HomeMy WebLinkAbout08/15/2000, C10 - LEASE WITH SAN LUIS OBISPO RAILROAD MUSEUM FOR USE OF THE HISTORIC FREIGHT HOUSE j ac,Enaa aEpont o
CITY OF SAN LUIS OBISPO
FROM: Ken Hampian,Assistant City Administrative Officer
Prepared By: Wendy George,Assistant to the City Administrative Officer WJ '
SUBJECT: LEASE WITH SAN LUIS OBISPO RAILROAD MUSEUM FOR USE OF
THE HISTORIC FREIGHT HOUSE
CAO RECOMMENDATION
Approve a lease agreement with the San Luis Obispo Railroad Museum for the use of the City-
owned historic freight building located in the Historic Railroad District.
DISCUSSION
Background
As part of the land acquisition necessary to develop a transit transfer center near the railroad station,
the City also acquired an old Southern Pacific freight house. State and regional transit funds were
used to purchase the land and building. Upon achieving ownership of the building, the City applied
for and received Transportation Enhancement Activity(TEA)funds for its restoration. Justification
for the use of TEA funds included the fact that the building was of historical value and could
possibly be used as a museum to display railroad related information and artifacts. In working with
the San Luis Obispo Council of Governments(SLOCOG)on the grant funding, SLOCOG indicated
to the City it also had an interest in possibly locating some facilities for regional transit staff in the
freight house, as well as a public meeting room.
At the July 20, 1999, meeting, the City.Council heard a presentation from the San Luis Obispo
Railroad Museum Organization (SLORRM), a non-profit organization, concerning the
establishment, operation and maintenance of a railroad museum in the historic building.
SLORRM proposed that it partner with the City in the actual museum development. According
to SLORRM's proposal, the City would pay for rehabilitating the exterior of the building, using
TEA funds, while the interior would be modified by SLORRM for the museum. SLORRM's
proposal coincided with the Council's adopted Community Partnerships for Cultural Resources
goal and the concept was endorsed by the Council. Staff was directed to develop a lease
agreement with SLORRM for the property.
Significant Aspects of the Lease with SLORRM
In developing the lease with SLORRM, City staff modeled the agreement after the one currently in
place between the City and the San Luis Obispo Children's Museum. In both cases, the agreement
is between the City as property owner and the non-profit organization as developer and operator of
a museum. Major points in the agreement are as follows:
C10-1
Council Agenda Report—Lease Agreement with SLORRM
Page 2
1. The agreement is for forty years, with a right to negotiate an additional fifteen year term.
2. The City has no obligation for the development or operation of the museum, including
tenant improvements.
3. The City may terminate the agreement with six months notice, if it needs the building for
official City business. Additionally, the City may terminate the agreement if SLORRM has
not established the museum within three years of the date that the City turns the building
over to the organization.
4. If the agreement is terminated early by the City, there is a buyout schedule should the City
wish to exercise its option to purchase permanent improvements made by SLORRM.
5. If SLORRM terminates the agreement,all permanent improvements revert to the City.
6. The rent is $1.00 per year.
7. In addition to the interior space designated for museum purposes,the building will contain a
small employee lounge and bathroom, with a separate outside entrance, for the use of
regional transit employees. A separate agreement with the transit authority will be
developed for use and maintenance of this space.
8. Language is also included which allows the City to use some space in the building should
the completion of a transit center require it.
9. SLORRM is responsible for repair and maintenance of any improvements it installs,
janitorial services and supplies and graffiti removal from the outside of the building.
10. The City is responsible for repair and maintenance of the building's exterior, for any
improvements it installs and for the grounds and landscape.
11. The,minimum standard for operational hours after the first year is that the museum be open
at least three hours each weekend day. In addition, once it is completed, the model railroad
room must be available to the public one evening a month, with the railroads, operating.
The City and SLORRM must meet annually to discuss hours of operation, with the
intention of raising them to the greatest extent of SLORRM's volunteer capacity.
12. Should additional railroad-related facilities become the property of the City in the future,
the City agrees to explore with SLORRM the possibility of incorporating them into the
museum.
The proposed lease agreement does not provide for a community meeting space within the
museum. After carefully considering the inclusion of such a room, staff determined that there were
several good reasons not to do so. Fist, it would necessarily cut back on the space allocated for
museum purposes. With a requirement for a waiting area for regional transit employees in the
building, the overall space has already been reduced. To add a meaningful community room that
C10-2
Council Agenda Report—Lease Agreement with SLORRM
Page 3
could seat up to 40 people would take up about 30% of the proposed general display area While
SLORRM may wish to include a meeting space for its board members, such a space would be
much smaller than what would be necessary for a community room. It is possible that this smaller
space could still be made available to other small community groups through agreement with
SLORRM.
Second, the administrative responsibility of renting out the space and providing janitorial services
for it would be complicated. The public meeting space would need to have its own private entrance
and be maintained by City staff. City staff would be renting out the room, but needing to
coordinate with the SLORRM on its needs for the space. If the community space were to be small
enough not to impact the museum display area, the benefit achieved would hardly be worth the
effort to coordinate its use and maintain the room. Finally, staff questions whether the historic
freight building was an appropriate place for a community room, given its location away from the
downtown core.
CONCURRENCES
The Public Works Director, Finance Director and Community Development Director have all
reviewed this agreement. The SLORRM Board of Directors also concurs with the agreement.
SLOCOG is happy with the inclusion of a regional transit employee area, but would also like to see
the incorporation of a community room.
FISCAL EMPACT
The agreement provides $1.00 a year in rent to the City. There will be additional Public Works
staff costs to maintain the exterior and landscaping of the building in the future. These costs will
need to be included in the next Financial Plan.
ALTERNATIVE
Inclusion of a community room in the museum could be required. As indicated above, staff does
not believe that such a room is the best use of the building space, and would rather see more space
devoted to the museum itself. City administration of the space would also add a complication to
museum operations.
Attachments
I.Agreement
,,,Agenda Report from July 20,1999 meeting available in Council Reading File
C10-3
UTACHMENT I
AGREEMENT BETWEEN THE CITY OF SAN LUIS OBISPO AND
THE SAN LUIS OBISPO RAILROAD MUSEUM
FOR USE OF CITY PROPERTY
This Agreement is made by and between the City of San Luis Obispo (herein referred to as
"City") and the San Luis Obispo Railroad Museum, a non-profit organization (herein
referred to as"SLORRIW).
W=SSETH
WHEREAS, the City owns a former Southern Pacific Railroad freight house, and
restored water tower and
WIEREAS, the City-owned freight house has a special historical heritage in that it
is a unique, limited and diminishing resource, and a prime means of encouraging knowledge
and enjoyment of California and local history; and
WHEREAS, SLORRM, a non-profit corporation, has proposed to establish and
operate a railroad museum utilizing the historic freight house, recognizing its individual
qualities and the way in which it could eventually be a part of the City's educational and
cultural heritage,and promotional functions; and
WHEREAS, both parties wish to work together toward the attainment of mutual
goals for the stabilization, protection, restoration, and productive use of the historic freight
house; and
WHEREAS, because of the above, the Council finds that this agreement serves an
important municipal purpose. NOW THEREFORE, in consideration of their mutual
promises, obligations, and covenants hereinafter contained, the parties hereto agree as
follows:
C104
ATTACHMENT I
TERMS
1. Location of Property. The City will allow the SLORRM to use City-owned
railroad facilities shown as Area A on Exhibit A, the extent of which may be
amended through agreement of the parties and is hereinafter referred to as
"Premises", to operate a railroad museum and perform associated activities for the
term of this agreement. Leased property includes the old Southern Pacific
Railroad freight house, adjoining landscape area on the Santa Barbara Street side
of the building and that portion of the property reserved for eventual railroad track
for display purposes. It does not include any sidewalks or bikeways.
2. Purpose of Agreement. The SLORRM agrees to lease Premises, and to develop
and operate a museum 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 museum, including any tenant improvements. Any costs incurred
for development and operation of the museum shall be the sole responsibility of the
SLORRM.
3. Term of Agreement. The term of this agreement shall commence upon execution
by both parties and expire on December 31, 2040. The SLORRM will reserve the
first right to negotiate an additional term upon mutual agreement of the City and the
SLORRM not to exceed fifteen (15) years, for purposes outlined in the intent of this
agreement. The SLORRM 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. Termination of Agreement The City reserves the right to terminate this
agreement by notifying SLORRM in writing six months prior to termination should
the City need the property for official City business. Additionally, should SLORRM
be unable to complete the proposed interior tenant improvements and establish a
museum within three years of the date of acceptance of the Historic Freight House
Structure from the City, the lease may be terminated, and, at the City's option, all
tenant improvements will become the property of the City or the site shall be
delivered free and clear of all tenant improvements.
In the event of early termination of this agreement by the City after completion of
the tenant improvements, for reasons other than failure to meet the terms of this
agreement, the City shall have the option to buy out permanent improvements at the
proportional rate of 90% of actual construction costs if cancellation is within the
first five (5)years, 70% between six (6) and fifteen (15) years,50% between sixteen
(16) and twenty-five (25) years and nothing thereafter. The above "buyout"
provisions shall be in lieu of any other compensation, including but not limited to,
relocation assistance.
2 C10-5
ATTACHMENT I
5. Termination of Agreement by SLORRM. SLORRM may terminate this
agreement by notifying the City in writing six months prior to termination. In the
event that SLORRM chooses to exercise this option, all permanent improvements
(excluding removable exhibits) shall revert to the City.
6. Relationship of Parties. Under this agreement, the City shall be solely and
exclusively a lessor, and SLORRM shall be solely and exclusively a lessee.
SLORRM shall not be considered a partner, agent, officer or employee of the City.
SLORRM's officers, members, affiliates, volunteers, employees and independent
contractors shall not be considered agents,officers or employees of the City.
7. Rent. In recognition of the benefits the SLORRM provides the community,the City
agrees to allow the SLORRM the use of Premises for $1 per year, payable on the
anniversary date of this agreement each year.
8. Extent and Condition of Premises. SLORRM shall accept the Premises "as is".
This agreement shall not obligate the City to guarantee the suitability of Premises,
the suitability of the Premises for the intended use by SLORRM, the duration that
Premises may be safely occupied, or the availability of alternate facilities. Should
any occurrence (such as fire, earthquake, flood or the need to repair or improve
Premises by the City) necessitate closing Premises, or a portion of Premises, to the
public,the SLORRM shall have no recourse to the City for any loss incurred.
9. Historic Freight House.
a. The SLORRM shall accept the Historic Freight House and environs, as
defined on Attachment A as Area A, for use subsequent to renovation of the
structure and grading by the City of adjacent area for installation of railroad
track by the SLORRM, with the understanding that installation of interior
museum facilities will be the obligation of SLORRM. Once all landscaping
and public art, if any, are in place, the City will consider proposals from
SLORRM for possible temporary use of Area B on Exhibit A. The final
decision on any such use will be made by the City Council after appropriate
staff review and any regulatory approvals.
b. Following completion of rehabilitation of the historic freight house by the
City in compliance with Americans with Disabilities Act(ADA)regulations,
the SLORRM agrees to assume full responsibility for insuring that the
facility continues to comply with ADA requirements.
c. In addition to the interior space designated for museum purposes, the
Historic Freight House shall contain a small employee lounge and bathroom,
with a separate outside entrance, for the use of regional transit employees, as
shown in Exhibit B.
3 C10-6
ATTACHMENT 11
d. City may elect at a future date to establish and operate a passenger transit
transfer facility in the vicinity of the Historic Freight House. Interior space
currently designated for museum purposes may be required for the transit
facility. Should such a change in use become necessary, City and SLORRM
shall work cooperatively to reallocate an appropriate space in a manner that
minimizes disruption of the museum use.
10. SLORRM Responsibility for Maintenance of Premises. SLORRM shall:
a. Provide all repair and replacement needed for any personal property installed
or improvements constructed on the interior or exterior by SLORRM after
the City completes its rehabilitation of the Historic Freight House.
b. Provide all graffiti removal from the outside of the building.
c. Provide all janitorial service needed, except for the area used exclusively by
transit drivers,to the satisfaction of the City.
d. Purchase and restock any consumable supplies needed in the day-to-day
operation of the building, including janitorial supplies and light bulbs and
lamps, except for those supplies needed for the area used exclusively by
transit drivers.
11. City Responsibility for Maintenance of Premises. The City shall:
a. Provide all repair and maintenance on the exterior of the building, except as
noted in 10(a)and(b) above.
b. Provide all repair and replacement needed for any equipment installed or
improvements constricted by the City on the interior or exterior.
c. Provide all maintenance service needed for the grounds and landscape.
d. Through a separate agreement, the City and the regional transit authority
shall determine responsibility for maintenance of that area used exclusively
by the transit drivers.
12. Cost of Operations. The SLORRM shall bear the entire cost of its operations on
Premises, including:
a. Paying all utility bills, including water, electricity, natural gas, cable
television service, telephone and garbage (along with recycling) except for
those portions of expenses which relate to the area used exclusively by the
transit drivers.
4 C10-7
ATTACHMENT ;I
b. Paying the Cost of any maintenance for which SLORRM is responsible.
c. Paying any taxes and fees related to its occupancy of the Premises, including
all possessory interest taxes that may be imposed.
13. Minimum Hours of Operation. The SLORRM agrees to keep the museum open
to the public for a minimum of three (3) hours on Saturday and three (3) hours on
Sunday, commencing one year following acceptance of the Historic Freight House
structure from the City. Prior to the completion of the first year, the museum shall
be opened a monthly average of a minimum of 16 hours per month. The hours of
operation shall be re-evaluated by SLORRM and the City at the beginning of each
calendar year and adjusted upward whenever possible given SLORRM volunteer
resources. During public hours of operation all parts of the actual museum,
including the proposed model railroad room, will be available to visitors. In
addition, once construction of the model railroad has progressed to a condition of
being operable for display purposes, the model railroad room shall be made
separately available to the public one evening per month during which time the
model railroads will in operation.
14. Alterations to Premises.The City shall be notified of and consider approval of any
exterior alterations, or any interior structural alterations made to Premises, prior to
their commencement. Approval of alterations, such as the installation of exterior
displays associated with the museum within areas approved for such use, shall not
be unreasonably withheld by the City. SLORRM shall comply with all applicable
procedures of the City's Community Development Department, Building Division,
Architectural Review Commission and Cultural Heritage Committee and all
applicable building codes in making any alterations to structural, electrical,
plumbing,interior and/or exterior systems and finishes of Premises.
15. Expansion of Museum Facilities. Should additional railroad related facilities
become property of the City in the future, the City agrees to explore with the
SLORRM the possibility of their incorporation into the railroad museum.
16. Labor Code Requirements. The SLORRM certifies that it is aware of the
provisions of the Labor Code of the State of California, which require every
employer to be insured against liability for workers compensation or to undertake
self-insurance in accordance with the provisions of that Code, and it certifies that it
will comply with such provisions throughout the term of this agreement.
17. Proof of Insurance. The SLORRM agrees to provide proof of insurance in
accordance with the requirements established in Exhibit C .
18. Indemnification. The SLORRM hereby agrees to indemnify and save harmless the
City, its officers, agents, and employees against:
5 C10-8
ATTACHMENT
a. Any and all claims and demands which may be made against the City, its
officers, agents or employees by reason of any injury or death of any person
or corporation caused by any negligent act or omission of the SLORRM
under this agreement or of SLORRM employees or agents;
b. Any and all damage to or destruction of the property of the City, its officers,
agents, or employees, occupied or used by or in the care, custody, or control
of the SLORRM, caused by any negligent act or omission of the SLORRM
under this agreement;
c. Any and all claims and demands which may be made against the City, its
officers, agents, or employees by reason of any injury to or death of or
damage suffered or sustained by an employee or agent of the SLORRM
under this agreement, however caused, excepting, any such claims or
demands which are the result of the negligence or willful misconduct of the
City, its officers,agents,or employees;
d. Any and all claims and demands which may be made against the City, its
officers, agents or employees by reason of infringement or alleged
infringement of any patent rights or claims caused by the use of any
apparatus, appliance, or materials furnished by the SLORRM under this
agreement; and
e. Any and all penalties imposed or damages sought on account of the violation
of any law or regulation or of any term or condition of any permit, when said
violation of any law or regulation or of any term or condition of any permit
is due to negligence on the part of the SLORRM.
f. The SLORRM, at its own costs, expense, and risk shall defend any and all
suits, actions, or other legal proceedings that may be brought against or for
employees on any such claim or demand of such third persons, or to enforce .
any such penalty, and pay and satisfy any judgment or decree that may be.
rendered against the City, its officers, agents, or employees in any such suit,
action, or other legal proceeding, when same were due to negligence of the
SLORRM.
19. Enforcement Costs and Attorney's Fees. The prevailing party in any action
between the parties to this agreement, brought to enforce the terms of this
agreement, may recover from the other party its reasonable costs and attorney's fees
in connection with such an action.
20. Non-Discrimination. There shall be no discrimination against or segregation of
any person or group of persons on account of race, religion, sex, sexual
orientation, national origin, age, physical, mental or economic status in the
construction, operation, lease, sublease, use, occupancy, tenure or enjoyment of
6 C10-9
ESE FACRMEK9T j
the Property or the improvements thereon, or any part thereof, and SLORRM, or
any person claiming under or through it, shall not establish or permit any such
practice of discrimination or segregation with reference to the construction of the
Project Improvements, or the selection, location, number, use or occupancy of
employees, contractors, subcontractors, laborers or materialmen, tenants, lessees,
subtenants, sublessees, invitees or vendees of the Property or the improvements
thereon, or any part thereof.
SLORRM shall not restrict access or use of the Property or the improvements
thereon, or any portion thereof, on the basis of race, religion, sex, sexual
orientation, national origin, age, physical, mental or economic status of any
person.
21. Assignment. SLORRM shall not assign this agreement to another party without
the City's prior written consent, which may be denied at the City's sole discretion.
22. Entirety and Integrity of Agreement. This document represents the entire and
integrated agreement between the City and SLORRM. This document supersedes
and negates all prior negotiations, representations, agreements and amendments,
either written or oral, regarding Premises and the operation of a railroad museum on
Premises. 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 both
parties, to the approval of the City Administrative Officer and the City Attorney and
as provided by law.
23. Notices. All official notices required under this agreement shall be given in writing
and submitted by certified mail,postage prepaid,and addressed as follows:
City: City Clerk
City of San Luis Obispo
990 Palm Street
San Luis Obispo,CA 93401
SLORRM:
24. Authority to Execute Agreement. Both City and SLORRM do covenant that each
individual executing this agreement on behalf of each party is a person duly
authorized and empowered to execute Agreements for such party.
This Agreement is executed this day of 2000, in
the City of San Luis Obispo, State of California.
7 C10-10
ATTACHMENT I
THE SAN LUIS OBISPO RAILROAD MUSEUM
President Date
CTTY OF SAN LUIS OBISPO
Mayor Date
Attest:
City Clerk
Approved as to form:
o*me
C10-11
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C10-13
L--------------------------J
Exhlb;t C
INSURANCE REQUIREMENTS FOR LESSEES (NO AUTO RISKS)
Lessee shall procure and maintain for the duration of the contract insurance against claims for
injuries to persons or damages to property which may arise from or in connection with the
Lessee's operation and use of the leased premises. The cost of such insurance shall be borne by
the Lessee.
Mininnunn Scope of Insurance
Coverage shall be at least as broad as:
1. Insurance Services Office Commercial General Liability coverage (occurrence form
CG 0001).
2. Workers' Compensation insurance as required by the State of California and
Employer's Liability insurance (for lessees with employees).
3. Property insurance against all risks of loss to any tenant improvements or betterments.
Afininrrnn Limits of Insurance
Lessee shall maintain limits no less than:
1. General Liability: $1,000,000 per occurrence for bodily injury, personal
injury and property damage. If Commercial General
Liability Insurance or other form wiui a general aggregate
limit is used, either the general aggregate limit shall apply
separately to this project/location or the general aggregate
limit shall be twice the required occurrence limit.
2. Employer's Liability: 51,000,000 per accident for bodily injury or disease.
3. Property Insurance: Full replacement cost with no coinsurance penalty
provision.
Deductibles and Self-Insured Retentions
Any deductibles or self-insured retentions must be declared to and approved by the Entity. At
the option of the Entity, either: the insurer shall reduce or eliminate such deductibles or
self-insured retentions as respects the Entity, its officers, officials, employees and volunteers; or
the Lessee shall provide a financial guarantee satisfactory to the Entity guaranteeing payment of
losses and related investigations, claim administration and defense expenses.
C10-14
Other Insurance Provisions
The'general liability policy is to contain, or be endorsed to contain, the following provisions:
1. The Entity, its officers, officials, employees and volunteers are to be covered as
insureds with respect to liability arising out of ownership, maintenance or use of that
part of the premises leased to the lessee.
2. The Lessee's insurance coverage shall be primary insurance as respects the Entity, its
officers, officials, employees and volunteers. Any insurance or self-insurance
maintained by the Entity, its officers, officials, employees or volunteers shall be excess
of the Lessee's insurance and shall not contribute with it.
3. Each insurance policy required by this clause shall be endorsed to state that coverage
shall not be canceled, except after thirty (30) days' prior written notice by certified
mail,return receipt requested, has been given to the Entity.
Acceptability of Insurers
Insurance is to be placed with insurers with a current A.M. Best's rating of no less than A:VII.
Verification of Coverage
Lessee shall furnish the Entity with original certificates and amendatory endorsements effecting
coverage required by this clause. The endorsements should be on forms provided by the Entity
or on other than the Entity's forms, provided those endorsements or policies conform to the
requirements. All certificates and endorsements are to be received and approved by the Entity
before work commences. The Entity reserves the right to require complete, certified copies of all
required insurance policies, including endorsements effecting the coverage required by these
specifications at any time.
43 C10-15