The Santa Monica City Council voted 4-3 Tuesday night to end exclusive negotiations with Revitalization Partners Group over a proposed $360 million restoration of the long-shuttered Civic Auditorium, citing frustration with the lack of financial documentation after nearly two years of discussions.
The council declined to extend the exclusive negotiation agreement with RPG, a consortium including Live Nation and other entertainment industry partners, instead directing staff to assess alternative options for the historic venue that has been closed since 2013.
"We've been told that now for close to two years on this project, and I haven't seen us move the ball to the goal," said Mayor Pro Tem Caroline Torosis. "We haven't talked about the total project cost, we haven't talked about the development timeline, we haven't talked about the entitlement path. We haven't talked about how it's going to be financed."
The decision came after city staff presented a financial analysis suggesting RPG's proposed holographic entertainment venue would be economically unfeasible without substantial public subsidy. Staff estimated the project would generate an internal rate of return of only 3-7%, well below the industry standard of 8-12% needed for viable investments.
RPG's vision called for transforming the 3,000-seat auditorium into an immersive digital venue featuring holographic technology similar to London's ABBA Voyage show, along with 14,000 square feet of new retail and restaurant space. The group estimated average ticket prices at $125.
However, throughout the exclusive negotiation period that began in April, RPG provided no written financial analysis, pro forma projections, or business plan to city staff, relying instead on verbal representations during meetings.
"I've never seen over a year of discussion and not a single option of how the projects can get financed," Torosis said. "We all love what we saw. No one is discounting the beautiful designs and concepts that were shown to all of us, that were confidential, that we weren't allowed to take with us, which was another issue."
Council Member Dan Hall expressed similar frustration with the partnership's progress. "My doubts are because it has been several extensions and several deadlines missed," Hall said. "We still have not been shown any actual plans beyond these nice renderings."
RPG disputed the criticism saying it had responded to all requests for information from the Council and that the process required more time due to the complex nature of the work. They said their various members had a long track record of successfully reviving entertainment venues and that the mission was personal as many of them had a history of working locally.
The failed negotiations are another setback for the property that has fallen into disrepair due to high rehabilitation costs and seismic retrofit requirements.
City Manager Oliver Chi, who has overseen multiple exclusive negotiation processes in his career, told the council he had never seen a six-month negotiation period yield so little substantive information about project financing.
"We haven't received anything from RPG related to financial, business pro forma details," Chi said during the meeting.
Despite the setback, public support for the project remained strong. Dozens of written comments urged the council to grant RPG's requested six-month extension.
"This is one of our last and biggest opportunities to revitalize downtown and bring back the economic prosperity our city so critically needs," wrote resident Judy Rosenberg in public comments. "We cannot afford to let this transformative project slip away due to an insufficient timeline."
Council members Barry Snell, Ellis Raskin and Mayor Lana Negrete voted to grant a shorter three-month extension, arguing the project deserved more time given its complexity and potential community benefits.
"If we give them three months, we can be here in January," Snell said, supporting his motion for the abbreviated extension.
But the majority sided with ending exclusive negotiations to allow broader market exploration.
Under the council's directive, city staff will now conduct a comprehensive analysis of the Civic site's highest and best use, examining options both with current constraints such as historic preservation requirements and without limitations that would allow complete redevelopment.
The decision does not preclude RPG from continuing to develop their proposal or participating in future competitive processes, but removes their exclusive negotiating rights to the prime downtown property.
The 72-year-old Civic Auditorium, which opened in 1958 and hosted legendary performers including The Beatles and Bob Dylan, was designated a historic landmark in 2002. The venue has remained largely vacant since closing for safety concerns in June 2013.
City staff indicated that a new competitive process to identify potential developers and uses for the site could begin within several months, pending completion of the highest-and-best-use analysis.