HomeMy WebLinkAbout01/02/1990, C-5 - AGREEMENT BETWEEN THE CITY OF SAN LUIS OBISPO AND SAN LUIS OBISPO LITTLE THEATRE FOR LEASE OF CITY IIIII�I�III�VIIIIIIIII� IU - MEETINGATE: /O
city of sary-Luis oBIspo /
GRIZe COUNCIL AGENDA REPORT ITS NUMBE
FROM: John Dunn, City Administrative Officer
Prepared by: Candace Havens, Special Assistant to
the City Administrative Officer
SUBJECT: Agreement between the City of San Luis Obispo and
San Luis Obispo Little Theatre for lease of City
property located at 1010 Nipomo Street
CAO RECOMMENDATION:
Adopt resolution and authorize the Mayor to execute
an agreement between the City of San Luis Obispo
and San Luis Obispo Little Theatre.
BACKGROUND:
For several years the San Luis Obispo Little Theatre (SLOLT) has
been seeking a new home. SLOLT now leases facilities at San Luis
Obispo Junior High School on a monthly basis and faces an uncertain
future at that location. In April 1988, SLOLT submitted a request
to the City to begin negotiations for the lease of City property
for construction of a new theatre.
The City has long supported development of a small theatre in the
downtown. In 1987, the results of a Performing Arts Facility study
by Hall Goodhue Haisley and Barker (HGHB) were presented to the
Council. The consultant identified a need for a large, 1500-seat
theatre and a smaller, 300-seat theatre within the City limits.
Subsequently, the City has entered into a joint Powers Agreement
with Cal Poly State University and with a private, non-profit
foundation to build the large theatre on the Cal Poly campus.
SLOLT's proposal will address smaller theatre needs.
After considering several possible theatre sites, the Council voted
in September 1988 to support lease of City property at 1010 Nipomo
Street; this is the site of an old transmission shop which
currently stores city maintenance supplies. The ' property was
purchased in 1982 in anticipation of the Mission Plaza Extension.
SLOLT anticipates breaking ground within two years, with
construction to take an additional year. The opening of the
theatre is estimated to be in October 1992 . At its September 19,
1989 meeting the City Council granted conceptual approval to the
San Luis Obispo Children's Museum for interim use of this site.
(An Agreement with the Museum is also scheduled for the review by
the Council on this agenda. )
Staff Report
Page Two
Councilmembers are asked to approve an agreement with the Little
Theatre that will be used to guide creation of a formal lease
agreement. Staff believes that the proposed agreement complies
with the current adopted policy (see attached policy statement,
adopted October 17, 1989) . The agreement features the following:
* A commitment by the City to support the arts of all kinds
and to encourage the fullest community benefit from the facility.
The SLOLT agrees to share the facility with other groups to meet
this goal.
* The SLOLT will bear the cost of development and operation
of the facility and the City will lease the property at $1 per
year.
* The lease will run 40 years and the SLOLT will have the
first option to re-lease for an additional 15 years.
* The SLOLT will provide an operations manager. If this is
a paid position, the City will consider funding a portion of the
salary which is directly related to providing services for groups
other than SLOLT.
* A seven-member committee will review the public use and
benefit of the facility to insure the intent of this agreement is
met. The committee will consist of representatives of SLOLT, City
Administration, City Council, the BIA, Chamber of Commerce and
County Arts Council.
* The SLOLT will comply with City required approvals. The
City will initiate a general plan amendment and rezoning of the
property to accommodate this type of use.
* The SLOLT will diligently pursue fundraising and
construction according to the proposed schedule and will maintain
the facility in first class condition once completed.
* If the SLOLT ceases operation before the term of the lease
expires, the City has the option to buy the theatre improvements
at a depreciated cost schedule. If the City chooses not to
exercise its option, SLOLT would sell the theatre to a city-
approved buyer.
CONCLUSION
From the beginning we have been working towards finding an
appropriate location for the Little Theatre. When it was
preliminarily decided to place the facility on City-owned land,
the earlier objection was expanded to ensure that any use of
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Staff Report
Page Three
City-owned land by a private non-profit corporation provide for a
maximum public benefit. Since the last time the Council reviewed
the proposed agreement, it has been significantly strengthened in
this respect. Specifically, we have added a strong "intent"
section to the agreement making it very clear what the City's
objectives are, and we have reorganized and refined the lease terms
to put all of the "use and operations" provisions together in one
section for easier comprehension and later reference. These
changes have been reviewed and approved by representatives of the
Little Theatre. In summary, the staff believes that we are
presently placing a much-improved document before you, with public
use and benefit being the primary criterion for success.
FISCAL IMPACT
Estimated value of the property is $325,000 and lease value of the
existing warehouse is estimated at $1025 per month. Fiscal impact
would involve 1) foregone revenues from possible lease or sale,
amounting to $1025 per month for up to 55 years lease or $676,500
in current dollars and 2) opportunity costs of committing the
property to this specific purpose and inability to use for other
desired purposes.
The City would receive $1 per year. The theatre may also produce
indirect fiscal benefits due to increased retail sales and visitors
to the downtown. At the end of the lease period, the City will own
the theatre. If the SLOLT cancels the Agreement before the end of
the term, the City may purchase it earlier at a depreciated cost
(see #17 of the Agreement) .
ALTERNATIVES
1. Adopt attached resolution approving agreement between the City
of San Luis Obispo and the San Luis Obispo Little Theatre, with or
without changes and direct staff to prepare a lease agreement from
this document. (Staff-recommended action. )
2. Direct staff and SLOLT to consider alternative theatre sites
and return to Council with an updated analysis of alternatives.
3. Take no action at this time. Staff asks that Council give
direction to staff and applicant as to concerns which must be
addressed prior to return to Council.
e-6-3
Staff Report _
Page Four
CONCURRENCES
This document has been reviewed by the departments of the City
Attorney, Administration, and Community Development.
CONSEQUENCE OF NOT TARING THE RECOMMENDED ACTION:
Delays in approval of an agreement with the SLOLT will delay their
fundraising efforts and, consequently, their ability to proceed on
proposed schedule. Plans have been made to remove the stored
materials from the building and unless occupied by another group,
such as the Children's Museum, the building will remain as it is.
No revenues will be expended or earned and no community function
will be served.
ACTION TAKEN: Approved As Recommended As Modified
Denied Continued
Attachments:
vicinity Map, Draft Resolution,
Draft Agreement, Letter from SLOLT,
Fundraising Overview
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VICINITY MAP - PROPOSED LITTLE 111EATER SITE ;�
RESOLUTION NO. (1989 SERIES)
A RESOLUTION OF THE COUNCIL OF THE
CITY OF SAN LUIS OBISPO
APPROVING AN AGREEMENT BETWEEN THE
CITY OF SAN LUIS OBISPO AND THE
SAN LUIS OBISPO LITTLE THEATRE FOR
LEASE OF A CITY PROPERTY AT ,1010 NIPOMO STREET
BE IT RESOLVED by the San Luis Obispo City Council as follows:
SECTION 1. That certain agreement attached hereto, marked
Exhibit "A" and incorporated herein by reference, between the City
of San Luis Obispo and the San Luis Obispo Little Theatre is hereby
approved and the Mayor is authorized to execute the same.
SECTION 2 . The City Clerk shall furnish a copy of this
resolution and a copy of the executed agreement approved by it to:
The San Luis Obispo Little Theatre, City Administrator, and
Community Development Director.
On motion of Councilmember
seconded by and on the following roll
call vote:
AYES:
NOES:
ABSENT:
the foregoing resolution was passed and adopted this day of
1989.
MAYOR
ATTEST:
CITY CLERK
l
Resolution No. (1989 .Series)
Page Two
APPROVED:
CITY ADMINISTRATIVE OFFICER
T RN
�,� FINANCE DIRECTOR
Exhibit A ~ ,i
AGREEMENT BETWEEN SAN LUIS OBISPO LITTLE THEATRE
AND THE CITY OF SAN LUIS OBISPO
FOR LEASE OF CITY PROPERTY AT 1010 NIPOMO STREET
THIS AGREEMENT entered into this day of 1989, by
and between the City of San Luis Obispo (hereinafter referred to
as "City) and San Luis Obispo Little Theatre, a non-profit
California corporation (hereinafter- referred to as "SLOLT") .
INTENT
WHEREAS, the City is the legal owner of property located at
1010 Nipomo Street, in the City of . an Luis Obispo as shown in
attached Exhibit "B" ;
WHEREAS, the City wishes to enhance Mission Plaza activities
and the vitality of downtown by encouraging development of live
theatre facilities and opportunities for other_ community events,
seminars, meetings and public presentations in the downtown;
WHEREAS, the addition of a non-profit theatre facility in
Mission Plaza is intended to complement ongoing plaza activities
and provide a place where historical, cultural and artistic events
can be presented for community enjoyment and education;
WHEREAS, it is the intent of the City to maximize daytime,
evening and year-round use of the facility. As such, the City
expects SLOLT to take every opportunity to keep the facility fully
occupied and active and to make the facility available at a cost
that encourages such use;
WHEREAS, the City represents that the property to be leased
is worth at least $325, 000 and that the lease rate is proposed to
be below market rate and is in the public interest;
WHEREAS, the City is willing to lease the subject property to
SLOLT and the SLOLT has authority to enter into an agreement for
the lease of real property;
NOW, THEREFORE, be it resolved that the City considers the
development of a non-profit community theatre on the proposed
property to be of benefit to the community at large and the parties
agree to meet the intent of this agreement according to the
following:
LEASE TERMS
1. SLOLT agrees to lease the subject property and to develop
and operate a facility on the proposed site for the term of the
lease, which will serve to meet the intent of this agreement. The
City will have no obligation for development and/or operation of
the proposed facility. Any costs incurred for development and
operation of facility shall be the sole responsibility of SLOLT.
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�! 2 . SLOLT will lease the property for forty (40) years
beginning with the start of construction and ending forty years
later on the anniversary of said date.
3 . SLOLT will reserve the first right to negotiate an
additional term upon mutual agreement of City and SLOLT not to
exceed fifteen (15) years for purposes outlined in the intent of
this agreement, outlined above. SLOLT shall submit any notice of
interest in an extended term no less than one (1) year prior to
termination of the base term of the lease agreement.
4 . The lease may not be assigned except by prio"r written
approval of the City. Such approval shall not be unreasonably
withheld.
5. The lease rate shall be fixed at $l. per year.
USE AND OPERATIONS
6. In recognition of the below market lease rate, SLOLT
agrees to make the facilities available without fee to the City for
official or City-sponsored uses. In addition, the City shall have
first right of use for uncommitted time periods consistent with the
requirements of SLOLT' s own use and other provisions of this
agreement.
C7 . SLOLT is encouraged to sub-lease the facility to promote
and ensure the fullest community benefit. First consideration for
use by others will be given to the City and to local non-profit
groups. The City and other performing groups and organizations
shall be assured use of the facility at .least ten (10) weeks per
fiscal year (July 1 to June 30) which will be coordinated with the
SLOLT performance and rehearsal schedule. Sub-lease charges will
be at a rate which generally reflects the costs to amortize costs
and maintenance of the building. The form of sub-lease agreements
and schedule sub-lease charges shall be subject to City approval
consistent with the purposes of this agreement.
8. A minimum of sixty (60) annual performances and offerings
which are open to the public will be provided by the SLOLT. During
this period, use of the facility will not be exclusive to the
SLOLT. If at any time SLOLT is unable to maintain this level of
operation, the City may issue a one hundred twenty (120) day notice
of early cancellation to terminate the lease agreement.
9. SLOLT will use due diligence in encouraging other
performing groups and organizations to utilize the facilities
whenever not in use by SLOLT.
10. . The SLOLT will provide a full or part-time operations
manager who will be responsible for meeting the terms of the
agreement and assuring the fullest community use of the facility.
- In the event that this position is a paid position, the City, upon
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receipt of written justification of the need for such position,
will consider funding a portion of the salary which is directly U
related to providing services for groups other than SLOLT.
11. Review of the public use and benefit of the facility
consistent with the intent of this agreement and the rights and
obligations stated thereon will be conducted annually by a seven-
member committee including:
* two members of SLOLT
* the Mayor and City Administrator .(or designees)
* one representative of the Business Improvement Association
* one representative of the Chamber of Commerce
* one representative of the County Arts Council.
OTHER PROVISIONS
12 . SLOLT agrees to accept the condition of the property "as
is" except for unknown subsurface toxic or hazardous materials.
The City shall be responsible for cost of any required clean up of
the site due to toxic or hazardous materials. If the cost exceeds
$10, 000, apportionment of the costs shall be subject to
negotiations between the parties. If no accommodation can be
reached, at the City's option, the lease would terminate and the
site would be returned to its pre-lease condition less structural
improvements, at the sole expense of SLOLT (excluding cost of site
clean up) .
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13 . The City will initiate a General Plan Amendment and
rezoning of the property to accommodate this type of use and will
make such efforts as are reasonably necessary to accomplish such
amendments and rezoning. Other required approvals (e.g. , use
permit, architectural review) and compliance with zoning and
parking requirements, including payment of in-lieu fees or securing
off-site parking, shall be the sole responsibility of SLOLT. It
is noted that the subject property lies partially in a Flood Hazard
Zone and that new or remodeled structures may require flood-
proofing.
14 . Except for "acts of God" and mutually agreed upon
excusable delays to be delineated in the lease, SLOLT will use due
diligence to adhere to the design, planning and construction
schedule described in Exhibit "C". The City reserves the right to
grant time extensions or to cancel this agreement for failure to
progress on this schedule, where failure results from reasons other
than those listed above. Said schedule will commence upon approval
of this agreement by all parties.
15. If after three (3) years of the effective date of this
agreement, SLOLT cannot demonstrate to the satisfaction of the City
that it has raised or otherwise has funds committed to cover eighty
percent (80%) of the construction costs of the building and, in no
event, less than $1.1 million, then the City shall have the right
to terminate or extend this agreement, at its sole option and
discretion.
16. If at any time SLOLT is unable to complete development,
the lease will be terminated, and, at the City's option, all
improvements will become the property of the City or the site shall
be delivered free and clear of all improvements.
17 . In the event of early cancellation after completion of
construction, the City shall have the option to buy out
improvements at the proportional rate of 90% of actual construction
costs if cancellation is within the first 5 years, 70% between 6
and 15 years, 50% between 16 and 25 years, and nothing thereafter.
If the City chooses not to exercise its option, SLOLT shall sell
their improvements to a city-approved successor.
18. The relationship that will exist between the City and
SLOLT in this matter will be that of lessor and lessee. Under no
circumstance will SLOLT be considered an employee, officer or agent
of the City under this agreement or the lease. Conversely, the
City is not an agent or extension of SLOLT and is acting solely in
its landlord capacity.
19 . SLOLT will insure all real property improvements for
their market value and shall maintain public liability insurance
in an amount acceptable to the City. In addition, any required
flood insurance shall be paid for by SLOLT. The City shall be
covered as "additionally insured" on such insurance policies.
SLOLT will also maintain a performance bond to cover the cost of
construction, including .materials and labor.
20. SLOLT will indemnify and hold harmless the City, its
officers, agents and employees from any claims; demands, damages,
penalties or costs, including attorneys' fees, imposed which may
arise from development, construction and operation of the proposed
theatre facility on City property.
21. SLOLT will maintain the buildings, features of the
theatre and formal landscaping surrounding the Theatre development
in first-class condition at all times (as shown as unshaded area
of Exhibit "B") . The City will maintain the natural vegetation
along the creekbank (shaded area of Exhibit "B") . Failure to so
maintain shall, at the City's option, constitute a material breach
of the lease.
22 . The City_ of San Luis Obispo reserves the right to enter
the property to construct and maintain retaining walls,. slope
banks, creek channel, Nipomo Street Bridge and other related items
both as they exist today and as they may be modified, changed or
replaced in the future. The City reserves the right of the public
to pass over and for the City to construct and maintain "Mission
Plaza" improvements on the property outside of the footprint of the
Cbuilding approved by the City '(shown as shaded area of Exhibit "B".
23. Both parties also recognize that some issues may not have
been anticipated or addressed herein and that changes to the
agreement may be warranted. Thus, this agreement may be amended
upon written consent of the both parties to the approval of the
City Administrative Officer and the City Attorney and as provided
by law.
This Memorandum of. Agreement is executed this day of.
1989 in the City of San Luis Obispo, State of California.
SAN LUIS OBISPO LITTLE THEATRE THE CITY OF SAN LUIS OBISPO
Director Mayor
Director City Administrative Officer
Director Att "rn
/Cu'IIC�G�/ L
Director Community Development Director
B1/SLOLT
EXHIBIT "B"
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SAN LUIS OBISPO LITTLE THEATRE
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Design, Planning and. Construction Schedule
Phase I Application, Project Description, Environmental 8 months
Review, and Schematic Design and City Approvals
Phase II Design Development. and Final Approvals 4 months
Phase III working Drawings 5 months
Phase IV Plan Check and Re-Check 5 months
Phase V Construction Bidding 3 months
Phase VI Construction 12 months
Total Design, Planning and Construction 37 months
B1/SLOLT
I
Dear
The San Luis Obispo Little Theatre is a nonprofit. incorporated. community perform-
ing arts organization which has been operating continuously in San Luis Obispo.
Calif., since 1946. The purpose of our organization has always been to provide a
forum for people to become involved in the presentation and enjoyment of live theatre,
and to provide facilities with which the study of theatre arts and stagecraft are
available to all.
We are.now beginning a fund-raising effort to build a permanent theatre facility (until
now, we have worked in various adapted rental spaces). We have signed an agreement
with the City of San Luis Obispo for a 40-year lease on a building site in the downtown
area of this progressive community, which is the county seat. Conceptual drawings.
exterior elevations. and site plans have been prepared. The estimated cost of this full-
equipped. 150-seat theatre is $1.2 million.
The San Luis Obispo Little Theatre has a membership of active company members.
season tickets subscribers, patrons, and friends of over 1500. Our annual operating
budget is presently $46,000, with which we produce a total of 60 performances of six
works, covering a broad spectrum from classical works. comedy, mystery, to modern
musicals, dramas, and production of original full-length scripts. Roughly 70 percent
of our operating budget is derived from ticket sales, with the rest being provided
through local contributions. We currently have a building fund of $14.000 in seed
money.
As a part of our fund-raising drive, we would like to apply to obtain funds from your
organization in order to make this long-awaited dream of a permanent performing
space a reality.
If you would kindly foreward your current application materials and any information
you feel is relevant, we would be grateful. If you have any questions or concerns,
please remit them with the above-requested materials..
Thank you for your consideration.
Sincerely yours.
San Luis Obispo Little Theatre, Inc.
Theatre Building Fundraising Overview
Fund-raising overview: In order to raise the funds needed to construct and
outfit a 150-seat community theatre complex at the corner of Monterey and
Nipomo Streets in San Luis Obispo. the San Luis Obispo Little Theatre. Inc.
plans the following fund-raising strategies:
I: Fund raising will be coordinated between the Board of Directors and the
Development Committee of the San Luis Obispo Little Theatre, Inc.
II: The fund-raising campaign will commence upon execution of the memo-
randum of agreement for the abovementioned site with the City of San Luis
Obispo, and will continue for approximately two years, at which time
groundbreaking on building construction is tentatively scheduled.
III: The following fund-raising strategies will take place within the frame-
work of at least six major fund-raising events. such as auctions. special
entertainment benefits, and benefit functions held in cooperation with local
community service groups. The San Luis Obispo Little Theatre's annual
production activity and yearly production fund-raising and ticket sales will
also be mounted as usual during the fund-raising period.
IV: Fund raising will be divided into two categories as follows:
A Local Fund Raising will be divided into three areas:
1. Large corporate funding. Local large corporations are defined as
corporations in the San Luis Obispo County area that employ more than
100 employees. Direct grants to a trust account will be solicited, with
$5.000 and $10.000 being the sought amounts. The target goal is ten
(10) grants of $5.000 and five (5) grants of $10.000.
Total targeted local large corporate funding: $100,000
2. Local small corporate and business funding. Local small corpora-
tions and businesses are defined as proprietorships, partnerships. and
corporations in the San Luis Obispo County area employing under 100
employees and providing products and/or services to the local commu-
nity. Direct donations and grants will be solicited. with $1.000 being the
sought amounts. 200 contributions of an average of$1.000 each is the
target goal for this group.
Total targeted small corporate and business funding: $200,000
3. Local private sources. Local private sources are defined as persons,
trusts. and non-profit institutions and organizations in the San Luis
Obispo County area. These sources will be solicited in four different
categories:
a) Seating dedication. Each of the 150 seats in the proposed theatre
will be dedicated to private sources donating $1.000 or more to the
building fund. Each dedication will be acknowledged with a plaque on
one of the theatre's seats.
Total targeted funding, seat dedication: $150,000
Page 2
b) Brick dedication. A decorative brick wall is planned for the lobby of
the theatre, containing a minimum of 1.000 bricks: Each donation of
$250-$500 will be acknowledged with the dedication of a brick to the
funding party.
Total targeted funding, brick dedication: $250,000
c) Small contributions plaque. Private contributions of $100-$250
will be acknowledged by the inclusion of the party's naive on a lobby
plaque dedicated to those giving small contributions. The target of
small contributions is 500 at an average of $100 each.
Total targeted funding, plaque dedication: $50,000
d) In memorium stage dedication. The stage of the proposed theatre
will be named in memorium for an individual donation of $25.000.
In memorium donation $25,000
Total projected local fund raising: $775,000
B: Granted fund-raising will be pursued on a national level. Grants will be
sought as direct funding, financial assistance. matching grants, and in-kind
donations of products, materials, and/or services. Application will be made
to grant sources such as those listed below:
Abbott Laboratories Fund Harris and Elba Kempner Fund
The Allstate Foundation Grayce B. Kerr Fund, Inc.
Alsdorf Foundation The Kresge Foundation
Amoco Foundation. Inc Andrew W. Mellon Foundation
ARCO Foundation Mobtl Foundation
C Athwin Foundation Monsanto Fund
AT&T Foundation The David & Lucile Packard Foundation
Mary Reynolds Babcock Foundation Pepsico Foundation
Bing Fund, Inc. The Frederick W. Richmond Foundation
The William Bingham Foundation The Seaver Institute
The Brown Foundation. Inc. The Standard Oil Company
Chrysler Corporation Foundation The Times-Mlrror Foundation
The Clorox Company Foundation The Wells Fargo Foundation
Compton Foundation. Inc. The McGraw-Hill Foundation, Inc.
The Connecticut Mutual Life Foundation,inc. Santa Barbara Foundation
Firman Fund Security Pacific Foundation
FMC Foundation California Arts Council
The Gar Foundation Nation)Endowment for the Arts/Theatre Program
General Electric Foundation Royal Academy of Dramatic Art
Houston Endowment. Inc. The Shubert Foundation
The James Irvine Foundation Disney Foundation
Total targeted national grant source funding: $600,000
Total anticipated funding, local and national sources: $1,375,000