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HomeMy WebLinkAbout1997-10-27 City Council (23)City Manager’s Report TO:HONORABLE CITY COUNCIL FROM:CITY MANAGER DEPARTMENT:ADMINISTRATIVE SERVICES AGENDA DATE: OCTOBER 27, 1997 CMR:442:97 SUBJECT:REQUEST FROM MUSEUM OF AMERICAN HERITAGE FOR COST ASSISTANCE WITH STRUCTURAL REPAIR OF WILLIAMS PROPERTY, 351 HOMER AVENUE RECOMMENDATION The Museum of American Heritage (Museum) has requested City assistance with costs up to a maximum of $65,000 for co~ecting recently discovered structural problems with the Williams House at 351 Homer Avenue. Past Council action has directed that use and improvement of the Williams property be at no cost to the City. Therefore, staff requests Council direction and recommends that: 1)If Council wishes to assist the Museum with costs for correcting structural problems with the stucco and sheathing up to a maximum of $65,000, staffbe directed to work with the Museum to identifymore precisely the extent of the problem and estimated costs, and proceed in one of the following ways: return to Council for approval of a Budget Amendment Ordinance to cover the entire cost, not to exceed $65,000. return to Council for approval of a Budget Amendment Ordinance to cover a portion of the cost, as determined by Council; return to Council for approval of a Budget Amendment Ordinance and a loan to the Museum to cover the costs, not to exceed $65,000, with a term of 5 years and an interest rate equal to the City’s average portfolio rate of return, plus .25 percent. CMR:442 Page 1 of 4 If Council prefers that the Museum retain responsibility for all costs associated with the project, direct staff to take no action. BACKGROUND On June 10, 1996, Council awarded the Museum an option to lease the Williams property at 351 Homer Avenue for the purpose of developing and operating a park and museum open to the public. Over the next year, the Museum fulfilled the required conditions of the option including receiving the necessary city approvals and raising funds for the development of its project. On May 7, 1997, the lease between the Museum and City was executed, and construction on the project was begun. On September 15, 1997, the Museum sent a letter (Attachment A) to the Council requesting City funding in an amount not to exceed $65,000 to be used to cover the costs of correcting structural problems and re-plastering the Williams house. The Museum has completed 60 to 70 percent of its Education Center building; seismically improved the garage and installed a rear fire wall; and installed a new roof on both the garage and the Williams house. The project is scheduled to be completed in November 1997. While attempting to obtain bids for patching the Williams house exterior stucco, the Museum recently discovered that the stucco may need to be entirely replaced rather than patched as was originally planned and budgeted for. In addition, a patch of stucco which recently came loose near the building grade level has revealed wood sheathing showing signs of significant dry rot. As of its September 15, 1997 letter, the Museum had received cost estimates for replacing the stucco and the sheathing totaling $58,000 to $63,000. The Museum has raised over $500,000 for architectural and construction costs for the Williams project; however, unaware of these building conditions at the time the lease was negotiated, it never contemplated replacement of the stucco and sheathing and has budgeted only $15,000 for patching and painting the exterior of the house. Therefore, the Museum has requested that the City Council authorize funding assistance in an amount not to exceed $65,000, to be used solely for enhancing the structural integrity of and for plastering costs for the Williams house. DISCUSSION City inspections of the Williams house conducted prior to soliciting proposals for the prope~y revealed the necessity for patching but not replacing the stucco. In general, the house was found to bc in good structural condition considering its age, and a termite report obtained in 1989 and updated in 1994 found no evidence of significant dry rot or termite damage. Since receiving the Museum’s September 15, 1997 letter, City staff has inspected the stucco and sheathing and recommends that the Museum contact contractors experienced in plaster testing and restoration regarding the exterior stucco and investigate further the condition and costs of repairing the sheathing. In response to this recommendation, the CMR:442 Page 2 of 4 Museum has solicited additional opinions and cost estimates but has not yet received them. Although specific costs are not available at this time, the Museum requires a timely response from the City in order not to delay the scheduled opening date, and has therefore requested a maximum allocation of $65,000. The Request for Proposals (RFP) for the Williams property identified general improvements required for use of the property and noted that proposers would be responsible for identifying any additional improvements that may be necessitated _by a specific use. In accordance with Council direction, the RFP and option to lease for the Williams property require that restoration and improvements necessary for the use and operation of the property be done at no cost to the City. However, the Museum points out that the condition of the sheathing was not possible to detect without doing destructive inspection, and the magnitude of the stucco repair that may be necessary is not something the Museum could have anticipated. In an October 6, 1997 letter to the City Manager (Attachment B), the architect for the project notes that the Museum has already paid for other significant improvements which were unknown to the Museum when it entered into the option to lease, such as strengthening of the roof structure and full fire sprinkling of all structures, and that it would be difficult for the Museum to raise additional funds for significant improvements at this late point in the " project. Past Council policy requiring the property be used and improved at no cost to the City and the recent discovery of possible significant conditions not anticipated nor budgeted for by the Museum, require staff to seek Council direction. Staff has identified the following four options for responding to the Museum’s request, which~ are reflected in the staff recommendation and discussed below under Resource Impact and Policy Implications: 1) City pays full cost of necessary repairs to stucco and sheathing; 2) City and Museum share the cost; 3) City loans the Museum funds to cover costs; and 4) Museum pays full cost of repairs. .RESOURCE IMPACT City funds have not been budgeted for Williams house improvements or repairs. If Council chooses to participate in the costs as requested by the Museum, staff would return with a Budget Amendment Ordinance. Funds would come from the Budget Stabilization Reserve. For the loan option, staff recommends a term of five years and an interest rate equat to the City’s average portfolio rate of return for the last fiscal year, plus .25 percent (the interest rate on the loan would be 6.24 percent for fiscal year 1997-98). The five-year term is consistent with. the longest term the City would normally utilize when investing City funds. Furthermore, a term of more than five years would increase risk to the City. By using the average portfolio rate of earnings, the City would not forego interest earnings on the loaned CMR:442 Page 3 of 4 funds. The additional .25 percent would compensate the City for the administrative effort involved in handlin.g the loan. POLICY IMPLICATIONS Based on Policy and Procedures 1-11 (Leased Use of City Land/Facilities) and past Council action, both the RFP and the option to lease for the Williams property include provisions requiring that restoration and improvements necessary for the use and operation of the property be done at no cost to the City. City participation in the cost of improvements would be an exception to this policy. The City has no official policy for loaning City funds to outside groups, and has not made such loans in the past. Should Council select this option, it could set a precedent for the future. It is possible that other community groups or interests would look to this action as a signal about a new City policy regarding loans. ENVIRONMENTAL REVIEW An environmental impact assessment determined that the project would have a less than significant impact on the environment and a negative declaration was adopted by the City Council on June 10, 1996. No further environmental review for the project is necessary under the requirements of the California Environmental Quality Act (CEQA). ATTACHMENTS Attachment A:September 15, 1997 letter to City Council from Museum of American Heritage Attachment B:October 5, 1997 letter from project architect to City Manager. PREPARED: Janet Freeland, Senior Financial Analyst DEPARTMENT HEAD APPROVAL: CITY MANAGER APPROVAL: CC: Museum of American Heritag Meliss)a Cavallo Acting Directors,....~~ministrative Servlces /( ~r~Fleming ;~/} [~ i(y Manager ~M] CMR:442 Page 4 of 4 THE MUSEUM of AMERICAN HERITAGE BOARD OF DIRECTORS J. Robert Beck Chairman George Zimmerntan Vice-chairman Charles L. Pack Treasnrer Beverly J. Nelson Secretary/Exec. Dir. R~ger D. Broussal Kathleen A. Craig Joseph Ehrlich Crystal D. Gamage Charles M. Gillis Kenoeth Kormanak Marshall Mathews Carl B. Moerdyke Roxy Rapp Tony K. Svensson OFFICERS Carl B. Moerdyke Preside n t Frank l,ivermore Founder/Vice-pr, es. Sozanoe H. Beaver Vice-president Theotlora Nelson - Vice-president COMMUNITY ADVISORY BOARD Jaotes L. Adams Robert E. Bond Allan Chin Marybelle Cody Joseph J. Corn Joan Cnnneen ¯ "Wallace V, Cunneert Leonard W. Ely Margc Gratiot Loretta Green Carroll Harrington Charles C. Boage Carl Holvlck Ralph Igler David M. Kelley Jacques Littlefield T. Kevin Mallen Jeantte McDonnell Shelley Monfort Barbara Newton Carroll Notthoff Rixford K. Snyder Sara C. Spang Steve Staiger Eleanor J. Watanabe Gall Woolley RECEIVED SEP 1 7 1997 CITY h~.NAGER’S OFFICE ATTACHMENT A 97SEP!7 AHI0:01 September 15, 1997 To: Subject: All Membei’s of the Palo Alto.City Council Condition of the Exterior Stucco on tiae Williams House Dear Honorable Council Members: There is much good news to report on the progress of the Williams House and Garden project. The Educa,~tion Center building and the attendant Handicapped Toilet Faciiil~ies are currently 60% to 70% complete. The garage has been seismically improved, a fire resistant rear wall has been installed, a new roo~f has been put on both the garage and the Williams House proper, and the overall schedule for completion of the project is ea’rly November, 1997. The Contractor, Jack & Cohen, has been attempting to secure bids for the patching of the exterior stucco. The original intent, when establishing our budget for the project, was to put in $15,000 for patching and painting the exterior of the Williams House. I’m enclosing copies of a letter from McVey Plastering Inc. dated August ’15, 1997. The key point of his letter was the 3’d sentence that states "when the walls were originally stuccoed, an interior material was used on the, exterior walls." This means the substrate plaster is a gypsum material rather than a Portland cement material,, which is proper for exterior use. We’re also enclosing a copy of McVey Plastering Inc. "’Memo-Letter" dated September 5, 1997, with ~.n estimate of some $32,200 to replace the existing exterior latent plaster with a three coat cement plaster application. The revelation that the substrate of the existing building was "an interior material" was completely unknown to us during the negotiations with the Palo Alto staff in securing the opt!on on the lease and ultimately the lease itself. The Museum has raised over $500,000 for architectural and construction’cost, whidh never contemplated stripping the Williams House down to the wood sheathing, replacing sheathing subject to dry rot and putting a brand newcomplete skin on the building. 3401 El Carnino Real ¯ Palo Alto, California 94306-2805 ¯ Phone 415/321-1004 ¯ Fax 4151494-6183 Founded 1985 By The Frank ’Liverraore Trust A California Non-pro(it Corporation Fed It) #77-9106732 State |D 111’2.80035 All Members of the Palo Alto City Council September 15, 1997 Page 2 We should not proceed with the short-term patch and paint process originally contemplated. Our plastering contractor is not even certain that the new materials, presently in use will adhere to the existing interior material referred to earlier. When we consider that the Williams House b.nd Garden were willed to the City for ownership in perpetuity we’re asking the Council to consider a one time long-term solution rather than the short-term fix referred to earlier. The costs for the long- term approach which will preserve the Williams House for perpetuity are as follows: 1.Demolition (removal of existing stucco $8,000 substrate and lath, no~i included in McVey Plastering’s estimate) 2.Scaffolding 3,000 3.McVey’s estimate (includes two layers of building paper wire lath, 3 coats of cement plaster) Total 32,200 $43,200 In addition, recently a patch stucco came loose close to the grade level of the building revealing that the wood sheathing, which is below the existing outside grade displays significant dry rot caused by many years of being located below the outside grade. Once again, this was a condition that could not be readily ascertained during our initial lease negotiations. If the sh,~eathing condition we observed in this one small area, is typical around the entire perimeter of the house the long-term structural integrity of the house may be called into question. It is impossible to determine the extent.of this dry rot condition without removing the stucco around the entire base of the house. The cost to replace the damaged portion of the sheathing with sound moisture resistant materials (assuming the mud sills are in sound condition) will run between $15,000 and $20,000, bringing the total additioiaal cost of this issue to some $58,000 to $63,000. So here’s the dilemma: Should the Museum, the Tenants, and Palo Alto, the Landlord, close our collective eyes to what we now know are serious conditions, we can cover-up the dlN ’rot, patch over the loose stucco and hope for the best? Or should the Landlord make the significant investment for the long-term benefit of the Community? All Members of the Palo Alto City Council September 15, 1997 Page 3 The decision on how to proceed should be made by the end of September or early October so that the project completion schedule will not be significantly impacted. We respectfully request you authorize an allocation not to exceed $65,000 to be used solely for the structural integrity and plastering costs of the Williams House. We anxiously and eagerly await your decision on this important issue. \ ~e Ehr’lTch ",Board Member and Chair of the Design Committee cc: June Fleming, City Manager JE/cm:ccncl.doc August.15, 1997 Robert M. Bybee Project Manager Jack & Cohen Builders, Inc. 975 High Street Palo Alto, California 94301 Dear Bob: PKOJ£CT:Palo Alto Historlcal.Museum 351 Homer Street Palo AIrs, CA After examining the existing exterior stucco walls, 1~ is my opinion Iz is no~ feasible to repair them. I was ~nly able to examine areas where ~he finish coa~ had failed and had fallen off ~he walls due to :he deterioration of the basacoa~. When ~h~ walls were ori~Inally stuccoed, an Interior material was used on ~he ex=erlor walls, In my opinion, even though it has lasted for a conside£able number of years, ~t. hag. re~9~gd ~he po~u~ where i= is no ion~er advisable to repair... Sincerely, K. Edwin McVelgh President SEP 86 ’97 13:48 MCVEIGH PLASTERIMG P,i,i TO: P.O. Box 7149 ° REDWOOD CrrY, CA 94063-0149 memo-letter Jack & Cohen Builders, Inc./Robert Bybee 975 High Street Palo Alto, CA 94301 DATE Sep=ember 5, 1997 SUBJECT:...Palo Alto Historical ~[useum 351 Homer Street, £a!o Alto, CA COST ESTIMATE: Estimate ro ~eplace’existin~ exterior lath and plaster with three coat cement plaster application. LABOR & MATERIALS }3~2QQ.00 No=e! Scaffold for work over 13’0’ is not ~ncluded. H. Edwin McVei~h,Dresiden~. ATTACHMENT B ARCHII’. October 6, 1997 June Fleming City Manager City of Pale Alto 250 Hamilton Avenue Pale Alto, CA 94301 " Deal" June, Thank you and Janet [br meeting with us last week to discuss the Will’iams house. I’m writing this letter as an aside to that meeting. I see a real opporlun~,b, .here [kn’,the City to set an example of how to respect the historic fabric of a struclure at a time when hislori~ prcsc~,ation issues are at the forefronl of public debate. . , . , , Tile Williams house will soon open to ureat public fanfare. Undoubledly, the Museum’s opening will be well-received and recognized as an impommt historic prcsc~walion project wilhin the communily. The grand opening will provide an opporlunity Ibr the City to participate in the public events surrounding the o~enin~ as a parmer in the project. This public-private partnership between the City’ and the Museum ~m s~wc to demonslratc what can be done when all parties contribute toward the common goals. The incentives that can apply to prescrvalion projects are all illustratqd in this project. Zoning relief granted by the City made it possible to prcse~we the gardens, the use of the State Historic Building Code made it possible to save the garage. In essence, this project stands as a billboard to the prese~walion values and goals I think tl~e City wanls to encourage. People’s reaclions to lhe projecl will del)end on Ihe visual impressions they carry away with them. l’m concerned that a patched stucco job will Ioo~ like just tllat -.a patch job. In order to really carry off the project well, we should repair the stucco in a way that will loo~ good and also help prolong the li[’c of the building by addressing tl~c. inadequacies of I]’lc existing inslallalion. To this end, the Museum seeks your and the Council’s assistance. Tile Museum has ah’cady tackled olher hidden problems encountered in the existing structure without seeking additional funding from the Cily. When the main housewas rc-rool~d, the existing roof structure was lk)und to be inadcquale {o resisl anlicipalcd lateral’ lbrces" fmmearlhquakes and required strengthening. At the time the Museum was awarded the oplion to lease, il was not known that full tim-sprinkling o[" all structures would be required.. These two ilems alone.cosl tens of thousands o[" dollars, which the Museum paid. ’Fun(lraising is dill]cull ill besl, all(I tile MtlsCtlm has done an incredihlc job of raising over a half a inillion dollars loward this project. If you-remcmhcr, as I do, lhc long history of groups who unsuccessfully at/cmplcd IO lackle lhis.prop~rly wilh ils really difficulties, including fund raising, then you can apprecialc lhe organizalion and effort Ihc Museum has put forward to reach this point. The magnitude of the stucco repair was no~ something we could have anticipaled, and its cost is difficult Ik)r lhe Museum IO raise ftallds [k)r at this lalc poim in the project. We ask thai yotl look favorably our us in findin~ a quick answer to this problem.upon ~~~. Sinccl,~~Monlgomery Anderson, A Principal Cody Anderson Wasney Architects, Inc. Janet Freeland, City, of Pill() Alto, Real Estale l)ivision Joe Ehrlich, Eh rl ich-Rom in ge r Arch itec ts " " Cody Anderson Wasney Architects Inc. ¯ 941 Emerson Street ¯ Pale Alto, CA 94301 ¯ Tel 415, :~28,181B ¯ Fax 415. 328.1888 ¯ Email cawarch@aol,com