HomeMy WebLinkAbout12/10/2024 Item 6a, Hermann, Hill, and McDonald - Staff Agenda CorrespondenceCity of San Luis Obispo, Council Memorandum
City of San Luis Obispo
Council Agenda Correspondence
DATE: December 10, 2024
TO: Mayor and Council
FROM: Greg Herman, Deputy City Manager
Prepared
by: Robert Hill, Sustainability & Natural Resources Official
VIA: Whitney McDonald, City Manager
SUBJECT: ITEM 6A – SAN LUIS OBISPO REPERTORY THEATRE LEASE
AGREEMENT
Staff received the following questions from a Council Member regarding the Council
Agenda Report and draft San Luis Obispo Repertory Theatre Lease Agreement that is
being presented to Council for consideration of approval. The questions are below with
staff’s response shown in italics:
1. What other leases does the City have with not-for-profit organizations? Are
the terms with SLO REP typical for 99-year leases?
Over the years, the City has entered into numerous long-term leases of City-owned
facilities with not-for-profit community partner organizations for rent of $1 per year
where the Council has recognized the public benefits that accrue to the community
from those relationships. These leases have different terms and conditions based
on the particular characteristics of the site or building facility and the needs of the
City and community partner at the time those leases were entered into. These
lease agreements also have a range of duration and lease term lengths. At
present, the City has $1 per year lease agreements with the San Luis Obispo
Repertory Theatre (for the existing “Little Theatre” site), the History Center of San
Luis Obispo County, the San Luis Obispo Museum of Art, the San Luis Obispo
Children’s Museum, the San Luis Obispo Railroad Museum, City Farm SLO, and
the YMCA.
2. What happens if SLO REP were to close or cease as an organization? What
happens to the building?
The draft Lease Agreement contains clear language for instances that would
constitute a breach of contract at paragraph 34. If SLO REP were to close, cease
to exist as an organization, or fail to maintain its non-profit corporate status in good
standing, the building and land interest would revert back to the City of San Luis
Obispo (following the specified noticing and administrative remedy procedures). In
that case, the City would have discretion to identify another tenant and / or use for
the building. The draft Lease Agreement also contains other possible options; with
City Council approval and at the City Council’s sole discretion, SLO REP could
propose operating as a for-profit organization and rent would then be at market
San Luis Obispo Repertory Theatre Lease Agreement Page 2
rate, and SLO REP could also propose an assignment of the leasehold interest to
another organization.
3. Did the City consider any other alternatives for use of the site?
The City Council first agreed to work with SLO REP in the 1990s to locate a site
for a new downtown theatre and identified this particular site in the early 2000s.
On March 7, 2000, the City Council conceptually approved moving the San Luis
Obispo Little Theatre (as it was known at that time) to the subject site and directed
staff to negotiate a Memorandum of Understanding. City staff and current and past
City Councils have continued to honor this direction and understanding since that
time. The use is also consistent with the Downtown Concept Plan (2017) – see
Figure 3.1 and Table 3.1, Block 10.