City Council Report

City Council Meeting: September 22, 2009

Agenda Item: 8-A

To: Mayor and City Council

From: Barbara Stinchfield, Director, Community and Cultural Services

Subject: Authorization for City Manager to Negotiate a Public/Private Partnership Agreement with the Nederlander Organization for the Use and Programming of the Santa Monica Civic Auditorium and Approval of Negotiating Parameters

Recommended Action

Staff recommends that the City Council:

1. authorize the City Manager to negotiate an agreement with the Nederlander Organization for the use and programming of the Civic Auditorium

2. approve key negotiating parameters for this agreement

Executive Summary

Both the Civic Center Specific Plan (CCSP) and Creative Capital place a high priority on renovation and upgrades to the landmark Santa Monica Civic Auditorium. Creative Capital made it clear that the use and programming of the Civic Auditorium should align with the community’s vision for its use, and that options for revenue generation and private partnerships needed to be weighed against an anticipated on-going public subsidy. In exploring ways to renovate and reposition the Civic Auditorium as a vital cultural hub within the Civic Center area, the City issued a Request for Qualifications (RFQ) for potential partners. This report requests authorization for the City Manager to negotiate an agreement with the Nederlander Organization and direction from City Council regarding key negotiating parameters.

Background

The Civic Auditorium was designated a City Landmark by the Landmarks Commission on November 12, 2001. That decision was upheld by the City Council during its April 9, 2002 meeting.

In June 2005, the City of Santa Monica adopted an update the 1993 Civic Center Specific Plan (CCSP) setting forth planning policies and land use and development regulations for a 67 acre area bounded by Pico Boulevard on the south, Fourth Street on the east, Ocean Avenue on the west and Colorado Avenue on the north.

Creative Capital, approved by City Council on February 27, 2007, committed the City to a cultural use of the Civic Auditorium in line with the community’s vision for the facility. That vision includes the need for significant upgrades to the building and its technical equipment. Creative Capital suggests that the recommendations regarding the Civic Auditorium in the CCSP be revisited to better accommodate the cultural uses envisioned by the community.

During the summer of 2008, capitalizing on the potential inherent in concurrent development, staff from the City, the Santa Monica Malibu School District and Santa Monica College worked collaboratively to explore possible shared use opportunities between the Civic Auditorium and Samohi campuses.

In March of this year City Council authorized the issuance of an RFQ to solicit qualifications from non-profit and/or for profit entities interested in participating in a public/private partnership for the use and programming of the Santa Monica Civic Auditorium (staff report). Further, Council approved a selection process and review criteria for responses, which included demonstrated experience and degree of innovation, abilities on recent comparable projects, financial capacity and understanding of the needs of this project. In approving issuance of the RFQ it was anticipated that staff would return to City Council to request authorization to negotiate with one or more firm(s).

Discussion

RFQ Selection Process

The RFQ, issued in June 2009, was distributed widely and advertised in both the local press and in trade publications. Due to demand from interested parties, four tours of the facility were scheduled and staff issued three addenda in response to inquiries. Despite this high level of interest, only one organization submitted a response by the deadline.

A staff review committee met in early August and were impressed with the depth and thoughtfulness of the Nederlander Organization’s submittal. Committee members cited their years of experience, financial capacity, expertise in working with historic facilities and the public sector; as well as their national reputation for the quality and breadth of their product, from Broadway productions to concerts. For all of these reasons staff felt the Nederlander Organization represents an excellent potential partner for the City.

The Nederlander Organization, established almost 100 years ago, is one of America’s premier entertainment companies. It is known for its ability to secure top headline entertainment based on long-term industry relationships, quality presentations and financial capability. Nederlander is one of the primary theatrical producers and theater operators on Broadway, whose production list includes among countless others: Lion King, Wicked, Rent, Avenue Q, Stomp, Riverdance, Evita and Chicago. They also have a major concert programming division which works with a broad array of talent, including such superstars as Sting, Bruce Springsteen, Bob Dylan and Tony Bennett. Further they have extensive experience working with municipalities and other government entities. In California they have agreements to run or program the Greek Theater in Los Angeles, the Santa Barbara Bowl, the Grove in Anaheim, the San Diego Civic Theater and the Center for the Performing Arts in San Jose.

Along with their statement of qualifications the Nederlander Organization submitted a conceptual approach to programming that seems particularly well aligned to community priorities. They are proposing an exciting mix of Broadway shows, family entertainment, concerts and special events, along with some innovative community partnerships. For example a ‘Pops’ concert series with the Santa Monica Symphony or a musical theater school for young people in partnership with local schools. Additional details on their conceptual approach can be found in Attachment A.

Negotiating Parameters

If the City Council authorizes the City Manager to move forward, staff is seeking guidance from Council on the focus of negotiation and public benefits. Recommended parameters include:

· Ensure that the programming and operation of the Civic Auditorium are financially sustainable over time

· Maximize the number and diversity of high quality cultural/entertainment options available at the Civic Auditorium

· Ensure that sufficient capital investment will be made to the facility to support its proposed use and ensure that adequate reserves are projected to maintain the facility over time

· Ensure that, as a result of this agreement, existing staff at the Civic Auditorium maintain employment comparable to their current employment status

· Ensure that the Civic Auditorium will remain available for community use

· Ensure that any advertising or sponsorship arrangements are compatible with City precedent and policies

· Effectively manage the flow of people and uses in the Civic Center area

Financial Impacts & Budget Actions

The five year forecast for the Civic Auditorium Fund underscores the need for a new approach to the use and programming of the Civic Auditorium. The Civic Auditorium requires an ongoing annual General Fund subsidy of $1.0 million in FY2009-10 and ranges between $1.1 to 1.3 million in FY2010-11 through FY2013-14. This baseline forecast does not include major infrastructure improvements, which would increase the subsidy. Five Year Forecast

The recommendations in this staff report have no immediate budgetary impacts; however future budgetary impacts will likely result from negotiations with the Nederlander Organization. The terms of the agreement would likely require the City to contribute to the cost of improvements and upgrades to the facility. This past June, in adopting a plan for the future use of RDA funds, City Council included 25M for Civic Auditorium improvements. All of these impacts would be evaluated and presented to Council prior to final commitments.

Prepared by:

Jessica Cusick, Cultural Affairs Manager

Attachment

Approved:	Forwarded to Council:
Barbara Stinchfield Director, Community & Cultural Services	P. Lamont Ewell City Manager