Monica Pier Playland Arcade/Arcade with ancillary retail
sales.
8,603 sf. +
641 sf. patios
June 2031
350‐B Santa Monica Pier Marlene’s Beachcomber/Retail sales of beach
related items.
375 sf July 2009
month‐to‐month
370 Santa Monica Pier Trapeze School NY/ Trapeze school. 10,985 sf. gross
deck area
April 2015
380 Santa Monica Pier Pacific Park/Amusement park with rides, games
and ancillary retail and food service.
70,000 sf. gross
deck area
May 2046
401 Santa Monica Pier Mariasol Cucina/Full service restaurant with
alcohol service.
6,204 sf. + 2,217
sf. patios
March 2028
404 Santa Monica Pier SM Bait and Tackle/Fishing bait and tackle with
ancillary retail and food sales.
292 sf. June 2004
month‐to‐month
Trolley Kiosk 66 to Cali/Pier related souvenir and sundries. 85 sf June 2016
Mobile Vending Carts Pier and/or beach‐oriented retail and food that
is not otherwise available on the Pier.
Aprox 25 sf. each varies
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