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HomeMy WebLinkAbout06/16/1998, C7 - PROPOSED LEASE AGREEMENTS WITH THE SAN LUIS OBISPO CHILDREN'S MUSEUM AND SAN LUIS OBISPO LITTLE THEATRE t � council Vdi°°°am 16 -cS j agenda Repoat IhmN=.6w CITY OF SAN LUIS OB IS PO FROM: Ken Hampian,Assistant City Administrative Officer Prepared By: Wendy George,Assistant to the City Administrative Officer It SUBJECT: PROPOSED LEASE AGREEMENTS WITH THE SAN LUIS OBISPO CHILD REN'S MUSEUM AND SAN LUIS OBISPO LITTLE THEATRE CAO RECOMMENDATION 1. Give conceptual approval to a long-term lease agreement with the San Luis Obispo Children's Museum(SLO Children's Museum)for property located at 1010 Nipomo Street. 2. Give conceptual approval to a two-year extension(to 2002)of the current lease with the San Luis Obispo Little Theatre (SLOLT) for property located at 888 Morro Street (Old Library Building)and to the City's continuing assistance in SLOLT's search for an appropriate long- term theater location. DISCUSSION Background In January of 1990, the City entered into an agreement with SLOLT to allow construction of a 300 seat community theater on City-owned property located at 1010 Nipomo Street. Construction of the theater was intended to be completed by the summer of 1992. That fimdraising and construction schedule turned out to be too ambitious, and a new agreement was executed in 1992 which set a date for completing construction of 1999. The new agreement also set time-related fundraising goals for SLOLT,none of which have been met to date. In the meantime, in November, 1992, the Council approved SLOLT's request to lease a portion of the old library property located at 888 Morro Street to be used as an interim theater pending the proposed construction. That agreement was extended in 1995 to the year 2000. At the same time as the agreement was made with SLOLT to lease the building located at 1010 Nipomo Street (1990), the City entered into an agreement with SLO Children's Museum to use the Nipomo site on an interim basis,pending theater construction. Since construction was significantly delayed due to SLOLT's lack of funds,in 1995 that agreement was also extended to the year 2000. Request from SLO Children's Museum In September, 1997, at the request of SLO Children's Museum, City staff met with representatives of SLOLT and SLO Children's Museum to discuss the future of the 1010 Nipomo Street site, the current location of the museum. The SLO Children's Museum representatives pointed out that in the seven years since it was established, the museum has seen its daily admissions soar. It has V-1 Council Agenda Report-Agreements with SLO Children's Museum and SLOLT Page 2 become a favorite family location for local residents, tourists and elementary school classes from inside and outside the county. Due to this success, the board of SLO Children's Museum was proposing to expand its facilities and wanted to know if it would be able to do so at the Nipomo Street site, the board's strong preference. Since this location had been promised to SLOLT for its proposed new theater,SLO Children's Museum was unsure how to proceed with its building plans. SLO Children's Museum assured staff that it would have no difficulty mounting a successful capital campaign, and that it was ready to move into a feasibility study immediately. Staff encouraged the Museum representatives to work with the City's Planning Division to evaluate whether or not expansion at the Nipomo Street site was viable and return to the City when the feasibility study was completed. Status of SLOLT's Theater Construction Project Over the last several years, staff has expressed its concern to SLOLT regarding the lack of progress in reaching fundraising benchmarks set forth in its agreements with the City. Since 1995, a high level of concern has been expressed in correspondence and in meetings with SLOLT. SLOLT officials have acknowledged that despite the best of intentions and various efforts, actual fimdraising has never approached benchmark goals. For example,by January 1, 1998, SLOLT was to have raised the full $1.5 Million needed for construction. Actual fundraising is probably less than$50,000 in cash and pledges. During the September 1997 meeting with SLOLT and the Museum,staff once again discussed their concerns with SLOLT"s lack of fimdraising and its failure to meet the fundraising targets established in the last agreement. Staff shared its growing discomfort about committing two properties to one non-profit organization for an indefinite period of time, even though agreed upon goals had not been met. Therefore, staff indicated that if the results of the Museum's feasibility study were promising, staff would likely recommend a long term agreement with the Museum for the 1010 Nipomo site. Staff also indicated that it would support a lease extension for the old library, and assist SLOLT in future site searches, given its excellent track record of service in the community. Results of SLO Children's Museum Feasibility Study and Current Plans In December, 1997, SLO Children's Museum completed its feasibility study which found that it was possible to expand the current museum facility to meet it needs. (A copy of the study is in the Council Reading File.) The concept would be to remodel the building in two phases. The first phase would be a two-story structure attached to the existing building. Upon completion of the first phase, a passage would be opened between the two buildings. The museum would occupy both buildings until such time as the second phase commences. The second phase would involve moving into the new structure,removing the original building and replacing it with a new building to match the first phase. Of the$300,000 needed for the first phase, SLO Children's museum currently has over$100,000 in cash assets before even beginning its capital campaign. A local bank is considering making a construction loan for the rest of the fimdmg, which would then be paid off from the capital Council Agenda Report-Agreements with SLO Children's Museum and SLOLT Page 3 campaign. SLO Children's Museum is ready to move into the design phase,and anticipates that construction could begin as early as January, 1999, should the City approve its request for a long- term lease on the Nipomo Street property. Stat?Recommendations Since receiving the original request from SLO Children's Museum to clarify its position in relation to the Nipomo Street site, staff has had several meetings and telephone conversations with representatives from both SLO Children's Museum and SLOLT. As a result, SLOLT has agreed to give up its option on the property at 1010 Nipomo Street. It return,staff recommends that SLOLT's lease for part of the old library (888 Morro Street) be extended until the year 2002, with the potential for additional extensions depending on the City's future needs for the location. In addition, staff proposes that the City continue to assist SLOLT in its search for a long-term theater location, after it has made substantial progress in actual fundraising. Such a location might be in the area of property owned by the City near the Children's Museum. In 1992, when the Council extended the SLO Children's Museum lease at its current site,it also conceptually endorsed the City-owned Parking Lot No. 14 (630 Monterey Street) as a permanent site for the Children's Museum. This site could potentially be used by SLOLT instead The City has also recently acquired property at 610 Monterey Street which adjoins this parldng lot. Cultural uses in this area would be consistent with the Conceptual Physical Plan for the Downtown Center which calls for cultural use on Monterey Street between Broad and Nipomo. If Council concurs with the conceptual recommendations set forth in this report, staff will work to draft a long-term lease between the City and SLO Children's Museum for the 1010 Nipomo property. Staff would return to Council in September with this agreement, as well as the extension of the lease with SLOLT for 888 Morro Street CONCURRENCES AND PUBLIC INPUT ON"OLD LIBRARY"USE ISSUE SLOLT and SLO Children's Museum concur with the CAO recommendations, except that SLOLT would like a longer lease extension for the old library (3-4 years). However, staff believes that a shorter lease, or series of leases, will not only encourage SLOLT to pursue fundraising aggressively,but will also allow flexibility for potential future City uses of the location. Over the last several months, another issue has been raised concerning the extent of availability of the old library to independent theater organizations. This issue has been raised by a Mr. Norman Schwartz, an independent drama instructor and producer, who wishes that SLOLT would be required under their lease to make longer periods of time available to independent theater organizations. While specific standards of availability were established in the agreement with SLOLT for the 1010 Nipomo site, such standards were not established in the old library lease. Nevertheless, SLOLT does allow independent uses of the facility — but not for duration's acceptable to Mr. Schwartz. In any case, staff will consider this issue with SLOLT as a part of our discussions to revise and extend the lease. �'�-3 Council Agenda Report-Agreements with SLO Children's Museum and SLOLT Page 4 FISCAL IMPACT There would be no fiscal impact to providing conceptual approval as proposed. Any actual fiscal impacts would occur at the time that new lease agreements are negotiated and approved. ALTERNATIVES 1. Retain the status quo. Staff does not recommend this alternative as it commits two City properties to one non-profit group for an extended period of time and that non-profit group has yet to develop an active capital campaign after eight years. At the same time, another non- profit is ready to begin construction design for one of the sites and has demonstrated that is financially ready to build. 2. Offer another site to San Luis Obispo Children's Museum. Since SLO Children's Museum has been successfully using the current location and has presented a feasible plan for expanding on the site without interrupting its program, it seems unfair to force a relocation because of another organization which is not prepared to use the site in the foreseeable future. 3. Conceptually agree to extending the current lease with SLOLT at the 888 Morro location for an additional 3-4 years, instead of the recommended two-year extension to 2002. As indicated, staff feels that a shorter lease not only provides impetus to SLOLT for its capital campaign,but also provides flexibility for firture City use of the property. 4. Provide another site to SLOLT for construction of a theater. Staff believes that it is inappropriate to make such a commitment at this time. When SLOLT makes substantial progress in actual flmdraising, to a level where construction is realistic, it would be more appropriate to consider possible commitment of another City site. Attachments 1. Letter from Greg Notley, SLO Children's Museum Board President 2. Letter from Peter Sterios,Architect 3. Architectural Feasibility Study(In Council Reading File) ��y � r A HANDS-0N MUSEUM 1010 Nipomo Street•San Luis Obispo,California 93401 805.544-KIDS . June 1, 1998 Ken Hampian Assistant City Administrative Officer City of San Luis Obispo P.O. Box 8100 San Luis Obispo, CA 93403-8100 Dear Mr. Hampian, At your request, and on behalf of the Board of Directors of the Children's Museum, I am forwarding information concerning our plans to improve the site we now occupy, should the City choose to allow us long-term use of the property. Due to the overwhelming response to the Museum as measured by admissions, school tours and a membership survey, it is clear to us that what everyone wants from this Museum is more of it! We have packed every square inch of the space we have with fun and adventure and genuinely feel that a bit more square footage would bring the vision of the Museum to full maturity, allowing us to install more exhibits and host special events on a scale that better meets the level of interest shown by our community. As outlined in the accompanying package, our basic approach would be to build in two phases. The first phase would be a two story structure attached to the existing structure. Upon completion of the first phase we would open a passage between the two buildings and occupy both spaces until such a time as we are able to construct phase two. Phase.two would involve moving into the new structure and removing the existing original building and replacing it with a new building to match the phase one building. The final product would be a new, larger facility that would serve as a solid and attractive anchor to the renovation of the Nipomo St. area. The concept of phasing the project allows us to operate continually during construction and provides a path of gradual growth, easing the fund raising requirements of our capital campaign. Of the approximately$300,000 needed' > '< ">'< for phase one, we currently have over$100,000 in cash assets ready to corr€tt >:` to this project. This is before any further capital fund rais.ing' s n0eded. Plea.".:%.:;;r. note that the construction costs shown in our estimate ar&pdi.piete (including site work and professional fees) and does not include,.any;J06 ted items or services. When we built the original Museum, the coritractig'eemmunity ATTACHMENT 1 EAFLkNDS-ONNWSELTMPE 1010 Nipomo Sweet•San Luis Obispo,Califomia 93401 805.544-KIDS responded with an overwhelming amount of free or discounted goods and services, and many have told us that they would be happy to do it again if given the opportunity! Also, we are in contact with a local bank that is looking forward to exploring the construction loan process with us. Based on our previous fund raising and grant writing experience, we feel that this community would respond very positively to a capital project in the downtown area that is aimed at child development. We have been contacted by the design team that is working on the creekside walkway project that will extend to Nipomo St. and they too are exited about the possibility of integrating the new entrance to the creekside walkway with such a positive and people friendly place as the Children's Museum. We hope that we have answered any questions you might have concerning our plans for this site if given the chance. We appreciate your consideration and look forward to the opportunity to continue working with the City in developing a vibrant Children's Museum for San Luis Obispo. Sincerely, F Idl i. 3 g A Notle and Preside t San Luis Obispo Children's Museum r I I I I-TI I I I ec,�}j SIEWOS 26 May 1998 flRCNIifCiURf WHIM 4C%ty O ' Jg98 r I r r Greg Notley C?I>�; �� Board President San Luis Obispo Children's Museum 1010 Nipomo Street San Luis Obispo, CA 93401 RE: Children's Museum Phase 1 Schedule and Budget Dear Greg, We have re-worked our initial budget and schedule for the new Children's Museum to show the Phase 1 portion of your project only. Based on current estimates from our previous plan, Phase 1 would encompass a 3200 SF,two story building to be located behind the current museum,with interior connections to the existing building. PROJECT COST Construction Cost—Phase 1 $302,500.00 (includes sitework, street patch, sidewalks,fire sprinkler tap, fire alarm,two-story, 3200 SF building with two stairs&elevator) (does not include landscaping, furniture,fixtures, &equipment) A&E Fees—Phase 1 $28,000,00 (includes Architectural, Structural, Mechanical& Electrical) (does not include Landscape, Civil, Building Permits& Fees) TOTAL $380,500,00 PROJECT SCHEDULE Design and Construction Documents Jun 98—Aug 98 Planning and Building Plan Check Sep 98—Nov 98 Bidding Dec 98 Construction Jan 99—Jul 99 Please feel free to call me if you have any questions. Sincerely, STERAS Architecture+ Interiors 911 Illll'li fl Hf ( I IkA.� Peter D. Sterios AIA SflH IIIIS IIflISUU Principal CRIIIHIIIR HIM cc file H1151 Hi - Ml ATTACHMENT 5HAHI.i 1H 7-7