Santa Monica, California SANTA MONICA CIVIC AUDITORIUM

A ULI Advisory Services Technical Assistance Panel Report Santa Monica, California SANTA MONICA CIVIC AUDITORIUM TECHNICAL ASSISTANCE PANEL (TAP) PROGRAM JULY 2013

ULI Los Angeles Mission Statement At the Urban Land Institute, our mission is to provide leadership in the responsible use of land and in creating and sustaining thriving communities worldwide. ULI Los Angeles, a district council of the Urban Land Institute, carries forth that mission as the preeminent regional real estate organization providing inclusive and trusted leadership influencing public policy and practice. About the ULI Los Angeles Technical Assistance Panels In keeping with the Urban Land Institute mission, Technical Assistance Panels are convened to provide pro-bono planning and development assistance to public officials and local stakeholders of communities and nonprofit organizations who have requested assistance in addressing their land use challenges. A group of diverse professionals representing the full spectrum of land use and real estate disciplines typically spend one day visiting and analyzing the built environments, identifying specific planning and development issues, and formulating realistic and actionable recommendations to move initiatives forward in a fashion consistent with the applicant s goals and objectives. Staff and Panel Members TAP Client City of Santa Monica Panel Chair John H. Alschuler, Jr. Chairman, HR&A Advisors, Inc. New York, New York Panelists Michael W. Ross Chief Executive Officer, Pasadena Civic Auditorium, Convention Center, Convention & Visitors Bureau Pasadena, California John Fisher, AIA President, John Sergio Fisher & Associates, Inc. Tarzana, California ULI Los Angeles Project Staff Gail Goldberg Executive Director, ULI Los Angeles Christine Aure Susa Director, ULI Los Angeles Matthew Severson Associate, ULI Los Angeles Report Editor Susan Davison, AICP, CGBP LEI, Inc. susan@leisustains.us Thomas W. Wulf Senior Vice President, Lowe Enterprises Real Estate Group Melani V. Smith, AICP Principal, Melendrez Dan Massiello Senior Vice President-Public Finance, Kosmont Companies ii Santa Monica Civic Auditorium Technical Assistance Panel

Contents Executive Summary... 2 Santa Monica Civic Auditorium Assistance Panel Report... 5 Technical Assistance Panel Assignment and Process... 7 Panel Observations and Recommendations... 9 Programming and Management... 10 Set the Dream... 12 Moving beyond the Civic: The Civic Center Creative District... 14 Opportunities... 16 Financing Options and Implementation... 18 Conclusion... 21 Acknowledgements... 22 Technical Assistance Panel Member Biographies... 23 1

Executive Summary Santa Monica Civic Auditorium, primary (north) elevation, looking southeast. THE CITY OF SANTA MONICA, DIRECTED BY THE Community & Cultural Service Department s Cultural Affairs Division ( Cultural Affairs Division ), requested ULI Los Angeles to host a ULI Technical Assistance Panel to provide a roadmap to address the long-term future of the Santa Monica Civic Auditorium and provide a framework to implement the vision. The event was part of ULI Los Angeles s Technical Advisory Panel ( TAP ) program which provides expert, multidisciplinary advice on land use and real estate issues facing communities in the Los Angeles Region. For many years, the Civic Auditorium was one of the largest concert venues in Southern California. International artists, such as the Doors, the Rolling Stones, the Beach Boys, Bob Hope, and Bob Dylan performed in the main auditorium. It was designed to be flexible enough to allow for local community events or large concert performances. But, with the lack of capital investment in the facility, and years of deferred maintenance, most concerts and events prefer to contract with newer, state-of-the-art venues in the Los Angeles area. The majority of event bookings at the Civic Auditorium now consist of consumer event shows, and while it remains home to the Santa Monica Symphony Orchestra, the building systems have deteriorated and reached the end of their useful life. The City of Santa Monica had plans and the funds to renovate the Civic Auditorium, but the loss of redevelopment agencies terminated those plans. At this time, the city closed regular operations of the Civic Auditorium on June 30, 2013. The panel now sees the challenge for the city is to redefine their vision for the Civic Auditorium and make it a reality. The Santa Monica Civic Auditorium is the Cultural Heart of the City Given the deep sense of civic pride and community connection to the building, the panel recommends the preservation and restoration of the Civic Auditorium. The ULI Los Angeles Technical Assistance Panel recommends the City of Santa Monica set the dream to renovate the theatre as a cultural icon for posterity. More than 43% of Santa Monica adults make all, or a portion of their living in arts-related fields. This factor points to a major opportunity for a type of development that taps into the desire for something for the community. The City of Santa Monica can establish a cultural center performing arts, visual arts, and more importantly, a special place for the Westside - where the city can demonstrate it is a leading place for culture, for all the arts. The city should aspire for a renovated Civic Auditorium that can qualitatively compete with downtown and other regional venues. The panel believes that any future for the Civic Auditorium will require major financial commitments; harmonious, appropriately-scaled development; improvements to the operating model; and the generation of other sources of revenue, through the sale of naming rights or general obligation bonds. 2 Santa Monica Civic Auditorium Technical Assistance Panel

Programming and Management The Civic Auditorium exists in a highly competitive, fluid market environment, which will require a distinct market position in order to succeed. Successful facility management demands extensive knowledge, expertise and creativity. A modern, well-managed facility can capture concerts, Broadway shows, family shows, filming, award shows, local events, graduations, and local performances. Additional event opportunities for revenue are available, through the booking of tradeshows, conventions, consumer shows, meetings, outdoor parking lot events, and banquets and receptions. Consideration should be given to a public non-profit management model, to be explored for the operation and management of the Santa Monica Civic Auditorium. This model will allow the city to maintain budget authority and to elect the governing board. The governing board oversees the management and sets policy. The Facility Manager is in charge of day-to-day operations and implements the policy. This governing format is valuable in that it enables the facility management to operate with greater flexibility and effectiveness, especially in the areas of personnel management, payroll, purchasing, contract approval, sales and marketing, event booking, scheduling, event management, parking, ticketing, advertising, concessions and catering, facility maintenance, and generally being able to negotiate competitive deals. This model can be successful if there are clearly defined goals and the facility management is entrepreneurial and market-focused. The panel believes the future of the Civic will require a substantial capital subsidy and annual operating support if its programming mix includes a commitment to provide below market pricing for community events and the arts sought by so many citizens. The panel recommends the city set the direction for the Civic and determine whether the Civic needs to operate at profit; break-even from operations; cover debt service; or operate at a loss. Currently, there is a large city subsidy, which cannot continue in the current economic environment. A snapshot of the Civic s financials indicate the cost of services are too high and out of alignment with what is considered feasible within the market. The panel suggests the Civic Auditorium set fees to cover costs, be priced within the industry norm, and be managed to industry standards. Set the Dream The Civic Auditorium needs to be a state-of-the-art facility that is flexible enough to be an ideal venue for drama, musicals, ballet, popular concerts, choral, classical concerts, film and both raked seating and flat floor special events including exhibits. The Civic Auditorium should be renovated to enhance acoustics; incorporate telescopic seating; and modernize the theatre system technology. These improvements are in addition to the excellent study already presented to the city for the renovation and addition to the Civic. Move Beyond the Civic: The Civic Center Creative District The Civic Center Specific Plan, adopted by the City of Santa Monica in 2005, has proven to be a planning vehicle that is adaptable to the changing market conditions and opportunities facing the city. In 2013, given the new reality facing the city, that the funding previously available to renovate the Civic Auditorium is no longer available, so new solutions and opportunities must be sought. The entire 10 acres that currently encompass the Auditorium Special Use District within the Specific Plan must now be replanned. While the Early Childhood Center currently proposed in the District is still a viable use, and planning for it is ongoing with Santa Santa Monica Civic Auditorium marquee displaying upcoming events. 3

The panel recommends a healthy mix of uses to generate activity in the Civic Center Creative District and provide a revenue stream to support any renovation and development. A mix of some of the following complimentary uses should be explored: boutique hotel and conference center; residential apartments; artist in residence; creative commercial office; and pedestrian activated ground floor retail. Side view of the primary entrance and its parabolic pylons. Monica College, the proposal to incorporate a soccer field within the acreage, to be shared with Samo High, is now obsolete. The space that this use would have occupied within the District, has therefore been reconsidered by the panel. The Civic Auditorium has survived as an island in a sea of surface parking for long enough, but for the Civic to succeed in the future, it must be embedded in a larger Creative District, flanked by compatible uses, and reconnected to the urban fabric of the city. In the future a surface parking lot will be considered an inappropriate use of a precious piece of land in this location. Citizens need welcoming, well-defined public spaces to stimulate face-to-face interaction, encourage civic participation, admire public art and gather for public events. Opportunities The panel suggests the following directions for the city to support the Civic Auditorium: 1) Support the renovation & modernization of the Civic Auditorium with significant financial support through development opportunities of the surrounding city controlled surface parking lots; 2) Support and encourage the establishment of the Civic Center Creative District through complimentary development uses to expand the arts impact; and 3) Bring a renewed vibrancy and activity to the Civic Center Creative District and establish the connections and linkages to the surrounding area. Financing Options Redevelopment funding is no longer a resource for the city and the ability to raise new annual revenues from the general fund to make debt service payments is curtailed. In order to determine what the city can afford in the post-redevelopment era, financing options must be explored prior to making a decision to continue planning such a project. The panel believes that a balanced multi-sourced approach should be utilized and suggests the city explore the following options: leverage the value of parking lots with development, naming rights, voter authorization for general obligation bond; public/ private opportunities; and other financing vehicles such as EB-5 financing, New Markets Tax Credit financing and Historical Tax Credits. Panel Recommendation The challenge for the city is to redefine their vision for the Civic Auditorium and make it a reality. In the future, the panel imagines the Civic Auditorium and any development within the Santa Monica Civic Center Specific Plan to be a place of civic pride, serving citizens ranging in age from early chilhood to mature adulthood, integrated seamlessly into its context, and providing a range of activities drawing community members to diverse facilities and lively public space. The city should save the Civic Auditorium due to its cultural history, landmark status and the unusually high level of civic pride associated with the structure, even though it is not cost effective to restore the building. In order to do so, the path forward will require an affirmative approach since achieving the vision will require a disciplined, sustained commitment from the City of Santa Monica. 4 Santa Monica Civic Auditorium Technical Assistance Panel

Santa Monica Civic Auditorium Technical Assistance Panel Report Background The Santa Monica Civic Auditorium was built in 1958, designed by Welton Becket, as a public gathering place dedicated to cultural, educational and community events. Welton Becket studied at the famed Ecole des Beaux Arts, and is known for his mid-twentieth century modern designs. Beckett designed cultural Los Angeles icons, such as the Capital Records building, the old Music Center, the Beverly Hilton Hotel, and the Santa Monica Civic Auditorium. His master planning work includes the Century City, and UCLA, where he was master planner from 1948 until 1968. The Civic Auditorium incorporates a modern style, and aside from minor upgrades, the building is largely in its original condition. The facility has a capacity for up to 3,000 seated and 3,500 standing. Designed as a multi-purpose facility, which can be used for both flat-floor events and sloped-floor events, the facility comprises 27,000 square feet on the main floor. The auditorium contains a unique mechanical riser system that allows the main floor to convert from flat exhibit space to sloped performance space for concerts. A forerunner of adaptable space, the riser system allowed the main floor to accommodate a variety of stage performances, theater, concerts, and events. The auditorium includes a stage area and proscenium opening, stage rigging, and rear access to the facility for event loading. The East/West wing provides an additional 4,200 square feet of exhibit/meeting space. More than 1,000 surface parking spaces are available and tents can be used over the main entrance to provide an additional 17,000 square feet of covered space for larger events. In 2002, the city designated the auditorium building a historic landmark, citing its mid-century international style and riser design as historic features. For many years, the Civic Auditorium was one of the largest concert venues in Southern California. International artists, such as the Doors, the Rolling Stones, the Beach Boys, Bob Hope, and Bob Dylan performed in the main auditorium. The Civic Auditorium has hosted significant entertainment and cultural events; from the Oscars, to conventions with a regional draw. From 1961 to 1968, the Academy of Motion Picture Arts and Sciences held its annual Oscar awards ceremony there. It was designed to be flexible enough to allow for local community events or large concert performances. But, with the lack of capital investment in the facility, and years of deferred maintenance, most concerts and events located to new facilities constructed in the Los Angeles area. The majority of event bookings at the Civic Auditorium now consist of consumer event shows, and while it remains home to the Santa Monica Symphony Orchestra, the building systems have deteriorated and reached the end of their useful life. Jessica Cusick and Lisa Luboff join the panel on a tour of the Civic. 5

TOP: John S. Fisher, Mike Ross, Jessica Cusick, John Alschuler and Lisa Luboff touring the facility. BOTTOM: Tom Wulf, John Sergio Fisher, and Mike Ross interview Nederlander representatives. Santa Monica Civic Center Specific Plan The Santa Monica Civic Center Specific Plan covers a portion of the city that provides critical opportunity for redevelopment and rejuvenation. Within the specific plan are a number of significant land uses, such as the downtown, the main street commercial area, and the civic center. The Civic Auditorium is located in the civic center of the city, which includes the City Hall, the city s Public Safety Facility and the County Courthouse. Since the plan was adopted in 1993, several public facilities were improved or constructed in the area, as well as the completion of the RAND headquarters on a 3.7- acre site directly opposite of the Civic Auditorium. During the planning process, a public open space and public/community facilities program was approved, which included residential and mixed-use housing with the area. The plan sought to create an appropriate balance between open space and housing, accommodate future light rail service, and provide for the future of the Civic Auditorium. A key objective of the plan was to maintain the Civic Auditorium as a prominent landmark and program it with activities for the community. Current development plans within the area also allow for the construction of an Early Childhood Education Center along the northern edge of the Special Use District, expected to add a layer of activity to the area. (The Civic Auditorium and Early Childhood Education Center reside within the Auditorium Special Use District, one of five special use districts within the Santa Monica Civic Center Specific Plan). 6 Santa Monica Civic Auditorium Technical Assistance Panel

Technical Assistance Panel Assignment and Process In 2012, the City of Santa Monica made a difficult decision. The city had expended significant time and resources to address the future of the Civic Auditorium and the potential opportunity for redevelopment within the Santa Monica Civic Center Specific Plan area. Over the course of seven years, the city examined a number of different ways to revitalize the Civic. Several public facilities within the area were upgraded and the city had plans and funds to renovate the Civic Auditorium. But, the loss of Redevelopment Agencies in the State of California, and the access to redevelopment funds, the city terminated the $50 million renovation plans for the Civic Auditorium. The cty indicated they are unable to continue to subsidize and operate the Civic Auditorium, for a variety of reasons, including: the building, along with its systems and performance technology are antiquated; it presents seismic safety concerns; the current business model, which relies primarily on consumer shows, is no longer economically viable; the Civic had lost its competitive position in the region for attracting concerts, performances and larger events, apart from community-subsidized activities, and it operates with an annual deficit of up to $2 million. The City of Santa Monica, directed by the Community & Cultural Service Department s Cultural Affairs Division ( Cultural Affairs Division ), requested that the Urban Land Institute Los Angeles to host a ULI Technical Assistance Panel to provide a roadmap to move forward. Now that redevelopment funding is no longer a resource, the city commissioned the TAP so as to address several major questions and provide recommendations on guiding future opportunities for the Civic Auditorium and the potential for future redevelopment within the Santa Monica Civic Center Specific Plan. Technical Assistance Panel Questions 1. EXAMINE THE STRATEGIES to maximize the full potential of the Civic Auditorium as a standalone, self-supporting venue bringing cultural events to Santa Monica. Consider the logical partners in this endeavor, the use of the building and the full site, including the parking lot. Specifically: Consider the financing options available to create a viable venue which must include a major retrofit and renovation. Once renovated can a sufficient number of events and activities be attracted to the Civic Auditorium considering regional competition and the venue s place in the community? If so, what types of events and activities might these be? What are reasonable expectations for operating profitably with sufficient income generation to pay any debt service resulting from the renovation? 2. WHAT KIND OF OPERATOR, and operation, would appear to create the best chance of success in the long term for this cultural icon? What size theatre might be most efficient and effective? The current Specific Plan allows for a 20,000 SF addition and calls for sports fields and open space adjacent to the Civic. Is this compatible with the strategy to renovate the facility and make it self-sufficient or should the plan be revised? Are there other actions the city can take to benefit the future viability of the Civic Auditorium? Tom Wulf and Dan Massiello meet with Francie Stefan. 7

The panel reviews their findings. 3. DESCRIBE THE ISSUES related to the redevelopment of this site, and the potential opportunities to overcome them. Is there a minimum area of the parking lot land required to be redeveloped in order to provide a feasible funding option? What might be the best types of development at this site? Is an integrated development approach preferable or should it be more segregated with separate uses and a project specific approach? What is the role of public parking in relation to any potential future pro-forma for the facility and the site? Panel of Experts The District Council assists the sponsor in refining the scope of work and convenes a panel to address those specific issues. Each panel follows a proven process that begins with a conversation between ULI representatives and the potential sponsor to frame the assignment. Each panel is comprised of highly qualified professionals who volunteer their time to ULI. They are chosen for their knowledge relative to the scope of the topic and screened to ensure their objectivity. Members of a TAP cannot be involved in matters pending before or be working for the sponsor of a TAP, and cannot solicit work from the sponsor during the panel s assignment period. ULI panel teams are interdisciplinary and typically include several developers, a planner, a market analyst, a finance expert, and others with the niche expertise needed to address a given project. ULI teams are structured to provide a holistic look at development problems. Each panel is chaired by a respected ULI member with previous panel experience. Process The agenda for the two day TAP process was intensive, and included interviews with a diverse group of stakeholders, a site tour, a working session and an evening spent discussing findings and formulating recommendations. Sponsor entities are responsible for significant preparation before the panel s visit, including providing extensive briefing material to each member prior to the panel s convening. During the day of the TAP, members tour the site, hear from public and private stakeholders, and then deliberate on the assigned issues. Panel members approach the assignment from many perspectives, such as market potential, land use and design, financing and development strategies, and organizing and implementation. Because of the in-depth preparation prior to the day of the TAP, panel members are able to assess a sponsor s issues and to provide recommendations in a compressed amount of time. In fulfillment of the mission of the Urban Land Institute, this report is intended to provide objective advice that will further ULI s mission to share best practices and provide educational services in local land use planning and real estate development. 8 Santa Monica Civic Auditorium Technical Assistance Panel

Panel Observations and Recommendations During the two day TAP, panelists began with a list of findings to help set the focus for the recommendations. Panelists discussed the various observations gathered during the review of the briefing materials, as well as the issues and ideas that were raised during the various interviews of the stakeholders. Panel overall recommendations included programming and management, recommendations for the theater, the creation of a civic center cultural district, development opportunities, and a list of financial options. Observations The Civic Auditorium has been the cultural heart of the City of Santa Monica. It is a gathering place for the community, one in which residents have special memories of community events that have been held in the building. The deep pride in the Auditorium indicates that it is a lifestyle anchor with tremendous value to the residents of the city. The city should save the Civic due to its cultural history, landmark status and the unusually high level of civic pride associated with the structure, even though it is not cost-effective to restore the building when compared to the cost of new construction. With the city s special emphasis on the arts and a high demand for the arts on the Westside, the Civic should be saved and can fill an important niche. The Civic Auditorium exists in a highly competitive, fluid market environment, which will require a distinct market position in order to succeed. The Civic Auditorium building is over fifty years old, with landmark status, is functionally obsolete, has deferred maintenance issues, and is disconnected from the urban fabric. The operating model has imbedded costs that the market cannot and will not carry. Preserving the Civic Auditorium as an arts center requires substantial subsidies, and will require annual operating support. There is no economic model for a self-sustaining cultural center. The arts are an important civic function, but are not typically economically viable on their own. In this case, the panel believes a successful future for the Civic will require major financial commitments and multiple sources of funding. In a very difficult economy, the City of Santa Monica is fortunate to have choices, but none of these choices are easy or obvious. The future of the Civic will require viewing the ten acre site as a single, holistic place. Any plan for renovation should be oriented towards the community, but based in reality. It should be focused on implementation, and include a development and operating plan that provides for long-term revenue solutions that support civic and performing arts programming. Despite clear consensus that the Civic Auditorium should be saved, there is a distinct lack of clarity with stakeholders as to function, economics and management. Panel members meet with the Santa Monica Convention and Visitors Bureau 9

Programming and Management Competing venues chart. Source: Pasadena Convention Center. The current operating model is the Civic Auditorium is managed by a municipal department. Very few cities cost effectively manage convention centers, theaters, stadiums or other large facilities. The public assembly facility business is competitive, with the Los Angeles area containing a variety of venues that serve the entertainment market. From the 2,100 seat Ahmanson Theater in downtown, to the 7,100 seat Nokia Theater, Los Angeles is home to more than fifteen venues that compete with the Civic, none of which are run by a city department. The Civic Auditorium cannot compete in terms of the facility, its acoustics and ambience, and the cost of services. Panelists consider it highly unlikely that the Civic Auditorium can be financially successful if its manager is constrained by city policies and procedures that make it difficult, if not impossible, to conduct business in a competitive, business-like manner. City leaders must free the facility from constraints that inhibit sound and reasonable business practices. Currently, there is a large city subsidy, which cannot continue in the current economic environment. The Civic Auditorium Venue Location # Seats Stage Comments Ahmanson Theater Downtown 2,100 Union Premier location. High profile/reputation Cerritos Center Cerritos 1,800 Non-Union Self-presents, controls product through non-compete Dorothy Chandler Auditorium Downtown 3,100 Union Premier location. High profile/reputation Greek Theater Griffith Park 6,100 Union Location, Accommodates larger shows, Traditional reputation Hollywood Palladium Hollywood 4,000 Open Floor Union Location, Night club setting, Livenation Nokia Theater Downtown 7,100 Union Location, Accommodates larger shows, Competes for TV shows Orpheum Theater Downtown 2,100 Non-Union Location, Co-promotion, higher profitability for marginal events Pantages Theater Hollywood 2,700 Union Owned and promoted by Nederlander Pasadena Civic Auditorium Pasadena 3,000 Union Convenient to valleys, L.A. Perceived distant from west-side Royce Hall Westwood 1,800 Non-Union Location, Higher profitability for marginal events Santa Monica Civic Aud. West-side 3,000 Union Premier location. Not true performing arts theater Segerstrom Hall Orange County 2,900 Union Orange County, Regional competition for 2nd shows in market Shrine Auditorium Downtown 6,300 Union Location, Accommodates larger shows, Competes for TV shows Terrace Theater Long Beach 3,100 Non-Union Convenient to South L.A., North Orange Co. The Grove Anaheim 1,700 Union Orange County, Nederlander promoted, 2nd shows in market Thousand Oaks Civic Theater Thousand Oaks 1,800 Non-Union Niche location, Higher profitability for marginal events Universal Amphitheater Hollywood 6,000 Union Location, Accommodates larger shows, Competes for TV shows provides free services to city departments and civic events. The panel suggests the Civic Auditorium needs to at least provide services at cost recovery. There should be no free services to the city or civic organizations. In the City of Pasadena, which is the same size, same demographic, and contains the Pasadena Civic Auditorium, the city pays to use the facility at a third of the normal rent. The city pays for every service, from internet access, to union stage hands, to audio services. In the City of Santa Monica, about 40% of the Civic Auditorium s usage is city departments. A lot of Auditorium use is not paid for and has been covered by the city subsidy. Services have to be priced within the industry norm. A snapshot of the Civic s financials indicate the cost of services are too high. The facility has a high operating cost and aging systems, completely out of alignment with what is considered feasible within the market. The building needs to be managed to industry standards. The City of Santa Monica must consider the following questions and define their own financial expectations of the Civic Auditorium: Is the mission of the Civic to make an operating profit profit being defined as a surplus of operating revenue over operating expenses? What level of profit is desired? Is the mission s objective only to generate income sufficient to breakeven from operations or should the profit be large enough to also cover debt service? Are operating losses acceptable? If they are, to what extent will the city fund the facility and programs? How will any shortfall be funded? Successful facility management demands extensive knowledge, expertise and creativity. A modern, well-managed facility can capture additional events. Concerts are attractive, Wiltern Theater Downtown 2,300 Union Location, owned and promoted by Livenation 10 Santa Monica Civic Auditorium Technical Assistance Panel

but in revenue terms, they are only one night. Management should seek to capture concerts, Broadway shows, family shows, filming, award shows, local events, graduations, and local performances. Additional event opportunities for revenue are tradeshows, conventions, consumer shows, meetings, outdoor parking lot events, and banquets and receptions. Rarely does a public assembly facility operate for a single purpose or event type. Ancillary revenue can be captured by internet connectivity charges, electric and equipment rentals, food and beverage concessions, ticket service charges (renovation fee) and retail space. All are an important part of the balance of activities, as well as the opportunities to drive revenue to offset any city subsidies. Like Santa Monica, most local government agencies finance, construct and manage the majority of public assembly facilities and thus this form of ownership is by far the most common, however often not the most effective and cost efficient model. The Santa Monica Civic Auditorium has an unusually high $2 million annual operating loss. At this point, the city believes this level of subsidy is unacceptable and will not continue in the future. There is no reason a public assembly facility cannot be successfully operated by a public body if: There are clearly defined goals. The approach is business-like, bottom-line oriented. The leadership knows the need for an entrepreneurial, marketing-oriented approach. The facility and operation are relatively non-political and freed of factors that cause instability, loss of confidence, and lack of competitiveness. In effect, the facility s operation is treated as a public enterprise or as if it were a private organization and as free as possible from bureaucratic restraints. There are four basic forms of governance of public assembly facilities: Elected public body Santa Monica Model (city council) While the reporting lines may be through an appointed official, (e.g., city manager, department head) it is the city council, etc. that makes the final decisions Elected public body with an independent board (e.g., recreation commission, facilities district, etc.). The board would likely be appointed by the public body, receive its authority from the public body and have some reporting responsibilities (and perhaps some approvals such as budget) to that body. Public non-profit or not-for-profit corporation Pasadena Model (public authority). (Pasadena Model) This arrangement has more independent authority yet would have to have at an operating agreement with the city. Private corporation limited liability company or partnership. Consideration should be given to the Public Non-profit Management model, to be explored for the operation and management of the Santa Monica Civic Auditorium. This model will allow the city to maintain budget authority and to elect the governing board. The governing board oversees the management and sets policy. The manager implements the policy. This governing format is valuable in that it enables the facility management to operate with greater flexibility and effectiveness, especially in the areas of personnel management, payroll, purchasing, contract approval, sales and marketing, event booking, scheduling, event management, parking, ticketing, advertising, concessions and catering, facility maintenance, and generally being able to negotiate competitive deals. The Facility Manager is in charge of the day-to-day operation, not the governing board. 11

Set the Dream The Civic staged for an exhibit event. The main floor includes a unique hydraulic tilting platform to allow for flexibility in uses. The panel recommendation is for the city to set the dream to renovate the theatre as a cultural icon for posterity set in the context of an engaging mixed use urban environment. The City of Santa Monica can establish a cultural center performing arts, visual arts, and more importantly, a special place for the Westside. The city can demonstrate it is a leading place for culture, for all the arts, and qualitatively compete with downtown venues so that the Westside population does not need to travel downtown to enjoy the best entertainment and special events. The city holds perhaps the largest concentration of creative professionals in the U.S. More than 43% of Santa Monica adults make all, or a portion of their living in arts-related fields. This factor points to a major opportunity for a type of development that taps into the desire for something beyond just another office building, residential tract, or shopping experience; a new destination that provides a real sense of ownership for the community. In the Creative Capital report that details a plan for the development of the city s arts and culture vision, the community envisions the arts and culture as an integral component of civic life, incorporating into the values, policies, and daily activities of the city. Residents view culture as an important component of what makes the city exceptional, desirable and economically competitive. Part of the plan involves the retention, development, and reuse of cultural facilities that fit into the community s identity. The panel considered the Civic Auditorium as one of those facilities that would contribute to the cultural participation in the city. In order to do so, the Auditorium needs to be a state-of-the art facility that is flexible enough to be an ideal venue for drama, musicals, ballet, popular concerts, choral, classical concerts, film, and both raked-seating and flat-floor special events that include exhibits. Each of the above uses has an ideal capacity that should be considered and accommodated, in order to provide the greatest amount of capacity to the city and to groups seeking to use the facility. The following are needs and possibilities for setting the dream: GREATLY IMPROVE THE ACOUSTICS. This can be done by removing the ceiling for a greater reverberation time coupled with adjustable absorption panels and draperies for variable acoustics ranging in reverberation times under one second for film to one second for reinforced sound to 2 seconds for classical orchestra or adjustable acoustics can be achieved electronically. GREATLY IMPROVE THE SEATS. Instead of plastic removable seating, the city should consider installing retractable permanent upholstered performing arts center seats. With the push of a button, seats can disappear when a flat floor is needed. Easily retractable seating equates to cost savings in labor. There currently is one company that can provide telescoping seating with curved rows which provide better sightlines and heightens audience self-awareness. A maximum of 2,000 seats is an ideal number for dramas, musicals, ballet and classical orchestra. The request for 3,000 seats for special filming premiers and popular concerts 12 Santa Monica Civic Auditorium Technical Assistance Panel

has been expressed. With the removal of the existing seating, there is enough height to build a balcony with 1,000 fixed performing arts seats. Two-thousand telescoping seats can be installed on the floor, designed to the height of the new balcony, and closed off to accommodate a 2,000 seat capacity event. A scrim roll drop at the balcony edge could visually separate and allow for the space closure, while still maintaining the acoustical volume. GREATLY IMPROVE THE TECHNOLOGY. Theatre system technology improvements needs to be installed in order to renovate the Civic Auditorium to astate-of-the-art facility. Improvements should include motorized rigging and tension grids for flexible front-of-house theatrical lighting positions, the use of movie lights and LED fixtures, and modernized amenities. Concessions and restrooms need to be expanded and improved. PROVIDE ADDITIONAL FLOOR SPACE. The retracted telescoping seating would yield 20,000 SF of flat floor. The motorized sloping floor was an innovation in its time but not as efficient today. It would be historically preserved. A flat area of 50,000 SF has been cited for exhibits and other special events. The stage area plus an addition from the stage all the way to Pico Blvd. could approach the needed area and present an iconic front in back. Other additions could include one or two small black box theatres for small performances and so that the cultural center can be continually active. All recommendations should include a series of design studies with projected costs and operating proformas. Illustrative figure of telescopic, retractable, and upholstered seating 13

Moving Beyond the Civic: The Civic Center Creative District Knitting the urban fabric. The rejuvenated facility should anchor a creative cultural district. The Civic Center Specific Plan, adopted by the City of Santa Monica in 2005, has proven to be a planning vehicle that is adaptable to the changing market conditions and opportunities facing the city. In 2013, given the new reality facing the city, that the funding previously available to renovate the Civic Auditorium is no longer available, new solutions and opportunities must be sought. The entire ten acres that currently encompass the Auditorium Special Use District within the Specific Plan must now be replanned and repurposed. While the Early Childhood Center currently proposed in the District is still a viable use, and planning for it is ongoing with Santa Monica College, the proposal to incorporate a soccer field within the acreage, to be shared with Samo High is now obsolete. The space that this use would have occupied within the District, has therefore been reconsidered by the panel. The Civic Auditorium has survived as an island in a sea of surface parking for long enough, but for the Civic to succeed in the future, it must be embedded in a larger Creative District, flanked by compatible uses, and reconnected to the urban fabric of the city. In the future a surface parking lot will be considered an inappropriate use of a precious piece of land in this location. The District must reflect four essential characteristics, it must be: CIVIC The uses must be compatible with and supportive of the civic focus of the Civic Center. CULTURAL The hub of a diverse and dynamic creative precinct that grows and expands events and offerings. The Civic Center, and the Auditorium Special Use District within in it, must support a broad range of performing arts, film exhibition, community activities, and special events. CREATIVE The city is becoming the home of the creative class, and must showcase arts and activities that represent the dynamism of the population of the city, as well as the entire westside of Los Angeles. Uses and programming should build upon the changing and continued growth of creative industries (in terms of digital and other technology and media) and their populations. ACTIVATED A successful site, in the remarkable coastal setting that the Civic Center enjoys, must be a place in which life, use and programming occurs both indoors and outdoors. It must also connect to the surrounding urban areas. Open Space The on site open space within the District should be complementary to Tongva Park, but serve different group sizes and accommodate different types of cultural and arts oriented events. In short, open space within the District should be accessible, flexible, and programmed. Examples of open spaces that may serve as models for this District s 14 Santa Monica Civic Auditorium Technical Assistance Panel

space are the canted lawn atop the Hypar Pavilion at Lincoln Center, the well established and beloved lawn at Bryant Park in New York, Federation Square in Melborne, and the plaza in front of the New World Symphony Building in Miami Beach. The specific development opportunities that the panel identified for the land within the District, are described in the Opportunities section of this report starting on page 16. Mobility In addition to providing facilities and amenities that complement the Civic, it is crucial that the District is knit together, and into the urban fabric that surrounds it, by connective tissue that is multimodal, serving not only drivers, but also transit riders coming from the future Metro Expo Line station at 4th and Colorado, or from Big Blue Bus stops, or others on foot, as well as those on private, or in the near future, city bike share bicycles. Specific physical connections are described below and shown in the figure on page 14. These elements should be considered in the replanning of the District, and either reflect guidance already contained in the Specific Plan itself, or introduce ideas that have already been adopted in the city s Bike Action Plan of 2011. 3rd Street should be reintroduced through the site from the south, and connected to Main Street, at least as a path for cycists. Civic Center Drive should be comfortable for all modes of travel, as it enters the site and travels east west. Multimodal connections to the site should be enhanced from the east and west via the Michigan Ave. Neighborhood Greenway improvements currently being planned. Olympic will be a central spine through the site itself, connected through from 4th Street to Ocean Boulevard, through the developing Village, with multimodal capability to serve cyclists as well as pedestrians and drivers. The western connection will facilitate flow ffrom the Pier, through the Civic Center to the Civic. One could imagine, for example, Santa Monica Glow festival art exhibits extending from the beach to the Civic Center Creative District via this path. Main Street s organization should be enhanced and clarified with the addition of colored buffered bike lanes north and south, crossing points for pedestrians should also be clearly marked. Though the street has a comfortably narrow section, the space within it for drivers, pedestrians and cyclists is not clearly differentiated. Streetscape improvements to this street, together with its realignment, as proposed in the Colorado Esplanade project, will facilitate the connection to downtown Santa Monica and to the Metro Expo Line. The Colorado Esplanade project also proposes improvements to the northern sidewalk of 4th Street, which will facilitate pedestrian connectivity to the Civic Center. The edges of the Creative District should also be re-imagined as new development is planned. Both the Pico Blvd. and 4th Street edges of the site are presently unactivated by at grade uses, and edged with surface parking. In the case of 4th street, at least south of Civic Center Drive, the sidewalk zone is isolated from the site by hedges, and devoid of the amenities which increase pedestrian comfort. On Pico Boulevard, the street edge is backed by either surface parking behind hedged shrubs, or back of house elements of the Santa Monica Civic, including its loading dock. However, at least in the case of the Pico Blvd. edge, an unutilized turf setback area is of a significant depth and could be redesigned to work with the sidewalk zone in order to provide a widened, shaded, pleasant walking environment. In the future, we imagine the The Civic Center Creative District to be a place of civic pride, serving citizens ranging in age from early chilhood to mature adulthood, integrated seamlessly into its context, and providing a range of activities drawing community members to diverse facilities and lively public space. 15

Opportunities Parking at the Civic. Opportunities What does it take to create this cultural and creative district? The panel suggested the setting of a few goals to provide the foundation for a community direction. GOAL 1: Bring a renewed vibrancy and activity to the Civic Center Creative District; GOAL 2: Support the renovation & modernization of the Civic Auditorium with significant financial support through development opportunities of the surrounding city controlled surface parking lots; GOAL 3: Support and encourage the establishment of the Civic Center Creative District through complementary development uses to expand the arts impact; GOAL 4: Establish the connections and linkages to the surrounding area. The city is quite fortunate to share a location and environment which is in high demand for a variety of potential development uses which could all be successful and achieve the established goals. Many cities and agencies are not so fortunate with land for development opportunities. What this provides is a clean slate of many viable development scenarios for the approximately five to six acre development property. The panel recommends a healthy mix of uses to generate activity in the Civic Center Creative District while programming a revenue stream to support any renovation and development. Examples of potential complementary and viable uses are the following (note: the sites available will likely not support all of these uses simultaneously at this scale, however a mix of these is recommended to accomplish the outlined goals): BOUTIQUE HOTEL AND CONFERENCE CENTER 200-400 keys; 20,000-40,000 SF conference facility. The addition of a full-service, low-rise hotel and conference center adjacent to the Civic Auditorium can be beneficial in achieving multiple goals for the district. First is the synergy with the Civic Auditorium for events, exhibits, conferences and even food service. The addition of a directly adjacent hotel and expanded conference space can further enhance the viability of the Civic Auditorium itself and attract additional meeting and conference business to the city. The food and beverage services of the hotel may also have the ability to support the Civic Auditorium needs. RESIDENTIAL APARTMENTS/MULTI-FAMILY 400-600 residential units & amenities. The addition of residents to the Civic Center Creative District can bring a vibrancy and life to the district; especially in off-hours, evenings and weekends where the current Civic area is predominately vacated. The demand for additional housing units continues to outstrip supply in the Santa Monica market and is expected to continue to do so for the near future. Although additional residents and units typically translate to increased traffic concerns, the panel recommends density precisely at these types of locations that have significant connectivity with the city and region as a whole. 16 Santa Monica Civic Auditorium Technical Assistance Panel

ARTIST IN RESIDENCE LIVE/WORK LOFTS OR ARTIST HOUSING 50-100 loft units (WAV Ventura example; http:// www.wavartists.com/). The inclusion of an artist in residence portion of development is essential to the creation and success of the Civic Center Creative District. Although this use will most certainly require subsidy, it is important to the creation of the district and vibrancy of the space. A residence for working artists, whether they be visual, performance, digital or new media will add both ongoing activity, but more importantly, creativity to the ongoing programming of the district and generate opportunities for additional events. COMMERCIAL OFFICE CREATIVE, TECHNOLOGY, DIGITAL AND MEDIA FOCUS 100,000-150,000 SF; Creative, low-rise general office uses. Building the vision of the Civic Center Creative District also includes the growth and expansion of innovative business and the synergy that brings within the district. The site is highly desirable from an office standpoint and in particular from the Creative Class within the city. Including these types of uses, and more importantly, people within the district will further enhance the success and vibrant nature of the site. PEDESTRIAN ACTIVATED GROUND FLOOR RETAIL 30,000-50,000 SF Stitching the uses together, surrounding the created open space, the Civic Auditorium and linking the district the fabric of the city, the ground floor retail amenities are an essential piece of the development. The Civic Center Creative District will benefit from an authentic, local, and unique mix of retail and food service amenities that continue to activate the space during an 18-hour day. It is within this space and adjacent to these retail establishments that the outdoor programming will bring the vibrancy and activity to the area. LAND REDEVELOPMENT Potential Revenues to support Civic Auditorium The current modernization and renovation program for the Civic Auditorium was reported to require approximately $4-6 Million per year in annual revenue to support the capital costs. A balanced mix of development can be programmed to achieve this goal. In concept, below, a mixture of the following program elements on the approximately 5.1 acre site achieve this goal: BOUTIQUE HOTEL & CONFERENCE CENTER: o 1 acre land area o 150,000 GSF +/- o 300 rooms +/- o $275 ADR, 75% occupancy, 14% TOT = $3.1 Million/year o Ground lease of land: approx. $.5 Million/year RESIDENTIAL APARTMENTS/MULTI-FAMILY: o 3 acre land area; 3.5 FAR; 460,000 GSF +/- o 400-600 residential units o Land value approx. $48 Million o Ground lease of land: approx. $2.8 Million/year COMMERCIAL OFFICE CREATIVE CLASS o 1.5-2 acre land area; 3.5 FAR o 250,000-300,000 GSF +/- o Land value approx. $15 Million o Ground lease of land: approx. $1.0 Million/year ARTIST IN RESIDENCE - POTENTIAL: o 1 acre land area; 2.0 FAR; 87,000 GSF +/- o 50-75 live/work affordable units o Likely requires subsidy/potential for Affordable Housing fund use 17

Financing Options and Implementation John Alschuler outlines the panel s recommendations for the final presentation. One fundamental question must be answered before the city can move forward on planning the rehabilitation and renovation of the Civic Auditorium: Can the city pay for it? Other sections of this report address the areas in which the panel discussed room for improvement in the operations of the Auditorium and other economic considerations, but we do not expect that the Auditorium s operations would ever meaningfully contribute to paying the debt service payments required to finance the costs of such major capital improvements. Now that redevelopment funding is no longer a resource for the city, the ability to raise new annual revenues to make debt service payments is severely curtailed. In order to determine what the city can afford in the post-redevelopment era, many financing alternatives must be explored prior to making a decision to continue planning such a project. The team assembled for the TAP considered many approaches to financing such a large project. Traditional vehicles such as general obligation bonds, city general fund financing (such as certificates of participation) or alternative pledges from within the operations of the Civic Auditorium Enterprise and/or other city Enterprises were all contemplated. Considering the fact that one of the stated goals is to have the facility be self-sustaining, i.e. elimination of general fund operating subsidies, the utilization of any city funds (outside of the Auditorium s operations) to support debt service were deemed not to be viable options. Furthermore, GO bonds are difficult to get approved in California due to the requirements of Proposition 13. Other financing vehicles that were looked at include EB-5 financing (a federal Visa/Immigration program encouraging job-creating foreign investment in the US), New Markets Tax Credit financing (another federal program offering tax credits in lieu of tax exempt interest), and historical tax credits (a similar program), but the reality is that while these programs offer attractive effective borrowing rates, they are in fact debt vehicles and the funding for their annual debt service ultimately must be generated by the Civic Auditorium itself or come from other city operations. What is needed is a new source of external funding that can be relied upon on an annual basis in order to repay any debt incurred to finance improvements. Possible external funding sources that could be available to the city may include the selling of naming rights for an annual fee or applying for grants or other philanthropic resources. While these and other alternatives should be explored, they are either insufficient in size to have a meaningful impact on the projected annual debt service requirements and/or it is simply too premature to ascertain the availability of any meaningful resources of this nature. In order to finance the rehabilitation and/or reconstruction of the Civic Auditorium, a more broad-based solution is required. The panel was unanimous in their assessment that in order to finance an investment of this magnitude, the city would need to tap into the value of its most readily available asset: the real estate on which the Auditorium sits. The parking lots surrounding the Auditorium are extremely valuable properties, 18 Santa Monica Civic Auditorium Technical Assistance Panel

and, if properly structured, the value contained therein can be unlocked, deployed to the city s benefit, and remain under the city s control as well. There are several methods that can be employed to monetize the value of the real estate assets surrounding the Civic Auditorium. As is the case with the entire project as a whole, several policy issues must be addressed and choices made that will affect the city and its residents far into the future. All approaches envision some sort of private development taking place next to the auditorium. This approach would ostensibly be a public/private partnership, whereby private capital will be deployed along with public funding. If the city chooses to leverage the value of this real estate asset in order to fund this project, the panel recommends, in general, that the city retain ownership of the property itself and devise a structure that would lease it to private entities to install a for-profit development. The types and amounts of revenues that could be generated by any such private development depend on the nature of that development. If some sort of hotel development is desired, new annual revenues realized by the city would likely be in the form of increases to site-specific transient occupancy, real estate and sales taxes, as well as ground rent generated by the footprint of the development project itself. If more of a residential development is desired, it seems likely that the major types of revenues produced would be ground rent and new real estate taxes generated by this currently tax-exempt property. There would also likely be site-specific increases to city sales tax receipts as well in a mixed-use scenario where retail and housing are installed within the new development. These new site-specific tax revenues generated by the new project could then be allocated by the city from within the general fund to the repayment of any debt service associated with the financing of the Civic Auditorium s capital improvements. When these revenues are combined with ground rent to be received by the leasing of said property, there will be a substantial amount of new annual revenues that can be deployed to support the large scale financing that would be required to pay the costs of the improvements to the Civic Auditorium. The current market value and best use of the parking lots, anticipated new revenues that could be generated by a private development and the market factors that need to be considered when determining what to develop and/or evaluating the likelihood of the success of any such endeavor, are all beyond the scope of this panel s assignment. However, very rough back of the envelope calculations made by the panel during the session, and based on the collective expertise and experience of the panel s members, estimated the potential for annual new revenues could be in the $4 million range or higher. At current interest rates, $4 million would pay the debt service to finance an approximately $50 million capital project. The panel considered these figures simply as food for thought as they are in no way intended to represent an actual projection or estimation of the city s ability to realize this level of new annual revenues. The panel does believe, however, that these high level, broad-based evaluations are conservative and could be higher if the proper mix of development opportunities can be realized. Moreover, the panel made sweeping assumptions and generalizations about the character and nature of what could be installed on the parking lot; ultimately, the choice of what to install, if anything, would be up to the city s policy-makers and could be something substantially different from what the panel contemplated for use in this very limited exercise. The Cultural District. 19

John Alschuler interviews Nina Fresco, Carol Lemlein and Frank Gruber from the Save the Civic community group. Moving beyond the Civic means that the city will be required to rethink the entire approach that was previously considered back in the era of redevelopment funding. Embarking down such a path of further study and exploration is expensive, in and of itself. The city must first determine if the ultimate goal of saving the Civic is even obtainable, before deciding how best to do so. The answer to the question should we save the Civic will not lie in a financial model because the panel believes it is not an economically sound decision. The answer lies within a cost/benefit analysis that must be applied to less scientific concepts, such as quality of life priorities regarding development and policy regarding how best to utilize city resources, such as real estate. Do the financial means to pay the costs of rehabilitating the Civic Auditorium even exist? The panelists believe that the answer is a qualified yes. Creating the vision and setting the direction The panel urges the city to consider the report suggestions, the thoughtful work of the city staff and the comments of its citizenry then move forward with an action plan. The Civic has closed while an important district of the city remains dominated by surface parking lots. Opportunities exist to reenvision the management of the Civic, its physical form, and its surrounding development context. While there is no easy course of action available, the city is fortunate to have the intellectual, cultural and financial assets that can address the apparent challenges. To that end, the panel urges that the city set clear direction in regard to: - The cultural, civic and artist function of the Civic Auditorium considering the aspirations of the community and the competitive market place. - The operating mode of the Civic Auditorium considering the need for management able to implement community s vision in the context of today s market and financial realities. - A financial plan for the renovation of the building. - A comprehensive development plan for the District, including the development of the parking lots. - A sustainable operating plan for operating financing. The panel recommends the City set the vision and craft a plan to resolve the above issues before any further engagement with the marketplace, i.e. to solicit operators of the facility, investors or development proposals. There are many ways to address these questions, the panel suggests consideration of the following two options. First, the City staff could lead this process drawing upon their considerable resources supplemented by constants with expertise in facility management, real estate, design, planning and cultural resources. Or, as the panel recommends, the City could create establish a new board appointed by and responsible to the City Council, a precursor to the entity that might eventually oversee and manage the new cultural district. The board could be led by a balanced group of citizens with experience in cultural programming, civic requirements, public/private development, and business management, again supported by appropriate third party advisory resources. In both instances, substantive community engagement would be solicited. Either path forward can be viable, though the panel expresses its recommendation for the near term creation of a new board. The process could take up to a year. Regardless, the panel urges the city and its elected leadership take this opportunity to make the required decisions to ensure the long term contribution of the Civic to the cultural and community life of Santa Monica. Once these issues are resolved, the city or the new governing board could choose experienced, creative executive leadership to implement the vision with the goal of opening the Civic within five to ten years. 20 Santa Monica Civic Auditorium Technical Assistance Panel

Conclusion Due to the loss of redevelopment funds, the city closed regular operations of the Civic Auditorium on June 30, 2013. The building is an important cultural resource and it is seen by the community as the cultural heart of the downtown civic area. The city should save the Civic Auditorium due to its cultural history, landmark status and the unusually high level of civic pride associated with the structure, even though it is not cost effective to restore the building in comparison to the costs of new construction. In order to do so, the path forward will require an affirmative approach since achieving the vision will require a disciplined, sustained commitment from the City of Santa Monica. At the heart of the recommendation is the need for the city to clearly lay out their vision for the future of the Civic Auditorium and the Civic Center Specific Plan. It is important that the city establish a program that is clearly defined and detailed along with a viable financing plan before issuing another Request for Proposal ( RFP ). For example, the local community may desire the renovation of the Civic Auditorium, but without a clear path forward that includes a viable, solid operating plan, the city will be responsible for the long term subsidy of the Civic Auditorium and it s programs. The panel believes the future of the Civic will require substantial subsidies and annual operating support. Any program for the Civic Center should include a long term vision, a defined path, short and long term revenue opportunities, and a cost-effective, business-like management structure. There is no economic model for a self-sustaining cultural center that does not rely on substantial annual private funding for either the building or its program components, or both. The panel suggested various development scenarios in the report that would provide the revenue foundation for the renovation and long term preservation of the Civic Auditorium through development opportunities at the site. For the Civic Auditorium to succeed in the future, it must be embedded in a larger Cultural Creative District, flanked by compatible uses and reconnected to the urban fabric of the city. Any program should be created so developers and the local community have clarity about the vision and support for the Civic Auditorium and the Civic Center Creative District. Communication should be integral to the public process and all costs, revenue, and subsidies should be transparent. Another part of the recommendation is for the city to create a public authority that runs the Civic Center program. This is the time for the city to take leadership and create a new public entity to implement its vision. This leadership would be a dedicated board of local leaders that mobilizes resources, builds community support, and worries about the future of this place. The Civic Center is not a building, it should be a place. Once you build it, you have to effectively run it. The board should craft an imaginative, long term, economically viable operating and management plan. The panel recommends the city design and develop a Cultural Creative District, that includes multiple venues and public open space, all centered around the renovation of the Civic Auditorium. The public board would execute the vision, oversee all renovation and development, and sustain the C ivic message over time. It is clear to the panelists that the City of Santa Monica has a sense of community spirit and a passion for the arts. In the future, the panel imagines the Civic Center Cultural Creative District to be a place of civic pride that provides a range of activities drawing community members to diverse arts and cultural facilities and lively public spaces. 21

Acknowledgements Michael Ross, Dan Massiello and John Alschuler meet with stakeholders discussing the Civic. The Technical Assistance Panel is thankful for the participation and commitment of city staff, stakeholders and community members. The following is a list of individuals who were interviewed or provided valuable information and perspective during the TAP process. City of Santa Monica Community and Cultural Services Department Karen Ginsberg, Director Jessica Cusick, Cultural Affairs Manager Lisa Luboff Varon, Senior Administrative Analyst City Manager s Office Rod Gould, City Manager Elaine Polachek, Assistant City Manager Housing and Economic Development Andy Agle, Director Jason Harris, Manager, Economic Development Jennifer Taylor, Administrator, Economic Development Nederlander J. Alex Hodges, Chief Operating Officer David K. Green, Senior Vice President / Chief Financial Officer Planning and Community Development Francie Stefan, Strategic and Transportation Planning Manager Sarah Lejeune, Principal Planner Save the Civic community group Nina Fresco Frank Gruber Carol Lemlein Architecture Brenda Levin, FAIA, Consultant Miriam Mulder, City Architect Santa Monica Convention and Visitor s Bureau Misti Kerns, Executive Director Jeff Jarow - SMCVB Board of Director Chair, Par Commercial Brokerage Ellis O Connor - SMCVB Board of Directors Vice Chair, MSD Hospitality Owner Representative for The Fairmont Miramar Paul Leclerc - SM TMD Committee Members, Loews Hotel General Manager Jonathan Wolf of IFTA and AFM Entertainment/Event Executive Sepp Donahower 22 Santa Monica Civic Auditorium Technical Assistance Panel

Panel Members John H. Alschuler, Jr. Chairman, HR&A Advisors, Inc. Mr. John Alschuler s work focuses on development finance, the revitalization of urban communities, regional economic development, waterfront redevelopment and asset planning for institutions. John s core skills include structuring publicprivate partnerships, development finance, building parklands, and creating innovative development strategies. John s wide-ranging practice is national and international in scope ranging from New York to Cincinnati, San Antonio to London. His work focuses on large-scale urban transformations, as well as discreet real estate transactions. Since founding the New York office of HR&A in 1984, he has led to bold plans that have reshaped important waterfronts, downtown districts and neighborhoods. John held several positions in city governments and brings his experience in public budgeting and public finance to his practice. He served as the City Manager of Santa Monica, California, where he was responsible for the planning and development of the Third Street Promenade. Dan Massiello Senior Vice President-Public Finance, Kosmont Companies Mr. Dan Massiello brings over 20 years of professional experience in the Public Finance industry to Kosmont Companies. Mr. Massiello started his career with an east coast financial advisory firm, and has been an investment banker in CA for 13 years. Mr. Massiello has structured and brought to market over $4 billion of new money and refunding transactions to market for Cities, Redevelopment Agencies, School and Community College Districts and Special Districts. Successfully completed transactions include General Fund Financings (Certificates of Participation), Tax Increment, General Obligation, Installment Purchase, Lease Revenue, Revenue, Special Tax, and Sales Tax supported financings. A significant portion of these transactions involved unrated and challenging credits, which have garnered Mr. Massiello the ability to engineer wellstructured and marketable financing vehicles that consistently meet his clients financing goals and objectives. TAP Panelists (left to right): Dan Massiello, Michael Ross, John Alschuler, Melani Smith, John Fisher and Tom Wulf. 23