EXHIBIT 13: BAC MINORITY VOTE & BSGCA POSITION

Prior to the April 18th meeting, this exhibit expresses the minority view on BAC votes lost on arts preservation and survival issues pertaining to the A-Building, On-Site Parking and Commercial Office Space.

It also expresses the Bergamot Station Gallery Cultural Association (BSGCA) position and view of the BAC process, and updates our Vision and Site Identity Statement submitted at the October 2015 meeting.

The BAC members from Bergamot Station embraced and respected the goals of the BAC process.  The BSGCA is not against change and its members on the BAC voted to support the community center, museum space and expanded restaurant that will enhance the arts center.  In fact, the developer’s presentation relied on the BSGCA’s recommended list of priority  infrastructure improvements and upgrades.

This view and position focuses on what the site can withstand and on priorities that are vital to the survival of the arts culture, namely:

I.	LEAVING THE A-BUILDING INTACT

II.	PRESERVING ON-SITE PARKING, AT LEAST 200 SPACES

III.	INCREASING PARKING CAPACITY INSTEAD OF REDUCING IT BY 40%
& NOT BUILDING COMMERCIAL OFFICE SPACE


BAC LIMITS FROM THE START AND OVERALL

The gallery climate at Bergamot Station just prior to the formation of the BSGCA in February 2014 had been challenged by a depressed economy, impingements on parking from neighboring businesses, disruption caused by Expo Line construction and confusion about Bergamot Station’s status, partially due to the nearby Hines project’s appropriation of the word Bergamot in its project name.  After the tenants, neighborhood council representatives and others spoke about the out-of-scale nature of the three proposals for Bergamot’s development, the City Council approved the creation of the BAC, selecting a developer to work with, Jeff Worthe, with the caveat that his team’s proposal was not affirmed.

Yet, after the first few logistics-dominated BAC meetings it became clear the basis of discussion started essentially with the developer’s proposal, which had been deemed by the BSGCA to be out-of-scale for the site and contradictory to the aims of cultural preservation and survival of the galleries and businesses.

In spite of all of these problems the galleries have continued to survive and decided to remain at Bergamot in the hope of identifying solutions for the future.

While the BSGCA’s October Vision Statement and other BAC discussions touched on tenant concerns about surviving construction and the risks of building too much, the process was not able to include the full impact of questions about parking, construction mitigation and abatement, risks of tenant relocation, leasing terms and tenant rights.  Many of these pragmatic business issues were considered premature by City Staff and the Worthe team, as well as beyond the timeline and purview of the BAC, and it remains unclear how issues vital to retention and survival will be proactively addressed PRIOR to the developer assuming the master lease.

One year later, there are still many unknowns at Bergamot as the Expo station nears its opening in May, with traffic and congestion in the area, parking availability in question and potential changes to tenant rights, security questions and looming concerns about potential crime.

RETENTION AND SURVIVAL ISSUES EXPRESSED TO THE BAC

Retention First Means the Arts Survive: Since tenant retention was the priority aim of the BAC as stated by the first of the City Council’s six directives, the Bergamot committee members argued early on that it was crucial to take care to divide development elements into deliberate phases. New development, if pertinent to enhancement of the arts center and for community benefit, as opposed to the developer’s needs, should first serve necessary retention of existing businesses and relocation of remaining tenants--after the numerous retention concerns are fully articulated and the phasing of development is worked out in detail. Construction as proposed without protections fully articulated threatens the very culture it’s purported to preserve.

We Support Community:  In votes in support of the mix of uses, for example, the subject of space for a new community center, the Bergamot members commented first on tenant retention concerns, then expressed the history and existence of community programming and access for those not familiar, and then articulated preferences based on the intuition of tenants who work at Bergamot daily. The BSGCA Vision Statement presented in October articulated eight ways of supporting the community.   Bergamot committee members respected the BAC agenda, specifically the community goals since access and non-profit support have been part of gallery programming since Bergamot’s inception.

What is necessary for arts culture enhancement?  But votes to allow the removal of half of the A-Building, removal of On-Site Surface Parking and the large scale of commercial office space, led the majority of Bergamot committee members to articulate options favoring much more limited development to pre-empt full-scale disruption. Bergamot members viewed the financing of infrastructure improvements as separate from the cost of new construction and development, as well as fundable from the margin collected from current rents.

Bergamot committee members argued in favor of the intrinsic value of the arts culture and the economic multiplier known to extend in such civically supported regions and against the justification of retention and renewal by large-scale development and commercial office space.




BAC VOTES ON THE A-BUILDING, ON-SITE PARKING & COMMERCIAL OFFICE SPACE

The votes lost by the minority create rather than remove obstacles to the survival and identity of Bergamot Station.  We believe the key to Bergamot’s survival is three-fold:

1) Leaving the A-Building intact, 2) Preserving as much on-site parking as possible, as well as increasing capacity, and 3) NOT building commercial office space.

1.	LEAVING THE A-BUILDING INTACT

--Destruction of half of the A-Building unnecessarily eliminates an iconic structure and replaces it with a new building that is totally out-of-scale with the existing buildings.

The eastern half of the A-Building, approximately 9,000 SF, is on the chopping block, to be replaced by a 3-story, 45,000 SF structure. The intact A-Building is an iconic structure at Bergamot Station. This beloved building could be described as the heart of Bergamot since it has been the central meeting ground for visitors and tenants from the beginning. It houses four arts-related businesses and the popular Bergamot Café and Garden Patio.

This BAC vote also contradicts the MOU signed by the developer, Jeff Worthe.  Notably, the vote to allow for the A-Building’s partial demolition counters the MOU’s promise to maintain the integrity of current buildings as well as tenants’ current spaces.  The MOU referred to a conditional provision to only “possibly” tear down the T-Building, if necessary, after acceptable relocation of its tenants.

--Demolition/New Construction threatens the survival of the existing GNCs, especially the galleries in the B-Building.

The prevailing argument for the majority view was that the proposed 15,000 SF ground-floor GNC space in the newly proposed C-Building nearly doubled the SF that was lost in eliminating half of the A-Building by providing 15,000 SF of new GNC space.

However, this also comes with two more stories and another 30,000 SF of Commercial Office Space and construction. Those 30,000 SF do not enhance Bergamot or contribute to its identity as an Arts Center. THEY THREATEN IT.

The preservation of the A-Building will not only maintain the integrity of the history of the site and the authentic look and feel of the arts center.  Its protection will permit continuity of its tenants and also create a buffer to the B-Building in the case of acceptable construction in the future to support additional GNCs in the southeast corner of the lot.


2.	PRESERVING SUBSTANTIAL ON-SITE PARKING (at least 200 spaces, in addition to creating more nearby)

--Free and accessible On-Site Surface Parking has been a key ingredient to Bergamot’s success.

The majority vote for removal of surface parking is counter to gallery operations and ease of access that has contributed to the singular and organic success of Bergamot Station and will radically alter the visitor and patron experience.  Proposed construction and additional uses underestimate parking needs on the lot.  While Bergamot reps have argued to preserve parking, the BAC has underestimated this vital aspect of Bergamot’s unique appeal, access and success.

Removal of On-Site Parking will not only reduce access for many of Bergamot’s senior & disabled visitors, it will choke off access to Bergamot, which is already constricted by the Expo rail on 26th Street and by only having one true entrance on the half street of Michigan Avenue.  Galleries need door-to-door truck and car access to their spaces on a constant/daily basis to transport art and stay in business.

3.	INCREASING PARKING CAPACITY INSTEAD OF REDUCING IT BY 40% AND NOT BUILDING COMMERCIAL OFFICE SPACE

--211 parking spaces are absolutely inadequate for Bergamot and arts center operations are unsustainable with new development.

The Worthe Group proposes to add 95,000 SF of new buildings, remove most of the On-Site Parking and reduce parking by 40% to 211 parking spaces.  The 350 existing parking space we have are currently inadequate.  Bergamot needs more space for parking even if there were no new development or Expo Line station about to open.  211 spaces will be woefully inadequate to handle current usage, let alone accommodate 95,000 SF of new usage.

While it is argued that the newly proposed C-Building replaces more than is taken, the costs are too high, for the following reasons:

--Construction of the proposed 3-story building will require much more parking than proposed.

Parking conflicts with the amount of commercial office space proposal since estimates of client and guest traffic for total future tenancy of the proposed amount of office space have not been integrated into the car trip and traffic evaluation.  Santa Monica building codes reasonably require of two (2) parking spaces per 1,000 SF. The proposed C-Building would require 90 new parking spaces alone, almost half of the 211 Parking Spaces proposed for the entire site.  Even with exceptions in the Bergamot area plan, parking needs have been severely underestimated and require further study, including how new, digital companies staff more employees per square footage of office space at communal tables instead of traditional office layouts.

--30,000 SF of Commercial Office Space is not needed at Bergamot Station and does not enhance it as an arts center.

Construction of 30,000 SF of new Office space adds to the glut of office space in the area, at Water Garden & proposed for the Hines site, last estimated at 420,000 SF newly available.
Construction of massive new office space threatens GNC survival, dilutes the arts center identity and threatens gallery survival.  Open space, as expressed in the proposal has not been physically demonstrated through meetings and models as remaining truly open in the real feel of the lot.

Just as Expo construction negatively impacted the gallery business, any construction on the lot will have a repelling impact on gallery attendance.  It’s also been established that without a hotel there is significant profit built into the developer’s adjusted Pro Forma, illustrating that a more modest renewal plan can work, preferable to the massive proposal.

Additionally, line items have not been fully broken down based in detail by the BAC as part of the process.  For example, annually recurring costs of infrastructure have not been examined for necessity, which changes the bottom line considerably over the developer’s term of control to create more developer profit, and the lack of parking revenue estimates in the financial plans also increase profits.

The BSGCA believes that the City can benefit more directly, and culturally, by NOT deferring to the developer on public land.  The rationale of requiring commercial office space to offset GNC subsidies needs to be further tested and can be dramatically reduced in scale based on the inherent profitability of the project. The galleries have provided the ground lease requirement for 22 years without fail.

The proposal for a hotel and commercial office space, already in high supply in close proximity, is private profit-motivated and superfluous beyond the modest infrastructure upgrades that make sense and add value to tenants, visitors and the community.

--Proposed construction will NOT retain 50% of Bergamot’s existing tenants based on the current timeline and status of property ownership.

The definition of Bergamot Station is a combination of both the galleries on the public property, Bergamot I, and the private property, Bergamot II which houses 15 tenants, representing 50% of the arts community’s experience of Bergamot, which is not delineated by the public/private property line.

In October, the BSGCA Vision Statement explained that for true retention and survival of Bergamot Station an estimated 90,000 square feet would be needed to accommodate current Bergamot I and Bergamot II tenants, specifically due to the term of current leases and/or potential sale of the private property and displacement of Bergamot II tenants.  The BAC vote to recommend 65,400 square feet of GNC space in the mix of uses, technically an increase in arts-related space in comparison to the developer’s initial plan to the BAC, did not actually ensure retention of tenancy, at least in terms of the unification of Bergamot I & II.

While the majority of Bergamot members initially saw the potential benefits of a new building in the southeast corner for potentially displaced Bergamot II tenants, the City Yards timeline revealed to the BAC undermines survival as a collective of both sections, in addition to construction being disruptive.

The City Yards timeline and current property division make the promises of priority relocation in the MOU possibly moot and it’s unlikely that Bergamot II galleries can stay based on nearly all of the leases matching the end of the public property master lease.  It’s not likely that Bergamot II tenants can go on hiatus while waiting three or more years for a new building and return to resume their activities. This changes the landscape to make the proposed new C-Building less pertinent to retention and, if a solution for unity of the two sections cannot be reached with the current master lease holder of Bergamot I and owner of Bergamot II, Wayne Blank, then the silver lining for the arts culture is the sparing of the cost and impact of construction and the jeopardy of disruption to Bergamot I galleries.

Also, as renewal then may focus on culturally relevant development for an expanded restaurant, community center and potential museum, financing of improvements will be less contingent on large-scale development and developer needs.  Improvements can be achieved in more manageable increments and within limited phases of evaluation in a manner more conducive to the preservation of current businesses.

BSGCA TENANT VOTES TO SUPPORT ARTS CENTER ENHANCEMENTS

The BAC vote to remove half of the A-Building, which Jeff Worthe declared necessary to the project, contradicted the MOU he signed. That contradiction, together with his decision during a year of BAC meetings not to reply to or meet with various individual gallery owners concerned about the future of their businesses, led the BSGCA to vote on the following accords to update our October Vision Statement:

a.	A-Building: As articulated in the developer MOU, no destruction of the A-Building.  This represents an emphasis on retaining the integrity of Bergamot Station, as well as protecting further retention of tenants and mitigating the impact of overdevelopment.

b.	Museum:  A new museum building at Bergamot Station, if there will not be one at the Civic Center and if space does not become available in Bergamot II, with the museum tenant participating in the design process (and the allocation of square footage to be determined) with proper construction phasing after additional parking becomes available or parking is built at City Yards.

c.	Community Center:  The presence of a Community Center, with similar square footage approved by the BAC, with preference for the location to be connected to the museum when built, or space available in the T-building.  A multi-tiered interim plan is recommended as in the October 2015 Vision Statement to assist hosting community programs in the spaces of current tenants.

d.	Restaurant: An expanded restaurant in its current location, or if design considerations do not interfere with the horizon of the arts center or interfere with gallery access, we support a new restaurant in the center of the lot with Jeff Stuppler given first right and right of refusal.

e.	On-Site Surface Parking: The protection of surface parking and individual tenants’ current rights to parking at Bergamot Station, even after additional parking becomes available, to secure the existing, operationally essential parking and access for patrons and installation logistics on the perimeter of the lot outside of tenants’ spaces with the exception of only taking away a maximum of 80 parking spaces in the center of the lot for the restaurant and related public space.

f.	Southeast Corner:  New construction in the southeast corner, with mutually agreed upon and precisely planned phasing and mitigation, and within design considerations that preserve the visual landscape of the arts center for galleries, with event space on the ground floor, possible market rate space above the first floor after BSGCA tenants are accommodated, and with building to begin after additional parking is built or becomes available without affecting the A-Building.

g.	No Hotel:  No hotel construction until further study of the impact of other changes, including the running of the Expo stop and traffic implications, are fully evaluated and specific plans for retention and proper relocation are planned for the displacement of current tenants.

h.	Association Proposal: Due to concerns about BAC voting and the range of continued unknowns about construction issues and mitigation, the BSGCA approved the creation of a written plan by June 1, 2016 to explore and propose self-management of Bergamot Station by the tenant association, if Wayne Blank’s lease is not extended, as well as structuring financing options for infrastructure improvements and building of necessary spaces.