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# Cash cow or just a big bust?
- URL: https://www.smdp.com/cash-cow-or-just-a-big-bust/
- Published: 2007-06-26T15:00:00.000Z
- Updated: 2026-10-24T01:20:39.000Z
- Author: Kevin Herrera
- Tags: Government & Politics, Pier, #archive-import

SM PIER It definitely has cachet, but it’s the cash that everyone’s concerned about.

For years there has been a debate about the financial standing of the venerable Santa Monica Pier. There are those who believe the iconic landmark is not performing to its potential and is a drain on the General Fund, soaking up a subsidy that has reached $833,000 per year.

Others contend the pier is a boon for Santa Monica,generating millions of dollars in free publicity and is often the first thing people think about when they think of Southern California.

A convoluted and confusing accounting practice that commingled various funds with the pier’s budget didn’t help matters either, making it look as if the pier had a larger operating budget than it actually did.

Looking to set the record straight, the body charged with maintaining and promoting the pier set out on a year-long mission to finally determine the old wooden walkway’s contribution to the city.

The report will be presented tonight to the City Council as it considers funding for the Pier Restoration Corp. (PRC), a non-profit, public benefit corporation that was created in 1983 to oversee the reconstruction and revitalization of the pier following severe storms that almost destroyed the attraction.

“We felt it was necessary to do this type of analysis because the city had a completely skewed view of our financial picture,” said Ellen Brennan, chair of the PRC.“They are trying to put pressure on us to lease spaces that would bring more money into the city. We felt it is our job to make sure that the leases we are approving are in the best interest of the people who use the pier. We don’t want finances to drive it.”

They shouldn’t have to since the pier is self-supporting and, contrary to belief, actually generates revenues for the city and provides marketing and exposure in excess of $25 million annually, according to the PRC’s report.

The most significant contribution to the General Fund comes from fees — licensing, permit, rental — and rents charged to businesses and vendors on the pier. Money also comes from those who park on the deck lot.

Parking is important, PRC officials said, because currently money generated by the 1550 parking lot, located directly north of the pier, is not credited to the pier. Instead, it goes into the beach fund. A survey of visitors found that 89 percent were headed to the pier.

If just 80 percent of revenues from that lot were deposited in the pier fund, that would mean an extra $1.8 million or so. A more conservative estimate puts revenues at $1.1 million, more than enough to cover City Hall’s subsidy,which does not include capital improvement costs, such as the current pier rehabilitation project and the future construction of new restrooms.

“This changes the picture dramatically when it comes to the pier subsidy,”said Ben Franz-Knight, chief executive officer of the PRC. “We aren’t saying that the revenue generated in the lot should go to the pier, but we are saying look at the entire picture and take that into consideration.

“The pier is generating revenue far beyond its deck.” The analysis also showed that the pier, which draws approximately $4 million visitors each year, is internationally recognized, drawing in tourists from all over the world, helping the hospitality industry remain competitive in the region.

That value may be hard to quantify, but it’s real, Brennan said. “People know it, they sense it,” she said. “If it wasn’t for the pier, we’d be Redondo Beach, and who’s ever heard of Redondo Beach? I do a lot of traveling and I’m shocked to find that everybody knows Santa Monica, and that’s because of the pier and the advertising it brings.”

The pier is regularly featured on television and the big screen. It’s familiar sign can often be seen during NBA games. It was also featured in the Oscars.

With that in mind, the PRC’s financial oversight committee hired a consultant to evaluate the market value of the pier based on a selection of articles, events and radio promotions in 2005 and 2006, and national exposure on television during the first three months of 2007.

What the consultant found out was that the average marketing value of the pier is in excess of $25 million, which “represents a tremendous contribution to the world-wide awareness of Santa Monica and a significant contribution to the value of Santa Monica as a community,”the report states.

Although the pier will not generate enough revenue to cover all of the costs of future capital improvements, PRC officials point out that the pier is a cultural and recreational source for residents and visitors and that it enhances the image and generates traffic for local businesses and hotels.

“The capital costs are more than offset by the notoriety of the pier,” Franz-Knight said.

The report is sure to have its critics, and may not change many people’s perceptions of the pier as an underperform-ing attraction that should be raking in the dough.

One of those who still needs convincing is Mayor Pro Tem Herb Katz, a former member of the PRC board, who has expressed his concerns about the pier’s finances and has called on PRC to be more creative in generating revenue.

“I have concerns about the pier and I probably always will, but when I found out about the 1550 lot and that they aren’t getting any credit for it, that made a difference,” said Katz. “We now have a more accurate picture and I’m feeling more comfortable about it, but that task is, and should always be, to turn it into a profitable, or at worst, break even ground.”

Katz said it is crucial for the pier to make more money so that it can place funds in a reserve for future improvements. To do that, Katz said there should be more consideration given to what types of business are operating there. But in doing so, one has to strike a delicate balance.

“You have several schools of thought,” Katz said. “One is we don’t want it to be, and this is mainly the pier board, a ritzy, plastic pier, and they always use Pier 39 in San Francisco as an example. I don’t like that either, but on the other hand, its got to... improve itself so the public not only feels perfectly safe down there, but also wants to go there.”

Katz said the new restrooms are a good example, and he would like to see better restaurants too.

“We need some real variety,” Katz said. PRC officials are working on it. They are searching for company to run an old-fashioned soda fountain in the carousel building, and are talking with those interested in returning boating to the pier.

In the end, Franz-Knight said, “we just think the pier needs credit where credit is due.”

*Originally published in the Santa Monica Daily Press print edition on June 26, 2007.* [Read the original PDF.](https://s3.us-east-1.amazonaws.com/smdp%5Fbackissues/062607.pdf?ref=smdp.com)