HomeMy WebLinkAboutR-11632 finding that a grant agreement with the San Luis Obispo Museum of Art is of public benefit iR 11632
RESOLUTION NO. 11632 (2026 SERIES)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS
OBISPO, CALIFORNIA, FINDING THAT A GRANT AGREEMENT WITH
THE SAN LUIS OBISPO MUSEUM OF ART IS OF PUBLIC BENEFIT IN
ACCORANCE WITH CALIFORNIA GOVERNMENT CODE SECTION
53083 AND APPROVING THE GRANT AGREEMENT
WHEREAS, The City of San Luis Obispo (City) enjoys a long-standing public /
private partnership with the San Luis Obispo Museum of Art (SLOMA) that stretches back
over 60 years, including through the lease of City property at the location of the existing
museum at 1010 Broad Street tangent to Mission Plaza in 1967. This relationship has
supported a wide variety of activities and initiatives during this time in support of the visual
arts, including the establishment of a formal Community Partnership Agreement with
SLOMA beginning in 2021 in furtherance of the City's Public Art Program; and
WHEREAS, SLOMA has put forward a Proposal for Supporting the Future San
Luis Obispo Museum of Art: A New Home in the Heart of Downtown (the “Proposal”)
submitted to City Council on October 30, 2025, that has significant alignment with
numerous City plans and policies. These include the City’s existing 2025-27 Major City
Goals, Economic Development Strategic Plan (2023), Downtown Concept Plan (2017),
and General Plan Land Use Element (2014); and
WHEREAS, SLOMA's Proposal describes plans to expand from its present
location at 1010 Broad Street by also bringing together three existing storefront properties
on Higuera Street between Chorro and Garden, while maintaining and featuring
connectivity to the creek walk, Mission Plaza, and the Cultural Arts District. The three
properties together would form a 24,000-square-foot museum facility with multiple
galleries, a museum cafe and store, a blend of indoor and outdoor space, and downstairs
offices supportive of SLOMA's operations and storage needs. The 1010 Broad Street
property would be used for expanded arts educations programming by SLOMA, which is
consistent with the existing lease agreement for that property with the City; and
WHEREAS, SLOMA’s Proposal is informed by a feasibility study and economic
development data that forecast SLOMA’s museum offerings would attract at least
106,200 individuals to the downtown area (Lord Cultural Resources, 2024), support 93
jobs, and generate total expenditures of over $4.9 million (Americans for the Arts: Arts
and Economic Prosperity 6 report and Arts and Economic Prosperity AEP 6 Calculator,
January 2024). These data suggest that an investment by the City in SLOMA’s new
museum space is fiscally prudent and underly Economic Development Subsidy findings
that are required by California Government Code Section 53083, which are documented
herein; and
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WHEREAS, on November 4, 2025, as part of its review of the unaudited year-end
2024-25 fiscal year budget, the City Council received numerous, favorable public
comments and testimony from SLOMA staff and members of its Board of Directors
regarding the Proposal, and directed staff to prepare a Grant Agreement to provide
funding in support of Phase I of SLOMA’s Proposal in an amount up to $500,000.
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis
Obispo as follows:
SECTION 1. The above recitals are true and correct and are a substantive part of
this Resolution.
SECTION 2. Findings.
Economic Development Subsidy
Under California Government Code Section 53083, the City is required to provide
specified information in written form available to the public, through its website, for any
economic development subsidy within its jurisdiction and to provide public notice and a
hearing regarding the subsidy. An “economic development subsidy” is defined in relevant
part under the Government Code as “any expenditure of public funds or loss of revenue
to a local agency in the amount of one hundred thousand dollars ($100,000) or more, for
the purpose of stimulating economic development within the jurisdiction of a local agency,
including, but not limited to . . . grants . . .” (Cal. Gov. Code § 53083(g)(1)).
The draft Grant Agreement entails a commitment of $500,000 in grant funding towards
SLOMA’s new museum space due to the long-standing community partnership with
SLOMA and the anticipated economic development and other public benefits the new
museum will provide. As such, the Grant Agreement constitutes an “economic
development subsidy” and disclosure of the following information and a public hearing
are required, as follows (shown in italics):
1) The name and address of all corporations or any other business entities, except
for sole proprietorships, that are the beneficiary of the economic development
subsidy, if applicable. San Luis Obispo Museum of Art, A California Non-Profit
Corporation.1010 Broad Street, San Luis Obispo, CA 93401.
2) The start and end dates and schedule, if applicable, for the economic
development subsidy. The start date is upon entry into the Grant Agreement.
City of San Luis Obispo grant funding would be required to be expended within
three years following the start date, unless otherwise amended.
3) A description of the economic development subsidy, including the estimated
total amount of the expenditure of public funds by, or of revenue lost to, the
local agency as a result of the economic development subsidy. The total
amount of direct expenditure of public funds is $500,000.00.
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4) A statement of the public purposes for the economic development subsidy. The
public purpose for the economic development subsidy is to support arts and
cultural activities in the downtown area of San Luis Obispo, which is expected
to generate direct and indirect local economic impact benefits.
5) Projected tax revenue to the local agency as a result of the economic
development subsidy. According to data provided by SLOMA and the
Americans for the Arts: Arts and Economic Prosperity 6 report (January 2024),
the operation of SLOMA’s new museum space will result in $123,500 in local
government revenue and will generate $4,926,203 million in total expenditures
an annual basis. SLOMA will be subject to possessory interest property tax,
however as the tenant improvements for the new museum space are not yet
constructed, it is not yet known what the assessment and taxing rate will be.
6) Estimated number of jobs created by the economic development subsidy,
broken down by full-time, part-time, and temporary positions. According to data
provided by SLOMA and the Americans for the Arts: Arts and Economic
Prosperity 6 report (January 2024), the operation of the new museum space
will generate 93 jobs. Employment data contained in this report is based on the
underlying IMPLAN model and is an annual average headcount of full time, part
time, and seasonal employment using the same definitions as the U.S.A.
Bureau of Economic Analysis Regional Economic Accounts and the U.S.
Bureau of Labor Statistics Census of Employment and Wages.
The public hearing and disclosure of economic development subsidy contained herein
have been duly noticed and carried out in accordance with the requirements of California
Government Code Section 53083.
SECTION 3. Environmental Review. The passage of this Resolution and
entering into a Grant Agreement is not considered a project under CEQA Guidelines
Section 15378.
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SECTION 4. Grant Agreement. City staff are hereby authorized to execute the
Grant Agreement in the form and manner approved by the City Attorney, attached as
Exhibit A, and to duly oversee and carry out the terms and conditions of the Lease
Agreement.
Upon motion of Council Member Marx, seconded by Mayor Stewart, and on the
following roll call vote:
AYES: Council Member Boswell, Marx, Shoresman, Vice Mayor Francis,
and Mayor Stewart
NOES: None
ABSENT: None
The foregoing resolution was adopted this 17th day of February 2026.
___________________________
Mayor Erica A. Stewart
ATTEST:
______________________
Teresa Purrington
City Clerk
APPROVED AS TO FORM:
______________________
J. Christine Dietrick
City Attorney
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the
City of San Luis Obispo, California, on ______________________.
___________________________
Teresa Purrington
City Clerk
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GRANT AGREEMENT
SAN LUIS OBISPO MUSEUM OF ART
This agreement dated ________________ is between SAN LUIS OBISPO MUSEUM OF
ART, a California non-profit corporation (“SLOMA”) and CITY OF SAN LUIS OBISPO,
a California Municipal Corporation and Charter City (“CITY”) (the “Grant Agreement”)
with reference to the following:
WHEREAS, SLOMA is a long-term lessee of CITY property at 1010 Broad Street located
at the corner of Monterey Street and Broad Street, San Luis Obispo, adjacent to Mission
Plaza and within CITY’s planned Cultural Arts District, which is the site of the current San
Luis Obispo Museum of Art (“1010 Broad Street”); and
WHEREAS, CITY and SLOMA have an existing Community Partnership Agreement for
the administration of public art, which notes the mutually beneficial relationship between
CITY and SLOMA as a way to continue to advance the visual arts, art education, and foster
a strong artistic community in San Luis Obispo; and
WHEREAS, SLOMA issued a written letter request and submitted its Proposal for
Supporting the Future San Luis Obispo Museum of Art: A New Home in the Heart of
Downtown (“Proposal”) to City Council on October 30, 2025, which describes SLOMA’s
plans to expand from 1010 Broad Street by bringing together three existing storefront
properties on Higuera Street between Chorro and Garden (the “New Museum”), while
also maintaining and featuring connectivity to the creek walk, Mission Plaza, and the
Cultural Arts District; and
WHEREAS, SLOMA's proposal indicates that the total project would be implemented
in two phases. SLOMA proposal requested that the City Council consider total funding
of $2.5 million, of which $500,000 would be used for the first phase to immediately
furnish and activate the new museum space, while the remaining $2 million would be
used towards the eventual purchase of the property at a later time; and
WHEREAS, at its regularly scheduled meeting on November 4, 2025, the City Council
considered the 2024-25 Year End Budget Report, and as per SLOMA’s request, also
directed staff to assign funds in the amount of $500,000 as part of the 2nd Quarter 2025-26
Budget Report and further directed staff to prepare this Grant Agreement to be used for
Phase 1 of the project, while also directing staff to “include terms that would commit the
City to providing funding of some kind toward Phase 2 of the project, subject t o further
analysis and discussion at a public meeting and with funding allocations determined during
future budget actions.” (Council Minutes for November 4, 2025, approved November 18,
2025); and
WHEREAS, CITY’s financial support towards implementation of the New Museum being
pursued by SLOMA is intended to provide both necessary financial support as well as serve
to motivate and catalyze other funders and donors in furtherance of SLOMA’s overall
capital campaign and fundraising goals for the New Museum; and
WHEREAS, the New Museum will ultimately be available to both residents of the City and
visitors alike, thereby serving public purposes in furtherance of CITY’s goals for facilitating
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both arts and cultural amenities, as well as contributing to a thriving and prosperous
downtown area through economic development activities, and
WHEREAS, SLOMA’s plans to expand from 1010 Broad Street and implement the New
Museum are consistent with CITY’s Land Use Element of the General Plan (2014),
Downtown Concept Plan (2017), Economic Development Strategic Plan (2023), and
CITY’s Major City Goal for “Cultural Vitality, Economic Resilience and Fiscal
Sustainability” adopted as part of the 2025-27 Financial Plan.
NOW, THEREFORE, CITY and SLOMA for and in consideration of the mutual benefits,
promises and agreements set forth herein, do agree as follows:
1. Phase I Implementation
On or before the date that is three (3) years following the execution of this Grant Agreement,
SLOMA shall complete construction of Phase 1 of the New Museum. SLOMA’s failure to
comply with this term may result in amendment in accordance with Paragraph 8, provided
substantial progress or extenuating circumstances can be documented, or termination of this
Grant Agreement as provided herein.
2. Grant Amount and Allowed Expenses
City agrees to pay SLOMA a one-time only grant on a reimbursement basis, as provided in
Section 4, in an amount up to $500,000 (“Grant Funds”), to be used towards implementation
and activation of the New Museum, subject to the conditions set forth herein. The Grant
Funds shall only be used for costs directly related to Phase 1 of the New Museum as
specified below.
CITY’s Grant Funds may only be used for “soft” costs, or expense items that are not
considered direct construction costs, such as the purchase of furniture and other items
supporting the operations and maintenance of the New Museum (“Eligible Costs”). If there
is a dispute about whether a project cost is an Eligible Cost, CITY shall have final
determination of whether the cost is an Eligible Cost.
SLOMA acknowledges and represents that the Grant Funds will not be used for construction
of any element of the New Museum, including any architectural, engineering, direct
construction, demolition, or alteration costs defined as contractor expenses for labor, project
management, installation, materials, equipment, utilities and other direct construction costs.
3. Conditions Precedent to Funding
SLOMA shall satisfy the following required conditions prior to any disbursement of Grant
Funds by CITY. With respect to any requested reimbursement, SLOMA shall:
a. Maintain its 501(c)(3) non-profit status.
b. Shall secure all other grant funds, donations, pledges, or financing necessary to
complete Phase 1 of the New Museum, inclusive of the amount of Grant Funds
provided by the CITY pursuant to this Grant Agreement, and shall first utilize (or
provide for first utilizing) all other grant funds, donations, or financing then available
(collectively “Other Available Funding”) for the New Museum prior to any request
for reimbursement from CITY. However, SLOMA’s initial reimbursement request
for Grant Funds may be made prior to complete exhaustion of Other Available
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Funding, as necessary, to ensure continued availability of funding to complete the
New Museum.
c. Secure all necessary project entitlements and building permit(s) for Phase 1 of the
New Museum that may be applicable as further described in Paragraph 6, below.
d. Submit for CITY review and approval a fundraising plan demonstrating project
feasibility, including cost estimating and project schedule.
e. Submit for CITY review and approval forecasted budgets for the first three years of
operating the New Museum demonstrating a fiscally sustainable business model.
f. Identify additional public benefits associated with the New Museum that can
reasonably be facilitated and implemented, such as public art in the creek walk area
or similar.
4. Reimbursement Requests
Upon satisfaction of the conditions identified in Section 3, reimbursement payment requests
for Eligible Costs shall be submitted to CITY’s Deputy City Manager. Reimbursement
payment requests shall include supporting documentation including itemized invoices or
other evidence that supports the request. Reimbursement payment requests may be
submitted on a bi-monthly (twice per month) basis and will be reviewed and approved for
reimbursement by the CITY in a timely manner, and CITY will make best efforts to process
and pay reimbursement requests within fifteen (15) business days from the date of such
payment request, provided that sufficient documentation supporting the reimbursement
request is provided to CITY. Sufficiency of payment documentation shall be in the sole but
reasonable discretion of the CITY and CITY reserves the right to request and receive
additional reasonable documentation to support SLOMA’s reimbursement requests and as
may be appropriate to aid in City’s determination of whether the requested reimbursement
payment is for an Eligible Cost.
5. Use of Grant Funds at Other Sites
If SLOMA determines that implementation of Phase 1 of the New Museum at the specified
site is impractical or inadvisable for any reason, then SLOMA may not use the Grant Funds
for any other purpose without prior written approval of the City Council.
6. Permits
SLOMA shall apply for and obtain all necessary building and other related permits and
project entitlements necessary to implement the New Museum in conformance with local,
state, and federal laws. This Grant Agreement does not authorize the construction or tenant
improvement of the New Museum or otherwise alter, impact, or interfere with the exercise
of CITY’s independent regulatory and land use authority.
7. Funding Source Recognition
SLOMA will ensure recognition of the role of CITY in providing funding through this Grant
Agreement. CITY shall be identified as a funding source in all applicable publications, press
releases, social media outreach and similar fundraising promotions.
8. Amendments and Phase 2 Funding
CITY and SLOMA may amend this Grant Agreement at any time provided that such
amendments make specific reference to this Grant Agreement, and are executed in writing,
signed by a duly authorized representative of each organization, and approved by the City
Council. Such amendments will not invalidate this Grant Agreement, nor relieve or release
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either CITY or SLOMA from its obligations under this Grant Agreement, except as
expressly provided in writing in any such duly executed amendments.
It is expressly anticipated that this Grant Agreement may be amended to provide additional
funding support towards Phase 2 of the New Museum expansion project, as that Phase is
defined and described in SLOMA’s Proposal. To be considered for future Phase 2 funding,
at a minimum SLOMA shall:
a. Satisfactorily complete and be in good standing with CITY for all items listed under
Paragraphs 3 and 9, herein.
b. Submit a detailed Phase 2 project description and supportive justification for the funding
request.
c. Submit sufficient due diligence items suitable for CITY’s review to ensure any
expenditure of public funds is appropriately supported and documented.
CITY shall have no obligation whatsoever to enact and approve an amendment to provide
additional funding of any amount, which is subject to the actual availability of funds at the
time a request is made and is within the then-seated City Council’s sole discretion.
9. Quarterly Reports and Financial Assurance
SLOMA shall provide quarterly reports on both Phase 1 of the New Museum and the
ongoing operations and activation of 1010 Broad Street, including the use of CITY Grant
Funds, if any, during the reporting period. These reports shall be due at the end of the first
month after the end of the calendar quarter (i.e. January, April, July, and September) and
submitted to the Deputy City Manager. The quarterly reports should include percentage of
completion, other available funding on hand or then receivable, and work anticipated to be
completed in the following quarter. CITY reserves the right to request and receive copies
of invoices, account statements, or audits of SLOMA’s financial records pertinent to
implementation of Phase 1 of the New Museum and in CITY’s sole discretion, to withhold
reimbursement payments until satisfactory reports and supporting documentation are
received.
10. Assignability
SLOMA shall not assign or transfer any interest in this Grant Agreement without the prior
written consent of the City Council.
11. Conflict of Interest
No member of the CITY’s governing body and no other public official of such locality, who
exercises any functions or responsibilities in connection with the planning or carrying out
of the New Museum project, will have any personal financial interest, direct or indirect, in
this Grant Agreement. SLOMA will also take any and all steps and enact appropriate
policies to assure compliance.
12. Severability
If any provision of this Grant Agreement is held invalid, the remainder of the Grant
Agreement will not be affected thereby and all other parts of this Grant Agreement will
nevertheless remain in full force and effect.
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13. Entire Agreement
This Grant Agreement constitutes the entire agreement between CITY and SLOMA for the
use of funds received under this Grant Agreement and shall supersede all prior
communications and proposals, whether electronic, oral, or written between CITY and
SLOMA with respect to this Grant Agreement.
14. No Agency or Employment
SLOMA is solely responsible for all activities supported by this Grant Agreement. Nothing
in this Grant Agreement creates a partnership, agency, joint venture, employment, or any
other type of relationship between SLOMA and CITY. SLOMA shall not represent itself as
an agent of CITY for any purpose and has no authority to bind CITY in any manner
whatsoever. SLOMA and all of its agents, representatives, or participants in any manner in
the performance of its obligations and duties hereunder, shall be employees, independent
contractors, or volunteers solely of SLOMA. They shall not for any purpose be considered
employees or agents of CITY.
15. Indemnification
SLOMA agrees, to the fullest extent permitted by law, to defend, indemnify, and hold
harmless CITY its officers, directors, affiliates, employees, and agents (“City
Indemnitees”), from and against any and all claims, liabilities, losses and expenses
(including reasonable attorney’s fees) directly, indirectly, wholly or partially arising from
or in connection with any act or omission of SLOMA, its employees or agents, in applying
for, accepting, or use of the Grant Funds, or in carrying out the New Museum project as set
forth. In the event the City Indemnitees are made a party to any action, lawsuit, or other
adversarial proceeding arising from SLOMA’s performance under this Grant Agreement,
SLOMA shall provide a defense to the City Indemnitees or at the City’s option, reimburse
the City Indemnitees their costs of defense, including reasonable legal fees, incurred in
defense of such claims.
16. Termination
The City Manager may, within reasonable discretion, initiate termination of this Grant
Agreement in the event of any material breach of the terms of this Grant Agreement by
SLOMA. Material breach includes breach of Sections 1-7, 9 and 15 of this Grant
Agreement, but does not include minor delays in reporting or other delays in obligations set
forth herein caused through no fault of SLOMA, as well as administrative or clerical errors
made in good faith. Upon the City Manager’s written notice of breach, SLOMA shall have
forty-five (45) calendar days to cure any such breach (the “Notice of Breach”). Should
SLOMA fail to cure or provide documentation of substantial progress towards curing such
breach within forty-five (45) calendar days of the date of the Notice of Breach, the City
Manager shall provide written notice of termination of this Grant Agreement (the “Notice
of Termination”). Said termination shall be effective thirty (30) calendar days after the City
Manager mails the Notice of Termination to SLOMA. Any remaining Grant Funds in excess
of then unpaid Eligible Costs, as defined in Section 2, actually incurred as of the date of
notice of termination shall revert to CITY upon the effective date of termination.
17. Notices
For purposes of notice under this Grant Agreement, all notices shall be considered effective
upon being sent by certified mail to the following addresses:
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CITY:
City of San Luis Obispo
990 Palm Street
San Luis Obispo, CA 93401
Attn: City Manager
SLOMA:
San Luis Obispo Museum of Art
1010 Broad Street
San Luis Obispo, CA 93401
Attn: Executive Director
CITY OF SAN LUIS OBISPO, A MUNICIPAL CORPORATION
By:
Whitney McDonald
City Manager
SAN LUIS OBISPO MUSEUM OF ART, A CALIFORNIA NON-PROFIT
CORPORATION
By: ___________
Leann Standish
Executive Director
APPROVED AS TO FORM:
By:
Christine Dietrick
City Attorney
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