It’s going to take a little longer to determine the fate of the Santa Monica Civic Auditorium.
On Tuesday night, the city council ended its Exclusive Negotiating Agreement (ENA) with Revitalization Partners Group, LLC (RPG). The council approved the city manager to negotiate and execute the ENA last July, but negotiations dragged on until April 8 of this year, when a six-month agreement was reached that expired last week.
An otherwise diplomatic staff report on this item could barely hide its disappointment in the results this far, stating, “Through multiple meetings and discussions with the city, RPG has not provided a formal project concept that can be shared publicly. While RPG has released a proposal for the Civic to the public, they have asked that the plans that were shared with staff remain confidential.”
Based on the limited information released thus far, RPG is proposing reimagining the Civic as an “immersive digital/holographic show theater with live music concerts, award shows, artist residencies, and special events” that could seat up to 3,300. They also propose the development of 14,000 square feet of new commercial and retail space.
However, at present, and again with limited information, the city states that the proposal is completely infeasible and would require significant public subsidy to make up for massive losses. Even the most optimistic estimate that assumes 200 shows a year at 100% capacity runs a deficit of $25 million. Realistic estimates put that at an even worse -$120 million.
This isn’t good news for a city in financial hardship.
RPG is requesting a six-month extension to complete several pieces of due diligence, including scope and cost, feasibility, financing structure, and public benefits and public engagement.
Santa Monica Forward, a community organization committed to equity, sustainability, and diversity, was less reserved than city staff in their disappointment. They posted to social media that, “Beyond the financial shortcomings, RPG has failed to deliver the basic documentation necessary for informed decision-making. After more than a year of negotiations, the company has provided only verbal representations and preliminary designs; no written financial plan, no capital structure, and no operating projections.”
City staff proposes that the council adopt one of three options in its report:
- “Approve a six-month extension (two consecutive 90-day periods).
- This option would continue negotiations with RPG, while preserving the City’s ability to terminate if no viable plan emerges as prudent.
- Grant a three-month extension (one consecutive 90-day period).
- This option provides additional ENA term but requires RPG to accelerate its analysis.
- Decline to extend the ENA and provide staff with direction to explore alternative options for the Civic site.
- This option terminates exclusive negotiations with RPG effective October 8, 2025. Under this alternative, staff would recommend that the City Council then provide staff with direction that could include the following options:
- Assess the highest and best use for the Civic site while considering current constraints (e.g., lack of dedicated parking for the Civic, seismic retrofit, and ADA requirements, SHPO historic preservation designation).
- Assess highest and best use for the SM Civic site without any constraints.”
- This option terminates exclusive negotiations with RPG effective October 8, 2025. Under this alternative, staff would recommend that the City Council then provide staff with direction that could include the following options:
For its part, RPG and its partners dispute the city’s findings. Beth Collins, who represents one of the companies in RPG’s partnership, came before the council to speak up for RPG’s efforts. She said, “I don’t know where the numbers came from in the staff report, but they didn’t come from us.” She also stated, “We are still very passionate about the Civic and believe it is an extremely viable project; and frankly, a group of companies that are our size would never waste the time and effort if we did not think the project was viable.”
In a video presentation introduced by Collins, another executive, Tim Sexton, assures viewers that, “We will do this without asking for a single dollar of public financing. No city financing; no taxpayer dollars, and no bonds.” He adds, “This restoration will be entirely self-financed by RPG, and the property will remain owned by the city.”
The video went on to present RPG’s vision for a new-look civic with park space and a rooftop bar/restaurant, and a social gathering area, among other features.
More than a dozen members of the public also attended to speak in favor of a six-month extension of the ENA with RPG, each wearing a blue button that said “Save the Civic.”
City Manager Oliver Chi, presenting to the council, admitted, “In no way is our analysis intended to be a definitive assessment of whether or not the project is viable, but given that we haven’t been provided with anything since we engaged with RPG…we felt it was important to at least provide the council with some type of assessment.”
Chi also made clear that ending the ENA wouldn’t end discussions with RPG, it would simply open up other options the city could explore to make a project viable. “Do you want us to negotiate with RPG exclusively? Or, is there a broader world of uses that we might want to assess at this moment?”
Councilmember Dan Hall inquired whether opening up the process to competition might better motivate RPG. He also asked Chi if he felt RPG was the group to best save the Civic. Chi said he felt RPG was capable, but that interfacing with the consortia has been “cumbersome” and that this time period has demonstrated “an uneven partnership.”
Later, Hall expressed doubts that RPG was the right partner to revitalize the Civic as a desirable concert venue, citing “several extensions and several deadlines missed.”
Councilmember Jesse Zwick sounded exasperated by the numerous iterations of what the project would be or need to be that have been told to him throughout the process. He also said, “Emotion is getting in the way of clear thinking and hard numbers.”
On the other side, Councilmember Ellis Raskin sounded more open to granting RPG an ENA extension, saying it doesn’t want it to be lost on everyone that there’s been genuine enthusiasm from Mr. Sexton and others about the work.
“I’m just very frustrated that we really haven’t been able to look at the financial aspects of this project,” said Councilmember Barry Snell. “It sounds exciting and I, too, would like to see the Civic back to its form in some way.” He then moved to grant the ENA extension for three months to allow RPG to develop more financial reporting. He was seconded by Mayor Lana Negrete.
Mayor Pro Tem Caroline Torosis, who works in economic development for the County Board of Supervisors, said she’s personally been involved in multiple ENAs. But she stated, “I’ve never seen over a year of discussion and not a single option of how the project is going to get financed.” She later added, “We have some fiduciary responsibility here, and we can’t just continue to give the exclusive negotiating rights to one team, unchecked, with no competition.”
Torosis moved a substitute motion to discontinue the ENA and direct staff to begin a competitive process moving forward with the development of the Civic. Hall said he would second if there was room to explore encumbered and unencumbered uses, meaning proposals that consider current site constraints, and one where greater or differing uses could be scaled (Their motion thus becoming staff recommendation #3 above).
The substitute motion passed, 4-3, with Zwick and Councilmember Natalya Zernitskaya joining Torosis and Hall. Snell, Raskin, and Negrete voted no, favoring a three-month extension of the ENA.
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