BEVERLYHILLS

STAFF REPORT

Meeting Date: May 16, 2017

To: Honorable Mayor & City Council

From: Huma Ahmed, Community Outreach Manager

Subject: Recommendation from the Beverly Hills Conference and VisitorsBureau, Rodeo Drive Committee and Beverly Hills Chamber ofCommerce Regarding a Proposed Summer Program in August 2017

Attachments: 1. Letter to Corporate Retailers2. August2017 Programming3. Summer Program Budget

INTRODUCTION

This item provides a recommendation from the CVB/Marketing Liaison Committee(Mayor Bosse and Councilmember Wunderlich) regarding a proposal from the City’spartner organizations for a special summer marketing program in August 2017.

This request was submitted to the Committee through the Beverly Hills Conference andVisitors Bureau (“CVB”) the Rodeo Drive Committee (“RDC”) and Beverly Hills Chamberof Commerce (“Chamber”). The proposal includes a request for carryover funding to beallocated into their work plans for FY 2017/1 8. As developed, it would be a collaborativeproject between the City and its local partnering business organizations.

DISCUSSION

On April 6, 2017, the City’s leading hoteliers and retailers requested an urgent meetingwith the CVB/Marketing Liaison Committee to discuss market conditions in Beverly Hills.The discussion highlighted regional and national issues affecting the businesscommunity.

Attending representatives shared that an immediate strategic marketing campaign wasneeded in order to compete with other regional businesses in the Los Angeles area. Thisprogram is an attempt to create an energetic vibe and active interest for visitors and theBeverly Hills community.

On May 10, 2017, a presentation was provided to the CVB/Marketing LiaisonCommittee. The proposal outlined a series of experiences that would be availablethroughout the “golden triangle” including Rodeo Drive. This program is designed toprovide activities every Thursday, Friday and Saturday evening for the month of August.

Page 1 of 3

Additionally, local businesses are being invited to stay open later, and provide in-storeincentives (Attachment 1). This summer marketing program also supports the Mayor’sBOLD. (Businesses Open Later Days) initiative and an established Council Priority forthis year.

The program includes events and ‘experiences’ that would create excitement and energyin the area as a way to attract people to stay, shop and dine in Beverly Hills.

The recommendations include (Attachment 2):

- Sidewalk StampslPavement Art: impermanent and semi-permanent chalkbased artwork on sidewalks to promote Beverly Hills businesses throughout thebusiness triangle.

- Style Sessions: Social media influencers to be invited as guest stylists for in-store events.

- Incentives: Cross promotions to drive business to the restaurants, discounts onparking after hours, and ridesharing discounts (promotions with Uber/Lyft, etc.).

- Summer Ride and Drive: Mercedes-Benz of Beverly Hills to provide test drivesof luxury vehicles within pre-designated locations in the business district. Otherlocal dealerships will also be invited to participate.

- Celebrity DJ’s and Summer Nights Playlist: The City will install the holidayspeakers throughout the business triangle for summer night music. The playlistswould vary by night and be incorporated with the Concerts on Cañon. CelebrityDJ’s will be present on designated evenings.

- Beverly Hills Mobile Carts and Drinks (non-alcoholic): to feature Beverly Hillsbranded carts featuring specialty non-alcoholic drinks, desserts and café tablesand chairs. A complete street closure of Rodeo Drive is proposed for the firstnight of the program which is tentatively proposed for Thursday, August 3, 2017.

FISCAL IMPACT

City Costs for Summer ProgramIn reviewing the City’s budget for FY 2016/17, it was determined that the City maycontribute carry-over funding from this fiscal year to FY 2017/18 to assist with programfunding. Additionally, the City’s in-kind costs would include a one-evening street closureof Rodeo Drive with an estimated cost of $27,534.

The total estimated costs for the Beverly Hills summer program initiative (Attachment 3)is as follows:

Item Cost

Promotions/Incentives $10,000

Celebrity D] $210,000

Branded food and drink carts; chairs and tables $200,000

Sidewalk Stamps/Pavement Art $90,000

Page 2 of 3

Item Cost

Fireworks — First Night Only $30,000

Create Concepts — Design Work $10,000

Advertising $1 10,000

Style Sessions — Digital Influencers $60,000

Banners $50,000

Postcards $20,000

Garage Signage $1,500

Subtotal $791,500

City/Partner Funding for this program would be as follows:

Description Funding

Conference and Visitors Bureau - from FY 16/17 work plan $200,000

Rodeo Drive Committee - from FY 16/17 work plan $75,000

Subtotal $275,000

City funding - estimated savings in FY 16/17 Tourism and$375 000

Marketing budget to carryover to FY 17/18

(Optional) City funding - estimated savings in FY 16/17$150 000

Business Development budget to carryover to FY 17/18

Subtotal $525,000

Total available funding $800,000

Additionally, the Rodeo Drive Committee estimates their retailers total in-kindcontribution will be approximately $1,950,000 for the 13 nights of summer programming.

RECOMMENDATION

Staff seeks City Council direction and possible approval for the following carryovers:• Authorization of $375,000 from the FY 16/17 Tourism & Marketing budget• Authorization for $150,000 (optional) from the Business Development budget to

be encumbered for funding the FY 17/18 for the Summer Program

Mahdi AluzriApproved By

Page 3 of 3

II 0 3 CD -

Dear (retailer name),

As you may be aware, competition for shoppers is heating up in the immediate vicinitysurrounding Beverly Hills. Westfield Century City and The Beverly Center are investingmillions of dollars in Westside shopping experiences within a 2-mile radius of Rodeo Drivedesigned to provide their customers with late night shopping, gourmet dining and nameentertainment. Investments such as these are chipping away at our market share as both touristsand locals alike look for unique experiences to entertain them in the later hours of the day.

Of particular concern to us, is the feedback that we continue to receive from all of our Four andFive Star hotels. They have stated that during the summer months - our busiest time of year forvisitors - they must direct their guests to neighboring competitors as there is no shopping oractivities available in the early evening hours in Beverly Hills. In August, nearly 20% of ourhotels’ business originates from middle-eastern countries who generally prefer to shop in the lateafternoon, into the evening. They also embrace nightlife. These guests pay top dollar for theiraccommodations, many rooms start at $800-si ,t)00 per night in the summer, travel on privatejets and come with their entire family. Our hotels are at or near full occupancy in the summer.We have a captive audience of our target demographic at these hotels and we cannot afford tocontinue to lose their business to other local destinations because our boutiques close at 6:00 or7:00pm.

Because of these “early” closures, Beveçly Hills has long been perceived as the place where thereis nothing to do in the evening. We have begun to change this perception with the multitude ofdining establishments available on Canon Drive. But just having a place to eat is notenough. We need to add shopping and entertainment to the equation to permanently shift theperception, protect our market share and set us up for success in the years to come.

To start this change in culture, we would ask that for the month of August, your Beverly Hillslocation remain open until 8:00 pm on Thursday, Friday and Saturday evenings. To buildawareness and to complement the new extended hours, the City of Beverly Hills will befunding:

A robust marketing campaign of events, promotions, digital partnerships and promotionto create buzz and excitement on our streets and to help us become more of an eveningdestination for hotel guests, Beverly Hills and Los Angeles County residents as well asthose of nearby markets who can drive to the city for the weekend. Hotels have agreed topromote shopping on their in-room entertainment devices and through their house cardrivers, sales and concierge staff as well as in their social media channels.

We want to reiterate that this is a city-wide initiative. We are banding together to become astronger, united city presence and to attract customers BEFORE they get used to going toCentury City for their luxury shopping. We need your 100% participation for this to work! As acondition of the city funding activities, we will need a firm commitment from the retailers onRodeo Drive to remain open on Thursdays, Fridays and Saturdays in August until 8:00 pm. Wealready have commitments from Burberry, Chanel, Dior, Louis Vuitton, Patek Philippe, Rolex,Torn Ford and Valentino.

We hope you will partner with us to continue making Beverly Hills a unique and vibrantdestination that cannot be rivaled anywhere else in the world. Please email me atlbosse(lbeverlyhulls.org or call 310-285-1013 by Thursday, May25 if you are able toparticipate with later hours every Thursday through Saturday in August. If you have anyquestions, please contact Cara Kleinhaut or Marissa Wallis at RDC(,AGEN-C.Corn or call 310-855-9595.

Please help us save our shoppers from leaving Beverly Hills!

All the best,

Mayor Lili Bosse

Noel Hernandez Sandy Murphy Ben TroddAKA The Beverly Hilton Beverly Wilshire,

A four Seasons Hotel

Adam Sydenham Todd Orlich Offer NissenbaumLuxe Rodeo Drive Hotel Montage Beverly Hills The Peninsula Beverly Hills

Rich Oken Alex Novo Luc DelafosseSixty Beverly Hills Viceroy L’Ermitage The Waldorf Astoria Beverly Hills

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Business Open Late Days Budget - City Liaisons Presentation 5/10

Item Description Notes Cost Executed by Responsible Party

Stores to stay open until 8pm Thur -

Outteach to Stores Sat. Potential in-store events tbd. N/C Chamber, RDC, CVB

Outreach to hotels and restaurants See restaurant promotion below N/C CVB/ChamberParking meters Mobile Bites on Rodeo N/C City

To play concerts onCanon on Thursdays,

Hang speakers along Rodeo and playlist on Friday andSpeakers Beverly Dr. Di on Saturdays TBC City

Guests would receive free parking

Free/discounted parking up until 9pm Thursday - Saturday N/C City/Two RodeoCome between 6 and 8 pm onThursday, Fri or Sat in August and

Promotion w/ Lyft receive $5 oft First 2000 people $10,000 CVBFree glass of wine/appetizer/dessert, etc. when you show your

shopping receipt of $50 or morefrom after 6pm at a Beverly Hills

Promotion with Restaurants restaurant N/C CVB/Chamber

Personal appearance every Sat Influencers w/ Social(curated BH playlist to be created Media. Includes

and available on Spotify or Pandora). equipment rental andFirst week Thursday-Saturday. 6 setup/tear down

Di appearances ($3SK per appearance) $210,000 AGENC CVB/RDCBeverly Hills Mobile Bites Beverly Hills Food Truck $125,000 AGENC CVB/RDC

Sidewalk placement with BH Mobile

Tables and Chairs Bites (13 nights) $5,000 per set up $65,000 AGENC RDC/CVBMercedes Test Drives To be sponsored n/c RDCFoot prints/stamps Along Rodeo Drive $65,000 AGENC RDC/Chamber/CVBFireworks First Night $30,000 City

CVB w/ RDC and CityCreative Concepts Yes Design Group (CVB) $10,000 YDG approval

Local and Drive Market and Where

Advertising Magazine Includes production $110,000 GP GENERATE/YDG CVBSelect influencers will be paid topost and appear in-store for meet $25,000/influencer -

Social Influencers and greets three stores at a time $120,000 AGENC RDCBanners Golden Triangle $50,000 YDG/AAA CVBPostcard Local LAC/BH Resident $20,000 YDG/Modern PC CVB

Garage Posters/Signs $1,500 YDG CVBHotels to advise if

Hotel in-room media Promote on TV’s possible TED HotelsIn addition to

Social Media City, CVB, Hotel and RDC distribution influencer content n/c AllPress Press release n/c CVB/RDC

Tour Bus Parking at Trolley stop onTour Operator Outreach Rodeo on open late evenings eblast n/c CVB/CityAGENC Fees TBDArt Installation Movable Screens per installation $85,000 AGENC

Event Company tohandle setup and tear

Food from Local Restaurants Tasting area down x 4 $600,000 AGENC

TOTAL $816,500-$1,5D1,SDD

Contribution by RDC = $2,000/night x 13 x 75 stores = $1,950,000