City Council Meeting: November 27,
Agenda Item: 3-H
To: Mayor and City Council
From: Andy Agle, Director of Housing and
for Proposals for Bergamot Station Arts Center Development
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.
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.
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.
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.
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.
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.
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
Teams Recommended to Receive RFP
first recommended team includes Bergamot Station Ltd., Worthe Real Estate
Group, Frederick Fisher and Partners, and Howard Robinson & Associates.
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.
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.
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
- Howard Robinson &
Associates, LLC is a land-use consulting firm representing property and
business owners, assisting clients through the planning entitlement
process. Mr. Robinson has worked with Mr. Blank for many years and
is a partner with Mr. Blank in CRAFTED.
The second recommended team includes The Lionstone Group, Industry
Ltd, Boulevard Partners, Lew Wolff, Marc Pally and Rios Clementi Hale
- The Lionstone Group,
founded in 2001, is a privately owned real estate investment firm that
currently owns approximately $2 billion of real estate investments across
the U.S. Lionstone is an active
participant in the Santa Monica office submarket with nearly one million
square feet of creative office/mixed-use space in downtown and the
Bergamot Transit Village Mixed Use Creative District. Lionstone has also
completed 14 development projects of approximately 10 million square feet,
including ground-up apartment projects.
- Industry Ltd, headquartered in Santa Monica, is a real estate
development and construction management firm specializing in creative
office and commercial space, adaptive reuse and historic renovation. Industry Ltd.’s subsidiary, Industry
Partners, provides real estate sales, leasing and market research services
and has a leasing portfolio in excess of three million square feet,
including the Lantana Campus and 1630 Stewart/Penn Station in Santa
Monica. Jim Jacobsen, founder of
Industry Ltd. and founding partner of Industry Partners, has built a
20-year career specializing in creative and lifestyle work space on the
Westside of Los Angeles. He has maintained
long-term relationships with The Lionstone Group and a number of Santa
Monica companies including Jerry Bruckheimer and POP Sound/Post.
- Boulevard Partners is an
investment and development firm committed to urban infill and sustainable
projects. Scott Ginsburg, Managing
Partner at Boulevard, managed the redevelopment of the award-winning
Lincoln and Rose Shopping Center in Venice, anchored by Whole Foods
Market, a project with many sustainable initiatives and extensive
- Lew Wolff, CEO of Wolff
Urban Management Inc., a real estate acquisition, investment, development
and management firm and also serves as Co-Chairman of Maritz, Wolff &
Co, a privately held hotel investments group that manages top-tier luxury
hotels. Mr. Wolff entered the hotel
business in the 1980s, with projects including the San Jose Holiday Inn
and Burbank Airport Hilton.
Recent hotel activities include the development and management of
the Hyatt Place-Mesa AZ (154 rooms) and the acquisition, renovation and
management of the Westin Saint Claire-Downtown San Jose (171 rooms).
- Marc Pally is a public art
consultant with extensive experience in public art and cultural planning
for civic, institution and private sector clients. He drafted and administered the Art in
Public Places Policy for the CRA/LA in 1985 and has worked on large-scale,
multi-phased public art projects including planning, artist selection,
concept and development, installation and operations with recent clients
including Macerich Company (for Santa Monica Place), Sony Pictures
Entertainment in Culver City, and the City of San Francisco. Since 2006, he has been the Artistic
Director of Glow in Santa Monica.
- Rios Celementi Hale Studios
is a multi-disciplinary design firm that has collaborated extensively with
Lionstone Development. Projects
include W Hotel Metro Plaza in Hollywood, Paramount Studios Master Plan +
Technicolor building renovations, Metro Lankershim Pedestrian Bridge,
Activision Headquarters in Santa Monica, and Euclid Park, Douglas, Joslyn,
Clover, Marine and Ozone Park Playgrounds in Santa Monica.
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.
- REthink Development is
headquartered in Santa Monica and specializes in sustainable,
LEED-certified mixed-use infill development and adaptive reuse projects
including Lofts at Cherokee Studios in Hollywood, a 22,000-square foot,
mixed-use building with home recording studios, which was awarded the
national AIA Top 10 Green Building Award.
Principal and Co-Founder Greg Reitz is an expert on green building
activities and sustainability programs.
- Kor Group is a fully
integrated real estate investment, development and management firm based
in Los Angeles. Since its inception
in 1999, Kor has acquired and developed hospitality, residential and
office assets valued in excess of $2 billion, including the Viceroy Hotel
in Santa Monica, a 162-room hotel that Kor acquired and transitioned from
a budget hotel to a contemporary boutique hotel, selected as “Top 100
Hotels in the US and Canada” by Travel + Leisure in 2009. Prior to joining Kor, Brian De Lowe,
Principal and lead partner on the team, was the Vice President of Business
Development for Viceroy Hotel Group where he oversaw all aspects of the
company’s acquisition and business development activities in North America
and South America. While with
Viceroy and Kor, he also served as Development Director, leading the acquisition,
development and redevelopment of adaptive reuse and hotel projects in the
U.S. and Latin America.
- David Hertz, FAIA
Architects is headquartered in Santa Monica and specializes in sustainable
design. The firm has been involved
in several local adaptive reuse projects including the conversion of the
historic Parkhurst Building on Main Street and Pier Avenue into a retail
store, and the reuse of a restaurant and market on 20th and Olympic into
one of the highest rated LEED Platinum buildings in the country. The firm also designed the Abbot Kinney
Hotel, an 82 room boutique hotel with 5 restaurants over a subterranean
robotic 250 space parking garage, working with Rethink Development.
- Mark Hornberger of
Hornberger + Worstell directs the firm’s master planning and design
efforts with recently completed projects including the SFMOMA Parking
Structure with rooftop sculpture terrace and event space and various
projects involving hotels and adaptive reuse of older buildings.
- Lord Cultural Resources
provides specialized planning services to the museum, cultural and
heritage sectors, and has worked with over 1,900 cultural institutions in
- Merry Norris is an arts
advocate, consultant and public art champion in Los Angeles, providing
curatorial services to private collectors, public institutions, developers
and boutique hotels since 1978. Ms.
Norris assisted in the establishment of MOCA and serves as trustee for
SCI-Arc, and Pasadena Museum of CA Art.
She is a member of the City of LA’s Mayor Advisory Design
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:
- The development must include
at least 75,000 square feet of arts-related space that is affordable to
non-profit and arts organizations, with emphasis on retaining existing
Bergamot Station Arts Center tenants and providing space for the Santa
Monica Museum of Art.
- The development shall include
open space, infrastructure and other amenities to support public access to
the light rail station as well as improving the environment and
functionality of the Site.
- The development shall maximize
the preservation of existing buildings, where feasible.
- The development should
incorporate additional uses which support the Site as a cultural
destination, including evening and weekend activation and uses that help
generate revenue for the Site.
These uses should include a hotel, restaurant and bar and could
also include other creative office and cultural uses that will maximize
the market feasibility of the project.
- Parking for the development
should consider LUCE parking approaches and shared parking considerations.
Parking that is exclusively reserved for the future tenants should be
minimized, while shared parking should be maximized for public
- The development should
maximize the amount of ground lease revenue to the City in order to
support the operations of the Big Blue Bus. The development, at a minimum, must
provide at least $610,000 per year in ground rent to the City.
- The development must
exemplify exceptional architecture and sustainable design and construction
as well as have a focused transit-oriented development approach.
- The development must
exemplify the concepts identified in the Bergamot Transit Village and
Mixed Use Creative District Area Plan process. Conceptualization and
design of the Site must be coordinated with the specific planning process
to ensure that each process informs the other.
- Conveyance of the Site
would be structured as a long-term ground lease.
- The development team would
be required to submit an analysis that demonstrates the project’s
- Within the context of the
other guiding principles, maximization of the ground lease income and
public revenue sources will be considered in the evaluation process.
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.
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 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
no immediate financial impact or budget action necessary as a result of the
Harris, Economic Development Manager
Forwarded to Council:
Andy Agle, Director
Housing and Economic Development