Response to Request for Proposal for Lease of THOMAS STREET SHOP SPACE AT SEATTLE CENTER
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1 Response to Request for Proposal for Lease of THOMAS STREET SHOP SPACE AT SEATTLE CENTER
2 TABLE OF CONTENTS Organization General Overview... 1 Plan and Proposed Use Management and Operations Proposed Term and Financial Return Contributions Implementation Schedule Working With Seattle Center Organization Financial Condition Site Plans
3 A. PROVIDE A GENERAL OVERVIEW OF YOUR ORGANIZATION, INCLUDING THE ORGANIZATION S STRUCTURE AND PURPOSE AND PROOF OF FINANCIAL STABILITY FOR EACH OF THE LAST THREE YEARS. SPACE NEEDLE As the most visible icon in the Pacific Northwest, the Space Needle has become a symbol of our City around the world. Privately-owned by the family of its builder, Howard S. Wright, the Space Needle is a reflection of Seattle and is operated and maintained as a world-class attraction. The Space Needle has been a significant attraction and tourism driver for more than 53 years. The Space Needle is well-experienced in the sustainable operation of an attraction, restaurant and retail business, having served over 50 million guests since it opened in We have over 300 team members with substantial average tenure, several surpassing 30 years of service. We have a solid management team with varying years of Space Needle history, coupled with experience from some of the most recognizable and respected names in our industry. As a cornerstone of Seattle Center, we have joined in the celebrations of our region s successes in government, sports, education and the arts. When the 2008 Century 21 Committee was formed, Space Needle board member Jeff Wright was named as co-chair of the Committee that created the Century 21 Master Plan to make Seattle Center a more vibrant and exciting part of our community. The Space Needle has played a role in our City s growth through support of local businesses and non-profit organizations. The Space Needle has been used as an inspirational symbol and our facilities have been made available at no cost to numerous non-profit organizations for fundraising opportunities. We are now focusing on our role in the City s development for the next 50 years. We strive to nurture and maintain this world-class status as we move ahead into the Next-50 in partnership with Seattle Center. The family-owned Space Needle is a proud neighbor and consistent supporter of the development of Seattle Center, aligned with the best interests of our community. As the 2008 Century 21 Committee s report was released, the Space Needle s board and management were actively exploring the possibilities in and around the Needle to add vitality to Seattle Center and draw additional visitors to the campus. We believe strongly that the concept of Public / Private Partnership is necessary to support the long-term success of Seattle Center. CHIHULY GARDEN AND GLASS In partnership with the City of Seattle and Seattle Center, Chihuly Garden and Glass opened in 2012 and has provided millions of guests with the exceptional experience of art influence, immersion, delight and surprise with Dale Chihuly s most comprehensive exhibition of his greatest works. The exhibition has become one of the must see staples of Seattle, earning the ranking of the #1 Thing to Do in Seattle on TripAdvisor. We believe that visitation on campus has grown with the addition of the exhibition, providing additional strength for campus resident groups. Chihuly Garden and Glass actively employs 150+ Team Members, offering living wages and a benefit package that substantially exceeds the Seattle $15 Minimum Wage schedule. Chihuly Garden and Glass continues to operate with a focus on further refining guest experience, 1
4 seeking opportunities to support and showcase local artists, education and cultural organizations, and collaboration on continued improvements to Seattle Center campus. Notable annual impacts include: More than $1.5 million in financial benefit to the City, County, and State from admission taxes, sales taxes, lease tax, rent paid, county taxes, and state taxes. Donations of more than 10,000 free tickets to local youth, education, social works, and community organizations throughout the year. Support in excess of $100,000 to community partners Pratt Fine Arts Center, Pilchuck Glass School, ArtsFund, and Seattle Public Schools to further arts engagement for youth and adults within Seattle and the Northwest. Admissions discounts in excess of $500,000 to King County residents. Ongoing employment of more than 150 Team Members. Implementation and improvement upon Seattle Public Schools STEAM curriculum, impacting district 6th grade students. Continued commitment to operate according to LEED Silver Certification by USGB. More than $1 million invested in improvements to common areas at Seattle Center campus, including Artists at Play and Enhanced Pedestrian Access. Space Needle and Chihuly Garden and Glass are financially solvent and operate profitably. If our proposal advances, further proof of financial stability can be provided if required. 2
5 B. PRESENT A DETAILED PLAN OF YOUR PROPOSED USE OF THE THOMAS ST. SPACE. INCLUDE ANY PRE-CONCEPT DESIGN AVAILABLE SUCH AS SKETCHES OR FLOOR PLANS AND AN ESTIMATE OF PLANNED CAPITAL INVESTMENT INCLUDING AND IDENTIFYING BOTH HARD AND SOFT COSTS. IDENTIFY DETAILS ON ANY PROPOSED ALTERATIONS TO THE THOMAS ST. SPACE. Looking West down Thomas Street - Will visually open up the access to the Artist at Play area creating a connected experience for families on both sides. Looking East - We imagine kiosks sprinkled organically up and down Thomas Street. 3
6 Thomas Street Experience: Located where the Expressly Northwest and Essentially Seattle gift shops currently reside, the main feature of our proposal envisions it to be the heart of the Thomas Street Experience and Market. This space will be a two-story building with a roof-top deck, created through the removal of the Thomas Street Shop and Essentially Seattle. The Essentially Seattle location is currently part of a long-term lease related to Chihuly Garden and Glass. If our proposal were accepted, we propose a release of Essentially Seattle from that 2012 lease in order for these sites to be combined for redevelopment resulting in the highest and best use for this site for the benefit of Thomas Street. A street-level main floor will house 5-7 smaller retail spaces with planned use for in-demand Northwest art and gallery space. The second level will be home to a retail oriented street-side café with an assortment of food and beverage options for Seattle Center guests to sample and delight in with a special focus on locally produced food and drink. We see this ranging from wine to coffee, chocolates, cheese and baked goods. All of these themed food vignettes will also offer out-of-town guests the opportunity to order products and services for home delivery and shipping throughout the world. We envision Seattle focused wines, chocolate, coffee and cheese products being sold allowing the consumer to enjoy Northwest food and beverages long after their visit to Seattle and Seattle Center. The chocolate experience may feature a variety of offerings from some of the best chocolatiers in the Northwest. Represented chocolatiers could include Fran s, Seattle Chocolates, Theo s, Dilettante, Intrigue and Chocolati, to name a few. We see this same concept extending to baked goods, coffee, ice-cream, wine and cheese. By representing a variety of products in each category, we believe that we can give our local Guests and visitors alike the opportunity to experience the best of what the Northwest has to offer all under one roof and organically rotating over time. Images represent the various opportunities for kiosks, flexible performance spaces, and artistic lighting installations. The roof-top deck will be a space for all visitors to relax and enjoy the new and enhanced landscaping while experiencing the sights and sounds of Seattle Center Campus with a place to sit and eat their Northwest fare. The space will be utilized seasonally as weather permits. Filled with tables, chairs and umbrellas will also create a highly desired shaded seating space. On the interior space of the main floor, the Thomas Street Experience building will feature an ADA compliant elevator to transport guests from the main floor to all other levels of the space. We envision stairs to flank the east and west sides of the building to provide multiple ingress and egress points for the facility. Restroom facilities will be made available to the public inside the building. 4
7 Image represents possible artistic and lighting installation. 5
8 Sprinkled in the surrounding spaces, our proposal includes the construction of numerous small, portable retail kiosks/pods in the neighboring spaces both East and West of the new building, as well as on the South side of Thomas Street. These kiosks, pods and/or eclectic carts could feature local arts and crafts such as jewelry, upcycled crafts, handmade pottery and art, as well as handcrafted goods for home and personal care. We see a site set aside for a rotating Artist in Residence program to support the development of local artists and to provide a live market for their efforts. We assume in this proposal that most of the kiosks are leased and managed by Seattle Center to allow for a more cohesive, yet uniquely Seattle Thomas Street Market curated by Seattle Center. This will provide additional revenue streams to Seattle Center and add to the overall excitement of the area. As part of the proposal approval, pending input and approval of Seattle Center and Monorail leadership, we are supportive of a redesign and shortening of the ramp to the Monorail. Additionally, we propose building a new and functional stairway to serve as the main point of ingress and egress to the landing. All of this would leave a large space to the North of the proposed building to activate more public seating, kiosks and/or performance areas. Use of decorative features will highlight the new street experience. Utilization of features including festoon lighting, temporary art installations, small art and garden vignettes, busker locations or ministages, in addition to the pop-up art and retail kiosks and eclectic carts, will brighten the space. All of this will be coupled with enhanced landscaping throughout the entire Thomas Street Experience corridor. Fully activated, the Thomas Street Experience creates a destination, an additional magnet activity on Campus creating a place that visitors must see and locals frequent. The Thomas Street Experience aims to create the backdrop that allows for an eclectic market street to organically emerge over time. Our hope is to create the type of street experience found in many great cities, a great public space reflective of the best of Seattle, yet not redundant to other Seattle experiences. Images represent possibilities for art and garden vignettes and artistic lighting installations. 6
9 Our proposal includes the following Key Features and Public Benefits: Rent and/or royalties to Seattle Center Job creation during design and construction as well as permanent positions once open and activated Highly Desired Additional Landscaping and Greenspace Additional public restrooms at Seattle Center Busker/performance locations Public art with the addition of art and garden vignettes Improved Monorail ingress and egress through potential redesign of the current ramp Highly needed seating and shaded spaces Retail space for Seattle Center to generate additional revenues 7
10 C. IF RELEVANT, DESCRIBE HOW YOUR PROPOSAL WILL BE MANAGED AND OPERATED, INCLUDING DAYS AND HOURS OF OPERATION, STAFFING AND ACTIVITY PLAN AND/OR EVENT SCHEDULE. Supported by the members of the Wright Family, owners of Space Needle and Center Art, Center Markets will oversee all day-to-day operations and strategic vision of the Thomas Street Experience. The core team will be a mix of our existing management team and dozens of full and part-time hourly Team Members that reflect the diversity of Seattle and the Pacific Northwest. If these new Team Members in the Food and Beverage areas desire to seek representation by a labor organization, we would welcome this and support them in that process aligned to the spirit of a labor peace agreement. We propose a highly active operation plan for the permanent retail building space, pop-up retail kiosks/pods and the food service areas with public hours extending from mid-morning to late evening. During winter, we anticipate opening at 10 a.m. and closing at 7 p.m. During the shoulder seasons of the late spring and early Fall, we expect to operate generally from 9:30 a.m. 8 p.m. The summer months, generally from Memorial Day to Labor Day, will see operating hours from 9 a.m. until 9 p.m. Public hours may be adjusted to align with visitor demand. From time-to-time for special events and educational activities, we may implement earlier openings or later closings. We plan to provide 24-hour on-site security and facility support that will coordinate closely with Seattle Center and enhance year-round security in this portion of the campus. Once in operation, we anticipate the Thomas Street Experience to employ approximately 40+ team members in family wage positions. Our goal to invest in the future of Seattle Center by creating additional magnet activities on Campus. Our proposal envisions a place where Seattle residents and visitors alike can come and enjoy signature local culinary-themed experiences, as well as a uniquely Seattle Thomas Street Market curated by Seattle Center with pop-up kiosks featuring local arts and crafts, an Artist in Residence program, and the addition of accessible public art and garden vignettes. This would complement the current mix of programing and Campus Partners, and continue to give locals and tourists alike reason to come, visit and explore Seattle Center. Activity Plan and Event Schedule Special events will typically be scheduled weeks and months in advance in coordination with the leadership of Seattle Center. Programming of performance / busker locations would be managed, as it has been, by Seattle Center. 8
11 Community Partner We anticipate engaging with Artist Trust to consult and assist in identifying high-caliber Northwest artists to be featured throughout the experience: Artist Trust Artist Trust is a not-for-profit organization whose sole mission is to support and encourage individual artists working in all disciplines in order to enrich community life throughout Washington State. To accomplish its mission, Artist Trust raises funds from an array of sources in order to give financial grants, through a peer review process, to individual artists working in the visual, performing, media, literary, and interdisciplinary arts; serve as a professional information resource for artists and encourage artists to support each other; and, provide recognition and support for the contributions artists make to the lives of people of Washington State and for the merit and integrity of artists work. As we continue to refine this concept, we expect additional discussions with non-profit groups to create maximize the opportunities for a wide range of local artists. 9
12 D. OUTLINE THE PROPOSED TERM AND FINANCIAL RETURN TO SEATTLE CENTER. Proposed Rental Breakdown We expect that the annual rent will be negotiated relative to the final capital investment and public benefit funding tied to the redevelopment of Thomas Street, as well as the length of lease. The expected annual financial compensation to Seattle Center is expected to average at least $250,000 annually, but in any calculation is expected to be consistent with or exceed other similar lease agreements on campus. We expect revenues generated from kiosk rentals will exceed $100,000 per year flowing directly to Seattle Center. We propose the initial term of the Lease shall be ten years with the tenant right to renew up to 2 additional 5-year terms provided the financial and public benefit milestones have been met. We expect the capital investment tied to the redevelopment of Thomas Street to be in the $4MM - $8MM range with the asset reverting to Seattle Center ownership at the expiration of Lease. We anticipate public Thomas Street improvements, including landscaping, kiosks and area improvements to be negotiated based on Seattle Center final direction and overall terms, anticipated to be approximately $1MM. Base Rent for any renewal time period shall be tied to a CPI formula agreed upon as part of a lease agreement. Prior to construction commencing, we propose to operate the retail space under its current use and will pay a rent structure that is equal to or better than the current sublease agreement with Seattle Center Foundation. We are willing to make reasonable adjustments to this proposal as requested by the City so long as the total economic cost to us is consistent with the above terms aligned to supporting the viability of the overall project over time. Public Benefits Taxes Collected It is anticipated that this proposal will provide significant incremental taxes to the City of Seattle as well as to Washington State annually and over the intended 20 year term of the lease agreement. Ranges of estimates of these taxes can be provided as the concept in this proposal is refined. City Tax Revenue This benefit is made up of the 3.0% local Sales and Use Tax and a 0.215% Business License Tax. Leasehold Excise Tax Income This proposal will pay a Leasehold Excise tax of 12.84% on the lease payments made to the City of Seattle. The 12.84% excise tax is split as determined by the State of Washington between the City of Seattle and the State. State Tax Revenue In addition to the City of Seattle s direct tax revenues, this proposal will provide additional tax income to the State of Washington. The major driver of the State s benefit of this proposal is the 6.5% Sales and Use Tax as well as the 0.471% Business and Occupation Tax. 10
13 E. EXPLAIN HOW YOUR PROPOSAL CONTRIBUTES TO SEATTLE CENTER PURPOSE STATEMENT AND ADDRESSES THE THREE PRIMARY GOALS OUTLINED ON PAGE 1 OF THE RFP. Seattle Center creates exceptional events, experiences and environments that delight and inspire the human spirit to build stronger communities. Our proposal clearly is in full alignment with Seattle Center s mission statement. Our plan, with Seattle Center input, is to build a vibrant market area that melds performance and service spaces to create an exciting new concept a space that provides free spaces, performance spaces and service spaces that are thought-provoking and inspiring. The service spaces aim to support Northwest artisans and companies, further strengthening the greater Seattle area business community. Solely backed and funded by members of the Wright Family, owners of the Space Needle and Center Art, this proposal will not require any public funding. F. PROVIDE A PROPOSED IMPLEMENTATION SCHEDULE, ASSUMING YOUR PROPOSAL IS SELECTED BY THE END OF With the selection process finalized in January of 2016, we anticipate the following aggressive, yet realistic schedule to fully activate the Thomas Street area by spring 2017: January 2016 January April/May 2016 April/May 2016 May August 2016 September 2016 April/May 2017 Programming of all proposed spaces and features finalized Drafting and negotiating lease terms Final lease is approved Finalization of all construction documents and permitting process Construction commences Anticipated opening date 11
14 G. IDENTIFY HOW YOUR TEAM PROPOSES WORKING WITH SEATTLE CENTER. ELABORATE ON THE ROLES THAT YOU WOULD ANTICIPATE SEATTLE CENTER AND YOUR TEAM PLAYING IN COMMUNICATIONS, DECISION MAKING, MARKETING, BRANDING AND OTHER ELEMENTS OF YOUR PROPOSAL. The Wright Family has always worked very closely with Seattle Center and appreciates the collaborative efforts with its senior staff. We will continue to foster and expand that relationship with the addition of this new project, ensuring the maximum possible benefit for Seattle Center and its guests. We see several areas in which the Thomas Street Experience and market provides additional opportunities to work together effectively to support the mission and vision of Seattle Center: Public/Media Relations We anticipate that the regional media will want to cover this both before and after the opening. Our experience has shown us that this type of the media focus is an excellent opportunity for Seattle Center and the City of Seattle to highlight the many wonderful things that our region has to offer. We will work together with Seattle Center s Director of Communications to highlight and maximize media opportunities for Seattle Center, the City of Seattle, and other existing campus resident organizations. Marketing Annually, we anticipate several million visitors to walk through and enjoy the Thomas Street Experience and market. Incremental visitation to Seattle Center Campus is expected, resulting in an opportunity for other campus resident organizations to realize increased revenues and achieve increased awareness. We look forward to developing collaborative marketing programs. Security/Operations Our Operations and Security departments will continue to work closely with Seattle Center and the broad range of other relevant authorities on a regular basis sharing. We will share information to maximize the security of our exhibition and the campus and make it safe, secure, easy to maneuver, and family-friendly. Decision Making and Communication As a 53-year partner of Seattle Center, the Wright Family has a respected history of open communication with Seattle Center leadership and other campus residents. We continue to be committed to clear and open communication on an ongoing basis through the Resident Director Meetings as well as regular meetings with the senior staff of Seattle Center. 12
15 H. PROVIDE SPECIFIC INFORMATION ON YOUR ORGANIZATION S FINANCIAL CONDITION, INCLUDING ANTICIPATED LOANS OR FUNDING EFFORTS NECESSARY TO IMPLEMENT YOUR PROPOSAL. IF YOU HAVE EXPERIENCE WITH THE TYPE OF PROGRAMMING BEING PROPOSED, SUBMIT RELATED FINANCIAL DATA FOR THE PAST EXPERIENCE. If our proposal is selected, the Proposer - with an ownership structure substantially similar to the Space Needle - will execute a lease with the City of Seattle. The Space Needle will provide management and oversight to the operation. The Space Needle is well experienced in the profitable operation of restaurant and retail businesses having served over 40 million guests since it opened in We have a history of attendance growth and of adding substantial family wage jobs to the local economy. More than five decades of profitability and a strong balance sheet provide the Space Needle owners the financial capacity to implement the proposal. The funding scenarios range from 100% equity or a combination of equity and debt. 13
16 All images are representative of initial concepts. Actual renderings will be completed during planning process. 14
17 All images are representative of initial concepts. Actual renderings will be completed during planning process. 15
18 All images are representative of initial concepts. Actual renderings will be completed during planning process. 16
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