Development Concept 27 Community Involvement Plan 109 Arts Center Management Plan 111 Financial Analysis of Development Program 129 Required Disclosure Forms 137
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PROPOSAL FOR: BERGAMOT STATION ARTS CENTER SUBMITTED: MAY 1, 2013 TO: THE CITY OF SANTA MONICA ECONOMIC DEVELOPMENT DIVISION 1 2 3 TABLE OF CONTENTS COVER LETTER 7 DEVELOPER INFORMATION 11 DEVELOPMENT CONCEPT 27 COMMUNITY INVOLVEMENT PLAN 109 ARTS CENTER MANAGEMENT PLAN 111 FINANCIAL ANALYSIS OF DEVELOPMENT PROGRAM 129 REQUIRED DISCLOSURE FORMS 137 DEVELOPER’S FINANCIAL CAPACITY MATERIALS ARE SUBMITTED UNDER SEPARATE COVER. 4 5 May 1, 2013 Jennifer Taylor City of Santa Monica EDD 1901 Main Street, Suite E Santa Monica, CA 90405 RE: Bergamot Station Arts Center Development We are pleased to present our Response to the ‘Request for Proposal’ for the Bergamot Station Arts Center Mixed-Use Development Project. Our Development Team has envisioned a project that seeks to exceed the expectations of the Community, City Council and City Staff by responding directly to the site, engaging neighborhood connection, welcom- ing Expo transit riders, creating a new arts and cultural destination and promoting connection with other distinctive areas of Los Angeles. The project will contribute an economically sensitive development program that will enhance the City’s tax base and be attractive to the level of investment that we are prepared to obligate ourselves to make. Located at the 26th/Bergamot Station on the Exposition Line, we have conceived a project that will provide the commu- nity with: • A distinctive and sustainable arts and cultural center with a mix of tenants and users including a new home for the Santa Monica museum of Art; • A recognizable home for media, entertainment and technology companies; • A distinctive project design that will provide a place where people will be engaged through many open, courtyard spaces, public art components, and architectural surprises; • A project that will “Connect” its internal uses with the other distinctive areas along the Exposition Light Rail Line; • A sustainable economic plan and robust team to ensure project implementation; • A home to established and emerging artists; • A new, unique community Arts Center which will promote interaction between visitors, users and workers in the project; • A complement to the existing as-built environment and existing businesses; and • Financial subsidies to ensure an ongoing and sustainable arts and cultural center and unique programming. Our Development Team will take highly specialized approach to the future users and tenants of the property. Position- ing the property involves tapping into market insights, understanding a property’s true potential and creating spaces that connect with people on an emotional level – not just as a commodity. Over and above our submission, we respectfully believe that implementation and superior operation of all elements of the project will require a focused effort and ongoing mutual cooperation among the City, the Community and our Ownership. Over time, elements of mutual interest are likely to change, to be refocused and must be addressed in a mutually cooperative environment. We have endured to form our team emphasizing the need to display a history of cooperative relations with Cities and municipalities and have the long-term perspective to ensure that project will be sustainable. Immediate and economic returns are simply not attainable at or until the economic and non-economic elements of the project are carefully completed in full and professional operation. For example, simply providing adequate land area for the arts and cultural components is not, in our estimation, satisfactory to meet the desired goals of having a compelling Arts Center, nor do we view the arts and cultural components as independent entities. We view all the wonderful as- pects of the project as “added value” to the Bergamot Area and community and have proposed a design, program and project to ensure sustainability. We have worked diligently to design a process and financial mechanisms to ensure the arts are sustainable and will not rely on public subsidies. We wish to assist the arts and cultural components and wish to capitalize on them as a standard bearer for arts and culture in Santa Monica and throughout the region. Connection, engagement and the arts will permeate the entire project. 6 7 As the Bergamot Area evolves and 26th/ Bergamot Exposition Light Rail Station commences operations, we have ventured designed a project that will engage the many transit riders as a home to the arts and cultural of Santa Monica. We have engaged a Development Team and Ownership Group that is part of the Santa Monica Community and the Los Angeles Art Community to ensure a compelling and sustainable project. Our team members have the experience developing mixed-use projects, hotels, grand parks, parking facilities, mixed-use projects, retail and arts and cultural centers. We are pleased to submit the attached proposal and the accompanying attachments. The mix of proposed uses, including an adjacent parking garage (not directly addressed in this submission), require both a commitment to excellence and a commitment to long-term investment. We strongly believe that the project must be viable on a stand-alone basis and not be subject to or conditioned on other projects. We have endeavored to address and provide both of the aforementioned goals in our proposal to be considered and selected as the developer for the future Bergamot Station Arts Center. Hopefully we have fully complied with the requirements of the submis- sion. In the event there are any outstanding questions, our team is available to address them. The Development Team believes that our design, team and financial commitment to the arts should be strongly considered through you review process. Our contact information is on the following page; please contact us with any questions regarding the proposal. Regards, Jim Jacobsen Scott Ginsburg Lew Wolff 26Street TOD Partners LLC 26Street TOD Partners LLC 26Street TOD Partners LLC 1645 Euclid Street Santa Monica, CA 90404 [email protected] 310-395-5151 Glenn Lowenstein 8 9 DEVELOPER INFORMATION BASIC INFORMATION Official name, address, names, and titles of proposing principals: Developer/Sponsor The Lionstone Group 100 Waugh Drive Houston, Texas 77007 Glenn Lowenstein Founding Partner Developer/Development Manager 26Street TOD Partners LLC 1645 Euclid Street Santa Monica, CA 90404 Jim Jacobsen Scott Ginsburg Lew Wolff Partner Partner Partner Form of legal entity: Limited Liability Company, filed with the State of California, April 16, 2013 The development organization does not have any existing relationship with a parent corporation, subsidiaries, joint ventures, or other entities. 10 11 DEVELOPER INFORMATION ARTICLES OF INCORPORATION 12 13 DEVELOPER INFORMATION DEVELOPMENT TEAM LIONSTONE ATTANASIO ADVISORS JIM SCOTT LEW 26 STREET TOD PARTNERS ARCHITECT / DESIGN TEAM COMMUNITY OUTREACH RIOS CLEMENTI HALE STUDIOS GREER/DAILEY & KIM KARIE ARTS & CULTURE FOOD & BEVERAGE MARC PALLY & CAROL GOLDSTEIN CEDD MOSES HOTEL MANAGEMENT COMMERCIAL LEASING WOLFF URBAN INDUSTRY PARTNERS BUILDER W.E. O’NEIL 14 15 DEVELOPER/SPONSOR 100 Waugh Drive Houston, TX 77007 713-533-5860 / 7713-533-5897 [email protected] THE LIONSTONE GROUP Founded in 2001, Lionstone is a privately owned real estate investment firm that specializes in researching, conceptualizing and executing national investment strategies based upon proprietary research and ideas. Lionstone currently manages investment vehicles that own approximately $2.0 billion of real estate investments across the U.S. on behalf of large public and corporate pension Partnerships, university endowments, foundations and high net worth individuals and families. The three founding partners – Thomas Bacon, Daniel Dubrowski and Glenn Lowenstein – have worked together for over 20 years, including 10 years as senior officers with Hines Interests. The management team has investment experience on $3.5 billion of JV/Partnerships across 11 individual investment programs over this time period. The top 11 executives at Lionstone have an average tenure of 7+ years at a ten year old firm. The executive group has over 20 years of professional experience on average. Lionstone is an active player in the Santa Monica submarket with nearly 1 mm square feet of creative office / mixed-use space in downtown and media district of Santa Monica. Through its principal investment history, Lionstone has acted as a principal investor, developer and lender on a diverse variety of projects. Lionstone’s principals have had extensive development experience, completing 14 development projects equaling approximately 10M square feet including two recent ground-up apartment projects with approximately 450 units. Lionstone currently manages investment vehicles that own approximately 9.7M square feet across the country with a total value of approximately $2.0 billion on behalf of large public and corporate pension funds, partnerships, university endowments, foundations and high net worth individuals and families. Lionstone Total Experience: $6.7 BN across 11 funds and 19 projects • Investment Advisor: $3.5 BN, 11 funds • Master Developer: • Completed Developments: $2.4 BN, 9.7 MM SF, 14 developments • Vision and Entitlements: $822 MM, 4.4 MM SF, 5 projects Glenn Lowenstein, Partner/Founder. Glenn is a founding partner of The Lionstone Group. Glenn serves as an Investment Committee member, as Chief Investment Officer and as the partner responsible for research, and capital markets strategy. Prior to forming Lionstone, Glenn was a senior officer