July 15, 2013 -- An inter-departmental team of City staffers Wednesday tapped Metropolitan Pacific Capital to develop two and a half acres of City-owned property in the heart of Santa Monica's Downtown.

While the decision is still preliminary until the Council votes at its August 27 meeting, officials hope that Metropolitan Pacific Capital will transform the parcel south of Arizona Avenue between Fifth and Fourth Streets into a new city center.
Image Credit: Metropolitan Pacific Capital and City of Santa Monica.

The parcel, a dream site according to City officials, is one of eight “opportunity sites” Downtown that have been identified by planners as locations for denser, higher development. Metropolitan Pacific Capital's proposed design would rise 12 stories and cover more than 500,000 square feet.

“The proposed development encompasses multiple uses, including hotel, office, cultural space, ground-level retail, significant public open space, and flex space that could be used for office or residential,” officials said of the proposal.

It also includes about 56,000 square feet of public open space and 1,220 underground parking spaces, 580 of which would be public.

Coming in at 148 feet, the preliminary design calls for a building that is some two stories taller than the limits staff has proposed for the opportunity sites. (“Santa Monica City Council to Study Building Heights Downtown,” July 3, 2013)

Still, staff said that of the three submitted proposals, Pacific Capital's best fit what the City was looking for.

“As proposed, the project would provide several public gathering spaces, pedestrian passages through the site, neighborhood serving retail, cultural facilities, a bicycle station and related facilities, public parking, iconic architecture, and possibly affordable housing or a financial contribution,” staff said.

“A special purpose entity would manage public open space and ensure active year-round programming, including a seasonal ice skating rink,” staff said.

The estimated cost of building the project is $331.3 million, and the developer would pay $1.3 million a year to the City for the ground lease, according to staff.

Revenue from the ground lease could help offset the payments on the site. When the City bought the property in 2010, it agreed to pay for it over the next three decades. According to the payment schedule, the City's annual payments would soon reach $4 million a year.

The City bought roughly half the property with money from its now-defunct Redevelopment Agency (RDA), which means that the State will review whether the City will have to sell the prime piece of real estate to pay for RDA debts. (“Santa Monica Hopes to Protect 'Dream Site' from State,” May 23, 2013)

Still, the City has decided to move forward with the development process.

Pacific Capital's proposal won out over a denser, taller proposal by Related California, the same firm developing the 325-unit Civic Center Village project. Related's plans called for a building nearly 200 feet tall and allotted more than half of the building's 484,039 square feet to housing. It also would have provided fewer public parking spaces and about 16,000 square feet less of public space.

Officials also rejected a smaller project by Forest City Development West, which included a 120-foot building. While that project called for more public space -- 78,350 square feet -- than either of the two proposals, it suggested only 847 parking spaces.

Like Related, Forest City proposed housing as part of its project. About 144,000 of the nearly 400,000 square feet of the proposed building would have been dedicated to housing, while about 213,000 square feet would have been office space.

For more details about the proposals, download the staff's report here (http://smgov.net/WorkArea/DownloadAsset.aspx?id=41700).