PISMO BEACH COUNCIL AGENDA REPORT

Transcription

1 PISMO BEACH COUNCIL AGENDA REPORT SUBJECT/TITLE: CONSIDERATION OF CHAPMAN ESTATE FUNDING AND ACCESS Agenda Item #7.A RECOMMENDATION: 1. Provide direction regarding funding for, and use of, the Chapman Estate; 2. Appoint two Council Members to an ad-hoc committee to work with staff and the Chapman Estate Advisory Commission (CEAC) to develop a revised strategic plan; 3. Direct staff to initiate an amendment to Conditional Use Permit (CUP) P based on direction from the City Council and the CEAC. BACKGROUND: On May 19, 2015, the City Council approved an agreement with Gates & Associates to prepare and complete the Chapman Estate Strategic Plan to serve as a guide in the successful management and sustainability of the Estate, a historic home and property offered to the City by late resident Clifford Chapman and accepted in The plan was meant to provide strategic direction on the use of and access to the Estate and to provide options for sustainable funding. On January 27, 2016, Gates & Associates presented the Draft Chapman Estate Strategic Plan to the Chapman Estate Advisory Commission (CEAC) and two members of the Parks, Recreation and Beautification Commission (PRBC). The Commissioners and staff requested that significant changes be made to the document. On March 7, 2016, Gates & Associates submitted a revised Plan (Attachment 2). While the consultant produced an updated document that addressed several comments generated from the January CEAC meeting, the CEAC did not recommend approval of the report at the subsequent March 10, 2016 Special Meeting, as it was not strategic in nature and contained very detailed information, making it difficult to determine a clear vision or plan for moving forward. While the City did not end up with a strategic plan recommended for approval as anticipated, the document did provide a variety of detailed information, suggestions and financial information that can help facilitate discussions on future policy direction. CEAC Recommendations At its March 10, 2016, Special Meeting, the CEAC discussed the revised plan. After thorough review and much discussion, they recommended the following to the City Council: 1. For the City Council to not accept the plan as written; 2. For the CEAC to work with City staff to further revise the document by removing Conditional Use Permit (CUP) language in an effort to make the document broader and more flexible in nature; Item 7.A Pg. 1

2 3. Consider supplemental donor, event, etc. funding opportunities with an annual public investment; 4. Consider additional and diversified events, over and above the uses in the existing CUP, to enable financial sustainability; 5. Prioritize Estate enhancements (i.e., routine maintenance, safety improvements, upgrade of individual structural items, etc.) and update costs, accordingly; 6. Consider rezoning the property from low-density residential to public/semipublic; 7. Specify which events will be allowed to have live music; 8. Pursue grant funding as a financial mechanism to support the Estate; 9. Retain an estate manager and professional fundraiser (separately and/or as a combined position); 10. Support the establishment of a 501(c)(3); 11. Focus on public access to the Estate, especially based upon the recommendation in item No. 4. Several of these recommendations will be addressed by the CEAC in the future, however, some warrant City Council policy direction. Policy Questions to Consider Moving Forward Staff requests that the Council provide direction regarding funding for, and use of, the Estate, using the five questions below to facilitate discussion regarding key outstanding issues. Question 1. Should the Estate be sustainable on its own, or should the Council consider making annual contributions from the General Fund? It has been the City's current policy to not subsidize operations of the Estate. All expenses to date have been funded by a small bequest left by Mr. Chapman. As outlined later in the report, these funds are dwindling. The initial assessment of financial feasibility for the Estate, assuming increased use of the site for a range of events and programs, looks at the relationship between capital investments (expenses) and potential operating revenues. This analysis assesses the feasibility of two scenarios: Alternative A and Alternative B (see Attachment 1). Alternative A assesses the property s operating economics if only necessary capital improvements are completed within the first ten years of operations. Alternative B evaluates the potential benefit to the property s operating economics if a series of siteenhancing capital improvements are also made. Item 7.A Pg. 2

3 Capital improvements should be prioritized based on specific events. For example, if weddings are to be hosted, the appropriate related accessibility improvements and/or site enhancements must be identified. Even if these improvements are made at the minimal level, the events listed in Alternative A would equate to 14 large events, 16 special purpose events, 10 facility rentals, 36 classes and 4 fundraisers, and would require approximately $111,750 per year in City General Fund support for the next 10 years, or a total of $1,117,504, assuming all other revenue estimates hold true. Staff requests that the City Council consider whether this amount of General Fund support is acceptable, or whether the number of events should be set at levels that will cover costs. Question 2. Based on information contained in the Plan, the number of events projected do not support the ongoing costs of the estate. Should the number of events be established in such a way that the costs of the estate are self-covered? The CEAC finds that the current Conditional Use Permit for the Estate is not adequate in that the number and types of events currently allowed will not support the Estate financially. If the City maintains the level of activity at the Estate that was previously deemed acceptable by surrounding neighbors, operating revenues will either result in an annual deficit or barely break even, regardless of the level of capital improvements completed. Also, funds to operate and maintain the Estate will depend to a great extent on donor and sponsorship support, which in turn requires a dedicated fundraiser/ manager. Other considerations, including the desire for public access to the Estate and fundraising alternatives that are closer to the intent of Mr. Chapman s gift, may be considered. Staff requests that the City Council consider whether neighborhood tolerance will remain a driving factor in determining levels public access and the number of events held. Question 3. Should the property ultimately be rezoned, or is a Conditional Use Permit the appropriate policy at this time? The CEAC has discussed the issue of rezoning the property from R-1 (Single Family) to OS-R (Open Space-Recreational) or G (Government). Staff has determined that rezoning the property to OS-R would require the City to process a Conditional Use Permit (CUP) for the existing passive and active recreational space on the estate. This zoning designation would also create an issue for the existing residence in that single-family homes are only permitted in the OS-R zone with proof that the existing open space does not permit a feasible and beneficial use of the property, which is contrary to the proposed use of the estate. Alternatively, rezoning the property to Government would require that a non-profit entity manage the estate, and require the City to process a CUP for a non-profit to manage the estate. It is staff s recommendation that neither zoning designation is an appropriate solution and that the R-1 zoning be left unchanged. Item 7.A Pg. 3

4 A Strategic Plan is an overall guiding document that sets forth goals and objectives, while a Conditional Use Permit is an implementation tool for the those goals and objectives. The Strategic Plan should thus be macro in its views and should not contain specific language from the CUP, which is subject to change over time. It is the CEAC s desire to work with a City Council Ad-hoc Committee and staff to remove such specific text from the Strategic Plan and present a revised document for approval by the City Council. If the revised plan is approved, a request to amend the CUP based on the direction of the revised plan will then be presented to the CEAC and Planning Commission for consideration. Question 4. Should a 501(c)(3) be established and a professional fundraiser be hired at this time? Casa Romantica, a historical estate in the City of San Clemente with attributes that parallel those of the Chapman Estate, has been operating successfully as a 501(c)(3) since While the 501(c)(3) entity shares the responsibility of maintaining and preserving this historic property with the City of San Clemente, it is responsible for all operating costs and programming. Casa Romantica has a 12-person Executive Board that guides the vision of the facility along with twelve staff members that handle fundraising, day-to-day operations and maintenance. A 501(c)(3) would be an effective tool in assisting with funding and staff recommends that the City Council consider establishment of a 501(c)(3) along with initial financial resources to hire a fundraiser. Question 5. Assuming the events are permitted as outlined in the Plan, in what other ways should the public be permitted to access the Estate? The CEAC and participating members of the PRBC recommend that the Estate be open to the public daily. As a comparison, Casa Romantica is closed on Mondays, but is open to the public 4 5 hours a day with a $5 entry donation. Access is presently limited to the outside areas, but this could change in the future. If access is allowed to the Chapman Estate, a partial or full access fee may be considered. Staff requests that the City Council provide direction as to whether a nominal fee be charged to the public for access to the Estate. The revised CUP will address this issue based on Council direction. Conditional Use Permit (CUP) Whereas the strategic plan is meant to be broad and flexible in its goals and policies for the use, maintenance and operations of the estate, language in the Conditional Use Permit (CUP) will be specific in nature and will implement the goals and policies of the strategic plan. The CUP (#P ) currently allows four annual fundraiser events, only one of which raises monies for the operation and maintenance of the Estate. The remaining three Item 7.A Pg. 4

5 approved fundraisers are held by the Community Action Partnership (CAPSLO), the SLO Opera and the SLO Symphony. The CUP also allows three free community events per year with 100 attendees or fewer, none of which raise funds for the operation and maintenance of the estate. Lastly, the CUP allows six annual gatherings that may or may not generate revenue. Gatherings are limited to 49 people at one time on the Estate grounds for social, educational, philanthropic or training get-togethers and may include tours of the Estate grounds, yoga or tai chi classes, holiday visits (such as Halloween trick-or-treating or Easter egg hunts), painting excursions, bird watching, etc. As currently written, the CUP only allows 13 annual events, and only one of those events is dedicated to raising funds for the operation and maintenance of the estate. Analysis and Conclusion The Chapman Estate is a treasured local landmark and can become a great asset for the Pismo Beach community and beyond. It is a unique and memorable venue for quiet enjoyment, educational uses, social gatherings, philanthropic events, and many other uses. Mr. Chapman fully intended this as indicated by language in his trust gifting the estate to the City. As an events venue and cultural resource, the Estate can attract users that will increase community patronage and pride and add to the local economy, and it has been established that large events can be held at the Estate with minimal impact to the neighborhood. In order for the Estate to provide these community benefits, however, it is clear that significant investment must be made in the form of capital improvements, deferred maintenance and management/fundraising. The CEAC recommends that the City Council not accept the plan as written, and instead, provide direction to the CEAC to work with staff in revising the document by removing CUP language in an effort to make the document broader in scope and more flexible in nature. Staff concurs with this recommendation. It is expected to take 4-6 weeks to draft such a document. Staff is requesting that the City Council provide direction on funding for, and use of, the Estate, with discussion facilitated by the following questions: 1. Should the Estate be sustainable on its own, or should the Council consider making annual contributions from the General Fund? 2. Based on information contained in the Plan, the number of events projected do not support the ongoing costs of the estate. Should the number of events be established in such a way that the costs of the estate are self-covered? 3. Should the property ultimately be rezoned, or is a Conditional Use Permit the appropriate policy at this time? Item 7.A Pg. 5

6 4. Should a 501(c)(3) be established and a professional fundraiser be hired at this time? 5. Assuming the events are permitted as outlined in the Plan, in what other ways should the public be permitted to access the Estate? Finally, staff is requesting direction from the City Council to initiate an amendment to the CUP based on Council policy direction. FISCAL IMPACT: The Chapman Estate Fund started the fiscal year with $266,977 primarily from the Chapman Estate Trust endowment. Other than City staff time spent on maintaining the property, no City funds have been directly spent on the Estate. After including rental revenues of $1,200 and a projected $100,000 of operating and improvement costs, the fund is expected to end the fiscal year (June 30, 2016) at $168,177. Annual operating costs of utilities, gardening, building and grounds maintenance, and minor repairs are approximately $50,000 to $60,000 per year. With the annual operating costs alone, staff estimates that, absent income or fundraising revenues, the City will no longer be able to support the Chapman Estate in two to three years. In addition to annual operating costs, the estate requires a minimal amount of mandatory accessibility improvements and other basic capital improvements to allow access to the grounds, totaling $1,533,370. The following table summarizes the components of these basic capital improvements. Basic Capital Improvement item Estimated Cost Safety Improvements $105,000 Basic Access Improvements for Grounds/Events 164,870 Grounds Enhancement Improvements 363,500 Seawall Restoration 900,000 Total Basic Capital Improvements $1,533,370 As mentioned above and as presented in detail in Attachment 1, the Chapman Estate Strategic Plan outlines two alternatives for financially supporting the Chapman Estate: Alternative A includes 14 large events, 16 special purpose events, 10 facility rentals, 36 classes and the minimum amount, or $1,533,370, of capital improvements. This scenario requires approximately $111,750 per year in City General Fund support for the next 10 years, or a total of $1,117,504, assuming all other revenue estimates hold true. This assumes $1,003,750 in revenues generated from fundraising over 10 years. Alternative B includes 17 large events, 20 special purpose events, 20 short-term rentals, 10 facility rentals, 36 classes, and $2,546,721 of capital improvements. This scenario requires approximately $184,080 per year in City General Fund support for the next ten years, or a total of $1,840,796. The majority of these funds would be upfront to support capital improvement costs so that the larger events could take place. This scenario assumes $1,154,375 in revenues generated from fundraising over 10 years. Item 7.A Pg. 6

7 The General Fund contribution in both cases would be used to subsidize operating costs assuming an estate manager and professional fundraiser were hired for a total of $50,000 per year and support capital improvements. The City Council could direct that General Funds be used to support these costs, depending on the City Council s other priorities for these funds. Depending on the timing of the capital projects, City staff could explore the possibility of issuing debt to finance the improvements. A summary of Alternatives A and B are provided in the following table and detailed as Attachment 1. Alternatives A and B Revenues and Expenditures Over 10 Years Alternative A Alternative B Revenues Events $497,716 $637,150 Fundraiser 1,003,750 1,154,375 City Funds 1,117,504 1,840,796 Total Revenue $2,618,970 $3,632,321 Expenditures Operating Costs $585,600 $585,600 Estate & Fundraiser Manager 500, ,000 Basic Capital Costs 1,533,750 1,533,750 Other Site Improvements 598,351 Renovating Guest House 415,000 Total Expenditures $2,618,970 $3,632,321 ALTERNATIVES: 1. Accept the Chapman Estate Strategic Plan in its current form and direct staff to prepare a Resolution providing for its adoption at the next meeting. 2. Provide alternative direction to staff. ATTACHMENTS: 1. Detail: Alternatives A & B 2. Draft Chapman Estate Strategic Plan dated March 7, 2016 Prepared by: Matt Everling, Planning Manager Meeting Date: April 5, 2016 Approved by: Jeff Winklepleck, Community Development Director Acting City Manager Approval: Item 7.A Pg. 7

8 Attachment 1 CHAPMAN ESTATE STRATEGIC PLAN on the property, due to the limited number of overall events that are palatable to the community, such increases are not significant enough to make up for the extensive site-enhancement capital improvements outlined in initial cost estimates for the Estate. However, as net operating revenues under Alternative A are estimated to be negative, an annual public contribution to the Estate may be necessary. Table 10 - Feasibility Summary for Chapman Estate Alternatives PISMO BEACH, CALIFORNIA 41 Item 7.A Pg. 8

9 CHAPMAN ESTATE STRATEGIC PLAN March 7, 2016 Item 7.A Pg. 9

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11 TABLE OF CONTENTS 1 - Executive Summary Goals and Vision Recommendations Summary Site Overview and History Community Engagement Management and Oversight...17 MANAGEMENT ROLES AND RESPONSIBILITIES...17 CHAPMAN ESTATE communications Requirements for Specific Uses...21 ALL EVENTS & GATHERINGS AT THE CHAPMAN ESTATE: REQUIREMENTS...22 EVENTS OF 50 OR MORE PERSONS: ADDITIONAL REQUIREMENTS...23 EVENTS OF 100 OR MORE PERSONS: ADDITIONAL REQUIREMENTS...23 DESIGNATED FUNDRAISING EVENTS: ADDITIONAL REQUIREMENTS EVENTS Site Improvement Needs...27 Background Financial Strategy...31 Methodology...32 Event/Programmatic Revenue and Cost assumptions...33 Financial Feasibility findings...35 Operating Costs...35 Capital Improvements...36 Operating Revenue...38 Financial Results...40 Donor Funding Focus...42 Appendices...45 Appendix A - Role of the Chapman Estate Advisory Commission...45 Appendix B - Estate Uses suggested in stakeholder interviews...46 Appendix C - Market Demand For Estate Uses...49 Appendix D - Alternative Scenarios Cash Flows...51 Appendix E - Cost Source Materials...55 Appendix F CONDITIONAL USE PERMIT (R )...59 Item 7.A Pg. 11

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13 CHAPMAN ESTATE STRATEGIC PLAN 1 - EXECUTIVE SUMMARY Located on the bluffs overlooking San Luis Bay and the Pacific Ocean, the Chapman Estate was bequeathed to the City of Pismo Beach by Clifford Chapman who had owned the property since the early 1960 s; the City of Pismo Beach took ownership of this Estate located in the residential neighborhood of Shell Beach in January This bequest has created a new City owned facility for public use, and this Strategic Plan will address operations, maintenance, and fundraising goals and stewardship responsibilities for the property. The terms of Mr. Chapman s bequest to the City set the over-arching vision and high-level goals for the management for the Chapman Estate. The Strategic Plan set forth in this document is intended to provide more specific guidance commensurate with a City owned and operated facility. The bequest of the Chapman Estate to the City included specific conditions to be fulfilled as a condition of the ownership transfer to the City. The terms of the bequest included a provision for Mr. Chapman s longtime partner, Mr. Don Shidler, to reside in the home for as long as he chooses to live there. Mr. Chapman and Mr. Shidler hosted many philanthropic, artistic and community events over the years at the Estate. In keeping with this legacy of cultural philanthropy, the bequest also stipulated that the Estate should continue to be available, at no cost, for annual private fundraising events held on the Estate by Community Action Partnership of San Luis Obispo County (CAPSLO), the San Luis Obispo Symphony, and Opera San Luis Obispo. It was also Mr. Chapman s wish that the Estate be open for other events for public enjoyment, and that funds raised through the use of the Chapman Estate be used to offset maintenance and overhead costs. Several iconic buildings are located on the Estate, including a bluff-side windmill, a light house, and the English Tudor residence of Mr. Chapman and Mr. Shidler, which have established the Chapman Estate as a well-known feature of the Shell Beach community. The City has been given a unique bequest of incredible beauty and value, and the goal of preserving this historic jewel for public use and enjoyment presents both exciting opportunities and significant challenges. A primary opportunity for fundraising and hosting future events is maximizing the existing brand image of the property as cultural center for the community. As part of the City s responsibility for operating the Estate in accordance with the PISMO BEACH, CALIFORNIA 1 Item 7.A Pg. 13

14 CHAPMAN ESTATE STRATEGIC PLAN Attachment 2 bequest, the City faces the challenge of managing activities and events to be hosted on the Estate in a manner that is both appropriate for the site and the neighborhood, and fiscally self-sustaining to the extent possible. To this end, the objectives of the Chapman Estate Strategic Plan are to analyze the opportunities and challenges of managing the Estate, and to develop short and long term strategies. 2 PISMO BEACH, CALIFORNIA Item 7.A Pg. 14

15 CHAPMAN ESTATE STRATEGIC PLAN 2- GOALS AND VISION The Chapman Estate is a widely recognized feature of the Shell Beach community, Pismo Beach and the region. Through a thoughtful Estate management plan it can continue to be an asset and destination for the community, and remain a source of neighborhood pride and identity. Saving this unique historic jewel for public use through implementation of sensitive management policies and strategies to fund operation improvements will allow for continued enjoyment of this asset. The terms of Mr. Chapman s bequest set the over-arching vision and goals for the stewardship of the Estate. This strategic plan is intended to provide more specific operations and management guidance commensurate with a City owned and operated facility. The goals of this strategic plan for the stewardship, management and operation of the Chapman Estate are to: Provide the Community with access to and enjoyment of the Estate Continue the traditional use of the Estate for philanthropic events and open the Estate for public use and enjoyment Acknowledge the Estate s location in and sensitivity to the existing neighborhood Preserve and enhance the historic and cultural resources of the Chapman Estate Support the economic vitality of the community by encouraging patronage of and partnerships with local businesses Define roles and responsibilities for operation, management and oversight of the Estate Optimize maintenance and operating costs, and generate revenue to offset those costs Achieve fiscal sustainability for operations and maintenance within three to five years Cover capital improvement and deferred maintenance costs through targeted fundraising efforts PISMO BEACH, CALIFORNIA 3 Item 7.A Pg. 15

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17 CHAPMAN ESTATE STRATEGIC PLAN 3 - RECOMMENDATIONS SUMMARY The following recommendations for the Chapman Estate will maximize the potential of the City of Pismo Beach to: ensure the Estate is financially self-supporting and solvent to support its maintenance and operations, preservation, and renovation costs, continue the tradition of community events and open the Estate for public use and enjoyment, and ensure that the uses on the Estate are compatible with, and sensitive to, the surrounding residential neighborhood, coastal environment, and in compliance with the original terms of the bequest. The recommendations summarized in this chapter are found throughout the plan. The background, context and purpose of each recommendation is discussed more fully in the relevant sections of the chapters that follow. MANAGEMENT ROLES AND RESPONSIBILITIES RECOMMENDATION: Confirm the roles and responsibilities related to the Estate, as set forth in the following chart. INDIVIDUAL / ENTITY Chapman Estate Advisory Commission RESPONSIBILITIES City Commission charged with overseeing the Estate improvements and uses. Responsibilities detailed in the Appendices REPORTS TO / APPEALS Advises and reports to City Council. COMMENTS Commission is composed of a designated City employee, a member of the Shell Beach Improvement Group, a representative from the San Luis Obispo Arts Council, a representative of the San Luis Symphony Board, a representative from either a Garden Club or the Cal Poly Horticulture or Cal Poly Landscape Architecture Deptartments,a resident from the immediate neighborhood, and a member at large. Non voting members are a trustee of the Clifford W. Chapman Trust of 1986 and one member of the City Council. PISMO BEACH, CALIFORNIA 5 Item 7.A Pg. 17

18 CHAPMAN ESTATE STRATEGIC PLAN Attachment 2 INDIVIDUAL / ENTITY Special Events Committee (SEC) Estate Manager and Fundraiser Facility Manager City Staff RESPONSIBILITIES City body that reviews applications for any event of 50 or more persons to be held at the Estate, and issue Special Event Permit as appropriate. Evaluate the event and impose requirements of the CUP as well as other City requirements to assure that the quiet of the neighborhood is not disrupted. Staff or contract position to lead the fundraising efforts, coordinate events / programs at the Estate. Handles all coordination required to run the programmatic and fundraising elements associated with the Estate, including website management. Oversees day-to-day maintenance and upkeep of Estate and grounds. Coordinate various aspects of site management, improvement and maintenance REPORTS TO / APPEALS City Manager/ or designee City Manager/ or designee City Public Works Director City Manager/ or designee COMMENTS Committee is composed of professional fire, police, recreation and City staff, as well as two members from the community at large. One full-time, two half-time, or contracted position. Non-voting member of the CEAC. Mr. Shidler will serve as the initial facility manager. The position will transition to a part-time or full-time City Staff position as needed. City Manager/ or designee Events Recreation Manager Programming Public Works Director Maintenance and improvements Docents Council Volunteer organization engaged in fundraising, maintenance, program operations. Sub-committees support CEAC efforts on specific tasks. Estate Manager & Fundraiser / CEAC Docent Program Coordination Solicit volunteers Assist City Staff in preparation of training manual Coordinate efforts Event Coordination Arrange, advertise and manage gatherings and neighborhood events Fundraising Campaign Support Identify request message Develop promotional materials Define sponsorship levels and recognition programs Identify and solicit donors Track/thank donors Volunteer Days Define the scope of projects which can be undertaken by volunteers Solicit and conduct volunteers Organize and manage volunteer days Thank volunteers Volunteers Numerous items of maintenance and repairs may be undertaken by volunteers. While community members of garden clubs may participate in general garden clean up, for more specialized tasks, professional volunteers must be sought, such as an electrical contractor volunteering time for electrical repairs, or a pool company volunteering for pool repair. Estate Manager Policies and procedures need to be developed to define the scope of volunteer efforts and possible conflicts with permitting, laws and liability issues. Develop a formal process for recognizing the various levels of volunteer contributors (such as name plaques on site, volunteer recognition days, use of image in advertising, or commendation from the City). CHAPMAN ESTATE COMMUNICATIONS RECOMMENDATION: The City should develop and maintain a Chapman Estate page on the City website to facilitate management of the Estate. This page should include: A mission statement for the Chapman Estate A Cultural Jewel for the Central Coast (Mission Statement should define the message to be used with fundraising efforts) Information regarding the Estate, including location, history, site features, and access opportunities Calendar/schedule of events, gatherings, open days and any other access to the Estate Conditional use permit and any other terms & requirements for use of Estate 6 PISMO BEACH, CALIFORNIA Item 7.A Pg. 18

19 CHAPMAN ESTATE STRATEGIC PLAN On-line permit applications for use of the Estate Information to facilitate coordination regarding the SEC permit process List of qualified vendors/service providers Good neighbor policy Sign-up opportunity for any community member or member of the public to receive s or direct mails notifying them of the activities and events scheduled at the Estate Comment box to enable the public to provide comments, feedback, input, suggestions, or complaints regarding the Estate or any event held at the Estate Contact information for event organizers Evaluation form for event organizers to complete after an event, as required by permits REQUIREMENTS FOR USE OF THE CHAPMAN ESTATE RECOMMENDATIONS: REQUIREMENTS FOR ALL EVENTS & GATHERINGS AT THE CHAPMAN ESTATE Permits for the proposed use Insurance coverage including all vendors and naming the City of Pismo Beach as additionally insured. On-site supervision Compliance with noise ordinance Areas of site to be used must be designated in permit. Use of the swimming pool is prohibited. The area around the swimming pool may be used with City approval. Alcohol, if served, limited to wine and beer Use of qualified vendors/service providers, registered with Estate management and preferably local Booths, tents or canopies in lawn areas must be held down by sand or water bags - stakes are not permitted No pets Carpooling or non-motorized transportation encouraged to Estate and/or shuttle locations Parking on west side of Ocean Blvd., only Ocean Blvd. access to remain open at all times ADDITIONAL REQUIREMENTS FOR EVENTS OF 50 OR MORE PERSONS: Comply with the provisions of Pismo Beach Municipal Code section 12.16, concerning Special Events Submit application for permit from City Special Events Committee at least 60 calendar days prior to the event Provide insurance coverage for event and all vendors, naming City of Pismo Beach as additionally insured Include map indicating layout / location of all elements of the event, such as generators, sound systems, vendors and booths, tents, portable stage, etc. Provide shuttle transportation for attendees unless event is limited to neighbors. A circulation plan must be provided to assure that the wider Shell Beach streets are used for shuttle transport. Shuttle busses must not idle at the event site or in the neighborhood. Shuttle bus drivers will be encouraged to take breaks off-site. PISMO BEACH, CALIFORNIA 7 Item 7.A Pg. 19

20 CHAPMAN ESTATE STRATEGIC PLAN Attachment 2 Hours of events, including set up and clean up, shall be limited by terms of the permit. Events shall be held no earlier than 11 a.m., and guest departure no later than 7 p.m. or one half hour after sunset, whichever is earlier. Set up hours shall begin no earlier than 9:00 a.m., and clean up shall be no later than 9:00 p.m. Any music provided shall be live music Use of amplified sound only in designated areas Locate ticketing/check-in out of public right-of-way Provide Good-Neighbor notices to all attendees ADDITIONAL REQUIREMENTS FOR EVENTS OF 100 OR MORE PERSONS: Provide written transportation and parking plan for vendors, sponsors, volunteers, etc. Provide vendors, volunteers, etc. with site layout diagram and designated entry gate to facilitate set up and loading Provide on-site traffic coordinator for event Complete evaluation form regarding operation of the event ADDITIONAL REQUIREMENTS FOR DESIGNATED FUNDRAISING EVENTS: Maximum attendance at the annual June CAPSLO Epicurean fundraiser is 600, including vendors, musicians and volunteers. The annual Chapman Estate fundraiser, August Opera SLO and September San Luis Obispo Symphony fundraisers are each limited to 300 persons, including vendors. CAPSLO fundraiser: Due to its size, the annual CAPSLO fundraiser will have additional specific requirements delineated in the Special Events Permit, including shuttle routes and pickup locations, street parking restrictions for vendors, volunteers and staff, ticket table location, assistance with vendor loading and unloading, 2016 EVENTS Feedback should be collected from neighbors regarding the 2016 events to determine whether adjustments to operations, procedures or events are necessary. Depending on the size and nature of the event, feedback may be gathered by volunteers canvassing the Shell Beach Neighborhood, by sending postcards to solicit feedback, or by having a community liaison stationed at the event to take comments from neighbors. As it is proven that events may be held without disturbance to the Shell Beach Neighborhood, the use of the Estate may be increased. RECOMMENDATION: A feedback policy should be in place, particularly for large events, to determine whether adjustments to operations, procedures or events are necessary. Depending on the size and nature of the events, feedback may be gathered via the Estate website, by volunteers canvassing the Shell Beach Neighborhood, by sending postcards to solicit feedback, or by having a community liaison stationed at the event to take comments. As it is proven that events may be held without disturbance to the Shell Beach Neighborhood, the use of the Estate may be increased. 8 PISMO BEACH, CALIFORNIA Item 7.A Pg. 20

21 CHAPMAN ESTATE STRATEGIC PLAN SITE IMPROVEMENT NEEDS RECOMMENDATION: Some improvements are required to promote safe public access to the Estate and to comply with the Americans with Disabilities Act (ADA). These basic improvements should be undertaken using funds from the Chapman Estate, supplemented with funds from the City of Pismo Beach. Additionally, some immediate improvements are advisable to promote and facilitate the public use and enjoyment of the Estate. These improvements are illustrated on pages 20 and 21 of the report. FINANCIAL STRATEGY RECOMMENDATIONS: While it should be reiterated that further analysis is required to determine precise operating and capital costs, as well as to better inform operating revenue assumptions, based on the results of this initial financial analysis, EPS has determined that due to the limited event program desired by the community, a minimal capital investment program results in a more favorable operating scenario (Alternative A). While early capital investments in the property may result in some increase in revenues from events on the property, due to the limited number of overall events that are palatable to the community, such increases are not significant enough to make up for the extensive site-enhancement capital improvements outlined in initial cost estimates for the Estate. However, as net operating revenues under Alternative A are estimated to be negative, an annual public contribution to the Estate may be necessary. Adopt the Fiscal Strategy of Alternative A, which requires a lower level of capital investment to maintain the Estate as a public benefit. Expenses and costs recommended to be undertaken in the first 10 years include: OPERATING COSTS For the purposes of this analysis, both alternatives are expected to require similar operating expenditures. 1 Operating costs are assumed to total approximately $59,000 in annual maintenance and upkeep as shown in detail in Table 2 below. COST ITEM COST Landscaping and Water Feature Maintenance $ 4,200 Tree Trimming $ 3,000 House Cleaning and Upkeep $16,800 Utilities $16,800 Insurance $ 8,000 Contingency (20%) $ 9,760 Total Annual Operating Costs $58,560 Table 2 - Operating Cost Summary In addition, this analysis assumes $25,000 per year for both an Estate Manager and a Professional 1 It should be noted that certain capital improvements may increase or decrease operating demands. However, the limited scope of this analysis did not address these considerations and such conclusions would require additional evaluation. PISMO BEACH, CALIFORNIA 9 Item 7.A Pg. 21

22 CHAPMAN ESTATE STRATEGIC PLAN Attachment 2 Fundraiser 2 in order to effectively program the site and generate sufficient fundraising dollars to offset capital improvements. The total annual operating costs are estimated to be nearly $109,000. CAPITAL IMPROVEMENTS Under both alternatives (A and B), certain capital improvements are assumed to be funded within the first ten years of operation. These include basic safety improvements, basic ADA and parking access improvements to the site, restoration of certain iconic elements of the grounds such as the Lighthouse and pool (Ground Enhancement Improvements), and restoration of the seawall. A summary of these assumed costs is shown below in Table 3. 3 It must be emphasized that the capital improvement costs are based on estimates made in summer 2013, and that future costs at the time of implementation will likely be higher due to inflation, and to continuing aging and deterioration of the property. IMPROVEMENT ITEM ESTIMATED COST Safety Improvements $ 105,000 Basic Access Improvements for Grounds/Events $ 164,870 Grounds Enhancement Improvements $ 363,500 Seawall Restoration $ 900,000 Total Basic Capital Improvements $1,533,370 Table 3 - Basic Required Capital Improvements (Alternatives A & B) Safety Improvements - These include improvements needed to meet basic safety needs such as addressing termite and fungus problems for all buildings, installation of fire extinguishers, deferred electrical improvements, removal of various hazards on site, installation of improvements to heating, plumbing and electrical, installation of railings, and outbuilding repairs. For both alternatives, these costs are assumed to be required before more intensive utilization of the site or in year one of operations. Basic Access Improvements for Ground/Wedding - Summarized below in Table 4, Gates & Associates estimates access improvements to the eastern end of the site, which would provide additional parking for event guests, caterers and others utilizing the site, would total $60,000 and should be completed in year 1 for both alternatives. In addition, event access costs are estimated individually for four potential event locations on the grounds. The total event access improvements are estimated to be approximately $165,000 for basic ADA access improvements. IMPROVEMENT ITEM COST Parking Lot $ 60,000 Event Access Location 1 (lower front lawn) $ 20,850 Event Access Location 2 (upper front lawn) $ 14,250 Event Access Location 3 (western ocean terrace) $ 13,550 Event Access Location 4 (promontory) $ 56,220 Total Parking and Event Access $164,870 2 It is assumed that the Estate Manager and Professional Fundraiser would comprise a single, full-time equivalent employee and that such a staff member would be required both to facilitate the level of usage assumed under both Alternatives as well as to generate the fundraising income assumed in this analysis. 3 Note these costs are basted on estimates provided in 2013 and will need to bae confirmed and adjusted for inflation. Note revenues will also need to be adjusted for inflation. 10 PISMO BEACH, CALIFORNIA Item 7.A Pg. 22

23 CHAPMAN ESTATE STRATEGIC PLAN Table 4 - Site Access Parking Lot / Event Access Grounds Enhancement Improvements - This improvement category includes rehabilitation of iconic elements of the property including the windmill and pool. While these improvements will not enable new or more events of various types, they will enhance the property and may result in better marketability and higher rental rates for events such as weddings and/or fundraisers. These improvements are assumed to be supported by a capital campaign and take place in year 3 of operations under both alternatives. The individual components of this capital item are shown below in Table 5. IMPROVEMENT ITEM COST Windmill $ 35,000 Greenhouse $ 20,000 Pavilion $ 15,000 Lighthouse $ 20,000 Existing Bathroom $ 7,500 Pool - Infill to create Terrace $ 50,000 Flat Work / Site Work $ 62,000 Landscaping $ 80,000 Electrical $ 74,000 Total Grounds Enhancement Improvements $ 363,500 Table 5 - Grounds Enhancement Improvements DONOR FUNDING FOCUS RECOMMENDATIONS: Retain a person or firm to develop and manage a funding campaign. The fundraising strategy should include annual giving (to address operation/maintenance costs) and develop capital campaigns to undertake major repairs and improvements. Fundraising campaign should include identification and pursuit of grant funding opportunities for cultural, historic, public access, education, park improvement and other aspects of the Estate. Retain site/program manager to develop and manage public access to the Estate. Develop signage as the entry to Chapman Estate which would; Acknowledge the gift from Mr. Chapman Provide basic information about public access to Estate (consider use of QR code to link to website with more information about estate) Serve as a location for notice posting and contact information Explore off-site fundraising opportunities such as events at other venues, on-line campaigns, and product sales. Off-site fundraisers could include events such as a winemaker dinner at a local winery, benefit night a a local theater, a golf tournament or a 5K Fun Run through Pismo Beach. Create partnerships with local businesses and community members to develop public access via classes at the Estate (yoga, painting, gardening and lectures). Explore opportunities to generate revenue and exposure to potential donors with wine maker dinners, garden luncheons, classical/jazz music dinners, etc. There are numerous events in the region PISMO BEACH, CALIFORNIA 11 Item 7.A Pg. 23

24 CHAPMAN ESTATE STRATEGIC PLAN Attachment 2 such as Savor the Central Coast, Jubilee by the Sea Jazz Festival, Bubblyfest by the Sea, Morro Bay Music Festival, etc. which could be partners for premier, limited access special fundraising events at the Estate. 12 PISMO BEACH, CALIFORNIA Item 7.A Pg. 24

25 CHAPMAN ESTATE STRATEGIC PLAN Figure 14: Main House mid-1930s 4 SITE OVERVIEW AND HISTORY The Chapman Estate is a well-known feature of the Pismo Beach community. The Estate is located at 1243 Ocean Boulevard, in the predominantly single family, medium density residential neighborhood of Shell Beach. Total acreage of the Estate is approximately one and one half acres, which was established by consolidating seven ocean front residential lots. The properties were acquired and developed over a period of years beginning in 1929 through 1946 by Arthur J. Rogers, who founded the Navy Oil Corporation in California s Central Valley. Rose and Clifford Chapman purchased the lots comprising the current Estate in 1963 and Clifford Chapman lived at the Estate with his mother Rose until her death in 1989, and with Mr. Don Shidler from 1963 until Mr. Chapman s death in The Chapman Estate is located in the Shell Beach neighborhood, the City s General Plan/ Local Coastal Plan Area H (Figure LU-11). The Estate s land use designation is low density residential, with medium density residential across Ocean Blvd., and open space along the nearby bluffs to the north and south. It is located among a variety of homes ranging from small bungalows to large newer houses. The Estate s location along the bluffs of the Pacific Coast provides natural beauty impossible to replicate. Its location, combined with the beauty of the Estate s buildings, grounds and gardens make it an extraordinary property. The Estate is comprised of several iconic buildings which were built at various times over a period of many years. The Guest House is the oldest building on the property, and was probably constructed between 1910 and What is now the Main House, an English Tudor mansion, was built in The swimming pool, the seawall, as well as stone garden walls were built in the early to mid-1930 s, as was the Windmill. The Estate is sometimes referred to by locals as The Windmill House due to the visibility of the bluff-side windmill, which was originally used to pump seawater to the swimming pool; the pool water was heated by flowing a thin stream of water over terra cotta tiles which absorbed heat. A lighthouse and the stone garage were built in the late 1940 s. Additional renovations and additions were made to the buildings and grounds after Mr. Chapman s purchase of the property, including landscaping, stone and brick garden walls and walks, the Begonia House (where Rose Chapman raised prizewinning begonias), Koi Pond and Pavilion of One Thousand Moons, and exterior restrooms. These features allowed the Estate to comfortably host large gatherings and events. PISMO BEACH, CALIFORNIA 13 Item 7.A Pg. 25

26 CHAPMAN ESTATE STRATEGIC PLAN Attachment 2 Pismo Beach General Plan Shell Beach Planning Area The Chapman Estate served as a cultural and philanthropic center for the community for many years. The artists, writers and performers that were invited to speak, perform and stay at the Chapman Estate by Mr. Chapman and Mr. Shidler included Ray Bradbury, Colleen Moore, Audra McDonald, Clare Booth Luce, Ralph Morrison, Elizabeth MacQueen, Dody Goodman, Richard Yako, Katherine Ryan Hyde and Mstislav Rosptropovich. Additionally, the neighborhood was invited to numerous holiday events, such as the well-loved Celebrate America July 4th celebrations. Over the years, Mr. Chapman and Mr. Shidler also hosted annual charitable events for the Community Action Partnership of San Luis Obispo County (CAPSLO), the San Luis Obispo Symphony, and the San Luis Obispo Opera. These events were enjoyed by many hundreds of attendees, and raised significant funds for those organizations. As was Clifford Chapman s desire that the Estate continue to be used for philanthropic events and for public enjoyment, he bequeathed the Estate to the City of Pismo Beach. After his passing in 2012, the City of Pismo Beach gave serious consideration to the bequest, and accepted ownership of the Estate as of January 1, As per the conditions of the bequest, Mr. Shidler continues to reside in the Estate home under a residential lease with the City. The lease agreement states that its intent is to provide for use of the Premises and the Property in substantially the same manner as they were used prior to the death of Clifford W. Chapman. It further states that Tenant and City shall each use their best efforts to cooperate with each other to carry out that intention during the term of this Lease. Additional details of the history of the Estate, its surroundings and its owners, can be found in: Cultural Resources Assessment, 2013, Rebecca Loveland Anastasio. 14 PISMO BEACH, CALIFORNIA Item 7.A Pg. 26

27 CHAPMAN ESTATE STRATEGIC PLAN 5 COMMUNITY ENGAGEMENT Since the bequest was made by Mr. Chapman, the City has actively sought the community s input in its considerations of acceptance of the Estate ownership, and of the activities and uses that are appropriate on the site. Prior to accepting ownership of the Estate, the City held public hearings and provided opportunities for community input including City Council Meetings of November 5, 2013 and December 3, After acceptance of ownership, the City Council also established the Chapman Estate Advisory Commission (CEAC) to act as an advisory group on matters related to the Estate. Proceedings of the CEAC are formally noticed and recorded public meetings. The responsibilities of the CEAC are listed in the Appendix A. Due to its location in a residential community, a Conditional Use Permit (CUP), or re-zoning is required for non-residential uses of the Estate. The Pismo Beach Planning Commission held public hearings on May 27 and June 24, 2014, and after consideration of the recommendations of CEAC and the Parks, Recreation and Beautification Commission (PRBC) and extensive public comment, approved a CUP for events on the Estate grounds for fundraising and community events, designating a maximum number of people. While developing the CUP to govern use of the Estate for specified public events or gatherings, input was solicited from a significant number of community members, via surveys, in-person and phone interviews. Some neighbors in the Shell Beach neighborhood expressed significant concerns with the proposed level of usage. Primary concerns of community members regarding the CUP were related to traffic congestion, parking on small residential streets, and funding needed for the Estate improvements. An amendment to the CUP allow the CAPSLO fundraising event to be held at its historic size (600 people), was upheld by the City Council on May 5, The current CUP is included as an Appendix F. The CAPSLO Afternoon of Epicurean Delights event was held on June 7, Under the terms of the CUP, extensive public notice was given and input sought. Notification was sent to 889 Shell Beach residents prior to the event, a liaison was present during the event to address any neighborhood issues, and an evaluation survey was sent to 889 Shell Beach residents as well as to all event attendees for input after the event. No residents responded to the pre-event mailing, and not one complaint was received after the event. PISMO BEACH, CALIFORNIA 15 Item 7.A Pg. 27

28 CHAPMAN ESTATE STRATEGIC PLAN Attachment 2 In July 2015, Gates + Associates contacted 60 stakeholders to schedule in-person and phone interviews. The stakeholders included Shell Beach neighbors, Pismo Beach residents, and other people who had expressed interest or concern regarding proposed activities on the Estate. Twenty seven stakeholders were interviewed on July 31 and August 1, 2015 on the Estate grounds. Input was gathered on the stakeholders opinions about appropriate uses for the Estate, appropriate frequency and intensity of use, concerns about impacts, and ideas about sources of funding to maintain the Estate as a public asset. While some stakeholders expressed ongoing concerns about potential impacts to the neighborhood, there was a range of opinions regarding the types, frequency and intensity of access to the Estate, but the prevailing sense was that the Estate is a special place that should be preserved and enjoyed. A list of events and uses that were mentioned, as well as other comments made during these interviews is attached as Appendix B. A joint workshop with the Chapman Estate Advisory Commission, Park and Recreation Commission and Community was conducted on August 31, At the workshop, revenue generating options to address cost of Estate maintenance and repairs were discussed. The direction received included: Emphasize sponsorship/donations for capital improvements. Develop revenue stream to offset operations costs with limited number of events. Develop, define & describe the role of Friends of the Estate, and hire a dedicated estate program manager to get sponsors. Provide public access through classes and regular limited tours of the Estate. Get the public access to the Estate as soon as possible.. 16 PISMO BEACH, CALIFORNIA Item 7.A Pg. 28

29 CHAPMAN ESTATE STRATEGIC PLAN 6- MANAGEMENT AND OVERSIGHT MANAGEMENT ROLES AND RESPONSIBILITIES The terms of Mr. Chapman s bequest set the vision to guide the stewardship and management of the Chapman Estate. To supplement Mr. Chapman s vision, this Strategic Plan will set forth more specific management criteria and responsibilities for the City to ensure the Estate can continue to be maintained and operated for the benefit of the community. As a City asset with unique opportunities and challenges, management of the Estate requires the involvement and oversight of a range of City advisory bodies and staff. A governance structure and communication protocols must be clearly defined. RECOMMENDATION: Confirm the roles and responsibilities related to the Estate, as set forth in the following chart. JOIN US FOR A STUDY SESSION FOR THE CHAPMAN ESTATE STRATEGIC MASTER PLAN CITY COUNCIL CHAMBERS 760 MATTIE ROAD PISMO BEACH, CALIFORNIA MONDAY AUGUST 31, :30 PM - 8:00 WE WILL REVIEW ISSUES, OPPORTUNITIES AND OPTIONS FOR THE PRESERVATION, USE, FUNDRAISING AND MANAGEMENT OF THE CHAPMAN ESTATE. CHAPMAN E S T A T E PRESERVATION CONNECTING PAST & FUTURE PISMO BEACH, CALIFORNIA 17 Item 7.A Pg. 29

30 CHAPMAN ESTATE STRATEGIC PLAN Attachment 2 INDIVIDUAL / ENTITY Chapman Estate Advisory Commission Special Events Committee (SEC) Estate Manager and Fundraiser Facility Manager City Staff RESPONSIBILITIES City Commission charged with overseeing the Estate improvements and uses. Responsibilities detailed in the Appendices City body that reviews applications for any event of 50 or more persons to be held at the Estate, and issue Special Event Permit as appropriate. Evaluate the event and impose requirements of the CUP as well as other City requirements to assure that the quiet of the neighborhood is not disrupted. Staff or contract position to lead the fundraising efforts, coordinate events / programs at the Estate. Handles all coordination required to run the programmatic and fundraising elements associated with the Estate, including website management. Oversees day-to-day maintenance and upkeep of Estate and grounds. Coordinate various aspects of site management, improvement and maintenance REPORTS TO / APPEALS Advises and reports to City Council. City Manager/ or designee City Manager/ or designee City Public Works Director City Manager/ or designee COMMENTS Commission is composed of a designated City employee, a member of the Shell Beach Improvement Group, a representative from the San Luis Obispo Arts Council, a representative of the San Luis Symphony Board, a representative from either a Garden Club or the Cal Poly Horticulture or Cal Poly Landscape Architecture Deptartments,a resident from the immediate neighborhood, and a member at large. Non voting members are a trustee of the Clifford W. Chapman Trust of 1986 and one member of the City Council. Committee is composed of professional fire, police, recreation and City staff, as well as two members from the community at large. One full-time, two half-time, or contracted position. Non-voting member of the CEAC. Mr. Shidler will serve as the initial facility manager. The position will transition to a part-time or full-time City Staff position as needed. City Manager/ or designee Events Recreation Manager Programming Public Works Director Maintenance and improvements Docents Council Volunteer organization engaged in fundraising, maintenance, program operations. Sub-committees support CEAC efforts on specific tasks. Estate Manager & Fundraiser / CEAC Docent Program Coordination Solicit volunteers Assist City Staff in preparation of training manual Coordinate efforts Event Coordination Arrange, advertise and manage gatherings and neighborhood events Fundraising Campaign Support Identify request message Develop promotional materials Define sponsorship levels and recognition programs Identify and solicit donors Track/thank donors Volunteer Days Define the scope of projects which can be undertaken by volunteers Solicit and conduct volunteers Organize and manage volunteer days Thank volunteers Volunteers Numerous items of maintenance and repairs may be undertaken by volunteers. While community members of garden clubs may participate in general garden clean up, for more specialized tasks, professional volunteers must be sought, such as an electrical contractor volunteering time for electrical repairs, or a pool company volunteering for pool repair. Estate Manager Policies and procedures need to be developed to define the scope of volunteer efforts and possible conflicts with permitting, laws and liability issues. Develop a formal process for recognizing the various levels of volunteer contributors (such as name plaques on site, volunteer recognition days, use of image in advertising, or commendation from the City). Management Roles and Responsibilities 18 PISMO BEACH, CALIFORNIA Item 7.A Pg. 30

31 CHAPMAN ESTATE STRATEGIC PLAN CHAPMAN ESTATE COMMUNICATIONS Develop a systematic transparent, consistent protocol for notifying and soliciting neighborhood input on estate events to encourage neighborhood input and facilitate tracking of the input. The City website should be the primary means of communication regarding events and activities at the Estate. Opportunity must be provided for the neighbors and other interested persons who do not access the Internet to be informed of those Estate activities. RECOMMENDATION: The City should develop and maintain a Chapman Estate page on the City website to facilitate management of the Estate. This page should include: A mission statement for the Chapman Estate A Cultural Jewel for the Central Coast (Mission Statement should define the message to be used with fundraising efforts) Information regarding the Estate, including location, history, site features, and access opportunities Calendar/schedule of events, gatherings, open days, and any other access to the Estate Conditional use permit and any other terms & requirements for use of Estate On-line permit applications for use of the Estate Information to facilitate coordination regarding the SEC permit process List of qualified vendors/service providers Good neighbor policy Sign-up opportunity for any community member or member of the public to receive s or direct mails notifying them of the activities and events scheduled at the Estate Comment box to enable the public to provide comments, feedback, input, suggestions, or complaints regarding the Estate or any event held at the Estate Contact information for event organizers Evaluation form for event organizers to complete after an event, as required by permits PISMO BEACH, CALIFORNIA 19 Item 7.A Pg. 31

32 CHAPMAN ESTATE STRATEGIC PLAN Attachment 2 This page intentionally left blank. 20 PISMO BEACH, CALIFORNIA Item 7.A Pg. 32

33 CHAPMAN ESTATE STRATEGIC PLAN 7 REQUIREMENTS FOR USE OF THE CHAPMAN ESTATE The Estate and grounds can accommodate a wide range of events, programs and gatherings. Use of the Chapman Estate is currently governed by the terms of a Conditional Use Permit (CUP). As a result of this Strategic Plan, a new Conditional Use Permit will be required to refine and elaborate upon the existing conditional use permit that is scheduled to expire December 24, Under the CUP, there are four annual major events allowed at the Estate: fundraisers for CAPSLO, the San Luis Obispo Symphony and the Opera San Luis Obispo, and a fundraising event for the Estate itself. Since the City accepted ownership of the Estate, several events have taken place pursuant to the CUP, including the June 7, 2015 CAPSLO benefit with 450 paid attendees and 150 vendors, musicians, volunteers and staff, the Broadway by the Sea benefit for the Opera San Luis in August 2015 with participation of 300 persons, and volunteer gardening days involving a small number of local residents. The City has learned to manage these events to reduce impacts on the neighborhood. Lessons learned from successful management of these events provide a framework for continued use of the Estate, and should be formalized as adopted policy. Requirements for use of the Chapman Estate are set forth in this chapter. Future CUP s or permitting processes should be guided by these requirements. PISMO BEACH, CALIFORNIA 21 Item 7.A Pg. 33

34 CHAPMAN ESTATE STRATEGIC PLAN Attachment 2 RECOMMENDATIONS: ALL EVENTS & GATHERINGS AT THE CHAPMAN ESTATE: REQUIREMENTS Permits for the proposed use Insurance coverage including all vendors and naming the City of Pismo Beach as additionally insured On-site supervision Compliance with noise ordinance Areas of site to be used must be designated in permit. Use of the swimming pool is prohibited. The area around the swimming pool may be used with City approval. Alcohol, if served, limited to wine and beer Use of qualified vendors/service providers, registered with Estate management and preferably local Booths, tents or canopies in lawn areas must be held down by sand or water bags - stakes are not permitted No pets Carpooling or non-motorized transportation encouraged to Estate and/or shuttle locations Parking on west side of Ocean Blvd., only Ocean Blvd. access to remain open at all times 64 Parking Spaces on West Side of Ocean Blvd. 22 PISMO BEACH, CALIFORNIA Item 7.A Pg. 34

35 CHAPMAN ESTATE STRATEGIC PLAN EVENTS OF 50 OR MORE PERSONS: ADDITIONAL REQUIREMENTS Comply with the provisions of Pismo Beach Municipal Code section 12.16, concerning Special Events Submit application for permit from City Special Events Committee at least 60 calendar days prior to the event Include map indicating layout / location of all elements of the event, such as generators, sound systems, vendors and booths, tents, portable stage, etc. Shuttle transportation for attendees Iis encouraged unless event is limited to neighbors. If shuttles are used, a circulation plan must be provided to ensure that the wider Shell Beach streets are used for shuttle transport. Shuttle busses must not idle at the event site or in the neighborhood. Shuttle bus drivers will be encouraged to take breaks off-site. Hours of events, including set up and clean up, shall be limited by terms of the permit. Use of amplified sound only in designated areas Locate ticketing/check-in out of public right-of-way Provide Good-Neighbor notices to all attendees EVENTS OF 100 OR MORE PERSONS: ADDITIONAL REQUIREMENTS Provide shuttle transportation for attendees unless event is limited to neighbors. See requirements above above regarding circulation plan, prohibition on idling, and driver breaks. Provide written transportation and parking plan for vendors, sponsors, volunteers, etc. Provide vendors, volunteers, etc. with site layout diagram and designated entry gate to facilitate set up and loading Provide on-site traffic coordinator for event Complete evaluation form regarding operation of the event PISMO BEACH, CALIFORNIA 23 Item 7.A Pg. 35

36 CHAPMAN ESTATE STRATEGIC PLAN Attachment 2 DESIGNATED FUNDRAISING EVENTS: ADDITIONAL REQUIREMENTS Maximum attendance at the annual June CAPSLO Epicurean fundraiser is 600, including vendors, musicians and volunteers. The annual Chapman Estate fundraiser, August Opera SLO and September San Luis Obispo Symphony fundraisers are each limited to 300 persons, including vendors. CAPSLO fundraiser: Due to its size, the annual CAPSLO fundraiser will have additional specific requirements delineated in the Special Events Permit, including shuttle routes and pickup locations, street parking restrictions for vendors, volunteers and staff, ticket table location, and assistance with vendor loading and unloading EVENTS The conditions of the current CUP allow for annual fundraisers for CAPSLO (600 attendee maximum), and fundraisers for the Chapman Estate, the Opera San Luis Obispo and the San Luis Obispo Symphony (all 300 attendee maximums). There are 16 specific provisions that apply to the CAPSLO event due to its size, including such things as traffic coordination, notification to the Shell Beach neighborhood, parking and shuttle provisions, and other event logistics. In addition to these four annual fundraisers, the CUP allows for three (3) free Community Events with 100 persons or less, and six (6) Gatherings (defined as groups of 49 or fewer persons at one time on the Chapman Estate Grounds for social, educational, philanthropic or training get-togethers). All events to be held at the Estate, other than the Gatherings, are also subject the requirements of a Special Event Permit. The CUP further defines conditions for shuttles and parking, limitation of alcohol to beer and wine, limitation of events to daylight hours, and submittal of a written evaluation after each event. The current CUP is provided as an attachment to this report. Recent events held under the existing CUP policies and guidelines have been positively received by the 24 PISMO BEACH, CALIFORNIA Item 7.A Pg. 36

37 CHAPMAN ESTATE STRATEGIC PLAN community. The June 7, 2015 Afternoon of Epicurean Delights, the annual fundraising event for CAPSLO, was attended by 450 paying guests, 98 vendors (49 purveyors with 2 staff each), 16 musicians and 28 volunteers. Notification was sent to 889 Shell Beach residents prior to the event, a liaison was present during the event to address any neighborhood issues, and an evaluation survey was sent to 889 Shell Beach residents as well as to all event attendees for input after the event. No residents responded to the pre-event mailing, and not one complaint was received after the event. From the 5 non-attending neighbors who did respond to the post-event survey, there were no negative comments. Stakeholders interviewed after the event agreed that the event had been run professionally without impacts to the neighborhood, in contrast to previous years. Several commented that their neighbors were not aware that the event was even taking place. The following comments reflect the improved operations of the largest event held at the Estate: I live right on Ocean Blvd., two doors down from the Chapman residence. In past years, it s been a total nightmare of congested traffic and parking throughout the neighborhood any time this event has taken place, really impacting all of the neighboring area residents. This past Epicurean Delights event was just perfect! There was no congestion of vehicle and pedestrian traffic, nor was parking even an Issue. Well done!! (Survey respondent) We would like to commend you all for respecting our neighborhood during the latest Epicurean Delights held June 7, Yesterday was stellar for the neighborhood, no car doors slamming, traffic was non-existent, vendors got in and out in an orderly manner, the shuttles were orderly and did their job swiftly. If we were not aware of this huge event in advance, we would never know it was happening. This was the best-planned event at the Chapman house we have witnessed in our 35 years as a resident on Ocean Boulevard. Thank you all City Council members, planning department, and Volunteers of Epicurean Delights. We would like to see these future events carried out in the same manner. Thank you all! (Neighbors within one block of the Estate who had previously written in opposition to events at the Estate) From the uniformly positive feedback received of the 2015 CAPSLO event, it is evident that the City has taken neighborhood concerns seriously and developed effective strategies to avoid negative impacts to the Shell Beach community. Going forward, the valuable lessons learned and operational policies that have been developed provide solid guidance for avoiding impacts to surrounding neighbors and maintaining the character of the residential neighborhood. PISMO BEACH, CALIFORNIA 25 Item 7.A Pg. 37

38 CHAPMAN ESTATE STRATEGIC PLAN Attachment 2 Planning and conducting the 2016 events to be identified in the CUP will demonstrate that the event operation protocols address neighborhood concerns. It will allow the operations and frequency of events to be further evaluated and tailored to best meet the goals of providing public benefit, garnering funding support to preserve the Estate, and protecting the neighborhood. Future events might include: o Designated annual fundraising events (CAPSLO, Opera SLO, SLO Symphony, Chapman Estate) o Community events such as: Local Artists Show Mr. Chapman Birthday Celebration Holiday Tree Lighting Mothers Day Garden Party Garden Party Halloween Party Winter and Spring Celebrations o Revenue generating events such as: Limited size weddings or reunions o Gatherings for less than 50 people such as: Garden Luncheons and Wine Maker dinners linked to local events such as Bubbly Fest, Shell Beach Art Walk, Jubilee by the Sea, Annual Orchard Show, Morro Bay Music Festival Classes or seminars in partnership with local organizations and business such as Studios on the Park, Cuesta College, Morro Coast Audubon Society, Seaside Gallery RECOMMENDATION: A feedback policy should be in place, particularly for large events, to determine whether adjustments to operations, procedures or events are necessary. Depending on the size and nature of the events, feedback may be gathered via the Estate website, by volunteers canvassing the Shell Beach Neighborhood, by sending postcards to solicit feedback, or by having a community liaison stationed at the event to take comments. As it is proven that events may be held without disturbance to the Shell Beach Neighborhood, the use of the Estate may be increased. 26 PISMO BEACH, CALIFORNIA Item 7.A Pg. 38

39 CHAPMAN ESTATE STRATEGIC PLAN New DG Path 8- SITE IMPROVEMENT NEEDS BACKGROUND Mr. Chapman bequeathed the Estate to the City, along with an endowment of approximately $300,000. To determine whether or not to accept ownership of the Chapman Estate, the City commissioned a variety of technical reports to determine the condition of the Estate buildings, structures and grounds. The reports included: Accessibility Survey & Report (Central Coast Access Specialists, LLC, 8/14/13) Arborist Report (Bunyon Bros., 8/9/13) Shoreline Stabilization Recommendations Report (Terra Costa, 7/15/13)) Chimney Inspection Report (Big Steve s Chimney Service, 8/21/13) Cultural Resources Assessment (Rebecca Loveland Anastasio, 11/13) Spore Report (Nation Laboratories, 7/29/13) Home Inspection Reports Main House and Out-Buildings (Action Home Inspection Service, 8/13-15/13) Mold Inspection Report (Environmental Services, 7/23/13) Swimming Pool Inspection Report (Accurate Leak Detection, 8/17/13) Wood Destroying Pests and Organisms Inspection Report (Western Exterminator Company, 7/22/13) When ownership of the Estate was transferred to the City as of January 1, 2014, the City appropriated $192,000 of the endowment funds to maintain the Estate property, and to initiate repairs and improvements to address health, safety and accessibility needs. Currently the City utilizes contract services, Public Works crews, and volunteers to maintain the Estate Grounds. The technical reports previously noted revealed the need for immediate repair and improvements to the property. Various categories of capital costs are summarized in Chapter 8 - Financial Strategy, and cost estimates with further detail, obtained by the City in late 2013, are provided in Appendix F. PISMO BEACH, CALIFORNIA 27 Item 7.A Pg. 39

40 CHAPMAN ESTATE STRATEGIC PLAN Attachment 2 RECOMMENDATION: Some improvements are required to promote safe public access to the Estate and to comply with the Americans with Disabilities Act (ADA). These basic improvements should be undertaken using funds Ramp with adjusted landscape MAIN HOUSE OUTLOOK Handrail at Stairs Ramp with adjusted landscape Basic Access Improvements for Grounds 28 PISMO BEACH, CALIFORNIA Item 7.A Pg. 40

41 CHAPMAN ESTATE STRATEGIC PLAN from the Chapman Estate, supplemented with funds from the City of Pismo Beach. Additionally, some immediate improvements are advisable to promote and facilitate the public use and enjoyment of the Estate. These improvements are illustrated on this and the previous page. Gravel Paving Landscape to be adjusted BEGONIA HOUSE KOI PAVILION Handicapped Parking with path connecting to existing path Concrete Paving Loading Area Restroom Ramp with retaining wall GUEST HOUSE POOL Replace planting with Herb Garden Connecting Path Repair Path and maintain 5 width Ramp with retaining wall and adjusted landscape Break Wall for Path Retaining Wall and adjusted landscape Basic Access Improvements for Grounds PISMO BEACH, CALIFORNIA 29 Item 7.A Pg. 41

42 CHAPMAN ESTATE STRATEGIC PLAN Attachment 2 The City has completed a number of repairs and improvements in the short term to enable continued occupancy of the Chapman House for Mr. Shidler and for ADA access to the grounds. Access and other improvements have included: Curb cut for property access Ramp from curb cut to Koi Pond Widening the walkway (from curb cut to Koi Pond) Widening walkway on south side of Koi Pond Installing a decomposed granite path and pad to place ADA accessible port-a-potties A new ADA compliant gate Window replacement Tree trimming and landscape maintenance. A variety of repairs or improvements are needed for health and safety, and for preservation of the Estate as a City asset, including but not limited to: Foundation and Support (concrete stem wall, subfloor insulation) Exterior components (door, window, stucco repair) Grounds and Drainage (safety rails at bluff edge, stair rail and loose bricks, stairway repairs) Roofing (leak repairs, downspout fitting replacements, improved rain gutters, attic ventilation) Plumbing, water heater, fuel gas system and heating and cooling systems (shut off leak repair, inadequate drainage, flue and gas pipe repairs) Electrical system (improved amp service, GFCI improvements, repair of ungrounded outlets) Fireplace and Chimneys (cleanout repair and needed masonry and spark arrestors) Miscellaneous repairs due to age/ decay (window replacement, bathroom ventilation, termite damage, handrails, safety rails, etc) There are also major required site improvements such as repair of the windmill and begonia house, renovations of guest house and restroom, repair of the sea wall, and ultimately upgrades to the house when it becomes available for public use. This magnitude of costs for major improvements will need to be addressed with major fundraising campaigns as described in the Financial Strategy Chapter. Fundraising campaigns should be carefully designed including seeking major donors to undertake specific projects. The various classifications of maintenance and operations costs, improvements, enhancements and repairs are discussed further in the Financial Strategy Chapter that follows. It must be recognized, however, that the City will need to subsidize overall costs, as it does for parks and facilities that are public resources that benefit the community. 30 PISMO BEACH, CALIFORNIA Item 7.A Pg. 42

43 CHAPMAN ESTATE STRATEGIC PLAN 9 - FINANCIAL STRATEGY The initial assessment of financial feasibility for the Chapman Estate, assuming increased use of the site for a range of events and programs, looked at the relationship between capital investments and potential operating revenues. This analysis assesses the feasibility of two scenarios: Alternative A and Alternative B. Alternative A assesses the property s operating economics given only necessary capital improvements be completed within the first ten years of operations. 1 Alternative B evaluates the potential benefit to the property s operating economics given a series of site-enhancing capital improvements. 2 To inform needed revenue and costs assumptions for their analysis, EPS conducted a series of interviews with local event planners, venue operators and hospitality professionals. In addition, EPS also conducted supplemental market research. The results of this analysis indicate that given the limited programmatic scope desired by the community (smaller to medium scale events held at below-market frequency), operating revenues will likely either operate with an annual deficit (under Alternative A) or barely offset annual operating costs (under Alternative B), depending upon the level of capital improvements completed. 1 Necessary or basic capital improvements include basic safety improvements, basic ADA and parking access improvements to the site, restoration of certain iconic elements of the grounds such as the Lighthouse and pool, and restoration of the seawall. 2 Site enhancing capital improvements include restoration of the guesthouse, construction of a kitchen and restroom facility on the grounds, and more extensive access improvements to better facilitate, and market for, weddings and other venues. PISMO BEACH, CALIFORNIA 31 Item 7.A Pg. 43

44 CHAPMAN ESTATE STRATEGIC PLAN Attachment 2 METHODOLOGY In order to establish a program both economically viable and community-oriented, EPS took into consideration an initial list of ideas publicly voiced in various Joint Study Sessions. These ideas represent a healthy assortment of programs that both promote community access to the site (classes and cultural enhancement programs) and to help to offset the operating costs of preserving the Estate (weddings, fundraisers, wine events, etc.). This preliminary list is organized into broader categories of Large Events, Limited Size Neighborhood Events, Special Purpose Center, Reunions, Garden Parties/Luncheons, and Short-Term Rental based on the program s size and scope. Based on community input that outlined an acceptable programmatic range (both regarding the number and size of events per year) that can both mitigate neighborhood disturbances and allow significant community access to the site. This pared-down program is illustrated below in Table 1. Table 1 - Refined List of Potential Event/Program Types 32 PISMO BEACH, CALIFORNIA Item 7.A Pg. 44

45 CHAPMAN ESTATE STRATEGIC PLAN LEVEL OF USAGE Level of usage for the Estate will be a significant factor in determining potential net event operating revenue. While market forces will certainly play a role both in potential programming options and event frequency for certain Estate uses, based on initial community feedback, it appears that the Estate s level and type of usage will primarily be determined/limited by community goals. Accordingly, this analysis bases frequency and programmatic assumptions on input from Joint Commissions Meetings and community input. This input suggests that, due to concerns on neighborhood disruption, the analysis is based on medium- to large-scale events be limited to nine programs per year, excluding the three preapproved fundraisers. 3 Understanding these community preferences, EPS developed operating scenarios with a maximum of nine medium to large-scale events and incorporated as many high revenue event types as possible to maximize potential operating revenues. EVENT/PROGRAMMATIC REVENUE AND COST ASSUMPTIONS After gaining a comprehensive understanding of the community s interests, EPS conducted interviews with local event planners and staff of similar venues to determine the costs and revenue assumptions of comparable event spaces. These interviews were supplemented with market research and, in addition to informing operating assumptions, served to appraise the overall market demand of such venues in the region and provide greater insight into the local market (e.g. there is a dearth of desirable wedding venues in and around Pismo Beach; and weddings are most popularly held in April). It should be noted that while assumptions gleaned from these efforts have been applied throughout the analysis, they are meant to provide a general financial overview of the various programs and should not be interpreted as a precise determination of the Chapman Estate s future cost and revenue expectations, which would require further analysis. The section below documents cost and revenue assumptions for each event/program type. LARGE EVENTS Weddings - Wedding venue rentals of comparable size have a large price variance ranging from the high hundreds up to $20,000 per event. However, these price discrepancies are largely due to the amenity packages provided by each venue. Through interviews with local vendors, EPS determined that per wedding event, the Chapman Estate could reasonably charge an average of $9,000 from a range of $5,000 to $13,000 for a maximum limit of 150 guests. While the Chapman Estate is a highly desirable event location, the lack of amenities, such as on site dressing rooms, wedding coordinator/onsite managers, access to the location, and full kitchen facilities, hinders its marketability. Other commonly cited concerns of interviewed event planners are the lack of indoor space and guest size limitations necessary to accommodate a larger client base. Generally, clients willing to rent out a venue of similar size have average guest lists of approximately 300 people. Cost assumptions are based on the average setup and cleanup rate of local vendors for an event of equal size and the shuttle service necessary to transport guests to and from the Estate. Wine Events - Suggestions for large event programming also include wine festivals on the Estate as an opportunity to display the region s local wineries while promoting cultural enrichment. While ticket 3 The three existing events at the site include Community Action Program San Luis Obispo, Opera San Luis Obispo, and San Luis Obispo Symphony. PISMO BEACH, CALIFORNIA 33 Item 7.A Pg. 45

46 CHAPMAN ESTATE STRATEGIC PLAN Attachment 2 prices can cost up to $500 in California, average prices of similar venues average approximately $80 per person. Although generally less revenue effective when compared to private weddings, these events promote local access to the Estate, as well as create a niche cultural community. In addition to transportation, setup, and cleanup costs, marketing is another significant overhead cost critical to establishing a successful and enduring program. Annual Fundraisers - EPS evaluated the cost and revenue budgets of fundraisers similar in scope, including those which have previously taken place on the Estate. This analysis assumes the execution of two annual fundraisers, one on-site and one off-site. The funds raised from both annual fundraisers would support basic annual operating costs of the Estate, including general upkeep, professional marketing services, and a part-time on site manager. For an on-site event of 275 attendees, fundraisers comprising of complementary programs such as silent auctions could potentially raise between $19,000 and $23,000. According to recent budgets from fundraisers on the property, event costs including food, beverages, setup, cleanup, transportation, marketing, and entertainment, add up to 48% of total ticket sales. These costs are essentially offset by donations, auctions, and raffles. The smaller, off-site fundraiser is assumed to generate $5,000 per year, which is consistent with smaller scale fundraising events in the area. In addition to these annual fundraisers, capital campaigns would be conducted every three to five years to fund large capital improvements to the site such as rehabilitation of the windmill, restoration of the seawall, and completion of ADA-compliant access improvements to all areas of the site. Limited Size Neighborhood Events Limited-size neighborhood events include smaller-scale festivals, fairs, and movie nights with a maximum attendance of 150 people. Similar to wine festivals, these events promote local access to the property and establish the estate for all ages. In terms of ticket pricing, an average price of $20 is comparable with similar events open to the general public in the region. As with the other events, costs include transportation, setup, cleanup, and marketing. Special Purpose - Special purpose centers such as a biweekly, semi-permanent art gallery, local museum, or open grounds is a potential approach to establishing the Estate as a local landmark and building public support. Although attendance to cultural centers of smaller communities is usually free, depending on the program structure, such as docent tours provided by volunteers and quality of donated collections, an average assumption of $10 per museum entrance is reasonable. This includes pricing tiers of $0 to $9 for children and seniors to higher fares of $11 to $20 for general admissions. As for attendance, EPS assumes a lower rate of 10 people per day upon stabilization. Facility Rentals - Facility rentals for private events such as reunions, garden parties, and luncheons are priced on a sliding scale depending on the size of the event from $1,000-$3,200. Reunions are expected to range up to 50 guests while garden parties and luncheons are expected to have less than 25 guests. Depending on the requests of each client, the price range is typical of seaside locations, large estates, and local landmarks. Costs for larger event such as reunions are expected to be similar to limited size neighborhood events of between 50 and 100 guests would likely require comparable services. While marketing fees do not apply for private events, they require on site management by staff. Classes or Seminars - Renting out the Estate to local instructors for six hours per day, 36 weeks per year is a considerable addition to local recreation facilities. Potential classes from the preliminary list include yoga, art, and tai chi, while other suggestions such as gardening and cooking had to be pared down due either permanent or temporary property restrictions. A $35 hourly facility rental cost would apply to instructors, which when compared to other recreation facility rentals are generally lower justified by the 34 PISMO BEACH, CALIFORNIA Item 7.A Pg. 46

47 CHAPMAN ESTATE STRATEGIC PLAN public benefits gained. Daily costs are assumed to be significantly lower than large-scale events since they would require less maintenance and instructors would be responsible for their own classes. Due to the limited size, these events would also not require transportation. Short-Term Rentals - Although discussed as a potential revenue stream, short-term rentals for overnight retreats and vacation rentals in the main house are not possible in the near future. However, it may be feasible to conduct short-term rentals in the guesthouse over the near-term, assuming significant interior and exterior renovations. Based on a market analysis of similar properties currently being rented out, the Estate could be rented out for approximately $1,200 per day with a $2,000 annual operating cost corresponding primarily to expenses such as more intensive cleaning, linens, marketing, increased maintenance. Despite being a potentially high revenue arrangement, as noted, it would require extensive renovations, and potentially diminished access to the public. Under Alternative B, applicable renovations to the guesthouse are assumed to take place in year five of operations with shortterm rental beginning the following year. Alternative A does not assume such renovations and likewise does not include revenue from short-term rentals. FINANCIAL FEASIBILITY FINDINGS This section documents the components utilized to test the financial feasibility of the Chapman Estate under a range of programmatic and capital improvement scenarios. For the purposes of this analysis, two specific feasibility scenarios have been documented. The first scenario, Alternative A, assumes only the most vital capital improvements are completed within the first ten years of operation. The second scenario, Alternative B, assumes undertaking a more robust site-enhancement capital improvement program in the early years of operations and tests whether corresponding increases in operating revenues justify such investments. Under Alternative B, operating revenues are expected to be considerably lower at stabilization. This section seeks to outline operating costs, capital costs and corresponding operating revenues under both Alternative A and Alternative B. OPERATING COSTS For the purposes of this analysis, both alternatives are expected to require similar operating expenditures. 4 Operating costs are assumed to total approximately $59,000 in annual maintenance and upkeep as shown in detail in Table 2 below. COST ITEM COST Landscaping and Water Feature Maintenance $ 4,200 Tree Trimming $ 3,000 House Cleaning and Upkeep $16,800 Utilities $16,800 Insurance $ 8,000 Contingency (20%) $ 9,760 Total Annual Operating Costs $58,560 Table 2 - Operating Cost Summary 4 It should be noted that certain capital improvements may increase or decrease operating demands. However, the limited scope of this analysis did not address these considerations and such conclusions would require additional evaluation. PISMO BEACH, CALIFORNIA 35 Item 7.A Pg. 47

48 CHAPMAN ESTATE STRATEGIC PLAN Attachment 2 In addition, this analysis assumes $25,000 per year for both an Estate Manager and a Professional Fundraiser 5 in order to effectively program the site and generate sufficient fundraising dollars to offset capital improvements. The total annual operating costs are estimated to be nearly $109,000. CAPITAL IMPROVEMENTS Under both alternatives (A and B), certain capital improvements are assumed to be funded within the first ten years of operation. These include basic safety improvements, basic ADA and parking access improvements to the site, restoration of certain iconic elements of the grounds such as the Lighthouse and pool (Ground Enhancement Improvements), and restoration of the seawall. A summary of these assumed costs is shown below in Table 3. 6 It must be emphasized that the capital improvement costs are based on estimates made in summer 2013, and that future costs at the time of implementation will likely be higher due to inflation, and to continuing aging and deterioration of the property. IMPROVEMENT ITEM ESTIMATED COST Safety Improvements $ 105,000 Basic Access Improvements for Grounds/Events $ 164,870 Grounds Enhancement Improvements $ 363,500 Seawall Restoration $ 900,000 Total Basic Capital Improvements $1,533,370 Table 3 - Basic Required Capital Improvements (Alternatives A & B) Safety Improvements - These include improvements needed to meet basic safety needs such as addressing termite and fungus problems for all buildings, installation of fire extinguishers, deferred electrical improvements, removal of various hazards on site, installation of improvements to heating, plumbing and electrical, installation of railings, and outbuilding repairs. For both alternatives, these costs are assumed to be required before more intensive utilization of the site or in year one of operations. Basic Access Improvements for Ground/Wedding - Summarized below in Table 4, Gates & Associates estimates access improvements to the eastern end of the site, which would provide an additional handicapped parking space, and loading area for caterers and others utilizing the site, would total $60,000 and should be completed in year 1 for both alternatives. In addition, event access costs are estimated individually for four potential event locations on the grounds. The total event access improvements are estimated to be approximately $165,000 for basic ADA access improvements. IMPROVEMENT ITEM COST Parking Lot $ 60,000 Event Access Location 1 (lower front lawn) $ 20,850 Event Access Location 2 (upper front lawn) $ 14,250 Event Access Location 3 (western ocean terrace) $ 13,550 Event Access Location 4 (promontory) $ 56,220 Total Parking and Event Access $164,870 Table 4 - Site Access Parking Lot / Event Access 5 It is assumed that the Estate Manager and Professional Fundraiser would comprise a single, full-time equivalent employee and that such a staff member would be required both to facilitate the level of usage assumed under both Alternatives as well as to generate the fundraising income assumed in this analysis. 6 Note these costs are based on estimates provided in 2013 and will need to be confirmed and adjusted for inflation. Note revenues will also need to be adjusted for inflation. 36 PISMO BEACH, CALIFORNIA Item 7.A Pg. 48

49 CHAPMAN ESTATE STRATEGIC PLAN Grounds Enhancement Improvements - This improvement category includes rehabilitation of iconic elements of the property including the windmill and pool. While these improvements will not enable new or more events of various types, they will enhance the property and may result in better marketability and higher rental rates for events such as weddings and/or fundraisers. These improvements are assumed to be supported by a capital campaign and take place in year 3 of operations under both alternatives. The individual components of this capital item are shown below in Table 5. IMPROVEMENT ITEM COST Windmill $ 35,000 Greenhouse $ 20,000 Pavilion $ 15,000 Lighthouse $ 20,000 Existing Bathroom $ 7,500 Pool - Infill to create Terrace $ 50,000 Flat Work / Site Work $ 62,000 Landscaping $ 80,000 Electrical $ 74,000 Total Grounds Enhancement Improvements $ 363,500 Table 5 - Grounds Enhancement Improvements In addition to the basic improvements described above, certain revenue-generating capital improvements were assessed as part of Alternative B. These improvements are assumed to increase operating revenues but are not necessary for the basic operation and function of the site. Selected include additional access improvements (over and above the basic ADA and parking improvements), construction of a new kitchen and restroom building on the eastern portion of the site (Other Site Improvements), and renovation of the guest house so that it may facilitate vacation /short-term rentals. These improvements are shown below in Table 6 along with the estimated costs of each improvement item. IMPROVEMENT ITEM ESTIMATED COST Site-Enhancing Access Improvements $ 313,351 Other Site Improvements $ 285,000 Renovating Guest House $ 415,000 Total Basic Capital Improvements $1,013,351 Table 6 - Selected Site-Enhancing Capital Improvements (Alternative B) These site-enhancement improvements include Additional Event Access Improvements, which are estimated to total $313,000 and are shown in more detail below in Table 7, and renovation of the guest house, which is estimated to cost $415,000. Note that certain, basic wedding access improvements are assumed to be completed under both alternatives in the first year of operation. The improvements detailed in Table 7 reflect improvements over and above basic ADA requirements that would ostensibly greatly enhance the aesthetic and functional access points throughout the site. PISMO BEACH, CALIFORNIA 37 Item 7.A Pg. 49

50 CHAPMAN ESTATE STRATEGIC PLAN Attachment 2 CAPITAL IMPROVEMENT COST ASSUMPTIONS IMPROVEMENT ITEM ESTIMATED COST Event Access Location 1 (lower front lawn) $ 17,905 Event Access Location 2 (upper front lawn) $ 0 Event Access Location 3 (western ocean terrace) $ 62,099 Event Access Location 4 (promontory) $ 233,347 Total Additional Event Access $ 313,351 Table 7 - Additional Event Access Improvements OPERATING REVENUE As noted in the previous section, certain site-enhancing capital improvements are expected to increase potential operating revenue due to the enhanced facilities, access and amenities added to the site. As shown in Table 8 below, under Alternative A the annual program (beyond the required three fundraisers) is assumed to include six limited size weddings, two wine-related events, one on-site annual fundraiser and five limited size neighborhood events, and one on-site annual fundraiser. The larger-scale events are anticipated to cover majority of annual operational costs. Smaller scale events such as facility rentals and special purpose events are limited to 16 operational days a year, while classes and seminars are sustained at 36 days. The smaller scale / limited size events contribute to fundraising efforts through neighborhood awareness of the Estate as a cultural resource. Under Alternative B, the annual program is anticipated to be slightly more robust and include up to eight limited size weddings, two wine-related events, six limited size neighborhood events, one on-site annual fundraiser, and twenty nightly short-term rentals. These larger-scale events are anticipated to cover majority of annual operational costs. Smaller scale events such as facility rentals and special purpose events are limited to 20 operational days a year, while classes and seminars are sustained at 36 days. The analysis assumes that given this level and type of usage on the Estate, the site could generate an estimated $74,000 per year given no additional site-enhancement capital improvements (Alternative A) and $111,000 per year following the completion of such site-enhancement improvements (Alternative B). It should be noted that the limitations on the levels of usage shown in Table 8 and assumed in Alternatives A and B are reflective of community input. Market forces would suggest additional revenue generating events could be held on the site. Included in the Appendices are estimates of level of usage per program at maximum market demand, which in the case of certain event/program types, is found to be considerably more frequent than assumed in this analysis. 38 PISMO BEACH, CALIFORNIA Item 7.A Pg. 50

51 CHAPMAN ESTATE STRATEGIC PLAN Table 8 - Event Revenue Assumptions by Event Type As demonstrated in Table 9 below, given the assumed event program and resulting revenues documented in Table 8 above, and the operating cost assumptions of approximately $109,000 per year as discussed in earlier sections, annual revenues under Alternative A result in a net operating deficit of over $34,000. Alternative B results in an operating surplus of approximately $2,000. PISMO BEACH, CALIFORNIA 39 Item 7.A Pg. 51

52 CHAPMAN ESTATE STRATEGIC PLAN Attachment 2 Table 9 - Chapman Estate Stabilized Operations Cash Flow As noted above, the range of event revenues and subsequent net operating revenues are predicated on to what extent site-enhancement capital improvements are completed. FINANCIAL RESULTS A dynamic ten-year cash flows for both Alternative A and Alternative B tests financial feasibility under a range of capital investment programs. Under Alternative A, only basic, required capital investments are assumed. Under Alternative B, in addition to these basic improvements, a series of site-enhancement capital improvements are assumed, with corresponding increased event revenues due to enhanced marketability and amenities on the site. The result of this analysis is initial estimates for funds required on an annual and long-term basis to support ongoing operations and capital improvement costs at the Chapman Estate. While specific fundraising, sponsorship and/or public funding capabilities have been neither confirmed nor assessed in great detail, these cash flow analyses indicate that under Alternative A, which assumes a far less significant capital improvement program, non-operating revenue or Other Revenue (a mix of public, fundraising and sponsorship dollars), would total an estimated $1.9 million. Alternative B, which assumes a far more robust capital program, would require approximately $2.8 million in Other Revenue over the first ten years of operations. These results are summarized in Table 10 below. 7 The detailed cash flows for Alternative A and Alternative B can be found in Appendix E. RECOMMENDATION: While it should be reiterated that further analysis is required to determine precise operating and capital costs, as well as to better inform operating revenue assumptions, based on the results of this initial financial analysis, EPS has determined that due to the limited event program desired by the community, a minimal capital investment program results in a more favorable operating scenario (Alternative A). While early capital investments in the property may result in some increase in revenues from events 7 Cash flows have been developed in constant 2015 dollars. 40 PISMO BEACH, CALIFORNIA Item 7.A Pg. 52

53 CHAPMAN ESTATE STRATEGIC PLAN on the property, due to the limited number of overall events that are palatable to the community, such increases are not significant enough to make up for the extensive site-enhancement capital improvements outlined in initial cost estimates for the Estate. However, as net operating revenues under Alternative A are estimated to be negative, an annual public contribution to the Estate may be necessary. Table 10 - Feasibility Summary for Chapman Estate Alternatives PISMO BEACH, CALIFORNIA 41 Item 7.A Pg. 53

54 CHAPMAN ESTATE STRATEGIC PLAN Attachment 2 RECOMMENDATION: Adopt the Fiscal Strategy of Alternative A, which requires a lower level of capital investment to maintain the Estate as a public benefit. DONOR FUNDING FOCUS The financial feasibility analysis demonstrates that to generate the revenue through on site events and rentals to cover the costs of required repairs and operations would necessitate a level of use that is not compatible with the City s commitment to preserve the neighborhood character. Even with careful management, there is a threshold for the number of larger events the neighborhood feels is acceptable. As the potential for revenue generating events at the Estate is limited, the cost for capital improvement and on-going operations will need to be addressed through fundraising campaign focused on donations and both off and on-site efforts. While a portion of operation costs can be recaptured through event/ rental revenue, it will be essential to generate funds for maintenance and renovation of the Estate through donations, sponsorships, fundraising and capital fundraising campaigns. To ensure that the maintenance and repair cost needs are met, a Fundraising and Estate Manager should be hired. This person s responsibilities will include development and management of a fundraising campaign and coordination of activities for the Estate that will enhance donor fundraising potential. The analysis assumed that the annual salary or contract costs for this position is expected to be approximately $50,000. Successful donor fundraising focus requires: A message that clearly communicates public benefit/access to Estate Positioning the Estate as a unique, regional, cultural treasure Engaging a professional as a commitment to develop and implement a fundraising campaign A successful fundraising campaign will need to have a compelling message and call to action. This message will be tailored around the preservation of the Estate as a unique regional, cultural resource for the public. Thus, public access to, and appreciation of the Estate will need to be enhanced. A public access strategy that focuses on smaller events (less than 50 people) in the garden including classes, garden luncheons, wine maker dinners, cultural events are more consistent with the neighborhood character. While some of these events could generate revenue, their primary focus would be positioning the Estate as a special public resource attractive to donors. At least 3 fundraising campaigns will be required to address the identified improvements. Campaign #1 could focus on site and outbuilding improvements. Many of these elements such as the windmill and lighthouse are iconic symbols or beloved areas of the Estate around which targeted appeals could be developed. Campaign # 2 should focus on the seawall repair for protection of this valuable resource to which so many have contributed to make successful. Campaign #3 would focus on access, repairs and upgrades improvements to the house to allow it to be open for public use. RECOMMENDATIONS: Retain a person or firm to develop and manage a funding campaign. The fundraising strategy should include annual giving (to address operation/maintenance costs) and develop capital campaigns to 42 PISMO BEACH, CALIFORNIA Item 7.A Pg. 54

55 CHAPMAN ESTATE STRATEGIC PLAN undertake major repairs and improvements. Fundraising campaign should include identification and pursuit of grant funding opportunities for cultural, historic, public access, education, park improvement and other aspects of the Estate. Retain site/program manager to develop and manage public access to the Estate. Develop signage as the entry to Chapman Estate which would; Acknowledge the gift from Mr. Chapman Provide basic information about public access to Estate (consider use of QR code to link to website with more information about estate) Serve as a location for notice posting and contact information Explore off-site fundraising opportunities such as events at other venues, on-line campaigns, and product sales. Off-site fundraisers could include events such as a winemaker dinner at a local winery, benefit night at a local theater, a golf tournament or a 5K Fun Run through Pismo Beach. Pursue Historic designation for the Estate to enhance opportunities for grants & fundraising. Create partnerships with local businesses and community members to develop public access via classes at the Estate (yoga, painting, gardening and lectures). Explore opportunities to generate revenue and exposure to potential donors with wine maker dinners, garden luncheons, classical/jazz music dinners, etc. There are numerous events in the region such as Savor the Central Coast, Jubilee by the Sea Jazz Festival, Bubblyfest by the Sea, Morro Bay Music Festival, etc. which could be partners for premier, limited access special fundraising events at the Estate. PISMO BEACH, CALIFORNIA 43 Item 7.A Pg. 55

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57 APPENDICES Attachment 2 CHAPMAN ESTATE STRATEGIC PLAN APPENDIX A - ROLE OF THE CHAPMAN ESTATE ADVISORY COMMISSION 1. To act as an advisory committee to the City Council with respect to all matters related to the operation and administration of the Property. 2. To act as an advisory committee to the City Council with respect establishing reasonable rules and regulation for use of the Property; 3. To act as a community forum to hear request from the public regarding the operation and maintenance of the Property; 4. To act as an advisory committee to the City Council with respect to which nonprofit groups qualify for free use of the Property; 5. To act as an advisory committee to the City Council with respect to establishing a schedule of rates and charges for users other than qualified nonprofits; 6. To act as an advisory committee to the City Council with respect to developing a landscaping plan for the Property, using arborists, geologists and other professionals as appropriate, which shall preserve as much as possible existing trees and plants and provide for replacing plants or trees which are lost for any reason; 7. To act as an advisory committee to the City Council with respect preparing and/or reviewing an inventory of furnishings and artifacts on the Property, determining which, if any, furnishings and artifacts should be retained for further use of the Property and which items if any, should be donated or destroyed; 8. To advise Council as to other matters upon the Council s request. PISMO BEACH, CALIFORNIA 45 Item 7.A Pg. 57

58 CHAPMAN ESTATE STRATEGIC PLAN Attachment 2 APPENDIX B - ESTATE USES SUGGESTED IN STAKEHOLDER INTERVIEWS Potential uses for short and long term income generating and community access raised by various stakeholders during the interviews are listed as follows. RETREATS Corporate retreats Executive retreats Writing workshops, yoga workshops Religious retreats EVENTS Weddings ceremony only, reception at hotel Weddings limited size Weddings + receptions shuttle from hotel Weddings wedding party stays at house Reunions Wine events tastings, winemaker dinners, sunset wine bar at the windmill Non-profit fundraisers Neighborhood events (community access, local tours) Sponsor dinners Mozart festival, acoustic music festivals Acoustic music picnics (guitar, flute, quartets, etc.) Free holiday events -Easter Egg Hunt on the grounds, Christmas evening carols & chocolate Garden parties, high teas Fine arts fair (not crafts fair) GATHERINGS Classes - painting, tai chi, yoga, garden, cooking Volunteer days Movies at the pool site (the pool may or may not be retained) Open grounds, with docent supervision Luncheons Local groups could have more frequent access to some areas 46 PISMO BEACH, CALIFORNIA Item 7.A Pg. 58

59 CHAPMAN ESTATE STRATEGIC PLAN RENTALS Guest house rental (such as a honeymoon suite) Supplemental guest house (new guest house ADA accessible) Main house rental Rent rooms (non-profit offices?) SPECIAL PURPOSE Tours of house and/or grounds docent tours (like Hearst Castle) Pismo Beach Museum of Art (e.g. Huntington Library & Gardens) Cultural Center (with receptions for art shows, poetry readings, literature, etc) Historic museum (Chapman Estate, Shell Beach, Pismo Beach,??) Photo shoots Sculpture garden SPONSORSHIPS Sponsorships from Clifford & Don s friends Cal Poly: Horticulture Dept, Architecture Dept, Grad projects, Koi Club Memorial tiles, pavers, benches, etc Garden Clubs, Rotary OTHER CONSIDERATIONS Consider on-site fundraisers Consider off-site fundraisers winemaker dinners, etc. Weather window for outdoor events is limited April, May, August- October are usually good Maintenance needs to be pristine to support income generation Need an event planner PISMO BEACH, CALIFORNIA 47 Item 7.A Pg. 59

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61 CHAPMAN ESTATE STRATEGIC PLAN APPENDIX C- MARKET DEMAND FOR ESTATE USES PISMO BEACH, CALIFORNIA 49 Item 7.A Pg. 61

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63 A-1: Potential Uses for Chapman Estate at Maximum Market Demand Benefits Costs Potential Net Revenue Max Guest/ Expected Rate Total Estimated Revenue Total Estimated Revenue Potential Uses Specificities Duration Time of Year #/Year Qualitative Total Estimated Cost Qualitative Guests Min Max Average Min Max Average Min Max Average Large Events Half Day/ All Day 150 Large events, specifically weddings, may cause disturbances In general, weddings and large scale within the neighborhood. Costs events are considered the receive Includes event coordination, Bride's dressing include required shuttling from the most revenue; benefits beyond area, Groom's dressing area, ceremony arch, Shell Beach Elementary school; Most popular from April, revenue include visibility for the dance floor, podium/stage, tables, chairs, seasonality of weddings; wedding Limited Size Weddings All Day Up to 150 June, August, September, 12 $5,000 $13,000 $9,000 $60,000 $156,000 $108,000 Estate to nonlocals, flexibility of $7,800 $52,200 $148,200 $100,200 linens silverware, glassware, outdoor lighting, supplies; setup and cleanup; early March, October scheduling other events during the setup and clean up, candles, day of onsite reduction of public use; insurance weekdays. Weddings can also be manager, full kitchen facilities and vendor coverage; limiting less disruptive if size and occurrence access to the property (security); are limited. requires an onsite manager or event coordinator; catering. $5 325 $ Adult only event; Revenue can Opportunity to display San Luis range on ticket sales; Costs Obispo's local wines and wineries; include required shuttling from Wine events include events such as tastings, Summer and Spring wine creates a niche cultural community Shell Beach Elementary school; winemaker dinners, sunset wine bar at the events can take place for novice and experienced wine Wine Events All Day Up to $10 $155 $83 $3,000 $46,500 $24,750 $2,000 venue supplies; setup and $1,000 $44,500 $22,750 windmill; Cost of admission depends on event outdoors while Winter and drinkers; adult only event; Revenue cleanup; insurance and vendor program Fall can take place indoors can range on ticket sales; flexibility of coverage; requires an onsite scheduling other events during the manager; requires marketing year. towards wineries. Music festivals include options including the Limited Size Neighborhood Events Mozart Festival, acoustic music festival, etc.; Revenue depends on structure All Day Up to 150 Spring/Summer Event 2 $0 $40 $20 $0 $24,000 $12,000 $600 -$600 $23,400 $11,400 (Movies Nights; Festivals; Fairs) Includes artwork and sculptures from local of event (profit or non profit); artist. Revenue depends on the structure of costs include required shuttling event (profit or non profit); from Shell Beach Elementary establishes the Estate as a public school; venue supplies; setup space for all ages; flexibility of and cleanup; reduction of public scheduling other events during the use; insurance and vendor weekdays; promotes cultural coverage; limiting access to the education in the community. property (security); requires an onsite manager or event Fundraisers Annual fundraisers for operating revenue All Day Up to 300 Spring/Summer Event 1 $0 $150 $75 $0 $90,000 $45,000 $2,500 coordinator. -$2,500 $87,500 $42,500 Special Purpose Full Day 20 Cultural Center Pismo Beach Museum of Art: Features semi Art Gallery permanent fine art and sculptures of local and Full Day 10 $0 $50,000 $25,000 $12,500 Revenue depends on the -$12,500 $37,500 $12,500 nonlocal artists structure of the center (profit or Revenue depends on the structure of non profit); requires donations or Open daily except for the center (profit or non profit); purchases of artwork, Thanksgiving, Christmas Historic museum of the Estate, Shell Beach, 250 $0 $20 $10 establishes the Estate as a public sculptures, etc.; requires Museum Full Day 10 night/day, and New Year's $0 $50,000 $25,000 $12,500 $37,500 $12,500 Pismo Beach, City space for all ages; promotes cultural docents and onsite manager; -$12,500 Day enhancement in the community. must designate specific operating days which decreases Tours of house and grounds with docent the flexibility of facility rentability Open Grounds Full Day 10 $0 $50,000 $25,000 $12,500 -$12,500 $37,500 $12,500 supervision Facility Rental Half Day 150 Costs include required shuttling In general, large scale events are from Shell Beach Elementary considered the most profitable; school; venue supplies; setup Includes tables, chairs, linens, silverware, benefits beyond Revenue include and cleanup; reduction of public Reunions glassware, setup and clean up, day of onsite Half Day Summer/Fall 2 $1,600 $4,500 $3,050 $3,200 $9,000 $6,100 visibility for the Estate to nonlocals, $1,200 use; insurance and vendor $2,000 $7,800 $4,900 manager, full kitchen facilities flexibility of scheduling other events coverage; limiting access to the during the weekdays; can be used for property (security); requires an local school reunions. onsite manager or event coordinator; catering. $8,400 $27,600 $18,000 Costs include required shuttling from Shell Beach Elementary school depending on guest size; Includes tables, chairs, linens, silverware, Provides a scenic venue for public venue supplies; setup and Luncheons/Garden Parties glassware, setup and clean up, day of onsite Half Day Summer/Fall 24 $700 $1,500 $1,100 $16,800 $36,000 $26,400 and private engagements; increases $8,400 cleanup; insurance and vendor manager, full kitchen facilities visibility for nonlocals. coverage; requires an onsite manager or event coordinator; catering. Item 7.A Pg. 63

64 A-1: Potential Uses for Chapman Estate at Maximum Market Demand Benefits Costs Potential Net Revenue Max Guest/ Expected Rate Total Estimated Revenue Total Estimated Revenue Potential Uses Specificities Duration Time of Year #/Year Qualitative Total Estimated Cost Qualitative Guests Min Max Average Min Max Average Min Max Average Classes or Seminars Provides community classes for Painting Year round weekday classes Revenue depends on the rental locals; garners cultural, physical, and (5 hours/day); Open daily rates (profit or non profit); must Yoga mental wellness for all ages; except for Thanksgiving, designate specific operating days No Service Hourly ,805 $0 $70 $35 $0 $126,350 $63,175 flexibility of scheduling other events $36,100 -$36,100 $90,250 $27,075 Tai Chi Christmas night/day, and which decreases the flexibility of during the weekend; adds another New Year's Day; assuming a facility rentability; may face some Gardening facility to parks and recreational $40 rental rate/ hour difficulty finding instructors. facilities. Cooking Short-Term Rental Daily/Weekly 15 Daily 120 $800 $1,500 $1,150 $96,000 $180,000 $138,000 $2,000 $94,000 $178,000 $136,000 Limits public/community use; Corporate; Religious; Workshop Retreats No Service 15 TBD requires insurance coverage; clean up; purchases of Requires no service to retreaters; Weekly 15 $5,600 $10,500 $8,050 $84,000 $157,500 $120,750 $2,000 cots for corporate retreats; relatively profitable for low $82,000 $155,500 $118,750 purchase of 3 bunkbeds and 1 maintenance; could provide lower queen/king sized bed for rates for local companies; flexibility vacation rentals; requires for reservations (could be scheduled Daily 120 $800 $1,500 $1,150 $96,000 $180,000 $138,000 $2,000 working appliances in the on days without large events). $94,000 $178,000 $136,000 kitchen and amenities such as Most likely used for summer Vacation Rental No Service 10 toiletries; requires washing or winter rentals machine/dryer for linens. Weekly 15 $5,600 $10,500 $8,050 $84,000 $157,500 $120,750 $2,000 $82,000 $155,500 $118,750 [1] All events will take place out doors until further renovation of the main house and guest house Item 7.A Pg. 64

65 CHAPMAN ESTATE STRATEGIC PLAN APPENDIX D- ALTERNATIVE SCENARIOS CASH FLOWS PISMO BEACH, CALIFORNIA 51 Item 7.A Pg. 65

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67 Alternative A: Limited Capital Improvements; Required City Subsidy to Cover Operating Costs Constant $2015 Item Total REVENUE Number of Events Limited Size Weddings (Less than 150 Guests) Wine Events Annual Fundraiser ( Guests)* Capital Campaign Thank You Dinner* Limited Size Neighborhood Events (Less than 150 Guests) Special Purpose Reunions Luncheons/Garden Parties Classes or Seminars Total Number of Events Event Revenue Limited Size Weddings (Less than 150 Guests) $129,250 $4,700 $11,750 $14,100 $14,100 $14,100 $14,100 $14,100 $14,100 $14,100 $14,100 Wine Events $117,000 $0 $13,000 $13,000 $13,000 $13,000 $13,000 $13,000 $13,000 $13,000 $13,000 Annual Fundraiser ( Guests)* $193,750 $19,375 $19,375 $19,375 $19,375 $19,375 $19,375 $19,375 $19,375 $19,375 $19,375 Capital Campaign Thank You Dinner* -$10,000 $0 $0 $0 -$5,000 $0 $0 $0 -$5,000 $0 $0 Limited Size Neighborhood Events (Less than 150 Guests) $54,000 $2,400 $3,600 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 Special Purpose $7,650 $500 $750 $800 $800 $800 $800 $800 $800 $800 $800 Reunions $136,800 $7,200 $14,400 $14,400 $14,400 $14,400 $14,400 $14,400 $14,400 $14,400 $14,400 Luncheons/Garden Parties $25,350 $1,950 $2,600 $2,600 $2,600 $2,600 $2,600 $2,600 $2,600 $2,600 $2,600 Classes or Seminars $37,666 $1,667 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 Total Event Revenue $691,466 $37,792 $69,475 $74,275 $69,275 $74,275 $74,275 $74,275 $69,275 $74,275 $74,275 Other Revenue City Funds $1,117,504 $340,700 $35,000 $28,000 $34,000 $29,000 $29,000 $529,000 $34,285 $29,285 $29,234 Capital Campaign (1 campaign every 3-5 years)* $765,000 $0 $0 $365,000 $0 $0 $0 $400,000 $0 $0 $0 Annual Fundraiser (Off-Site)* $45,000 $0 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 Annual Fundraiser (On-Site)* NA Revenue reflected above under Event Revenue for Annual Fundraiser Total Other Revenue $1,927,504 $340,700 $40,000 $398,000 $39,000 $34,000 $34,000 $934,000 $39,285 $34,285 $34,234 TOTAL REVENUE $2,618,970 $378,492 $109,475 $472,275 $108,275 $108,275 $108,275 $1,008,275 $108,560 $108,560 $108,509 COSTS Operating Costs Ongoing Maintenance Costs [1] $585,600 $58,560 $58,560 $58,560 $58,560 $58,560 $58,560 $58,560 $58,560 $58,560 $58,560 Estate Manager $250,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 Professional Fundraiser $250,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 Total Operating Costs $1,085,600 $108,560 $108,560 $108,560 $108,560 $108,560 $108,560 $108,560 $108,560 $108,560 $108,560 Capital Improvements Safety, Operation and Function Improvements [2] $105,000 $105,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 Seawall Restoration $900,000 $0 $0 $0 $0 $0 $0 $900,000 $0 $0 $0 Site Access Parking Lot/Wedding Access [3] $164,870 $164,870 $0 $0 $0 $0 $0 $0 $0 $0 $0 Grounds Enhancement Improvements [4] $363,500 $0 $0 $363,500 $0 $0 $0 $0 $0 $0 $0 Other Site Improvements [5] $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Total Capital Improvement Costs $1,533,370 $269,870 $0 $363,500 $0 $0 $0 $900,000 $0 $0 $0 TOTAL COSTS $2,618,970 $378,430 $108,560 $472,060 $108,560 $108,560 $108,560 $1,008,560 $108,560 $108,560 $108,560 NET CASH FLOW $0 $62 $915 $215 -$285 -$285 -$285 -$285 $0 $0 -$51 CUMALATIVE CASH FLOW $62 $977 $1,192 $907 $621 $336 $51 $51 $51 $0 * Fundraising is reflected in this analysis as including a capital campaign every few years to fund large capital improvements and a corresponding thank you dinner to be held on the property, an annual fundraising event on-site, and an annual off-site fundraiser. ** Other Revenue estimates are provided to illustrate how much additional revenue, over and above event-generated revenue, would be required to pay for the ongoing operating costs and capital improvements included in this analysis. [1] Includes $4,200 for landscaping, $6,000 every two years for tree trimming, $1,400 per month for house cleaning, $1,400 per month for utilities, $8,000 for insurance and a 20 percent contingency. [2] Estimate includes improvements needed to meet basic safety needs such as addressing termite and fungus problems for all buildings, installation of fire extinguishers, deferred electrical improvements, removal of various hazards on site, installation of improvements to heating, plumbing and electrical, installation of railings and outbuilding repairs. For both alternatives, these costs are assumed to be required prior to more intensive utilization of the site. [3] Gates & Associates estimates access improvements to the eastern end of the site, which would provide additional parking for event guests, caterers and others utilizing the site, would total $60,000 and should be completed in year 1 for both alternatives. Wedding access costs are estimated individually for four potential wedding locations on the grounds. The total wedding access improvements are estimated to be approximately $165,000 for basic ADA access improvements and additional $315,000 for all access improvements to all locations. Of these totals, both alternatives assume all basic access improvements would be required. Alternative A does not assume any additional access improvements. [4] This improvement category includes rehabilitation of iconic elements of the property including the windmill and pool. While improvements such as these will not enable new or more events of various types, they will enhance the property and may result in better marketability and higher rental rates for events such as weddings and/or fundraisers. These improvements are assumed to be supported by a capital campaign and take place in year 3 of operations. [5] Reflects estimated cost of new kitchen and restroom building construction to support catering and other basic operations for small, medium and large-scale events. In Alternative A, these improvements are not assumed to take place in the first ten years of operation. Item 7.A Pg. 67

68 Alternative B: Revenue Neutral with Upfront City Payment of Capital Costs Constant $2015 Item Total REVENUE Number of Events Limited Size Weddings (Less than 150 Guests) Wine Events Annual Fundraiser ( Guests)* Capital Campaign Thank You Dinner* Limited Size Neighborhood Events (Less than 150 Guests) Special Purpose Short Term Rentals Reunions Luncheons/Garden Parties Classes or Seminars Total Number of Events Event Revenue Limited Size Weddings (Less than 150 Guests) $165,900 $4,700 $9,400 $14,100 $17,850 $17,850 $20,400 $20,400 $20,400 $20,400 $20,400 Wine Events $133,500 $6,500 $13,000 $13,000 $13,000 $13,000 $15,000 $15,000 $15,000 $15,000 $15,000 Annual Fundraiser ( Guests)* $209,375 $19,375 $19,375 $19,375 $19,375 $19,375 $22,500 $22,500 $22,500 $22,500 $22,500 Capital Campaign Thank You Dinner* -$15,000 $0 $0 $0 -$5,000 $0 -$5,000 $0 -$5,000 $0 $0 Limited Size Neighborhood Events (Less than 150 Guests) $64,500 $2,400 $4,800 $4,800 $6,000 $6,000 $8,100 $8,100 $8,100 $8,100 $8,100 Special Purpose $9,300 $500 $800 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 Short Term Rentals $78,000 $0 $0 $0 -$2,000 -$2,000 $9,500 $15,250 $15,250 $21,000 $21,000 Reunions $138,000 $7,200 $9,600 $14,400 $14,400 $14,400 $15,600 $15,600 $15,600 $15,600 $15,600 Luncheons/Garden Parties $24,750 $650 $1,300 $2,600 $2,600 $2,600 $3,000 $3,000 $3,000 $3,000 $3,000 Classes or Seminars $38,200 $2,200 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 Total Event Revenue $846,525 $43,525 $62,275 $73,275 $71,225 $76,225 $94,100 $104,850 $99,850 $110,600 $110,600 Other Required Revenue** City Funds $1,840,796 $335,000 $45,000 $425,000 $32,335 $356,000 $9,500 $649,000 $3,710 -$7,000 -$7,749 Capital Campaign (1 campaign every 3-5 years)* $900,000 $0 $0 $250,000 $0 $400,000 $0 $250,000 $0 $0 $0 Annual Fundraiser (Off-Site)* $45,000 $0 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 Annual Fundraiser (On-Site)* NA Revenue reflected above under Event Revenue for Annual Fundraiser Total Other Revenue $2,785,796 $335,000 $50,000 $680,000 $37,335 $761,000 $14,500 $904,000 $8,710 -$2,000 -$2,749 TOTAL REVENUE $3,632,321 $378,525 $112,275 $753,275 $108,560 $837,225 $108,600 $1,008,850 $108,560 $108,600 $107,851 COSTS Operating Costs Ongoing Maintenance Costs [1] $585,600 $58,560 $58,560 $58,560 $58,560 $58,560 $58,560 $58,560 $58,560 $58,560 $58,560 Estate Manager $250,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 Professional Fundraiser $250,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 Total Operating Costs $1,085,600 $108,560 $108,560 $108,560 $108,560 $108,560 $108,560 $108,560 $108,560 $108,560 $108,560 Capital Improvements Safety Improvements [2] $105,000 $105,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 Seawall Restoration $900,000 $0 $0 $0 $0 $0 $0 $900,000 $0 $0 $0 Access Improvements for Grounds/Wedding Areas [3] $478,221 $164,870 $0 $0 $0 $313,351 $0 $0 $0 $0 $0 Grounds Enhancement Improvements [4] $363,500 $0 $0 $363,500 $0 $0 $0 $0 $0 $0 $0 Other Site Improvements [5] $285,000 $0 $0 $285,000 $0 $0 $0 $0 $0 $0 $0 Renovating Guest House [6] $415,000 $0 $0 $0 $0 $415,000 $0 $0 $0 $0 $0 Total Capital Improvement Costs $2,546,721 $269,870 $0 $648,500 $0 $728,351 $0 $900,000 $0 $0 $0 TOTAL COSTS $3,632,321 $378,430 $108,560 $757,060 $108,560 $836,911 $108,560 $1,008,560 $108,560 $108,560 $108,560 NET CASH FLOW $0 $95 $3,715 -$3,785 $0 $314 $40 $290 $0 $40 -$709 CUMALATIVE CASH FLOW $95 $3,810 $25 $25 $339 $379 $669 $669 $709 $0 * Fundraising is reflected in this analysis as including a capital campaign every 3-5 years to fund large capital improvements and a corresponding "thank you" dinner to be held on the property, an annual fundraising event on-site (shown in Event Revenue), and an annual off-site fundraiser. ** Other Revenue estimates are provided to illustrate how much additional revenue, over and above event-generated revenue, would be required to pay for the ongoing operating costs and capital improvements included in this analysis. [1] Includes $4,200 for landscaping, $6,000 every two years for tree trimming, $1,400 per month for house cleaning, $1,400 per month for utilities, $8,000 for insurance and a 20 percent contingency. [2] Estimate includes improvements needed to meet basic safety needs such as addressing termite and fungus problems for all buildings, installation of fire extinguishers, deferred electrical improvements, removal of various hazards on site, installation of improvements to heating, plumbing and electrical, installation of railings and outbuilding repairs. For both alternatives, these costs are assumed to be required prior to more intensive utilization of the site. [3] Gates & Associates estimates access improvements to the eastern end of the site, which would provide additional parking for event guests, caterers and others utilizing the site, would total $60,000 and should be completed in year 1 for both alternatives. Wedding access costs are estimated individually for four potential wedding locations on the grounds. The total wedding access improvements are estimated to be approximately $165,000 for basic ADA access improvements and additional $315,000 for all access improvements to all locations. Of these totals, both alternatives assume all basic access improvements would be required. Alternative B assumes additional access improvements would be completed in year 3 to attract small to medium size weddings as well as other events. Revenue and programming have been adjusted accordingly. [4] This improvement category includes rehabilitation of iconic elements of the property including the windmill and pool. While improvements such as these will not enable new or more events of various types, they will enhance the property and may result in better marketability and higher rental rates for events such as weddings and/or fundraisers. These improvements are assumed to be supported by a capital campaign and take place in year 3 of operations. [5] Reflects estimated cost of new kitchen and restroom building construction to support catering and other basic operations for small, medium and large-scale events. Construction of the building is estimated to total $285,000. In Alternative B, these improvements are assumed to take place in year three of operations, with corresponding increases in revenue for certain event types. This building would be located adjacent to the parking improvements on the east end of the property. [6] Assumes renovation of guest house in year five of operations, which could be utilized as bride/groom changing rooms and potentially for short-term rental on a limited basis. Such improvements could potentially increase revenues for certain events such as weddings and allow for shortterm rentals on the site prior to the main house becoming available for a wider variety of uses. Item 7.A Pg. 68

69 CHAPMAN ESTATE STRATEGIC PLAN APPENDIX E- COST SOURCE MATERIALS PISMO BEACH, CALIFORNIA 53 Item 7.A Pg. 69

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71 CHAPMAN ESTATE COSTS Attachment 2 Action Home Inspection Report Main Building ( ) - Costs & Assessment by Steve Puglisi ( ) 1-EX GR safety rails at bluff edge $ 6,000 A GR 2-EX GR safety rail at cliff edge $ 1,000 A GR 6-EX GR uneven steps at portal $ 1,500 A GR 7-EX GR stair rail post at portal $ 100 A GR 8-EX GR loose bricks at portal $ 100 A GR 10-EX GR stairway handrails $ 2,000 A GR 11-EX GR stair at enclosed patio $ 500 A GR 13-EX GR retaining wall guardrail/handrail $ 2,500 A GR "A" sitework 13, EX BL railing bracket $ 200 A 15-EX BL blockaded door (replace lockset)? $ 100 A 1-WH seismic straps $ 100 A 2-WH flue pipe in contact with p/w $ 100 A 3-WH flue pipe/draft diverter attachment $ 100 A 4-WH relief valve discharge $ 100 A 1-FG gas pipe at water heater and furnace $ 200 A Key: 2-FG gas pipe to furnace in crawl space $ 100 A EX GR: Exterior Grounds and 2-ES electrical disconnect A EX BL: Exterior Building Com 3-ES GFCI breaker at main panel A WH: Water Heater 4-ES subpanel wiring at kitchen A FG: Fuel Gas System 5-ES subpanel feeders at kitchen A ES: Electrical System 6-ES subpanel knockouts at kitchen A HC: Heating and Cooling Sys 7-ES refrigerator wire splices at kitchen A FC: Fireplace and Chimneys 8-ES outlet missing at west side A L: Laundry 9-ES GFCI at exterior outlets A SA: Smoke and CO Alarm 10-ES exterior outlet conduit at rear A M: Miscellaneous Conditions 11-ES ungrounded outlets at garage A P: Plumbing System 12-ES wire grommets at garage A R: Roofing 13-ES outlets throughout house A K: Kitchen Fixtures 14-ES outlets inadequacy A FS: Foundation and Support 15-ES GFCI throughout A 16-ES GFCI at patio/deck A 17-ES garbage disposal switch A 18-ES electrical evaluation A ES Electrical repair subtotal (2 through 17) $ 8,000 A 1-HC flue pipe rust damage $ 500 A 2-HC flue pipe clearance to p/w $ 100 A 2-FC masonry at family room fireplace $ 200 A 3-FC spark arrestors evaluation chimney inspection report A entire chimney report/estimate was $7,50 1-L clothes dryer duct at east bathroom $ 200 A 1-SA smoke alarm/security system unknown A 2-SA CO alarms at hallway and basement $ 200 A 2-M ventilation at half bathroom $ 500 A 3-M deadbolts $ 500 A 13-M newell post at main stairway $ 200 A 16-M safety rails at main stairway $ 1,000 A 18-M handrail at basement stairway $ 200 A 19-M riser height at basement stairway $ 1,000 A 20-M 1 inch step at breakfast room $ 500 A "A" total 27,800 1-P main water shutoff leak $ 100 B GR 4-P irrigation valve leak $ 100 B GR "B" grounds EX BL subarea access decay at patio/deck $ 100 B 19-EX BL framing and sheathing decay patio/deck $ 3,500 B 1-R roof leak at solarium $ 500 B 3-P ABS pipe at kitchen window $ 1,000 B 5-P wet ground at patio/deck $ 1,000 B 1-K dishwasher drain hose $ 100 B 3-L hoses at laundry $ 100 B "B" total 6500 Item 7.A Pg. 71

72 CHAPMAN ESTATE COSTS Attachment 2 9-EX GR drain at basement doorway $ 200 C GR "C" grounds FS concrete stemwall $ 8,000 C 1-EX BL door and jamb decay at entry C 2-EX BL trim decay at chimney C 3-EX BL door and jamb decay utility room C 4-EX BL post decay at north side C "C" total EX BL window sash decay west side C 6-EX BL window shutter decay C 7-EX BL window sash at patio C 8-EX BL doorjamb decay at west side C 9-EX BL door and jamb decay at dining room C 10-EX BL windowsill decay at east flat roof C EX BL Wood decay subtotal ( 1 through 10) $ 2,000 C 11-EX BL shake siding on south wall $ 1,500 C 13-EX BL vinyl veneer $ 200 C 14-EX BL door veneer $ 300 C 16-EX BL rusted nails $ - C 17-EX BL rusting at stucco corners $ - C 20-EX BL ceiling panel damage in basement $ 2,000 C 4-R downspout fitting at north side $ 100 C 6-P toilets not retrofitted $ 1,000 C 7-P toilet at guest bathroom $ 100 C 8-P bathtub drain at master bath $ 200 C 9-P bathroom sink at master bath $ 100 C 10-P toilet tank at southwest bathroom $ 100 C 12-P sink drainage at basement kitchen $ 200 C 13-P drainpipe strapping at northwest subarea $ 100 C 5-WH water heater age $ 500 C 3-FG gas main rust and clearance $ 200 C 1-ES 100 amp service $ 15,000 C 3-HC r/a filters at basement furnaces $ 100 C 1-FC cleanout cover in basement $ 100 C 4-M windowsill decay at dining room $ 100 C 5-M stall shower moisture damage at master bath $ 200 C 6-M window sill wood damage at master bath $ 100 C 7-M windowpane at dining room $ 100 C 8-M windowpane at library $ 100 C 9-M windowpane at second story flat roof $ 100 C 10-M windowpanes at master bedroom and $ 100 C bath 11-M window/plaster leak at half bath $ 200 C 12-M window leak at east bedroom $ 100 C 15-M floorboards at main stairway $ 500 C 21-M condensation line from refrigerator $ 100 C TOTAL THIS SECTION $ 68,000 Western Exterminator Company ( ) Termite report: Section 1 $ 26,770 ($2000 covered in section above as "Woo Termite report: Section 2 $ 450 TOTAL THIS SECTION $ 27,220 Action Home Inspection Report Out-Building ( ) Handrails at 4 stair locations $ 8,000 Rebar protruding from stone bluff below guest house - hazards should be removed $ 2,960 TOTAL THIS SECTION $ 10,960 TOTAL $ 106,180 Item 7.A Pg. 72

73 CHAPMAN ESTATE COSTS Attachment 2 Specialty Construction ( ) 1 Construct new catererers kitchen & $ 283,013 restrooms At non prevailing wage $ 199,647 Notes: This is at prevailing wage 2 Renovate guest house $ 414,595 This is full renovation, including items cov Included items covered by Action Inspection $ 16,055 (costs by Specialty Construction) Included items covered by Western $ 2,720 Exterminators Shown in Group 1 costs New water heater $ 3,000 3 New site electrical service $ 73,875 Includes Greenhouse, guest house, Wind Included items covered by Action Inspection $ 10,520 (Re-wire greenhouse - costs by Specialty Included items covered by Action Inspection $ 4,280 (Re-wire windmill - costs by Specialty Con Included items covered by Action Inspection $ 3,000 (Electrical inspection of entire premises - 4 Windmill $ 32,595 Foundation repair $ 13,200 Renovate weathered exterior $ 8,080 Repair stairs to windmill basement $ 2,540 Repair wooden shakes $ 8,775 5 Greenhouse Wood decay (Western Exterminators) $ 9,800 Repair stone column $ Pavilion (@ koi pond) Safety fencing around koi pond $ 5,000 may not be required 7 Lighthouse Wood decay (Western Exterminators) $ 4,570 Rusted vent screen $ Restroom $ 6,670 Wood decay (Western Exterminators) $ 1,050 Provide for hot water $ 2,100 Misc. restroom & pool $ 3,220 Moisture windows $ 1,050 Replace mirrors in women's $ Pool Area $ 70,870 Repair deteriorated brick wall $ 12,120 Repair pool $ 1,250 Repair pool deck $ 25,000 Accurate Leak Detection estimate Install synthetic turf $ 32,500 Accurate Leak Detection estimate 10 Site / miscellaneous $ 50,000 Miscellaneous rain gutters $ 10,000 Contingencies $ 40, Garage Demo & rebuild $ 215,655 Mike Alshouse estimate $ 1,155,823 Item 7.A Pg. 73

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103 Project No July 15, 2013 Geotechnical Engineering Coastal Engineering Maritime Engineering Ms. Carolyn Johnson CITY OF PISMO BEACH 760 Mattie Road Pismo Beach, California CONCEPT-LEVEL SHORELINE STABILIZATION RECOMMENDATIONS CHAPMAN SEAWALL 1243 OCEAN BOULEVARD PISMO BEACH, CALIFORNIA Dear Ms. Johnson: TerraCosta Consulting Group, Inc. (TerraCosta) is pleased to provide schematic design level recommendations and associated costs for necessary shoreline stabilization improvements at 1243 Ocean Boulevard in Pismo Beach, California. BACKGROUND As you are aware, TerraCosta was previously involved with the temporary repairs made to the Chapman Seawall at 1243 Ocean Boulevard, as well as the sea cave infill at 1400 Ocean Boulevard. TerraCosta served as civil and geotechnical engineer-of-record for the emergency repairs. Earth Systems Pacific provided special inspection services. Emergency repair work was conducted in February 2013 and consisted of filling existing voids behind the Chapman Seawall with concrete, and infilling the existing sea cave below 1400 Ocean Boulevard with a two- to three-sack cement concrete slurry. Repairs are described in greater detail below. Locations of those repair efforts are indicated on the attached Site Plan (Figure 1). It should be noted that these emergency infill repairs are not intended to prevent the seaward movement of the infill, and permanent repairs are still necessary to provide adequate lateral restraint for the emergency repairs and for the rehabilitation of the entire full-height wall as well. In this regard, while the currently contemplated repairs may 3890 Murphy Canyon Road, Suite 200 San Diego, California (858) voice (858) fax Item 7.A Pg. 103

104 Ms. Carolyn Johnson July 15, 2013 CITY OF PISMO BEACH Page 2 Project No prevent any additional undermining for the next five to ten years, we do believe it important to stress the need for additional lateral restraint to prevent a more massive failure of the existing aging seawall. It is our understanding that the City of Pismo Beach now needs to prepare the necessary plans and associated documents to acquire a Coastal Development Permit through the City of Pismo Beach, and possibly the California Coastal Commission. SCHEMATIC SHORELINE STABILIZATION RECOMMENDATIONS The original concrete seawall that protects the Chapman Estate on the west-facing side of the property was constructed circa The wall is approximately 60-feet long and 40- feet high. Recent temporary repairs were made to address failures in the lower portion of the wall. Those failures were largely created by erosional notches and voids forming behind the wall as a result of long-term undermining and flanking of the seawall itself. Emergency repair measures ultimately consisted of placement of concrete infill behind the existing wall face to prevent further failures. A sea cave behind the south end of the panel wall was infilled as well, and incorporated an epoxy coated soil nail to temporarily restrain a failed portion of wall panel that threatened to topple onto the adjacent beach. Permanent repairs are needed to ensure the continued effectiveness of the full-height Chapman seawall. For long-term shoreline stabilization measures, we recommend the construction of a tiedback shotcrete skin over the existing seawall. This repair would be steel-reinforced, and would be restrained by a series of high-capacity, post-grouted, double-corrosion protected steel ground anchors. The shotcrete surface would be colored and sculpted to blend into adjacent native bluffs. This approach would be nearly identical in nature to the seawall constructed at nearby Ocean Boulevard, also designed by TerraCosta and recently completed by J.C. Baldwin Construction. The proposed seawall would be keyed into the underlying bedrock several feet and would result in a design-life of 75 years with periodic maintenance. The general limits of this repair are indicated on Figure 2. N:\27\2795\2795 TCG Letters\2795 L01 City of PB.doc Item 7.A Pg. 104

105 Ms. Carolyn Johnson July 15, 2013 CITY OF PISMO BEACH Page 3 Project No In our opinion, this tied-back wall repair represents the minimum necessary to preserve the existing panel wall, and the portions of the main residence that are situated very close to the southern side of the wall. Adjacent to the northern edge of the Chapman seawall is an existing old concrete infill. Similar to the Chapman seawall, the infill shows signs of undermining, flanking, and general deterioration. A significant concrete bag wall extends from the top of the concrete infill to the top-of-bluff and generally protects the steep upper bluff adjacent to the Chapman Estates lighthouse. The general condition of this bag wall has not been evaluated by our firm, but is not considered to be an engineered wall, per se. It is unclear when the bag wall was constructed, but review of historic photos indicates a possible construction in the early to mid 1980s. The permitting status of both the concrete infill and upper bag wall is unknown. Although we have not evaluated the integrity of this northerly concrete infill and concrete bag wall, we do know that the existing undermining will eventually compromise the existing erosion protection measures, resulting in at least a partial, if not total, collapse similar to that experienced at the adjacent panel well. Accordingly, we recommend that at a minimum, the undermined notch be filled with a new high-strength concrete keyed into the underlying formation, with the structural keyway similar to what was completed at nearby Ocean Boulevard. The exposed face of this notch infill could be carved and colored to match the proposed Chapman seawall repairs, significantly improving both the stability and appearance of at least the lower portion of the existing northerly concrete infill and bag wall. The proposed notch infill would extend from the north end of the Chapman seawall and continue across the face of the substantial sea cave that was also infilled under an emergency permit at the north end of the property. The general limits of proposed work are indicated on Figure 2. This notch infill work is also considered critical from the standpoint that failure of this existing infill could, in turn, destabilize the bag wall above it. Failure to maintain this infill would also ultimately make the north end of the Chapman seawall more vulnerable to flanking. N:\27\2795\2795 TCG Letters\2795 L01 City of PB.doc Item 7.A Pg. 105

106 Ms. Carolyn Johnson July 15, 2013 CITY OF PISMO BEACH Page 4 Project No CONSTRUCTION COSTS We have discussed the subject project with J.C. Baldwin Construction Company, the contractor responsible for the emergency repairs at the site, as well as several recently completed City of Pismo Beach seawall projects. For planning purposes, we have prepared the following rough estimates for the above recommended repairs: Permanent Facing over Chapman Seawall $ 720,000 Lower Concrete Infill $ 60,000 Total $ 780,000 ANTICIPATED ENGINEERING SERVICES At a minimum, we would recommend the following services in support of permitting for the proposed improvements. Surveying: We recommend that a photogrammetrically prepared topographic map be generated for purposes of construction drawing preparation. We estimate the cost to prepare the topographic map will be $8,000. Geotechnical Basis of Design Report: We propose to prepare a geotechnical basis of design report that provides design parameters for the proposed repair, along with engineering justification for those repairs. We estimate that the cost to prepare this report will be $15,000. Construction Drawings: We propose to prepare a set of construction drawings and specifications in a style and format similar to those prepared for the Ocean Boulevard and Vista Del Mar seawall projects. We estimate the cost to prepare plans for the above referenced improvements would be approximately $23,000. Structural Calculations Package: Structural calculations will be provided by an outside consultant. We anticipate structural engineering costs will be on the order of $8,000 for the recommended shoreline stabilization measures described above. N:\27\2795\2795 TCG Letters\2795 L01 City of PB.doc Item 7.A Pg. 106

107 Ms. Carolyn Johnson July 15, 2013 CITY OF PISMO BEACH Page 5 Project No Response to Review Comments Responses to City of Pismo Beach and California Coastal Commission comments can be provided on a time-and-materials basis. We appreciate the opportunity to assist the City of Pismo Beach in the development of the Chapman Estate. If you have any questions or require additional information, please feel free to give us a call. Very truly yours, TERRACOSTA CONSULTING GROUP, INC. Walter F. Crampton, Principal Engineer R.C.E , R.G.E. 245 WFC/jg Attachments cc: Mr. Ben Fine, City of Pismo Beach Mr. Scot Graham, City of Pismo Beach N:\27\2795\2795 TCG Letters\2795 L01 City of PB.doc Item 7.A Pg. 107

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