Honorable Mayor and Members of the Hermosa Beach City Council
Regular Meeting of November 29, 2022
Title
APPROVAL OF THE HERMOSA BEACH CHAMBER OF COMMERCE AND VISITORS BUREAU’S REQUEST FOR RELIEF FROM PRODUCTION OF THE 2022 NEW YEAR’S EVE CELEBRATION AND AN AGREEMENT BETWEEN THE CITY OF HERMOSA BEACH AND THE HERMOSA BEACH CHAMBER OF COMMERCE AND VISITORS BUREAU TO PROVIDE THE ST. PATRICK’S DAY PARADE, MEMORIAL DAY FIESTA HERMOSA, LABOR DAY FIESTA HERMOSA OR LOCALE 90254, HERMOSA FOR THE HOLIDAYS, AND SIDEWALK SALES EVENTS
(Community Resources Manager Lisa Nichols)
Body
Recommended Action:
Recommendation
Staff recommends City Council:
1. Approve the Hermosa Beach Chamber of Commerce and Visitors Bureau’s request for relief from its contractual obligation to fund and produce a New Year’s Eve Celebration in 2022 (Attachment 16);
2. Approve an agreement with the Hermosa Beach Chamber of Commerce and Visitors Bureau to provide the St. Patrick’s Day Parade, Memorial Day Fiesta Hermosa, Labor Day Fiesta Hermosa or Locale 90254, Hermosa for the Holidays, and Sidewalk Sales Events for commencement on January 1, 2023, for a one-year term and the option to extend for two additional one-year terms (Attachment 15); and
3. Authorize the Mayor and City Manager to execute and the City Clerk to attest to the agreement subject to approval by the City Attorney.
Body
Executive Summary:
The Fiesta Hermosas have evolved over the last 50 years since it began in 1968. The City has executed successive agreements with the Hermosa Beach Chamber of Commerce and Visitors Bureau (Chamber) to produce Fiesta Hermosa with a current agreement in place through 2022. Through the agreement terms, the Chamber agrees, for the duration of the agreement, to fund and produce community events including: St. Patrick’s Day Parade; Holiday Celebration/Tree Lighting; and a New Year’s Eve Celebration. Due to ongoing budget and sponsorship constraints, the Chamber requests relief from the contractual obligation to fund and produce a New Year’s Eve Celebration in 2022 and for the foreseeable future. Staff worked with the Chamber to develop mutually agreeable terms for a new agreement to consider the remainder of the Chamber’s community events including: St. Patrick’s Day Parade; Memorial Day Fiesta Hermosa; Hermosa for the Holidays; and Sidewalk Sales. Additionally, the proposed new agreement would provide an option to the Chamber to host either the Labor Day Fiesta Hermosa or a more locally focused event with a smaller event footprint, titled Locale 90254. If approved, the agreement term would commence January 1, 2023, for a one-year term and may be extended for two additional one-year terms at request of the Chamber and the exclusive direction of the City Manager.
Background:
Fiesta de las Artes began in 1968 as a one-day Labor Day event on what is now Pier Plaza. This event has evolved over the last 50 years to a bi-annual event held on Saturday, Sunday, and Monday of each Memorial Day and Labor Day weekend, titled Fiesta Hermosa. Since 1972, the City has executed successive agreements with the Chamber to produce both Fiesta Hermosas.
At its February 12, 2019 meeting, City Council approved a three-year agreement with the Chamber to provide Fiesta Hermosas through 2021 (Attachment 1). As a result of the COVID-19 pandemic, the 2020 Memorial Day and Labor Day Fiesta Hermosas, and the 2021 Memorial Day Fiesta Hermosa were cancelled. At its meeting on May 13, 2021, City Council approved the first amendment extending the agreement for an additional one-year term to the end of 2022 (Attachment 2).
At its June 22, 2021 meeting, City Council approved a second amendment to the agreement to allow event activities to take place Friday evening on a trial basis beginning with the 2021 Labor Day Fiesta Hermosa (Attachment 3).
At its October 12, 2021 meeting, City Council approved the expansion of the 2021 holiday event from a one-day event to a three-day event, titled Hermosa for the Holidays, and for the City to serve as co-sponsor for the event resulting in a waiver for two days of Pier Plaza Use fees.
At its December 14, 2021 meeting, City Council approved the Chamber’s request for relief from its contractual obligation to fund and produce a New Year’s Eve Celebration in 2021 due to ongoing budget and sponsorship constraints. At its April 12, 2022 meeting, City Council approved a third amendment to the agreement to allow event activities to take place in the Community Center parking lot and on the beach on the south side of the Pier on a trial basis beginning with the 2022 Memorial Day Fiesta Hermosa (Attachment 4).
At its May 10, 2022 meeting, City Council approved a fourth amendment to the agreement to allow set-up of event activities in the Community Center parking lot and on the beach south of the Pier to begin the Thursday prior to the event and tear-down to conclude the Tuesday following the event on a trial basis beginning with the 2022 Memorial Day Fiesta Hermosa (Attachment 5).
At its October 25, 2022 meeting, City Council approved the expansion of the 2022 holiday event from a one-day event to a three-day event, titled Hermosa for the Holidays, and for the City to serve as co-sponsor for the event resulting in a waiver of indirect costs.
Past Council Actions
Discussion:
At its July 25, 2017 meeting, City Council established a Fiesta Hermosa Subcommittee (subcommittee), which consisted of Mayor Detoy and Councilmember Armato, to work with staff and the Chamber to receive community input on the overall impacts and benefits of the Fiesta Hermosas and to develop a list of recommended improvements to incorporate into an agreement to begin in 2019. Following City Council’s approval of that agreement at its February 12, 2019 meeting, the subcommittee was decommissioned at City Council’s December 17, 2019 meeting. Attachment 14 is an overview of the recommendations outlined through the work of the previous subcommittee, and the Chamber’s action in response to the recommendations.
At its July 13, 2021 meeting, City Council revived the subcommittee, which consists of Mayor Pro Tem Jackson and Councilmember Campbell, to evaluate the Fiesta Hermosas, and to work with staff and the Chamber on a new agreement to begin in 2023 with the Chamber for the Fiesta Hermosas, and to evaluate the initial performance under the new agreement.
The subcommittee, staff, and the Chamber met in November 2021 to evaluate the Fiesta Hermosas, and to discuss parameters for the new agreement. Following this initial meeting, several meetings were held throughout 2022 with the subcommittee, staff, and the Chamber to continue to evaluate the Fiesta Hermosas and to develop mutually agreeable terms for a new agreement (Attachment 15).
The proposed agreement incorporates new terms including, but not limited to the following:
Cancellation of the New Year’s Eve Celebration
Following the cancellation of several Fiesta Hermosa events, and other community events throughout 2020 and 2021 due to the COVID-19 pandemic, the Chamber successfully produced the: Locale 90254 followed by the 2021 Labor Day Fiesta Hermosa; 2021 Hermosa for the Holidays; 2022 St. Patrick’s Day Parade; both the 2022 Memorial Day and Labor Day Fiesta Hermosas, and 2022 Hermosa for the Holidays.
At its December 14, 2021 meeting, City Council approved the Chamber’s request for relief from its contractual obligation to fund and produce a New Year’s Eve Celebration in 2021 due to ongoing budget and sponsorship constraints. The Chamber submitted a letter (Attachment 16) requesting relief from the contractual obligation to fund and produce a New Year’s Eve Celebration again in 2022, as the Chamber continues to experience budget and sponsorship constraints. In its letter of request, the Chamber shares that it would conduct a planned marketing campaign to promote New Year’s Eve in the City including: highlighting the holiday activities planned by local businesses; safe driving; and care of our community through cleanliness.
Additionally, following negotiations with the Chamber, in the proposed new agreement, the New Year’s Eve Celebration would no longer be a contractual obligation of the Chamber beginning in 2023 and for the foreseeable future. The Chamber anticipates the budget and sponsorship constraints would continue making it difficult for the Chamber to fund and produce the event in addition to the other community events outlined in the proposed new agreement.
Inclusion of the Hermosa for the Holidays as a Three-Day Event
The proposed new agreement includes the expanded Hermosa for the Holidays event. In 2021 and 2022, the Chamber expanded the holiday event from a one-day event to a three-day event and was required to apply for the expansion through the City’s Special Events Permit Program and subject to the review and approval process outlined in the Special Events Policy Guide (Attachment 17). In support of the Chamber hosting this community event for public involvement and benefit, the proposed new agreement includes the holiday event as a three-day event, eliminating the need for the Chamber to apply for the expanded event through the Special Events Permit Program.
Inclusion of the Sidewalk Sales
The proposed new agreement includes the Sidewalk Sales events, which are held to encourage the community to shop local with special promotions, sales, in-store activities, and live music. In the current agreement, these events are not included. The Chamber is required to apply for these events through the City’s Special Events Permit Program and subject to the review and approval process outlined in the Special Events Policy Guide. In support of the Chamber and its mission to support local businesses, the proposed new agreement includes the Sidewalk Sales events, eliminating the need for the Chamber to apply for the events through the Special Events Permit Program.
An Option to Provide Either Labor Day Fiesta Hermosa or Locale 90254
The proposed new agreement includes a provision to provide the Chamber the option to hold either Labor Day Fiesta Hermosa or Locale 90254. Locale 90254 would be a more locally focused event with a smaller event footprint and would take place on a weekend in late September or early October, on dates mutually agreed upon between the Chamber and the City. The Chamber must provide the City its decision on which event would be held by December 31, 2022. The event not selected by the aforementioned date would then be considered deleted from the agreement. This provision was included to allow additional time for community input on the possible change from a Labor Day Fiesta Hermosa to the Locale 90254 event, and to prevent the option to alternate between events annually to allow stability and consistency to the community and the annual Special Events Calendar. While Locale 90254 would not be entirely comparable to Fiesta Hermosa, Attachment 14 captures the recommendation that was made by the former subcommittee based on community input, for the Chamber to explore the viability of hosting one Fiesta Hermosa on a non-holiday weekend.
Fee-Waiver of Indirect Costs
The proposed new agreement includes a fee-waiver of all indirect costs associated with each event proposed through this agreement including the: St. Patrick’s Day Parade; Memorial Day Fiesta Hermosa; Labor Day Fiesta Hermosa or Locale 90254; Hermosa for the Holidays; and Sidewalk Sales. The Chamber would be responsible for all direct costs associated with each event including but not limited to City staff time, resources, or inspections, parking, or an Amplified Sound Permit.
During negotiations for the proposed new agreement, the Chamber requested a fee-waiver of parking fees for Lot A for the Memorial Day Fiesta Hermosa, totaling approximately $16,750. In its request letter, the Chamber shares the City subsidy would help off-set the costs of the beach concert during Fiesta Hermosa, which is a new event element that began with the 2022 Memorial Day Fiesta Hermosa. Additionally, the request letter shared if the request was granted, the City would be recognized as a co-sponsor for the beach concert component of the Memorial Day Fiesta Hermosa, alongside an additional sponsor as the total sponsorship need would total to approximately $50,000.
The City’s Special Events Fee Waiver Grant Policy, adopted by City Council at its October 10, 2019 meeting, does not allow consideration of fee-waivers of direct costs. Since the adoption of the Special Events Fee Waiver Grant Policy, staff has been following the direction outlined in this policy to ensure all direct costs are recouped for any special event in the City. For example, staff no longer considers fee waivers of direct costs when negotiating with event representatives for a Long-term Agreement through the Long-term Agreement Policy. To remain consistent with this practice, staff did not approve the Chamber’s request for a fee waiver of parking fees for Lot A for the Memorial Day Fiesta Hermosa. The proposed new agreement does not contractually obligate the Chamber to hold the beach concert during the Memorial Day Fiesta Hermosa.
While staff did not approve the request for a fee waiver of parking fees for Lot A for the Memorial Day Fiesta Hermosa, the City’s flexibility, and partnership in support of the Chamber and the events outlined in the proposed new agreement can be demonstrated, but not limited to, with the waiver of indirect costs. In 2022, the following events received waivers of indirect costs: St. Patrick’s Day Parade, Memorial Day and Labor Day Fiesta Hermosas, and the Hermosa for the Holidays, totaling a City subsidy to the Chamber of approximately $177,013. Additionally, the $616 application fee would be waived for each event, which is a fee associated with the staff time to review, prepare, and permit each event, which totals $3,080. Given the amount of City subsidy per event, the City should be listed as a top-tier sponsor, if not the highest tier. Attachment 18 is an overview of the indirect and direct costs associated with each of the Chamber’s events in 2022.
General Plan Consistency:
This report and associated recommendation have been evaluated for their consistency with the City’s General Plan. Relevant Policies are listed below:
Governance Element
Goal 1. A high degree of transparency and integrity in the decision-making process.
Policy:
• 1.6 Long-term considerations. Prioritize decisions that provide long-term community benefit and discourage decisions that provide short-term community benefit but reduce long-term opportunities.
Parks and Open Space Element
Goal 3. Community parks and facilities encourage social activity and interaction.
Policies:
• 3.1 Community-friendly events. Encourage, permit, and support community group, nonprofit, or business organized events on City property that support physical activity, beach culture, and family-friendly social interactions.
• 3.2 Social and cultural events. Design and program parks and open space to accommodate unique social and cultural events to foster connectedness and interaction.
Fiscal Impact:
The proposed new agreement includes an estimated annual total of subsidies through fee-waivers of indirect costs of approximately $177,013. It would also include a fee-waiver of the application fee for each event, which would total to $3,080. The estimated annual total of recoupment of direct costs would be approximately $71,957 annually, which includes a credit to the Chamber of approximately $16,750 for each Fiesta Hermosa. The credit is from Proposition A funds for the Chamber providing shuttle transportation for event attendees offsite to the event, and back.
Attachments:
1. Agreement Between the City of Hermosa Beach and the Hermosa Beach Chamber of Commerce to Provide Fiesta Hermosa (Current)
2. First Amendment to Agreement
3. Second Amendment to Agreement
4. Third Amendment to Agreement
5. Fourth Amendment to Agreement
6. Link to February 12, 2019 City Council Staff Report
7. Link to May 13, 2021 City Council Staff Report
8. Link to June 22, 2021 City Council Staff Report
9. Link to October 12, 2021 City Council Staff Report
10. Link to December 14, 2021 City Council Staff Report
11. Link to April 12, 2022 City Council Staff Report
12. Link to May 10, 2022 City Council Staff Report
13. Link to October 25, 2022 City Council Staff Report
14. Table of Action from the Chamber on the Former Fiesta Hermosa Subcommittee’s Recommendations
15. Agreement Between the City of Hermosa Beach and the Hermosa Beach Chamber of Commerce and Visitors Bureau to provide the St. Patrick’s Day Parade, Memorial Day Fiesta Hermosa, Labor Day Fiesta Hermosa or Locale 90254, Hermosa for the Holidays and Sidewalk Sales Events (New)
16. Chamber’s Request Letter re: 2022 New Year’s Eve Celebration
17. Special Events Policy Guide
18. 2022 Year at a Glance: Chamber Event Fees
Respectfully Submitted by: Lisa Nichols, Community Resources Manager
Noted for Fiscal Impact: Viki Copeland, Finance Director
Legal Review: Mike Jenkins, City Attorney
Approved: Suja Lowenthal, City Manager