Santa Monica City Council
July 14, 2022

• The Project will include approximately 36,110 square feet of leased retail and restaurant space on the ground floor;
• The Project will open in March of 2025; and,
• The Project will also include additional facilities and services, including an observation deck, 285 subterranean parking spaces, 231 long-term bicycle parking/storage spaces, and other minor departments to support the proposed facilities.

The scope of our work included an analysis of the following:

Market Analysis of the Potential Operating Performance
• Supply and Demand Analysis
• Projection of Operating Performance
Operational Phase (reoccurring annually)
• The flow of dollars through the economy into the City of Santa Monica attributable to hotel guest and resident spending induced by the project • The measurable taxes generated to the City of Santa Monica’s General Fund through the operations of the Ocean Avenue Project
• The number of jobs supported by the direct spending associated with the operations of the Project
It should be noted that our fiscal analysis was limited to direct revenues to the City of Santa Monica, as opposed to revenues collected and allocated by the State of California to the county, which provides additional revenue not detailed in this report.

The report was prepared for your internal use to assist you in analyzing the financial and economic impact of your development to the City of Santa Monica. As is customary in assignments of this type, neither our name nor the material submitted may be included in any prospectus or as part of any printed material or used in offerings or representations in connection with the sale of securities or participation interest to the public without prior written consent. We acknowledge that this report is being submitted to the City of Santa Monica as part of the development agreement application for the Project.

As in all studies of this type, the estimated results are based on competent and efficient management and presume no significant change in the status of the competitive lodging market from that as set forth in this report. The terms of our engagement are such that we have no obligation to revise our conclusions to reflect events or conditions that occur subsequent to the date

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of completion of our fieldwork. However, we are available to discuss the necessity for revisions in view of changes in the economy or market factors impacting the competitive lodging market.

The outbreak of the Novel Coronavirus (COVID-19), declared by the World Health Organization as a “Global Pandemic” on the 11th of March 2020, is causing heightened uncertainty in both local and global market conditions. Global financial markets have seen steep declines since late February largely on the back of the pandemic over concerns of trade disruptions and falling demand. Many countries globally have implemented strict travel restrictions and a range of quarantine and “social distancing” measures.

Market activity is being impacted in most sectors. As of the date of this report, we consider that we can attach less weight to previous market evidence for comparison purposes, to inform opinions of potential future performance. Indeed, the current response to COVID-19 means that we are faced with an unprecedented set of circumstances on which to base a judgement.

Our market analysis is, therefore, reported on the basis of ‘material uncertainty’. Consequently, less certainty – and a higher degree of caution – should be attached to our market analysis than would normally be the case. Performance may change more rapidly and significantly than during standard market conditions. Given the unknown future impact that COVID-19 might have on the real estate market, we recommend that you keep this market analysis under frequent review.

This report is subject to the Statement of Assumptions and Limiting Conditions presented in the Addenda.

After you have had an opportunity to review this report, please feel free to contact us with any questions or comments. Thank you for the opportunity to work with you on this interesting engagement.

Yours sincerely,
CBRE Hotels Advisory

By: Jeff Lugosi
Executive Vice President | Practice Leader
[email protected]

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By: Brandon Feighner
Executive Vice President
[email protected]
By: Catherine Bolstad
Senior Vice President
[email protected]

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EXECUTIVE SUMMARY

INTRODUCTION
CBRE Hotels Advisory was formally retained by Ms. Paula Larmore of Harding Larmore Kutcher & Kozal, LLP to conduct an analysis of the economic and fiscal impact of the proposed Ocean Avenue Project to be located in Santa Monica, California, within the jurisdiction of The City of Santa Monica.

This report represents the culmination of our market research, analysis, and assessments relative to the proposed Project.

We have analyzed the economic and fiscal impact of a lodging development plan to include 120 guestrooms and 100 residential units. The development program evaluated is to also include appropriate supporting facilities, anticipated to include meeting space, a lobby lounge, pool-side bar, a spa, fitness facilities, retail, guest amenities, an observatory deck, and administrative space.

As discussed further in the Methodology section, our analysis does not include specific operating projections for the Cultural Uses Campus portion of the plan, which involves the preservation, relocation and adaptive use of two City-designated landmarks.

Our analysis is focused on presenting the economic and fiscal impact in a representative year of operation, stated in 2021 value dollars. In addition, we will also present a fiscal 25-year forecast for the Project beginning March 1, 2025, in line with the development timeline for the proposed Project. Our estimates of economic and fiscal impacts are based upon projected cash flows and operating levels for the proposed Hotel, residential, and ancillary facilities, as presented herein.

It should be noted that we obtained data regarding visitor levels, spending, and the Regional InputOutput Modeling System (RIMS), economic multipliers from Los Angeles County Economic Development Corporation (LAEDC), and the California Travel and Tourism Commission (CTTC) in order to complete our analysis and compile this report. The input data used to detail the fiscal impact on The City of Santa Monica taxes were derived from various local, state, and federal sources during this study.

In addition, it is important to note that our fiscal analysis of sales and use tax is limited to revenue generated from operations at the Ocean Avenue Project. This includes the leased retail and restaurant space. We have limited our analysis of fiscal impact to measurable on-site spending but with an understanding that the operations of the Ocean Avenue Project would include additional tax revenues from hotel visitor spending off-site. Accordingly, our analysis does reflect the economic impact associated with overnight hotel visitor spending outside of the Hotel.

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Summary of Findings
The following tables summarize our findings for a representative year and a 25-year fiscal period as noted herein. The Project is assumed to open on March 1, 2025. The representative year assumes a stabilized year of impact in 2021 value dollars. Please note that some calculations may not foot due to rounding.

TOTAL ANNUL ECONOMIC IMPACT
(BASED UPON A STABILIZED YEAR OF OPERATION, 2021 DOLLARS) Proposed Ocean Avenue
Project Hotel
Hotel Guests
Occupied Hotel Rooms 35,040
Double Occupancy Factor 1.4
Total Hotel Visitor Days 49,056
Total Visitor Spending $103,395,511
Multiplier 1.3
TOTAL ECONOMIC IMPACT Direct and Indirect $134,414,164
NUMBER OF JOBS SUPPORTED by Direct and Indirect Spending 999 Note: Numbers have been rounded.

Rooms Revenue $27,051,000
TOT Rate 14.00%
TOT Generated, Rounded $3,787,000
Direct Sales Revenue (Meals & Beverages, Non-Food Retail, Entertainment, Transportation, Other) $61,884,000
Tax Rate 1.75%
Sales and Use Tax Generated, Rounded $1,082,970
Real Estate Tax $3,715,000
(All components of the mixed-use Project) 14.00%
Property Taxes Generated to the City $520,100
Hotel Gross Revenue $41,875,000
Business Tax Rate1 $1.25
Business Tax Generated to the City, Rounded $52,000
Stabilized Utility Expense $708,000
Utility Tax (10%), Rounded $70,800
Stabilized Parking Revenue $1,086,000
Parking Tax (10%) $108,600
Total Measurable Tax Revenues to City of Santa Monica Local Agencies, Rounded $5,621,000
1 Tax equates to $75 for the first $60,000 in Gross Revenues plus $1.25 per additional $1,000 of Gross Revenues over $60,000.
(STABILIZED YEAR OF OPERATION, 2021 DOLLARS)

PROPOSED OCEAN AVENUE PROJECT

OPERATIONAL PHASE MEASURABLE TAX REVENUES

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• In a representative year, the proposed Hotel will have an estimated economic impact, which includes both direct and indirect visitor spending, of $134,414,000 (rounded). • The proposed Hotel is projected to have a direct fiscal impact to The City of Santa Monica of $5,621,000 (rounded) in a representative year, which includes revenues to the city from TOT, business license, utility, parking, sales, and property taxes. • It is estimated that 999 jobs will be supported annually by the direct and indirect spending associated with the proposed Project.
• Over a 25-year period beginning fiscal year 2025/26, the estimated fiscal impact of the proposed Project is approximately $229,619,000, while the economic impact is estimated to be approximately $3.94 billion.

The following tables present a 25-year projection of economic and fiscal impact associated with the proposed Ocean Avenue Project development.

For the reader’s clarification, the term “representative year” is utilized herein to note hypothetical current value dollars. A representative year illustrates the Project’s performance as if it were at a stabilized level of operations today, after the anticipated real growth in operating metrics, with all revenues and expenses expressed in current value dollars.

TOT
Sales and Use
Tax Utilities Business Parking
Property Tax
(Hotel)
Property Tax
(Non-Hotel) Total
2021 Rep Yr. $3,787,140 $1,082,970 $70,800 $52,344 $108,600 $223,580 $296,520 $5,621,954 2025/26 3,702,160 1,190,280 80,100 51,329 106,000 246,820 327,320 5,704,009 2026/27 4,254,180 1,253,827 82,500 58,953 121,800 251,720 333,900 6,356,880 2027/28 4,552,380 1,299,519 85,000 62,883 130,400 256,760 340,620 6,727,561 2028/29 4,684,820 1,338,511 87,500 64,733 134,300 261,940 347,480 6,919,284 2029/30 4,822,160 1,378,669 90,100 66,646 138,300 267,120 354,480 7,117,475 2030/31 4,969,440 1,420,017 92,800 68,669 142,500 272,440 361,620 7,327,486 2031/32 5,116,580 1,462,619 95,600 70,710 146,700 277,900 368,900 7,539,009 2032/33 5,273,520 1,506,498 98,500 72,863 151,100 283,500 376,320 7,762,300 2033/34 5,430,460 1,551,682 101,400 75,038 155,700 289,240 383,880 7,987,400 2034/35 5,592,440 1,598,233 104,500 77,280 160,300 294,980 391,580 8,219,313 2035/36 5,760,160 1,646,195 107,600 79,599 165,100 300,860 399,420 8,458,934 2036/37 5,932,920 1,786,175 110,800 81,986 170,100 306,880 407,400 8,796,261 2037/38 6,110,860 1,839,771 114,100 84,446 175,200 313,040 415,520 9,052,937 2038/39 6,294,120 1,894,966 117,500 86,980 180,500 319,340 423,780 9,317,186 2039/40 6,482,980 1,951,823 121,000 89,590 185,900 325,780 432,320 9,589,393 2040/41 6,677,440 2,010,370 124,600 92,278 191,500 332,360 441,000 9,869,548 2041/42 6,877,780 2,070,689 128,300 95,046 197,200 338,940 449,820 10,157,776 2042/43 7,084,140 2,132,810 132,100 97,898 203,100 345,660 458,780 10,454,487 2043/44 7,296,660 2,196,795 136,100 100,835 209,200 352,520 468,020 10,760,130 2044/45 7,515,620 2,262,694 140,200 103,860 215,500 359,520 477,400 11,074,794 2045/46 7,741,020 2,330,588 144,400 106,976 222,000 366,660 486,920 11,398,564 2046/47 7,973,280 2,400,491 148,700 110,185 228,700 373,940 496,720 11,732,016 2047/48 8,212,540 2,472,487 153,200 113,490 235,600 381,360 506,660 12,075,337 2048/49 8,458,940 2,546,659 157,800 116,895 242,700 388,920 516,740 12,428,654 2049/50 8,712,760 2,623,039 162,500 120,401 250,000 396,760 527,100 12,792,560 Total 25 Years $155,529,360 $46,165,408 $2,916,900 $2,149,566 $4,459,400 $7,904,960 $10,493,700 $229,619,294 *Parking assumed at 50% of other operated departments revenue *Other Expenditure = total revenue - rooms expenditure - parking + leased space retail and restaurant revenue

PROPOSED OCEAN AVENUE PROJECT
REPRESENTATIVE YEAR AND 25-YEAR PROJECTION OF REVENUES AND FISCAL IMPACT

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Lastly, we present the incremental economic and fiscal impact (i.e. net of the existing economic and fiscal impact of the site and current improvements) of the proposed redevelopment in the following table.

Direct Indirect Total
2021 Rep Yr $103,395,511 $31,018,653 $134,414,164
2025/26 $72,197,724 $21,659,317 $93,857,041
2026/27 $82,962,509 $24,888,753 $107,851,261
2027/28 $88,777,789 $26,633,337 $115,411,125
2028/29 $91,360,763 $27,408,229 $118,768,992
2029/30 $94,039,403 $28,211,821 $122,251,224
2030/31 $96,909,375 $29,072,813 $125,982,188
2031/32 $99,779,347 $29,933,804 $129,713,151
2032/33 $102,840,650 $30,852,195 $133,692,845
2033/34 $105,901,953 $31,770,586 $137,672,539
2034/35 $109,058,922 $32,717,676 $141,776,598
2035/36 $112,330,689 $33,699,207 $146,029,896
2036/37 $115,700,610 $34,710,183 $150,410,793
2037/38 $119,171,628 $35,751,488 $154,923,117
2038/39 $122,746,777 $36,824,033 $159,570,810
2039/40 $126,429,180 $37,928,754 $164,357,934
2040/41 $130,222,056 $39,066,617 $169,288,672
2041/42 $134,128,717 $40,238,615 $174,367,333
2042/43 $138,152,579 $41,445,774 $179,598,353
2043/44 $142,297,156 $42,689,147 $184,986,303
2044/45 $146,566,071 $43,969,821 $190,535,892
2045/46 $150,963,053 $45,288,916 $196,251,969
2046/47 $155,491,945 $46,647,583 $202,139,528
2047/48 $160,156,703 $48,047,011 $208,203,714
2048/49 $164,961,404 $49,488,421 $214,449,825
2049/50 $169,910,246 $50,973,074 $220,883,320
Total 25 Years $3,033,057,248 $909,917,174 $3,942,974,423 25-YEAR DIRECT AND INDIRECT SPENDING

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TOT
Sales and Use
Tax Utilities Business Parking
Property Tax
(Hotel)
Property Tax
(Non-Hotel) Total
2021 Rep Yr $3,787,140 $768,880 $65,800 $29,284 $58,600 $190,000 $296,520 $5,196,104 2025/26 3,702,160 835,030 74,400 25,246 49,400 206,000 327,320 5,224,376 2026/27 4,254,180 887,920 76,600 32,088 63,500 223,000 333,900 5,862,907 2027/28 4,552,380 922,621 78,900 35,211 70,400 241,000 340,620 6,218,893 2028/29 4,684,820 950,309 81,200 36,231 72,500 261,000 347,480 6,395,480 2029/30 4,822,160 978,829 83,600 37,290 74,600 283,000 354,480 6,578,079 2030/31 4,969,440 1,008,172 86,100 38,431 76,900 306,000 361,620 6,772,104 2031/32 5,116,580 1,038,419 88,700 39,565 79,100 331,000 368,900 6,967,164 2032/33 5,273,520 1,069,575 91,400 40,784 81,500 358,000 376,320 7,173,599 2033/34 5,430,460 1,101,652 94,100 41,996 84,000 388,000 383,880 7,381,328 2034/35 5,592,440 1,134,711 97,000 43,248 86,400 420,000 391,580 7,595,358 2035/36 5,760,160 1,168,760 99,900 44,545 89,000 455,000 399,420 7,816,645 2036/37 5,932,920 1,294,425 102,900 45,881 91,700 493,000 407,400 8,135,106 2037/38 6,110,860 1,333,269 106,000 47,258 94,400 534,000 415,520 8,372,346 2038/39 6,294,120 1,373,256 109,200 48,675 97,300 578,000 423,780 8,616,671 2039/40 6,482,980 1,414,468 112,500 50,136 100,200 626,000 432,320 8,868,384 2040/41 6,677,440 1,456,898 115,800 51,640 103,200 678,000 441,000 9,127,338 2041/42 6,877,780 1,500,609 119,200 53,190 106,300 734,000 449,820 9,393,839 2042/43 7,084,140 1,545,615 122,700 54,785 109,500 795,000 458,780 9,668,180 2043/44 7,296,660 1,591,978 126,400 56,429 112,800 861,000 468,020 9,950,807 2044/45 7,515,620 1,639,729 130,200 58,121 116,200 932,000 477,400 10,241,790 2045/46 7,741,020 1,688,933 134,100 59,865 119,700 1,009,000 486,920 10,541,198 2046/47 7,973,280 1,739,586 138,100 61,660 123,300 1,092,000 496,720 10,849,586 2047/48 8,212,540 1,791,754 142,300 63,509 127,000 1,182,000 506,660 11,167,123 2048/49 8,458,940 1,845,504 146,600 65,414 130,800 1,279,000 516,740 11,493,917 2049/50 8,712,760 1,900,849 151,000 67,375 134,700 1,384,000 527,100 11,830,544 Total 25 Years $155,529,360 $33,212,870 $2,708,900 $1,198,573 $2,394,400 $15,649,000 $10,493,700 $212,242,763

PROPOSED OCEAN AVENUE PROJECT
*Parking assumed at 50% of other operated departments revenue *Other Expenditure = total revenue - rooms expenditure - parking + leased space retail and restaurant revenue Incremental (Net) Fiscal Impact

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METHODOLOGY

ECONOMIC IMPACT METHODOLOGY
The total economic impact of the proposed development in the City of Santa Monica consists of direct spending by hotel guests that includes lodging, food and beverage, souvenirs, attractions, transportation, and incidentals, as well as indirect spending. Indirect spending is a function of monies spent by visitors in area businesses, which in turn these businesses utilize to operate and spend on other items. We have applied our economic analysis to the operational phase of the development. In addition to this impact, the proposed development will create additional impact such as jobs and spending during the construction phase, which we have not incorporated into this analysis.

Projected Operating Performance
We have estimated the supply and demand for hotel room nights and have estimated the share of the market that the proposed Hotel should reasonably be expected to capture for its first five years of operation.

Based on our analysis of market demand and the estimated occupancy and average daily room rates for the proposed Hotel, we have estimated revenues and expenses for the Hotel for its first ten years of operation. These estimates result in a “bottom line” of income before fixed charges of interest, depreciation, amortization, and income taxes.

We have utilized these projections as the basis for the economic impact. The economic impact projections include an allocation for spending on entertainment. It should be noted that we have not developed specific operating projections for the Cultural Use Campus component, which is proposed to include a museum, gallery, and event space, given that it is in the concepting phase, but we have factored in visitor spending within entertainment. Given the anticipation that the museum (and the project as a whole) will have an international appeal given its world class architect, our projections in this regard should be understood as conservative in nature. The Hotel operating projections also serve as the basis for fiscal impact, which also includes real estate tax from the residential component.

Operational Phase Economic Impact
The methodology used to determine the economic impact of the operational phase of the Project in the City of Santa Monica includes an estimation of visitor spending within the different categories.

This allocation of visitor spending is performed by taking the overall hotel visitor spending data for The City of Santa Monica and applying it to the average daily rate and number of occupied rooms of the proposed Project. We have also analyzed the number of jobs directly supported by this visitor

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spending utilizing Regional Travel Impact Model (RTIM) developed by Dean Runyan Associates, Inc. and information from their California Travel Impacts by County report prepared for Visit California.

FISCAL IMPACT METHODOLOGY
Fiscal impact is the amount of tax revenue generated directly to the City of Santa Monica by spending within the hotel and by hotel operations. This includes an estimation of the associated tax revenues (transient occupancy tax, sales and use tax, and property tax) generated during a representative year (2021) and a 25-year period for the proposed development from its projected opening in March of 2025. This net result is the fiscal impact to the City of Santa Monica. Please note, this reflects the fiscal impact generated directly by the proposed Project and does not factor in fiscal impacts created by spending outside the project except as noted.

ASSUMPTIONS AND CONDITIONS OF THE STUDY
It should be noted that our economic impact analysis is limited to overnight visitors who stay in the City of Santa Monica at the Hotel, as well as those tenants residing in the residential units of the Project, and does not incorporate day visitors that come to the area due to the new facilities and positioning of the Project.

DEFINITIONS
Hotel/Motel Guests - those overnight visitors who stay at lodging facilities in The City of Santa Monica. The primary purpose of their visits to the city varies and includes leisure, convention, business, and self-contained groups.

Multiplier - a means to determine the indirect economic benefits of visitor expenditures in a community, such as spending by hotels and restaurants and their employees. The multiplier is applied to direct spending by visitors to measure the total flow of visitor dollars through the economy.

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SITE AND PROJECT DESCRIPTION

SITE DESCRIPTION
The proposed Project will be located at the corner of Ocean Avenue and Santa Monica Boulevard with physical addresses of 101 Santa Monica Boulevard, 129 Santa Monica Boulevard, 1327 Ocean Avenue, 1333 Ocean Avenue, and 1337 Ocean Avenue, Santa Monica, California 90401.

The site encompasses 82,569-square feet (1.89 acres). Based on our assessment, the identified site located in the Downtown District of the City of Santa Monica is deemed to benefit from an excellent location with respect to access, visibility, and proximity to local sources of demand and nearby amenities. Overall, we are of the opinion that the long-term strategic potential for the proposed Project is also considered to be excellent. A regional map and aerial view of the Project site are presented on the follow pages.

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REGIONAL MAP
Subject Site

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AERIAL VIEW
Subject Site

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PROJECT DESCRIPTION
The development will represent architecture by highly acclaimed Frank Gehry and his established practice, Gehry Partners, LLP. Proposed developments for the Project include a hotel; residential apartments; cultural uses; a publicly accessible rooftop observation deck; restaurant and retail uses; open space; and a three-level subterranean parking garage to accommodate up to 285 vehicles and long-term bicycle parking/storage (231 spaces). Specifically, the proposed development would provide 122,400 square feet for the 120-room Hotel, including 8,700 square feet of meeting facilities and a 4,400-square-foot spa. The residential component of the Project will feature 100 units comprised of deed-restricted affordable units, replacement rent-controlled units, and market-rate units. Approximately 36,110 square feet of restaurant and retail uses are proposed to be developed (including outdoor dining areas), as well as a 35,500-square-foot Cultural Use Campus, which incorporates two City-designated landmarks and we understand will include a museum, gallery, and event space.

Our analysis assumes that the proposed Hotel will represent a 120-room luxury-tiered lodging property inclusive of ancillary support amenities to be open by March 1, 2025. Additionally, our projections assume the development of the proposed ground floor restaurant and retail developments, as well as the Cultural Use Campus, will be completed by March 1, 2025. This development timeline is in line with the timeline proposed by the developer.

Furthermore, our analysis assumes the proposed Hotel would be operated as a luxury, boutique lodging property with a “soft brand” affiliation, which would provide access to a central reservation system and global distribution system. Furthermore, our projections for the proposed Hotel assume a professional management company would be retained to operate the 120-room luxury Hotel at a market-level management fee (3.0 percent of projected gross revenues).

Architectural renderings of the Ocean Avenue Project are presented on the following pages. Floor plans and additional renderings for the proposed Project are included in the EIR Submission provided in the Addenda of this report.

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ARCHITECTURAL RENDERING

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ARCHITECTURAL RENDERING

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HOTEL MARKET ANALYSIS

NATIONAL MARKET OVERVIEW
In addition to our advisory and valuation group, our Firm contains a research division, CBRE Hotels’ Americas Research (“CBRE Hotels’ Research”). CBRE Hotels’ Research owns the database for Trends® in the Hotel Industry, the statistical review of U.S. hotel operations, which first appeared in 1935 and has been published every year since. Beginning in 2007, CBRE Hotels’ Research unveiled its powerful Hotel Horizons®, an economics-based hotel forecasting model that projects five years of supply, demand, occupancy, ADR, and revenue per available room (“RevPAR”) for the U.S. lodging industry with a high degree of accuracy. Hotel Horizons® reports are published on a quarterly basis for 60 markets and six national chain-scales.

As a result of the COVID-19 Pandemic, the December 2020 – February 2021 National Edition of Hotel Horizons® publication prepared by CBRE Hotels’ Research reported that the U.S. lodging sector has been negatively impacted by two headwinds in 2020: a contraction in overall economic activity and the need for social distancing. Accordingly, CBRE anticipates a 36.2 percent reduction in the number of occupied room nights occupied in 2020 compared to 2019. The resulting 37.4 percent decrease in occupancy combined with a forecasted 21.5 percent decrease in average daily room rate (ADR), results in a projected annual decline in revenue per available room (RevPAR) of

50.9 percent through year-end 2020.

Based on CBRE’s current forecast, the pace of decelerating occupancy, ADR, RevPAR, and demand begins to lessen in the coming months. By Q2 2021, CBRE anticipates year-over-year growth in the top line revenue performance of the U.S. lodging sector. The expected declines in RevPAR will be more severe than those experienced in the 2001 and 2009 economic downturns combined.

However, given the expected quick rebound in economic growth and historic resiliency of travel demand, CBRE is forecasting a strong hotel revenue recovery in 2021 and 2022, with the anticipation that RevPAR could recover to pre-pandemic levels by 2024.

The CBRE Hotels’ Research baseline scenario forecast, which outlines the impact that COVID-19 is projected to have on hotels throughout the nation, is presented in the following table.

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REGIONAL LODGING MARKET OVERVIEW
In addition to publishing quarterly Hotel Horizons® reports for the nation, CBRE Hotels’ Research also publishes reports on a quarterly basis for 65 national hotel markets (“MSA’s”), including the Los Angeles-Long Beach MSA market. The Los Angeles Edition of Hotel Horizons® MSA includes more than 103,000 hotel rooms throughout the geographic areas encompassing Hollywood/Beverly Hills; Long Beach; the Central Business District; the Los Angeles International Airport district; the East, North, and Southeast districts; Pasadena/Glendale/Burbank; Santa Monica/Marina Del Rey; and the South Bay district.

Based on the December 2020 – February 2021 Edition of Hotel Horizons®, RevPAR for the MSA increased by 0.2 percent in 2019 over prior year levels, attributable to a modest increase in accommodated demand. RevPAR for this market is projected to decline by 55.2 percent through year-end 2020 based on data ending Q3 2020. Consistent with the current forecasts for the performance of the overall U.S. lodging market, it is anticipated that the Los Angeles MSA lodging market will achieve RevPAR levels in line with those experienced in 2019 by 2024 with significant gains expected in the coming years as vaccines become more widely distributed.

The CBRE Hotels’ Research baseline scenario forecast, which outlines the impact that COVID-19 is projected to have on hotels throughout the Los Angeles-Long Beach MSA, is presented below.

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As the proposed Hotel will represent a luxury property, we have also provided the historical performance and CBRE’s projected baseline COVID-19 performance for the luxury segment of hotels throughout the United States, as noted below. As can be seen, RevPAR for this segment of hotels is projected to have decreased by 67.4 percent through year-end 2020, with gains of 46.1 percent and 48.7 percent in 2021 and 2022, respectively. Between 2023 and 2024, RevPAR is projected to return to 2019 levels.

Therefore, as seen in the preceding data sets, the national, regional and luxury hotel markets are projected to be materially impacted in the short to mid-term, although all indications are that markets will have returned to pre-COVID-19 levels before or well before the proposed Hotel opens its doors to guests.

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COMPETITIVE LODGING MARKET OVERVIEW
In order to identify the competitive market for the proposed Hotel, we have analyzed the greater Santa Monica hotel market as well as the luxury West Los Angeles market and selected a competitive supply based on location; size; facilities and amenities; brand and affiliation; rate structure; and market orientation.

The following table summarizes the identified competitive set for the proposed Hotel. This table presents the luxury hotel set for Santa Monica and West Los Angeles and represents an appropriate competitive set based on the proposed facilities and anticipated very high quality level of the Project.

PROPOSED OCEAN AVENUE PROJECT
Summary of the Competitive Lodging Market
Hotel Location Rooms Open Date
Chain
Scale
Dorchester Collection Hotel Bel Air Los Angeles, CA 103 Jun 1946 Luxury Dorchester Collection Beverly Hills Hotel Beverly Hills, CA 210 Jun 1912 Luxury Waldorf Astoria Beverly Hills Beverly Hills, CA 170 Jun 2017 Luxury The Peninsula Beverly Hills Beverly Hills, CA 195 Aug 1991 Luxury Fairmont Miramar Santa Monica, CA 302 Jun 1921 Luxury
Oceana Santa Monica Santa Monica, CA 70 Jun 1957 Luxury Shutters On The Beach Santa Monica, CA 198 Jun 1993 Luxury Casa Del Mar Santa Monica, CA 129 May 1926 Luxury
Total 1,377
Source: STR, Inc.

A map of the competitive supply is presented below, followed by the historical aggregate performance of these properties.

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COMPETITIVE MARKET MAP

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ADDITIONS TO SUPPLY
It should be noted that the City of Santa Monica has experienced very few new luxury hotel openings in the last few decades. The 175-room JW Marriott Santa Monica Le Merigot opened in November of 1999 and, more recently, the 271-room Santa Monica Proper Hotel opened in June of 2019.

The JW Marriott Santa Monica Le Merigot and the Santa Monica Proper Hotel have been excluded from our supply and demand analysis for the Hotel as they are not deemed to be directly competitive due to their location and/or positioning within the market. Given the lack of new development sites and high barriers to entry, this development trend is anticipated to continue well into the future.

Based on discussions with planning representatives in the greater Santa Monica area, as well as interviews with hoteliers active in this area, we have not identified any planned additions to the competitive supply. As noted in the competitive supply table previously presented, the most recent addition to the identified competitive set is the 170-room Waldorf Astoria Beverly Hills, which is located in the City of Beverly Hills.

It should be noted that there are numerous other hotel projects that have been proposed, approved, or are currently under construction throughout the greater Los Angeles MSA lodging market. Many of these projects are either highly speculative at this point in time or will differ from the proposed Hotel with regard to location and/or positioning. Accordingly, they have been excluded from our analysis.

HOTEL ROOMS DEMAND
Demand for hotel rooms is categorized in three ways:
• Demonstrated Demand: the demand already captured at competitive hotels; • Induced Demand: the demand that does not presently seek accommodations in the competitive market, but could be persuaded to do so through marketing efforts, room rates, facilities, services and amenities; and,
• Unsatisfied Demand: the demand that seeks accommodations in the market but is not satisfied due to one of a number of factors: sell-outs; lack of a particular type of accommodation; lack of meeting space; or high room rates.

HISTORICAL PERFORMANCE OF THE COMPETITIVE SUPPLY
Presented in the following table is a summary of the historical supply and demand and the resulting occupancy percentages for the identified competitive market for the period 2012 to 2019 as well

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as through year-to-date (YTD) April 2019 and 2020. Also included are the competitive market’s average daily rate (ADR) and revenue per available room (RevPAR) figures. RevPAR is an industry standard which equates to the total revenue generated by available rooms and thereby measures the operational success of a market or individual property.

HISTORICAL MARKET PERFORMANCE OF THE COMPETITIVE SUPPLY Annual Percent Occupied Percent Market Average Percent Percent Year Supply Change Rooms Change Occupancy Daily Rate Change REVPAR Change 2012 439,095 N/A 342,969 N/A 78.1% $539.17 N/A $421.13 N/A 2013 439,429 0.1% 352,529 2.8% 80.2% 578.30 7.3% 463.94 10.2% 2014 439,460 0.0% 349,411 -0.9% 79.5% 624.52 8.0% 496.55 7.0% 2015 439,552 0.0% 350,072 0.2% 79.6% 657.88 5.3% 523.95 5.5% 2016 439,825 0.1% 356,319 1.8% 81.0% 692.78 5.3% 561.25 7.1% 2017 476,205 8.3% 378,879 6.3% 79.6% 724.49 4.6% 576.42 2.7% 2018 500,373 5.1% 402,907 6.3% 80.5% 765.95 5.7% 616.75 7.0% 2019 488,110 -2.5% 371,465 -7.8% 76.1% 788.05 2.9% 599.73 -2.8% CAAG/Avg. 1.5% 1.1% 79.3% 5.6% 5.2%
YTD 4/19 156,240 N/A 124,999 N/A 80.0% 780.30 N/A 624.27 N/A YTD 4/20 145,920 -6.6% 73,251 -41.4% 50.2% 771.11 -1.2% 387.09 -38.0% Source: CBRE Hotels Advisory
• As can be noted from the table above, supply in the competitive market has increased at a compound annual growth rate (CAAG)of 1.5 percent between 2012 and 2019. This supply increase is attributable to the opening of the 170-room Waldorf Astoria Beverly Hills in June of 2017, as well as fluctuations in room inventory at other identified competitive properties.

Through YTD April 2020, supply decreased by 6.6 percent over prior year levels. This decline is largely a result of the aforementioned COVID-19 Pandemic, which resulted in temporary closures of hotels, including the Fairmont Miramar, Casa Del Mar, and Shutters on the Beach.
• The average annual occupancy for these eight hotels was 79.3 percent over the past eight years, ranging from a low of 76.1 percent in 2019 to a high of 81.0 percent in 2016. The decline in accommodated demand experienced between 2018 and 2019 is largely a result of ongoing renovations at several of the competitive hotels. Through YTD April 2020, occupancy decreased significantly from 80.0 percent to 50.2 percent, due to the impact of the COVID-19 Pandemic. The decrease in occupancy experienced through YTD April 2020 is consistent with the performance of the overall U.S. hotel market and the greater Los Angeles-Long Beach MSA lodging market.

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• RevPAR for the competitive market increased at a CAAG of 5.2 percent over this historical period, increasing by a total of approximately $179. Those hotels that have historically achieved the highest RevPAR levels within the competitive set are the 210-room Dorchester Collection Beverly Hills Hotel, the 170-room Waldorf Astoria Beverly Hills, and the 195- room Peninsula Beverly Hills.

MIX OF DEMAND
The demand captured by the competitive supply is derived primarily from the transient commercial and leisure demand segments followed by the group travelers. The following table summarizes the estimated 2019 mix of demand for the competitive supply.

COMPETITIVE MARKET
2019 ESTIMATED MIX OF DEMAND
Market Segment Room Nights Ratio
Transient 297,100 80%
Group 74,300 20%
Total 371,400 100%
Source: CBRE Hotels Advisory
Using the historical growth in the market as a base and taking into account the current demonstrated and future projected economic conditions, we have estimated future growth in market demand. Each market segment is discussed in the following paragraphs, followed by a summary table setting forth our estimated growth in demand by market segment and overall.

Transient Segment
As outlined in the previous table, transient demand represents the single largest demand source for the competitive supply, with an estimated approximately 80.0 percent of the total occupied rooms in 2019. This equates to approximately 297,100 room nights of captured demand in the competitive set. The transient segment is comprised of both commercial and leisure demand.

The commercial demand in the competitive market generally is derived from conventional commercial demand, generated largely by the financial services, real estate, and law firms located in Santa Monica, Beverly Hills, Century City, Westwood, and West Los Angeles. These travelers appear to select hotels based on the proximity of the property to their office or place of business and usually have a shorter length of stay.

Additionally, this competitive market also has strong demand from entertainment-related businesses. The demand from entertainment and creative industries is generated by the motion picture, recording and related technology, advertising and design and fashion industries.

Historically, Santa Monica was host to the American Film Market which generated thousands of hotel room nights within the local market. While the pandemic has temporarily paused a significant

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portion of this industry, we anticipate that similar events return to the local market over the mid- to long-term, given large and growing number of companies and facilities in the area. Entertainmentrelated commercial travelers appear to select a hotel based on its location relative to area amenities such as restaurants and shopping or location and setting rather than its proximity to the company’s office. The entertainment and creative industry traveler typically has a longer length of stay.

The leisure portion of this segment consists of leisure travelers to and within Southern California for mostly recreational reasons. This segment is comprised of both domestic weekend travelers, as well as international travelers.

Group Segment
The group market is estimated to have represented approximately 20 percent of the market demand for the competitive supply in 2019 with approximately 74,300 group room nights. Within the competitive market, the group segment comprises various types of group demand categorized as follows:
• Traditional group business, such as executive corporate meetings and other high-end retreats; and,
• Catering-based social group business, such as wedding parties, which primarily utilize the hotels during weekends.

As previously discussed, the COVID-19 Pandemic has caused a negative impact on the overall U.S. lodging sector. A contraction in overall economic activity and the need for social distancing has resulted in unprecedented declines in occupancy, ADR, and, subsequently, RevPAR growth rates throughout all 65 major markets tracked by CBRE Hotels’ Research.

Hotels located within the Los Angeles-Long Beach MSA are projected to have experiences a decline in demand of 40.0 percent through year-end 2020, with increases of 33.4 percent, 19.1 percent, and 6.8 percent projected for 2021, 2022, and 2023, respectively. For the identified competitive market, we project accommodated demand to have decreased by approximately 48 percent through year-end 2020. We project the competitive market to experience increases of 50.3 percent in 2021, 22.4 percent in 2022, and 7.7 percent in 2023.

SUMMARY OF DEMAND GROWTH AND MARKET OCCUPANCIES
Based on the foregoing analysis, future demand growth is projected to be driven by increases in commercial, leisure, and group room nights. Although both supply and demand are expected to continue to grow, we have estimated a stabilized market occupancy of 80.0 percent over the longterm, in line with the average annual occupancy level achieved by the competitive market between 2012 and 2019 (79.3 percent). While the market will perform at occupancies above and below

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this level, the stabilized occupancy is based on the historical performance of the competitive market, as well as the market orientations of the individual properties. As is shown in the following table, the market is projected to achieve this rate by 2027 and remain at this level for the duration of the projection period. Given the attractiveness of the current supply and destination, and the projected levels of unsatisfied demand present in the marketplace, we do not anticipate that future additions will materially impact the aggregate market occupancy.

The following table illustrates the projected growth in supply and demand for the projection period through 2029.

ESTIMATED MARKET PERFORMANCE OF THE SUBJECT HOTEL
Penetration Analysis
Our estimates of occupancy are based on our survey of competitive hotels, an analysis of the segmentation of demand in the market area and our assessment of the proposed property’s market position. The “penetration rate” of a hotel is the percentage of room nights captured relative to the property’s “fair share.” The hotel's “fair share” is determined by dividing the subject property’s number of guestrooms by the total number of guestrooms in the competitive market (including the subject property). Factors indicating that a hotel would possess competitive advantages suggest a market penetration in excess of 100 percent of fair market share, while competitive weaknesses

PROPOSED OCEAN AVENUE PROJECT
Competitive Market
Estimated Future Growth in Lodging Supply and Demand
2019 - 2029
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
ROOMS SUPPLY 1,371
Cumulative Rooms Supply 1,337 1,206 1,377 1,377 1,377 1,377 1,477 1,497 1,497 1,497 1,497 --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- Total Annual Rooms Supply 488,005 440,190 502,605 502,605 502,605 502,605 539,105 546,405 546,405 546,405 546,405 Growth Over the Prior Year -2.5% -9.8% 14.2% 0.0% 0.0% 0.0% 7.3% 1.4% 0.0% 0.0% 0.0%

DEMONSTRATED DEMAND IN BASE YR
Transient 297,097 80%
Group 74,274 20%
--------- ---------
TOTAL DEMONSTRATED DEMAND 371,372 100%
--------- ---------

PROJECTED DEMAND
Transient
Demonstrated 297,097 178,258 267,388 320,865 346,534 356,930 367,638 386,393 397,984 409,924 422,222 Induced/(Unsatisfied) 0 0 0 0 0 0 7,500 0 (1,520) (13,460) (25,758) --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- Total 297,100 178,300 267,400 320,900 346,500 356,900 375,100 386,400 396,500 396,500 396,500 Growth Over Prior Year N/A -40.0% 50.0% 20.0% 8.0% 3.0% 5.1% 3.0% 2.6% 0.0% 0.0% --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- Group
Demonstrated 74,274 14,855 23,025 34,538 36,264 37,352 38,473 39,627 40,816 42,040 43,302 Induced/(Unsatisfied) 0 0 0 0 0 0 0 0 (156) (1,380) (2,642) --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- Total 74,300 14,900 23,000 34,500 36,300 37,400 38,500 39,600 40,700 40,700 40,700 Growth Over Prior Year N/A -79.9% 54.4% 50.0% 5.2% 3.0% 2.9% 2.9% 2.8% 0.0% 0.0% --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- Total Market Demand 371,400 193,200 290,400 355,400 382,800 394,300 413,600 426,000 437,200 437,200 437,200 Growth Over Prior Year N/A -48.0% 50.3% 22.4% 7.7% 3.0% 4.9% 3.0% 2.6% 0.0% 0.0% Market Occupancy 76% 44% 58% 71% 76% 78% 77% 78% 80% 80% 80% Source: CBRE Hotels Advisory

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are reflected in penetration rates of less than 100 percent. However, other factors besides competitive weaknesses could result in penetrations of less than 100 percent. The actual penetration of each market segment by the proposed property may deviate from fair market share for the following reasons:
• The competitive advantages or disadvantages of the subject Hotel versus the competition taking into consideration such factors as location, room rate structure, quality and extent of amenities offered, chain affiliation, quality of management, marketing efforts, image, and the hotel’s world-class architecture;
• The characteristics, composition and needs of each market segment; • The restraint on demand captured due to capacity constraints during certain periods of the week or season, or due to the accommodation of certain market segments; and, • Management decisions concerning target markets.

The proposed Hotel will be one the newest property in the competitive set as well as in Santa Monica upon its opening, with a luxury hotel positioning and extensive amenities and facilities. Estimated occupancy levels for the proposed Hotel have been projected on the basis of a penetration analysis.

Our estimate of the Hotel’s performance utilizes a March 1, 2025 opening date.

Penetration of the Subject Hotel
Due to its location in Santa Monica, as well as its Frank Gehry design; anticipated luxury positioning; proposed facilities; unique amenities such as the museum and observation deck; restaurant offerings; terraces; spa and fitness center; as well as its premier oceanfront location in the heart of Downtown Santa Monica; the proposed Hotel is expected to penetrate the competitive market at 89 percent in its first year of operation, increasing to a stabilized penetration level of 100 percent by 2027. On a stabilized basis, we project the proposed Hotel to capture approximately 84 percent of its demand from the transient market segment with the balance of demand captured from the group market segment.

The following table presents our projection of occupancy and penetration for the proposed Hotel for its first five years of operation.

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PROPOSED OCEAN AVENUE PROJECT
Market Penetration and Projected Occupancy
2025 2026 2027 2028 2029

TOTAL ROOMS AVAILABLE
PROPOSED OCEAN AVENUE PROJECT 36,500 43,800 43,800 43,800 43,800 Competitive Market 539,105 546,405 546,405 546,405 546,405 ==== ==== ==== ==== ====
Fair Share of Supply 6.8% 8.0% 8.0% 8.0% 8.0%
==== ==== ==== ==== ====

ESTIMATED TOTAL MARKET DEMAND
Transient 375,100 386,400 396,500 396,500 396,500
Group 38,500 39,600 40,700 40,700 40,700
------- ------- ------- ------- -------
TOTAL 413,600 426,000 437,200 437,200 437,200
------- ------- ------- ------- -------

FAIR SHARE OF DEMAND
Transient 25,400 31,000 31,800 31,800 31,800
Group 2,600 3,200 3,300 3,300 3,300
------- ------- ------- ------- -------
TOTAL 28,000 34,200 35,100 35,100 35,100
------- ------- ------- ------- -------

SUBJECT PENETRATION
Transient 88% 92% 92% 92% 92%
Group 95% 145% 175% 175% 175%
------- ------- ------- ------- -------

ROOM NIGHTS CAPTURED
Transient 22,300 28,500 29,200 29,200 29,200
Group 2,500 4,600 5,700 5,700 5,700
------- ------- ------- ------- -------
TOTAL CAPTURED DEMAND 24,800 33,100 34,900 34,900 34,900 ==== ==== ==== ==== ====
MARKET SHARE CAPTURED 6.0% 7.8% 8.0% 8.0% 8.0%
OVERALL MARKET PENETRATION 89% 97% 100% 100% 100%
------- ------- ------- ------- -------
SUBJECT OCCUPANCY 68% 76% 80% 80% 80%
------- ------- ------- ------- -------

MARKET MIX
Transient 90% 86% 84% 84% 84%
Group 10% 14% 16% 16% 16%
------- ------- ------- ------- -------
TOTAL 100% 100% 100% 100% 100%
==== ==== ==== ==== ====
Source: CBRE Hotels Advisory

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AVERAGE DAILY RATE
Competitive Market
We have also estimated the average daily rate (ADR) of the competitive market based upon our analysis of the historical rates achieved, interviews with management of the competitive properties, the anticipated impact of the new supply, including the proposed Hotel, entering the market, and the changing economic conditions.

As a result of the COVID-19 Pandemic, ADR for upper-priced hotels located within the greater Los Angeles-Long Beach MSA is projected to decrease by 24.0 percent in 2020, with annual increases of between 4.4 percent and 18.9 percent projected between 2021 and 2023. For the competitive market, ADR is projected to decease by 19.3 percent through year-end 2020. In 2021, ADR is projected to increase by 9.9 percent, tapering to 5.0 percent in 2022. Thereafter, ADR is projected to increase by 3.0 percent per annum, in line with the assumed long-term rate of inflation.

Based on the foregoing analysis, the following table summarizes our estimates of future supply, accommodated demand, occupancy, average daily rate, and RevPAR for the competitive market from 2020 to 2029.

PROJECTED MARKET PERFORMANCE OF THE COMPETITIVE SUPPLY
Annual Percent Occupied Percent Market Average Percent Percent Year Supply Change Rooms Change Occupancy Daily Rate Change REVPAR Change 2020 440,190 -9.8% 193,200 -48.0% 44% $636.00 -19.3% $279.14 -53.5% 2021 502,605 14.2% 290,400 50.3% 58% 699.00 9.9% 403.88 44.7% 2022 502,605 0.0% 355,400 22.4% 71% 734.00 5.0% 519.02 28.5% 2023 502,605 0.0% 382,800 7.7% 76% 756.00 3.0% 575.79 10.9% 2024 502,605 0.0% 394,300 3.0% 78% 779.00 3.0% 611.14 6.1% 2025 539,105 7.3% 413,600 4.9% 77% 807.00 3.6% 619.13 1.3% 2026 546,405 1.4% 426,000 3.0% 78% 833.00 3.2% 649.44 4.9% 2027 546,405 0.0% 437,200 2.6% 80% 858.00 3.0% 686.52 5.7% 2028 546,405 0.0% 437,200 0.0% 80% 883.00 2.9% 706.52 2.9% 2029 546,405 0.0% 437,200 0.0% 80% 910.00 3.1% 728.13 3.1% CAAG 0.3% 1.4% 3.0% 4.1%
Source: CBRE Hotels Advisory
Average Daily Rate and Yield for the Subject
Our derivation of the average daily rate for the proposed Hotel in a stabilized year of operation is based on the historical average daily rates achieved by the market and information concerning the other hotel properties in the competitive supply. Considerations were also given to the comparison

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of the other competitive properties with the proposed Hotel in terms of quality of facility, location, and mix of demand.

As discussed herein, the Subject Hotel is anticipated to be a high-quality, luxury hotel with an attractive design. Further, the Subject Hotel is planned to offer attractive and desirable facilities and amenities in an increasingly sophisticated market, including a museum and observation deck.

Therefore, we have estimated that the Subject Hotel will achieve an opening average daily rate of $772 stated in 2021 value dollars. In consideration of the proposed amenities and facilities of the proposed Hotel, as well as its expected positioning in the market, we find this rate reasonable, placing the Subject Hotel below the competitive market average but within the range of the properties in the competitive set. ADR for the proposed Subject Hotel is projected to increase in line with our market projections, resulting in an ADR of $870 in its first calendar year of operation (2025).

The following table outlines our estimates of average daily rate and the resulting revenue yield for the Subject Hotel. It should be noted that figures are rounded to the nearest dollar amounts.

PROJECTED MARKET PERFORMANCE OF THE SUBJECT HOTEL
Annual Percent Occupied Percent Occupancy Average Percent Percent Market Revenue Year Supply Change Rooms Change Percentage Daily Rate Change REVPAR Change Penetration Yield 2025 36,500 N/A 24,800 N/A 68% $870.00 3.0% $591.12 N/A 89% 96% 2026 43,800 20.0% 33,100 33.5% 76% 896.00 3.0% 677.11 14.5% 97% 105% 2027 43,800 0.0% 34,900 5.4% 80% 923.00 3.0% 735.45 8.6% 100% 107% 2028 43,800 0.0% 34,900 0.0% 80% 950.00 3.0% 756.96 2.9% 100% 107% 2029 43,800 0.0% 34,900 0.0% 80% 979.00 3.0% 780.07 3.1% 100% 107% 2030 43,800 0.0% 34,900 0.0% 80% 1,008.00 3.0% 803.18 3.0% 100% 107% CAAG 4.7% 8.9% 3.0% 7.2%
Source: CBRE Hotels Advisory
The analysis below is based on a fiscal year beginning on March 1, 2025. Accordingly, we must convert the calendar year forecast into fiscal year periods. To accomplish this for the first fiscal year 2025/26, we have taken a weighted average of ten months for calendar year 2025 and two months for calendar year 2026 to derive the fiscal year projection. We have then performed this analysis for each subsequent fiscal year. In doing so, it is our calculation that, for the first fiscal year, the proposed Hotel will achieve an occupancy of 69 percent with a corresponding ADR of $875. We have presented our projections of the occupancy and ADR for the Subject Hotel for the fiscal year period 2025/26 to 2035/36 in the following table.

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CONVERSION TO FISCAL YEAR OCCUPANCY AND ADR INPUT
Annual Rooms Inflated
Year Available Occupied Occupancy ADR
2025/26 43,800 30,222 69.0% $875.00
2026/27 43,800 33,726 77.0% 901.00
2027/28 43,800 35,040 80.0% 928.00
2028/29 43,800 35,040 80.0% 955.00
2029/30 43,800 35,040 80.0% 983.00
2030/31 43,800 35,040 80.0% 1,013.00
2031/32 43,800 35,040 80.0% 1,043.00
2032/33 43,800 35,040 80.0% 1,075.00
2033/34 43,800 35,040 80.0% 1,107.00
2034/35 43,800 35,040 80.0% 1,140.00
2035/36 43,800 35,040 80.0% 1,174.00
Although it is possible that the proposed Hotel will experience growth in occupancy and ADR above those estimated in the report, it is also possible that sudden economic downturns, unexpected additions to supply, or other external factors will force the property below the selected point of stability. Consequently, the estimated occupancy and ADR levels are representative of the most likely potential operations of the Subject Hotel over the projected holding period based on our analysis of the market as of the date of this report.

PROJECTIONS OF THE PROPOSED PROJECT PERFORMANCE
To prepare estimates of future operating results for the proposed Hotel and other components of the Project, a basis is to best estimate the results that could be achieved with competent management in a representative year or stabilized year of operation, calculated in 2021 dollars.

We estimate that during a representative year, the Hotel could achieve a stabilized occupancy of 80 percent at an average daily room rate of $772, stated in 2021 dollars. From this base, we considered the effects of inflation, and occupancy levels for the projection period for a 25-year operating period beginning March 1, 2025.

The estimates of revenues, costs and expenses are based on the proposed facilities and services and the operational characteristics thereof. Our projections are based on the operating results of comparable high-end boutique styled and branded hotels located throughout the U.S. with a particular focus of those properties located within the greater Los Angeles MSA. These hotels are believed to operate with efficient management and proper control over costs and expenses. The projections and comparable property financials are presented in the addenda.

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The following presents summary tables of estimated rooms revenue and total revenues, followed by our commentary on the revenue and expense line items that are integral to the fiscal and economic impact of the Hotel and Project.

ESTIMATED OPERATIONAL REVENUES
Average Annual Rooms Total
Year Daily Rate Occupancy Revenue Revenue
2025/26 $875.00 69.0% $26,444,000 $41,063,000
2026/27 901.00 77.0% 30,387,000 47,162,000
2027/28 928.00 80.0% 32,517,000 50,306,000
2028/29 955.00 80.0% 33,463,000 51,786,000
2029/30 983.00 80.0% 34,444,000 53,317,000
2030/31 1,013.00 80.0% 35,496,000 54,935,000
2031/32 1,043.00 80.0% 36,547,000 56,568,000
2032/33 1,075.00 80.0% 37,668,000 58,290,000
2033/34 1,107.00 80.0% 38,789,000 60,030,000
2034/35 1,140.00 80.0% 39,946,000 61,824,000
Revenues: The revenue projections include rooms, food and beverage, other operated departments, and rentals and other miscellaneous income. Rooms revenue is based on the conclusions of market positioning and stabilized rate and occupancy projections. Food and beverage revenue has been estimated at $257 per occupied room (POR) or approximately $9.0 million annually. This incorporates the 8,700 square feet of meeting space, the pool bar, room service, and lounge. We note that we have included revenue projections for the leased retail and restaurant space elsewhere in the report in order to factor these facilities into the fiscal impact portion of this analysis. Other operated departments is assumed to include spa, parking, and minor operating departments. We estimate revenue in this department in a stabilized year of operation to be $62 POR or a total of approximately $2.2 million, which is deemed to be reasonable based on the proposed facilities of the Hotel. Lastly, rentals and other income is estimated at approximately $5 POR plus a monthly rent of $8 per square foot for the 36,110 square feet of retail space (19,130 square feet of indoor dining, 4,940 square feet of outdoor dining, and 12,040 square feet of retail). This equates to approximately $3.6 million in rentals and other income in a representative year. It should be noted that in year one of our projections for the proposed Hotel (2025/2026), we have assumed a 5.0 percent vacancy rate for the leased retail and restaurant space.

Expenses: Expenses have been projected based on the specific positioning of the Subject Hotel and our evaluation of the financial comparables. We estimate expenses of $200 per occupied room for rooms expense, or a ratio of 25.9 percent to departmental revenue. Our food and beverage expense estimate in a stabilized year of operation is projected to be 90 percent of departmental

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revenue. Our analysis assumes that the only food and beverage operations managed by the Hotel would be the 8,700 square feet of banquet space, the pool bar, and the lobby lounge. All other food and beverage facilities are assumed to be operated by third party operators. Lastly, we estimate other operating departmental expense to be 78 percent of departmental revenue.

Undistributed Expenses: Undistributed Operating Expenses are operating expenses that are not chargeable to a particular operating department and are presented as undistributed operating expenses, in accordance with the Uniform System of Accounts for the Lodging Industry. These expenses include administrative and general, marketing, property operations and maintenance, and energy and utilities. These expenses are relatively unaffected by fluctuations in occupancies and ADR. Excluding management fees, which are a fixed percentage based on a contract agreement and market parameters, these expenses are analyzed primarily on a dollar amount per available room (PAR) basis.

We estimate administrative and general expense to be approximately $26,725 PAR, inclusive of credit card commissions; information and telecommunication systems is estimated to be $4,100 PAR; sales and marketing expense is estimated to be approximately $17,500 PAR, which includes any marketing assessments; property operations and maintenance expense is estimated to be approximately $12,000 PAR; and utilities expense is estimated to be approximately $5,900 PAR. It is anticipated that there will be some efficiencies for property operations as a result of the residential components of the Ocean Avenue Project.

Other Expenses: The remaining expenses comprise a management fee, which we estimate at 3.0 percent of total hotel revenues; property tax; and a reserve for furniture, fixtures, and equipment.

The reserve has been ramped up as a percentage of total revenue from two percent in year one to four percent by year three. It should be noted that our estimate of property taxes for the Hotel (and Project) are presented in the fiscal impact portion of this report and are calculated on estimated development costs, rather than estimated value upon completion, which is consistent with the Los Angeles County Assessor’s most probable methodology in evaluating new construction.

We have presented the financial comparables and our 10-year projection of the Subject’s estimated annual operating results in the Addenda of this report.

Economic Impact Calculation
Total annual economic impact attributed to the proposed Subject assuming stabilized operations is approximately $134,414,200. The total number of new local jobs created is estimated at 999 jobs annually, based on projected direct and indirect spending. All monetary figures are stated in 2021 value dollars.

The following table summarizes our findings.

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TOTAL ANNUL ECONOMIC IMPACT
(BASED UPON A STABILIZED YEAR OF OPERATION, 2021 DOLLARS) Proposed Ocean Avenue Project Hotel
Hotel Guests
Occupied Hotel Rooms 35,040
Double Occupancy Factor 1.4
Total Hotel Visitor Days 49,056
Total Visitor Spending $103,395,511
Multiplier 1.3
TOTAL ECONOMIC IMPACT Direct and Indirect $134,414,164
NUMBER OF JOBS SUPPORTED by Direct Spending 999
Note: Numbers have been rounded.

The following text provides summary tables and the assumptions used to reach the aforementioned conclusions.

Total Hotel Visitors
In order to calculate the visitor impact of the hotel operations, it is first necessary to estimate total daily hotel visitors and lodging expenditures. Total daily hotel visitors have been derived by taking the projected occupancy of the proposed facilities and multiplying them by the double occupancy factor. Based on our knowledge of the proposed Hotel and the local lodging market, we estimate that a multiple occupancy factor of 1.4 people per room is reasonable.

Furthermore, to determine the daily hotel spending per visitor, we divided the average daily rate by the occupancy factor. For the Ocean Avenue Project, this yields a daily hotel spending per visitor of $551.43 ($772 ADR / 1.4 occupancy factor). The following table summarizes these calculations.

TOTAL HOTEL VISITORS AND DAILY LODGING EXPENDITURES
Ocean Avenue Project
Total Occupied Rooms 35,040
Occupancy Factor 1.4
Total Hotel Visitors 49,056
Average Daily Rate $772.00
Daily Hotel Spending per Visitor $551.43
Source: CBRE Hotels Advisory

Direct Visitor Spending
Based on the daily lodging expenditure per visitor, it is now possible to project spending in other categories. Our estimates of projected spending on other categories are based upon the 2018 Santa Monica Visitor Spending Report from Lauren Schlau Consulting and CIC Research, Inc. (the most recent report available), which summarizes expenditures by segment. For these segments, our analysis of daily expenditures for overnight stays included the following categories:

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• Lodging & Accommodations;
• Meals & Beverages;
• Shopping;
• Amusement & Attractions;
• Transportation; and,
• Miscellaneous Spending.

The following table presents the average spending ratios for hotel visitors for the overall City of Santa Monica area.

TOTAL ANNUAL VISITOR SPENDING IN SANTA MONICA BY CATEGORY (2018) Total Annual Percent of
Category Expenditures Total Spending
Lodging $506,223,688 26.2%
Meals 325,638,180 16.8%
Beverages 151,010,681 7.8%
Shopping/gifts 790,231,531 40.8%
Admission fees 29,580,355 1.5%
Activities 19,661,285 1.0%
Local Transportation/parking 41,985,673 2.2%
Spa/beauty/health club 22,945,460 1.2%
Groceries/other items 47,641,968 2.5%
Total $1,934,918,821 100.0%
Source: Lauren Schlau Consulting and CIC Research, Inc. for Santa Monica Travel & Tourism As we have determined the average hotel visitor direct spending per day for all of the City of Santa Monica, we can then apply the corresponding ratios per category to the proposed Ocean Avenue Project hotel visitors. These spend amounts per category for the Subject are presented in the following table.

HOTEL VISITOR DIRECT SPENDING PER DAY
Spending Category Basis Ocean Avenue Project
Lodging 26.2% $551.43
Meals 16.8% $354.72
Beverages 7.8% $164.50
Shopping/Gifts 40.8% $860.80
Attractions 1.5% $32.22
Daily Transport 1.0% $21.42
Health Spa 2.2% $45.73
Activities 1.2% $24.99
Groceries/Other Items 2.5% $51.90
Total 100.0% $2,107.70

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Next, we will apply this daily expenditure to the number of annual hotel visitors (49,056) to calculate total direct visitor spending for each category. The following table presents our conclusions of total direct visitor spending in a representative year.

HOTEL VISITOR DIRECT SPENDING
Spending Category Basis Ocean Avenue Project
Lodging 26.2% $27,050,880
Meals 16.8% $17,401,002
Beverages 7.8% $8,069,500
Shopping/Gifts 40.8% $42,227,298
Attractions 1.5% $1,580,674
Daily Transport 1.0% $1,050,633
Health Spa 2.2% $2,243,572
Activities 1.2% $1,226,128
Groceries/Other Items 2.5% $2,545,825
Total 100.0% $103,395,511

The Multiplier Effect
The total impact of direct spending related to the introduction of the proposed subject property is amplified by means of an economic multiplier. A multiplier is used to estimate the impact that the visitor dollar makes beyond the initial goods/services purchased. The infusion of new dollars into the local economy also produces additional goods and services. In short, “direct” visitor spending creates indirect and induced economic benefits for the City. For example, visitor spending collected “directly” within a hotel restaurant also “indirectly” supports food and beverage suppliers and delivery services. Moreover, the direct and indirect spending induces further spending in the community by employees of the benefiting businesses.

Based upon the RIMS II economic modeling system and discussions with representatives from the Los Angeles Economic Development Council (LAEDC), we have used an overall economic multiplier of 1.3 for the City of Santa Monica. We applied this multiplier to the expenditures related to the visitors to the Subject, to determine the overall economic impact of the Project.

HOTEL DIRECT AND VISITOR SPENDING
Ocean Avenue Project
Direct Spending $103,395,511
Multiplier 1.3
Direct and Indirect Spending $134,414,164

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Other Benefits
As stated above, the economic impact presented does not include economic benefit of the construction of the proposed facilities. It is projected that with the development of the subject property, there will be additional economic benefits such as increased real estate values in the immediate neighborhood of the Project. Furthermore, the rental apartment units will drive some level of economic impact and spending.

In addition to the above it is important to note that the proposed Ocean Avenue Project development is anticipated to have a positive effect on the overall rate positioning of the overall hotel supply. While difficult to measure, the proposed Hotel and mixed-use Project will improve the quality of the overall supply in the marketplace and, thus, allow the existing hotels as a whole to potentially increase their average rates. It should also improve the pedestrian flow on Ocean Avenue, Santa Monica Boulevard, and Second Street as ground level retail and restaurants are added. Lastly, the proposed museum should also bring significant awareness to the Project and enhance Santa Monica, as well as drive additional economic and fiscal impact through the inducement of additional visitation to Santa Monica.

It should also be noted that additional monetary and other community benefits will be provided by developer but are not included in this analysis because Development Agreement negotiations are not yet completed. However, these additional benefits are anticipated to be substantial and should be taken into consideration once known.

Lastly, while our fiscal impact analysis was generally limited to revenue sources that flow directly to Santa Monica’s General Fund, it is worth noting that the project as proposed, is estimated to generate approximately $29.5 million to the SMMUSD during the 30-year operational period.

Operational Phase Employment
Our employment and salary estimates for a stabilized year of operation of the proposed Hotel are based upon industry standards, benchmarks provided by CBRE Hotels’ in-house data, related analyses, and our understanding of the Project. It should be noted that certain categories have been combined in accordance with the most recent categorization of industry employment generated by travel spending as detailed in California Travel Impacts by County report prepared by Dean Runyan Associates, Inc. for the Visit California Commission.

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SUMMARY OF ESTIMATED DIRECT EMPLOYMENT
Visitor Spending Direct Indirect Total
Lodging1 $27,050,880 $8,115,264 $35,166,144
Meals $25,470,501 $7,641,150 $33,111,652
Transportation $1,050,633 $315,190 $1,365,822
Retail Trade $44,773,123 $13,431,937 $58,205,060
Entertainment $5,050,374 $1,515,112 $6,565,486
Total $103,395,511 $31,018,653 $134,414,164
Related Jobs2

10.2 jobs/$1 million in demand for Hotels/Eating and Drinking 536 161 696

8.3 jobs/$1 million in demand for Transportation 9 3 11

4.0 jobs/$1 million in demand for Retail Trade 179 54 233

8.9 jobs/$1 million in demand for Entertainment 45 13 58 TOTAL JOBS 768 231 999
1 Rooms Revenue only.
2Each multiplier measures the total change in the number of jobs that results from the corresponding change in output delivered to final demand by the industry.

Source: Dean Runyan Associates, Inc., Visit California 2019

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FISCAL IMPACT ANALYSIS
Taxes and Other City Revenues
Revenue generated by lodging and residential facilities represents a relatively large source of tax collections for the City of Santa Monica. Potential government revenues drawn from tourism-related projects generally include:
• Sales and use tax;
• Transient Occupancy Tax (TOT);
• Property Tax – hotel and residential;
• Business Tax;
• Utility Tax; and,
• Parking Tax.

Our analysis of the total tax revenues for the City of Santa Monica is limited to measurable tax revenues which include transient occupancy tax (TOT), sales and use tax, utility tax, business tax, parking tax, and property tax revenues. We have incorporated the projected property tax associated with the residential component, as well.

Transient Occupancy Tax
The current transient occupancy tax rate in the City of Santa Monica is calculated at a rate of 14.0 percent of the daily rent. In a stabilized year of operation, the TOT is based upon the average daily rate of $772 and an occupancy rate of 80 percent, which equates to approximately $3,787,000.

Property Taxes
As mentioned previously in the hotel operations portion of this report, our analysis will estimate the property taxes generated by the Project, and the potion allocated to the City of Santa Monica based on the construction costs of the Project. It is important to note that the assessor may utilize at least three methodologies to estimate a developer’s tax burden, though the most common for new construction is the Cost Approach. As such we have relied upon this methodology in the following.

To recap, a breakdown of the property tax rate area (TRA) for the Project site is summarized in the following table.
2019/20 TAX RATE FOR TRA #8004
Taxing Agencies Tax Year Rate
General 1.000000%
City of Santa Monica 0.002743%
Community College 0.078829%
Metro Water District 0.003500%
Unified Schools 0.093440%
Total Year Tax Rate 1.178512%
Source: City of Santa Monica

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Further, the following table presents a summary of the developer’s anticipated costs to construct the project.

Ocean Avenue, Santa Monica, CA
Development Budget Estimate - Estimated Current Costs
Land Costs $25,628,912
Hard Costs $233,659,563
Soft Costs $79,280,288
Financing Costs $32,932,198
Total Development Budget $371,500,960
Source: Worthe Real Estate Group
As appropriate and applicable, we have segmented the costs specifically between the hotel portion and then residential (including all other components of the luxury mixed-use project) to arrive at a supportable property tax estimate for the various components of the Project. According to information provided by the developer, the hotel portion of the project will comprise 122,400 square feet of the larger mixed-use development or approximately 39 percent of the total floor area of the Project, inclusive of all above- and below-grade areas but not including approximately 4,800 square feet of mechanical and shared services (i.e., trash, storage, utilities).

Hotel
Property Taxes for the proposed Hotel are estimated to be approximately $1,597,000 in stabilized year of operation and based on the allocation of approximately $159,745,000 to construct the hotel portion of the Project. Based on our research of the tax structure in the county, and information provided by the Office of the Auditor-Controller, approximately 14.0 percent of the real estate taxes directly go to the City. However, this 14.0 percent tax rate is only calculated based on the 1.0 percent General Levy that directly goes to the City’s General Fund. We have applied these ratios accordingly. In a representative year of operation, this equates to a contribution of $224,000 (rounded) to the City’s General Fund based on the hotel’s estimated property tax burden and an allocation of the City’s anticipated share.

Property Tax – Residential & All Other Components
In addition to the hotel component, we have estimated the property tax for the residential component. As we understand it, the proposed Project will feature 100 residential units comprised of 12 studio units, 55 one-bedroom units, 23 two-bedroom units, and 10 three-bedroom units.

Based on discussions with the Project’s developer, we have assumed that 80 units would represent market-rate units and 20 units would represent affordable housing units. We understand that 16 of the market-rate units will be priced-controlled similar to the City’s existing rent control. However, it should be noted that no property tax adjustment was made for the 16 price-controlled units, which were evaluated under the same assumptions as the market rate units. Based on the current

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programming for the proposed Hotel, we understand that the residential component of the Project would represent a gross building area of 117,700 square feet. As mentioned throughout this report, the Project will also include 36,110 square feet of leased retail and restaurant space and the 35,500 square foot Cultural Use Campus (e.g., museum, gallery, event space). The cost to construct all components other than the previously calculated hotel portion is approximately $211,756,000. In a representative year of operation, this equates to a contribution of $297,000 (rounded) to the City’s General Fund based on the estimated property tax burden of all other nonhotel components and an allocation of the City’s anticipated share.

Sales and use tax
The current retail sales and use tax in the City of Santa Monica is 10.25 percent. Based on recent prior reports and analysis, the current retail sales and use tax that is contributed directly to the City of Santa Monica is 1.75 percent of the total 10.25 percent collected. For the purpose of our analysis, we have only included tax revenues that directly flow to the City’s General Fund.

The sales and use and property tax revenues generated from the development and operation of the Ocean Avenue Project is based on the non-room projected revenues as presented in the financial projections. Sales and use tax revenue was based on the projected income at the Ocean Avenue Project for food and beverage, and spa. We have also factored in approximately $1,400 per square foot in restaurant sales for the leased restaurant space and $1,200 per square foot for the leased retail space. We believe these estimates to be reasonable based on the performance of comparable restaurant and retail sales in the local market. For the purpose of our analysis, these figures are estimated to increase by 3.0 percent per year during the projection period. In a representative year, the direct sales and use tax equates to approximately $1.1 million (rounded).

Business License Tax
We have calculated the business license tax, which is a function of gross revenue. The tax is $75 for the first $60,000 plus $1.25 for each additional $1,000 in revenues. The business tax is estimated to be approximately $52,000 in a representative year of operation.

Utility and Parking Tax
Utility and Parking tax are both at 10.0 percent. In a representative year, they equate to approximately $71,000 and $109,000 respectively.

Over a 25-year projection period (fiscal year 2025/26 through 2049/50), the total direct fiscal impact on the City from the operations of the Ocean Avenue Project is approximately $212,243,000 and is based on the calculations presented in the following tables, beginning first with the measurable tax revenues of the Project to the City in a representative year of operation.

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The following tables summarize our projections for potential revenue to the City of Santa Monica based on the operations of the Ocean Avenue Project, for a 25-year period beginning March 1, 2025.

Rooms Revenue $27,051,000
TOT Rate 14.00%
TOT Generated, Rounded $3,787,000
Direct Sales Revenue (Meals & Beverages, NonFood Retail, Entertainment, Transportation, Other) $61,884,000 Tax Rate 1.75%
Sales Tax Generated, Rounded $1,082,970
Real Estate Tax $3,715,000
(All components of the mixed-use Project) 14.00%
Property Taxes Generated to the City $520,100
Hotel Gross Revenue $41,875,000
Business Tax Rate1 $1.25
Business Tax Generated to the City, Rounded $52,000
Stabilized Utility Expense $708,000
Utility Tax (10%), Rounded $70,800
Stabilized Parking Revenue $1,086,000
Parking Tax (10%) $108,600
Total Measurable Tax Revenues to City of Santa
Monica Local Agencies, Rounded $5,621,000 1
Tax equates to $75 for the first $60,000 in Gross Revenues plus $1.25 per additional $1,000 of Gross Revenues over $60,000.
(STABILIZED YEAR OF OPERATION, 2021 DOLLARS)

PROPOSED OCEAN AVENUE PROJECT

OPERATIONAL PHASE MEASURABLE TAX REVENUES

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Total Revenue Rooms Expenditure
Other
Expenditure* Utilities Parking*
Hotel Real Estate
Tax
Non-Hotel Real
Estate Tax TOT
Sales and Use
Tax Utilities Business Parking Hotel @ 14%
Non-Hotel @
14% Total
2021 Rep Yr. $41,875,000 $27,051,000 $61,884,000 $708,000 $1,086,000 $1,597,000 $2,118,000 $3,787,140 $1,082,970 $70,800 $52,344 $108,600 $223,580 $296,520 $5,621,954 2025/26 41,063,000 26,444,000 68,016,000 801,000 1,060,000 $1,763,000 2,338,000 3,702,160 1,190,280 80,100 51,329 106,000 246,820 327,320 5,704,009 2026/27 47,162,000 30,387,000 71,647,260 825,000 1,218,000 $1,798,000 2,385,000 4,254,180 1,253,827 82,500 58,953 121,800 251,720 333,900 6,356,880 2027/28 50,306,000 32,517,000 74,258,228 850,000 1,304,000 $1,834,000 2,433,000 4,552,380 1,299,519 85,000 62,883 130,400 256,760 340,620 6,727,561 2028/29 51,786,000 33,463,000 76,486,345 875,000 1,343,000 $1,871,000 2,482,000 4,684,820 1,338,511 87,500 64,733 134,300 261,940 347,480 6,919,284 2029/30 53,317,000 34,444,000 78,781,065 901,000 1,383,000 $1,908,000 2,532,000 4,822,160 1,378,669 90,100 66,646 138,300 267,120 354,480 7,117,475 2030/31 54,935,000 35,496,000 81,143,857 928,000 1,425,000 $1,946,000 2,583,000 4,969,440 1,420,017 92,800 68,669 142,500 272,440 361,620 7,327,486 2031/32 56,568,000 36,547,000 83,578,203 956,000 1,467,000 $1,985,000 2,635,000 5,116,580 1,462,619 95,600 70,710 146,700 277,900 368,900 7,539,009 2032/33 58,290,000 37,668,000 86,085,599 985,000 1,511,000 $2,025,000 2,688,000 5,273,520 1,506,498 98,500 72,863 151,100 283,500 376,320 7,762,300 2033/34 60,030,000 38,789,000 88,667,557 1,014,000 1,557,000 $2,066,000 2,742,000 5,430,460 1,551,682 101,400 75,038 155,700 289,240 383,880 7,987,400 2034/35 61,824,000 39,946,000 91,327,603 1,045,000 1,603,000 $2,107,000 2,797,000 5,592,440 1,598,233 104,500 77,280 160,300 294,980 391,580 8,219,313 2035/36 63,679,000 41,144,000 94,068,281 1,076,000 1,651,000 $2,149,000 2,853,000 5,760,160 1,646,195 107,600 79,599 165,100 300,860 399,420 8,458,934 2036/37 65,589,000 42,378,000 102,067,150 1,108,000 1,701,000 $2,192,000 2,910,000 5,932,920 1,786,175 110,800 81,986 170,100 306,880 407,400 8,796,261 2037/38 67,557,000 43,649,000 105,129,784 1,141,000 1,752,000 $2,236,000 2,968,000 6,110,860 1,839,771 114,100 84,446 175,200 313,040 415,520 9,052,937 2038/39 69,584,000 44,958,000 108,283,778 1,175,000 1,805,000 $2,281,000 3,027,000 6,294,120 1,894,966 117,500 86,980 180,500 319,340 423,780 9,317,186 2039/40 71,672,000 46,307,000 111,532,741 1,210,000 1,859,000 $2,327,000 3,088,000 6,482,980 1,951,823 121,000 89,590 185,900 325,780 432,320 9,589,393 2040/41 73,822,000 47,696,000 114,878,304 1,246,000 1,915,000 $2,374,000 3,150,000 6,677,440 2,010,370 124,600 92,278 191,500 332,360 441,000 9,869,548 2041/42 76,037,000 49,127,000 118,325,113 1,283,000 1,972,000 $2,421,000 3,213,000 6,877,780 2,070,689 128,300 95,046 197,200 338,940 449,820 10,157,776 2042/43 78,318,000 50,601,000 121,874,836 1,321,000 2,031,000 $2,469,000 3,277,000 7,084,140 2,132,810 132,100 97,898 203,100 345,660 458,780 10,454,487 2043/44 80,668,000 52,119,000 125,531,161 1,361,000 2,092,000 $2,518,000 3,343,000 7,296,660 2,196,795 136,100 100,835 209,200 352,520 468,020 10,760,130 2044/45 83,088,000 53,683,000 129,296,796 1,402,000 2,155,000 $2,568,000 3,410,000 7,515,620 2,262,694 140,200 103,860 215,500 359,520 477,400 11,074,794 2045/46 85,581,000 55,293,000 133,176,470 1,444,000 2,220,000 $2,619,000 3,478,000 7,741,020 2,330,588 144,400 106,976 222,000 366,660 486,920 11,398,564 2046/47 88,148,000 56,952,000 137,170,934 1,487,000 2,287,000 $2,671,000 3,548,000 7,973,280 2,400,491 148,700 110,185 228,700 373,940 496,720 11,732,016 2047/48 90,792,000 58,661,000 141,284,962 1,532,000 2,356,000 $2,724,000 3,619,000 8,212,540 2,472,487 153,200 113,490 235,600 381,360 506,660 12,075,337 2048/49 93,516,000 60,421,000 145,523,351 1,578,000 2,427,000 $2,778,000 3,691,000 8,458,940 2,546,659 157,800 116,895 242,700 388,920 516,740 12,428,654 2049/50 96,321,000 62,234,000 149,887,921 1,625,000 2,500,000 $2,834,000 3,765,000 8,712,760 2,623,039 162,500 120,401 250,000 396,760 527,100 12,792,560 Total 25 Years $1,719,653,000 $1,110,924,000 $2,638,023,298 $29,169,000 $44,594,000 $56,464,000 $74,955,000 $155,529,360 $46,165,408 $2,916,900 $2,149,566 $4,459,400 $7,904,960 $10,493,700 $229,619,294 *Parking assumed at 50% of other operated departments revenue *Other Expenditure = total revenue - rooms expenditure - parking + leased space retail and restaurant revenue

PROPOSED OCEAN AVENUE PROJECT
REPRESENTATIVE YEAR AND 25-YEAR PROJECTION OF REVENUES AND FISCAL IMPACT

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Packet Pg. 856 Attachment: Attachment M Applicant CBRE Economic and Fiscal Impact Ocean Avenue Project (4857 :

Harding Larmore Kutcher & Kozal, LLP
Ocean Avenue Project
March 25, 2021

CONCLUSIONS
The estimated gross economic and fiscal impact of the proposed Project to the City of Santa Monica is expected to be material. We have estimated a total economic impact of approximately $134,414,200 in a representative year, stated in 2021 dollars, for the hotel development and a fiscal impact of approximately $5,621,000. During a 25-year period of operation beginning in fiscal year 2025/2026, the estimated economic impact is estimated at approximately $3.94 billion, and the fiscal impact is approximately $229,619,000.

The estimates of economic impact generated by the proposed Hotel are not inclusive of all potential economic benefits. Excluded from our analysis are:
• The fiscal impact of the residential units over and above the property tax presented herein;
• The fiscal and economic impact directly associated with the Cultural Use Campus; • The economic impact upon the City of Santa Monica during the construction of the proposed project. This impact includes applicable salary taxes, spending by the workers with the county, and property taxes during the construction period; • The spending induced by day visitors;
• The property and transfer taxes generated by a projected increase in surrounding property values due to the enhancement of the subject facilities and overall neighborhood;
Overnight Visitor Direct +
Indirect Economic Impact TOT
Sales and Use
Tax Utilities Business Parking Hotel @ 14%
Non-Hotel @
14% Total
2021 Rep Yr. $134,414,164 $3,787,140 $1,082,970 $70,800 $52,344 $108,600 $223,580 $296,520 $5,621,954 2025/26 $93,857,041 3,702,160 1,190,280 80,100 51,329 106,000 246,820 327,320 5,704,009 2026/27 $107,851,261 4,254,180 1,253,827 82,500 58,953 121,800 251,720 333,900 6,356,880 2027/28 $115,411,125 4,552,380 1,299,519 85,000 62,883 130,400 256,760 340,620 6,727,561 2028/29 $118,768,992 4,684,820 1,338,511 87,500 64,733 134,300 261,940 347,480 6,919,284 2029/30 $122,251,224 4,822,160 1,378,669 90,100 66,646 138,300 267,120 354,480 7,117,475 2030/31 $125,982,188 4,969,440 1,420,017 92,800 68,669 142,500 272,440 361,620 7,327,486 2031/32 $129,713,151 5,116,580 1,462,619 95,600 70,710 146,700 277,900 368,900 7,539,009 2032/33 $133,692,845 5,273,520 1,506,498 98,500 72,863 151,100 283,500 376,320 7,762,300 2033/34 $137,672,539 5,430,460 1,551,682 101,400 75,038 155,700 289,240 383,880 7,987,400 2034/35 $141,776,598 5,592,440 1,598,233 104,500 77,280 160,300 294,980 391,580 8,219,313 2035/36 $146,029,896 5,760,160 1,646,195 107,600 79,599 165,100 300,860 399,420 8,458,934 2036/37 $150,410,793 5,932,920 1,786,175 110,800 81,986 170,100 306,880 407,400 8,796,261 2037/38 $154,923,117 6,110,860 1,839,771 114,100 84,446 175,200 313,040 415,520 9,052,937 2038/39 $159,570,810 6,294,120 1,894,966 117,500 86,980 180,500 319,340 423,780 9,317,186 2039/40 $164,357,934 6,482,980 1,951,823 121,000 89,590 185,900 325,780 432,320 9,589,393 2040/41 $169,288,672 6,677,440 2,010,370 124,600 92,278 191,500 332,360 441,000 9,869,548 2041/42 $174,367,333 6,877,780 2,070,689 128,300 95,046 197,200 338,940 449,820 10,157,776 2042/43 $179,598,353 7,084,140 2,132,810 132,100 97,898 203,100 345,660 458,780 10,454,487 2043/44 $184,986,303 7,296,660 2,196,795 136,100 100,835 209,200 352,520 468,020 10,760,130 2044/45 $190,535,892 7,515,620 2,262,694 140,200 103,860 215,500 359,520 477,400 11,074,794 2045/46 $196,251,969 7,741,020 2,330,588 144,400 106,976 222,000 366,660 486,920 11,398,564 2046/47 $202,139,528 7,973,280 2,400,491 148,700 110,185 228,700 373,940 496,720 11,732,016 2047/48 $208,203,714 8,212,540 2,472,487 153,200 113,490 235,600 381,360 506,660 12,075,337 2048/49 $214,449,825 8,458,940 2,546,659 157,800 116,895 242,700 388,920 516,740 12,428,654 2049/50 $220,883,320 8,712,760 2,623,039 162,500 120,401 250,000 396,760 527,100 12,792,560 Total 25 Years $3,942,974,423 $155,529,360 $46,165,408 $2,916,900 $2,149,566 $4,459,400 $7,904,960 $10,493,700 $229,619,294 *Parking assumed at 50% of other operated departments revenue *Other Expenditure = total revenue - rooms expenditure - parking + leased space retail and restaurant revenue

PROPOSED OCEAN AVENUE PROJECT
REPRESENTATIVE YEAR AND 25-YEAR PROJECTION OF REVENUES AND FISCAL IMPACT

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Packet Pg. 857 Attachment: Attachment M Applicant CBRE Economic and Fiscal Impact Ocean Avenue Project (4857 : Ocean Avenue Project Development Harding Larmore Kutcher & Kozal, LLP
Ocean Avenue Project
March 25, 2021

• The anticipated increase in the overall average daily rate and competitive positioning of the Santa Monica hotel market directly attributable to the opening of the Ocean Avenue Project; and,
• The development costs include construction costs for the historic preservation elements (including the rehabilitation and adaptive reuse of the City-designated landmarks), museum, publicly-accessible open space (including observation desk), and physical sustainability elements (i.e. elements required to achieve LEED Platinum certification) community benefits as well as relocation costs for the existing residential tenants.

Additional monetary and other community benefits will be provided by developer but are not included in this analysis because Development Agreement negotiations are not yet completed. However, these additional benefits are anticipated to be substantial and should be taken into consideration once known.

Our analysis of the total tax revenues for the City of Santa Monica is limited to measurable tax revenues which include transient occupancy tax, sales and use tax, business tax, utility and parking tax, and property tax revenues. It is our opinion that the proposed development would bring significant fiscal impact to the City of Santa Monica through additional visitor spending, tax revenue, and jobs.

INCREMENTAL (NET) FISCAL AND ECONOMIC IMPACT
At your request, we have calculated the incremental economic and fiscal impact (i.e. net of the site’s existing economic and fiscal impacts). The first step is to develop a base case for the existing facilities.

Base Case – Existing Operations
We reviewed the existing improvements and developed a base case of fiscal and overnight visitor economic impact. There are currently seven leased operations totaling 12,271 square feet. It should be noted that we have not been provided with the recent total revenue achieved by these seven leases. However, based on the historic revenues achieved by this space and on our knowledge of revenue generated by comparable leased properties within the local market, we have estimated that these seven outlets would have achieved total revenue in the amount of approximately $18.5 million. We have used this estimate as the basis for sales and use tax. Furthermore, while no revenue or expense detail for these leases in place has been provided, we have assumed that a reasonable estimate for utilities would be approximately $50,000, and parking revenue would amount to approximately $500,000 for the purpose of this analysis. Lastly, we have utilized the 2020 roll preparation as the basis for the real estate tax baseline. This incorporates the existing structures, including retail operations and existing residential.

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Packet Pg. 858 Attachment: Attachment M Applicant CBRE Economic and Fiscal Impact Ocean Avenue Project (4857 : Ocean Avenue Project Development Harding Larmore Kutcher & Kozal, LLP
Ocean Avenue Project
March 25, 2021

As no hotel facilities currently exist, we have applied a zero baseline to overnight direct and indirect visitor spending. We note that the existing restaurant operations drive some level of economic impact and find it reasonable to state that the leased retail in the redevelopment will replace this economic impact. As it is difficult to allocate visitation to a specific day activity or restaurant, we are relying on the overnight visitation, which identifies the unique new overnight guests to Santa Monica, as the methodology for concluding to economic impact. The following presents the economic impact and revenue basis for the existing operations, followed by the fiscal impact for existing operations.

Overnight Visitor Direct +
Indirect Economic Impact Total Revenue
Rooms
Expenditure
Other
Expenditure* Utilities Parking
Existing Real
Estate Tax @
14% of
General Fund
2021 Rep Yr $0 $18,448,000 $0 $17,948,000 $50,000 $500,000 $283,683 2025/26 0 20,866,000 0 $20,300,000 57,000 566,000 308,000 2026/27 0 21,492,000 0 $20,909,000 59,000 583,000 314,000 2027/28 0 22,137,000 0 $21,537,000 61,000 600,000 320,000 2028/29 0 22,801,000 0 $22,183,000 63,000 618,000 326,000 2029/30 0 23,485,000 0 $22,848,000 65,000 637,000 333,000 2030/31 0 24,190,000 0 $23,534,000 67,000 656,000 340,000 2031/32 0 24,916,000 0 $24,240,000 69,000 676,000 347,000 2032/33 0 25,663,000 0 $24,967,000 71,000 696,000 354,000 2033/34 0 26,433,000 0 $25,716,000 73,000 717,000 361,000 2034/35 0 27,226,000 0 $26,487,000 75,000 739,000 368,000 2035/36 0 28,043,000 0 $27,282,000 77,000 761,000 375,000 2036/37 0 28,884,000 0 $28,100,000 79,000 784,000 383,000 2037/38 0 29,751,000 0 $28,943,000 81,000 808,000 391,000 2038/39 0 30,644,000 0 $29,812,000 83,000 832,000 399,000 2039/40 0 31,563,000 0 $30,706,000 85,000 857,000 407,000 2040/41 0 32,510,000 0 $31,627,000 88,000 883,000 415,000 2041/42 0 33,485,000 0 $32,576,000 91,000 909,000 423,000 2042/43 0 34,490,000 0 $33,554,000 94,000 936,000 431,000 2043/44 0 35,525,000 0 $34,561,000 97,000 964,000 440,000 2044/45 0 36,591,000 0 $35,598,000 100,000 993,000 449,000 2045/46 0 37,689,000 0 $36,666,000 103,000 1,023,000 458,000 2046/47 0 38,820,000 0 $37,766,000 106,000 1,054,000 467,000 2047/48 0 39,985,000 0 $38,899,000 109,000 1,086,000 476,000 2048/49 0 41,185,000 0 $40,066,000 112,000 1,119,000 486,000 2049/50 0 42,421,000 0 $41,268,000 115,000 1,153,000 496,000 Total 25 Years $0 $760,795,000 $0 $740,145,000 $2,080,000 $20,650,000 $9,867,000 *Parking assumed at 50% of other operated departments revenue *Other Expenditure = total revenue - rooms expenditure - parking + leased space retail and restaurant revenue

BASE CASE - FISCAL IMPACT
Existing Operations

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Packet Pg. 859 Attachment: Attachment M Applicant CBRE Economic and Fiscal Impact Ocean Avenue Project (4857 : Ocean Avenue Project Development Harding Larmore Kutcher & Kozal, LLP
Ocean Avenue Project
March 25, 2021

Incremental (Net) Impact Conclusion
This results in the following incremental economic and fiscal impact (i.e. net of the site’s existing economic and fiscal impacts). Please note, the economic impact presents the spending associated with overnight visitors. In addition to this, there is day visitor economic impact, which is captured by the existing restaurant facilities and should also be captured by the proposed leased retail and restaurant space. Furthermore, additional impact will be driven by museum attendees.

The fiscal impact of the existing operations is factored into the incremental (net) fiscal projections below.

TOT
Sales and Use
Tax Utilities Business Parking
Existing Real
Estate @14%
New Residential
@ 14% Total
2021 Rep Yr $0 $314,090 $5,000 $23,060 $50,000 $33,700 $0 $425,850 2025/26 0 355,250 5,700 26,083 56,600 $36,000 0 479,633 2026/27 0 365,908 5,900 26,865 58,300 $37,000 0 493,973 2027/28 0 376,898 6,100 27,671 60,000 $38,000 0 508,669 2028/29 0 388,203 6,300 28,501 61,800 $39,000 0 523,804 2029/30 0 399,840 6,500 29,356 63,700 $40,000 0 539,396 2030/31 0 411,845 6,700 30,238 65,600 $41,000 0 555,383 2031/32 0 424,200 6,900 31,145 67,600 $42,000 0 571,845 2032/33 0 436,923 7,100 32,079 69,600 $43,000 0 588,701 2033/34 0 450,030 7,300 33,041 71,700 $44,000 0 606,071 2034/35 0 463,523 7,500 34,033 73,900 $45,000 0 623,955 2035/36 0 477,435 7,700 35,054 76,100 $46,000 0 642,289 2036/37 0 491,750 7,900 36,105 78,400 $47,000 0 661,155 2037/38 0 506,503 8,100 37,189 80,800 $48,000 0 680,591 2038/39 0 521,710 8,300 38,305 83,200 $49,000 0 700,515 2039/40 0 537,355 8,500 39,454 85,700 $50,000 0 721,009 2040/41 0 553,473 8,800 40,638 88,300 $51,000 0 742,210 2041/42 0 570,080 9,100 41,856 90,900 $52,000 0 763,936 2042/43 0 587,195 9,400 43,113 93,600 $53,000 0 786,308 2043/44 0 604,818 9,700 44,406 96,400 $54,000 0 809,324 2044/45 0 622,965 10,000 45,739 99,300 $55,000 0 833,004 2045/46 0 641,655 10,300 47,111 102,300 $56,000 0 857,366 2046/47 0 660,905 10,600 48,525 105,400 $57,000 0 882,430 2047/48 0 680,733 10,900 49,981 108,600 $58,000 0 908,214 2048/49 0 701,155 11,200 51,481 111,900 $59,000 0 934,736 2049/50 0 722,190 11,500 53,026 115,300 $60,000 0 962,016 Total 25 Years $0 $12,952,538 $208,000 $950,994 $2,065,000 $1,200,000 $0 $17,376,531 *Parking assumed at 50% of other operated departments revenue *Other Expenditure = total revenue - rooms expenditure - parking + leased space retail and restaurant revenue Taxes

BASE CASE - FISCAL IMPACT

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Packet Pg. 860 Attachment: Attachment M Applicant CBRE Economic and Fiscal Impact Ocean Avenue Project (4857 : Ocean Avenue Project Development Harding Larmore Kutcher & Kozal, LLP
Ocean Avenue Project
March 25, 2021

Overnight Visitor Direct +
Indirect Economic Impact TOT
Sales and Use
Tax Utilities Business Parking
Property Tax
(Hotel)
Property Tax
(Non-Hotel) Total
2021 Rep Yr $134,414,164 $3,787,140 $768,880 $65,800 $29,284 $58,600 $190,000 $296,520 $5,196,104 2025/26 $93,857,041 3,702,160 835,030 74,400 25,246 49,400 206,000 327,320 5,224,376 2026/27 $107,851,261 4,254,180 887,920 76,600 32,088 63,500 223,000 333,900 5,862,907 2027/28 $115,411,125 4,552,380 922,621 78,900 35,211 70,400 241,000 340,620 6,218,893 2028/29 $118,768,992 4,684,820 950,309 81,200 36,231 72,500 261,000 347,480 6,395,480 2029/30 $122,251,224 4,822,160 978,829 83,600 37,290 74,600 283,000 354,480 6,578,079 2030/31 $125,982,188 4,969,440 1,008,172 86,100 38,431 76,900 306,000 361,620 6,772,104 2031/32 $129,713,151 5,116,580 1,038,419 88,700 39,565 79,100 331,000 368,900 6,967,164 2032/33 $133,692,845 5,273,520 1,069,575 91,400 40,784 81,500 358,000 376,320 7,173,599 2033/34 $137,672,539 5,430,460 1,101,652 94,100 41,996 84,000 388,000 383,880 7,381,328 2034/35 $141,776,598 5,592,440 1,134,711 97,000 43,248 86,400 420,000 391,580 7,595,358 2035/36 $146,029,896 5,760,160 1,168,760 99,900 44,545 89,000 455,000 399,420 7,816,645 2036/37 $150,410,793 5,932,920 1,294,425 102,900 45,881 91,700 493,000 407,400 8,135,106 2037/38 $154,923,117 6,110,860 1,333,269 106,000 47,258 94,400 534,000 415,520 8,372,346 2038/39 $159,570,810 6,294,120 1,373,256 109,200 48,675 97,300 578,000 423,780 8,616,671 2039/40 $164,357,934 6,482,980 1,414,468 112,500 50,136 100,200 626,000 432,320 8,868,384 2040/41 $169,288,672 6,677,440 1,456,898 115,800 51,640 103,200 678,000 441,000 9,127,338 2041/42 $174,367,333 6,877,780 1,500,609 119,200 53,190 106,300 734,000 449,820 9,393,839 2042/43 $179,598,353 7,084,140 1,545,615 122,700 54,785 109,500 795,000 458,780 9,668,180 2043/44 $184,986,303 7,296,660 1,591,978 126,400 56,429 112,800 861,000 468,020 9,950,807 2044/45 $190,535,892 7,515,620 1,639,729 130,200 58,121 116,200 932,000 477,400 10,241,790 2045/46 $196,251,969 7,741,020 1,688,933 134,100 59,865 119,700 1,009,000 486,920 10,541,198 2046/47 $202,139,528 7,973,280 1,739,586 138,100 61,660 123,300 1,092,000 496,720 10,849,586 2047/48 $208,203,714 8,212,540 1,791,754 142,300 63,509 127,000 1,182,000 506,660 11,167,123 2048/49 $214,449,825 8,458,940 1,845,504 146,600 65,414 130,800 1,279,000 516,740 11,493,917 2049/50 $220,883,320 8,712,760 1,900,849 151,000 67,375 134,700 1,384,000 527,100 11,830,544 Total 25 Years $3,942,974,423 $155,529,360 $33,212,870 $2,708,900 $1,198,573 $2,394,400 $15,649,000 $10,493,700 $212,242,763 Fiscal Impact
*Parking assumed at 50% of other operated departments revenue *Other Expenditure = total revenue - rooms expenditure - parking + leased space retail and restaurant revenue

INCREMENTAL IMPACT

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Packet Pg. 861 Attachment: Attachment M Applicant CBRE Economic and Fiscal Impact Ocean Avenue Project (4857 : Ocean Avenue Project Development Addenda

ADDENDA

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Packet Pg. 862 Attachment: Attachment M Applicant CBRE Economic and Fiscal Impact Ocean Avenue Project (4857 : Ocean Avenue Project Development Addenda

ADDENDUM A

COMPARABLE FINANCIALS

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Packet Pg. 863 Attachment: Attachment M Applicant CBRE Economic and Fiscal Impact Ocean Avenue Project (4857 : Ocean Avenue Project Development Addenda

PROPOSED OCEAN AVENUE PROJECT
Operating Results of Comparable Hotels
Hotel A Hotel B Hotel C
Ratio Per Room P.O.R. Ratio Per Room P.O.R. Ratio Per Room P.O.R.

Revenues
Rooms 60.3% $277,620 $960.72 54.5% $156,656 $576.05 59.5% $164,713 $564.75 Food & Beverage 33.0% 151,747 525.13 36.7% 105,469 387.82 33.4% 92,374 316.72 Other Operated Departments 5.2% 24,104 83.41 4.9% 14,030 51.59 5.7% 15,861 54.38 Miscellaneous Income 1.5% 6,897 23.87 4.0% 11,533 42.41 1.4% 3,951 13.55 Total Revenues 100.0% 460,368 1,593.13 100.0% 287,687 1,057.87 100.0% 276,898 949.40 Departmental Expenses
Rooms 35.7% 99,078 342.86 35.3% 55,248 203.16 28.1% 46,212 158.45 Food & Beverage 96.6% 146,545 507.13 85.1% 89,806 330.23 78.4% 72,407 248.26 Other Operated Departments 74.4% 17,934 62.06 89.4% 12,542 46.12 79.2% 12,569 43.09 Total Departmental Expenses 57.2% 263,557 912.05 54.8% 157,595 579.50 47.4% 131,187 449.80 Departmental Profit 42.8% 196,811 681.08 45.2% 130,092 478.37 52.6% 145,711 499.60 Undistributed Expenses
Administrative & General 8.3% 38,183 132.13 8.2% 23,563 86.65 9.7% 26,949 92.40 Information and Telecommunication Systems 1.3% 6,011 20.80 1.6% 4,495 16.53 2.1% 5,699 19.54 Sales and Marketing 8.5% 39,031 135.07 4.6% 13,350 49.09 6.7% 18,678 64.04 Property Operations and Maintenance 4.8% 22,031 76.24 4.1% 11,767 43.27 3.7% 10,344 35.47 Utilities 1.5% 6,890 23.84 2.2% 6,311 23.21 2.1% 5,752 19.72 Total Undistributed Operating Expenses 24.4% 112,146 388.09 20.7% 59,486 218.74 24.3% 67,422 231.17 Gross Operating Profit 18.4% 84,665 292.99 24.5% 70,606 259.63 28.3% 78,289 268.43 Base Management Fee 1.9% 8,824 30.53 4.0% 11,523 42.37 3.0% 8,320 28.53 Fixed Expenses
Property Taxes 5.0% 22,984 79.54 2.4% 6,796 24.99 2.3% 6,497 22.28 Insurance 0.3% 1,376 4.76 1.0% 2,962 10.89 1.5% 4,174 14.31 Total Fixed Expenses 5.3% 24,359 84.30 3.4% 9,758 35.88 3.9% 10,671 36.59 Net Operating Income Before Reserve 11.2% 51,482 178.16 17.1% 49,325 181.37 21.4% 59,298 203.31 FF&E Reserve 4.0% 18,415 63.73 4.0% 11,507 42.31 4.0% 11,076 37.98 Net Operating Income After Reserve 7.2% $33,068 $114.43 13.1% $37,817 $139.06 17.4% $48,222 $165.34 Source: CBRE Hotels Advisory

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Packet Pg. 864 Attachment: Attachment M Applicant CBRE Economic and Fiscal Impact Ocean Avenue Project (4857 :

Addenda

PROPOSED OCEAN AVENUE PROJECT
Operating Results of Comparable Hotels
Hotel D Hotel E Weighted Average
1 Ratio Per Room P.O.R. Ratio Per Room P.O.R. Ratio Per Room P.O.R.

Revenues
Rooms 55.0% $94,176 $350.14 59.6% $130,348 $543.54 57.4% $157,497 $573.05 Food & Beverage 38.5% 65,926 245.11 28.8% 63,071 263.00 34.7% 95,371 347.00 Other Operated Departments 6.5% 11,092 41.24 11.4% 24,850 103.62 5.9% 16,150 58.76 Miscellaneous Income 0.1% 99 0.37 0.2% 359 1.50 2.0% 5,454 19.85 Total Revenues 100.0% 171,293 636.85 100.0% 218,628 911.66 100.0% 274,472 998.66 Departmental Expenses
Rooms 33.0% 31,051 115.44 34.2% 44,534 185.70 33.3% 52,391 190.62 Food & Beverage 107.3% 70,729 262.96 105.9% 66,783 278.48 91.0% 86,805 315.84 Other Operated Departments 41.5% 4,604 17.12 78.6% 19,543 81.49 74.9% 12,091 43.99 Total Departmental Expenses 62.1% 106,385 395.53 59.9% 130,859 545.67 55.1% 151,287 550.45 Departmental Profit 37.9% 64,908 241.32 40.1% 87,768 365.99 44.9% 123,185 448.21 Undistributed Expenses
Administrative & General 10.2% 17,403 64.70 9.2% 20,011 83.44 8.9% 24,495 89.12 Information and Telecommunication Systems 1.4% 2,393 8.90 1.3% 2,820 11.76 1.6% 4,314 15.70 Sales and Marketing 8.1% 13,814 51.36 5.8% 12,775 53.27 6.6% 18,036 65.62 Property Operations and Maintenance 4.0% 6,819 25.35 1.5% 3,306 13.78 4.0% 10,845 39.46 Utilities 2.6% 4,470 16.62 1.9% 4,083 17.03 2.0% 5,617 20.44 Total Undistributed Operating Expenses 26.2% 44,899 166.93 19.7% 42,995 179.28 23.1% 63,308 230.34 Gross Operating Profit 11.7% 20,009 74.39 20.5% 44,774 186.70 21.8% 59,878 217.86 Base Management Fee 4.3% 7,412 27.56 3.0% 6,559 27.35 3.3% 9,001 32.75 Fixed Expenses
Property Taxes 0.0% (69) (0.26) 3.8% 8,228 34.31 2.7% 9,697 35.05 Insurance 1.2% 2,007 7.46 0.1% 208 0.87 0.9% 2,532 9.21 Total Fixed Expenses 1.1% 1,938 7.20 3.9% 8,436 35.18 3.6% 9,961 36.24 Net Operating Income Before Reserve 6.2% 10,659 39.63 13.6% 29,779 124.17 14.9% 40,916 148.87 FF&E Reserve 4.0% 6,852 25.47 4.0% 8,745 36.47 4.0% 10,979 39.95 Net Operating Income After Reserve 2.2% $3,807 $14.15 9.6% $21,033 $87.71 10.9% $29,937 $108.93 Source: CBRE Hotels Advisory

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Packet Pg. 865 Attachment: Attachment M Applicant CBRE Economic and Fiscal Impact Ocean Avenue Project (4857 :

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Addendum B

ESTIMATED OPERATING RESULTS FOR THE

PROPOSED HOTEL

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Packet Pg. 866 Attachment: Attachment M Applicant CBRE Economic and Fiscal Impact Ocean Avenue Project (4857 : Ocean Avenue Project Development Addenda

PROPOSED OCEAN AVENUE PROJECT
Projected Operating Results
Fiscal Years Beginning March 1
2025/26 2026/27 2027/28 2028/29 2029/30
Number of Units: 120 120 120 120 120
Number of Annual Rooms Available: 43,800 43,800 43,800 43,800 43,800 Number of Rooms Occupied: 30,222 33,726 35,040 35,040 35,040 Annual Occupancy: 69.0% 77.0% 80.0% 80.0% 80.0%
Average Daily Rate: $875.00 $901.00 $928.00 $955.00 $983.00 Revenue Per Available Room: $603.75 $693.77 $742.40 $764.00 $786.40 Amount Ratio Amount Ratio Amount Ratio Amount Ratio Amount Ratio Revenues
Rooms $26,444,000 64.4% $30,387,000 64.4% $32,517,000 64.6% $33,463,000 64.6% $34,444,000 64.6% Food & Beverage 8,785,000 21.4% 10,098,000 21.4% 10,806,000 21.5% 11,130,000 21.5% 11,464,000 21.5% Other Operated Departments 2,119,000 5.2% 2,436,000 5.2% 2,607,000 5.2% 2,685,000 5.2% 2,766,000 5.2% Miscellaneous Income 3,715,000 9.0% 4,241,000 9.0% 4,376,000 8.7% 4,508,000 8.7% 4,643,000 8.7% Total Revenues 41,063,000 100.0% 47,162,000 100.0% 50,306,000 100.0% 51,786,000 100.0% 53,317,000 100.0% Departmental Expenses
Rooms 7,382,000 27.9% 8,011,000 26.4% 8,409,000 25.9% 8,662,000 25.9% 8,921,000 25.9% Food & Beverage 8,411,000 95.7% 9,230,000 91.4% 9,725,000 90.0% 10,017,000 90.0% 10,318,000 90.0% Other Operated Departments 1,653,000 78.0% 1,900,000 78.0% 2,033,000 78.0% 2,094,000 78.0% 2,157,000 78.0% Total Departmental Expenses 17,446,000 42.5% 19,141,000 40.6% 20,167,000 40.1% 20,773,000 40.1% 21,396,000 40.1% Departmental Profit 23,617,000 57.5% 28,021,000 59.4% 30,139,000 59.9% 31,013,000 59.9% 31,921,000 59.9% Undistributed Expenses
Administrative & General 3,470,000 8.5% 3,695,000 7.8% 3,850,000 7.7% 3,964,000 7.7% 4,083,000 7.7% Information and Telecommunication Systems 556,000 1.4% 573,000 1.2% 590,000 1.2% 608,000 1.2% 626,000 1.2% Sales and Marketing 2,375,000 5.8% 2,446,000 5.2% 2,520,000 5.0% 2,595,000 5.0% 2,673,000 5.0% Property Operations and Maintenance 1,629,000 4.0% 1,678,000 3.6% 1,728,000 3.4% 1,780,000 3.4% 1,833,000 3.4% Utilities 801,000 2.0% 825,000 1.7% 850,000 1.7% 875,000 1.7% 901,000 1.7% Total Undistributed Operating Expenses 8,831,000 21.5% 9,217,000 19.5% 9,538,000 19.0% 9,822,000 19.0% 10,116,000 19.0% Gross Operating Profit 14,786,000 36.0% 18,804,000 39.9% 20,601,000 41.0% 21,191,000 40.9% 21,805,000 40.9% Source: CBRE Hotels Advisory Fiscal Years Beginning March 1

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Packet Pg. 867 Attachment: Attachment M Applicant CBRE Economic and Fiscal Impact Ocean Avenue Project (4857 :

Addenda

PROPOSED OCEAN AVENUE PROJECT
Projected Operating Results
Fiscal Years Beginning March 1
2030/31 2031/32 2032/33 2033/34 2034/35
Number of Units: 120 120 120 120 120
Number of Annual Rooms Available: 43,800 43,800 43,800 43,800 43,800 Number of Rooms Occupied: 35,040 35,040 35,040 35,040 35,040 Annual Occupancy: 80.0% 80.0% 80.0% 80.0% 80.0%
Average Daily Rate: $1,013.00 $1,043.00 $1,075.00 $1,107.00 $1,140.00 Revenue Per Available Room: $810.40 $834.40 $860.00 $885.60 $912.00 Amount Ratio Amount Ratio Amount Ratio Amount Ratio Amount Ratio Revenues
Rooms $35,496,000 64.6% $36,547,000 64.6% $37,668,000 64.6% $38,789,000 64.6% $39,946,000 64.6% Food & Beverage 11,808,000 21.5% 12,162,000 21.5% 12,527,000 21.5% 12,903,000 21.5% 13,290,000 21.5% Other Operated Departments 2,849,000 5.2% 2,934,000 5.2% 3,022,000 5.2% 3,113,000 5.2% 3,206,000 5.2% Miscellaneous Income 4,782,000 8.7% 4,925,000 8.7% 5,073,000 8.7% 5,225,000 8.7% 5,382,000 8.7% Total Revenues 54,935,000 100.0% 56,568,000 100.0% 58,290,000 100.0% 60,030,000 100.0% 61,824,000 100.0% Departmental Expenses
Rooms 9,189,000 25.9% 9,465,000 25.9% 9,749,000 25.9% 10,041,000 25.9% 10,342,000 25.9% Food & Beverage 10,627,000 90.0% 10,946,000 90.0% 11,274,000 90.0% 11,613,000 90.0% 11,961,000 90.0% Other Operated Departments 2,222,000 78.0% 2,289,000 78.0% 2,357,000 78.0% 2,428,000 78.0% 2,501,000 78.0% Total Departmental Expenses 22,038,000 40.1% 22,700,000 40.1% 23,380,000 40.1% 24,082,000 40.1% 24,804,000 40.1% Departmental Profit 32,897,000 59.9% 33,868,000 59.9% 34,910,000 59.9% 35,948,000 59.9% 37,020,000 59.9% Undistributed Expenses
Administrative & General 4,206,000 7.7% 4,331,000 7.7% 4,462,000 7.7% 4,596,000 7.7% 4,733,000 7.7% Information and Telecommunication Systems 645,000 1.2% 664,000 1.2% 684,000 1.2% 705,000 1.2% 726,000 1.2% Sales and Marketing 2,754,000 5.0% 2,836,000 5.0% 2,921,000 5.0% 3,009,000 5.0% 3,099,000 5.0% Property Operations and Maintenance 1,888,000 3.4% 1,945,000 3.4% 2,003,000 3.4% 2,063,000 3.4% 2,125,000 3.4% Utilities 928,000 1.7% 956,000 1.7% 985,000 1.7% 1,014,000 1.7% 1,045,000 1.7% Total Undistributed Operating Expenses 10,421,000 19.0% 10,732,000 19.0% 11,055,000 19.0% 11,387,000 19.0% 11,728,000 19.0% Gross Operating Profit 22,476,000 40.9% 23,136,000 40.9% 23,855,000 40.9% 24,561,000 40.9% 25,292,000 40.9% Source: CBRE Hotels Advisory

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Packet Pg. 868 Attachment: Attachment M Applicant CBRE Economic and Fiscal Impact Ocean Avenue Project (4857 :

Addenda
Addendum C

ASSUMPTIONS AND LIMITING CONDITIONS

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Packet Pg. 869 Attachment: Attachment M Applicant CBRE Economic and Fiscal Impact Ocean Avenue Project (4857 : Ocean Avenue Project Development Addenda
Assumptions and Limiting Conditions

1. CBRE, Inc. through its consultant (collectively, “CBRE”) has inspected through reasonable observation the subject property. However, it is not possible or reasonably practicable to personally inspect conditions beneath the soil and the entire interior and exterior of the improvements on the subject property. Therefore, no representation is made as to such matters.

2. The report, including its conclusions and any portion of such report (the “Report”), is as of the date set forth in the letter of transmittal and based upon the information, market, economic, and property conditions and projected levels of operation existing as of such date. The dollar amount of any conclusion as to value in the Report is based upon the purchasing power of the U.S. Dollar on such date. The Report is subject to change as a result of fluctuations in any of the foregoing. CBRE has no obligation to revise the Report to reflect any such fluctuations or other events or conditions which occur subsequent to such date.

3. Unless otherwise expressly noted in the Report, CBRE has assumed that:
(i) Title to the subject property is clear and marketable and that there are no recorded or unrecorded matters or exceptions to title that would adversely affect marketability or value. CBRE has not examined title records (including without limitation liens, encumbrances, easements, deed restrictions, and other conditions that may affect the title or use of the subject property) and makes no representations regarding title or its limitations on the use of the subject property. Insurance against financial loss that may arise out of defects in title should be sought from a qualified title insurance company.
(ii) Existing improvements on the subject property conform to applicable local, state, and federal building codes and ordinances, are structurally sound and seismically safe, and have been built and repaired in a workmanlike manner according to standard practices; all building systems (mechanical/electrical, HVAC, elevator, plumbing, etc.) are in good working order with no major deferred maintenance or repair required; and the roof and exterior are in good condition and free from intrusion by the elements. CBRE has not retained independent structural, mechanical, electrical, or civil engineers in connection with this consulting report and, therefore, makes no representations relative to the condition of improvements. CBRE consultants are not engineers and are not qualified to judge matters of an engineering nature, and furthermore structural problems or building system problems may not be visible. It is expressly assumed that any purchaser would, as a precondition to closing a sale, obtain a satisfactory engineering report relative to the structural integrity of the property and the integrity of building systems.
(iii) Any proposed improvements, on or off-site, as well as any alterations or repairs considered will be completed in a workmanlike manner according to standard practices.
(iv) Hazardous materials are not present on the subject property. CBRE is not qualified to detect such substances.

The presence of substances such as asbestos, urea formaldehyde foam insulation, contaminated groundwater, mold, or other potentially hazardous materials may affect the value of the property. (v) No mineral deposit or subsurface rights of value exist with respect to the subject property, whether gas, liquid, or solid, and no air or development rights of value may be transferred. CBRE has not considered any rights associated with extraction or exploration of any resources, unless otherwise expressly noted in the Report. (vi) There are no contemplated public initiatives, governmental development controls, rent controls, or changes in the present zoning ordinances or regulations governing use, density, or shape that would significantly affect the value of the subject property.
(vii) All required licenses, certificates of occupancy, consents, or other legislative or administrative authority from any local, state, nor national government or private entity or organization have been or can be readily obtained or renewed for any use on which the Report is based.
(viii) The subject property is managed and operated in a prudent and competent manner, neither inefficiently or superefficiently. (ix) The subject property and its use, management, and operation are in full compliance with all applicable federal, state, and local regulations, laws, and restrictions, including without limitation environmental laws, seismic hazards, flight patterns, decibel levels/noise envelopes, fire hazards, hillside ordinances, density, allowable uses, building codes, permits, and licenses.
(x) The subject property is in full compliance with the Americans with Disabilities Act (ADA). CBRE is not qualified to assess the subject property’s compliance with the ADA, notwithstanding any discussion of possible readily achievable barrier removal construction items in the Report.

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Packet Pg. 870 Attachment: Attachment M Applicant CBRE Economic and Fiscal Impact Ocean Avenue Project (4857 : Ocean Avenue Project Development Addenda
(xi) All information regarding the areas and dimensions of the subject property furnished to CBRE are correct, and no encroachments exist. CBRE has neither undertaken any survey of the boundaries of the subject property nor reviewed or confirmed the accuracy of any legal description of the subject property.

Unless otherwise expressly noted in the Report, no issues regarding the foregoing were brought to CBRE’s attention, and CBRE has no knowledge of any such facts affecting the subject property. If any information inconsistent with any of the foregoing assumptions is discovered, such information could have a substantial negative impact on the Report. Accordingly, if any such information is subsequently made known to CBRE, CBRE reserves the right to amend the Report, which may include the conclusions of the Report. CBRE assumes no responsibility for any conditions regarding the foregoing, or for any expertise or knowledge required to discover them. Any user of the Report is urged to retain an expert in the applicable field(s) for information regarding such conditions.

4. CBRE has assumed that all documents, data and information furnished by or behalf of the client, property owner, or owner’s representative are accurate and correct, unless otherwise expressly noted in the Report. Such data and information include, without limitation, numerical street addresses, lot and block numbers, Assessor’s Parcel Numbers, land dimensions, square footage area of the land, dimensions of the improvements, gross building areas, net rentable areas, usable areas, unit count, room count, rent schedules, income data, historical operating expenses, budgets, and related data. Any error in any of the above could have a substantial impact on the Report. Accordingly, if any such errors are subsequently made known to CBRE, CBRE reserves the right to amend the Report, which may include the conclusions of the Report. The client and intended user should carefully review all assumptions, data, relevant calculations, and conclusions of the Report and should immediately notify CBRE of any questions or errors within 30 days after the date of delivery of the Report.

5. CBRE assumes no responsibility (including any obligation to procure the same) for any documents, data or information not provided to CBRE, including without limitation any termite inspection, survey or occupancy permit.

6. All furnishings, equipment and business operations have been disregarded with only real property being considered in the Report, except as otherwise expressly stated and typically considered part of real property.

7. Any cash flows included in the analysis are forecasts of estimated future operating characteristics based upon the information and assumptions contained within the Report. Any projections of income, expenses and economic conditions utilized in the Report, including such cash flows, should be considered as only estimates of the expectations of future income and expenses as of the date of the Report and not predictions of the future. Actual results are affected by a number of factors outside the control of CBRE, including without limitation fluctuating economic, market, and property conditions. Actual results may ultimately differ from these projections, and CBRE does not warrant any such projections.

8. The Report contains professional opinions and is expressly not intended to serve as any warranty, assurance or guarantee of any particular value of the subject property. Other consultants may reach different conclusions as to the value of the subject property. Furthermore, market value is highly related to exposure time, promotion effort, terms, motivation, and conclusions surrounding the offering of the subject property. The Report is for the sole purpose of providing the intended user with CBRE’s independent professional opinion of the value of the subject property as of the date of the Report. Accordingly, CBRE shall not be liable for any losses that arise from any investment or lending decisions based upon the Report that the client, intended user, or any buyer, seller, investor, or lending institution may undertake related to the subject property, and CBRE has not been compensated to assume any of these risks. Nothing contained in the Report shall be construed as any direct or indirect recommendation of CBRE to buy, sell, hold, or finance the subject property.

9. No opinion is expressed on matters which may require legal expertise or specialized investigation or knowledge beyond that customarily employed by real estate consultants. Any user of the Report is advised to retain experts in areas that fall outside the scope of the real estate consulting report profession for such matters.

10. CBRE assumes no responsibility for any costs or consequences arising due to the need, or the lack of need, for flood hazard insurance. An agent for the Federal Flood Insurance Program should be contacted to determine the actual need for Flood Hazard Insurance.

11. Acceptance or use of the Report constitutes full acceptance of these Assumptions and Limiting Conditions and any special assumptions set forth in the Report. It is the responsibility of the user of the Report to read in full, comprehend and thus become aware of all such assumptions and limiting conditions. CBRE assumes no responsibility for any situation arising out of the user’s failure to become familiar with and understand the same.

12. The Report applies to the property as a whole only, and any pro ration or division of the title into fractional interests will invalidate such conclusions, unless the Report expressly assumes such pro ration or division of interests.

13. The allocations of the total value estimate in the Report between land and improvements apply only to the existing use of the subject property. The allocations of values for each of the land and improvements are not intended to be used with any other property or consulting report and are not valid for any such use.

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Packet Pg. 871 Attachment: Attachment M Applicant CBRE Economic and Fiscal Impact Ocean Avenue Project (4857 : Ocean Avenue Project Development Addenda

14. The maps, plats, sketches, graphs, photographs, and exhibits included in this Report are for illustration purposes only and shall be utilized only to assist in visualizing matters discussed in the Report. No such items shall be removed, reproduced, or used apart from the Report.

15. The Report shall not be duplicated or provided to any unintended users in whole or in part without the written consent of CBRE, which consent CBRE may withhold in its sole discretion. Exempt from this restriction is duplication for the internal use of the intended user and its attorneys, accountants, or advisors for the sole benefit of the intended user.

Also exempt from this restriction is transmission of the Report pursuant to any requirement of any court, governmental authority, or regulatory agency having jurisdiction over the intended user, provided that the Report and its contents shall not be published, in whole or in part, in any public document without the written consent of CBRE, which consent CBRE may withhold in its sole discretion. Finally, the Report shall not be made available to the public or otherwise used in any offering of the property or any security, as defined by applicable law. Any unintended user who may possess the Report is advised that it shall not rely upon the Report or its conclusions and that it should rely on its own consultants, advisors and other consultants for any decision in connection with the subject property. CBRE shall have no liability or responsibility to any such unintended user.

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Packet Pg. 872 Attachment: Attachment M Applicant CBRE Economic and Fiscal Impact Ocean Avenue Project (4857 : Ocean Avenue Project Development Attachment N
Final Environmental Impact Report and Appendices for the Ocean Avenue Project available online:
https://www.smgov.net/Departments/PCD/Environmental-Reports/Ocean-AvenueProject-EIR/

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Packet Pg. 873 Attachment: Attachment N Link to Ocean Avenue Project EIR (4857 : Ocean Avenue Project Development Agreement (180 mins)) Attachment O
Environmental Analysis
Project Exempt Pursuant to CEQA 15182
The City is the Lead Agency for this project under the California Environmental Quality Act (“CEQA”) (Public Resources Code Section 21000 et seq.), and the CEQA Guidelines (California Code of Regulations, Title 14). Per Section 15182 of the regulations implementing CEQA (CEQA Guidelines), a residential or mixed-use project, or a project with a floor area ratio of at least 0.75 on commercially-zoned property, including any required subdivision or zoning approvals, is exempt from CEQA if the project satisfies the following criteria:
(A) It is located within a transit priority area as defined in Public Resources Code section 21099(a)(7);
(B) It is consistent with a specific plan for which an environmental impact report was certified; and
(C) It is consistent with the general use designation, density, building intensity, and applicable policies specified for the project area in either a sustainable communities strategy or an alternative planning strategy for which the State Air Resources Board has accepted the determination that the sustainable communities strategy or the alternative planning strategy would achieve the applicable greenhouse gas emissions reduction targets.

The Project meets all of the above criteria. Specifically, the Project site is located in a Transit Priority Area (TPA), as it is within 0.5 miles of a major transit stop – the Downtown Station for the Metro E (Expo) Light Rail line. Additionally, the proposed Project is consistent with the applicable specific plan for this area - the Downtown Community Plan, for which a Program EIR was certified (State Clearinghouse No. 2013091056). Lastly, the proposed Project is consistent with the general use designation, density, building intensity, and policies of the Southern California Association of Government’s (SCAG’s) adopted 2016-2040 Regional Transportation Plan/Sustainable Communities Strategy (RTP/SCS). Lastly, as confirmed by the EIR, the Project does not cause any new significant impacts, or worsen any previously12.A.t Packet Pg. 874 Attachment: Attachment O Environmental Analysis for Ocean Avenue Project (4857 : Ocean Avenue Project Development Agreement (180 identified significant impacts, than those identified in the DCP EIR. Therefore, the Project is legally exempt from CEQA per Section 15182.

The DCP allows projects on Established Large Sites (ELS) to be authorized up to an absolute height limit of 130 feet subject to four requirements, one of which is requires additional environmental review to the extent not analyzed in the DCP Final EIR. The other three DCP requirements include: the project shall be processed through a Development Agreement; preparation of a shade/shadow analysis; and inclusion in the application submittal comprehensive responses to how the project meets each of the priorities described in the Downtown Districts Chapter. The Project meets all of these DCP requirements
EIR Analysis Conducted in Accordance with the Downtown Community Plan Given public interest, and to promote informed decision-making, the City has also prepared an Environmental Impact Report (EIR) for the Project in compliance with CEQA instead of simply confirming the applicability of the Section 15182. In accordance with Section 15121 of the CEQA Guidelines, the purpose of the EIR is to serve as an informational document that: “…will inform public agency decision-makers and the public generally of the significant environmental effect of a project, identify possible ways to minimize the significant effects, and describe reasonable alternatives to the project.” (City of Santa Monica, Downtown Community Plan, July 2017, p. 196; and the City of Santa Monica’s procedures for implementing CEQA). The principal State CEQA Guidelines sections governing content of the EIR are Sections 15120 through 15132 (Contents of an EIR), and Section 15161 (Project EIR).

As required by Section 15082 of the CEQA Guidelines, a Notice of Preparation (NOP) for the EIR was published on December 21, 2018 with the review period ending on January 30, 2019. The purpose of the NOP was to formally convey that the City was preparing a Draft EIR for the Project, and to solicit input regarding the scope and content of the environmental information to be included in the Draft EIR.

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Packet Pg. 875 Attachment: Attachment O Environmental Analysis for Ocean Avenue Project (4857 : Ocean Avenue Project Development Agreement (180 In addition, a public scoping meeting was held on January 10, 2019 from 6:00 P.M. to 7:30 P.M. at the Civic Center Auditorium at 1855 Main Street, Santa Monica, California 90401. The meeting included a presentation of the Project and an overview of the CEQA process followed by an open house format which provided interested individuals, groups, and public agencies the opportunity to view materials, ask questions, and provide oral and written comments to the City regarding the scope and focus of the Draft EIR as described in the NOP.

In recognition of the current COVID-19 pandemic, an extended 90-day comment period for the Draft EIR was provided, which began on May 18, 2020 and ended on August 17, 2020. In accordance with Section 15087(a) of the State CEQA Guidelines, a public notice indicating the Draft EIR was available for review was distributed to parties providing comment on the NOP and residents within a 1,000-foot radius of the Project Site. Additionally, the notice was published in the Santa Monica Daily Press and mailed to all neighborhood groups, relevant governmental agencies, and interested parties.

The Draft EIR was made available for review online on the City of Santa Monica’s Planning & Community Development Department website.

The environmental issues studied in detail in the Draft EIR include:
• Aesthetics (Visual Character, Views, Light and Glare, Shading) • Air Quality/Health Risk
• Construction Effects
• Cultural Resources - Historical Resources
• Cultural Resources - Archaeology and Paleontology
• Energy
• Geology and Soils
• Greenhouse Gas Emissions
• Hazards and Hazardous Materials
• Hydrology and Water Quality
• Land Use/Planning
• Neighborhood Effects
• Noise and Vibration
• Transportation
• Tribal Cultural Resources
• Utilities and Service Systems

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Packet Pg. 876 Attachment: Attachment O Environmental Analysis for Ocean Avenue Project (4857 : Ocean Avenue Project Development Agreement (180 Other issue areas such as Agricultural/Forestry Resources, Biological Resources, Mineral Resources, Population/Employment/Housing, Public Services, and Recreation were determined to be less than significant in the Initial Study (Appendix A of the EIR).

The Final EIR, which was published on May 3, 2022, contains all comments and responses to comments received during the comment period as well as minor changes to the Draft EIR. Prior to Council certification of the Final EIR, Staff is recommending additional minor revisions to the Final EIR clarifying that the City’s 2018 draft Local Coastal Plan Land Use Plan (LUP) has not yet been certified and to specify that implementation of the Project would require a site-specific amendment to the 1992 LUP.

Comments on the Draft EIR
The Draft EIR was available for a 90-day public review period, during which a total of 7 comment letters were received. Comments were raised regarding the transportation analysis, adequacy of the EIR, general support for the project, and concerns about historic effects. Responses to all comments received are included in the Final EIR within Chapter 10, Responses to Comments.

Significant Impacts
As indicated in Chapter 3, Environmental Impact Analysis, of the Final EIR, the Project would result in significant unavoidable impacts related to construction-related groundborne vibration that could affect the adjacent off-site Gussie Moran House, which is a City-designated Landmark (refer to Section 3.3, Construction Effects, Section 3.4, Cultural Resources and Section 3.12, Noise). Additionally, based on the City’s prior thresholds for intersection levels of service (LOS), the proposed Project would result in significant and unavoidable impacts related to neighborhood traffic effects and transportation (refer to Section 3.11, Neighborhood Effects and Section 3.13, Transportation).

Cultural Resources - Historical Resources
The Gussie Moran House, located at 1323 Ocean Avenue, immediately north of the Project site is a City-designated Landmark as it helps illustrate the historic context of

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Packet Pg. 877 Attachment: Attachment O Environmental Analysis for Ocean Avenue Project (4857 : Ocean Avenue Project Development Agreement (180 Ocean Avenue. Construction activities along the northern boundary of the Project site would exceed the California Department of Transportation (Caltrans) vibration damage potential threshold criteria for “Fragile” and “Fragile Historic” buildings. Therefore, Project construction activities could result in structural damage to the building – particularly the decorative shingles, steeple, tower, and chimney. MM CR-1 and MM NOI-2 could reduce potential impacts to less than significant; however, implementation of these mitigation measures would require consent from the owner of 1323 Ocean Avenue (Gussie Moran House). The City does not have the jurisdiction or control to mandate that the offsite property owner consent to the Applicant’s implementation of these mitigation measures. Therefore, because the consent of the offsite property owner cannot be guaranteed, it has been conservatively concluded that unless mitigated, construction activities could have potentially significant and unavoidable historic impacts to the Gussie Moran House.

Noise
As described previously, onsite construction-related vibration impacts would be reduced to less than significant through the implementation of MM NOI-2. However, construction activities could result in structural damage to the Gussie Moran House – particularly the decorative shingles, steeple, tower, and chimney. MM NOI-2 could reduce potential impacts to less than significant; however, that would require voluntary acceptance of these mitigation measure requirements by the property owner. The City does not have the jurisdiction or control to mandate implementation of these mitigation measures by the property owner. Therefore, because the consent of the offsite property owner cannot be guaranteed, it has been conservatively concluded that unless mitigated, construction activities could have potentially significant and unavoidable construction vibration impacts to the Gussie Moran House.

Transportation
As described further in Section 3.13 of the Final EIR, Transportation, operation of the proposed Project would generate up to an estimated 146 net new AM peak hour trips, 146 net new PM peak hour trips, and 168 net new weekend midday peak hour trips.

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Packet Pg. 878 Attachment: Attachment O Environmental Analysis for Ocean Avenue Project (4857 : Ocean Avenue Project Development Agreement (180 Based on the City’s previously adopted significance criteria of LOS, the addition of these Project-generated trips would result in significant and unavoidable impacts at the following four study intersections under the Approval Year (2020) traffic conditions:
• Palisades Beach Road (PCH) & California Incline (weekend midday hour); • Ocean Avenue & California Avenue (PM and weekend midday peak hours); • Second Street & Wilshire Boulevard (PM and weekend midday peak hours); and • Main Street & Olympic Drive (AM and weekend midday peak hours).

In addition, the proposed Project would result in significant and unavoidable impacts at the following six study intersections under the Future Year (2025) traffic conditions:
• Palisades Beach Road (PCH) & the California Incline (AM peak hour); • Ocean Avenue & California Avenue (all peak hours);
• Second Street & Arizona Avenue (weekend midday peak hour); • Second Street & Santa Monica Boulevard (PM and weekend midday peak hours);
• Main Street & Olympic Drive (AM and weekend midday peak hours); and • 4th Street & Santa Monica Boulevard (all peak hours).

As described in Section 3.13, Transportation, there are no feasible mitigation measures to avoid or reduce the traffic impacts at any of these intersections. Potential mitigations (e.g., re-timing signals, removing on-street parking, removing bicycle lanes, etc.) would be inconsistent with the policies of the City’s LUCE and DCP, which are intended to encourage multi-modal transportation.

It should be noted that after publication of the Draft EIR, on June 9th, 2020 the City adopted vehicle miles traveled (VMT) as the metric for analyzing the transportation impacts of projects that are subject to CEQA, to align with the requirements of Senate Bill (SB)743. VMT measures the cumulative distance of automobile travel, taking into account the origin and destination of a particular trip. Typically, development located at a greater distance from other land uses and in areas without transit generates more VMT than development near other land uses with more robust transportation options.

Since the Project’s Notice of Preparation and Draft EIR predate the adoption of the VMT thresholds, the Project’s analysis of transportation effects in the EIR are utilized using

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Packet Pg. 879 Attachment: Attachment O Environmental Analysis for Ocean Avenue Project (4857 : Ocean Avenue Project Development Agreement (180 the former level of service (LOS) standards. Nonetheless, Section 3.13, Transportation, of the EIR does provide analysis and disclosure of the Project’s VMT effects.

Neighborhood Effects
The proposed Project would result in significant and unavoidable intersection impacts at four study intersections under the Approval Year (2020) and six study intersection during the Future Year (2025) based on the City’s previously adopted LOS significance thresholds. Therefore, neighborhood effects related to intersection operations would remain significant and unavoidable.

Alternatives Studied
The selection of alternatives studied in the EIR are based on CEQA requirements as well as consideration of public comments received during the NOP comment period for the Draft EIR. The EIR studied five alternatives to the project, which are intended to reduce the environmental impacts of the projects:
• Alternative 1 – No Project/No Build
Per CEQA Guidelines Section 15126.6(e)(2), the No Project/No Build Alternative analysis discusses the existing conditions at the time the Notice of Preparation (NOP) was published (December 21, 2018) and compares impacts of the No Project/No Build Alternative to the Project. Under the No Project/No Build Alternative, the Project would not be developed. Rather, the existing on-site uses (commercial office, medical offices, medical spa, salon, restaurants, and parking lot) would remain unchanged.
• Alternative 2 – DCP Tier II Mixed-Use Housing Projects Compliant with Ocean Transition (OT) and Bayside Conservation (BC) Districts Alternative 2 assumes that the parcels within the Project site would be sold and independently developed by separate developers. Alternative 2 would develop three individual mixed-use housing projects with ground floor commercial uses and upper floor residential uses, consistent with the DCP’s Tier II development standards for the OT and BC Districts (DCP Section 9.10.060). Alternative 2 would consist of three individual four-story mixed-use housing projects at 1333 and 1337 Ocean Avenue, 101 Santa Monica Boulevard, and 129 Boulevard. These projects would be separately developed but would total 227,347 SF with 69,837 SF of ground floor restaurant and retail uses and 148,210 SF of upper floor residential

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Packet Pg. 880 Attachment: Attachment O Environmental Analysis for Ocean Avenue Project (4857 : Ocean Avenue Project Development Agreement (180 uses. Alternative 2 would include a total of 150 residential units, an approximately 50 percent increase (50 units) in residential units from the proposed Project. This alternative would also increase restaurant and retail floor area by approximately 93 percent (33,727 SF) from 36,110 SF under the proposed Project, and would eliminate the hotel and Cultural Use Campus.
• Alternative 3 – Maximum 84-Foot Building Height (Reduced FAR/Development) Alternative 3 would develop the proposed Project’s land uses with a reduced height of 84 feet and a corresponding reduction in total floor area. Similar to the proposed Project, Alternative 3 would include a hotel, mixed-use buildings with ground floor commercial uses and upper floor residential uses, and a Cultural Use Campus that would incorporate the two relocated City-designated Landmarks. Alternative 3 would consist of a mixed-use project totaling 270,570 sf with 36,110 SF of ground floor restaurant and retail uses, 100,291 SF of upper floor residential uses, 88,929 SF of hotel uses, and 35,500 SF of cultural uses. This alternative’s total floor area (above and below grade) would be approximately 15 percent less as compared to the proposed Project. Alternative 3 would include a total of 91 residential units, an approximately 9 percent decrease (9 units) in residential units from the proposed Project. This alternative would also decrease the number of hotel guestrooms by approximately 46 percent (55 guestrooms) and the total hotel floor area by approximately 28 percent (33,471 SF), from 120 guestrooms and 122,400 SF under the proposed Project.
• Alternative 4 – Retention of Existing City-Designated Landmarks and 101 Santa Monica Boulevard
Alternative 4 would develop a 50-foot-tall mixed-use commercial, residential, office, and museum project consistent with the height limits in the DCP for the BC and OT Districts. The existing City-designated Landmarks and the existing building at 101 Santa Monica Boulevard would be retained in place and three new mixed-use buildings would be constructed around the existing buildings. Alternative 4 would comprise three 50-foot-tall mixed-use buildings totaling 169,717 sf with 60,526 SF of ground floor restaurant and retail uses, 70,460 SF of upper floor residential uses, 12,000 SF of commercial office, 26,041 SF of museum space, and 690 SF of storage resulting in a 2.04 FAR. Alternative 4 would include a total of 80 residential units, an approximately 20 percent decrease (20 units) in residential units, from the proposed Project. This alternative would increase restaurant and retail floor area by approximately 68 percent (24,416 SF) from 36,110 SF under the proposed Project.

However, there would be an approximately 27 percent decrease (9,459 SF) in the size of the Cultural Use Campus (i.e., museum), from 35,500 SF under the proposed Project.
• Alternative 5 –Revised Circulation Alternative

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Packet Pg. 881 Attachment: Attachment O Environmental Analysis for Ocean Avenue Project (4857 : Ocean Avenue Project Development Agreement (180 Alternative 5 would involve development of a mixed-use hotel, residential, commercial, and Cultural Use Campus as generally described for the proposed Project. However, this alternative would include a revised circulation plan to address City concerns related to potential drop-off location along Ocean Avenue.

As with the proposed Project, Alternative 5 would reconfigure First Court into an “L”- shape with one-way access from Arizona Avenue east to Second Street. A vehicle access ramp from First Court would provide entry to the proposed subterranean parking garage. However, Alternative 5 would also provide an additional entrance to the Project site via a 16-foot wide curb cut along Ocean Avenue with a 13-foot wide vehicle access ramp into the proposed subterranean parking garage. This ramp would be similar in design and at construction to similar grade as compared to the other ramps on the Project site. This additional vehicle access ramp would be positioned between the proposed Cultural Use Campus and Hotel Building and extend above grade for approximately 100 feet through the heart of the public courtyard fronting the Cultural Use Campus. Alternative 5 would include 36,110 SF of ground floor restaurant and retail uses, 117,700 SF of upper floor residential uses (100 residential units), and 121,400 SF of hotel uses (120 guestrooms).

However, due to the configuration of the additional vehicle access ramp, this alternative would result in a reduction of ground level open space and a 2,000-SF reduction of below ground area for museum gallery space, hotel ballroom space, and back-of-house (BOH) uses. In total, Alternative 5 would have a total development area of 314,750 SF and a 2.95 FAR.

Environmentally Superior Alternative
In general, the environmentally superior alternative as defined by CEQA should minimize adverse impacts to the project site and its surrounding environment. Of the alternatives considered, the No Project Alternative does not create new impacts; therefore, it is generally environmentally superior to any project that proposes to change existing conditions through the addition of increased development with associated impacts. However, the No Project Alternative would not contribute to City efforts to implement the goals and objectives of the DCP, provide additional visitor serving uses in Coastal Zone, help meet regional housing demand, or meet the primary Project objectives.

CEQA Guidelines section 15126.6 states that if the environmentally superior alternative is the No Project/No Build Alternative, the EIR shall also identify an environmentally superior alternative from among the other alternatives. The remaining alternatives were reviewed in accordance with the State CEQA Guidelines requirement to identify an

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Packet Pg. 882 Attachment: Attachment O Environmental Analysis for Ocean Avenue Project (4857 : Ocean Avenue Project Development Agreement (180 environmentally superior Alternative other than the No Project/No Build Alternative.

According to Section 15126.6(a) of the State CEQA Guidelines, the purpose of an Alternatives analyses is to identify alternative developments that would feasibly attain most of the basic objectives of the project but that would avoid or substantially lessen any of the significant effects of the project. Other than Alternative 1, none of the remaining alternatives to the Project would avoid all of the Project’s potentially significant and unavoidable impacts.

Of the five alternatives considered for further analysis, Alternative 3, Maximum 84-Foot Building Height (Reduced FAR/Development), is the environmentally superior alternative because impacts to transportation and temporary construction-related impacts to air quality and noise would be reduced to the greatest extent. The reduction in the scope of development under Alternative 3 would reduce the overall duration of construction impacts relative to the proposed Project. Additionally, due to the reduced number of residential units and hotel guestrooms, this alternative would eliminate the weekend midday peak hour impact at Second Street & Arizona Avenue under the Future Year (2025) traffic conditions and reduce the increases in vehicle delay at the other impacted intersections.

Alternative 3 also would achieve the greatest number of primary Project objectives. For example, while Alternative 3 would not develop to the maximum height permitted within the ELS Overlay, this alternative would remain consistent with the LUCE and DCP including with respect to development standards, visitor-serving, residential, and pedestrian-oriented ground floor uses, historic preservation and adaptive reuse of two City-designated Landmarks, pedestrian-oriented design, publicly accessible open space, sustainability, high quality architectural design, TDM measures, and community benefits. Further, this alternative would enhance the Downtown by adding culturally rich uses, pedestrian-focused amenities, affordable and market rate housing, retail, restaurant and entertainment uses, and a full-service hotel. However, due to the reduced scope of development, Alternative 3 would eliminate the publicly accessible rooftop observation deck described for the proposed Project. Due to the substantial

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Packet Pg. 883 Attachment: Attachment O Environmental Analysis for Ocean Avenue Project (4857 : Ocean Avenue Project Development Agreement (180 reduction in hotel guestrooms, Alternative 3 would be less consistent with Policy 199 of the City’s Local Coastal Program Land Use Plan (LUP) provides that “overnight visitor accommodations and related support facilities such as shops, restaurants and cultural uses that serve visitors and the local community alike shall be priority uses.”

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Packet Pg. 884 Attachment: Attachment O Environmental Analysis for Ocean Avenue Project (4857 : Ocean Avenue Project Development Agreement (180 1 Vernice Hankins
From: Justin Gordon <[email protected]>
Sent: Wednesday, July 6, 2022 9:10 PM
To: Sue Himmelrich; Kristin McCowan; Gleam Davis; Phil Brock; Christine Parra; Lana Negrete; Oscar de la Torre; councilmtgitems
Cc: David Martin; Roxanne Tanemori; David White
Subject: Yes on the Ocean Avenue Project!

EXTERNAL
Dear City Councilmembers:

My name is Justin Gordon and I am writing to express my strong support for the proposed development project on Ocean Avenue. Born and raised in Santa Monica, and a proud alum of Santa Monica High School, Class of 2004, I have a vested interest in the city’s future.

I believe this project will bring a mix of uses to an underutilized site, reinvigorating Ocean Avenue and the downtown area. I am particularly happy to see that space is being prioritized for the public, including a museum in homage to renowned architect (and Santa Monica resident) Frank Gehry, as well as a publicly accessible viewing deck, which will offer beautiful views of Santa Monica and the ocean.

With so much negative press about the downtown area, including businesses shuttering, crime/homelessness rising, etc., having a world-class, legendary architect such as Gehry put his touch on Ocean Avenue will be a gift for generations to come.

As an alum of the Santa Monica Public School system (K-12), I am thrilled to see that the project provides many community benefits for local schoolchildren. Donations to the Santa Monica Education Foundation and annual field trip opportunities for local students, will ingratiate this project with the host community. Further, a hotel internship program is being created, which will benefit students at both Santa Monica High School and Santa Monica College.

As a world class city and tourist destination, it is confounding that Santa Monica does not have more museums. A Frank Gehry museum on Ocean Avenue will provide everyone from local residents to visitors around the world with an opportunity to see his incredible work while exploring all that this beautiful city has to offer.

I believe this project is going to add a level of class and character that downtown Santa Monica desperately needs right now. The last two years have been rough for tourism and the city's budget.

Santa Monica should invest in a project that benefits everyone, and this one does just that. I strongly urge you to support this project. Thank you for your consideration.

Best,
Justin
‐‐

GORDON & GORDON
Justin Michael Gordon, Esq.
12100 Wilshire Blvd.

Ste 800
Los Angeles, CA 90025
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Packet Pg. 885 Attachment: Written Comments (4857 : Ocean Avenue Project Development Agreement (180 mins)) 2 (310) 806-9205
Fax (310) 451-3335
www.gordontrust.com
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and any accompanying attachment(s)is intended
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Packet Pg. 886 Attachment: Written Comments (4857 : Ocean Avenue Project Development Agreement (180 mins)) 1 Vernice Hankins
From: O'Connor, James <[email protected]>
Sent: Thursday, July 7, 2022 3:27 PM
To: Sue Himmelrich; Kristin McCowan; Gleam Davis; Phil Brock; Christine Parra; Lana Negrete; Oscar de la Torre; councilmtgitems
Cc: David Martin; Roxanne Tanemori; David White
Subject: Re: Ocean Avenue Project at City Council

EXTERNAL
Mayor Himmelrich and City Council,
I am writing to express my support for the Ocean Avenue Project.

I am a Principal at Moore Ruble Yudell Architects and Planners. I would like to share my perspective as a longtime resident of Santa Monica.

The extraordinary project before you on Wednesday night will bring to the Santa Monica community an experience that is vibrantly new and, at the same time, redolent of our city’s history. It is a unique project in that it situates a wide range of complementary uses – retail, rental housing, a revenue‐generating luxury hotel, adaptively‐reused historic Ocean Avenue structures, a notable public art element, improved pedestrian areas and a public viewing deck that will provide sweeping views of the ocean, the Los Angeles basin and the mountains that surround it – onto a single location.

The prospect of a Frank Gehry‐designed museum providing educational opportunities and access to important works from his archives/collection, as well as the work of other architects and designers, is especially exciting and wholly appropriate. Since its founding, Santa Monica has attracted notable and groundbreaking architects and nurtured new and notable talents, including Mr. Gehry. The community’s appetite for good architecture has encouraged outstanding architects to put down roots here and produce award‐winning residential, institutional, and cultural projects. The museum will put architecture and placemaking front and center in one of the region’s most visited locations and will perhaps inspire young residents and visitors to explore careers in the field.

Please consider Staff’s recommendations and vote to approve this project on July 14. Thank you.

James Mary O’Connor FAIA
Ocean Park
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Packet Pg. 887 Attachment: Written Comments (4857 : Ocean Avenue Project Development Agreement (180 mins)) 1 Vernice Hankins
From: Nat Trives <[email protected]>
Sent: Thursday, July 7, 2022 4:27 PM
To: Sue Himmelrich; Kristin McCowan; Gleam Davis; Phil Brock; Christine Parra; Lana Negrete; Oscar de la Torre; councilmtgitems
Cc: David Martin; Roxanne Tanemori; David White
Subject: July 14th Agenda Item 14, Ocean Avenue Project – Support

EXTERNAL
Re: July 14th Agenda Item 14, Ocean Avenue Project – Support Honorable City Council and Staff:

I write in support of the proposal for the Ocean Avenue Project. Many of you know me as a resident of Santa Monica for over 70 years, a graduate of Samohi and Santa Monica College, a frontline officer and then supervisor in the Santa Monica Police Department, a city councilmember, mayor, and a lifelong educator and community activist. As such, my experience in the community qualifies me to evaluate community benefits in their own right and also against the backdrop of seven decades of happenings and observations about our community.

This project provides numerous City benefits that are specific and defined, robustly supported financially, and informed by professional expertise. This project is a gift to the community that will certainly keep on giving. In particular, the next generation of Santa Monica residents will greatly benefit. Santa Monica’s youth will have the opportunity to visit the museum for annual field trip opportunities, which will allow students to view a collection of Frank Gehry’s archives. Santa Monica residents and visitors alike will be able to take in the beauty of our wonderful City from the rooftop viewing deck and one hundred percent of the net income from the observation deck will go towards the Santa Monica Education Foundation to support our local schools.

The project’s full service hotel and new shops/restaurants will have substantial economic and fiscal impacts. As the City is just re-emerging from the COVID-19 pandemic, it is more important than ever to approve projects that will generate revenue for our local economy and allow our City to provide the high level of services that our residents expect.

This project has made sizable contributions to the City’s top priorities and includes extraordinary community benefits for all residents to realize. I truly believe the Ocean Avenue Project will revolutionize downtown Santa Monica and renew its vibrancy for decades to come. I urge you to approve the proposal.

Sincerely,
Nathaniel Trives
310-399-1788
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Packet Pg. 888 Attachment: Written Comments (4857 : Ocean Avenue Project Development Agreement (180 mins)) July 8, 2022
VIA E‐MAIL
Santa Monica City Council
Re: Agenda Item 12, Ocean Avenue Hotel Project, 13DEV‐004, 20ENT‐0303, 18ENT‐0385 Dear Councilmembers,
After years of community input, thoughtful consideration and creative design, I look forward to presenting our revised Ocean Avenue Project (“Project”) to you on July 14. As you know, our Project is designed by Pritzker Prize‐winning architect Frank Gehry and includes a new labor‐friendly hotel with a rooftop viewing deck open to the public; deed‐restricted affordable, rent‐controlled and market‐rate apartments; restaurants and shops; and a Cultural Uses Campus that incorporates two City‐designed landmarks. Our Project embraces the City’s goals and policies for the Downtown area with community access/engagement, historic preservation and cultural uses, the pedestrian experience, and sustainability being key elements of the Project’s design. The Project will also provide substantial fiscal, economic and other benefits for the community. We respectfully ask that you approve our Project as recommend by City Staff and the Planning Commission.

Project Summary
Our proposed design will transform the corner of Ocean Avenue and Santa Monica Boulevard with a truly special Project that embraces and epitomizes the LUCE and DCP’s vision for new investment in Downtown Santa Monica. Gehry Partners has carefully studied and evaluated the site, City policies, the community’s input, and the Project’s relationship to the urban fabric and the environment. The Project is designed to engage the community and includes:

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2  a new labor‐friendly hotel with 120 rooms;
 an observation deck on the roof of the hotel that will be open to the public, providing unparalleled public views of our City’s magnificent beach/coastline and majestic mountains that will generate revenue for Santa Monica’s public schools;  100 residential apartments with a variety of unit types (studios to three‐bedrooms) consisting of 25 deed‐restricted affordable, 11 rent‐controlled and 64 market‐rate units;  a 35,500 sf Cultural Uses Campus that incorporates and features the existing Queen Anne Victorian and Spanish Colonial landmarks on the Project Site, to be occupied by a cultural facility/museum use;
 Restaurants and shops;
 Ground‐level publicly‐accessible open space and paseos weaving through the Project;  Elimination of curb cuts on Ocean Avenue and Santa Monica Boulevard and widened sidewalks to enhance the pedestrian experience; and
 285 spaces of subterranean parking.

The Project’s benefits package prioritizes affordable housing, cultural facilities and historic preservation per the DCP’s guidance and also includes meaningful open space for the public including the rooftop viewing deck, local hiring and internship programs, cutting edge sustainability features, spectacular design by a world‐renowned architect, and financial contributions for transportation and pedestrian improvements, affordable housing, early childhood initiatives, economic equity, parks and open space.

In addition, the Project will result in fiscal and economic benefits to the City and the Santa Monica‐Malibu Unified School District and create hundreds of new construction and permanent jobs in the heart of Downtown.

Background
After initially purchasing most of the property in 1980 that make up the Project Site (with the balance in 2007) and considering the Site’s prominent location along Ocean Avenue in the core of Downtown Santa Monica, our family knew the site deserved extraordinary vision and investment. One of our first decisions was, in 2007, to ask Santa Monica resident Frank Gehry to go on this journey with us. His vision and creativity have been invaluable throughout the process.

Following guidance from the City’s LUCE adopted in 2010 and given its identification of our Project Site as a key place to focus new investment, we continued our work with Frank Gehry on a plan that would incorporate the two City‐designated landmarks, add a new hotel, add a cultural uses, replace the existing rent‐controlled housing, add residential condominiums, and prioritize the pedestrian experience in and around the Project. This effort led to our filing of a development agreement application in February 2013 proposing, among other things, 125 hotel rooms, 22 residential condominium units, 19 replacement rental apartments, 5 affordable Item 12.A
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3 rental apartments, a cultural uses campus including the preservation and adaptive re‐use of the Spanish Colonial Revival Landmark and Queen Anne Landmark, ground floor restaurants and retail, an observation deck, a maximum height of 244 feet and a 4.0 FAR (the “2013 Plans”).

Despite overwhelmingly positive feedback on the 2013 Plans from the community, the Architectural Review Board, and other City and civic leaders, the combination of our Project and two others (the Miramar and the Holiday Inn/Wyndham) all proposing taller buildings resulted in the City asking us to put our Project on hold while the City prepared its specific plan for the Downtown. Respecting the City’s request, we spent the next 4 years listening and engaging in the City’s process of developing the DCP.

Following the DCP’s adoption in 2017, we worked with Frank Gehry to redesign the Project to reduce the Project’s height and floor area, eliminate the residential condominiums, add rental housing and make the corner of Ocean Avenue and Santa Monica Boulevard more special. We then filed revised plans in 2018, hosted additional community outreach meetings and presented the revised Project to the Landmarks Commission, Architectural Review Board, Planning Commission and City Council for their preliminary feedback on the revised plans.

In June 2018, the City Council directed City Staff to move forward with development agreement negotiations for our Project. The Project today is the culmination of the feedback we received during the prior preliminary hearings and community outreach, additional input from City Staff’s various departments, and our team’s further design work. A comparison of the current Project compared with the original 2013 Plans and the DCP standards is included in the below table:
2013 Project Current Project DCP
FAR 4.0 2.95 4.0
Max. Height 244’ 130’
(avg. 48’‐1” across the site)
130’
Hotel Rooms 125 rooms 120 rooms
Residential   46 condos/apartments 100 apartments
In May 2022, the Planning Commission held its hearing to review the Project and with a 7‐0 vote, unanimously recommended approval of the Project. Prior to and during this hearing, many Santa Monica residents, businesses and stakeholders, including the Santa Monica Conservancy, expressed their support and excitement for the Project and its many benefits.

Project Details
Our Project’s program has been developed to implement the LUCE, DCP and Coastal Act policies for the Project Site by providing a broad mix of uses in the heart of Downtown, the City’s economic engine.

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4 Hotel
The Project Site, with its prominent location along Ocean Avenue in the City’s Coastal Zone, is the perfect location for a new hotel. The City’s LUCE, DCP and Coastal policies all encourage hotels in the City’s Downtown. (LUCE Policy D 1.4, p. 2.6‐10; DCP Policy CCP2.3, p. 55; Local Coastal Program 1992 Land Use Plan (“1992 LUP”) Policy 70, p. 74.) In addition to visitor‐serving uses being a priority use in the City’s coastal zone, hotels both support economic sustainability and have low traffic impacts. (LUCE Policy E 6.3, p. 3.4‐21.) Hotel’s Rooftop Observation Deck
The Hotel Building is the tallest component of the Project and we’ve intentionally located a public observation deck on its roof with 360‐degree views. Access to the observation deck is through elevators directly accessible from the Project’s ground‐level paseos in order to invite pedestrians walking along Ocean Avenue or Santa Monica Boulevard to stop in and enjoy the views. We’ve agreed to a maximum entry fee of $1.00/person (with CPI adjustments) with all net proceeds going to the Santa Monica’s public school students via the SM Ed Foundation.

Hotel’s Height
At 130’, the Hotel Building is consistent with the DCP’s height limit for the Project site and is the only portion of the Project that is at 130’. As discussed above, the Project ensures the community benefits from the height by including a rooftop observation deck that will be open to the public. With the Project’s open space and varying building heights, the overall average height across the Project site is 48’‐1”. As shown in the below diagram, the Project’s varied building heights are consistent and compatible with the range of building heights along Ocean Avenue in Downtown Santa Monica.

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5 Housing
The Project provides 100 new apartments, including market‐rate, deed‐restricted affordable, and rent‐controlled units, located near transit and services, implementing key City policies and goals.1 Consistent with LUCE Policy D7.7 to "[e]ncourage residential units with a diversity of types, forms, [and] sizes,” apartments range in size from studios to three bedrooms. The apartments are disbursed above the ground floor in 4 buildings (three on the Second Street Parcel and one on the Ocean Avenue Parcel) providing residents with light and access to the Ocean breezes as well as to provide visual interest/articulation and views through the Project.

One of the key changes we made to the Project in response to feedback from the 2013 preliminary hearings and listening during the DCP process was to eliminate the residential condominiums (despite absorbing the economic hit of doing so), increase the number of residential apartments, diversify the unit types to include more family‐sized units, and substantially increase the affordable housing.
1 LUCE Policy LU3.2 calls for “additional housing opportunities on the transit rich commercial boulevards.” LUCE Policy LU4.3 encourages “mixed‐use development close to transit to provide housing opportunities for the community, support local businesses, and reduce reliance on automobiles.” (LUCE at p. 2.1‐13.) Item 12.A
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Packet Pg. 893 Attachment: Written Comments (4857 : Ocean Avenue Project Development Agreement (180 mins))

6 As explained in the DCP, a key priority for community benefits discussions in new development is the provision of “a range of housing options at varying affordability levels to accommodate the city’s diverse residents and workforce.” (DCP at p. 27.) In this regard, 36 of the apartments are deed‐restricted affordable and/or rent‐controlled. 25 apartments will be deed‐restricted for households ranging from 30% of Area Median Income to Moderate Income while 11 of the apartments will be rent‐controlled. The breakdown of the affordability levels is included below.

Rent Level   # of Units
30% AMI 4
50% AMI 4
80% AMI 6
Moderate   11
Rent‐Controlled 11
Total 36
The Project includes the onsite replacement of 19 existing residential units located on the Project Site with 3 of the replacement units being deed‐restricted affordable to 80% AMI households and 5 of the replacement units being deed‐restricted to Moderate Income Households. Prior to commencement of construction for the Project, existing tenants will be offered temporary/interim housing, relocation assistance, and the opportunity to move back in to one of the replacement units with no increase in the rent (other than Rent Control Board’s allowed general adjustments) for the temporary/interim housing nor the replacement unit. If an existing tenant income‐qualifies for a deed‐restricted affordable unit, the rent for the replacement unit will be the lower of the deed‐restricted affordable rent or their existing rent (plus the Rent Control Board’s allowed general adjustments).

Historic Preservation
Rehabilitation, Repositioning, and Adaptive Reuse of Landmarks Inspired by the LUCE’s identification of historic preservation as a key community benefit and directive to integrate the preservation of historic buildings into land use and planning practices (Policy LU12.1), the Project includes rehabilitating, repositioning and adaptively reusing the two on‐site landmark buildings – a Queen Anne‐style Victorian building and a Spanish Colonial Revival style building – as featured components of a Cultural Uses Campus. If there are more than 11 existing units with tenants that both (a) want to move back into the Project and (b) do not income‐quality for a deed‐restricted affordable unit, then up to 5 of the Moderate units could be occupied by existing tenants and their rent would be the lower of (x) their existing rent (plus the Rent Control Board’s allowed general adjustments) or (y) the Moderate‐income rent.

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Packet Pg. 894 Attachment: Written Comments (4857 : Ocean Avenue Project Development Agreement (180 mins))

7 Consistent with strongly‐expressed guidance from the Landmarks Commission, both Landmarks will be given prominence in the forefront of the Project’s new Cultural Use Campus, with the Landmark buildings being the “dominant visual elements” and the new construction being clearly new and differentiated. (FEIR at p. 3.4‐39) Although the Landmarks would be repositioned, the Landmarks would both continue to front on (and be directly accessible from) Ocean Avenue facing Palisades Park, as has historically been the case. As confirmed in the Project’s EIR, the Landmarks’ “slight shift in locations would not substantially alter the historic setting or context of the buildings because they would continue to convey the same general history and streetscape of residential development along Ocean Avenue.” (FEIR at p. 3.4‐37)  At the request of the Planning Commission, and to ensure public access and visibility to the Landmarks, we've committed in the proposed Development Agreement that no fences, walls or hedges will be provided in the setback/open space area between the Landmarks and Ocean Avenue.

As emphasized in the Staff Report, all work on the Cultural Uses Campus will be undertaken and performed in accordance with The Secretary of the Interior’s Standards for the Item 12.A
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Packet Pg. 895 Attachment: Written Comments (4857 : Ocean Avenue Project Development Agreement (180 mins))

8 Treatment of Historic Properties and subject to the Landmarks Commission’s issuance of a Certificate of Appropriateness. The Project’s historic preservation consultant Robert Chattel, AIA, has prepared a “Conformance Recommendations” memorandum that offers background information, provides an overview of concept‐level design (specifically focusing on the Landmark Buildings), and makes recommendations for future design development to ensure conformance with the Secretary of the Interior’s Standards for the Treatment of Historic Properties (“Secretary Standards”).

Although the Cultural Uses Campus design will continue to be refined through the Certificate of Appropriateness process, it is well established that the Project will include beneficial restoration of various character‐defining features of the two City Landmarks including previously removed and currently missing elements. For example:
 As detailed in the EIR, “the proposed rehabilitation of the Queen Anne Landmark would preserve, repair (as necessary), and restore important exterior character‐ defining features as well as remove incompatible, non‐character‐defining elements and additions.” (FEIR at p. 3.4‐37.) Notably, “the original tower, which has been shortened and modified over the years, and its original widow walk would be restored to its full height and would be clad in wood siding as it was historically” and “the integral porch on the second floor of the front elevation, which has also been altered, would be restored to its full length, extending it in front of the window to the north.” (FEIR at pp. 3.4‐37‐38.)
 The Spanish Colonial Revival Landmark’s front (Ocean Avenue) façade would be restored based on physical evidence and historical documentation to its period of significance (1926). This work would include reconstruction and restoration of the main entrance’s prior cast stone Churrigueresque inspired decorative surround with flanking spiral engaged columns and reconstruction of the decorative sconces that were once over each of the main front window openings at ground‐level. (FEIR, Appendix E at p. 96.)
We look forward to recapturing these elements with Chattel’s guidance and the Landmarks Commission’s required Certificate of Appropriateness. Moreover, as recommended by the Planning Commission, if we find evidence of additional character‐defining features during the course of the rehabilitation work, we will restore or document them as appropriate.

Rehabilitation of the two Landmarks would also include seismic and structural retrofitting, handicap accessibility improvements, fire‐life safety improvements, and upgrades to mechanical, electrical and plumbing systems. (FEIR at p.2‐32.) In deference to the low‐scale size of the two Landmarks, the Project limits the total above‐grade floor area on the northern three parcels of this valuable Ocean Avenue property to approximately 17,000 square feet, resulting in this northern portion of the site being Item 12.A
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Packet Pg. 896 Attachment: Written Comments (4857 : Ocean Avenue Project Development Agreement (180 mins))

9 substantially underdeveloped compared with the building height and floor area allowed by Code. In this regard, much of the new floor area will be subterranean to preserve the setting of the Landmarks consistent with the Secretary Standards.

Protection and Repositioning During Construction
The process for repositioning the Landmarks and protecting them through construction was studied extensively for the EIR. Gehry Partners, Robert Chattel, a general contractor, and structural engineer Thomas A. Sabol, PHD, SE, (principal with Englekirk Institutional) collaborated in developing the approach for the temporary relocation and protection of the Landmarks throughout the course of construction. In brief summary:
 The Landmarks would be prepared to be temporarily relocated including thorough documentation of the Landmarks existing conditions, training for construction employees regarding the protection of the Landmarks, temporary removal and/or protection of all sensitive features, and stabilization of the Landmarks for their moves during temporary on‐site relocation (e.g. through shoring, lateral support, bracing and temporary restraints).
 Temporary on‐site locations would be prepared during the staging process and the Landmarks would be detached from their current foundations and moved to the temporary locations with the Landmarks supported by a series of stabilized girders.

Experienced building movers will be utilized.
 While in their temporary locations, permanent new foundations for the Landmarks would be constructed and then the Landmarks would be moved to their permanent locations in support of the Cultural Uses Campus and structurally secured.  General excavation of the Project Site and the remainder of the Project’s construction would then occur under and around the newly shored Landmarks without placing them in jeopardy.
 Chattel will assist in the implementation and oversight of these activities.

A depiction of the key elements of the basic steps in this carefully crafted preservation protection process is included below.

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Packet Pg. 897 Attachment: Written Comments (4857 : Ocean Avenue Project Development Agreement (180 mins))

10 Enhancing Public Access to the Landmarks
In addition to embracing these Landmarks and incorporating them into a prominent part of the Project from a design perspective, we are excited to take these historic buildings that are currently in private use (occupied by private office, medical and spa uses) and make them accessible to and utilized by the general public as part of the Cultural Uses Campus for the appreciation and enjoyment of Santa Monicans and visitors.  An interpretive educational exhibit (e.g. signage, display and/or plaques) will be included in the Cultural Uses Campus to assist the public in understanding the historical, cultural, and architectural significance of both the Queen Anne style Landmark building and the Spanish Colonial Revival style Landmark structure. This exhibit will be submitted for review and approval by the Landmarks Commission.

Overall, we feel that the extraordinary effort to rehabilitate the Landmarks as part of the Cultural Uses Campus and open them up to the public will make a valuable and long‐lasting contribution to the City’s social and cultural fabric far more meaningful than is the case today.

Cultural Use ‐  Museum
Seeing the need and opportunity for a cultural use Downtown, a key element we asked Frank Gehry to incorporate into the Project is the cultural facility/museum use. LUCE policies identify cultural uses as a priority, seeking to “[s]upport and enhance cultural development within and around mixed‐use activity centers” and, “[e]ncourage land uses that provide accessibility for residents of all ages to arts and cultural programming in…new developments.” (LUCE Policy CE5.4 at p. 3.5‐11; LUCE Policy CE4.2 at p. 3.5‐10.) The DCP expressly identifies a Item 12.A
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Packet Pg. 898 Attachment: Written Comments (4857 : Ocean Avenue Project Development Agreement (180 mins))

11 cultural institution as a preferred community benefit for the Project. (DCP at p. 30; DEIR at p. 2‐

15.)
Gehry Partners has amazing experience designing museums around the world, and with that vast knowledge his firm has designed the Cultural Uses Campus to attract and exhibit works of local, international, established and emerging artists, including architects, and implement world‐class exhibitions and programs. Cherished pieces from the Frank Gehry’s archives will be shown at one or more permanent or rotating exhibit(s), and the location, adjacent to a Gehry‐designed hotel will provide perfect synergy, often lacking in traditional architecture exhibitions.

A key focus will be on education – exposing youth to the challenges and possibilities of design and how architecture is a way to solve problems, challenge the imagination, and work collaboratively. In this regard, we’ve committed to offer each of the public elementary, middle, and high schools in Santa Monica and Santa Monica College an annual field trip opportunity with transportation provided at no charge. We’ll also be offering field trip opportunities to a non‐profit organization in Santa Monica that provides after school programming for underrepresented youth no less than 4 times per year. In addition, all students/youth will have discounted entry year‐round.

The museum will include high quality, diverse educational and community programming. To ensure access to the museum by all Santa Monica residents, there will one day a month with entry is free for Santa Monica residents and Santa Monica residents will have discounted entry year‐round.

Mobility/Circulation and the Pedestrian Experience
During the Project’s 2018 preliminary hearings, the interconnected set of open spaces, separation of vehicular and pedestrian traffic, and emphasis on the pedestrian experience were mentioned by many City decisionmakers and community members as important and positive aspects.  Notably, our Project will provide an uninterrupted pedestrian experience (closing the existing curb cuts) along both Ocean Avenue and Santa Monica Boulevard per the LUCE’s priority for the “pedestrian environment above all other modes” in the Downtown. (LUCE, p.

4.0‐18.)
First Court Alley Revisions
First Court alley is proposed to be re‐routed through the Project Site to Second Street to allow the southern portion of First Court alley to become a “Pedestrian Mall” for the public’s enjoyment and to enhance public engagement with and through the Project. As a result, Item 12.A
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Packet Pg. 899 Attachment: Written Comments (4857 : Ocean Avenue Project Development Agreement (180 mins))

12 vehicular access to the Project will be provided from First Court alley with egress to Second Street.

This creative circulation solution is encouraged in the LUCE and DCP circulation strategies including LUCE Policy B4.14 to “discourage north‐south alley access to Santa Monica Boulevard and explore alternative routing” and Policy D9.6 is to “improve the aesthetic appearance of the alleys, and where appropriate incorporate the alleys into the pedestrian system.” (LUCE, pp.

2.4‐17, 2.6‐15.)
First Court
Second Street
Ocean Avenue
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Packet Pg. 900 Attachment: Written Comments (4857 : Ocean Avenue Project Development Agreement (180 mins))

13 The cost of the Pedestrian Mall improvements, maintenance, as well as the re‐routing of First Court alley will all be borne by the Project.

Publicly‐Accessible Open Space
One of our key strategies to engage the public is to include ground‐level open space that invites pedestrians into the Project, including the Cultural Uses Campus. The strategic connection of the Ocean Avenue Paseo to the First Court Pedestrian Mall/Santa Monica Boulevard Paseo signals to pedestrians that they are welcome to stroll through the Project and up to the rooftop observation deck. These open spaces will be activated by the restaurant, retail, and cultural uses in the Project. The City should embrace this highly pedestrian‐oriented design approach.

Sustainability
In addition to our Project being a transit‐oriented, infill development with a mix of employment and residential opportunities located in walking distance to high‐quality transit, we’re proud of the cutting‐edge sustainability elements we’ve been able to include in the Project.

The Project will be designed to achieve LEED Platinum certification, and we’ve committed to dual‐plumb the Project and use the City’s new upgraded recycled water system for all County‐approved uses including for toilet‐flushing, any cooling tower, and landscaping.

Because the City’s recycled water line is currently located in Palisades Park, we’ve also committing to paying for it to be extended to our site. The Project will also include onsite storage of rainwater and reuse of such water.

Our Project will also achieve water neutrality by including onsite water efficiencies such as low flow fixtures, drought tolerant landscaping, and offsetting any remaining net new water demand through payment of in‐lieu fees to the City for retrofitting of fixtures in other buildings/sites.

The Project will include rooftop solar panels, sustainable design features to reduce power demand, and substantial EV charging infrastructure. At the request of the Planning Commission, we've agreed to annually assess the demand for EV chargers and continue to add EV chargers to meet demand. In addition, we’ve committed to use 100% Green Power from the Clean Power Alliance, which consists of power generated from solar and wind (https://cleanpoweralliance.org/power‐sources/).

The Project will also have an aggressive transportation demand management (“TDM”) plan with a 2.2 average vehicle ridership target. The proposed TDM measures include a variety of physical and programmatic measures to reduce single‐occupancy vehicle trips to the Project Item 12.A
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Packet Pg. 901 Attachment: Written Comments (4857 : Ocean Avenue Project Development Agreement (180 mins))

14 including transportation allowances for employees and residents, guaranteed ride home program, substantial bicycle parking, and showers and lockers for employees using active forms of transportation.

Economic and Fiscal Benefits
The Project ‐‐ most notably its hotel component ‐‐ will contribute to the economic health of the City by providing meaningful economic and fiscal benefits to the City and substantial additional revenue to the school district. As explained in the LUCE and documented by Santa Monica Travel & Tourism, hotels are a particularly desirably land use because overnight visitors spend more money than day‐time visitors2 and have significantly less traffic impacts. (LUCE Policy E6.1, p. 3.4‐21.) In addition to the direct Transient Occupancy Tax (“TOT”) that is generated from the hotel, visitors produce significant other tax revenue through retail sales and other spending in the city. (LUCE at p. 3.4‐8.) Economic Impacts
As documented by the City’s financial consultant HR&A Advisors, Inc., the Project’s economic impacts are significant:
 Approx. $258.3 million is the estimated total economic output (direct and indirect sales and spending) from construction
 Approx. $72.8 million/yr is the estimated ongoing, annual total economic output ($59.8 million/yr net)
Fiscal Impacts
The Project will also provide considerable tax revenues to the City’s general fund of approximately $5.2 million/yr on an ongoing basis after Project stabilization ($3.4 million/yr net). These recurring revenues consist of property tax, sales and use tax, hotel TOT, business license tax, utility user’s tax, and parking facilities tax.

HR&A’s analysis did not estimate other tax revenues such as for City special funds (e.g., special assessments) or tax revenues to Santa Monica‐Malibu Unified School District and Santa Monica College. However, our financial consultant’s CBRE estimated that the Project would generate approximately $26.5 million to Santa Monica‐Malibu Unified School District over a 30‐year period.
2 In 2021, the daily average spend per person staying in a hotel/motel was $273.71 vs. $49.99 for daytime visitors. In 2019, prior to the pandemic, the daily average spend per person staying in a hotel/motel was $413.19 vs. $87.15 for daytime visitors.

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Packet Pg. 902 Attachment: Written Comments (4857 : Ocean Avenue Project Development Agreement (180 mins))

15 Employment
As the LUCE acknowledges: “local employment . . . serves as the foundation for [a community’s] long term economic growth and stability” and locating new employment near transit reduces vehicle trips while creating a healthy job base. (LUCE at pp. 3.1‐7 and 3.4‐7.) The Project will provide a wide range of new employment with a full‐service hotel, restaurants, retail and cultural use facility. The Project also provides significant new construction‐related employment opportunities. The hotel and construction employment will be labor friendly. To ensure that our local community benefits from these opportunities and prioritize outreach to underserved communities, the Project’s community benefits package includes local hiring programs for construction workers and permanent jobs, internships at the hotel, and equal opportunity subcontracting. This will benefit members of the community by providing new local employment opportunities and further reduce VMT.

Project Feasibility
As documented by the City’s consultant HR&A Advisors, Inc, the Project’s tremendous community benefits package and commitment to iconic design results in the Project projecting a lower than reasonable investment return for a development project of this type (7.7% vs. reasonable return of 13‐15%). This is the case even if the assumption of a subsidy for the Cultural facilities/museum use, which HR&A believes may be overly conservative3, is entirely removed (return increases to 12% vs. reasonable return of 13‐15%).

We also wanted to highlight that neither our model nor HR&A’s account for the more than 81,500 square feet of developable area that we are not building (primarily by prioritizing the low‐scale museum use and preservation of the landmarks on the northern 3 lots along Ocean Avenue) and the associated lost opportunity with that additional square footage over the Life of the Project.

Overall, we’ve proposed a Project that includes inherent benefits for the community (historic preservation, Cultural facilities/museum, revenue‐generating union hotel, housing, 3 HR&A’s report indicates that our Project proforma assumes a subsidy for the Cultural facility/museum use but that it may be possible for the museum operator to find other revenue streams (e.g. donors) to support the museum use and/or for us to seek a property tax exemption for the Cultural facility/museum. While we agree these may both be possible, we haven’t explored with enough confidence to know if we can offset the assumed subsidy and the ultimate responsibility for attracting and retaining an operator for the Cultural facility/museum and keeping it open is on us. Moreover, our model already assumes some level of fundraising in support of the Cultural Uses Campus as the subsidy we’ve assumed only assumes $20/sf typical operating expenses for the building only and does not include the additional operational costs associated with a museum (e.g., salaries, programming, etc.).

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Packet Pg. 903 Attachment: Written Comments (4857 : Ocean Avenue Project Development Agreement (180 mins))

16 iconic architecture) and we respectfully ask that you not add exactions that would further erode at the Project’s feasibility/viability and increase the risk that the Project never gets built.

Environmental Impact Report
As recommended by City Staff, we ask that you both (a) confirm that the Project qualifies for an exemption from CEQA review pursuant to CEQA Guidelines Section 15182 (Projects Pursuant to a Specific Plan) and (b) certify of the Project’s Final EIR, which the City elected to prepare to promote fully informed decision‐making despite that the Project qualifies for a CEQA exemption. The EIR is very thorough and comprehensive and clearly meets and exceeds the legal requirements for EIRs. The EIR demonstrates that the Project would provide numerous environmental and community benefits, while causing very few potentially significant and unavoidable environmental impacts.

The EIR also analyzes five alternatives to the Project, a reasonable range per the requirements of State CEQA Guidelines § 15126.6. With the exception of the No Project Alternative, none of remaining alternatives would eliminate the significant and unavoidable impacts identified in the DEIR. Notably, all of the reduced density alternatives (Alternatives 2, 3, and 4) would require either the reduction of residential units or the reduction/elimination of hotel rooms, or both, inconsistent with the City’s and Coastal Act’s goals and policies encouraging the development of housing and visitor‐serving uses in the City’s Downtown. 1992 LUP Amendment
As explained in the Staff Report and EIR, our Project is consistent with the LUCE, DCP, the Draft Coastal Land Use Plan adopted by the City Council in 2018 (“Draft LUP”), and the Coastal Act. Because the City does not have a fully‐certified Local Coastal Plan (“LCP”), which consists of a certified LUP and a certified Implementation Plan, the Coastal Commission reviews projects for consistency with the Coastal Act directly and neither the Draft LUP not the City’s outdated 1992 Coastal Land Use Plan (based on the 1984 LUCE and 1988 Zoning Ordinance) are binding on the Coastal Commission. Despite the City adopting the Draft LUP to replace the 1992 LUP, the Coastal Commission appears to still recognize the 1992 LUP as relevant guidance in reviewing Coastal Development Permits. Thus, we have proposed an amendment to the City’s 1992 LUP to update it to be consistent with the DCP and Draft LUP policies with respect to the Project Site.

Conclusion
In conclusion, we are extremely proud of our Project, the abundant benefits it will bring to the residents of Santa Monica and broader community, and to have earned the unanimous (7‐0) recommendation of approval from the Planning Commission and City Staff. It advances Item 12.A
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Packet Pg. 904 Attachment: Written Comments (4857 : Ocean Avenue Project Development Agreement (180 mins))

17 the City’s goals and policies, will bring a hotel, housing, shops/restaurants, and a cultural use in a dramatic new Gehry Partners design while incorporating the site’s Landmarks and elevating their prominence and access for the public. We started on this project in 2007 and first submitted in 2013, and after 9 years of listening, revising, and refining our Project through the City’s formal review process, we respectfully ask for your approval of our Project.

Sincerely,
Jeff Worthe
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Packet Pg. 905 Attachment: Written Comments (4857 : Ocean Avenue Project Development Agreement (180 mins)) 1 Vernice Hankins
From: Diane Drake <[email protected]>
Sent: Saturday, July 9, 2022 8:13 AM
To: Sue Himmelrich; Kristin McCowan; Gleam Davis; Phil Brock; Christine Parra; Lana Negrete; Oscar de la Torre; councilmtgitems
Cc: David Martin; Roxanne Tanemori; David White
Subject: Item #12 - OAP

EXTERNAL
Dear Mayor Himmelrich, Mayor Pro Tem McCowan, and City Council Members, I’m writing to ask you to please vote in favor of the proposed Frank Gehry development at the corner of Ocean Ave and Santa Monica Blvd.

We are fortunate to have an artist of Gehry’s caliber bringing this sort of world‐class development to our City. It reflects well on Santa Monica’s leadership in architecture for a sustainable future, and will add to the beauty and distinction of the city.

As a project neighbor, (I live at 1045 Ocean Ave), I look forward to having a new walkable destination for dining, shopping, cultural enrichment (the architecture and art museum), all crowned by the sweeping 360‐degree‐observation‐ deck views of our bay and mountains. It will be a most welcome addition to the neighborhood.

Again, please vote yes. Thank you for your consideration.

Sincerely,
Diane Drake
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Packet Pg. 906 Attachment: Written Comments (4857 : Ocean Avenue Project Development Agreement (180 mins)) 1 Vernice Hankins
From: Daniel Galamba <[email protected]>
Sent: Saturday, July 9, 2022 1:30 PM
To: councilmtgitems; Gleam Davis; Phil Brock; Christine Parra; Lana Negrete; Sue Himmelrich; Kristin McCowan; Oscar de la Torre; Daniel Galamba
Subject: July 14, 2022 City Council Meeting Item 12.A.-Please reject the Ocean Avenue Project Development Agreement

EXTERNAL
Dear City Council,
I urge you to reject this Ocean Avenue Project Development Agreement for many of the same reasons that the Development Agreement for the Miramar Hotel expansion should have been rejected.  These include:

This project is way too large and not in character for our City of Santa Monica.  It is up to 12 stories 130 feet high.  The character of our city should limit this project to 3 stories 35 feet high, more in line with Santa Barbara and Manhattan Beach.

This project will create more traffic, congestion and gridlock in the downtown area that already suffers from these maladies.  We need less gridlock, not more.

The 64 market rate apartments will encourage developers to destroy existing low and moderate income rent controlled housing in the area and replace them with luxury housing that only rich people can afford and are not under rent control as happened in Westwood and West Los Angeles in the 1980's and has also been happening here in Santa Monica.

We're already lost about 9,000 rent‐controlled units here in Santa Monica since the Ellis Act was enacted and we need to preserve our existing rent‐controlled housing.  Otherwise, we will end up being a bi‐furcated city with the rich at the top, the poor at the bottom in public housing and not much in between.  I don't want this for our City of Santa Monica.  I want Santa Monica to be a place where people of various economic levels can live.

The Fess Parker resort in Santa Barbara is very pleasant and nice.  This shows that the hotels don't need to be big and ugly.

It should be noted that 3 of the 4 City Council members who voted for the Miramar Project were voted out of office.

The vast majority of the people in Santa Monica don't want these monster hotel projects.  They want to preserve the low‐rise beachfront character of our city, again more in line with Santa Barbara and Manhattan Beach rather than New York City.

In summary I am requesting that you limit this project to no more than 3 stories 35 feet high and building on no more than 50% of the lot above ground.  This is in keeping with the character of our community and really is to the benefit of both the developer and our City of Sant Monica.  Thank you.

Sincerely,
Dr Daniel Galamba
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Packet Pg. 907 Attachment: Written Comments (4857 : Ocean Avenue Project Development Agreement (180 mins)) 1 Vernice Hankins
From: Kelli Haas <[email protected]>
Sent: Sunday, July 10, 2022 1:26 PM
To: Sue Himmelrich; Kristin McCowan; Gleam Davis; Phil Brock; Christine Parra; Lana Negrete; Oscar de la Torre; councilmtgitems; David Martin; Roxanne Tanemori; David White Subject: July 14 Agenda Item 12 - Support for Ocean Avenue Project

EXTERNAL
City of Santa Monica Councilmembers ‐
Our family strongly supports Item 12, the Ocean Avenue Project. We have lived in Santa Monica in the Wilmont neighborhood since relocating here from Houston in 2003. Over the years, Santa Monica has truly become our adopted home and we feel very connected to the community here. We are active in the PTA, our children’s athletic teams, local school communities and our children have only known Santa Monica as their home.

The Ocean Avenue Project is the perfect addition to the Downtown Santa Monica area. Downtown feels like it lacks the community inclusiveness that the other pockets of Santa Monica have – Montana Ave, Main Street, Ocean Park Blvd. To be honest, we do not venture into downtown often because it feels as though it caters to tourists instead of those who live here. We would love for the area to be better activated for families like us. The museum will be a highlight for us, and we love that we’ll be able to use the observation deck for ourselves and our visitors – there isn’t any other vantage point like that for our community to enjoy those views!

Please vote to support the Ocean Avenue Project. It will make the Santa Monica that our family loves that much better.

Sincerely,
Kelli and Bryan Haas
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Packet Pg. 908 Attachment: Written Comments (4857 : Ocean Avenue Project Development Agreement (180 mins)) 1 Vernice Hankins
From: Erik Huberman <[email protected]>
Sent: Sunday, July 10, 2022 4:34 PM
To: Sue Himmelrich; Kristin McCowan; Gleam Davis; Phil Brock; Christine Parra; Lana Negrete; Oscar de la Torre; councilmtgitems
Cc: David Martin; Roxanne Tanemori; David White
Subject: Yes on the Ocean Avenue Project- Item 12

EXTERNAL
Honorable Councilmembers,
I am writing to share my support for the proposed Ocean Avenue Project. I grew up in Santa Monica and came back to the City to make Santa Monica my home in 2008. As a longtime resident, I have a vested interest in the development of our vibrant City.

There are many aspects of the project that I appreciate. First, I am impressed with the world class design by Pritzker Prize‐winning architect Frank Gehry. I feel fortunate that Gehry is sharing his architectural prowess with our City, which will undoubtedly add a new level of class to our downtown community.

Additionally, I believe the fiscal and economic benefits of the project will help revive Santa Monia. We have all seen the economic toll that the pandemic had on Santa Monica, particularly in the downtown area. The proposed new hotel, coupled with shops and outdoor dining, will reinvigorate Ocean Avenue.

I encourage you to approve this project so the residents of Santa Monica can enjoy all of the benefits this new development has to offer.

Sincerely,
Erik Huberman
To help protect your priv acy, Microsoft Office prevented automatic download of this picture from the Internet. Erik Huberman | CEO 1714 16th Street
Santa Monica, CA 90404
hawkemedia.com
T: 310.451.7295
M: 805.443.3501
To help protect your privacy, Microsoft Office prevented automatic download of this picture from the Internet. image.png
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Packet Pg. 909 Attachment: Written Comments (4857 : Ocean Avenue Project Development Agreement (180 mins)) Albin Gielicz
July 11, 2022
City Council Members:

Thank you for scheduling a special meeting to consider this unique project. I endorse the Ocean Avenue Project, and respectfully ask that you approve it on July 14.

I am involved in my community. I have served on the Recreation and Parks Commission for more than 8 years. I currently serve as Chair of Santa Monica Travel & Tourism.

However, I’m submitting this letter as a 18 year resident of Santa Monica. As a community member who appreciates the many opportunities the City provides for engagement, I participated in the LUCE and DCP workshops that have shaped the way we approach planning, and have watched with great interest the evolution of various project plans in the downtown community.

The OAP, like the other successful large site projects envisioned for the Downtown Santa Monica neighborhood, has delivered on design and a public-facing character. The OAP project offers a generous package of community benefits to help meet our city’s priorities. • Transportation and pedestrian improvements will be immediately obvious to frequent visitors to Downtown. The elimination of curb cuts on Santa Monica Boulevard and Ocean Avenue will greatly enhance bicycle and pedestrian safety. Widened sidewalks with connections to the site’s programmed interior will invite visitors to explore the corner and provide the foot traffic that restaurants and retailers depend on. The applicant’s “as much juice as we need” approach to fitting out electric vehicle parking spaces as set forth in their application reflects the applicant’s future-friendliness.
• Affordable housing, dispersed throughout the 100-unit apartment structures, will be comprised of 25 units of deed-restricted apartments and 11 replacement rent-controlled apartments (for current residents of the Belle Vue building who wish to return to the location after construction). The applicant’s generous move out/move in program for the current tenants set forth in the DA is unique in the history of our city.
• Publicly accessible open space truly defines the proposed project. 12,000 square feet of sustainably landscaped paseos and courtyards will be incorporated into the project on the ground level, making the site visually and physically porous and inviting to pedestrians and community members visiting on bicycles or micromobility devices. The ground level pedestrian experience is open and connected site wide. The vacation of a portion of First Court will allow the City to create a Pedestrian Mall connected to Santa Monica Boulevard. I trust that the applicant will make provisions to keep these spaces safe. • High above the street level, the 5,000 square foot publicly accessible observation deck will cap the hotel building, providing dramatic views of Santa Monica, the Santa Monica Mountains and the Pacific Ocean. Beyond the awe factor, the observation deck presents a unique teaching opportunity. The 360-degree view can’t help but impress upon people that our city is Item 12.A
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Packet Pg. 910 Attachment: Written Comments (4857 : Ocean Avenue Project Development Agreement (180 mins)) surrounded by natural wonders, and that we have a special responsibility to protect them. I would recommend that the developer commission attractive but unobtrusive interpretive signage for each of the directions to orient visitors and provide brief geographic, historical, marine, and climate-related information about what they’re looking at. • As more young households go to work in our city, the project’s childcare initiatives take on new value. Childcare is key to our economic recovery and to the peace of mind of parents who are invested in their children’s future in Santa Monica.
• Economic Equity/Opportunity fund will help ensure that our continuing economic recovery moves forward inclusively.
• Funding for parks and open space will provide resources for desperately needed improvements to the community’s shared spaces. This obligation reflects the City’s long-term vision in its approach to larger development projects.
• An emphasis on culture will differentiate this project from the other large site projects (which will contribute their own signature features to our cityscape). The audacious sculptural element on the corner more than fulfills the City’s public art requirement. It announces the intention of the campus loudly and clearly – you are entering a vibrant art space, from the pavement to the observation deck. The significant museum element will help visitors learn about and appreciate the built environment, and may inspire new generations of architects, artists, and engineers.

Finally, I would like to comment on the design. The applicant selected a world-renowned Pritzker Award winning architect, Frank Gehry, who brings energy and a singular sense of place to every project.

Gehry’s impressive staff of designers, model makers, draftspeople and engineering experts are evident in every inch of this project, from the materials to the textures. I would like to add that we Santa Monicans enjoy an embarrassment of riches as far as architecture is concerned. So many fine local architects, like Gehry, understand our unique community and go the extra mile to design for its future.

Please approve the Ocean Avenue Project.

Sincerely,
Albin Gielicz
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Packet Pg. 911 Attachment: Written Comments (4857 : Ocean Avenue Project Development Agreement (180 mins)) 1 Vernice Hankins
From: Judy Abdo <[email protected]>
Sent: Sunday, July 10, 2022 10:20 PM
To: Sue Himmelrich; Kristin McCowan; Gleam Davis; Phil Brock; Christine Parra; Lana Negrete; Oscar de la Torre; councilmtgitems
Cc: David Martin; Roxanne Tanemori; David White
Subject: FW: Email to CC

EXTERNAL
City Council Members,
I am commenting on Item 12, the Ocean Avenue Project. I am a former Councilmember and Mayor of Santa Monica, and I currently serve on the MWD Board of Directors representing Santa Monica. I am also a steering committee member of Climate Action Santa Monica. My remarks are made as a 48‐year resident of Ocean Park, not on behalf of any organization.

The community has waited for this proposed project for many years. Since it was first introduced to the public, the world has undergone dramatic changes. We are still feeling the shockwaves of the COVID‐19 economic downturn. The issues of climate change and water conservation have also come to the fore in a way we could not have anticipated when the project was introduced.

So I am happy to see a major project emerge that responds so conscientiously and unhesitatingly to these stressors.

First, the direct fiscal impact and total economic impact of the project will be significant, and will provide a boost to City coffers and local merchants and services. A generous, 30‐year commitment to Santa Monica schools will boost our public education system and help it maintain its excellent national ranking. New union hotel jobs, union construction jobs, a local hire program for construction and operations, and a hotel internship for students at Santa Monica high schools and Santa Monica College will enrich our community in so many ways.

Second, the applicant’s commitment to achieving LEED Platinum certification reflects this community’s values and our expectations. Water neutrality, rooftop solar infrastructure and 100% Green Power through the Clean Power Alliance for those energy needs not met by solar are also solid responses to our values and local and State laws. It is also wonderful to know that all residential and retail guests will have access to EV charging stations in the garage. Drought tolerant landscaping and participation in the Marine Debris Reduction Program will contribute to the project’s modest environmental footprint.

I would also like to comment on the architecture and site planning. The famed architect, Frank Gehry, has designed an energetic, upbeat campus, skillfully bringing together a wide variety of components — mixed‐use housing, walkable open spaces, a hotel, eye catching public art, a museum, and adaptively reused historical structures — into a single, exciting site. This is place‐making at its best, and Mr. Gehry’s entire team deserves our applause for their creativity and ingenuity.

I urge you to vote yes on the project. Thank you very much for your work.

Judy Abdo
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Packet Pg. 912 Attachment: Written Comments (4857 : Ocean Avenue Project Development Agreement (180 mins)) 2 Item 12.A
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Packet Pg. 913 Attachment: Written Comments (4857 : Ocean Avenue Project Development Agreement (180 mins)) July 11, 2022
Re: Item 12
Dear City Council:

Santa Monica Forward supports the Ocean Avenue Project and urges you to follow Staff’s recommendation on July 14 to approve.

The proposed project is consistent with current Downtown planning requirements. It is a significant project, located on a prominent corner in downtown Santa Monica, a hub of resident and visitor activity year-round. The applicant and architect have responded to the urban/coastal interface with a project that encompasses a wide range of elements: the adaptive reuse of historic structures, an improved pedestrian experience (which includes an internal walk street/paseo), a unique cultural component, a substantial housing commitment, the city’s only public observation deck, an important cultural component, and a truly significant hotel.

The project is designed by Pritzker Prize-winning architect Frank Gehry, whose work is celebrated across the region and around the world. Gehry is a long-time resident of Santa Monica and is considered a “hometown architect” with an understanding of the community’s unique identity.

Forward calls out four key aspects of the plan that align with our guiding principles:
1 - New and replacement housing
Santa Monica Forward applauds the project’s strong housing program, which will bring 100 newly constructed apartments to the project site. This component includes:
● 20 deed-restricted affordable apartments
● 16 replacement rent-controlled apartments
● 64 market-rate apartments
2 - Union workforce, local hire, local internship program The project applicant proposes a robust employment program that will provide good-paying jobs during construction and operation and will train students to sustain Santa Monica’s vital hospitality industry:
● The creation of new union hotel jobs for the 120-room hotel ● New union construction jobs
● A local hire program for construction and permanent jobs Item 12.A
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Packet Pg. 914 Attachment: Written Comments (4857 : Ocean Avenue Project Development Agreement (180 mins)) ● A hotel internship program for students at Santa Monica high schools and Santa Monica College
3 - Economic benefits
As Santa Monica emerges from the devastating pandemic-related recession, we look forward to the project’s meaningful investment in our city’s economic future. ● The project’s direct fiscal impact will amount to an estimated $5.6 million annually, with $229.6 million estimated over the first 25 years of operations ● Its total economic impact will be substantial – approximately $134.4 million annually; $3.94 billion over the first 25 years of operations
● $29.5 million to the Santa Monica Malibu Unified School District over the first 30 years of operations
4 – Sustainability and transit
The project, which seeks LEED Platinum designation, represents a solid commitment to sustainability.
● The project will achieve water neutrality through the inclusion of dual plumbing/use of recycled water and use of low flow fixtures
● Solar infrastructure is integrated into the rooftop design ● It will operate on 100% Green Power purchased from Clean Power Alliance/SCE, for any power not generated on-site
● EV charging stations and infrastructure
● It will provide 231 bicycle parking spaces; this number is 81% of the number of vehicle parking spaces provided on site
● Transportation allowances for employees and residents ● The project is located in a transit-rich neighborhood with multiple public transportation choices, bike rental facilities and shared mobility options, all within a short walk of the site
Santa Monica Forward asks Councilmembers for a positive vote on Thursday night and looks forward to final approval and completion of this exceptional project.

Sincerely,
Abby Arnold and Carl Hansen
Co-chairs, Santa Monica Forward
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Packet Pg. 915 Attachment: Written Comments (4857 : Ocean Avenue Project Development Agreement (180 mins)) 1 Vernice Hankins
From: Emily McCarron <[email protected]>
Sent: Monday, July 11, 2022 12:37 PM
To: Sue Himmelrich; Kristin McCowan; Gleam Davis; Phil Brock; Christine Parra; Lana Negrete; Oscar de la Torre; councilmtgitems
Cc: David Martin; Roxanne Tanemori
Subject: Item 12 – Ocean Ave Project

EXTERNAL
Dear Mayor Himmelrich and City Council Members,
My name is Emily McCarron. I live in the mid-city area and am a frequent visitor to the downtown neighborhood.

I enthusiastically support this project.

The Ocean Avenue Project is a lot more than a hotel building designed by one of the world’s most respected architects. It is an entire urban campus that brings together housing, culture, historic buildings, places to eat and shop, and spaces to walk. Most of all, it will bring people together. I think that is the secret sauce of Frank Gehry projects around the world.

The sculptural building that Mr. Gehry has designed for the corner is awe-inspiring. It’s as fun and confident as the people who live and work in Santa Monica. It reflects (no pun intended) our passion for creativity. It will be a fantastic Instagram/selfie location, much like the Pier sign just a couple of blocks away. We’re coming out of the awful pandemic, and anything that stresses the outdoor experience that we’re so proud of will boost our civic confidence and pride and draw Santa Monicans and visitors to our city to the downtown district.

The project’s website really gives a great sense of the pedestrian-friendliness of the project. As a non-driver, this is very important. The "paseos" inside of the campus open up a corner that is currently like a wall. The project will transform the surface parking lot – a space made for cars – into brand-new residential space.

Strolling between those incredible structures will almost be like walking through an open air museum. Even the apartment buildings will be works of art!
The sidewalks will be widened. Although this is not the “sexy” part of the project, it is really important, because the intersection of Ocean and Santa Monica gets a lot of foot traffic, including families with strollers. There is nothing worse for pedestrians than waiting for the walk sign in a crowd of people who are all impatient to get across Ocean Avenue to get to the park. If you’ve ever stood in that “people jam” you know what I mean. On a crowded weekend, you might even see individuals step off the curb onto Santa Monica just to get some breathing room or to be first in line to cross. With this project, we have a chance to have a more accommodating, safe and beautiful pedestrian environment.

I have a lot more praise for the project. There are many more aspects of this plan that capture the imagination and bring tangible benefits to our city. I look forward to the hearing next week. But I thank you in advance for considering a YES vote on the Ocean Avenue Project.

With gratitude,
Emily McCarron
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Packet Pg. 916 Attachment: Written Comments (4857 : Ocean Avenue Project Development Agreement (180 mins)) 1 Vernice Hankins
From: Katie Savage <[email protected]>
Sent: Tuesday, July 12, 2022 10:22 AM
To: Sue Himmelrich; Kristin McCowan; Gleam Davis; Phil Brock; Christine Parra; Lana Negrete; Oscar de la Torre; councilmtgitems
Cc: David Martin; Roxanne Tanemori; David White
Subject: Ocean Avenue Project Letter of Support

EXTERNAL

City of Santa Monica Councilmembers ‐
I am writing to you today to express my support for the Ocean Avenue Project. My husband and I are long‐time Santa Monica residents who live in the Wilmont neighborhood with our two children. My husband is the pastor at Santa Monica Nazarene Chruch, and I am a local high school teacher. We have an 8th grader and 5th grader who attend the local public schools (elementary & middle) and are active in many different communities in Santa Monica – local PTAs, faith‐based organizations, Little League, etc. We care very much about our City, both in its current state and in the legacy we are leaving behind for our children.

We feel incredibly lucky to have a Frank Gehry design being proposed in Santa Monica. The iconic architecture on this corner of Downtown is a much‐needed facelift to a collection of rundown buildings and a surface parking lot. Based on the renderings, we can tell it will look amazing from many vantage points and will be a welcome change from some other projects we have seen going up all over town.

In particular, we are excited about this project because of our 8th grader’s affinity for Frank Gehry’s architecture. In 5th grade, our students at Franklin Elementary are required to do projects on “Famous Californians” and our son selected Frank Gehry, who has chosen Santa Monica as his “adopted” hometown. He studied Mr. Gehry’s projects, prepared a report on his life and achievements, and we visited the places we could in order to see his projects in real life (his two homes in Santa Monica and of course the Walt Disney Concert Hall). It was wonderful to see our son so inspired by Mr.

Gehry, and we are excited to see another iconic design come to life right here where he lives.

In addition to the architecture, we feel lucky to have a museum being proposed on this site, especially for our kids – we certainly don’t have enough museums and often have to leave Santa Monica in order to expose our kids to the cultural arts. We’ve learned that Mr. Gehry’s own archives will be displayed as a permanent collection and we know it will become a gem of our community – a “must see” part of any Santa Monican family’s weekend activities.

Please approve this project without delay! We recently learned that it has been in planning for more than 9 years ‐ it would be a real shame to lose an opportunity to have our skyline improved by an architect of this notoriety. Thank you for your time.

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Packet Pg. 917 Attachment: Written Comments (4857 : Ocean Avenue Project Development Agreement (180 mins)) 2 Katie& Scott Savage
Wilmont neighborhood residents
‐‐
katie savage
www.katie‐savage.com

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Packet Pg. 918 Attachment: Written Comments (4857 : Ocean Avenue Project Development Agreement (180 mins)) ^ los angeles county museum of art
5905 wilshire boulevard
los angeles california 90036
Michael govan
ceo/wallis annenberg director
t 323 857 6001
f 323 857 6148
July 12, 2022
Santa Monica Councilmembers
Santa Monica City Hall
1685 Main Street
Santa Monica, California, 90401
RE: Agenda Item 12, Ocean Avenue Project
Dear Santa Monica City Council,
I am writing to express my strong support for the Frank Gehry-designed Ocean Avenue Project in Santa Monica.

I have worked with Frank Gehry for decades on several projects, including the redesign of the Modern Art collection at LACMA that reopened just last year, and the Solomon R. Guggenheim Museum in Bilbao.

That is why I am excited to see what Frank and Jeff Worthe have created for this very important stretch of Santa Monica along Ocean Avenue. As the Los Angeles region, and Santa Monica in particular, becomes the focus of the world’s attention in the coming years, this stunning architecture near the iconic Santa Monica Pier will be shown off to the rest of the world.

The design of these buildings represents Frank Gehry and his vision for the future of his adopted hometown, where he maintains his influential home that changed the world’s thinking of what defined a single-family home. The hotel, residential buildings and museum will undoubtedly serve as a testament to his creativity and genius for generations to come.

The addition of the museum makes it even more important that this project is approved. At a time when some cultural institutions are scaling back, a new museum, with a focus on architecture and the arts, should be celebrated. Not only does the new museum building add to the list of iconic Frank Gehrydesigned museums, but it also incorporates two historic landmarked buildings that tie the future of architecture with its local past. Santa Monica has been the center of a great deal of artistic innovation over the last century. A museum will help promote the specific artistic importance of Santa Monica – and I look forward to attending the opening of the museum when it opens in a few years! For these reasons, I urge you to approve the Ocean Avenue Project.

Thank you,
Michael Govan
CEO and Wallis Annenberg Director
Los Angeles County Museum of Art
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Packet Pg. 919 Attachment: Written Comments (4857 : Ocean Avenue Project Development Agreement (180 mins)) July 12, 2022
City Council
City of Santa Monica
1685 Main Street
Santa Monica, CA 90401
Re: Agenda Item 12, Ocean Avenue Project - SUPPORT
Dear Mayor and Council Members,
On behalf of the Santa Monica Chamber of Commerce, we write to support the Ocean Avenue Project. The project has been through an extensive, yearslong process and it is time that Santa Monica reaps the extensive community and economic benefits that this development will bring.

This project will provide much needed housing in our downtown, including affordable units, rent-controlled units and market-rate units.

The new housing, coupled with the 120-room hotel and new dining and retail options, will reinvigorate this corridor along Ocean Avenue.

In addition, it is an honor that Santa Monicans will receive this worldclass design by Pritzker Architecture Prize-winner Frank Gehry. Not only will Gehry’s design be a work of art in and of itself, but the Cultural Uses Campus will offer exclusive archives from Gehry’s career. This will provide significant educational opportunities for students from Santa Monica’s public schools and youth-serving non-profits.

Most importantly, the Chamber of Commerce believes that the Ocean Avenue Project will help revive the City through the project’s financial contributions and employment opportunities. The past two years of the pandemic have created a hardship for many in our community and we believe this project’s local hiring program, coupled with key investments in local initiatives, will jumpstart our economic recovery.

The Chamber is proud to support the Ocean Avenue Project and urges the City Council to approve it.

Sincerely,
Warmly,
Judy Kruger Greg Morena
President/CEO 2022-23 Board Chair
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Packet Pg. 920 Attachment: Written Comments (4857 : Ocean Avenue Project Development Agreement (180 mins)) From: Marilyn Strong on behalf of Larry Ruvo
To: Sue Himmelrich; Kristin McCowan; Gleam Davis; Phil Brock; Christine Parra; Lana Negrete; Oscar de la Torre; councilmtgitems
Cc: David Martin; Roxanne Tanemori; David White
Subject: Ocean Avenue Project - Support Item 12
Date: Tuesday, July 12, 2022 1:04:02 PM

EXTERNAL
Dear City of Santa Monica City Council Members,
I am very pleased to provide my wholehearted support for the Worthe / Gehry Partners Ocean Avenue Project. Not only am I a Santa Monica property owner on Ocean Avenue, but I have personally worked with Gehry Partners on their project in Las Vegas, the Cleveland Clinic Lou Ruvo Center for Brain Health. I am extremely familiar with the world-renowned quality and detail that evolves with each and every Gehry project.

What I believe is important for this project is not only its world-class design and emphasis on historic preservation – which honors both our past and future - but that it also has a dynamic focus on many environmental sustainability initiatives including 100% Green Power, rooftop solar infrastructure, EV charging stations and drought tolerant landscaping among other items. It is so important to encourage sustainable designs for the future of our city, and from a Pritzker-Prize winning architect no less.

The Ocean Avenue Project, particularly in this location, will deliver a much-needed boost to our local community by providing millions of dollars of economic benefits per year. Even with these important economic benefits, Gehry Partners managed to design a beautiful project which includes special components of publicly accessible open space, both at the ground level and on an observation deck with panoramic views of our city.

I believe the residents of Santa Monica will welcome and benefit greatly by the addition of The Ocean Avenue Project to our community.

Warm regards,
Larry Ruvo
Ocean Avenue Property Owner
LR/ms
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Packet Pg. 921 Attachment: Written Comments (4857 : Ocean Avenue Project Development Agreement (180 mins)) 1 Vernice Hankins
From: Leslie Lambert <[email protected]>
Sent: Tuesday, July 12, 2022 3:29 PM
To: councilmtgitems
Cc: [email protected]; Kristin McCowan; Gleam Davis; Phil Brock; Oscar de la Torre; Christine Parra; Lana Negrete
Subject: Item 12A

EXTERNAL
Dear Mayor Himmelrich, Vice Mayor McCowan and Councilmembers:

I strongly encourage you to take all necessary actions necessary to adopt the Development Agreement for the Ocean Avenue Project.  This project has evolved over the past ten years and now provides the City the opportunity for new affordable and rent controlled replacement housing, a hotel with union wages and benefits and TOT revenues, the preservation of two local landmarks, and a cultural facility that will be a local treasure and an attraction to visitors from outside our region.

The Cultural Uses Campus and Museum will feature the following:
 35,500 square feet of museum space (roughly the size of the Hammer in Westwood)  Curated works of significant local, international, established and emerging artists and architects  Annual field trip opportunities for students from all educational facilities in Santa Monica, including covering their cost of transportation
 Monthly "free day" for all Santa Monica residents
 Discounted entry fee for all Santa Monica residents and all students/youth  At least four times a year, field trip opportunities for youth‐serving nonprofit organizations  Required Programming Plan demonstrating the Developer's commitment to youth education and creating opportunities for higher education students for research and education  Showcase for exclusive pieces from the archives of Frank Gehry, an internationally recognized architect and Santa Monica resident.  This archives exhibition, located within a project designed by Mr. Gehry, will offer inspiration to aspiring and established urban designers and architects from our region as well those from all over our country and the world.

As a forty‐three year resident of Santa Monica and one who has spent eighteen years on City boards and commissions, I can honestly say that I have never seen a project that offers such a significant contribution to the arts and urban design.  It is an opportunity that must not be lost.

Please adopt staff's recommendation on Item 12A.  Thank you for your consideration.

Sincerely,
Leslie Lambert
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Packet Pg. 922 Attachment: Written Comments (4857 : Ocean Avenue Project Development Agreement (180 mins)) 1 Vernice Hankins
From: Talia Tinari <[email protected]>
Sent: Tuesday, July 12, 2022 4:28 PM
To: Sue Himmelrich; Kristin McCowan; Gleam Davis; Phil Brock; Christine Parra; Lana Negrete; Oscar de la Torre; councilmtgitems
Cc: David Martin; Roxanne Tanemori; David White
Subject: Support for Item 12, July 14th Agenda-Ocean Avenue Project

EXTERNAL
Dear City Council Members,
I am writing in support of the Frank Gehry Ocean Avenue Project. A design by a world‐renowned architect, one of L.A.'s own, would both historically restore and elevate that portion of Ocean Avenue.

Marrying several elements; hotel, retail, housing, preservation of historical buildings and cultural attractions in a sustainable, LEED Platinum building reflects in purpose and in practice what Santa Monica strives to be; a forward thinking city committed to sustainability.

Respectfully,
Talia Tinari
Wilmont Neighborhood Resident
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Packet Pg. 923 Attachment: Written Comments (4857 : Ocean Avenue Project Development Agreement (180 mins)) 1 Vernice Hankins
From: Nicole Blaine <[email protected]>
Sent: Tuesday, July 12, 2022 4:40 PM
To: Sue Himmelrich; Kristin McCowan; Gleam Davis; Phil Brock; Christine Parra; Lana Negrete; Oscar de la Torre; councilmtgitems; Roxanne Tanemori; David White
Subject: July 14 Agenda Item 12 - Support for Ocean Avenue Project

EXTERNAL
City of Santa Monica Councilmembers ‐
Our family is in 100% support of the Ocean Avenue Project. Both my husband and I were raised in Santa Monica, and in turn now have two children going through the same schools we attended (Franklin, Lincoln and Samohi). My husband is a high school theater teacher, and we are lifelong supporters of the arts and huge fans of Santa Monica’s public schools.

Additionally, we are the owners of a small business, a comedy club called The Crow, located at Bergamot Station.

Needless to say, we are very invested in Santa Monica and believe this project will greatly benefit the community.

We have seen so many projects come and go in this town, and lots of dull and uninspiring architecture.  If there is going to be a large‐scale development on this special corner of our Downtown area, we feel lucky to have such a fantastic design that complements our City’s history (with preservation of the landmarks) and inspires its future, with a building that is likely to become a landmark 55 years from now!
It's no secret that our public schools require extra funding to give our children even basic access to the arts, and this project proposes an immediate cash infusion along with a 55‐year pledge to donate to the Santa Monica Education Foundation from net income from the publicly accessible observation deck. Who else is stepping up to the plate to offer this to our children? Please don’t let this opportunity pass us by.

With the pandemic, we witnessed how quickly our social services for our children dried up when we lost our revenue from tourism. The SMC pool closed. Our libraries closed. Our after‐school programs at our schools shut down. Many of these services have yet to return. Our children have suffered the most from these closures, and we are mindful that hotel revenue is an important and vital part of this City’s economic engine. Given the reality that developments like this are an asset to our City’s vitality, we think the hotel being proposed is beautiful and sensitively fits into our City’s skyline.

Bravo, Mr. Gehry!
Please approve this project and provide our kids with more exposure to the arts, beautiful architecture, and future funding streams for more arts education in our public schools.

Sincerely,
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Packet Pg. 924 Attachment: Written Comments (4857 : Ocean Avenue Project Development Agreement (180 mins)) 2 Nicole& Mickey Blaine
Wilmont neighborhood residents
‐‐
Nicole Blaine
owner ∙ bossmamma
∙ The Crow ∙  a new comedy club elevating comedy culture To help protect your priv acy, Microsoft Office prevented automatic download of this picture from the Internet.

Follow The Crow on Insta: @crowcomedy
Email me about The Crow: [email protected]
.

Ring the bells that still ring
Forget your perfect offering
There is a crack, a crack in everything
That's how the light gets in
-Leonard Cohen
∙
Shameless self‐promotion is found below. (Sorry/ Not Sorry) Check out my new stand‐up special now streaming
on Amazon Prime Video, iTunes, and more by going
to my website: www.NicoleBlaine.com
Follow me on Insta @nicblaine
To help protect your privacy, Microsoft Office prevented automatic download of this picture from the Internet. ∙
Why you still scrolling? Go toa live comedy show!
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Packet Pg. 925 Attachment: Written Comments (4857 : Ocean Avenue Project Development Agreement (180 mins)) July 12, 2022
Dear City Planning Commission,
Abundant Housing LA is a pro-housing, nonprofit advocacy organization working to help solve Southern California’s housing crisis. Our organization supports more housing at all levels of affordability, which are needed in order to make housing more affordable, improve access to jobs and transit, promote greater environmental sustainability, and advance racial and economic equity.

Abundant Housing LA supports the Ocean Avenue project and urges you to vote affirmatively on item Agenda Item 12, Ocean Avenue Hotel Project, 13DEV‐004, 20ENT‐0303, 18ENT‐0385 tonight.

Rental housing is a significant component of the project. Twenty-five of the 100 units will be affordable at various levels of affordability and will be dispersed among market-rate units across the three mixed-use residential buildings on the site.

Good housing does not exist in a vacuum. The location of the Ocean Avenue Project residential component is particularly favorable. The site is a short walk or bicycle ride from transit, including the Expo Line and numerous Blue Bus stops. It is located 2-½ blocks from the Third Street farmer’s market, close to grocery stores and restaurants at all price points, and other retail. Its proximity to Palisades Park, the Pier and the beach will afford residents recreational opportunities that are free or low-cost. Finally, it is within walking distance of jobs in our hospitality, service, tech, and government sectors.

AHLA urges you to follow Staff’s recommendation and vote yes on this important project.

Best Regards,
Leonora Camner
Leonora Camner Jaime Del Rio Tami Kagan-Abrams
AHLA Executive Director AHLA Field Organizer AHLA Project Director Item 12.A
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Packet Pg. 926 Attachment: Written Comments (4857 : Ocean Avenue Project Development Agreement (180 mins)) July 12, 2022
RE: Support for Item 12 Ocean Avenue Project
City of Santa Monica City Council,
We are writing to the City Council in support of Item 12 on the July 14th City Council Agenda. We believe that the Ocean Avenue Project is a great fit for downtown Santa Monica and the project is particularly timely.

The Ocean Avenue Project will offer many valuable community benefits, especially for a young family like ours. The museum will add a family-friendly attraction that will be great for children of all ages.

Additionally, we appreciate the thoughtfulness of the layout of the project, providing a lot of publiclyaccessible open space on both the ground level and the observation deck. This will be a great place for us to meet up with other families on the weekend.

On a personal note, this project is particularly meaningful to our family as it is designed by Frank Gehry.

Gehry also designed the Cleveland Clinic Lou Ruvo Center for Brain Health which is dedicated to my grandfather, Lou Ruvo, who was a victim of Alzheimer’s disease. The unparalleled visions that Frank Gehry brings to life are spectacular and we believe the Ocean Avenue Project will be yet another celebrated design.

We urge you to swiftly approve the Ocean Avenue Project. Thank you! Sincerely,
Lauren Ruvo & Matt Carroll
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Packet Pg. 927 Attachment: Written Comments (4857 : Ocean Avenue Project Development Agreement (180 mins)) July 12, 2022
Dear City Council Members,
Abundant Housing LA is a pro-housing, nonprofit advocacy organization working to help solve Southern California’s housing crisis. Our organization supports more housing at all levels of affordability, which are needed in order to make housing more affordable, improve access to jobs and transit, promote greater environmental sustainability, and advance racial and economic equity.

Abundant Housing LA supports the Ocean Avenue project and urges you to vote affirmatively on item Agenda Item 12, Ocean Avenue Hotel Project, 13DEV‐004, 20ENT‐0303, 18ENT‐0385 on July 14.

Rental housing is a significant component of the project. Twenty-five of the 100 units will be affordable at various levels of affordability and will be dispersed among market-rate units across the three mixed-use residential buildings on the site.

Good housing does not exist in a vacuum. The location of the Ocean Avenue Project residential component is particularly favorable. The site is a short walk or bicycle ride from transit, including the Expo Line and numerous Blue Bus stops. It is located 2-½ blocks from the Third Street farmer’s market, close to grocery stores and restaurants at all price points, and other retail. Its proximity to Palisades Park, the Pier and the beach will afford residents recreational opportunities that are free or low-cost. Finally, it is within walking distance of jobs in our hospitality, service, tech, and government sectors.

AHLA urges you to follow Staff’s recommendation and vote yes on this important project.

Best Regards,
Leonora Camner
Leonora Camner Jaime Del Rio Tami Kagan-Abrams
AHLA Executive Director AHLA Field Organizer AHLA Project Director Item 12.A
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Packet Pg. 928 Attachment: Written Comments (4857 : Ocean Avenue Project Development Agreement (180 mins)) 1 Vernice Hankins
From: Elena Christopoulos <[email protected]>
Sent: Tuesday, July 12, 2022 5:55 PM
To: Sue Himmelrich; Kristin McCowan; Gleam Davis; Phil Brock; Lana Negrete; Christine Parra; Oscar de la Torre; councilmtgitems
Cc: David Martin; Roxanne Tanemori; David White
Subject: Item 12 - Ocean Ave Project - APPROVE
Importance: High

EXTERNAL
Dear City Councilmembers,
I submit these comments as a 15‐year resident of the vibrant Downtown Santa Monica neighborhood. I ask you to approve the Ocean Avenue Project.

The project has been in process for nearly a decade. During that time, the community meeting and float‐ups demonstrated that there is significant support for the project among my neighbors, friends and fellow residents and those who live and work downtown.

There are countless reasons for that support. Among them: the pedestrian‐friendly campus environment that the project will provide on a high‐value corner site, generous community benefits, significant hotel revenue, plentiful rental housing (affordable, replacement rent control and market rate), a museum that will engage residents and visitors alike in the processes of creating a beautiful built environment, LEED Platinum certification, a bold and iconic public art element, and of course, outstanding planning and design by one of the world’s most prominent architects, Frank Gehry.

The Ocean Avenue Project campus – which we all hope will be completed in time for the Los Angeles Olympics – is a short walk from my residence. I speak for scores of Downtowners who will be frequent visitors to the shops, restaurants, museum, and the publicly accessible observation deck, which will provide an inspiring overview of the LA Basin and the natural environment that surrounds us. Just as important, the completed project will without a doubt provide an experience to tourists and visitors unlike any other in the greater LA area.

The project has my wholehearted support as well as the support of the Downtown residents and I urge you to support Staff’s recommendations to approve the Development Agreement and certify the EIR.

Thank you for your consideration,
Elena Christopoulos
Commissioner, City of Santa Monica

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Packet Pg. 929 Attachment: Written Comments (4857 : Ocean Avenue Project Development Agreement (180 mins)) 1 Vernice Hankins
From: Camilla Chan <[email protected]>
Sent: Tuesday, July 12, 2022 11:30 PM
To: Sue Himmelrich; Kristin McCowan; Gleam Davis; Phil Brock; Christine Parra; Lana Negrete; Oscar de la Torre; councilmtgitems
Cc: David Martin; Roxanne Tanemori; David White
Subject: July 14 Agenda Item 12 - Support for Ocean Avenue Project

EXTERNAL
City of Santa Monica Councilmembers,

Our family would like to provide our emphatic support for the Ocean Avenue Project. We’ve lived in Santa Monica – both in Mid‐City and now in Sunset Park – for many years and have children who have attended elementary school in Santa Monica. Over the years we have seen many development projects proposed in the area, none as great as the Ocean Avenue Project. This project has multiple facets that will bring great value to the community.

Initially, our interests were piqued by the high‐level design that Frank Gehry’s architecture brings to the community. We were then delighted to learn that the project would also include a museum of Frank Gehry’s modern architecture, allowing our children to view inspired work from the archives of Frank Gehry. To top it all off, we are aware that regular school tours will be offered at the museum, with special pricing for local students.

The Ocean Avenue Project also emphasizes education through its partnership with the Santa Monica Education Foundation (SMEF). The rooftop of the Ocean Avenue Project’s hotel will be a publicly accessible observation deck with 360‐degree views. This feature will attract locals and visitors alike, with 100% of the entry fee proceeds going to the SMEF. Our family has seen first‐hand the positive work that the SMEF does for our public school children and this steady revenue stream will allow the SMEF to continue its valuable work.

Our family is looking forward to this project and consider it a great benefit to our community, especially for Santa Monica’s school‐aged children. We’d like to urge the Council to approve the Ocean Avenue Project and hopefully in a few years our family will be able to walk through it ourselves.

Sincerely,
Matthew & Camilla Benham
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Packet Pg. 930 Attachment: Written Comments (4857 : Ocean Avenue Project Development Agreement (180 mins)) 1 Vernice Hankins
From: Malissa Shriver <[email protected]>
Sent: Wednesday, July 13, 2022 12:40 AM
To: councilmtgitems
Subject: Support for Ocean Avenue Project-Agenda Item 12

EXTERNAL
Hello,
As a long time resident of Santa Monica, as both a former renter and a current homeowner, and as a parent and President of a local non profit, I strongly support this magnificent architectural development. I particularly appreciate the cultural amenities included in the plan, the opportunities it will afford our students, as well as showcasing our beautiful city and our legendary local artist Frank Gehry at his best. I can’t think of another project that has undergone such an arduous, years long process of careful iteration, attending to our community’s strict standards and has arrived at this aspirational moment, fully realized with such a multitude of assets. Something beautiful and smart, representing the best of us all.

Malissa Shriver
President
Turnaround Arts Ca
310‐729‐4100
Turnaroundartsca.org
Twitter @MalissaShriver
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Packet Pg. 931 Attachment: Written Comments (4857 : Ocean Avenue Project Development Agreement (180 mins)) 1 Vernice Hankins
From: Frances Anderton <[email protected]>
Sent: Wednesday, July 13, 2022 11:48 AM
To: Frances Anderton
Cc: Sue Himmelrich; Kristin McCowan; Gleam Davis; Phil Brock; Christine Parra; Lana Negrete; Oscar de la Torre; councilmtgitems; David White; David Martin; Roxanne Tanemori Subject: Support for Ocean Avenue Project

EXTERNAL
Dear Santa Monica Councilmembers:

My name is Frances Anderton and I have covered architecture and design on radio and in print in Los Angeles for three decades. I’m also a Santa Monica resident and I happen to live in an apartment building co-designed by Frank Gehry very early in his career. I have also taught with his design partners in a 2011 studio at USC.

I am writing now to express my support for his Ocean Avenue Project.

Having a legacy building by this celebrated architect would surely be an asset to Santa Monica, especially one that brings public benefits like an art museum, viewing terrace and some affordable housing. Furthermore, it is fitting that Gehry should cap his amazing career right here in the city where he lives, opened his office, schooled his son Alejandro (at Samohi), and spent many hours over many decades holding court at Fromins.

But there are other reasons for supporting this scheme. I find that Gehry makes inviting public spaces and buildings both cultural and commercial that are characterful and comfortable to be in. Such character is displayed here in the varied roofline, the landscaped walkways and the palette of ice-cream colors and undulating walls that will likely sparkle in the Santa Monica sun.

So, if this project has met all your planning directives and community requirements, especially the affordable housing component, I hope you will support its realization.

Thank you for your consideration.

Sincerely,
Frances
Frances Anderton
francesanderton.com
Mobile: 310‐429‐8158
IG: dna_designandarchitecture
LinkedIn: Frances Anderton

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Packet Pg. 932 Attachment: Written Comments (4857 : Ocean Avenue Project Development Agreement (180 mins)) 1 Vernice Hankins
From: Cris Gutierrez <[email protected]>
Sent: Wednesday, July 13, 2022 2:09 PM
To: Sue Himmelrich; Kristin McCowan; Gleam Davis; Phil Brock; Christine Parra; Lana Negrete; Oscar de la Torre; councilmtgitems
Cc: David Martin; Roxanne Tanemori; David White
Subject: Support for 7/14/22 Agenda Item 12A: Ocean Avenue Project

EXTERNAL
Dear Mayor Himmelrich and City Council Members:

As a Santa Monica resident, with pride and enthusiasm, I write to support you in establishing a development agreement for the Ocean Avenue Project, including staff’s recommendations.

Designed by celebrated architect and fellow Santa Monican Frank Gehry, the Ocean Avenue Project actually will represent a civic commitment of us all, through your vote, to build in our city and community an aesthetic exemplar of sustainability housed in architectural artistry that embraces the ocean, sky and natural world, a campus where communal potential can be refreshed and newly realized.

The multi-use campus of the Ocean Avenue Project enables diverse people to mingle in a beautiful place as residents, neighbors, families, students, workers, friends, artists, shoppers, visitors, etc. The architecture embeds a museum space, a sophisticated, respectful model of Victorian home-reuse, weaving into paseos, swirling public art and elegant hotel heights, which include an expansive observation platform offering a 360-degree vista. From there, one can imagine the views where beauty abounds in the wonder of Nature and human possibility.

Building upon decades of Santa Monica’s sustainability and climate policies, ordinances and initiatives, this city and community have worked hard to set a high standard for development projects. Having the LEED Platinum v. 4 standard apply to the entire Ocean Avenue Project is meaningful. Of particular note, given California’s long-standing drought and our local water conservation/self-sufficiency goals, the Ocean Avenue Project will extend the purple pipes system beyond the project site as one of many community benefits provided.

The Ocean Avenue Project clealry adds to Santa Monica’s stature as an environmental leader, now bringing forth architectural achievements meant to inspire as communities aspire. For each of us, increasingly profound for the young, seeing development projects with sustainability and resiliency as core principles of exquisite designs instills confidence in who we are now and in our future.

Athens has the Parthenon; Florence, the Duomo. Santa Monica can have the Gehry.

It’s time for our City Council to approve the Ocean Avenue Project and establish the development agreement for it to be a reality.

With respect,
Christine “Cris” Gutierrez
Santa Monica resident
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Packet Pg. 933 Attachment: Written Comments (4857 : Ocean Avenue Project Development Agreement (180 mins)) 2 Vernice Hankins
From: Cindy Mahamitra <[email protected]>
Sent: Wednesday, July 13, 2022 12:46 PM
To: Sue Himmelrich; Kristin McCowan; Gleam Davis; Phil Brock; Christine Parra; Lana Negrete; Oscar de la Torre; councilmtgitems
Cc: David Martin; Roxanne Tanemori; David White
Subject: Ocean Avenue Project- Suppport Item 12

EXTERNAL

Dear City Councilmembers,
As a parent with a child in the Santa Monica-Malibu Unified School District, my husband and I are steadfast supporters of the Santa Monica Education Foundation. We have been donating to the Ed Foundation for years because we believe in equity. The Ed Foundation is an organization in our community that provides equal access and opportunity for all students in our public schools.

When we heard the Ocean Avenue Project might direct the proceeds of its observation deck to the Ed Foundation, we were thrilled. This organization has not only benefitted my child, but all children in our community.

Having the proceeds go to the Ed Foundation ensures a continuous stream of funding for our public-school children. We urge you to vote to ensure these proceeds go to the Santa Monica Education Foundation.

Thank you,
Cindy Mahamitra
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Packet Pg. 934 Attachment: Written Comments (4857 : Ocean Avenue Project Development Agreement (180 mins)) 1 Vernice Hankins
From: Ryan Chin <[email protected]>
Sent: Wednesday, July 13, 2022 3:13 PM
To: Sue Himmelrich; Kristin McCowan; Gleam Davis; Phil Brock; Christine Parra; Lana Negrete; Oscar de la Torre; councilmtgitems
Cc: David Martin; Roxanne Tanemori; David White
Subject: Ocean Avenue Project - Support Item 12

EXTERNAL
Dear City Council Members,
I am writing to strongly recommend that the proceeds of the Ocean Avenue Project’s Observation Deck be directed to the Santa Monica Education Foundation.

My 14 year old son is a product of SMMUSD, recently graduating from Lincoln Middle School and soon to start his freshman year at SAMO High School.  My wife and I are also active donors to the Ed Foundation, and I currently serve on the SMMUSD Financial Oversight Committee.

We believe the Ed Foundation is fiscally prudent and has a track record of responsibly managing donations.  We can’t think of a better organization to be the steward of these proceeds.  By directing the proceeds to the Ed Foundation, you will be helping to supplement the cost of providing a quality education at our Santa Monica public schools and ensuring these funds are available to help our students in perpetuity.

Sincerely,
Ryan Chin
917‐838‐6141
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Packet Pg. 935 Attachment: Written Comments (4857 : Ocean Avenue Project Development Agreement (180 mins)) Michael White, AIA
Architect
810 California Avenue, #6
Santa Monica CA
90403
July 13, 2022
Santa Monica Planning Commission
1685 Main Street #212
Santa Monica, CA
90401
RE: July 14th Agenda Item #12, Ocean Avenue Project – Yes on the Ocean Avenue Project – Item 12 Dear Santa Monica Planning Commission,
As a resident and homeowner in Santa Monica, I wanted to write you in support of The Ocean Avenue Project. My family and I live in the neighborhood, in close proximity to The Ocean Avenue site, and are looking forward to having such a great new addition to our community.

Also, as a practicing architect, I am impressed with the sensitive and artistic way Frank Gehry has designed this building. We are lucky to have such an amazing new addition to our city.

This project has my complete support!
Sincerely,
Michael White
Santa Monica Home Owner / Resident
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Packet Pg. 936 Attachment: Written Comments (4857 : Ocean Avenue Project Development Agreement (180 mins)) 1 Vernice Hankins
From: Jack Walter <[email protected]>
Sent: Wednesday, July 13, 2022 4:33 PM
To: Sue Himmelrich; Kristin McCowan; Gleam Davis; Phil Brock; Christine Parra; Lana Negrete; Oscar de la Torre; councilmtgitems
Cc: David Martin; Roxanne Tanemori
Subject: Ocean Avenue Project, July 14th Agenda Item 12

EXTERNAL
Dear Councilmembers,
I have watched this project and attended community meetings for it since it received its Development Agreement in 2013, over the years it has gotten better.

The cost to build this cutting-edge architecture is challenging and comes at a premium, the developer and their team are some the strongest in Southern California and will execute seamlessly.

This signature architecture will a be published and know around the world, it is in Santa Monica, facing the Pacific.

A salute to such boldness.

It is an honor to support it.

Best regards,
Jack Walter
13DEV-0004 Development Agreement; 18ENT-0385 (Environmental Impact Report); 20ENT0303 (Local Coastal Program Land Use Plan Amendment) for 101 Santa Monica Boulevard, 129 Santa Monica Boulevard, 1327 Ocean Avenue, 1333 Ocean Avenue, and 1337 Ocean Avenue

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Packet Pg. 937 Attachment: Written Comments (4857 : Ocean Avenue Project Development Agreement (180 mins)) 2 Vernice Hankins
From: Pantipa Sarai <[email protected]>
Sent: Wednesday, July 13, 2022 4:31 PM
To: Kristin McCowan; Gleam Davis; Phil Brock; Christine Parra; Lana Negrete; Oscar de la Torre; councilmtgitems; Sue Himmelrich
Cc: David Martin; Roxanne Tanemori; David White
Subject: "Yes on the Ocean Avenue Project – Item 12" or "Ocean Avenue Project- Support Item 12.”

EXTERNAL
Dear City Councilmembers,
I am writing to support the proceeds from the Gehry Observation Deck going to the Santa Monica Education Foundation.

Parents and community members have a unique way to support the children in our Santa Monica public schools, and that is through the Santa Monica Education Foundation. The Ed Foundation raises money to fund essential staff and programs at all 12 Santa Monica public schools, ensuring equal access to instructional aides, art programs, STEM programs, and more. I can't say enough about the impact that the SM Education Foundation has on our children at our K-12 schools.

With the Ed Foundation as the beneficiary of the observation deck’s proceeds, the City Council is making a strong statement in support of public education. What better way to ensure the health and wellbeing of our community’s children than ensuring that their education is the best it can be? Thank you for your consideration.

Sincerely,
Pantipa Sarai
1105 Bay St. #A, Santa Monica, CA 90405
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Packet Pg. 938 Attachment: Written Comments (4857 : Ocean Avenue Project Development Agreement (180 mins)) MILTON S. F. CURRY
3818 Roderick Rd.

Los Angeles, CA 90065
E [email protected]
July 13, 2022
Santa Monica City Councilmembers
Santa Monica City Hall
1685 Main Street
Santa Monica, California, 90401
RE: Support of Item 6-A, Ocean Avenue Project
City of Santa Monica Planning Commissioners,
I currently serve as the Professor of Architecture at the University of Southern California School of Architecture, where I served as Dean from 2017-2022. I am writing this letter as an individual, not in my professional role as professor.

I would like to express support of the Ocean Avenue Project. The Ocean Avenue Project, designed by Pritzker Prize winning architect Frank Gehry, will enable Santa Monica to continue on a sustainable path of densifying its core and adding cultural and public amenities sorely needed in the city today.

The density of the project, along with the mixed-use nature of the programming, will add to the already existing urban fabric of Santa Monica; while enhancing pedestrian-centered activity. Frank Gehry’s Santa Monica Place once was the innovative upstart in a city that has now grown and matured substantially. Like what Santa Monica Place Third Street promenade has become, the Ocean Avenue Project has an opportunity to achieve in transforming existing land into a dynamic hub of activity.

The addition of a major cultural institution - the museum component at a scale of over 40,000 gsf - will put Santa Monica on the map as one of many locations in Los Angeles that are cultural destinations. The museum component will attract design professionals, curators, workers and others whose interest in art and architecture will be catalytic towards building a like-minded community in Santa Monica as other communities have done so in Southern California (including Orange County and San Diego - both with new museums - among others).

For these reasons, I urge your careful consideration and approval of this important project.

Sincerely,
Milton S. F. Curry
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Packet Pg. 939 Attachment: Written Comments (4857 : Ocean Avenue Project Development Agreement (180 mins)) From: Matthew Covington
To: Sue Himmelrich; Kristin McCowan; Gleam Davis; Phil Brock; Christine Parra; Lana Negrete; Oscar de la Torre; councilmtgitems
Cc: David Martin; Roxanne Tanemori; David White
Subject: Ocean Avenue Project - Item #12 - Support SM Ed Foundation Date: Wednesday, July 13, 2022 4:59:05 PM

EXTERNAL
Dear City Council Members,
I recently heard that the proceeds of the Ocean Avenue Project’s Observation Deck may go to the Santa Monica Education Foundation. My wife and I are delighted to learn of this potential benefit to support all of the students in Santa Monica.

For many years, the Ed Foundation has been funding programs that are essential to our children’s education. Not only has our child been positively impacted by these programs (instructional assistants, arts programs, STEM programs), but ALL children in our district have benefitted from them. The Ed Foundation firmly believes that all children, no matter their personal or family circumstances, deserve to have the best education possible.

When people donate to the Ed Foundation, they know that they are supporting an organization that supports our children’s education. The Ed Foundation has a stellar reputation in our community and I know that they are the best beneficiary of the observation deck proceeds. We hope you will support this potential benefit to the Ed Foundation. Our children will be the beneficiaries for years to come.

Sincerely yours,
Matthew D. Covington
2501 Pearl Street
Santa Monica, CA 90405
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Packet Pg. 940 Attachment: Written Comments (4857 : Ocean Avenue Project Development Agreement (180 mins)) Zachary Gaidzik
July 8, 2022
Re: Item 12 – Ocean Avenue Project
City Councilmembers:

I am writing to express my support for the Ocean Avenue Project. Please consider Staff’s recommendation to approve the project on Thursday night.

I am a lifelong resident of Santa Monica currently serving as West/Metro Field Deputy for Supervisor Sheila Kuehl.

I am a member of the Ocean Park Association board. I am a former member of Climate Action Santa Monica Steering Committee. However, the opinions I express in this letter are mine only.

This project has been in the works for several years and has undergone an evolution that has made a fantastic concept into a truly great project.

This is a future-focused project composed of many disparate parts ingeniously woven into a whole. In that way, it is a project unlike any other in Santa Monica. What for years has been referred to as “the Frank Gehry Hotel project” turns out to be much more than world-class lodging in an amazing building. It is a campus that includes 100 units of rental housing (25 of which will be deed-restricted affordable), and a unique museum that will inform and inspire visitors about architecture and the built environment. Restaurants, broad walkways, adaptively reused historic buildings (that will remind us of Ocean Avenue’s past), and a incredible public art component round out the many elements that are arranged into a single, harmonious, exciting unit. But in my opinion, the best feature is the public viewing deck from which visitors, residents and children will take in a spectacular 360-degree view of Santa Monica Bay from Palos Verdes to Point Dume, and around to the Santa Monica Mountains – the foundations of our priceless natural environment that we are all working so hard to protect.

The economic benefits generated from the project will benefit our community for decades to come. An estimated $3.94 billion boost to the local economy and tax revenues of nearly $3 billion are projected to be generated by the project in its first 25 years of operations.

The project’s sustainability program more than responds to City and State requirements. The applicant will certainly receive the LEED Platinum rating it is seeking.

Finally, as a product of SMMUSD, I am pleased that our school system will also receive a significant boost, both through direct funding and through programs that will offer training in one of the city’s most successful economic sectors – hospitality. Education will to a huge extent determine the success of the city’s future economy.

I’m proud to support the Ocean Avenue Project. I hope you will consider the outstanding design and the wide range of benefits that the project offers and vote yes. Thanks to City Staff for its work on this complex proposal, and to you for your attention.

Sincerely,
Zachary Gaidzik
Santa Monica
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Packet Pg. 941 Attachment: Written Comments (4857 : Ocean Avenue Project Development Agreement (180 mins)) From: Pam O"Connor
To: Sue Himmelrich; Kristin McCowan; Gleam Davis; Phil Brock; Christine Parra; Lana Negrete; [email protected]; councilmtgitems
Cc: Roxanne Tanemori; David Martin
Subject: Ocean Avenue Project
Date: Wednesday, July 13, 2022 11:34:37 PM

EXTERNAL
July 13, 2022
Item #12
City Council,
I am writing to express my strong support for the Ocean Avenue Project. I urge you to follow your Staff’s recommendations and approve this extraordinary project.

I served on City Council from 1994 to 2018. During that time, Council adopted the ambitious and comprehensive 2010 LUCE, as well as the Downtown Community Plan (DCP).

The DCP was years in the making. What was finally brought to Council was the product of an enormous effort by the City Manager’s office, the Planning Director and staff, the Planning Commission, the Downtown Community Plan team, all related departments, expert planning consultants, community groups, and most importantly, hundreds of community members who showed up time and time again at workshops. Although at times seemingly a contentious process, it energized the community in new ways. A vibrant new stakeholder group -- downtown residents – emerged and the process renewed interest across the city in the future of Downtown Santa Monica.

The City employed information technology in new ways, gathering input on the plan on its website.

The effort resulted in an extraordinary, 304-page document, which set forth parameters for “large sites” like the one you are considering tomorrow night. This will be the last of those large sites to be planned.

The Ocean Avenue Project fulfills and exceeds the requirements set forth in the DCP. And it does so with flair and imagination.

I'm sure you have heard from many community members about the pedestrian friendliness of the proposed project, its proximity to public transportation, 100 units of housing – including affordable and replacement rent-controlled units -- the meaningful cultural elements, the revenue-generating hotel, the adaptive reuse of landmarked structures, the publicly-accessible sky deck, the energetic design, and even a museum that celebrates the built environment. What might have been a crazy quilt in the hands of a less-skilled designer has become, under the visionary guidance of master architect Frank Gehry and his talented team, a triumph of site planning, a genuinely new place on an old site.

The Ocean Avenue Project is an uncommon expression of the DCP’s objectives. Please approve the project which will become an instant icon and will serve our community for decades.

Sincerely,
Pam O’Connor
Former Mayor and Councilmember
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Packet Pg. 942 Attachment: Written Comments (4857 : Ocean Avenue Project Development Agreement (180 mins)) From: Colby Goff
To: Kristin McCowan; Gleam Davis; Phil Brock; Christine Parra; Lana Negrete; Oscar de la Torre; councilmtgitems; Sue Himmelrich
Cc: David Martin; Roxanne Tanemori; David White
Subject: Ocean Avenue Project, July 14th Agenda Item 12 – Support Date: Wednesday, July 13, 2022 9:35:56 PM

EXTERNAL
Dear Council Members and City Leaders,
I am writing to voice my enthusiastic support for the Frank Gehry project on Ocean Avenue. I have lived in Santa Monica for more than 20 years, we are raising our kids here, we own several businesses in the City and we are incredibly proud to be a part of the community.This project is an endeavor we should optimistically rally around as it will become an iconic local fixture that residents and visitors seek out.The project’s incorporation of the two on-site landmarks into a new museum makes this project uniquely Santa Monica.The public access to views of the ocean and the Santa Monica skyline will benefit residents, employees and visitors.

I hope you will support this project. We are excited to see this completed, and equally excited for the positive momentum it will bring at a time when the City feels like it's struggling on many fronts.Thank you for your consideration.

Colby Goff
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Packet Pg. 943 Attachment: Written Comments (4857 : Ocean Avenue Project Development Agreement (180 mins)) From: Robert TeSelle
To: Sue Himmelrich; Kristin McCowan; Gleam Davis; Phil Brock; Christine Parra; Lana Negrete; Oscar de la Torre; councilmtgitems
Cc: David Martin; Roxanne Tanemori; David White
Subject: Yes on Ocean Avenue Project - Item 12
Date: Wednesday, July 13, 2022 6:43:59 PM
Dear City Council Members,
We were delighted to hear that the proceeds from the Ocean Avenue Project’s Observation Deck may be directed to the Santa Monica Education Foundation.

We are long-time residents of Santa Monica whose children attended SMMUSD schools, and whose grandchildren now attend SMMUSD schools. One of our children is also a teacher at Roosevelt Elementary. We wholeheartedly endorse a decision to direct the proceeds to the Education Foundation.

We have been donors to the Ed Foundation for many years because we believe in what the organization does. The Santa Monica Education Foundation is the only organization in our community that ensures that ALL students, no matter what school they attend, will have access to an enriched, quality education. The impact that Ed Foundation programs have on students’ education is immeasurable. The Ed Foundation’s support for the arts, STEM, instructional aides, and social-emotional programs makes all students’ experiences richer. We are confident that the proceeds from the observation deck will be used well in the hands of the Santa Monica Education Foundation.

Thank you for your consideration.

Sincerely,
Joyce Abbott and Robert TeSelle
507 Lincoln Blvd.

Santa Monica, CA 90402
[email protected]
[email protected]
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Packet Pg. 946 Attachment: Written Comments (4857 : Ocean Avenue Project Development Agreement (180 mins)) July 12, 2022
To: Santa Monica City Council
Re: SM City Council July 14 - Agenda Item 12A - Ocean Ave Project – SUPPORT Dear Mayor Himmelrich and City Council Members,
Inclusive Santa Monica is writing in strong support of City Staff’s recommendation to approve the Ocean Avenue Project.

Inclusive Santa Monica (ISM) is a coalition of organizations and individuals committed to an inclusive and equitable Santa Monica. This project’s significant commitments to affordable housing, union jobs and environmental sustainability align with our vision for a more equitable Santa Monica.

The project includes 20 deed-restricted affordable apartments, 16 replacement rent-controlled apartments, and 64 market rate units. Our city and state are in the midst of a severe housing shortage, and projects like this are just what our community needs.

The hotel would create quality union jobs, include a local hire program, and bring millions of dollars in annual revenue to our city. All of which would support our community as we weather the impacts of the current economic uncertainty.

Lastly, the project is also beautifully designed, seeks a LEED Platinum designation, and would achieve water neutrality. What is there not to love?
We appreciate your careful consideration and once again urge you to vote in accordance with the staff recommendation to approve the Ocean Avenue Project.

Sincerely,
Inclusive Santa Monica Steering Committee
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Packet Pg. 947 Attachment: Written Comments (4857 : Ocean Avenue Project Development Agreement (180 mins)) 1 Vernice Hankins
From: Jeremy Stutes <[email protected]>
Sent: Thursday, July 14, 2022 11:42 AM
To: Sue Himmelrich; Kristin McCowan; Gleam Davis; Phil Brock; Christine Parra; Lana Negrete; [email protected]; councilmtgitems
Cc: David Martin; Roxanne Tanemori; David White
Subject: OAP support - hearing protocols

EXTERNAL
Dear Mayor Himmelrich and Council Members,
I am a mass transit advocate and have been engaged in community development matters in Santa Monica for more than a dozen years. The issues affecting Santa Monica, especially the revitalization of the Downtown district, are hugely important to me and my fellow transportation advocates.

I am also a trained COVID compliance officer. I feel compelled to comment that I know several community members, some former city decision‐makers and civic leaders, who are unable to attend tonight's hearing because of the risk of exposure to the BA.5 variant. I am one of those people.

I commend you on your recent decision to reinstate phone‐in testimony and create a hybrid engagement process. But it is unfortunate that, as you are aware, the county will likely raise the COVID level status to "high" imminently, and tonight's hearing on this important project must be heard on an in‐person basis only.

I just want to add that I have had the good fortune of experiencing the project models and talking with the applicant, and am in full support of OAP.

I wish you good health, and urge you to approve the project without reservation.

Best regards,
Jeremy Stutes
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Packet Pg. 948 Attachment: Written Comments (4857 : Ocean Avenue Project Development Agreement (180 mins)) City Council
Report
City Council Meeting: July 14, 2022
Agenda Item: 16.A
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To: Mayor and City Council
From: Denise Anderson Warren, City Clerk, Records and Election Services Department
Subject: Request of Mayor Himmelrich that the City Council allocate the $29,000 of annual BID funding and $18,000 of Discretionary Funds previously discussed at their May 24, 2022 Budget Study Session. The funds include $10,000 to the Westside Coalition for their annual Martin Luther King Jr. Celebration, $5,000 to the Santa Monica Little League to repair the scoreboard at Los Amigos Park and $3,000 to Samohi for their bilingual graduation celebration.

The motion to officially allocate the funds was inadvertently left off of the agenda for the June 28, 2022 Council meeting where the FY 22-23 budget was adopted.

Prepared By: Nikima Newsome, Assistant City Clerk
Approved Forwarded to Council

16.A
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