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City
Council Report |
City Council Meeting: January
12, 2009
Agenda Item: 8-A
To: Mayor and City Council
From:
Subject: The Broad Foundations’ Proposed Museum
in Civic Center
Recommended
Action
Staff recommends that
Council approve agreements-in-principle regarding the lease of Civic Center
property for The Broad Foundations’ proposed art museum project and authorize
the City Manager to negotiate and execute an agreement providing for the
Foundations to reimburse any City expenditures in the event the Foundations
choose to locate the museum outside Santa Monica.
Executive
Summary
Pursuant to Council direction,
staff has initiated negotiations with The Broad Foundations regarding creation
of a public museum of art in the
Background
At its November 17, 2009
meeting, the City Council directed staff to initiate negotiations with The
Broad Foundations (The Broad Art Foundation and The Eli and Edythe Broad
Foundation) regarding the creation of a public museum of contemporary art in
the
Discussion
Pursuant to Council direction, City staff and The Broad
Foundations’ representatives have negotiated proposed agreements-in-principle
for the lease of City-owned land for the planned public museum. Staff seeks Council approval of the proposed
principles to provide a structure for the Foundations to seek entitlements and
to create the outlines of an eventual agreement between the City/Redevelopment
Agency and the Foundations.
Requirements of City and Redevelopment Agency
Under the proposed agreements-in-principle, the City or
Redevelopment Agency would do the following, at City/Agency expense:
1.
Ground-lease the
2.5-acre site to the Foundations for 99 years at $1 per year. On the site, allow the Foundations to
construct a museum that must include art exhibition space and art archives and,
at the Foundations’ option, may also include museum and Foundation support
space, a museum shop, and a museum café.
Pursuant to the Civic Center Specific Plan and Creative Capital, open
space and cultural facilities would be built in this location, likely at the
City’s expense to construct and operate.
Under the proposed principle, the City would make the space available
for the Foundations’ use for the proposed museum, which the Foundations would
construct and operate at their own expense.
The identified uses would be allowed on the site, with the exhibition
space and art archives required to be built.
The Foundations’ headquarters would also be located in the
museum. In addition to art and
culture, the Foundations’ missions include advancing entrepreneurship in
education and science. If the subject
property were commercially zoned and valued at $400 per square foot, the worth
of the City land would be estimated at over $43 million. Under similar assumptions, commercially zoned
land would command an estimated annual rent of $3 million per year. However, because the General Plan, Civic
Center Specific Plan, and Zoning Ordinance allow only open space and cultural
uses on the site, its value in the open market is negligible. In fact, by paying to build and operate a
museum on the site, it is arguable that the Foundations are effectively
reducing the City’s capital and operating costs for the site. In addition, because the land will not be
used for a profit-making enterprise, the City’s lease of the property for $1
per year is similar to other leases of City property to service providers.
2.
Clear and ready the
site for construction including, without limitation, removing existing asphalt
and other improvements, completing necessary grading, and running utilities to
the site.
Prior to the commencement of construction by the Foundations, the City
would prepare the site for construction.
The Public Works Department estimates a City expenditure of
approximately $750,000. It is
anticipated that the City would otherwise make the investment for the
development of parks and cultural facilities on the site.
3.
Provide parking as
follows:
A. Make the
Public parking for the museum would be provided in the Civic Center
Parking Structure. If the City develops
underground parking as envisioned in the Civic Center Specific Plan, such
parking would also serve public visitors to the museum. It is anticipated that
public parking would otherwise be required to serve the park and cultural uses
on the site.
B. Provide the Foundations with up to 1,000 free parking
validations annually, to be used at the Foundations’ discretion for events that
support the museum’s mission to make its art available for the benefit of the
public. Validations may not be used for
private events unrelated to the museum’s mission, such as private parties, if
any.
A limited supply of parking validations would be offered to support
special events that expand the museum’s reach within the community. At the current parking rate of $8 per entry,
the annual value of the validations is $8,000.
C. Make the
The Foundation would be able to purchase monthly parking passes in the
Civic Center Parking Structure, with a limited number of designated, daytime
spaces. The arrangement is similar to
the City’s agreements with the Santa Monica Courthouse.
4.
Provide the
Foundations with expedited and priority processing for all entitlements,
permits, and approvals to implement the museum.
One of the Foundations’ top priorities is to complete the museum within
an expedited timeframe. Under the
proposed principle, the processing of permits and entitlements would be
expedited in a manner similar to the City’s success with expediting permits and
entitlements for the development of the Annenberg Beach House.
5.
Implement any
required off-site environmental mitigations as part of the City’s broader
responsibility for implementation of the
Under the proposed principle, the City would take responsibility for any
off-site environmental mitigation. It is
likely that the City would otherwise take such responsibility as part of the
CCSP implementation. The Civic Center
Specific Plan, which was certified in June 2005, identifies one off-site
mitigation measure specifically tied to the development of the Civic Auditorium
Special District. The measure, which
involves the implementation of an additional left-turn phase at the
6.
Designate staff to
process entitlements, plan check, permitting, and inspection to expedite the
permitting of the museum.
As has been done for the RDA-funded priority projects, designated staff
would take responsibility for expediting project development.
7.
Expedite the CEQA
review process including utilization of a contract EIR firm to prepare the EIR.
The City would rely on a firm that is familiar with the City and CEQA to
expedite the environmental review.
8.
Make every effort
to expedite the entitlement and permit process.
Through the use of designated and experienced staff and consultants,
staff will expedite the entitlement and permit process.
9.
Make a one-time
contribution of $1 million toward the design of the museum.
The Foundations requested an annual contribution of one-third of the
expected operating budget (approximately $4 million) to support the operations
of the museum in
10. Make good faith efforts to pursue federal and state
stimulus funds to assist with museum construction costs.
The City will continue such efforts.
11. Facilitate early design review by the Architecture
Review Board and Planning Commission so that the Development Agreement provides
final approval of key building elements (for example, building massing, elevations,
colors, and materials.) Subsequent
design review would be limited to those design items not approved as part of
the Development Agreement (for example, landscaping.)
As was done with the RAND Development Agreement, the proposed principle
would provide the Foundations with a high-level of design certainty once the
Development Agreement is approved. To
ensure that the Planning Commission’s and Architectural Review Board’s
expertise is reflected in the Council’s approval of the museum design, the
Planning Commission and Architectural Review Board would be engaged in reviewing
the project early in the design process.
12. Maintain adjacent landscaped and plaza areas outside
the perimeter of the museum building consistent with the highest standards
applied to other public open spaces in
It is expected that the City would maintain these areas as part of any
development of the
13. Provide security for the exterior of the museum
building and the park consistent with the highest standards applied to other
public open spaces in
It is expected that the City would continue to police these areas
according to the high quality that the community has come to expect.
14. Pursue construction of the
The proposed “good neighbor” principle is intended to ensure that the
park design complements the museum’s design and operations.
15. Ensure that the Foundations will not be charged, or
will be reimbursed by the City, for all City processing and permitting fees
(such as plan check, inspection and other similar fees) and City development
impact fees (including sewer, parks and recreation, and other similar
development fees and charges); provided, however, the Foundations will pay the
School District Developer Fee and Child Care Linkage Fee. Furthermore, the City will not be obligated
to pay on-going taxes, if any, that the Foundations may be required to pay in
connection with operation of the museum.
The direct and indirect cost to the City to absorb all permit and
development fees is estimated at approximately $900,000.
16. Facilitate the museum’s daily operations (e.g. with
respect to such operational needs as pick-up and delivery of large-scale
artwork by trucking companies.)
Any operational requirements in the Development Agreement will need to
reflect the unique nature of the museum’s operations.
Requirements of the Broad Foundations:
Under the proposed principles-of-agreement, the Broad Foundations
would do the following, at the Foundations’ expense:
1.
Construct a museum
on the site to serve as the home and showcase of The Broad Collections and the
headquarters of The Broad Art Foundation’s worldwide lending program.
Foundation representatives estimate an expenditure of between $40
million and $60 million for design and construction of the museum.
2.
Engage a
world-class architect to design the museum.
As it is important that the museum becomes a signature building within
3. Establish an independent endowment of $200 million to
fund the museum’s operations, maintenance and art acquisitions. The final agreements will contain provisions
to ensure that the endowment is in place and dedicated to the museum operating
costs, so as to ensure that the museum will continually maintain a world- class
art collection on display for the life of the museum.
A fundamental consideration is that the museum endowment is of
sufficient size to ensure its continued operation in a first-class manner. The Foundations have committed to an
endowment of $200 million based on review of similar museums around the country.
The Foundations’ staff and Board of Governors are currently preparing a budget
for the operations and maintenance of the museum, as well as a forecast of the
appropriate endowment size to ensure the long-term viability of the museum. The Foundations will share their completed
analysis with the City before final agreements are approved.
4.
Construct no less
than 30,000 square feet of art exhibition space that is open to the public
during regular and reasonable hours consistent with the hours that comparable
public museums are typically open.
The museum’s fundamental public amenity will be its art exhibition
space. The proposed principle is
intended to ensure that an ample amount of exhibition space is included within
the museum to maximize public access to the Collections.
5.
Construct and
operate an art archive that will be accessible to art professionals. The archive will serve as the home of The
Broad Collections, though pieces of The Broad Collections will continue to be
displayed in the Broad residences and loaned to other institutions as part of
The Broad Art Foundation’s worldwide lending program.
The Collections include approximately 2,000 artworks by more than 200
artists. A significant element of the
museum will be an archive that makes the full breadth and richness of The Broad
Collections available for viewing and study by art professionals.
6.
For as long as the
Foundations occupy the building, make good faith efforts to collaborate with
Santa Monica’s schools and Santa Monica College through means such as hosting
school group visits to the exhibition space and providing access to The Broad Collections
for workshops, lectures, and seminars for students, educators and arts
professionals.
As the museum provides outstanding educational opportunities, the
Foundations would commit to collaboration with and access for the schools and
college.
7.
Pay the
The Foundations would pay the one-time School District Development Fee
and the one-time Child Care Linkage Fee.
8.
Reimburse the
City’s and Agency’s actual out-of-pocket expenses incurred after
January 12, 2009 as a result of performing the tasks enumerated in Section
I, above, should the Foundations construct the museum outside of Santa Monica
due to reasons outside the control of the City, its employees, or Council
members.
One of staff’s concerns is that the Foundations and City could proceed
through the entitlement process, at considerable City expense, and then the
Foundations could choose to locate the museum in another city that is courting
them. In order to provide the City with
a level of protection, the Foundations would be responsible for reimbursing any
City/Agency out-of-pocket expenses, and the City and Foundations would execute
such agreement immediately.
A remaining risk is that the City could tie up the land in pursuit
of a failed museum project and forgo making progress on other ultimate uses of
the land.
Eventual Agreements
As legal documents are drafted and negotiated to reflect the
agreements-in-principle, the agreements will need to address issues such as
remedies in the event of default and performance milestones to ensure continued
progress on development of the museum.
Alternatives
Council could modify
the agreements-in-principle with the understanding that additional negotiation
with and consideration by the Foundations may be required. Council could also direct staff to terminate
negotiations.
Next Steps
If the City Council
approves the agreements-in-principle, City staff and Foundations
representatives will initiate the entitlement process, environmental review,
and negotiation of appropriate agreements.
During the period of environmental review and negotiation of the
Development Agreement, the City Council, as well as the Planning Commission and
Architectural Review Board, would participate in conceptual review of the
proposed museum design.
Financial
Impacts & Budget Actions
In
addition to the opportunity cost of leasing the land for $1 per year, the
upfront direct and indirect costs of the proposed agreements-in-principle are
estimated at approximately $2.7 million, including $1 million for design
assistance, $750,000 for site preparation, $900,000 for permitting and fees,
and $50,000 for off-site environmental mitigation. On May 12, 2009, Council allocated $21 million
of long-term redevelopment funding capacity toward the development of the Civic
Auditorium District. With $2.7 million
allocated for the City/Agency contribution toward museum development, the
Public Works Departments estimates that the remaining $18.3 million will be
sufficient to complete the
Prepared by: P. Lamont Ewell, City Manager
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Approved: |
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Forwarded to Council: |
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P.
Lamont Ewell City
Manager |
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P. Lamont Ewell City Manager |