To:                   Mayor and City Council


From:              City Staff


Subject:          Proposed Guidelines for Leasehold Management of Santa Monica Pier  for Calendar Years 2003 and 2004






This report recommends that Council approve proposed guidelines for leasehold management of City property located on Santa Monica Pier for calendar years 2003 and 2004.




In November 1983 City Council created the Santa Monica Pier Restoration Corporation (PRC) as a non-profit, public benefit corporation to oversee the reconstruction and commercial revitalization of the Pier.  The responsibilities and authority of the PRC were formalized and broadened in December 1985, with Council approval of a Services Agreement with the PRC and by-laws for the corporation.  The relationship between the City and PRC was reaffirmed and modified upon Council approval of a new Services Agreement on December 19, 2000, transferring to City Economic Development Division staff, supported by the Office of the City Attorney, responsibility for lease and license negotiations and administration of approved uses of the Pier.  The PRC remains responsible for establishing, subject to Council approval, policies and guidelines for operation of the Pier, for promoting and marketing of the Pier as a community asset, for hosting and managing special events and activities on the Pier, and as advocates for Pier-related capital projects and improvements.


The PRC formulated a set of public policy statements, goals and objectives for future development and use of property on the Pier, set forth in the General Use and Development Plan adopted by the PRC in September 1987 and approved by Council in February 1988.  The 1988 Plan identified a multi-step program for the commercial revitalization of the Pier through attraction of diverse products and services appealing to the varied public visiting the Pier.  The appropriate tenant mix distribution identified at that time included retail, restaurant and entertainment/amusement uses.  A primary objective of the PRC’s development program was to revitalize the Pier in a manner that preserved its historic design and use characteristics while serving the future recreational needs of the community and the economic requirements of the City.  The Pier’s economic position was to be improved by increasing the commercial area available for leases and licenses, and improving the quality of products and services offered while maintaining it as an affordable destination.


Council oversight and review of PRC activities continues through its appointment of members to the PRC Board of Directors and through review and approval of an annual Plan of Work, annual Leasing Guidelines and annual budget proposed by the PRC.  The Plan of Work sets forth the goals and objectives of the PRC for the ensuing fiscal year, and the Leasing Guidelines set forth the standards and methodology used by City staff to implement the commercial objectives of the PRC stated in the Plan of Work.  The City provides funds for PRC activities and program implementation through the allocation of budget resources. 


Guidelines for design and future development and use of property on the Pier were set forth as public policy statements in the 1988 General Use and Development Plan.  As called for in Section 5.1 of the 2000 Services Agreement, draft leasing guidelines for Santa Monica Pier were reviewed with and approved by the Leasing Committee and PRC Board.  At its meeting held February 13, 2001, Council approved the Leasing Guidelines for fiscal years 2000-01 and 2001-02, subject to the Guidelines being returned for periodic review and possible modification by the PRC Board and City Council as the means by which each year’s Plan of Work is to be implemented. 


The PRC and Economic Development Division staff has concluded the following leases, licenses and operating agreements on behalf of the City since February 2001 for commercial use of the Pier in accordance with the approved Leasing Guidelines:



Also during the past fiscal year, the PRC and Economic Development Division staff solicited proposals for leasehold development and operation of 250 Santa Monica Pier (formerly Ash Grove and Arcadia).






Council approved the PRC’s Plan of Work for fiscal year 2002-03 on May 21, 2002.  This Plan of Work identified the following lease and license-related issues as needing to be addressed during the current fiscal year:



Proposed Leasing Guidelines for calendar years 2003 and 2004 setting forth the standards and methodologies to be utilized by City staff to implement the commercial objectives of the PRC as stated in the Plan of Work are conveyed as Attachment A.  The proposed Leasing Guidelines were presented to and reviewed with the Leasing Committee on November 25, 2002, and approved by the PRC Board of Directors at its meeting held December 4, 2002.  Significant modifications in the proposed Leasing Guidelines from those approved by Council on February 13, 2001, are summarized as follows:



Budget and Financial Impact


The City currently budgets for and funds anticipated costs of the Pier Restoration Corporation, and budgets for anticipated lease rental and license revenue and costs associated with City staff operation, maintenance and management of the Pier through Economic Development Division of Resource Management Department.  Anticipated enhanced revenue based upon the proposed Leasing Guidelines will be a part of the fiscal year 2003-04 budget.  Approval of the proposed Leasing Guidelines will not affect the fiscal year 2002-03 budgeted amount.




Staff recommends that City Council approve the Leasing Guidelines for calendar years 2003 and 2004 for use of Santa Monica Pier commercial area, and that the City Manager be authorized to implement the Leasing Guidelines as approved.



Attachment A:  Santa Monica Pier Leasing Guidelines for calendar years 2003 and




Prepared by:  Jeff Mathieu, Director of Resource Management

                        Mark Richter, Economic Development Manager

                        Elana Buegoff, Senior Administrative Analyst