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Bad Business Then and Now
By Frank Gruber
March 14, 2011-- The Santa Monica City Council decision last Tuesday to proceed with negotiating a contract with the Nederlander Organization to operate the Civic Auditorium, which would depend on the City spending an estimated $45 million for renovations, brought to my mind the Civic’s history -- not the history of events that took place there, but how the place came to be. (See story: Council Votes For Live Shows at the Civic Auditorium, March 10, 2011.)
Santa Monica acquired the land to build the Civic by using eminent domain to buy up and destroy the homes in the “Belmar Triangle,” an African-American neighborhood that had been there for half a century.
To raise the money to build the auditorium, in 1953 the City put a bond issue on the ballot. The city manager at the time, as recorded in this headline from the Santa Monica Evening Outlook, promised Santa Monica voters that if they approved the bond, it would cost them nothing, because sales tax revenues would cover the debt service.
The bond issue passed in a landslide, but perhaps the destruction of the Belmar Triangle cursed the Civic. There were a few moments of brilliance with the Academy Awards, and a number of memorable concerts of blessed memory to local baby boomers, but within ten years or so after opening the Civic was a white elephant.
For decades the Civic has been a drain on the City’s treasury while adding little to the cultural life of the city. The Civic has only balanced its books with revenues from the daytime use of the parking lot, and it has required a staff that the City now feels it must protect in any agreement for the auditorium’s future management.
And the Civic will be deep in the red for the foreseeable future. According to the staff report for the proposed deal with the Nederlanders, if nothing is done the loss to the City from operating the auditorium over the next 10 years will be approximately $33 Million; if a deal is made, and subject to the City investing the previously mentioned $45 million, the cumulative subsidy could be decreased to an amount between $8.7 (based on “very optimistic” projections) and $14.7 million (“very pessimistic”). (Credit should be given to City Manager Rod Gould and his staff who, in connection with the negotiations with the Nederlanders, have been honest enough to remove daytime parking revenues from the income attributed to the Civic.)
So -- best case, “very optimistic” scenario, the City invests $45 million and still loses $8.7 million over ten years. All to support a commercial enterprise, the concert tour business.
Maybe we should call Eli Broad -- we could offer him $45 million and the Civic and perhaps he’d change his mind and bring his museum to Santa Monica after all.
But of course the key to selling this bad deal, just as in 1953, is that it won’t cost us anything (or much): we’ll use redevelopment money to pay for most of the renovations. That is, unless, as City Manager Gould put it, the state “raids” Santa Monica’s redevelopment money by eliminating redevelopment under state law.
I feel bad to say this about Mr. Gould, who, after all, is a conscientious guy and loyal to his employer, and wasn’t around Santa Monica in 1994, but this self-righteous image of poor little Santa Monica being raided by the state has it backwards. The earthquake redevelopment district, which includes the Civic Center, was the raid. Calling a vast swath of Santa Monica “blighted” because of the 1994 earthquake was a figment of then-City Manager John Jalili’s productive imagination.
It may be appropriate to use earthquake redevelopment money to seismically upgrade parking structures. Perhaps, even if not earthquake-related, it would be okay to spend state and county and schools money to build the City’s new park, “Palisades Garden Walk,” since the site is next to the pier and the whole world will use it.
But is it fair to use someone else’s money to build a library in Santa Monica? The Pico library is a great project, but isn’t it up to us to pass a library bond to build it?
And should the state, county and schools get less money because Santa Monica wants to fix the Civic up so that maybe Bob Dylan will play a concert here?
Mental exercise: what if there had been no earthquake? Then how would we pay for all this stuff?
Mr. Gould: use your moral outrage to persuade the legislature to put something on the ballot to amend Prop. 13 so that cities don’t need a two-thirds super-majority to pass a bond issue.
I don’t want to be too critical -- city staff may have made the best of a bad situation in making the deal with the Nederlanders -- but do we need all this nostalgia for the Civic? I have no great ideas about what to do with the place, but am I the only one who considers it -- or at least three sides of it -- stone cold ugly? Am I the only one who considers the Civic’s loading docks facing Pico an act of pure architectural hostility?
Prediction: Nothing will happen. The City is not going to have $45 million to spend on this, the Nederlander deal won’t happen, and the financial bleeding will continue until the City is ready to build the new park planned for the parking lot (which by all rights will commemorate the Belmar Triangle neighborhood). At that time maybe a new Eli Broad will come along who will pay to tear the whole thing down except the façade, and build a new cultural facility in its place.
* * *
Eileen Fogarty chose a good time to retire, given that she recently completed the major task she inherited when she became Santa Monica’s planning director, namely the update to the land use and circulation elements of the general plan.
But the LUCE was not her major accomplishment as planning director.
Her major accomplishment was changing the relationship between the Planning Department and the residents of the city. And by “residents” I do not mean only those anti-development Santa Monicans who had so much anger and suspicion about the department in the years before Ms. Fogarty arrived. It is true that they now trust the City’s planners more now than they did then, but Ms. Fogarty’s impact goes even further.
Ms. Fogarty, following a strategy of relentless outreach, changed the political dynamic surrounding development in Santa Monica. Before she arrived, the dialogue was polarized, between no-growthers on one side and developers and their representatives on the other. There was no middle-way. Ms. Fogarty changed that.
She did it by coupling the outreach with real content. She sponsored meeting after meeting, and workshop after workshop, and although she listened, she also educated. She brought in consultants, who described reality with a message that was not an unsophisticated one of either more development or less development, but a complicated and complex message about how to manage change.
Not surprisingly, they found in Santa Monica a population of people who responded well to serious discussion. Ms. Fogarty and her team attracted to these events not only the “usual suspects” (from both sides), but also many members of the community who were not known for speaking out, but who also had strong views about the future of the community.
She put these people in the same room, and what do you know, they listened and they talked to each other. Both the no-growthers and the pro-growthers learned that they would not always agree with Ms. Fogarty and her planners, but that the disagreements were attributable to real differences in analysis, not to some simplistic narrative of either corruption or bowing to political pressure.
As someone who was on the Planning Commission in the ’90s, I can say that this is a big change.
And speaking of meetings and workshops, as reported in The Lookout (Planners Want Public Input on Downtown Block, March 11, 2011) the Planning Department and the Planning Commission will be hosting an important workshop this Wednesday evening about plans for the land the City has acquired on Arizona between Fifth and Sixth.
Details: Wednesday, March 16 from 7 to 9 p.m. at the Civic Center Auditorium at 1855 Main Street.
A second meeting on the same site will be hosted by Downtown Santa Monica, Inc. (formerly the Bayside District Corporation), on Thursday, March 24 from 7 to 9 p.m. at the Main Library at 601 Santa Monica Boulevard.
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