City Council Meeting: November 27, 2012

Agenda Item:  3-H  

To:               Mayor and City Council 

From:           Andy Agle, Director of Housing and Economic Development

Subject:        Request for Proposals for Bergamot Station Arts Center Development

 

Recommended Action

Staff recommends that the City Council adopt the project objectives listed in this report and authorize staff to issue a Request for Proposals (RFP) to development teams led by Bergamot Station Ltd./Worthe Real Estate Group, Lionstone Group/Industry Ltd. and REthink Development/Kor Group for development of the City-owned property located at 2525 Michigan Avenue, home to the Bergamot Station Arts Center. 

 

Executive Summary

An evaluation panel has completed a review of qualifications submitted by five prospective development teams who responded to the Request for Qualifications for the opportunity to develop the 5.6-acre, City-owned site located at 2525 Michigan Avenue (“Site”). The evaluation panel recommends that three teams be invited to respond to a RFP. The recommended short-listed teams are led by Bergamot Station Ltd./Worthe Real Estate Group, Lionstone Group/Industry Ltd., and REthink Development/Kor Group. 

 

 

Background

 

On March 20, 2012, the City Council endorsed the Bergamot Station Arts Center Preferred Concept and authorized the issuance of a Request for Qualifications (RFQ) for the purpose of soliciting development team qualifications for the City-owned, 5.6 acre site located at 2525 Michigan Avenue, known as the “Bergamot Station Arts Center.”  The Site was purchased by the City with transit funds in 1989 with the goal of serving future transit needs in Santa Monica and providing a source of revenue for the Big Blue Bus.  The Expo Light Rail Line Phase II extension is currently under construction and will include a stop at Bergamot Station, due to open in 2016.

 

The City currently leases the Site to Bergamot Station LLC for $603,797 a year.  The lease expires on December 31, 2015.  The Site contains five buildings totaling 76,020 square feet and is occupied by approximately 30 small creative businesses including art galleries, product designers, a non-profit theatre company and a café. The lessee owns land adjacent to the City-owned property.  This privately owned portion of Bergamot Station Arts Center is not included in the RFQ nor will it be included in the RFP.  The Expo Light Rail Line will bring significant changes to the Site and overall area.

 

The Bergamot Station Arts Center Preferred Concept is an overarching vision for the Site that was developed in accordance with the principles, policies and recommendations set forth in the LUCE and the City’s Creative Capital strategy.  The Preferred Concept balances the City’s three primary goals for the Site:  1.) to support the arts, 2.) to deliver a transit-oriented development, and 3.) to maximize revenue for the Big Blue Bus operations.  The concept emphasizes retaining the concentration of art galleries and other art uses, providing space for a museum, creating revenue-producing and visitor-serving uses, including a hotel and restaurants/bars, and delivering infrastructure improvements to compliment the arts center and new Expo station.  The Preferred Concept was the result of eight months of community consultation that was started in July 2011 in order to create consensus for a community vision for the future of the Site within the larger context of the Bergamot Area Plan, which is currently in development.

 

Discussion

 

The RFQ was issued on May 21, 2012, with submittals due to staff on July 11, 2012.  Five development teams submitted Statements of Qualifications (SOQ’s). An evaluation panel comprised of a City-retained real estate financial advisor and staff from the Community and Cultural Services, Planning and Community Development, Big Blue Bus, Public Works and Housing and Economic Development departments reviewed the SOQ’s. The RFQ evaluation criteria required that development teams have professional experience in successfully developing and managing high-quality, mixed-use projects that include a variety of uses, including hotels, as well as experience in managing and promoting cultural arts centers.  Development teams were expected to demonstrate experience in deploying innovative strategies involving adaptive reuse of older buildings, the creation of transit-oriented urban infill developments, and the creation of vibrant, sustainable, cultural activity centers.

 

The evaluation criteria also rated development teams’ successful experience with community involvement and similar public-private partnerships, as well as the ability to secure financing for complex, mixed-use developments. After reviewing the SOQs of the five teams, the evaluation panel selected four teams to present their experience and qualifications in person. The evaluation panel has completed its review and recommends that three teams be invited to respond to an RFP.  The teams, as noted below, will be required to keep the lead, core development partners through the RFP process.  Sub-consultants may be added or changed.

 

Teams Recommended to Receive RFP

A.    The first recommended team includes Bergamot Station Ltd., Worthe Real Estate Group, Frederick Fisher and Partners, and Howard Robinson & Associates. 

·       Bergamot Station Ltd.’s founder Wayne Blank is an experienced art center developer/operator and an entrepreneurial arts advocate and dealer.  Mr. Blank is the original developer of Bergamot Station and owns Shoshana Wayne Gallery.  Along with Howard Robinson, Mr. Blank also developed CRAFTED at the Port of Los Angeles, an arts and crafts marketplace located in San Pedro. 

 

·       Jeffrey M. Worthe is a Principal of M. David Paul Ventures and President of Worthe Real Estate Group, headquartered in Santa Monica.  The firm’s main focus is the acquisition and development of office, mixed-use, sound stage and warehouse projects in California. Currently, the firm owns over of five million square feet of properties.  Mixed-use projects that are complete or under construction include the redevelopment of a former USPS sorting center warehouse into Warner Brothers studio broadcasting, creative office space, a health club and two-acre park, and The Pointe in Burbank, a ground-up building housing KCET Studios, creative office, park and underground parking structure with 1,400 spaces.  Plans for a new hotel development in Santa Monica are underway. 

 

·       Frederick Fisher & Partners has over 29 years of experience in architecture and project management, leading the development of many large-scale institutional projects, including the Annenberg Center for Information Science and Technology at Caltech, PS1 Contemporary Arts Center, the Broad Art Foundation and Bergamot Station.

 

 

B.    The second recommended team includes The Lionstone Group, Industry Ltd, Boulevard Partners, Lew Wolff, Marc Pally and Rios Clementi Hale Studios. 

 

 

 

 

 

 

C.    The third recommended team includes REthink Development, Kor Group, David Hertz, FAIA-Studio of Environmental Architecture, Hornberger + Worstell, Lord Cultural Resources and Merry Norris Contemporary Art. 

 

 

 

 

 

 

 

RFP Project Objectives

Staff requests authorization to issue a Request for Proposals (RFP) for the Site to the three recommended development teams. The RFP would request comprehensive and thorough development proposals to implement the City’s vision for the Site. To ensure that the RFP clearly states the City’s vision, goals, and objectives for the Site, staff recommends that Council adopt project objectives for inclusion in the RFP. The recommended objectives for development of the Site are:

 

 

 

 

 

 

 

 

 

Financial issues

 

 

 

 

 

Next Steps

At the conclusion of the Request for Proposal process, staff would recommend that Council authorize an Exclusive Negotiating Agreement with a recommended development team during which time the development would be further refined, entitlements would be considered and business terms negotiated.

 

Environmental Analysis

Issuance of a Request for Proposal is not subject to the California Environmental Quality Act.  Any proposed development would be subject ultimately to review pursuant to the California Environmental Quality Act.

 

Public Outreach

Public participation in the two community workshops, multiple focus groups with local gallery owners and regional cultural arts organizations and entrepreneurs, individual meetings with over 25 local stakeholders and feedback received from the Arts Commission, Planning Commission and City Council from July 2011 to March 2012 provide the basis for the project objectives recommended to be included in the RFP and would provide a basis for reviewing the RFP.

 

Financial Impacts & Budget Actions

 

There is no immediate financial impact or budget action necessary as a result of the recommended action.

Prepared by: Jason Harris, Economic Development Manager

 

 

Approved:

 

Forwarded to Council:

 

 

 

 

 

 

Andy Agle, Director

Housing and Economic Development

 

Rod Gould

City Manager