STATEMENT ON THE SUBJECT: RECOMMENDATIONS: BACKGROUND /ANALYSIS: AGENDA ITEM 4.C. CITY COUNCIL UNFINISHED BUSINESS SUBJECT: .

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1 CITY COUNCIL UNFINISHED BUSINESS DECEMBER 18, 2017 SUBJECT:. INITIATED BY: STUDY AND REPORT ON.SUNSET BOULEVARD MUSIC, ENTERTAINMENT, DINING, HOTEL AND PERFORMANCE CONTENT PRODUCTION OPPORTUNITIES ALONG WITH THE OPPORTUNITIES FROM THE CITY'S ZONING CODE AND INFRASTRUCTURE ECONOMIC DEVELOPMENT DEPARTMENT Maribel Louie, Director of Economic DevelopmenT'\..._,.. Jackie Rocco, Business Development Manager Brant Birkeland, Business Development Analyst STATEMENT ON THE SUBJECT: The City Council will receive the Sunset Strip Music, Entertainment, Dining, Hotel and Content Production Study (the Study) and consider directing staff to implement the Study's action plan. RECOMMENDATIONS: The City Council will receive the Sunset Strip Music, Entertainment, Dining, Hotel and Content Production Study (the Study) and consider directing staff to implement the Study's action plan. BACKGROUND /ANALYSIS: At its November 7, 2016 meeting, Council directed staff to study and report on current and future opportunities to enhance the identity and experience of the Sunset Strip and expand the music, entertainment, dining, hotel and entertainment production atmosphere on the Strip as part of "Study and Report on Sunset Boulevard Music, Entertainment, Dining, Hotel and Performance Content Production Opportunities as well as Opportunities from the City's Zoning Code and Infrastructure. n (D'Amico/Duran) 11/7/16 - Item 4.A. This directive included tasks with an economic development focus as well as tasks with a public space and land use and social services focus. The economic development focus is being addressed by the Economic Development Department/Business Development Division (EDD) while the Community Development Department/Long Range and Mobility Planning Division (LRMP) is focused in the short term on evaluating the built environment on Sunset. EDD staff, working in close coordination with Sunset Strip business owners/operators and representatives of Sunset Strip stakeholder organizations prepared The Sunset Strip Music, Entertainment, Dining, Hotel, and Content Production Study (the Study) in summer and fall The Study is intended to benchmark current economic conditions, test assumptions Page 1 of 18 AGENDA ITEM 4.C.

2 regarding the vibrancy of the Sunset Strip, explore opportunities for growth in key industries, and create a framework for a vision of the Sunset Strip's future. The Study includes an analysis of quantitative economic data (TOT Revenue, Sales Tax Revenue, Sunset Strip Business Composition, Sunset Strip Ernplo_y_ment, Sunset Strip_ Loc_ation Quotient and Sunset Strip and Citywide Retain and.pffice lv1.?_rket_data) q_nd g~alit.?tive data including a Visitor Profile Study conducted by Lauren Schlau Consulting (LSG) in June and August 2017, and a series of Industry Specific Round Table Meetings conducted by the Business Development Division in summer The Study is organized into six sections: Introduction, Existing Economic Analysis, Visitor Profile, Business Owner/Operator Input, Findings and Action Plan. Economic Background While the economic health and vitality of the Sunset Strip has been a source of discussion and concern in recent years, the economic analysis shows that the Sunset Strip is a key driver of the City's economy and fiscal health. Sunset is a vibrant, multifaceted commercial corridor, home to approximately 700 business and 7,000 employees spanning multiple industries. Businesses on the Sunset Strip have recovered from the recession and revenue generated on the Strip now well exceeds pre-recession levels. This is particularly true for Transient Occupancy Tax (TOT) generated from hotel stays and sales tax revenue generated from restaurant sales, as illustrated in Figures 1 and 2 below. Additionally, office and retail vacancy rates are lower than both citywide and regional levels. - Sum - % increase $20,000, r 18.0% $18,000, ~ - $16,000, # $14,000, r $12,000, , ~, $10,000,000.0 $8,000,000.0 $6,000,000.0 $4,000,000.0 $2,000,000.0 $0.0 FY FY FY FY FY FY FY Figure 1. Sunset Strip TOT Revenue 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% Page 2 of 18

3 - Revenue - % Change $3,500,000, ~ 20.0% $3,000,000 ; " $2,000,000 $1,500,000 $1,000,000 $500, % 10.0% 5.0% 0.0% -5.0% -10.0% -15.0% $ % Figure 2. Sunset Strip Sales Tax Revenue Existing nightclubs and entertainment venues remain stable, however the venues face increased competition from other entertainment districts including Downtown Los Angeles, Hollywood and Echo Park, as well as an evolving Sunset Strip customer demographic. Owners/operators of nightclub and entertainment venues as well as other nightlife establishments, such as restaurants and bars, provided key insights regarding ways the City can remove barriers to the growth and expansion of the nightlife scene. These ideas, which focus on modernizing regulations, streamlining processes, and encouraging innovation, are presented in the Study's recommendations included in this report. Business owners and visitors are generally satisfied with the business environment and the user experience on the Sunset Strip, however there are areas for improvement. These areas include the lack of a vision for the Sunset Strip, certain City policies and regulations, infrastructure improvements, and the safety and cleanliness of the Sunset Strip. Kev Questions: The Study and recommendations contained within are intended to be proactive without being prescriptive and seek to capitalize on the strengths and unique qualities of the Sunset Strip, while addressing the concerns raised by business owners and visitors and those revealed through the economic analysis. The result is a framework for the vision of Sunset Strip's future, built on a foundation of economic analysis and stakeholder input that can guide the long-term vibrancy of the Strip. The following questions, answered through the Study, establish the foundation for a future vision of the Sunset Strip. Page 3 of 18

4 1. Where are we today? The rock and roll history and prestige of the Sunset Strip remains a driving factor in both tourist visits and business location decisions. Businesses on the Sunset Strip have capitalized on the history and prestige of the Strip to establish a complete and diversified commercial corridor that has evolved to include a mix of professional offices, high-end and casual restaurants, world class hotels, retail shops and nightclubs and entertainment venues. The vast majority (90%) of businesses on the Sunset Strip today are engaged in professional and personal services or hospitality based (hotels and restaurants) industries. While not directly involved with music and entertainment, many of these businesses have incorporated the Strip's history into their design, marketing and in some cases operations. The businesses, particularly hospitality based businesses, are major drivers of the City's economy and fiscal health, particular through the generation of TOT and sales tax revenue generated at the hotels, restaurants and bars on the Sunset Strip. Although the Sunset Strip has often been considered a uniform entertainment and nightlife corridor, the Strip has evolved to a series of distinguishable clusters, each with a unique character and composition of businesses. While there is some overlap among the clusters and the businesses within each area, particularly restaurants which are found throughout the Sunset Strip, the clusters generally include: Hotel Cluster: Concentration of hotels on both the north and south sides of the Strip between Sweetzer Avenue and La Cienega Boulevard. Retail Cluster: Concentration of retail businesses and restaurants, characterized by the Sunset Plaza, between La Cienega and Larrabee Street. Nightclub Cluster: Concentration of nightclubs, including the Sunset Strip's iconic venues such as the Viper Room, Roxy, Rainbow Room and Whiskey A Go-Go beginning at Larrabee Street and extending west toward Doheny. Office Cluster: Concentration of professional and personal service-based businesses generally beginning at Hammond Street and extending to the western City boundary. The clustering of similar businesses can be the catalyst for both competition and coordination among businesses, driving innovation and quality. For example, an individual hotel within the hotel cluster is more likely to continually evolve, innovate, and strive to improve because it is located in close proximity to other hotels that are working to attract the same guests. The same can be said for restaurants and nightclubs located within close proximity to one another. Certain businesses on the Sunset Strip take advantage of the coordination and communication associated with the clustering of businesses. A video production business located on the Sunset Strip chose its location primarily because a sound editing studio it works closely with chose to move to the Sunset Strip. Hotels within the hotel cluster consistently refer guests to neighboring properties when they are fully booked. These organic interactions that occur on the Page 4 of 18

5 Sunset Strip can be bolstered by a concentrated effort by the City to identify the clusters and support the growth and collaboration of the individual businesses within the clusters. The identification of clusters on the Strip could also address the perception by many visitors and employees that the Sunset Strip is unwalkable and disconnected. Breaking down the Sunset Strip into distinct clusters from a public realm perspective could result in improved walkability and connectivity within the individual clusters, which collectively would improve the overall walkability of the Sunset Strip and make the public realm of the Strip more vibrant and welcoming for e_mployees and guests. 2. What's Missing? The existing conditions on the Sunset Strip have helped establish the vibrant commercial corridor discussed above. However, businesses located on the Strip and patrons visiting Sunset have identified items that would bolster the Sunset Strip and help guide a successful future. Vision and Marketing Businesses have stressed the need for a new vision or narrative for the Sunset Strip that recognizes the current evolution and transformation of the Strip, while also respecting the history and prestige of Sunset. An updated vision that highlights and promotes the current mix of businesses and experiences of the Sunset Strip will serve as a foundation for future City policy and regulatory updates, as well as provide business and property owners and investors with a framework to inform future business decisions. The Study provides the necessary foundation for this vision. In addition to guiding policy, the vision would inform future marketing campaigns and strategies. Many businesses, across all target industries, believe that the Sunset Strip would benefit from a revamped, focused, innovative marketing campaign and strategy. While organizations such as Visit West Hollywood and the West Hollywood Chamber of Commerce market the City of West Hollywood, stakeholders stated the need for marketing that is unique to the Sunset Strip. Destinations Business owners and guests identified the need for additional destinations on Sunset. From a business owner/operator perspective, restaurant and bar owners indicated that most of their customers come to Sunset specifically to eat or drink at their business and there are not enough destinations on the Strip that draw visitors to produce a "spillover" effect of customers into restaurants and bars. Additionally, while hotels are consistently at or near capacity, hotel managers note that their guests often leave the Sunset Strip for events or to visit destinations outside our City. While the issue may certainly be a lack of destinations, nightclub owners/operators note a misalignment between their customers and the hotels, restaurants and bars on Sunset stating that their customers typically eat and stay off of the Strip due to the cost of rooms and meals. Finally, from a visitor perspective, on survey responses, visitors indicated additional events or destinations as a key component missing from the Sunset Strip. Page 5 of 18

6 Events Businesses and visitors both indicated a desire for more frequent, smaller-scale events on the Sunset Strip. These types of events have the potential to attract new visitors to the Sunset Strip, draw the approximately 7,000 employees who work on the Sunset Strip to venues or areas of the Strip they may have not visited in the past, and provide additional destinations or amenities to the visitors staying at hotels on the Sunset Strip. Business and visitors have noted that the events should utilize existing resources and venues, such as the iconic nightclubs, as well as bars, restaurants or parking lots. A summer music series, similar to the twilight concerts at the Santa Monica Pier was discussed by multiple groups. The idea of rotating the concert series through the existing music venues received universal support. Economic Development Department (EDD) staff is currently working on a proposal to celebrate the 50 year anniversary of the "Summer of Love" on the Sunset Strip that encompasses many of the elements discussed above and could serve as a kick-off event and model for a reimagined event series on Sunset. Businesses expressed a desire for a streamlined Special Event Permitting Process and an increase in the number or type of events that can be held without a special events permit. EDD staff has recently completed a series of updates to the Special Event Permitting Process that are intended to allow flexibility and remove barriers for businesses holding events. These updates include eliminating Special Event Permit requirements for promotional business activities that have little or no impact on neighboring businesses and residential neighborhoods and simplifying regulations for small scale activities that still require a permit. Infrastructure The physical and technological infrastructure of the Sunset Strip was identified by business owners/operators and visitors as a negative factor in the overall vitality and vibrancy of the Strip. Three key points of emphasis regarding the physical infrastructure include the lack of pedestrian walkability, the absence of an iconic entryway or gateway feature announcing arrival onto the Strip, and the lack of fiber-optic internet. ~ Iconic Signage Throughout the Los Angeles region, iconic features such as the Beverly Hills, Hollywood and Venice signs, Santa Monica Pier and others attract tourists to areas they may not have otherwise visited. This is particularly true in the selfie/social-media world of today. The City of West Hollywood Innovation Division, working with a City Council subcommittee, is preparing to explore options for future gateway signage on the Sunset Strip. Business owners have stated a desire that the entryway gateway feature be innovative and iconic, welcoming visitors to the Sunset Strip. Prioritizing the design and construction of an iconic gateway feature ~ Walkability The Sunset Strip, like many commercial corridors in the United States, was Page 6 of 18

7 originally planned and designed for the car. However, as mobility patterns change and the Sunset Strip evolves to a hospitality and service corridor, the streetscape should evolve as well. Pedestrian-friendly improvements should be considered and prioritized in future infrastructure and public realm plans. The City's Innovation Division Street Media project will encompass some of the public realm and infrastructure improvements needed on the Sunset Strip, including vehicular wayfinding, street furniture and bus shelters. LRMP will bring forward a contract for Council approval in January, 2018 to develop a Sunset Strip Public Life Activation Plan intended to enhance the walkability of the Strip and activate public space on Sunset. A key consideration to improving pedestrian mobility would be the installation of high-visibility crosswalks that may include lights or reflectors laid into the street. LRMP is currently prioritizing crosswalks throughout the City for the installation of high-visibility crosswalks. Finally, the Public Works Department will finalize purchase of streetlights citywide from SoCal Edison (SCE) in December Ownership of the streetlights will provide the City with the flexibility to explore options that will improve lighting for pedestrians, improving the walkability of the Strip, without impacting safe driving conditions for motorists. ~ Fiber Optic Internet Businesses on the Sunset Strip have noted that the lack of investment in technology infrastructure is limiting the growth and expansion of existing businesses and the services that the business can provide. A key consideration is the lack of high-speed fiber optic internet service on the Sunset Strip, which impacts businesses across industries on Sunset. Fiber-based broadband services would allow nightclubs to livestream performances and content production businesses to transfer large video or sound files to and from studios or offices as a way to help office buildings attract and retain desirable tenants and make hotels on the Sunset Strip more attractive to guests. As stated in the City of West Hollywood Fiber Strategic Plan "Economic development will become a key beneficiary of the fiber network. This asset can be used as a tool to attract and retain business by reducing the cost of doing business in the City while enabling high-speed Internet connectivity that may not be available in other cities" and "The City will be able to actively market areas of West Hollywood as "fiber ready" and provide prospective businesses with a range of available service providers." Prioritizing completion of the City's fiber ring and activation of fiber services on the Sunset Strip is a priority for most businesses. While high-speed fiber optic internet is important to business retention, expansion and attraction on the Sunset Strip, preparing for the next generation of cellular service and/or speeds will be critical in enhancing the customer experience on the Strip. Many visitors forgo in-store wifi internet for personal cell service. This is true for retail customers as well as customers of bars and restaurants. While there are many policy and regulatory considerations - including both federal and state regulations - the City can begin investigating the infrastructure requirements and standards to prepare for the new technology. Page 7 of 18

8 Housing Business owners report that local and regional housing issues are beginning to impact business on the Sunset Strip. There are two primary factors related to housing directly affecting the Sunset Strip, including: }.> Lack of affordable housing for employees working on the Sunset Strip. }.> Uses on the Sunset Strip do not align with needs or desires of residents adjacent to the Sunset Strip. Business owners/operators report that the majority of employees do not live within close proximity to the Strip, with some traveling from as far away as Bakersfield or San Bernardino, leading to negative factors such as high employee turnover. Further business owners report and data from the 350 intercept surveys conducted by LSC confirm that the majority of visitors to the Sunset Strip are not West Hollywood residents. In fact, only 11 % of surveyed visitors are residents of the City. While this factor cannot solely be attributed to the cost of housing, it is likely a primary factor. From a citywide perspective, approximately 94 percent (23,170) of the 24,616 employees working in West Hollywood live outside of the City. While there are a number of factors that result in this large figure, the cost of housing is certainly a leading factor. A lack of homes suitable for a range of income levels and family structures makes it difficult for people to live near their jobs and remain in their neighborhood, supporting businesses and the local economy. Integrating housing affordability into a broader economic development strategy not only benefits business owners and employees working on the Sunset Strip, it also increases the amount of disposable income available for residents to spend at Sunset Strip businesses. 3. What should be Preserved? While preparing the foundation for a future vision for the Sunset Strip, it is important to determine what existing elements of the Sunset Strip should be preserved, and how the City can protect and enhance the Sunset Strip's unique assets and amenities and cultural character. Below is a summary of items that emerged through the course of the Study that should be preserved moving forward. Hotels and Restaurants Hotels and restaurants are the primary drivers of the City's economy and play a key role in the financial health and stability of the City. TOT and sales tax revenues have risen steadily since dipping in 2009 and now exceed pre-recession levels. TOT revenue generated on the Sunset Strip approached $20 million in FY15-16 after barely eclipsing $10 million in FY Additionally, sales tax revenue generated on the Sunset Strip continues to grow, driven primarily by restaurants. Revenue generated by casual dining restaurants has nearly doubled since 2005 and now is the leading source of sales tax revenue on the Sunset Strip, followed closely by revenue generated by fine dining restaurants, which have recovered strongly since Although hotels and restaurants have performed well from a revenue generation perspective, individual businesses within these industries, particularly restaurants, face Page 8 of 18

9 many challenges, including increasing labor costs and competition from other areas of the greater Los Angeles area and evolving customer dining behaviors and interests. As such, the City can explore opportunities to continue to support Sunset Strip hotels, restaurants and other revenue generating businesses to ensure their long-term success and viability. For existing businesses, the City can ~ work with businesses to identify and remove barriers that prevent businesses from responding to evolving market conditions and allow businesses the flexibility to compete in an increasingly competitive hospitality and restaurant regional economy. Examples include providing greater flexibility in the type of accessory live music that can occur within a restaurant or bar and educating businesses on updated special events and filming policies that can help supplement the primary business activity. For future businesses, streamlining the application, review and permitting process can decrease costly delays and help businesses hit the ground running when they open, leaving businesses better prepared to survive the critical first years of operation. This is particularly important for small and first time business owners. The City can also seek ways to help restaurants and hotels that meet the needs and interests of the approximately 7,000 Sunset Strip employees and patrons of nightclubs. Nightclubs and Entertainment Nightclubs, music and entertainment are synonymous with the Sunset Strip. Nightclubs on the Sunset Strip today hold a distinct advantage that nightclubs in other prominent cities, such as Austin, Nashville and London do not enjoy, which is that the majority of the venues on Sunset Strip own the buildings they are located in. This alleviates the Sunset Strip nightclubs from the development pressures such as increased rents and the threat of redevelopment of the site that nightclubs and music venues in other cities face. The stability provided by owning the venues is a leading factor in ensuring the long-term viability of the venues. Further, the history and prestige associated with the iconic nightclubs on the Sunset Strip plays a major role in the relevance and longevity of the venues. Owners report that many patrons, whether first-time or repeat visitors, are drawn to the history of the venues. While ownership of the venues is a key benefit, there are challenges that must be addressed to preserve the nightclubs. Parking, both for customers and band tour buses, is increasingly challenging. Buses are not permitted to park on Sunset, and therefore, bands and equipment are typically dropped off at the site and the bus is taken off site, in some cases outside of the City while the band rehearses and performs. Nightclub owners report that venues located in other areas of Los Angeles do not face this challenge and it is a competitive disadvantage for the Sunset Strip venues. Additionally, without on-site parking, patrons who drive to the venue typically park in a nearby structure or lot. The price for parking at the structures or lots is increased substantially on weekends or nights of big shows, leading to patron frustration and dissatisfaction. The increase in ride-share services has helped address some of the challenges of patron parking, however further work in aligning available parking with uses and destinations and encouraging shared parking is required. Another challenge is the lack of necessary infrastructure, primarily fiber-optic internet, to Page 9 of 18

10 keep up with evolving behaviors in consumption of performances. Many venues now live-stream their shows, and the existing internet infrastructure makes this difficult for Sunset Strip venues. Additionally, the lack of a coordinated marketing effort limits the nightclub's ability to reach a greater share of the market. Due to a variety of economic and regulatory factors, including the cost of land and the regulatory and permitting process, it is unlikely that a new standalone performance venue or nightclub will open on the Sunset Strip in the near future. Therefore, if preserving the Sunset Strip as a music and nightlife destination is a priority, in addition to focusing efforts on the retention of existing venues, the City can seek opportunities to diversify and expand music and entertainment offerings on the Sunset Strip. A key initial step would be to allow existing non-nightclub businesses such as restaurants, bars and retail spaces to host live music during specified hours, as a permitted accessory or incidental use, as long as the music does not violate the City's noise ordinance. This would provide an additional incentive for patrons to attend non-nightclub businesses on the Sunset Strip and would also help reestablish the Sunset Strip as a music and entertainment destination, creating the necessary critical mass that could create spillover benefits for traditional nightclub and entertainment venues. Existing Businesses Although the scope of the study is focused primarily on the music, entertainment, dining, hotel and content production industries, retail and office uses continue to perform well on the Sunset Strip and add to the distinct character of Sunset. As such, all efforts should be made to enhance and preserve the businesses and buildings within the existing retail and office clusters. History and Prestige Finally, the Sunset Strip's history and prestige continues to be a factor in businesses deciding to locate on the Sunset Strip and guests choosing to eat, shop and stay or visit the Strip. The history and prestige, which can be traced back to the 1920's and through the 20th century, is what has made the Sunset Strip known worldwide and should be embraced and celebrated moving forward. 4. What's Possible - a Framework for the Vision? The future of the Sunset Strip will build on the foundation of the past and the current conditions of today. While it is important to develop a vision for the Strip's continuing evolution, implementing immediate and short-term actions today will ensure that the Sunset Strip is set up for success when the visioning process begins. These actions, described below, seek to remove barriers to prosperity growth and prosperity, identify target industries where innovation will occur, ensure that the Sunset Strip is clean and safe today and in the future and create a framework for the future vision of the Sunset Strip. Policies, Procedures and Regulations The City of West Hollywood has a lead role in cultivating a successful future for the Sunset Strip. A key aspect of this leadership role involves establishing the policies, Page 10 of 18

11 procedures and regulations that shape the buildings, streetscape, and businesses on Sunset. Before we can see what's possible on Sunset, we must begin by addressing barriers to success posed by existing policies, procedures and regulations. Businesses have identified a number of City policies and regulations that they perceive to pose additional challenges or barriers to the success of their business. These include, but are not limited to: ~ Existing minimum off-street parking requirements ~ Standards regulating the change of use of buildings ~ Existing restaurant permitting and approval processes ~ Special events permitting process ~ Noise ordinance ~ Difficulties associated with obtaining film permits ~ Requirement that all businesses with a California Alcohol Beverage Control (ABC) license have a licensed manager on-site at all times ~ Bus parking policies The City has either addressed or plans to address a number of these policies, including a recent update to the noise ordinance (approved July, 2016), proposed changes to the special events permitting process, and the elimination of the licensed on-site manager requirement for businesses with an ABC license (approved November 2017). Additionally, several divisions are currently engaged in several policy and infrastructure projects will effect Sunset, including the Innovation Division Street Media Project and the LRMP's update to policies for billboards and tall wall signs, joint development of a pilot creative digital sign at 8755 Sunset. The Arts Division and LRMP are collaboration on an upcoming installation of a micro-park at 8755 Sunset as well. Where City policies, procedures and regulations have been updated, educating business owners/operators on the changes will be key to ensure that businesses reap the benefit of the changes. While recent and proposed policy changes will have a positive impact on businesses on the Strip, policy and regulation barriers remain. The existing minimum off-street parking requirements have resulted in a misalignment between the supply and demand of parking that does not meet the needs of businesses on the Sunset Strip. Some businesses, such as hotels, report that even though their rooms are consistently booked at or near capacity they have experienced an approximate 40 percent reduction in use of their on-site parking structures. Additionally, valet operators serving restaurants have similarly experienced a 40 percent reduction in their service in the past year, and nearly 40 percent (36%) of visitors arrive to the Strip by ride share. At the same time, retail, office and restaurant businesses cannot find or afford code-required parking. This is especially true for businesses whose employees work outside of traditional business hours, such as content production businesses, when parking leases are typically not available. The Business Development Division received a directive by Council to evaluate reductions to commercial parking standards. Work on this directive is underway and will take into account the issues identified here not only on Sunset but also citywide. Page 11 of 18

12 Existing and potential restaurant owners and real estate brokers have noted that the City's current regulations limit the growth of quick service and fast casual businesses, such as delis, coffee shops, and the like on the Sunset Strip. This is primarily related to the fact that these types of food service providers, which typically do not have a fullservice kitchen, have limited dining and seating areas, and serve walk-up customers are regulated the same as a full-service sit down restaurant. While full-service restaurants have largely been successful and serve a demand on the Sunset Strip, there is a desire for restaurants that would cater to residents living adjacent to the Strip, the approximately 7,000 employees working on the Sunset Strip who may want to eat a quick lunch on Sunset as well as patrons attending concerts or shows who typically are not customers of the Strip's fine dining establishments. Further, given increased labor costs and the cost of land on the Sunset Strip, providing additional flexibility would benefit restaurateurs today and in the future. Additionally, evaluating the standards regulating the change of use of a building or tenant space, with a focus on easing entry onto the Sunset Strip for businesses within target industries, will further open possibilities for the future of the Strip. While there are many larger scale economic and market factors that will affect what's possible on the Strip, removing barriers presented by City policies, procedures and regulations and educating business on changes that have already occurred will play a key role in shaping a successful future. Infrastructure Implementing the infrastructure improvements discussed above is another step the City can take to ensure a prosperous future for the music, entertainment, dining, hotel and content production industries on the Sunset Strip. Nearly every business within each of these target industries would benefit from one, if not all of the infrastructure improvements, particularly deployment of fiber-internet capabilities. Needed infrastructure improvements would align with and compliment policy, procedure and regulatory changes to pave the way for business growth and expansion on the Sunset Strip. Infrastructure improvements will ensure that Sunset Strip's physical built environment does not become a deterrent to innovation on the Strip. Clusters A likely successful future involves further development of the four unique clusters discussed previously. These clusters have formed organically by the market and achieved what many cities seek to create through planning and economic development efforts. As previously mentioned, clusters can be the catalyst for both competition and coordination among businesses, driving innovation and quality within the individual cluster and across the Sunset Strip. This is true for all industries, from hotels to content production. The cluster approach preserves and seeks to enhance the entertainment and nightlife history of the Sunset Strip, while also recognizing the mix of businesses, including hotels, retail, services and restaurants that have emerged and drive the economic vitality of the Strip. While each cluster is unique, the commonality of being located on the Sunset Strip should be maintained and celebrated. Rather than taking a one-sized approach to the Sunset Strip, the City can identify missing elements within each cluster, from both the public realm and from a business Page 12 of 18

13 perspective, to enhance each individual cluster and in turn enhance the overall Strip. The clusters can be marketed and promoted, and desired businesses within clustered industries can be targeted for location on the Strip. Further, the clusters can be integrated into future public realm and infrastructure improvements to enhance the presence of the cluster to visitors and current and future businesses. Clean and Safe A successful future involves a clean and safe environment. Currently, there are mixed results when considering the safety and cleanliness of the Sunset Strip. Business operators across all industries generally agree that their customers do not perceive the Sunset Strip as clean and safe, particularly at night. For example, hotel operators have reported that guests are reluctant to leave a hotel property on foot, and instead rely on a ride-share service if they do venture out onto the Strip. Additionally, restaurant owners report that customers generally arrive to the restaurant in their car or by ride-share and go directly in and out, without strolling on Sunset before or after a meal. However businesses in the nightclub industry report that their customers do generally feel safe and typically bounce between the various venues during the night. Data collected through the user intercept study shows that on a scale of one to five, visitors rated the feeling of safety on the Strip at 4.1 and the cleanliness of the Strip at 3.9. In addition to the public safety services provided by the LA County Sheriff Department, supplemental safety, security and hospitality services are provided on the Sunset Strip by Block by Block Security Ambassadors. Currently, the cost for additional security services is paid for by the Sunset Strip BID. However, in other areas of the City, such as along Santa Monica Boulevard, the services are paid for by the City. The City is exploring offering the same arrangement on Sunset as currently provided along Santa Monica, allowing the Sunset Strip BID to focus more resources on marketing and improving the business conditions on the Sunset Strip. Additionally the City is considering offering enhanced power washing of sidewalks for all commercial areas of West Hollywood. While there is not conclusive evidence regarding the perception of cleanliness and safety on the Sunset Strip today, the City should make all necessary efforts to ensure that the Sunset Strip is clean and safe and a comfortable environment for visitors and employees moving forward. Such a move will be consistent with the City's efforts in other commercial corridors. Action Plan: The Study's action plan is informed by the findings made through quantitative and qualitative analysis of the Sunset Strip Music, Entertainment, Dining, Hotel, and Content Production industries. The action plan consists of a series of actions presented in a table format, categorized by common themes and includes identification of the City's role (lead or support), the lead city department and a timeline for implementation. The intent of the action plan is to address challenges and/or capitalize on opportunities identified in the study and result in high-impact actions that can be implemented within the current and next fiscal year. Page 13 of 18

14 Some of the actions outlined below are part of the current and ongoing work plans of several divisions or build on existing planned projects or initiatives, such as the Fiber Infrastructure and Service Strategic Plan, proposed Sunset Strip Public Realm Study, Block by Block Security Ambassador Program, Street Media project and updates to policies related to special events, filming, and on-site licensed manager requirements. Other actions would require an update to the work plans of the departments associated with each action. By packaging the new and ongoing actions into a coordinated action plan, staff believes that the sum of the collective actions will be much greater than their individual parts. Recommendations City Role Policies, Procedures and Regulations 1. Municipal Code Review/Amendments. Lead: a. Amend existing off-street parking requirements to better align with CDD the unique needs of Sunset Strip businesses, employees and EDD customers. Timeline: In progress. DPW PSD b. Amend the zoning code to allow live amplified or non-amplified music in certain commercial businesses, such as restaurants, bars and retail stores as a permitted or incidental use, limited to certain days and hours (i.e. Thursday - Saturday 5:00 pm - 9:00 pm). Timeline: Add to CDD Zone Text Amendment work plan, Initiated in Second Quarter C. Develop a program to modify and streamline planning approval and permitting process for food-service businesses of a limited size. Timeline: Add to CDD Zone Text Amendment work plan, Initiated in Second Quarter d. Investigate and identify opportunities to improve and expand parking locations for tour buses serving bands playing on the Sunset Strip. Timeline: Begin immediately following Council approval. e. Transition responsibility for payment of Block by Block security ambassador program and social, vocational services from the SSBID to the City of West Hollywood in addition to providing enhanced sidewalk power washing cleaning. Timeline: First/Second Quarter Page 14 of 18

15 2. Develop an education and outreach program focusing on City policies Lead: affecting and/or impacting businesses, including: EDD a. Create an ad hoc committee to discuss the opportunities and challenges of filming on the Sunset Strip, including filming in commercial properties on the Strip. Timeline: First/Second Quarter b. Distribute educational materials to. business owners/operators and event coordinators on proposed and/or completed updates to the City's special events permit process and polices. Timeline: First/Second Quarter C. Distribute educational materials to business owners/operators on the City's updated (effective July, 2016) noise ordinance. Timeline: First/Second Quarter d. Conduct outreach on recent changes (November, 2017) to the requirement for any business with an ABC license provide a licensed on-site manager at all times. Timeline: In Progress. Vision, Marketing and Events 3. Work with the Sunset Strip BID, Visit WeHO, West Hollywood Chamber of Support: Commerce, and other organizations to: EDD a. Establish an updated marketing strategy for the Sunset Strip and promote the Sunset Strip as a unique attraction in Los Angeles through marketing opportunities with Visit West Hollywood, discover Los Angeles and Visit California. Timeline: b. Update the website with current and relevant information, including, a comprehensive weekly calendar of events occurring on the Sunset Strip, and provide accurate links to Sunset Strip businesses and attraction. Timeline: C. Establish a concert or events series that would rotate among or occur at the various nightclubs and/or venues on the Sunset Stip. Timeline: d. Engage Sunset Strip BID members and stakeholders with regular and consistent communication on current issues, events and opportunities on the Strip. Timeline: Begin immediately. e. Promote the industry nodes/clusters on the Sunset Strip and foster collaboration among businesses within the clusters. Timeline: First/Second Quarter f. Market the Sunset Strip to small or niche sound and film production studios and ancillary businesses involved in the entertainment and media industry. Timeline: First/Second Quarter Page 15 of 18

16 g. Conduct a study of competitive and aspirational nightlife districts around the United States to identify key elements of their success in terms of asset management, marketing and target audience(s). Timeline: h. Conduct an on-going visitor profile study to determine the demographic and psychographic profile of visitors to the Strip, and use those findings to target market. Timeline: 2018 and ongoing. i. Conduct a study of who is not visiting the Sunset Strip both from the Los Angeles area as well as those staying in West Hollywood hotels. Timeline: Business Technical Assistance and Communications 4. Provide technical assistance and regularly communicate with businesses on Lead: the Sunset Strip through the following: EDD a. Conduct bi-annual roundtable meetings with hospitality and tourism businesses to discuss industry trends, opportunities and challenges. Timeline: First/Second Quarter b. Conduct quarterly check-ins and provide businesses assistance to new businesses during first year of operation. Timeline: First/Second Quarter C. Work with owners/operators of existing nightclubs to establish a business retention and expansion plan to help keep existing nightclubs operating on the Sunset Strip. Timeline: First/Second Quarter d. Monitor regional, national and industry-specific trends impacting businesses on the Sunset Strip. Timeline: In Progress. Infrastructure 5. Initiate the following physical infrastructure improvements on the Sunset Lead: Strip: DPW a. Prioritize completion of the City's "fiber ring" in accordance with FTD Phase 1 of the Fiber Infrastructure and Service Strategic Plan and EDD prioritize fiber-based services on Sunset Blvd. in Phase 2. Timeline: COD Recommendations for Council approval will be presented as part of the next 2-year budget process. b. Complete citywide purchase of streetlights from SoCal Edison (SCE) and begin testing various forms of LED lighting on the Sunset Strip. Timeline: December C. Move forward with pedestrian safety improvements on Sunset identified in the 2017 Pedestrian and Bicycle Mobility Plan. Example: enhancements to the crosswalk at Sunset and Sherbourne. Timeline: Engineering Design Third Quarter Page 16 of 18

17 d. Explore opportunities for a Sunset Strip gateway sign feature. Timeline: In Progress - Innovation Division Street Media Project. e. Initiate COD Public Life Activation Plan for Sunset to identify improvements to sidewalks and public spaces that support increase pedestrian activity and economic goals. Timeline: Contract for the plan is scheduled for Council approval January 2018, begin immediately thereafter. COD- Community Development Department EDD - Economic Development Department DPW - Department of Public Works PSD - Public Safety Department FTD - Finance and Technology Department Next Steps Following approval of this item, staff from the Business Development Division will continue to work on action items currently in progress and work with staff from other divisions and departments and outside partners on action items that are set to begin immediately following approval of the action plan. Business Development staff will work with other departments and divisions and external partners to develop a detailed schedule for actions that can be incorporated into work plans for the next fiscal year. As previously mentioned, LRMP will bring forward a contract to develop a Public Life Activation Plan for the Sunset Strip, addressing specific issues and priorities identified by the Council and raised in roundtable discussions with Sunset stakeholders. This focused Plan will identify key opportunities to enhance the Strip as a place for people, enhancing pedestrian links between destinations, and supporting economic goals by encouraging visitors to spend time along the Strip, and further shape a future vision for the Sunset Strip. CONFORMANCE WITH VISION 2020 AND THE GOALS OF THE WEST HOLLYWOOD GENERAL PLAN: This item is consistent with the Primary Strategic Goal(s) (PSG) and/or Ongoing Strategic Program(s) (OSP) of: OSP-3: Promote Economic Development while Maintaining Business Vitality & Diversity. OSP-8: Enhance the Cultural and Creative Life of the Community. In addition, this item is compliant with the following goal(s) of the West Hollywood General Plan: ED-1: Maintain a diverse and resilient economy. Page 17 of 18

18 ED-7: Enhance the City as a regional, national and international destination for the entertainment, nightlife, dining and retail industries that are key to West Hollywood's fiscal health. EVALUATION PROCESSES: Staff will develop a process for regular surveying of businesses going forward as well regular site visits with businesses to communicate policy updates and solicit their input on proposed policy changes. ENVIRONMENTAL SUSTAINABILITY AND HEALTH: N/A COMMUNITY ENGAGEMENT: Staff conducted industry-specific outreach and online surveys with Sunset Strip business owners/operators on the following dates: Restaurant and bar owners: 7 /11 /17 Nightclub owners/operators: 7/12/17 and 10/11 /17 Music publishing and movie production owner/operators: 7 /18/17 Hotel managers: 7/18/17 Expediters/development consultants: 7/19/17 Real Estate brokers: 7/24/17 Retail property owner: 10/4/17 OFFICE OF PRIMARY RESPONSIBILITY: ECONOMIC DEVELOPMENT DEPARTMENT/ BUSINESS DEVELOPMENT DIVISION FISCAL IMPACT: None at this time. Staff will incorporate activities related to this item into currently budgeted work plans." ATTACHMENTS: A. Sunset Strip Music, Entertainment, Dining, Hotel, and Content Production Study Page 18 of 18