City Council
Report
City Council Meeting: August 27, 2024
Agenda Item: 5.K
1 of 4
To: Mayor and City Council
From: David Martin, Director, Administration
Subject: Approval to Authorize City Manager to Execute and Negotiate Lease Agreements with Bergamot Station Arts Center Tenants
Recommended Action
Staff recommends that the City Council:
1. Adopt a finding of Categorical Exemption pursuant to Section 15301 of the California Environmental Quality Act (CEQA) Guidelines and a finding no possibility of significant effect pursuant to Section 15061(b)(3) (Common Sense Exemption) of the CEQA Guidelines;
2. Authorize the City Manager to execute and negotiate a 41-month lease agreement with Social and Public Art Resource Center (SPARC) through 2027; and
3. Authorize the City Manager to execute and negotiate lease agreements with Bergamot Station Arts Center (Bergamot) tenants for up to 36 months (through 2027).
Summary
Staff recommends Council authorization for the City Manager to execute and negotiate lease agreements (Agreements) at Bergamot of up to 36 months or through 2027 in lieu of annual terms. The Agreements would support tenant investment and streamline lease renewals for long-term tenants in good standing.
Discussion
Bergamot is located at 2525 Michigan Avenue (Property) and is one of Santa Monica’s most prominent cultural arts assets and cultural hubs. The City purchased the Property in 1989 with Department of Transportation (DOT) funds and with the goal that the 2 of 4
Property could serve future transit needs, including providing a revenue source for DOT.
Around 1993, as an interim measure until future transit developments were realized, the City master-leased the Property to a developer and gallerist to curate and operate an arts center we know today as Bergamot.
In 2000, Council approved Bergamot Station Leasing Guidelines (Guidelines) to maintain and enhance the interim use of Bergamot in service and support of the Santa Monica arts community. In recognition of City investment, the then master lessee was offered a five-year term lease plus five one-year options. In turn, the master lessee(s) offered annual subleases to tenants to coincide with its one-year options.
The City assumed responsibilities of the overall ground lease in 2022 and direct administration of Agreements. The City maintained the one-year lease renewal structure for continuity and flexibility in anticipation of future redevelopment of the Property. In July 2024, Council authorized executing a contract with Rising Realty Partners for property management of Bergamot.
SPARC
In February 2024, SPARC executed a six-month lease agreement with the City at Bergamot Station Arts Center. SPARC has since requested to extend its lease through 2027 to meet a condition of grant funding.
SPARC received a grant from the State of California Natural Resource Agency (Grant) to replace, repair, and improve the Great Wall of Los Angeles Mural and Great Wall Interpretive Bridge (Great Wall). The Great Wall is a half-mile long mural depicting the history of California through images of significant figures and historic events from diverse and traditionally marginalized communities. An element of the Grant includes site control of rental space to support the Great Wall project. To meet the condition of the Grant, SPARC proposes extending its lease through 2027, or an extension of approximately 41 months.
3 of 4
The proposed extension would be in continued service and support to the arts community in Santa Monica, create synergy within Bergamot, and provide stability to one of the largest gallery spaces at Bergamot with rental revenue backed by the Grant.
Bergamot Lease Agreements
Agreements at Bergamot are offered annually, mirroring Guidelines, to Bergamot tenants in good standing. Tenants have expressed that one-year leases do not lend confidence to invest in their spaces; and City and property management staff experience an administrative burden to negotiate and execute nearly 30 Agreements annually.
The proposed modification would allow for negotiation and execution of Agreements of up to 36 months for tenants in good standing, provide confidence for tenant investment, and reallocate property management resources.
Redevelopment
Bergamot is identified as a priority development site for affordable housing in the City’s Housing Element. Staff will be presenting to Council at this meeting on the proposed timeline for implementation. The proposed extension of Agreements through 2027 would not interfere with the Property’s redevelopment timeline.
Past Council Actions
Meeting Date Description
12/05/2000 Council approved and authorized the City Manager to implement Bergamot Station Leasing Guidelines
Environmental Review
The Agreements are exempt from CEQA pursuant to Section 15301 of the CEQA Guidelines. Section 15301 exempts Class 1 (Existing Facilities) projects from CEQA, which include the operation, repair, maintenance, permitting, leasing, licensing, or minor alteration of existing public or private structures, facilities, mechanical equipment, or 4 of 4
topographical features, involving negligible or no expansion of existing or former use.
The Agreements provide for the leasing of the existing Bergamot Station and would not expand use of the Property. Therefore, the Agreements are exempt pursuant to Section 15301. Additionally, the Agreements are exempt from CEQA pursuant to the Common Sense Exemption of CEQA Guidelines, which states that CEQA does not apply “where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment.” The Agreements would lease City-owned real estate and would not result in adverse physical impacts on the environment, and as such, is exempt from CEQA.
Financial Impacts and Budget Actions
There is no immediate financial impact or budget action necessary as a result of the recommended actions. Staff will return to Council if specific budget actions are required in the future.
Prepared By: Ava Lee, Senior Development Analyst
Approved Forwarded to Council