Attachment H
6/26/2025
SMACP Attachment H | HR&A 2
This project will establish a preferred scenario for the conversion of the Santa Monica Airport, centered on a great park (consistent with Measure LC), after its closure at the end of 2028.
In this phase, the Consultant Team developed three scenarios for the site to spark conversation and invite the community and City Council to comment on the parts and pieces that they like. This input will be considered in developing the Preferred Scenario.
Project Goals
SMACP Attachment H | HR&A 3
Financial Analysis Tasks
HR&A is evaluating potential capital and operating funding sources and financing mechanisms to ultimately develop a funding strategy for the preferred scenario.
This analysis assumes that the City General Fund is not anticipated to be a source for new capital or operating revenue.
Capital Funding Strategy 1 How to pay for construction? 2 Operating Funding Strategy
How to pay for operating & maintenance costs?
3 Economic & Fiscal Benefit
What other economic and fiscal benefits should be
accounted for?
SMACP Attachment H | HR&A 4
Capital costs to build parks vary depending on quality of design; required infrastructure; type, provision, and intensity of use; and more.
Capital Costs
$.8M
$2.M
$4.M $4.M
$4.6M
$5.9M
$M
$1M
$2M
$3M
$4M
$5M
$6M
$7M
Los Angeles State
Historic Park
Scissortail Park Memorial Park Wilmington
Waterfront Park
Sarasota Bay
Park
Brooklyn Bridge
Park
Park Capital Costs Per Acre
Capital costs are adjusted to 2024 dollars from year of completion, except for Memorial Park (estimated FY 26-28). HR&A analysis of park capital costs.
Source: HR&A Analysis (all parks except noted otherwise), City of Santa Monica (Memorial Park), and Sasaki (Wilmington Park). Sarasota Bay Park acreage and capital costs are only for Phase 2.
Total: $493M
85 acres
Total: $142M
70 acres
Total: $40M
10 acres Total: $161M
40 acres
Total: $65M
Phase 2: 14 acres
Total: $20M
32 acres
Phases 1&2 estimate,
Phases 3&4 will be in
addition to this.
per acre
per acre
per acre per acre
per acre
per acre
SMACP Attachment H | HR&A 5
While upfront construction costs are significant, operators of urban parks need to plan for significant ongoing operating and maintenance costs, with higher costs for more highly activated and used spaces.
Operating Costs
$94K $100K $109K
$178K
$224K
$423K
$K
$100K
$200K
$300K
$400K
$500K
Scissortail Park Santa Monica
Public Landscape
Division
Los Angeles State
Historic Park
Central Park Sarasota Bay
Park
Brooklyn Bridge
Park
Park Annual Operating Expenses per Acre
All operating costs are based on operations in 2023 except for Brooklyn Bridge Park (2022), Central Park (2024). The City’s Public Landscape Division number is from the City’s 2024 adopted budget. The City’s budget only includes landscaping and tree-trimming. This total does not reflect true costs including security and programming. Sarasota Bay Park acreage and operating costs is for both Phase 1 and Phase 2.
Total: $36M
85 acres
Total: $7M
70 acres
Total: $14M
144 acres
Total: $5M
24 acres
Total: $150M
Total: $4M 843 acres
32 acres
This is limited to
landscaping and
irrigation at parks,
not programs,
security or other
operating expenses.
per acre per acre
per acre
per acre
per acre
per acre
SMACP Attachment H | HR&A 6
HR&A is assessing the potential capital and revenue from the relevant funding sources and financing mechanisms, which could be combined to develop a feasible funding strategy.
Funding Strategy Approach
Public Funding
Real Estate &
Value Capture
Philanthropy
Construction (all
phases)
Capital Cost Capital Sources
Public Funding
Real Estate &
Value Capture
Philanthropy
Administration
Equipment
Events and
Programming
Maintenance
Security
Other
Operating Expenses Revenue Sources
Earned Income
Funding sources are categorized in four categories:
• Public Funding: provided by government entities at the local, state, or federal level. The General Fund is not anticipated as a potential source of capital or revenue for this project. • Philanthropy: contributions from individuals, corporations, and foundations. • Real Estate and Value Capture: real estate and other tools to redirect projected increases in land values and tax revenues from park investments to fund park construction and/or operations. • Earned Income: revenue generated through park amenities and programs, only applicable to operations.
SMACP Attachment H | HR&A 7
Each funding source/mechanism will have trade-offs.
Any preferred scenario and associated funding strategy will require a commitment from Council and community members to be realized.
Funding Strategy Approach
Allow uses
other than
parks and
recreation.
Potential Trade-offs
Impose new
taxes or fees
on property
owners.
Forego
General Fund
revenue to
the City.
Require a
public vote to
approve.
Prompt
Surplus Land
Act process
with potential
delays.
Extend
timeline to
secure funds
and realize
vision.
Reduce park
scope on site.
Require LA
County or
City
partnership.
SMACP Attachment H | HR&A 8
Category Source Capital or
Operating
Revenue
Imposes new taxes
or fees on property
owners or residents
Example
Public
Sources
General Obligation Bond (GO Bond) Capital Yes Measure QS, Santa Monica (2024) $495M
Federal, State, and Regional Grants Capital No Sustainable Water Infrastructure Project, Santa Monica (2021)
$8.8M from State Water Resources
Control Board Prop 1
$7.5M County of LA Measure W
Real Estate &
Value
Capture
Enhanced Infrastructure Financing
District (EIFD)
Capital No La Verne EIFD, La Verne (2020) $44M
est. present value as of 2020 based
on projected revenue at 3%
Mello-Roos Community Facilities
District (CFD)
Both Yes OC Great Park, Irvine (2013)
$60M in FY24
Climate Resilience District Both Depends on the
financing tool used.
Regional Climate Protection
Authority, Sonoma County (2022)
Ground Lease Operating
Revenue
No The Viceroy Hotel, Santa Monica
(1966)
Land Sale Capital No NA
Philanthropy Philanthropy
Philanthropic potential is not
anticipated to be substantial based on
a lack of precedent, but remains
subject to specific analysis.
Both No Annenberg Community Beach
House , Santa Monica (2005)
$45M in 2025 dollars
Earned
Revenue
Existing Airport Lease Revenue Operating
Revenue
No NA
Income-Generating Programs Operating
Revenue
No NA
Summary of Funding Sources/Mechanisms
and Considerations
We’re not anticipating the City General Fund to be a source of new capital or operating revenue for this project.
Sources: HR&A Advisors, City of Irvine, City of La Verne EIFD Infrastructure Financing Plan Amended 2020, City of Santa Monica, LA Conservancy.
SMACP Attachment H | HR&A 9
General Obligation Bond
(GO Bond)
Capital
Overview
A General Obligation (GO) Bond is a
voter-approved municipal bond backed
by the issuing government's credit and
taxing power.
• It is typically repaid through a property
tax levy, which would result in
additional property taxes for Santa
Monica residents.
• A GO Bond requires approval from
two-thirds (2/3) of registered voters.
Pros
Can achieve a large sum of upfront capital
early.
Since they’re backed by the General Fund,
GO Bonds can typically anticipate more
favorable interest rates than other financing
tools.
Considerations
Increases property taxes to pay bond debt
service, which can negatively impact
property values if the obligation is too high.
Requires 2/3-voter approval, timeline for
which may delay project implementation.
Need bond issuance to be coordinated with
SMMUSD and SMC.
SMACP Attachment H | HR&A 10
Capital
Overview
Allocates tax-increment revenues
generated in an area to finance
specified public benefits like
infrastructure, parks, or affordable
housing. It is one of the only forms of TIF
allowed in CA.
• Formed by vote of local elected
officials.
• Must expire within 45 years of
approving issuance of bonds.
• Improvements can be financed
either through bond issuance or
under a “pay-go” model.
• Funding potential and
implementation complexity vary
depending on the district and
jurisdiction participation.
Enhanced Infrastructure
Financing District (EIFD)
Tax-Increment Financing
Illustrative Graph
Pros
Does not impose new taxes or fees on
property owners.
Considerations
The City would forego revenue that would
otherwise go to the General Fund for the
period of the EIFD (45 years).
City share of revenue may be insufficient
without County participation.
Revenues ramp up slowly over time.
Use of funds is limited to capital
expenditures.
SMACP Attachment H | HR&A 11
Capital & Operating Revenue
Overview
Special district that can collect taxincrement revenues and/or levy a special tax to finance public
improvements.
• Shares common features with both
EIFDs and CFDs.
• Proceeds can be used to cover
capital or operating costs.
• Authorized to finance projects that
address climate change mitigation,
adaptation, or resilience.
• Implemented through the same
process as an EIFD.
Climate Resilience District Pros
Does not always impose new taxes or fees on
property owners.
Can leverage multiple funding sources.
Considerations
• City share of tax-increment revenues may be
insufficient without County participation.
• City/County participation can be
challenging.
• Depending on the tools used, the City may
forego revenue that would otherwise go to
the General Fund for the period of the CRD.
Tax-Increment Financing
Illustrative Graph
SMACP Attachment H | HR&A 12
Capital & Operating Revenue
Overview
Imposes an additional tax on property
owners to finance public infrastructure
and certain services (e.g., as street
improvements, parks, public buildings,
and sewer improvements).
• Formation requires a two-thirds
approval of registered voters within
the district, making an on-site CFD
more straight-forward to
implement than an off-site CFD.
• Most CFDs fail if the total property
tax levy exceeds 2% of assessed
value.
• Improvements can be financed
either through bond issuance or
under a “pay-go” model.
• Funding potential and
implementation complexity vary
depending on districts and
jurisdiction participation.
Community Facilities District Pros
Relatively simple implementation process if
established before 12 or more voters are in
place.
Allows for flexibility in defining tax allocation
per parcel.
Generates meaningful long-term revenues,
which can be used flexibly for capital or
operating revenue.
Considerations
May be difficult to secure voter approval, if
required by an off-site district.
Could require a complex and long
implementation timeline.
1.00%
0.07%
0.07%
0.01%
0.00% 0.50% 1.00% 1.50% 2.00%
Value
Applicable Levies & Assessment
City of Santa Monica
General Levy Community College
School District Water District
Potential CFD Levy
(0.85%)
SMACP Attachment H | HR&A 13
Operating Revenue
Overview
On-site development in which the City
retains ownership of the land and
ground-leases to a developer can
generate long-term, ongoing operating
revenue.
• The value of land on-site will depend
on a public vote allowing uses other
than parks and recreation.
Project
Value Cost to
Develop
Residual
Land
Value
Pros
Can address other community needs like new
housing and commercial space.
Can generate sustainable long-term
operating revenue.
Considerations
Would require a public vote to allow uses
other than parks and recreation.
Proceeds would depend on allowed uses
and density.
Difficult current market conditions limit
viable uses today.
Would require compliance with Surplus Land
Act and coordination with the California
Dept. of Housing and Community
Development requirements.
Supportable development
values are calculated by
deducting construction costs
and developer profits from
estimated development
proceeds.
The result is the value that a
developer could pay for land
and still achieve the desired
return.
On-Site Development
(Ground Lease)
SMACP Attachment H | HR&A 14
Capital
Overview
The City could sell a portion of the airport
site to generate capital for construction.
• The City could sell land on the site
within the City of Santa Monica for onsite development. • The City could also sell the portion of
the site that is located within the City
of Los Angeles (17 acres).
• The value of land on-site will depend
on a public vote allowing uses other
than parks and recreation.
Community members who participated in
engagement surveys expressed
opposition to land sale as a funding
source.
Pros
Can potentially generate significant upfront
capital if the right pieces are in place (e.g.
zoning and market conditions).
Considerations
Community expressed opposition in
engagement surveys.
Proceeds would depend on allowed uses
and density.
The Los Angeles parcel is currently zoned for
single-family housing, with limited likelihood
of rezoning, which would require partnership
with the City of LA.
Difficult current market conditions limit
viable uses today.
Would require compliance with Surplus Land
Act and coordination with the California
Dept. of Housing and Community
Development requirements.
Land Sale
Source: Sasaki
17 acres
in the
City of LA
SMACP Attachment H | HR&A 15
Earned Revenue
Existing Airport Lease Revenue
Income-Generating Programs
Operating Revenue
Overview
The City currently earns revenue from
non-aviation leases at the site, such as
Barker Hanger, Ruskin Theater, and Freize
Art Fair. This revenue could remain at the
site.
Pros
Utilizes an existing revenue source at the site.
Provides ongoing revenue without new taxes
or City debt.
Considerations
• Operating revenue is limited to existing nonaviation leases.
Operating Revenue
Overview
Revenue-generating uses and programs
can provide ongoing operating revenue.
Program revenue is typically correlated
to the attendance and frequency of
programs (i.e. larger events generate
more gross revenue).
Examples: Amphitheatre, event venues
and rentals, paid parking, food/beverage
concessions, and sporting tournaments.
Pros
Can enhance visitor experience through
amenities and activities.
Considerations
• Some income-generating uses rely on
ticketed entry, limiting access to residents.
SMACP Attachment H | HR&A 16
Category Source Capital,
Operating
Revenue
Considerations
Approval Requirements Foregoes
City General
Fund
Revenue
Imposes new
taxes or fees on
property
owners or
residents
Public Funding General Obligation Bond (GO
Bond)
Capital Requires 2/3 approval of
registered voters.
No Yes
Federal, State, and Regional
Grants
Capital NA No No
Real Estate &
Value Capture
Enhanced Infrastructure
Financing District (EIFD)
Capital Requires a vote by local
elected officials.
Yes No
Mello-Roos Community
Facilities District (CFD)
Both Requires 2/3 approval of
registered voters.
No Yes
Climate Resilience District Both Requires a vote by local elected officials.
Yes Depends on
the financing
tool used.
Ground Lease Operating
Revenue
Requires public vote to
allow uses other than parks
and recreation.
Yes No
Land Sale Capital Requires public vote to
allow uses other than parks
and recreation.
Yes No
Philanthropy Philanthropy Both Potential is not anticipated to be substantial based on a lack of precedent, but remains subject to specific analysis.
Earned Revenue Existing Airport Lease Revenue Operating Revenue
NA No No
Income-Generating Programs Operating
Revenue
NA No No
Summary of Funding Sources /Mechanisms
and Considerations
SMACP Attachment H | HR&A 17
Takeaway
Any scenario for the site could have a feasible funding strategy, but each option will have clear trade-offs and costs that are shared by the City and community.
Next Steps
HR&A, in collaboration with the City and Sasaki, will:
• Estimate annual operating expenses of the preferred scenario, • Assess the potential capital and operating revenue potential of each funding source to develop a funding strategy for the preferred scenario, and
• Analyze economic and fiscal impacts of the scenarios to compare the potential benefits.
Discussion & Next Steps
SMACP Attachment H | HR&A 18
1. Any person who relies on or otherwise uses this analysis is required to have first read, understood and accepted the following disclosures, limitations and disclaimers, and will, by reason of such reliance or other use, be deemed to have read, understood and accepted the same.
2. HR&A Advisors, Inc. (HR&A) has been engaged and compensated by the City of Santa Monica to prepare this analysis. In preparing this analysis HR&A has used its independent professional judgment and skills in good faith, subject to the limitations, disclosures and disclaimers herein.
3. This analysis is based on estimates, assumptions and other information developed by HR&A. Every reasonable effort has been made to ensure that the data contained in this analysis are accurate as of the date of this analysis; however, factors exist that are outside the control of HR&A and that may affect the estimates and/or projections noted herein. HR&A neither guarantees any results nor takes responsibility for their actual achievement or continuing applicability, as actual outcomes will depend on future events and circumstances beyond HR&A’s control.
4. HR&A reviewed the information and projections provided by third parties using its independent professional judgment and skills in good faith, but assumes no liability resulting from errors, omissions or any other inaccuracies with respect to the information provided by such third parties referenced in this analysis.
5. HR&A also relied on data provided by or purchased from the Redfin and the CoStar Group. HR&A assumes no liability resulting from errors, omissions or any other inaccuracies with respect to the information provided by these parties.
6. In addition to relying on data, information, projections and forecasts of others as referred to above, HR&A has included in this analysis estimates and assumptions made by HR&A that HR&A believes are appropriate, but HR&A makes no representation that there will be no variances between actual outcomes and such estimates and assumptions.
7. No opinion is intended to be expressed and no responsibility is assumed for any matters that are legal in nature or require legal expertise or specialized knowledge beyond that of a real estate consultant.
8. Many of the figures presented in this report will be rounded. HR&A disclaims any and all liability relating to rounding errors.
9. This analysis may be relied on and otherwise used only by persons who receive this analysis from HR&A or with HR&A’s prior written consent and only for the purpose stated in writing in conjunction with such receipt or consent. No reliance on or other use of this analysis by any person or for any purpose other than as stated in the previous sentence is permitted. HR&A disclaims all responsibility in the case of any reliance on or other use of this analysis in conflict with the above portions of this paragraph.
10. If the analysis is referred to or included in any offering material or prospectus, the analysis shall be deemed to have been included for informational purposes only and its use shall be subject to these General and Limiting Conditions. HR&A, its directors, officers and employees have no liability to recipients of any such offering material or prospectus. HR&A disclaims any and all liability to any party.
11. This analysis is qualified in its entirety by, and should be considered in light of these General and Limiting Conditions. By use of this analysis, each party that uses this analysis agrees to be bound by all of the General and Limiting Conditions stated herein.
General and Limiting Conditions
Case Studies:
Park Funding Strategies
Case study capital and operating costs are
reported in 2024 dollars unless otherwise noted.
SMACP Attachment H | HR&A 20
Los Angeles State
Historic Park
Los Angeles, CA
32 Acres
Sources: California State Parks, Los Angeles Times
Image Source: California State Parks
Capital Strategy Example
Los Angeles State Historic Park was funded by
public funding, including $20M from Proposition
40. However, this is not an available or applicable
source to the Santa Monica Airport.
Total Capital Cost: ~$20M
Capital Cost Capital
Sources
Public Funding
100%
Proposition 40
SMACP Attachment H | HR&A 21
Sarasota Bay
Sarasota, FL
53 Acres, 10 acres in Phase 1, 14 acres in Phase 2
Sources: Sarasota News Leader
Image Source: The Bay Sarasota
Capital Strategy Example
Sarasota Bay was primarily funded by a TIFbacked City bond ($47M). The TIF district encompasses the park and surrounding property.
Additionally, government grants ($12M) and
private philanthropy ($5M) contributed to
complete the capital goal.
Phase 2 Capital Cost: $65M
Capital Cost Capital
Sources
Public Funding
18%
Grants
Philanthropy 8%
Real Estate & Value
Capture 74%
TIF-backed City
bond
SMACP Attachment H | HR&A 22
Brooklyn Bridge
Park
New York City, NY
85 Acres
Sources: Brooklyn Bridge Park Conservancy, Annual Report (2022); Brooklyn Bridge Park Corporation, Financial Statement (2022).
Image Source: Brooklyn Bridge Park Conservancy
Operating Strategy Example
Ground lease revenue at Brooklyn Bridge Park
exceeds operating cost needs. Operating costs
are supplemented by earned revenue, allowing
the park to grow a reserve fund with lease
revenue.
Annual Operating Cost: $36M
Operating
Cost
Operating
Sources
Earned
Income 2%
Philanthropy
7%
Real Estate & Value
Capture 90%
Ground leases for
on-site real estate
SMACP Attachment H | HR&A 23
City Park
New Orleans, LA
1300 acres
Sources: New Orleans City Park (2025)
Image Source: New Orleans City Park
Operating Strategy Example
By necessity, City Park in New Orleans generates
nearly 75% of operating expenses from earned
income. Their top income drivers are special
events and venue rentals.
Annual Operating Cost: $31M
Operating
Cost
Operating
Sources
Public Funding
15%
State TIF and
special tax
Philanthropy 6%
Earned
Income 75%
SMACP Attachment H | HR&A 24
Gloria Molina Grand
Park
Los Angeles, CA
12 acres
Sources: The Music Center (2024)
Image Source: Gloria Molina Grand Park
Operating Strategy Example
Through an agreement with Los Angeles County,
The Music Center manages Gloria Molina Grand
Park until 2031.
The Music Center receives reimbursements for
specialty production and event activities.
Annual Operating Cost: $7M
Operating
Cost
Operating
Sources
Earned
Income 15%
Public
Funding 86%
LA County
General Fund
SMACP Attachment H | HR&A 25
Los Angeles State
Historic Park
Los Angeles, CA
32 Acres
Sources: Los Angeles State Historic Park
Image Source: Los Angeles State Historic Park
Operating Strategy Example
Los Angeles State Historic Park generates almost
half of its operating revenue from earned
revenue, the largest source of which is special
events like concerts. Additional revenue sources
are paid parking, film and photoshoot permits,
and concessions.
Annual Operating Cost: $3.5M
Operating
Cost
Operating
Sources
Earned
Income 43%
Public
Funding 57%
California State
Parks
SMACP Attachment H | HR&A 26
Presidio Trust
San Francisco, CA
1500 acres
Sources: Presidio Trust (FY2024 Budget)
Image Source: Presidio Trust
Operating Strategy Example
Presidio Trust provides housing for ~3,000
residents and leases to 200+ commercial
tenants. This and other uses make up its
business revenue, which subsidizes park
operations to meet operating needs above
what earned income generates.
Annual Operating Cost: $63M
Operating
Cost
Operating
Sources
Real Estate &
Value
Capture 68%
Ground leases
for on-site
real estate
Earned Income
32%