HomeMy WebLinkAboutStaff Report 131-07City of Palo Alto
City Manager’s Report
TO:
FROM:
HONORABLE CITY COUNCIL
CITY MANAGER DEPARTMENT: ADMINISTRATIVE
SERVICES
11
DATE:
SUBJECT:
MAY 14, 2007 CMR: 131:07
ROTH BUILDING, 300 HOMER AVENUE - REJECT $300,000
CONTRIBUTION CONDITION APPROVAL OF OPTION
AGREEMENT AND LEASE, AND CONSIDERATION OF ADDENDUM
TO THE ENVIRONMENTAL IMPACT REPORT(EIR)FOR THE
SOUTH OF FOREST AREA COORDINATED PLAN
RECOMMENDATION
The Palo Alto History Museum (Museum) is requesting the addition of a condition to the
attached Option Agreement and Lease that the City contribute up to $300,000 for the cost of
repairing Roth building leaks and drainage problems. Staff recommends that Council reject this
request. If Council approves this condition, staff recommends that Council: 1) authorize the
Mayor to execute the Option Agreement and Lease, amended according to Council direction; and
2) consider the Addendum to an Environmental Impact Report (EIR) for the South of Forest
Avenue Coordinated Area Plan (SOFA CAP).
BACKGROUND
In April 2000, the City Council approved the $1,957,000 purchase of the Roth Building and its
0.41 acre site for potential development as a "public facility or alternative use if a public facility
is not feasible," in conjunction with the South of Forest Avenue Coordinated Area Plan (SOFA
CAP).
In acquiring the Roth Building, the City entered into a development agreement with the Palo
Alto Medical Foundation (PAMF). The development agreement required that the City complete
demolition and removal of the non-historic wings by July 2003. The purpose of the demolition
was to provide for additional park space and provide a buffer of approximately 100 feet between
the historic Roth Building and a residential development project being undertaken by
Summerhill Homes immediately south of the Roth Building. On March 4, 2002, the Council: 1)
approved the demolition of the basement/wings associated with the non-historic 1947 addition;
2) approved the temporary retention of the spine of the 1947 addition; and 3) reviewed and
commented on the summary of a request for proposals from non-profit organizations to lease and
renovate the Roth Building. On May 20, 2002, the Council approved a Request for Proposals
(RYP) and directed staff to solicit proposals for the lease of the Roth Building. On May 12,
2003, Council approved the permanent retention of the spine. In response to the RFP, one
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proposal, from the Palo Alto History Museum (Museum), was received on November 25, 2003.
On December 8, 2003, Council dedicated the park space, excluding the .41-acre Roth Building
site. In December 2003, the Roth building non-historic wings were demolished. Seismic bracing
of the spine was completed in April 2004. On March 1, 2004, the Council accepted the proposal
submitted by the Museum and directed staff to prepare the Option Agreement and Lease
Agreement and complete the environmental review. On July 10, 2006, Council approved: 1)
creation of Capital Improvement Program (CIP) Project PF-07011, Roth Building Maintenance;
and 2) the Budget Amendment Ordinance (BAO) in the amount of $415,000 to provide an
appropriation for CIP Project PF-07011, Roth Building Maintenance. The funding was requested
to provide interim measures to prevent further deterioration of the building until the Museum
takes over the site. The interim measures included perimeter drainage and the installation of a
temporary ventilation/dehumidification system. The perimeter drainage and installation of the
dehumidification system have been completed.
DISCUSSION
Following Council’s acceptance of the Museum proposal in April 2004, staff sent the Museum a
draft Option Agreement. The draft was in accordance with the terms of the Council-approved
Request for Proposals, which was attached to and an integral part of the proposal submitted by
the Museum. In February 2006, staff received the Museum’s proposed changes to the draft
Option Agreement. Since that time, staff has been in negotiations with the Museum.
Museum Request for $300,000 City Contribution
The attached Option Agreement and Lease includes the terms and conditions agreed upon by the
Museum and staff with the exception of the Museum’s requested condition that the City
contribute up to $300,000 for repairing leaking and drainage problems at the Roth building. The
Museum’s contractor has recently estimated that the cost to refurbish the Roth building will be
$7.2 million, including $150,000 to $300,000 to repair leaking and drainage problems. If
approved by Council, the contribution would occur at the appropriate time during renovations
following execution of the lease. The $300,000 would be above and beyond the $415,000
allocated in the CIP approved in July 2006 for City repairs and maintenance to the Roth building.
One of the requirements of the 2002 RFP was that improvements, maintenance and operation of
the property be at no cost to the City. Staff has consistently taken the position that no additional
costs be incurred. The Roth Building was not included in the Infrastructure Management Plan
and there are no other funds identified for this request. In addition, staff is concerned that
funding the repairs would establish a precedent for additional demands for City contributions to
public/private entities, such as Lytton Plaza, the Art Center Foundation and the Junior Museum.
Therefore, staff is recommending Council reject the Museum’s condition. If Council does
decide to proceed with the funding request, staff would return with a budget amendment at a
future date.
RFP and Museum Proposal
The general intent and terms of the Council-approved RFP were to lease the 17,000 square foot
Roth Building under a long-term lease to a non-profit group or organization that: could improve,
maintain and operate the property for a use that provides public benefit and/or fills a public need;
preserves and maintains the historic significance of the property; is compatible with adjacent
park use; and does not adversely impact the residential neighborhood. In addition,
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improvements, maintenance and operation of the property are to be at no cost to the City. The
RFP specifies that preference be given to non-profit groups located in or serving Palo Alto and
requires public access to the Roth Building restrooms by users of the park. It also strongly
encourages the provision of a community meeting room as part of the project. The proposal
criteria listed in the RFP and upon which the Museum proposal was evaluated by staff and the
Council are summarized in Attachment A. For additional information on the terms of the RFP
and details of the Museum proposal and its evaluation, refer to CMR:152:04 dated March 1,
2004.
Option Agreement and Lease
Under the attached Option Agreement and Lease, the Museum is granted a two-year period to
satisfy the specified conditions prior to exercising the option and entering into the lease.The
major option conditions the Museum must satisfy are as follows:
1.Pay the option purchase price ($5,000).
Submit schematic plans within twelve (12) months of the commencement of the
Option Agreement.
Receive approval of its development plans from the Joint Architectural Review/
Historic Resources Board for SOFA 1 projects, Planning and Transportation
Commission and City Council. The development plans will include specific details of
the interior and exterior historic preservation and maintenance features to be included
in the development of the property.
Receive approval of any land use permits or approvals required to implement the
proposed use and improvements. The proposed use and improvements will require
approval of a conditional use permit and a variance for parking.
Receive approval of a long term maintenance plan and schedule for the building from
the City Manager or his designee.
Satisfy the Director of Administrative Services that the Museum has sufficient
finances or financial commitments to implement the project as approved by the City
and furnish the Director of Administrative Services with evidence that sufficient
financial security will be available to construct the project.
One option condition to be satisfied by the City is the requirement that the City maintain the
property in its current condition, subject to special requirements consisting of the improvements
to the building approved by Council on July 10, 2006.
Major conditions of the Lease include a term of 40 years and an annual rent of $1.00 per year.
Required services and uses include: restoration, preservation and improvement of the Roth
Building; operation of a local history museum; the provision of a restroom available to the public
using the adjacent park; and a community meeting room available for use by neighborhood
groups. Permitted uses include administrative offices and storage, fundraising activities to
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support the required services, and periodic rental of space for fundraising purposes.
Improvements required by the lease are those improvements approved by the City during the
option period. With the exception of the public restroom, which the City will maintain, the
Museum is responsible for all maintenance of the property, including the outside areas on the
northwestern and southwestern sides of the Roth Building. Subleasing is permitted subject to the
City’s approval and in accordance with City codes and ordinances.
Changes and Additions to Option and Lease Agreements
The terms of the attached Option Agreement and Lease are consistent with those of the Museum
proposal and its attached option to lease accepted by the Council in 2004, except for the changes
and additions discussed below. Attachment B includes a more detailed summary of the
conditions of the option and the terms of the proposed lease with changes/additions noted in
boldface.
Proposed changes to the Option Agreement include extending the schematic plan timeline and
the addition of specific requirements for City maintenance during the option term. The time
requirement for the Museum to submit its schematic plans has been extended from 6 months to
12 months, as staff felt the Museum’s request for more time to submit its schematics was
reasonable. Requirements for City maintenance consist of: the maintenance and improvements
approved by Council on June 5, 2006; maintaining trees on the property; securing the property;
and repairing damage caused by vandalism.
A major change to the Lease is the term of 40 years. The Council-approved RFP specified a 30-
year term with no options to renew. In its 2004 proposal, the Museum requested two changes to
RFP provisions, one of which was a request for an option to renew at the end of the 30-year lease
term, so that donors could be assured of a permanent home for their artifacts and the long-term
benefit of their financial contributions. Staff did not support the requested change and Council
did not approve it based on the fact that the 30-year term was already longer than that of other
City leases. The Museum has now requested a 40-year term in order to meet itsfundraising
objectives and makes the following case in support of its request. The Museum claims that the
40-year term is necessary to qualify for federal investment tax credits, which many large donors
require. Also, even without use of investment tax credits, major donors are not willing to commit
significant funds or artifacts without some guaranty of at least relative permanence. In addition,
the project estimated costs are $7.2 million, which far exceeds costs of any other project
sponsored by a non-profit leasing City Property.
Additional terms and provisions of the attached Lease which were not anticipated or included in
the RFP or the Museum proposal approved by Council include the following additional rights of
the Museum to:
Charge admissions fees for Museum visitors.
The proposal accepted by Council stated that the museum was to be open to the public
free of charge. Memberships to the Museum were proposed to be sold and fees for
museum programs were to be reasonable and competitive. The attached Lease requires all
activities to be open to the public; however, in addition to membership fees, it permits the
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Museum to charge a fee for admission to the museum to members and non-members for
any and all activities.
Suspend operations for up to an aggregate 180 days if finances require.
The Museum’s proposal included hours of operation from 11-4, Friday through Sunday.
The attached Lease does not specify hours of operation. It also permits the Museum to
temporarily close to conduct repairs, make alterations, change exhibits, and observe
holidays. It also allows the Museum to suspend operations for up to an aggregate of 180
days in any 3 year period if for any reason the organization is financially unable to
operate the museum.
Rent to for-profit organizations for corporate fundraising events.
In addition to providing a community meeting room available to neighborhood groups
(strongly encouraged in the RFP), the Museum proposal anticipated subleasing space in
the Roth Building for office use by local non-profits, for residential use by a caretaker,
director or curator, and for the purpose of providing a gift shop/bookstore and/or a small
caf6 in the facility. It also proposed temporary rentals to community groups or individuals
for meeting rooms. Rentals and subleasing for these purposes are permitted in the
attached Lease. In addition, language has been added which permits the Museum to: 1)
periodically rent space to for-profit organizations for corporate events unrelated to the
required services and uses for the purpose of fundraising to support the required services
and uses; and 2) sublease up to 25% percent of the property to a for-profit food service
operator and/or a for-profit gift/book shop operator. All rental and subleased uses are
subject to City codes and regulations and must be in support of the Museum’s obligation
to provide the required services and uses. These uses must not interfere with the
obligation of the Museum to provide the required services, activities and uses. Subleased
uses are also subject to approval by the City Manager. Concerning the community
meeting room to be made available to neighborhood groups, it should be noted that the
Museum’s proposal specified that the availability of the room not be dependent upon the
Museum’s hours of operation; however, this is not specifically required in the attached
Lease.
The attached Lease also includes added maintenance obligations for both the City and the
Museum which were not anticipated in the RFP or Museum proposal. In addition to the
Museum’s request that the City maintain and clean the public restroom, which was accepted by
the Council, the lease now requires the City to maintain the restroom water and sewer lines,
provide separate utility service, pay for the public restroom utilities and be responsible for
property damage and personal injury in the restroom. The RFP and Museum proposal
anticipated that the Museum would maintain the landscaping in the courtyard area. In addition to
the courtyard, the attached lease requires the Museum to maintain the northwestern and
southwestern sides of the Roth building, including the sidewalk.
NEXT STEPS
If directed by Council, staff will revise Option Agreement (Attachment C) and Lease to include
the additional condition of the City’s contribution and return to Council with a Budget
Amendment Ordinance to fund the repairs up to $300,000. The two-year option term will begin
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upon the execution of the option by the City, and the Museum will begin the process of fulfilling
option conditions. When the conditions have been met, the lease will be executed and
construction of the approved improvements and operation of the museum will commence. Once
the option conditions have been met, and assuming no substantial changes are made to the
proposal or the form of lease during the development approval process, the lease will be
executed by both parties without returning to Council. Council will have the opportunity to
review and approve the detailed plans for the project during the option period.
RESOURCE IMPACT
The City of Palo Alto purchased the Roth Building at a cost of $1,957,000 and spent an
additional $950,000 to retain the spine. The cost to the City for improvements and maintenance
allocated in the July 2006 CIP is $415,000. The proposed improvements, maintenance and
operation of the property during the lease term will be at no cost to the City with the exception of
the cost of maintenance and utilities for the restroom open to the park public and, if approved by
Council, up to $300,000 to repair the leaks and drainage system. The estimated annual cost to the
City for restroom maintenance and utilities is $25,000 to $30,000. Estimated cost for providing
the service box is $2,700. If approved, the $300,000 would come from the Budget Stabilization
Reserve. The estimated value of the proposed tenant improvements is $7.2 million. It is
important to note that while the development and operation is to be at no cost to the City; the
City will receive a nominal $1 per year in lease revenue for the facility.
POLICY IMPLICATIONS
The proposed option to lease is consistent with City policy and with prior Council approval with
the exception of the changes discussed above.
ENVIRONMENTAL REVIEW
Council has considered the Environmental Impact Report (EIR) for the South of Forest Area
Coordinated Area Plan (SOFA CAP). Attached for Council consideration is an Addendum to the
EIR for SOFA CAP (Attachment D) prepared for this project. During the option period, the
optionee will also be required to fully comply with all provisions of CEQA as they may apply to
the specific development plans.
PREPARED BY:
WILLIAM W. FELLMAN
Manager, Real Pro
DEPARTMENT HEAD APPROVAL:
LAL0 PI
Assi Services
CITY MANAGER APPROVAL:
City Manager
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ATTACHMENTS
Attachment A: Summary of RFP Evaluation Criteria
Attachment B: Summary of proposed option to lease
Attachment C: Option Agreement
Attachment D: Addendum to EIR for the SOFA CAP
CC:Palo Alto History Museum
Beth Bunnenberg
Gloria Brown
Carolyn Caddes
Karen Holman
Dick Rosenbaum
Steve Staiger
University South Neighborhood Group
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ATTACHMENT A
EVALUATION CRITERIA
Roth Building Proposals
The extent to which the proposed leased use satisfies a public need or provides
public benefit. Preference will be given to non-profit groups located in or serving
Palo Alto.
o The extent to which the proposal is responsive to the guidelines and standards for
rehabilitation for historic preservation of the property as set out in the Secretary of
the Interior’s Standards for Rehabilitation of Historic Buildings (attached as
Exhibit II to the option to Lease Agreement).
The consistency of the proposed use with existing City goals and objectives (as
set forth in the Comprehensive Plan, Zoning Ordinance, and Municipal Code),
including compatibility with park use.
The impact of the proposed use upon the immediate neighborhood, the
community generally, and the environment.
The history and assessment of the proposer’s ability to finance and carry out the
proposed construction, operation and maintenance of the facility and services as
proposed.
6. The monetary and non-monetary consideration to be provided to the City.
7.The degree of public access, i.e., the numbers of people, especially City residents
and taxpayers, that will be serviced by the proposed use.
8. The fees to be charged to Palo Alto citizens, if any.
o
10.
11.
A five-year pro-forma financial analysis of the proposed use, setting forth the
project revenues and expenses for this period of time.
Evidence of the proposer’s ability to finance or to obtain financing for the
required improvements. NOTE: If the proposal is being submitted by more than
one group or organization, evidence of financial commitment as a group is
required.
Evidence of the proposer’s ability to address sensitive design issues relating to
adaptive reuse of the historic building and interface with the park.
ATTACHMENT B
SUMMARY OF OPTION TO LEASE
between the City of Palo Alto and the Palo Alto History Museum
for the Roth Building located at 300 Homer Avenue, Palo Alto
Conditions of the Option
Term of the Option: 2 years
Museum Conditions:
Prior to exercising its option to Lease the property, the Palo Alto History Museum (Museum)
must satisfy the following conditions:
1.Pay the option purchase price ($5,000).
o Submit schematic plans for the project within twelve (12) months of the
commencement of the option.
Comply with all requirements of the California Environmental Quality Act (CEQA).
Receive approval of its development plans for the entire project from the
Architectural Review/Historic Resources Board for SOFA1 projects, the Planning &
Transportation Commission and City Council.
Receive approvals from the City Engineer and Chief Building Official of construction
drawings, including the construction contract form and proposed construction
schedule.
o Receive approval from the City Manager of a long-term maintenance plan and
schedule for the building during the Lease term.
Receive approval of any land use permits or approvals required to implement the
project and development plans.
o Provide evidence to the Real Property Manager that any and all permits from any
agencies having pre-construction jurisdiction over the proposed development have
been authorized and are available.
Satisfy the Director of Administrative Services that the Museum has sufficient
finances or financial commitments to implement the project as approved by the City
and furnish to the Director of Administrative Services evidence that sufficient
financial security will be available to construct the project.
10. Submit to the Real Property Manager a security deposit as required by the Lease.
City Conditions:
During the option period the City will be required to maintain the property in its current
condition, subject to special requirements outlining specific improvements.
Terms of the Lease
LESSOR:
City of Palo Alto
TENANT:
The Palo Alto History Museum, a non-profit corporation
PREMISES:
300 Homer Avenue, Palo Alto, commonly known as the Roth Building.
PURPOSE:
The purpose of the Lease is to allow the Museum to perform the project as described in
Exhibit C to the Lease by developing and operating a museum open to the public, according
to the terms and conditions of the Lease.
TERM:
The term of the Lease is 40 years.
USES:
A. REQUIRED: Throughout the term of the Lease, the Museum shall provide the following
services, activities and uses:
Restoration, preservation and improvement of the Roth Building.
Restrooms available to the public using the adjacent City park and a community
meeting room available for use by neighborhood groups.
Displays, exhibits and demonstrations relating to local history.
All required activities shall be open to the public. The Museum may charge a
membership fee for members and a fee for admission to members and non-
members for activities or use of facilities.
PERMITTED: In addition to the required uses, the following uses shall also be
permitted, but only as incidental to the required uses:
1. Workshops, classes and lectures associated with museum purposes.
2.Administrative offices and storage space to support the required services, activities
and uses under the Lease.
Fund raising activities only to support the required services, activities and uses,
including but not limited to sales of goods and gifts related to the museum use and the
hosting of benefits and social activities; and
Periodic rental of space to Palo Alto-based community groups and individuals
(including living quarters for a caretaker, director, and/or curator of the Museum
building) and to for-profit organizations for corporate events unrelated to the
required services and uses for the purpose of fund-raising to support the required
services and uses. Rentals must not interfere with the obligation of Museum to
provide the required services, activities and uses.
Co OPTIONAL: Subject to the prior written approval of the City Manager, the Museum
may provide additional services and uses which are ancillary to and compatible with the
required services above, including use of the property for revenue-generating events or
operations so long as such uses do not interfere with Museum’s ability to provide the
required services and uses, will not result in damage to the property, and all net
revenue generated by such are devoted exclusively to funding the activities of the
Museum conducted at the property.
C.PROHIBITED: Any use not authorized by the Lease.
D.SPECIAL USES:
2
Museum has the right to exclusive use the paved patio area at thb rear of the
building, which shall be included in the leased area.
Museum has the right to temporarily close the museum operations to conduct
repairs, make alterations, change exhibits, and observe holidays and to suspend
operations for up to an aggregate of one hundred eighty (180) days in any three
(3) year period if for any reason Museum is financially unable to operate the
museum. The Museum shall provide the City with not less than thirty (30)
days" written notice of its intention to temporarily suspend operations for any
period of time.
CONSIDERATION/RENT:
No MONETARY: One Dollar ($1.00) per year, payable upon execution of the Lease and
thereafter on each anniversary date of the Lease.
go NON-MONETARY: Development and operation of a museum consistent with the
purpose and clauses of the Lease, at no cost to the City.
SECURITY DEPOSIT:
A $10,000 security deposit is required which can be cash, assignment of savings account,
certificate of deposit or letter of credit.
REQUIRED IMPROVEMENTS TO BE MADE BY TENANT:
Required improvements are those improyements which are identified and shown in the plans
approved by the City during the option period
MAINTENANCE OBLIGATIONS OF TENANT:
Except for the public restrooms to be maintained by the City, the Museum shall be responsible
for all maintenance and repairs on the Property in accordance with the City-approved
maintenance program to preserve the historic features of the building, including in the areas on
the northwestern and southwestern sides of the Roth building, including the sidewalk and
courtyard area.
MAINTENANCE OBLIGATIONS OF CITY."
City to maintain the public restrooms accessible from the exterior of the property, including
water and sewer lines serving the restrooms. City to also maintain all trees except for those
located on the northwestern and southwestern sides of the Roth building, including the
courtyard area. City to be responsible for property damage and personal injury occurring on
or about the public restrooms.
UTILITIES:
Museum to pay all utilities except for utilities supplied to the public restrooms, which shah be
the responsibility of the City. Museum and City shall each be responsible for the cost of
installing and maintaining its meter for its respective utilities service.
ASSIGNMENT/SUBLETTING:
Assignment or encumbrance of the Lease is prohibited except if the Museum dissolves or ceases
doing business, in which case the Museum may assign its interest in the Lease to a non-profit
organization who agrees to abide by the terms and conditions of the Lease, subject to approval
by the City. The Museum may sublease to other non-profit groups for office use and to a
museum caretaker for residential use subject to compliance with City ordinances and to approval
by the City Manager. Museum also has the right to sublease up to 25 % of the property to for-
profit organizations, and portions of the property to a food,service operator and a gift!book
shop so long as these uses are in support of Museum’s obligation to provide the required
services, activities and uses specified in the Lease.
TAXES~ ASSESSMENTS, INSURANCE:
The Museum shall be responsible for all taxes and assessments for the property and shall
maintain insurance meeting the City’s standard requirements for insurance protection.
Attachment C
OPTION AGREEMENT
Project: Roth Building
300 Homer Avenue
This Option Agreement (the "Agreement") is made this day of ,2007 (the
"Commencement Date"), by and between the CITY OF PALO ALTO, a California charter city
("CITY"), and the PALO ALTO HISTORY MUSEUM, a California nonprofit public benefit
corporation ("MUSEUM") ("Party" or "Parties").
RECITALS:
A. CITY owns real property and improvements located at 300 Homer Avenue, Palo
Alto, Santa Clara County, California, commonly referred to as the Roth Building (the
"PROPERTY"), as described in Exhibit "B" to the Lease, attached hereto and incorporated herein by
reference as Exhibit I (the "Lease").
B. CITY, pursuant to its Policy and Procedures 1-11, issued a request for proposals for
an option to lease the PROPERTY and received a proposal from MUSEUM, which was selected by
CITY’s City Council (the "Council") for an award of contract.
C. MUSEUM desires to obtain an exclusive option to lease the PROPERTY, in
accordance with the covenants, terms, and conditions of this Agreement and the Lease, for the
purpose of (a) developing and operating the PROPERTY for use as a history museum and (b)
restoring and preserving the PROPERTY (the "Project").
D. CITY desires to grant to MUSEUM an exclusive option to lease the PROPERTY (the
"Option"), during which time MUSEUM shall develop specific plans, obtain financing, and satisfy
other covenants, terms and conditions set forth herein prior to exercising the Option ~nd
implementing the Project, in accordance with this Agreement and the Lease.
NOW, THEREFORE, in consideration of the covenants, terms and conditions set forth
above, the Parties mutually agree, as follows:
SECTION 1. GRANT OF OPTION
CITY hereby grants to MUSEUM an Option for the purpose of developing, operating,
restoring and preserving the PROPERTY, subject to the covenants, terms and conditions set forth
herein and in the Lease.
SECTION 2. TERM OF AGREEMENT
070501 jb 0072742
The term of this Agreement (the "Option Term") shall be twenty-four (24) months, beginning
on the Commencement Date.
SECTION 3. PURCHASE PRICE OF OPTION
The purchase price of the Option shall be Five Thousand Dollars ($5,000.00) (the "Purchase
Price"), which shall be due and paya’ble to CITY by MUSEUM by no later than the date of
MUSEUM’s execution of this Agreement. CITY shall retain the Purchase Price if MUSEUM does
not exercise the Option in accordance with the covenants, terms and conditions of this Agreement;
provided, however, if MUSEUM does exercise the Option and thereafter promptly executes the
Lease, the Purchase Price will be credited against the security deposit that MUSEUM is required to
post under the Lease.
SECTION 4. CONDITIONS PRECEDENT
MUSEUM shall not exercise the Option, unless and until each and every following condition
has been satisfied:
4.1 Purchase Price of Option
MUSEUM shall have paid to CITY the Purchase Price.
4.2 Schematic Plans Submittal
MUSEUM shall have submitted to CITY the schematic plans for the Project (the "Schematic
Plans") within twelve (12) months of the Commencement Date. The Schematic Plans shall include,
but not be linfited to, a site layout of all buildings, landscape developments, schematic floor plans for
all structures, simple elevations of all structures, identification of the methods and measures for
preservation of historic features of the site in accordance with the Secretary of Interior’s Standards
for Rehabilitation (for Historic Buildings), as described in Exhibit II, attached hereto and
incorporated herein by reference (the "Standards"), a plan for fulfilling parking requirements (the
"Parking Plan"), a detailed description of all proposed improvements or modifications (including
proposed uses and methods of operation and a general outline specification which identifies
proposed construction material and methods), and an estimate of the total construction cost for all
proposed improvements under the Project. If the development of the PROPERTY is intended to be
performed in phases, the Schematic Plans shall include all phases of the PROPERTY’s development.
4.3 Development Plans Approvals
MUSEUM shall have submitted the development plans for the PROPERTY (the
"Development Plans") to, and shall have received approval of, CITY’s Historic Resources Board,
Architectural Review Board, Planning and Transportation Commission, and the Council. The
Development Plans shall include, but not be limited to, the Schematic Plans, interior plans, structural
plans, exterior elevations, and interior eleVations and shall indicate specific plans and details of the
interior and exterior historic preservation and maintenance features to be included in developing the
PROPERTY. The Development Plans shall be consistent and in accordance with the Standards. If
the development of the PROPERTY is intended to be performed in phases, the Development Plans
-2-
070501 jb 0072742
shall include all the phases of the PROPERTY’s development. Phase I of the Project shall include at
a minimum the improvements necessary to make the PROPERTY usable for the required services
and uses specified under the Lease.
4.4 Construction Drawings Approval
MUSEUM shall have obtained approval of the construction drawings for the Project (the
"Construction Drawings") from CITY’s City Engineer (the "City Engineer") and CITY’s Chief
Building Official (the "Chief Building Official"). The Construction Drawings shall include: (i)
complete architectural and engineering working drawings; (ii) complete construction specifications;
(iii) complete construction contract form; (iv) proposed construction schedule; and (v) landscape
plans.
Should the development of the PROPERTY be performed in phases, MUSEUM need only
obtain approval of the Construction Drawings for Phase I of the Project in order to exercise the
Option.
4.5 Long Term Maintenance Plan
MUSEUM shall have submitted to and received approval of a long-term maintenance plan
and schedule for the building on the PROPERTY from CITY’s City Manager (the "City Manager,"
or his designee.
!i
4.6 Land Use Designation
MUSEUM shall have received approval from the Council for any necessary change in land
use zoning for the PROPERTY, any necessary change in CITY’s Comprehensive Plan designation
and any other land use permit or approval required, if necessary, for the PROPERTY for
implementation of the Project and the Development Plans as approved by CITY.
4.7 Subdivision Map Act Compliance ....
MUSEUM shall have complied with the conditions of the Subdivision Map Act (California
Government Code Section 66410 et seq.) and Title 21 of the Palo Alto Municipal Code, as amended,
to the extent applicable to the PROPERTY and the Project.
4.8 CEQA Compliance
MUSEUM shall have complied with the California Environmental Quality Act ("CEQA"), as
amended, and all related CITY procedures for implementing CEQA, to allow the Project to be
implemented.
4.9 Permits
MUSEUM shall have provided to CITY’s Real Property Manager (the "Real Property
Manager") satisfactory evidence that any and all permits and approvals issued by any and all
agencies having pre-construction jurisdiction over the Project, including, but not limited to, building
070501 jb 0072742
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permits, grading permits, street opening permits and health permits, have been authorized and are
available. Should the development of the PROPERTY be performed in phases, the requirement of
this Section 4.9 shall apply only to the Phase I improvements.
4.10 Certification to Chief Building Official
MUSEUM shall have submitted to the Chief Building Official its written certification that
the plans for any proposed building construction comply, in all respects, with current building codes,
the federal Americans with Disabilities Act of 1990, as amended, including any implementing
regulations, and energy conservation requirements as set forth in the California Code of Regulations,
Title 24, for non-residential construction. Should the development of the PROPERTY be performed
in phases, the requirement of this Section 4.10 shall apply only to the Phase I improvements. To the
extent feasible, MUSEUM shall be entitled to utilize the California State Historic Building Code to
achieve compliance with the aforementioned code, regulations and laws.
4.11 Sufficient Funds
MUSEUM shall have satisfied CITY’s Director of Administrative Services (the "Director of
Administrative Services") that it has sufficient funds and/or financial commitments to implement the
Project as approved by CITY. Should the development of the PROPERTY be performed in phases,
the requirement of this Section 4.11 shall apply only to the Phase I improvements.
4.12 Sufficient Security to Complete Project
MUSEUM, in accordance with Section XII (TENANT’S ASSURANCE OF
CONSTRUCTION COMPLETION) of the Lease, shall have furnished to the Director of
Administrative Services satisfactory evidence that assures CITY sufficient financial security will be
made available to complete construction of the Project, as set forth in the approved Development
Plans and Construction Drawings. Should the development of the PROPERTY be performed in
phases, the requirement of this Section 4.12 shall apply only to Phase I improvements.
4.13 Security Deposit
MUSEUM shall have submitted to the Real Property Manager a security deposit in
accordance with Section IX (SECURITY DEPOSIT) of the Lease. Consistent with Section 3 hereof,
MUSEUM shall be entitled to apply the Purchase Price toward the security-deposit requirement.
SECTION 5. EXERCISE OF OPTION
If, at any time during the Option Term, MUSEUM has satisfied each and every condition
precedent set forth in Section 4 hereof to the satisfaction of CITY, MUSEUM may exercise the
Option by giving the Real Property Manager thirty (30) days’ prior written notice of its election in
order to accommodate CITY’s contract administration process, accompanied by two (2) duly
executed originals of the Lease. CITY shall execute the Lease within one (1) month of receipt of
MUSEUM’s request to exercise the Option and return one executed original to MUSEUIM.
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SECTION 6. GENERAL CONDITIONS
6.1 Review by CITY
MUSEUM hereby acknowledges that one of the purposes of this Agreement is to afford the
Parties the opportunity to determine whether or not MUSEUM is ready, willing and able to satisfy
the various conditions and obtain the required approvals to implement the Project. Several of those
conditions involve obtaining the review and approval of elective or appointive officials, officers, or
employees of CITY. Each of those reviews shall be conducted in an independent manner and
nothing contained herein shall be deemed to limit the jurisdiction or authority otherwise possessed
by the. officials, officers, or employees in the conduct of such review. Nothing contained in this
Agreement shall be deemed to imply that the approvals will be forthcoming, and the failure to
authorize or issue any such approval or permit by any official, officer, or employee of CITY shall
not be deemed in any manner a breach of this Agreement, nor shall any such denial constitute the
basis of any claim, liability, obligation, or cause of action with respect to this Agreement or the
Lease. Subject to the foregoing, CITY agrees to reasonably cooperate with MUSEUM to cause
applications for necessary permits or approvals to be processed in a timely manner consistent with
the policies and procedures normally used by CITY for such process.
6.2 Other Governmental Approvals
CITY agrees to consent to any lawful and complete application by MUSEUM with respect to
any permits or approvals related to activities or improvements approved by CITY in accordance with
this Agreement that may be required by any other governmental or regulatory agency u~elated to
CITY.
6.3 Assignment Prohibited
This Option is awarded based on the unique background and proposal of MUSEUM.
Therefore, this Option cannot be sold, assigned or otherwise transferred without the prior written
consent of CITY, acting in its sole discretion. Failure of MUSEUM to obtain CITY’s required
written consent shall render void any such sale, assignment or transfer.
6.4 Extension of Option
Upon receipt of the written request of MUSEUM stating the reasons therefor, the City
Manager, or his designee, shall be empowered to extend the Option Term, as follows:
6.4.1 The City Manager, or his designee, shall grant, in writing, an extension of the
Option Term for a reasonable period of time, as determined by the City Manager, or his
designee, in the event MUSEUM is delayed in fulfilling the conditions precedent to the
exercise of the Option by reason of any cause not the fault of, or within the reasonable
control of, MUSEUM, its officers, employees or agents; or
6.4.2 The City Manager, or his designee, may, in his sole discretion, grant an
extension of the Option Term for a period not to exceed one hundred eighty (180) days, in
the event MUSEUM is delayed in fulfilling the conditions precedent to the exercise of this
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070501 jb 0072742
Option for any other reason. However, the City Manager, or his designee, may grant such
extension only upon the following conditions:
a. Written request for such extension shall have been delivered by
MUSEUM to the Real Property Manager at least fifteen (15) days prior to the
expiration of the Option Term;
b. Payment in an amount equal to Two Thousand Dollars ($2,000.00)
shall be submitted to CITY with the request for extension referred to above; in the
event the extension is denied, CITY shall refund that amount to MUSEUM; and
6.5
c. MUSEUM shall submit, together with its request for extension,
evidence of its progress toward fulfilling the conditions precedent to the exercise of
the Option, documentation of its proposed actions and the feasibility of satisfying the
conditions within the term of the extension requested and such other information and
material as may be required by the City Manager, or his designee.
Termination of Option
Subject to Section 6.4 hereof, the failure of MUSEUM to fulfill the covenants, terms and
conditions of this Agreement fully and satisfactorily during the Option Term shall absolutely and
conclusively terminate MUSEUM’s rights hereunder without any further obligation by CITY to
MUSEUM arising hereunder. Upon the termination hereof without the exercise of the Option,
MUSEUM shall, within five (5) business days of receipt of a request of the Real Property Manager,
deliver to CITY a duly executed quitclaim deed in recordable form and approved as to form by
CITY’s city attorney, attached hereto and incorporated herein by reference as Exhibit III,
quitclaiming to CITY any and all right, title and interest of MUSEUM in and to the PROPERTY.
Execution of the Lease by CITY and MUSEUM substantially in the form of Exhibit I hereof shall
also constitute a termination of this Agreement.
6.6 MUSEUM’s Right to Enter and Related Indemnification Obligation During Option
Term
CITY hereby grants to MUSEUM, its officers, employees, and agents, during the Option
Term and any extension thereof, the right to enter the PROPERTY or any portion thereof at
reasonable times for the purposes of conducting, at MUSEUM’s own cost and expense, such soil,
geologic, engineering, environmental, design, and such other investigations or activities, that are
reasonably required in connection with the Project to evaluate the PROPERTY’s condition or satisfy
any of the conditions to the exercise of the Option. MUSEUM shall protect, indemnify, defend and
hold CITY, its elective and appointive officials, officers, and employees, free and harmless from and
against any costs, expenses, loss, damages or liability that CITY may incur in connection with, as a
result of, or by reason of any such investigation. Should this Agreement expire or be terminated
without the execution of the Lease, MUSEUM shall repair any and all damage caused to the
PROPERTY by reason of any such investigation or activities performed.
6.7 Insurance Coverage During Option Term
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During the Option Term, MUSEUM shall, at its sole cost and expense, obtain and maintain
commercial general liability insurance coverage in the form and amounts as required and set forth in
Section XIX (INSURANCE) of the Lease prior to any investigation conducted on the PROPERTY
by MUSEUM, its officers, employees and agents.
6.8 Notices
Any notice, tender, or delivery to be given in accordance with this Agreement by either Party
to the other shall be given in accordance with Section XXII (NOTICES) of the Lease.
6.9 MUSEUM’s Representations and Warranties
MUSEUM represents and warrants to CITY that it has not employed any real estate broker,
professional or finder in connection with the negotiation of this Agreement or the Lease and hereby
agrees to hold CITY harmless and free from any liability in connection with any commission or
finder’s fee alleged to be incurred.
6.10 CITY’s Obligation to Maintain the PROPERTY
During the Option Term, CITY shall maintain the PROPERTY in its current condition,
ordinary wear and tear excepted, subject to only the following special requirements: CITY shall (i)
install a dehumidification system; (ii) seal the windows and repair the roof, as needed; (iii) install
new basement waterproofing and an area drain inlet to collect water runoff externally at the
southeast corner of the building; (iv) connect roof gutter downspouts from the "spine" to a perimeter
drain that will drain water away from the basement; (v) maintain and trim all trees that are part of the
PROPERTY so that they do not impose an undue maintenance burden upon, or present an imminent
danger to, the PROPERTY; and (vi) keep the PROPERTY secured, and repair any damage caused
by vandalism, including the repair of broken windows and doors. CITY shall, through either third
party insurance or self-insurance, provide the same level of insurance coverage that is required to be
maintained by MUSEUM pursuant to the Lease.
6.11 Entire Agreement
This instrument contains the entire agreement between the Parties relating to the grant of
Option. Any oral representations or modifications concerning this instrument shall be of no force
and effect, except in a subsequent modification which is made in writing and signed by the Parties.
6.12 Recovery of Attorneys’ Fees
In the event of any controversy, claim or dispute between the Parties, arising out of or
relating to this Agreement or the breach thereof, the prevailing party shall be entitled to recover from
the losing party reasonable expenses, including reasonable attorneys’ fees, and other reasonable legal
costs and expenses.
6.13 Binding on Successors
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This Agreement shall bind and inure to the benefit of the respective heirs, personal
representatives, successors and assigns of the Parties, except as may be expressly provided
elsewhere in this Agreement.
[Signatures on following page.]
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IN WITNESS WHEREOF, the
month, and year first above written.
CITY:
Parties have executed this Option Agreement on the day,
MUSEUM:
CITY OF PALO ALTO PALO ALTO HISTORY MUSEUM
By: By:
Mayor Its:
ATTEST:
By: By:
City Clerk Its:
APPROVED AS TO FORM:
By:
Senior Asst. City Attorney
RECOMMENDED FOR APPROVAL:
By:
Asst. City Manager
By:
Director, Planning and Community Environment
By:
Manager, Real Property
Attachments: Exhibit I: Lease
Exhibit II: Secretary of the Interior’s Standards
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ALL-PURPOSE ACKNOWLEDGMENT
STATE OF CALIFORNIA )
)
COUNTY OF SANTA CLARA )
SS.
On ,2007, before me,
(NOTARY)
personally appeared
SIGNER (S)
personally known to me -or- proved to me on the basis of satisfactory evidence to be the
person(s) whose name is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and that by his!her/their
signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted,
executed the instrument.
WITNESS my hand and official seal.
NOTARY
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Exhibit I
Project: Roth Building
300 Homer Avenue
LEASE #
This Lease is made this day of ,2007,_(the "Commencement Date"), by
and between the CITY OF PALO ALTO, a California charter city ("CITY"), and the PALO ALTO
HISTORY MUSEUM, a California nonprofit public benefit corporation ("TENANT") ("Party" or
"Parties").
RECITALS:
1. In April 2000, CITY purchased the real property and improvements located at 300
Homer Avenue, Palo Alto, Santa Clara County, California, commonly referred to as the Roth
Building (the "PROPERTY"), described in Exhibit "B" to this Lease, attached hereto and
incorporated herein by reference.
2. On ,2007, CITY entered into an Option Agreement with TENANT, on
file with the City Clerk as City Contract No. (the "Agreement"). Under the Agreement,
TENANT agreed to secure all necessary CITY approvals and permits in order to exercise the option
to lease the PROPERTY (the "Option"), construct improvements and operate the PROPERTY, as
described in Exhibit "C" to this Lease, attached hereto and incorporated herein by reference (the
"Project"). :
3. TENANT has satisfied all the conditions set forth in the Agreement, and now desires
to exercise the Option in regard to the Project.
4. CITY desires to lease the PROPERTY to TENANT, in accordance with the
covenants, terms and conditions set forth below.
NOW, THEREFORE, in consideration of the covenants, terms and conditions, the Parties
mutually agree, as follows:
SECTION I. PURPOSE
The purpose of this Lease is to allow TENANT to undertake the Project, by developing and
operating the PROPERTY as a history museum open to the public, according to the covenants, terms
and conditions of this Lease, including the General Conditions, as described in Exhibit "A", attached
hereto and incorporated herein by reference.
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SECTION lI. PROPERTY
Subject to the covenants, terms and conditions set forth in this Lease, CITY hereby leases the
PROPERTY to TENANT, and TENANT hereby leases the PROPERTY from CITY, for the purpose
of undertaking the Project and complying with the requirements set forth in Section III hereof.
SECTION III. REQUIRED~ PERMITTED~ AND OPTIONAL SERVICES AND USES
In furtherance of the purpose stated above, and as set forth in Exhibit "C," the following
required, permitted, and optional services and uses shall be provided, permitted or prohibited on the
PROPERTY, including any additions or modifications to the PROPERTY as may be approved by
CITY.
A. Required Services and Uses. Throughout the Lease Term, TENANT shall
provide the following services and engage in the following uses at the PROPERTY:
1.Restoration, preservation and improvement of the Roth Building.
2.Restrooms that are made available to the public accessible from the
adjacent City park commonly known as Heritage Park (the "Park") and a community meeting room
that is made available for use by neighborhood/community groups (subject to CITY’s
responsibilities for maintenance, repair, security and insurance set forth in Section XVII hereof).
3.Displays, exhibits and demonstrations relating to local history.
4.All required activities shall be open to the public; provided, however,
that MUSEUM may charge a membership fee for members and a fee for admission to members and
non-members in regard to any and all activities or for use of facilities provided on the PROPERTY.
B.Permitted Services and Uses. In addition to the required services and uses set
forth above, the following services and uses shall be permitted, but only as they may be incidental to
the required services and uses:
1.Workshops, classes and lectures associated with museum purposes.
2. Administrative offices and storage space to support the required
services and uses under this Lease.
3.Fund-raising activities only to support the required services and uses,
including, but not limited to, sales of goods and gifts related to the museum use and the hosting of
benefits and social activities.
4.Periodic rental of rooms and other portions of the PROPERTY by Palo
Alto-based community groups and individuals (including living quarters for a caretaker of the
Museum building), but in no event shall such rental be permitted for commercial purposes and in no
event shall such rental interfere with or limit the required services and-uses of the PROPERTY as set
forth above. Notwithstanding the foregoing, TENANT may periodically rent portions of the
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PROPERTY to for-profit organizations for corporate events unrelated to the required services and
uses for the purpose of fund-raising to support the required services and uses so long as the timing
and frequency of such events do not materially interfere with the obligation of TENANT to provide
the required services and uses (for example, and not by way of limitation, TENANT may rent the
facilities for evening corporate events).
C.Optional Services and Uses. Subject to the prior written approval of the City
Manager, or his designee, TENANT may also use the PROPERTY to provide additional services
and uses which are ancillary to and compatible with the required services and uses stated above and
not in conflict with the required services and uses. In addition, and also subject to the prior written
approval of the City Manager, or his designee, TENANT may also use the PROPERTY to conduct
revenue-generating events or operations so long as (i) such uses do not materially interfere with
TENANT’s ability to provide the required services and uses described in Section III(A) hereof, (ii)
such services and uses will not result in damage to the PROPERTY or materially impair the
operations conducted on the PROPERTY, and (iii) all net revenue generated by such services and
uses are devoted exclusively to funding the activities of TENANT conducted at the PROPERTY. In
each case, the approval of the City Manager, or his designee, shall not be unreasonably withheld.
D. Prohibited Uses. The above listed required, permitted and optional services
and uses shall be the only services and uses permitted upon or from the PROPERTY.
E.Special Uses. TENANT shall have the following rights:
1.TENANT shall have the exclusive right to use the paved patio area at
the rear of the building, provided that such patio area is made part of the PROPERTY and ~uch area
and its use is otherwise subject to the covenants, terms and conditions of this Lease.
2.TENANT shall have the right to temporarily close the MUSEUM
operations to conduct repairs, make alterations, change exhibits, and observe holidays. In~dOition,
TENANT shall have the right to suspend operations for up to an aggregate of one hundred ~ighty
(180) days in any three (3) year period if for any reason TENANT is financially unable to operate
the MUSEUM. TENANT shall provide CITY with no less than thirty (30) days prior written ~o~ice
of each occasion that TENANT intends to temporarily suspend operations for any period of time,
For the purposes of this subparagraph (E)(2), the three-year period shall commence on the first day
of the first period of temporary suspension of operations, whether or not TENANT has provided
written notice of such suspension of operations to CITY, if the suspension is related to TENANT’s
financial inability to continuously operate the MUSEUM. If TENANT temporarily suspends
operations for any number of non-consecutive periods, the aggregate of which exceeds a total of180
days in any three-year period, then, at the election of CITY and upon reasonable notice thereof to
TENANT, TENANT shall be deemed to have surrendered or abandoned the PROPERTY. CITY at
its election may exercise any and all rights and remedies to which it may be entitled under applicable
law with respect to a surrender or abandonment. Nothing in this subparagraph (E)(2) shall be
construed to prohibit TENANT from effecting a transfer of this Lease pursuant to Section XX hereof
as if it were ceasing business operations.
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SECTION IV. TERM
The term of this Lease ("Lease Term") shall be forty (40) years, beginning on the
Commencement Date. No provision is made for the extension or renewal of the Lease Term.
SECTION V. CONSIDERATION/RENT
A.Rent. As partial consideration for the Lease, TENANT shall pay to CITY
One Dollar ($1.00) per year in accordance with Section VIII hereof. TENANT alternatively may
pay CITY the sum total of all rent that would be due and payable over the Lease Term thereof in
advance at the commencement of the Lease Term.
B.Non-Monetary Consideration. In addition to the rent set forth in Section V(A)
hereof, TENANT shall develop and operate at no cost to CITY a museum consistent with Section I,
Section III, and Exhibit "C" hereof.
SECTION VI. CHARGE FOR UNAUTHORIZED SERVICES AND USES
TENANT shall pay CITY a sum equal to one hundred percent (100%) of the net receipts
(determined after deduction of all costs reasonably incurred by TENANT for conducting the activity
in question) for any service or use that is not permitted or authorized by Section III hereof. The
existence of such charge or the payment or receipt of money under this Section, does not constitute
an authorization of a particular service or use and does not constitute a waiver of CITY’s right to
terminate such service or use.
SECTION VII.
MEMBERSHIP
NON-PROFIT COMMUNITY ORGANIZATION BYLAWS &
Changes in restrictions, rules, articles of incorporation or .bylaws of TENANT which change
or modify the essential character or membership requirements of TENANT shall, prior to being put
into effect; be reviewed and approved by the City Manager and the City Attorney, which approval
shall not be unreasonably withheld. TENANT’s rules, articles of incorporation and bylaws, and any
amendments thereto, shall be on file with the Real Property Manager during the Lease Term.
SECTION VIII. RENT PAYMENT PROCEDURE
A.Payment of Rent. Except as otherwise provided in Section V(A), on or before
each annual anniversary date of the Lease Term, TENANT shall pay to CITY the rent as set forth in
Section V hereof.
B. Commencement of Obligation. TENANT’s obligation to pay the rent shall
commence upon the Commencement Date.
C.Place of Payment. Rental payments shall be delivered to the Revenue
Collections Division, 250 Hamilton Avenue, P. O. Box 10250, Palo Alto, CA 94303, The
designated place of payment may be changed at any time by CITY upon ten (10) days’ prior written
notice to TENANT. Rental payments may be made by check or draft made payable to the City of
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Palo Alto. TENANT assumes all risk of loss if payments are delivered by mail but are not received
by CITY.
SECTION IX. SECURITY DEPOSIT
A security deposit in the sum of Ten Thousand Dollars ($10,000.00) shall have .been
provided to CITY by TENANT prior to the execution of this Lease by CITY. CITY shall retain the
security deposit during the Lease Term. The security deposit shall have taken one of the forms
described below. Notwithstanding the foregoing, TENANT may apply the Five Thousand Dollars
($5,000.00) purchase price of the Option to the required security deposit under this Section IX.
A.Cash.
B.The assignment to CITY of a savings deposit account held in a financial
institution in Santa Clara County or San Mateo County, which is deemed acceptable to CITY. At a
minimum, such assignment shall be evidenced by the delivery to CITY of the original passbook (if a
passbook is issued) reflecting the savings deposit account and a written assignment of the deposit
account to CITY in a form approved by the City Attorney and the Real Property Manager.
C.A Time Certificate of Deposit from a financial institution in Santa Clara
County or San Mateo County wherein the principal sum is made payable to CITY or order. Both the
financial institution and the form of the certificate must be approved by the City Attorney and the
Real Property Manager.
D.A Letter of Credit or other instrument of credit from a financial institution,
subject to regulation by the state or federal government, pledging that funds necessary tO secure
performance of the Lease covenants, terms, and conditions, are on deposit and guaranteed for
payment, and agreeing that such funds shall be deemed trust funds securing TENANT’s performance
and that all or any part shall be paid to CITY, or order, upon demand by CITY. Both the financial
institution(s) and the form of the instrument(s) must be approved by the City Attorney and the Real
Property Manager.
Regardless of the form in which TENANT elects to make the security deposit, all or any
portion of the principal sum shall be made available unconditionally to CITY for correcting any
default or breach of this Lease incurred by CITY as a result of the failure by TENANT, its
successors or assigns, to faithfully perform all of the covenants, terms, and conditions of this Lease.
Should TENANT elect to provide a Time Certificate of Deposit, Letter of Credit, or other instrument
of credit (collectively, the "INSTRUMENT"), to fulfill the security deposit requirements of this
Lease, the INSTRUMENT shall contain a provision whereby the institution issuing the
INSTRUMENT agrees to provide CITY with written notice of its intent not to renew the
INSTRUMENT at least thirty (30) days prior to expiration or termination of the INSTRUMENT. If
TENANT has not provided CITY with an acceptable alternate form of security deposit at least ten
(10) days prior to expiration or termination of the INSTRUMENT, CITY may demand and obtain
from the institution issuing the INSTRUMENT, the amount secured by the INSTRUMENT in
satisfaction of the security deposit requirements of this Lease.
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Should TENANT elect to assign the savings deposit account to CITY, or provide an alternate
INSTRUMENT, to fulfill the security deposit requirements of this Lease, the assignment or issuance
of the INSTRUMENT shall have the effect of releasing the depositor or creditor therein from
liability on account of the payment of any or all of the principal sum to CITY, or order, upon
demand of CITY. The agreement entered into by TENANT with a financial institution to establish
the deposit necessary to permit assignment or issuance of a certificate as provided above, may allow
the payment of interest accruing on account of the deposit to TENANT, or order.
TENANT shall maintain the required security deposit during the Lease Term. Failure to do
so shall be deemed a default and may be grounds for immediate termination of this Lease. The
security deposit shall be rebated, reassigned, released, or endorsed to TENANT, or order, as
applicable, at the end of the Lease Term, provided TENANT has fully and faithfully performed each
and every covenant, term, and condition of this Lease.
On each five-year anniversary date of the Commencement Date, the amount of the security
deposit set forth above shall be adjusted according to the following formula:
R= SD[B + 0.85(A-
Where:
SD=
A =
Revised security deposit.
Initial security deposit.
Average monthly index for the 12 calendar months ending with and
including the index published just prior to the month in which each
security deposit adjustment is to become effective.
Average monthly index for the 12 calendar months ending with and
including the index published just prior to commencement of this
Lease.
In no event shall the amount of the revised security deposit be less than the initial security
deposit. The difference between the initial security deposit and the revised security deposit shall be
due and payable to CITY within ten (10) days of receipt of a notice of revision of the security
deposit from the Real Property Manager.
SECTION X. INITIAL CONSTRUCTION BY TENANT
A.Minimum Construction and Timing. Commencing upon the execution of this
Lease, TENANT shall in an efficient and workmanlike manner improve the PROPERTY, at no cost
to CITY, to adequately accommodate those services and uses required by the Project under Section
III and Exhibit "C" hereof. The development plans (in schematic form) prepared by TENANT and
approved by CITY during the Option Term, preceding execution of this Lease, shall be a master plan
for development of the PROPERTY, and the construction drawings prepared by TENANT and
approved by the City Engineer and the Chief Building Official during the same period shall provide
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the plans, specifications, and time schedule for constructing the Phase I improvements. The
approved development plans and construction drawings for Phase I of the Project, as described in
Exhibit "D" to this Lease, are attached hereto and incorporated herein by reference.
B.Development Plans and Construction Drawings. All design and construction
of the improvements shall conform to the construction and architectural standards described in
Exhibit "D" and shall meet all other requirements contained in this Lease.
C.Asbestos and Lead Paint. CITY is aware of lead paint and asbestos-laden
materials in the building on the PROPERTY. TENANT shall be solely responsible for any lead and
asbestos abatement or containment on the PROPERTY to the extent required under all applicable
federal, state and local building and safety codes and regulations, and shall fully comply with any
applicable asbestos notification requirements under California Health and Safety Code section 25915
et seq., as amended.
D.Compliance with ADA. All construction or improvement of the PROPERTY
shall comply with the federal Americans with Disabilities Act of 1990, as amended, including the
Act’s implementing regulations, as amended, and TENANT shall be entitled to utilize the California
State Historic Building Code to achieve compliance both with the ADA and Title 24 referenced in
Section X(E) hereof.
E.Certificate of Inspection. Upon completion of construction of any substantial
improvement to the PROPERTY, TENANT shall submit to the Real Property Manager a Certificate
of Inspection, verifying that the construction was completed in conformance with Title 24 of the
California Code of Regulations for non-residential construction.
SECTION XI.ADDITIONAL CONSTRUCTION AND/OR ALTERATION BY
TENANT
A.CITY’s Consent. No additional structures, improvements, or facilities shall be
constructed, erected, altered, or made within the PROPERTY without the prior written consent of
the Council, if the same is required by CITY procedures or ordinances, or otherwise by the City
Manager, or his designee, which consent shall not be unreasonably withheld.
B.Strict Compliance with Development Plans and Construction Drawings. Any
additional improvements constructed by TENANT within the PROPERTY shall be constructed in an
efficient and workmanlike manner and in strict compliance with detailed plans and specifications
approved by the Council, if the same is required by any CITY policy, procedure or ordinance, or
otherwise by the City Manager, or his designee, and applicable CITY ordinances, resolutions and
other rules and regulations.
C.Certificate of Inspection. Upon completion of construction of any substantial
improvement to the PROPERTY, TENANT shall submit to the Real Property Manager a Certificate
of Inspection, verifying that the construction was completed in conformance with Title 24 of the
California Code of Regulations for non-residential construction. To the extent feasible, MUSEUM
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shall be entitled to utilize the California State Historic Building Code to achieve compliance with the
aforementioned code, regulations and laws.
SECTION XII. TENANT’S ASSURANCE OF CONSTRUCTION COMPLETION
Prior to commencement of this Lease and improvement of the PROPERTY, or any phase
thereof, TENANT shall furnish the Real Property Manager with satisfactory evidence that sufficient
funds will be available to complete the approved construction. The amount of such assurance shall
be at least the total estimated construction cost that was submitted to and approved by CITY in
accordance with the Agreement. Evidence of such assurance shall take one of the forms described
below and shall guarantee TENANT’s full and faithful performance of all of the covenants, terms,
and conditions of this Lease:
A.Completion bond naming CITY as beneficiary;
B. Performance and payment bonds, supplied by TENANT’s contractor or
contractors, provided the bonds are issued with both TENANT and CITY named as beneficiaries;
C. Irrevocable letter of credit from a financial institution naming CITY as
beneficiary; or
D.Any combination of the above.
All bonds and letters of credit must be issued by a company qualified to do business in the
State of California, must be in a form acceptable to the Director of Administrative Services and the
City Attorney, and must ensure the faithful and full observance and performance by TENANT of all
of the covenants, terms, and conditions relating to the construction of improvements in accordance
with the development plans and construction plans approved by CITY as set forth in this Lease. To
the extent a letter of credit is utilized, the amount of the letter of credit shall be substantially equal to
the estimated cost to complete all approved construction, and CITY shall cooperate with TENANT
to structure the letter of credit so that its amount may be periodically reduced to reflect the remaining
cost to complete all approved construction, to permit TENANT to recover from the issuer of the
letter of credit any collateral to actually pay for the construction in progress with such collateral that
is no longer needed.
CITY may request, and TENANT shall provide promptly, a revised estimated construction
cost estimate upon the completion of the construction documents. TENANT shall furnish this
revised estimate to the Real Property Manager.
SECTION XIII. DAMAGE TO OR DESTRUCTION OF IMPROVEMENTS
In the event of damage to or destruction of TENANT-constructed or TENANT-improved
buildings, facilities, or improvements located within the PROPERTY, or in the event TENANT-
constructed or TENANT- improved buildings, facilities, or improvements located within the
PROPERTY are declared unsafe or unfit for use or occupancy by a public entity with the authority
to make and enforce such declaration, TENANT shall, within thirty (30) days, commence and
diligently pursue to completion the repair, replacement, or reconstruction of improvements necessary
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to permit full use and occupancy of the PROPERTY for the purposes required by this Lease. Repair,
replacement, or reconstruction of improvements within the PROPERTY shall be accomplished in a
manner and according to plans approved by the City Engineer, the Chief Building Official and the
Real Property Manager. Except as otherwise provided herein, the termination of this Lease shall not
reduce or nullify TENANT’s obligation under this Section.
Notwithstanding the foregoing, should TENANT improvements on the PROPERTY be more
than fifty percent (50%) destroyed or damaged by an insured loss during the last ten (10) years of the
Lease Term, TENANT shall have the option of rebuilding or repairing such damage or terminating
this Lease. In addition, TENANT shall have the option of rebuilding or repairing such damage or
terminating this Lease if insurance proceeds actually recovered by TENANT on account of the loss
are less than ninety percent (90%) of the estimated cost to restore the damage. TENANT shall notify
the Real Property Manager in writing of its decision within ten (10) days of the occurrence of such
damage or destruction. In the event that TENANT elects to terminate this Lease and not rebuild or
repair such damage, TENANT shall demolish any remaining structures or portions of structures not
desired by CITY and clean up any and all debris and shall pay to CITY a pro-rata portion of the
proceeds of insurance required in accordance with Section XIX hereof. The pro-rata portion shall be
based on the following formula:
Where:
L =P(R/T)
TENANT’s portion of insurance proceeds.
Total insurance proceeds paid exclusive of demolition and debris
removal expenses.
Remaining term of the Lease.
The total Lease Term, including any extensions made in accordance
with this Lease.
TENANT’s liability for demolition and cleanup shall be limited to insured losses including
any deductible amount.
SECTION XIV. RECORD DRAWINGS PLANS
Upon completion of all the improvements on the PROPERTY, TENANT shall provide the
Real Property Manager with a complete set of reproducible record drawings plans, reflecting the
actual construction, building construction and site improvements within or upon the PROPERTY.
These record drawings plans shall be made available in CAD format on a compact disk and
delivered to the Real Property Manager. TENANT shall also provide the Real Property Manager
with a statement signed by TENANT under penalty of perjury certified as to accuracy and of actual
construction costs for all such improvements.
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SECTION XV. OWNERSHIP OF IMPROVEMENTS
All improvements constructed, erected or installed upon the PROPERTY must be free and
clear of all liens, claims, or liability for labor or material and shall become the property of CITY, at
its election, upon the expiration or earlier termination of this Lease and, upon City’s election, shall
remain upon the PROPERTY upon the termination of this Lease.
Title to all equipment, furniture, furnishings and trade fixtures placed by TENANT upon the
PROPERTY shall remain in TENANT, and replacements, substitutions and modifications thereof
may be made by TENANT throughout the Lease Term. TENANT may remove such fixtures and
furnishings upon termination of this Lease if TENANT is not then in default under this Lease,
provided that TENANT shall repair to the satisfaction of CITY any damage to the PROPERTY and
improvements caused by such removal and provided that usual and customary lighting, plumbing
and heating fixtures shall remain upon the PROPERTY upon termination of this Lease.
SECTION XVI. MAINTENANCE OBLIGATIONS OF TENANT
During the Lease Term, TENANT, at its sole expense, shall perform all regular and
extraordinary maintenance and repairs to the PROPERTY, except to the restrooms to be used by the
park public, including all painting necessary to keep the PROPERTY and all improvements thereto
in first-class order, repair and condition as contemplated under the approved development plans and
construction drawings for the Project. Except for CITY’s obligations regarding trees stated in
Section XVII(B) hereof, TENANT shall maintain the landscaping in the historic court yard. For
purposes of continued historic preservation of the PROPERTY, TENANT shall comply with the
maintenance plan and schedule described in Exhibit "E," attached hereto and incorporated herein by
reference. In addition, TENANT shall maintain, at its sole expense, all equipment, furnishings and
trade fixtures upon the PROPERTY required for the maintenance and operation of the Project.
TENANT waives the right to make repairs at the expense of CITY and the benefit of the provisions
of Sections 1941 and 1942 of the Civil Code of California, as amended, relating thereto; and further
agrees that if and when any repairs, alterations, additions or betterments shall be made by it as
required by this paragraph, it shall promptly pay for all labor done or materials furnished and shall
keep the PROPERTY free and clear of any lien or encumbrance of any kind whatsoever. Should
TENANT fail to make any repairs or perform any maintenande work for which it is liable, CITY
shall have the option to make the repairs and TENANT, within ten (10) days of receipt of a bill
therefor from the Real Property Manager, reimburse CITY for the cost of such repairs, plus a fifteen
percent (15%) administrative overhead fee. The making of such repairs or performance of
maintenance by CITY shall not be construed as a waiver of the duty of TENANT to make repairs or
perform maintenance as provided herein.
SECTION XVII. MAINTENANCE OBLIGATIONS OF CITY
CITY shall have the following obligations with respect to the PROPERTY which it shall
undertake at its sole cost and expense, without the right of reimbursement from TENANT:
A. CITY shall be responsible for the maintenance, repair and replacement, as
necessary, of the public restrooms that are part of the PROPERTY and are accessible from the
070501 jb 0072742
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exterior of the PROPERTY to users of the Park (the "Public Restrooms"), including the repair and
replacement of fixtures, wall and floor coverings, and doors.
B.CITY shall be responsible for the maintenance and removal, as necessary, of
trees located on the PROPERTY or immediately adjacent to the PROPERTY. The preceding
sentence notwithstanding, TENANT shall landscape and maintain the areas of the PROPERTY
located on the northwestern and southwestern sides of the Roth Building, including the sidewalks
and the courtyard area.
C. CITY shall be responsible for the maintenance and repair of the water and
sewer lines serving the Public Restrooms.
D. CITY shall be responsible for property damage and personal injury occurring
on or about the Public Restrooms.
SECTION XVIII. UTILITIES
TENANT shall be solely responsible for and shall pay, prior to delinquency, all charges for
utilities supplied to the PROPERTY during the Lease Term. CITY shall pay for all utilities supplied
to the Public Restrooms or used by CITY for the performance of its obligations under this Lease.
Each Party shall be responsible for the cost of procuring, installing, maintaining and repairing the
meters for their respective utilities service.
SECTION XIX. INSURANCE ~i
During the Lease Term, TENANT, at its sole expense, shall obtain and maintain the
following insurance acceptable to CITY in full force and effect.
A. Minimum Scope of Insurance
Coverage shall be at least as broad as:
1. Insurance Services Office Commercial General Liability coverage (occu~ence
form CG 0001).
Insurance Services Office form number CA 0001 (Ed. 1/87) covering
Automobile Liability, code 1 (any auto).
Workers’ Compensation insurance as required by the State of California and
Employer’s Liability Insurance.
Course of Construction insurance form providing coverage for "all risks" of
loss.
The policy or policies of insurance maintained by TENANT shall provide the following
minimum limits and coverages:
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POLICY
A. WORKERS’ COMPENSATION
B.COMPREHENSIVE
AUTOMOBILE LIABILITY,
including owned, hired, and non-
owned automobiles.
MINIMUM LIMITS OF LIABILITY
Statutory
Bodily Injury
Property Damage
$1,000,000 ea. Person
$1,000,000 ea. Occurrence
$1,000,000 ea. Occurrence
COMMERCIAL GENERAL
LIABILITY, including products
and completed operations, broad
form contractual, and personal
injury.
Bodily Injury
Property Damage
$1,000,000 ea. person
$1,000,000 ea. Occurrence
$1,000,000 aggregate
$1,000,000 ea. Occurrence
D.FIRE &EXTENDED
COVERAGE
Not less than one hundred percent (100%) of the replacement
cost of all insurable improvements within or upon the
PROPERTY. Such policies must include water damage and
debris cleanup provisions. Additional fire and extended
coverage must be obtained in accordance with this clause
upon completion of construction or installation of any major
insurable improvement under the Project.
E. COURSE OF CONSTRUCTION Completed value of the project.
B. Deductibles and Self-Insured Retentions
Any deductibles or self-insured retentions must be declared to and approved by CITY. At
the option of CITY either: the insurer shall reduce or eliminate such deductibles or self-insured
retentions as respects CITY, its elective or appointive officials, officers, employees, and volunteers;
or TENANT shall procure a bond guaranteeing payment of losses and related investigations, claim
administration and defense expenses.
Insurance shall be in full force and effect commencing on the Commencement Date. Each
insurance policy required by this Lease shall contain the following clauses:
1."Each insurance policy required by this clause shall be endorsed to
state that coverage shall not be suspended, voided, canceled by either party, reduced in coverage or
in limits except after thirty (30) days’ prior written notice by certified mail, return receipt requested,
has been given to the CITY."
070501 jb 0072742
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2."All rights of subrogation are hereby waived against the CITY OF
PALO ALTO and its elective and appointive officials, officers or employees, when acting within the
scope of their employment or appointment."
3. "The CITY OF PALO ALTO is named as a loss payee on the
PROPERTY and course of construction insurance policies described above."
4."The CITY OF PALO ALTO, its elective and appointive officials,
officers, employees, agents and volunteers are to be covered as insureds as respects: liability arising
out of activities performed by or on behalf of TENANT; products and completed operations of
TENANT; premises owned, occupied or used by TENANT; or automobiles owned, subleased, hired
or borrowed by TENANT. The coverage shall contain no special limitations on the scope of
protection afforded to the CITY, its elective and appointive officials, officers, employees, agents or
volunteers."
5."For any claims related to this Lease, TENANT’s insurance coverage
shall be primary insurance as respects the CITY OF PALO ALTO, its elective and appointive
officials, officers, employees, agents and volunteers. Any insurance or self-insurance maintained by
CITY, its elective and appointive officials, officers, employees, agents or volunteers shall be excess
of TENANT’s insurance and shall not contribute with it."
6."Any failure to comply with reporting or other provisions of the
policies including breaches of warranties shall not affect coverage provided to the CITY ~F PALO
ALTO, its elective and appointive officials, officers, employees, agents or volunteers."
7. "TENANT’s insurance shall apply separately to each insured against
whom a claim is made or suit is brought, except with respect to the limits of the insurer’s liability."
C.Acceptability/of Insurers
Insurance shall be placed with insurers with a current A.M. Best’s rating of not less than
A:VII.
TENANT agrees to deposit with the Real Property Manager, on or before the effective date
of this Lease, certificates of insurance necessary to satisfy CITY that the insurance provisions of this
Lease have been complied with, and to keep such insurance in effect and the certificates therefor on
deposit with CITY during the Lease Term. Should TENANT not provide evidence of such required
coverage at least three (3) days prior to the expiration of any existing insurance coverage, CITY may
purchase such insurance coverage for not more than a six-month period, on behalf of and at the
expense of TENANT.
CITY shall retain the right at any time to review the coverage, form, and amount of the
insurance required hereby. If, in the opinion of CITY’s Risk Manager, the insurance provisions in
this Lease do not provide adequate protection for CITY and for members of the public using the
PROPERTY, the Real Property Manager may require TENANT to obtain insurance sufficient in
coverage, form, and amount to provide adequate protection as determined by the Risk Manager.
070501 jb 0072742
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CITY’S requirements shall be reasonable and shall be designed to assure protection from and against
the kind and extent of risk which exists at the time a change in insurance is required.
The Real Property Manager shall notify TENANT, in writing, of changes in the insurance
requirements. If TENANT does not deposit copies of acceptable insurance policies or certificates
with CITY incorporating such changes within sixty (60) days of receipt of such notice, or in the
event TENANT fails to maintain in effect any required insurance coverage, TENANT shall be in
default under this Lease without further notice to TENANT. Such failure shall constitute a material
breach and shall be grounds for immediate termination of this Lease at the option of CITY.
The procuring of such required policy or policies of insurance shall not be construed to limit
TENANT’S liability hereunder or to fulfill the indemnification provision and requirements of this
Lease. Notwithstanding the policy or policies of insurance, TENANT shall be obligated for the full
and total amount of any damage, injury, or loss caused by or connected with this Lease or with use
or occupancy of the PROPERTY to the extent such liability is imposed by other provisions of this
Lease.
SECTION XX. ASSIGNING, SUBLETTING, AND ENCUMBERING PROHIBITED
As CITY has relied on the qualifications of TENANT in awarding this Lease, except as set
forth under Section III hereof, any mortgage, pledge, hypothecation, encumbrance, transfer, or
assignment (collectively, "ENCUMBRANCE") of TENANT’s interest in the PROPERTY, or any
part or portion thereof, is prohibited. Any attempted ENCUMBRANCE shall be null and void and
shall confer no right, title, or interest in or to this Lease or the PROPERTY.
Subleasing space to other non-profit groups for office purposes and/or subleasing space for
residential purposes to a museum caretaker shall be permitted subject to compliance of the use with
CITY ordinances, rules and regulations and to approval by the City Manager, or his designee. In
addition, TENANT shall have the right to sublease up to twenty-five percent of the useable space in
the PROPERTY to one or both of the following: (A) a for-profit food service operator; and (B) a
for-profit gift/book shop operator; provided, however, these uses shall be in support of TENANT’s
obligation to provide the required services and uses specified in Section III(A) hereof. If TENANT
commences proceedings to dissolve or otherwise cease doing business during the Lease Term,
TENANT shall have the right to assign its interest in this Lease to a non-profit organization who
agrees to abide by the covenants, terms and conditions of the Lease and provide the required,
permitted and optional services and uses so long as such assignment is approved by CITY, which
approval shall not be unreasonably withheld.
SECTION XXI. DEFAULT IN TERMS OF THE LEASE BY TENANT
A. CITY’s Remedies on Default. Except as otherwise provided under this Lease,
should TENANT default in the performance of any covenant, term or condition contained in this
Lease and such default is not corrected within sixty (60) days of receipt of a notice of default from
CITY, CITY may:
070501 jb 0072742
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1. Terminate this Lease, and all rights of TENANT and those who claim
under TENANT, stemming from this Lease, shall end at the time of such termination;
2.At CITY’s sole option, cure any such default by performance of any
act, including payment of money, and the cost thereof, plus all reasonable administrative costs, shall
become immediately due and payable by TENANT to CITY;
3. Seek an action or suit in equity to enjoin any acts or things which may
be unlawful or in violation of the rights of CITY;
4.Seek a mandamus or other suit, action or proceeding at law or in
equity to enforce its rights against TENANT, and to compel TENANT to perform and carry out its
duties and obligations under the law and under TENANT’s covenants, terms and conditions with
CITY as provided herein; or
5.Pursue any other remedy available by law or specifically provided in
other provisions of this Lease.
B.Cumulative Remedies. However, in the event of a default which can not
reasonably be cured within sixty (60) days, TENANT shall have a reasonable period of time to cure
the default. The remedies given to CITY hereunder, or by any law now or hereafter enacted, are
cumulative and the exercise of one right or remedy shall not impair the right of CITY to exercise any
or all other remedies. In case any suit, action or proceeding to enforce any right or exercise any
remedy shall be brought or taken and then discontinued or abandoned, then, and in every guch case,
CITY and TENANT shall be restored to its and their former position and rights and remedies as if no
such suit, action or proceedings had been brought or taken.
C.Insolvency of TENANT. In addition to a violation or breach of any other
provision of this Lease, TENANT shall be considered to be in default under this Lease should
TENANT:
1.be adjudicated a bankrupt; or
make a general assignment for the benefit of creditors.
SECTION XXII. NOTICES
All notices, statements, demands, requests, consents, approvals, authorizations, offers,
agreements, appointments or designations hereunder give by either party to the other, shall be in
writing and shall be sufficiently given and served upon the other party if (1) personally served, (2)
sent by United States Postal Service certified mail, postage, prepaid, (3) sent by express delivery
service, or (4) in the case of a facsimile, if sent to the telephone number(s) set forth below during
normal business hours of the receiving party and followed within 48 hours by delivery of hard copy
of the material sent by facsimile, in accordance with (1), (2) or (3) above. Personal service shall
include, without limitation, service by delivery service and service by facsimile transmission.
Delivery of notices properly addressed shall be deemed complete when the notice is physically
delivered to the Real Property Manager or to (TENANT’s desi ~nee)
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070501 jb 0072742
All notices pursuant to this Lease shall be addressed as set forth below or as either Party may
subsequently designate by written notice.
TO:CITY TO:TENANT
Real Property Manager
City of Palo Alto
P.O. Box 10250
250 Hamilton Avenue
Palo Alto, CA 94303
FAX: (415) 329-2468
with a copy to:
City Clerk, City of Palo Alto
P.O. Box 10250
250 Hamilton Avenue
Palo Alto, CA 94303
FAX: (415) 329-2646
and
City Attorney, City of Palo Alto
P.O. Box 10250
250 Hamilton Avenue
Palo Alto CA 94303
FAX: (415) 329-2646
XXIII. ATTACHMENTS TO LEASE
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This Lease includes the following exhibits, which are attached hereto and by this reference
incorporated into this Lease:
Exhibit A - General Conditions
Exhibit B - Description of PROPERTY
Exhibit C - Tenant’s Use, Historic Preservation and Development of Property
Exhibit D - Development Plans and Construction Drawings
Exhibit E - Long Term Maintenance Plan and Schedule for PROPERTY
The inclusion of clauses in Exhibit A (GENERAL CONDITIONS) is not in any way
intended to lessen the importance of these provisions, but is merely done to enhance the organization
of various clauses and this Lease.
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IN WITNESS WHEREOF, the parties have executed this Lease the day and year first above
written.
CITY:TENANT:
CITY OF PALO ALTO PALO ALTO HISTORY MUSEUM
By: By:
City Manager
Its:
By:.
It s:
APPROVED AS TO FORM:
By:
Senior Asst. City Attorney
RECOMMENDED FOR APPROVAL:
By:
Director of Planning and Community Environment
By:
Director of Administrative Services
070501 jb 0072742
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ALL-PURPOSE ACKNOWLEDGMENT
STATE OF CALIFORNIA )
)
COUNTY OF SANTA CLARA )
SS.
On ,2007, before me,
(NOTARY)
personally appeared
SIGNER (S)
personally known to me -or- proved to me on the basis of satisfactory evidence to be the
person(s) whose name is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted,
executed the instrument.
WITNESS my hand and official seal.
NOTARY
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EXHIBIT A
GENERAL CONDITIONS
1.DEFINITIONS
CITY shall mean the City of Palo Alto, a California charter city, acting by and through its
City Council.
The City Manager is hereby authorized to take any actions under this Lease on behalf of
CITY except for termination of this Lease.
Provisions in this Lease refer to specific officers or employees of CITY. Should these
positions be eliminated or the title changes, it is understood and agreed that such references shall be
considered to be to the new title for renamed positions or to the replacement official designated with
the responsibilities of any eliminated position. Any reference to a City officer or employee includes
a reference to the officer’s or employee’s designated representative.
2.PARTNERSHIP/CORPORATE AUTHORITY & LIABILITY
If TENANT is a partnership, each general partner:
A. represents and warrants that the partnership is a duly qualified partnership
authorized to do business in Santa Clara County; and
B. shall be jointly and severally liable for performance of the terms and
provisions of this Lease.
If TENANT is a corporation, each individual signing this Lease on behalf of TENANT
represents and warrants that;
A. he is duly authorized to do so in accordance with an adopted Resolution of
TENANT’s Board of Directors or in accordance with the Bylaws of the corporation; and
B.TENANT is a duly qualified corporation in the State of California.
As used in this Lease, the term "TENANT’s AGENT" shall mean TENANT’s officers,
agents, employees, sublessees, concessionaires, or licensees, or any person acting under contract
with TENANT; however, the definition of TENANT’s AGENTS used herein shall not be construed
to authorize or permit any sublease or licenses not authorized or permitted elsewhere in this Lease.
As used in this Lease, the term "CITY’s AGENTS" shall mean CITY’s officers, agents or
employees, or any person acting under contract with CITY.
The of TENANT is hereby authorized to take any actions under this
Lease on behalf of TENANT except for termination of this Lease.
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3. TIME
Time is of the essence of this Lease.
4.SIGNS
TENANT agrees not to construct, maintain, or allow any sign to be placed upon the
PROPERTY except as may be approved by CITY, which approval shall not be unreasonably
withheld. Unapproved signs, banners or the like may be removed by CITY.
5.PERMITS AND LICENSES
TENANT shall be required to obtain any and all permits and/or licenses which may be
required in connection with the operation of, and any approved TENANT construction upon, the
PROPERTY as set forth in this Lease.
6.MECHANICS LIENS
TENANT shall at all times indemnify and save CITY harmless from all claims for labor or
materials supplied in connection with construction, repair, alteration, or installation of structures,
improvements, equipment, or facilities within the PROPERTY, and from the cost of defending
against such claims, including attorney’s fees. TENANT shall provide CITY with at least ten (10)
days written notice prior to commencement of any work which could give rise to a mechanics lien or
stop notice. CITY reserves the right to enter upon the PROPERTY for the purposes of posting
Notices of Non-Responsibility.
In the event a lien is imposed upon the PROPERTY as a result of such construction, repair,
alteration, or installation, TENANT shall either:
A.Record a valid Release of Lien; or
B.Deposit sufficient cash with CITY to cover the amount of the claim on the lien
in question and authorize payment to the extent of the deposit to any subsequent judgment holder
that may arise as a matter of public record from litigation with regard to the lienholder claim; or
C.Procure and record a bond in accordance with Section 3143 of the California
Civil Code, as amended, which releases the PROPERTY from the claim of the lien from any action
brought to foreclose the lien.
Should TENANT fail to accomplish one of the three optional actions within thirty (30) days
after TENANT has received actual notice of the filing of such a lien, the Lease shall be in default.
7.LEASE ORGANIZATION AND RULES OF CONSTRUCTION
Words of the masculine gender shall be deemed and construed to include correlative words
of the feminine and neuter genders. Unless the context otherwise indicates, words importing the
070501 jb 0072742
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singular number shall include the plural number and vice versa, and words importing persons shall
include corporations and associations, including public bodies, as well as natural persons.
The terms "hereby", "hereof", "hereto", "herein", "hereunder" and any similar terms, as used
in this agreement, refer to this Lease.
All the terms and provisions hereof shall be construed to effectuate the purposes set forth
herein, and to sustain the validity hereof.
The titles and headings of the sections of this Lease have been inserted for convenience of
reference only, are not to be considered a part hereof and shall not in any way modify or restrict any
of the terms of provisions hereof or be considered or given any effect in construing this Lease or any
provision hereof in ascertaining intent, if any question of intent shall arise.
8.AMENDMENTS
This Lease sets forth all of the agreements and understandings of the Parties and any
modifications must be written and properly executed by them. The Option Agreement, entered into
on ., 2007, by and between TENANT and CITY, is hereby superseded by this
Lease.
9.UNLAWFUL USE
TENANT agrees that no improvements shall be erected, placed upon, operated, nor
maintained within the PROPERTY, nor any activity conducted or carried on therein or therefrom, in
violation of the terms of this Lease, or of any regulation, order of law, statute, or ordinance of a
governmental agency having jurisdiction over TENANTs use of the PROPERTY.
10. NONDISCRIMINATION
TENANT and its officers, employees and agents shall not discriminate against any person
because of race, skin color, gender, age, religion, disability, national origin, ancestry, sexual
orientation, housing status, marital status, familial status, weight or height, consistent with Palo Alto
Municipal Code section 7.9.73.020. TENANT shall not discriminate against any employee or
applicant for employment because of attributes mentioned in the previous sentence. TENANT
covenants to meet all requirements of the Palo Alto Municipal Code pertaining to nondiscrimination
in employment, consistent with Palo Alto Municipal Code section 2.30.510. If TENANT is found in
violation of the nondiscrimination provision of the State of California Fair Employment Practices
Act or similar provisions of federal law or executive order in the conduct of its activities under this
Lease by the State of California Fair Employment Practices Commission or the equivalent federal
agency or officer, it shall thereby be found in default under this Lease, and such default shall
constitute a material breach of this Lease.
11. INSPECTION
CITY’s employees and agents shall have the right at all reasonable times to inspect the
PROPERTY to determine TENANT’s compliance with the provisions of this Lease.
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070501 jb 0072742
12. HOLD HARMLESS
TENANT hereby waives all claims, liability and recourse against CITY including the fight of
contribution for loss or damage of or to persons or property to the extent growing out of or arising
from TENANT’s use or occupancy of the PROPERTY or from any activity undertaken by TENANT
or TENANT’s AGENTS which is related to this Lease. Except as to the extent resulting from the
negligence or willful misconduct of CITY or its officers, agents or employees, TENANT hereby
agrees to protect, indemnify, hold harmless and defend CITY, its officers, agents, and employees
against any and all claims, liability, demands, damages, cost, expenses or attorneys’ fees arising out
of the operation or maintenance of, or construction on, the PROPERTY, or TENANT’s performance
or nonperformance of the terms of this Lease. In the event CITY is named as co-defendant,
TENANT shall notify CITY of such fact and shall represent CITY in such legal action unless CITY
undertakes to represent itself as co-defendant in such legal action, in which event TENANT shall
pay to CITY its litigation costs, expenses and attorneys’ fees.
CITY hereby waives all claims, liability and recourse against TENANT including the right of
contribution for loss or damage of or to persons or property to the extent growing ont of or arising
from any activity undertaken by CITY or CITY’s AGENTS which is related to this Lease or the
PROPERTY. Except to the extent resulting from the negligence or willful misconduct of TENANT
or TENANT’s AGENTS, CITY hereby agrees to protect, indemnify, hold harmless and defend
TENANT and TENANT’s AGENTS against any and all claims, liability, demands, damages, costs,
expenses or attorneys’ fees arising out of the negligence of CITY or CITY’s AGENTS or resulting
from a default by CITY of its obligations under this Lease. In the event TENANT is named as a co-
defendant, CITY shall notify TENANT of such fact and shall represent TENANT in such legal
action unless TENANT undertakes to represent itself as co-defendant in such legal action, in which
event CITY shall pay to TENANT its litigation costs, expenses and attorneys’ fees.
13. TAXES AND ASSESSMENTS
This Lease may create a possessory interest which is subject to the payment of taxes levied
on such interest. TENANT acknowledges that all taxes and assessments (including but not limited
to the possessory interest tax) which may become due and payable upon the PROPERTY or upon
fixtures, equipment, or other property installed or constructed thereon, shall be the full responsibility
of TENANT and TENANT shall pay the taxes and assessments prior to delinquency.
14. SUCCESSORS IN INTEREST
herein
parties
Unless otherwise provided in this Lease, the covenants, terms, and conditions contained
shall apply to and bind the heirs, successors, executors, administrators, and assigns of all the
hereto, all of whom shall be jointly and severally liable hereunder.
15. CIRCUMSTANCES WHICH EXCUSE PERFORMANCE (FORCE MAJEURE)
If either Party shall be delayed or prevented from the performance of any act required
hereunder by reason of acts of God, restrictive governmental laws or regulations, or other cause
without fault and beyond the control of the Party obligated (financial inability excepted),
070501 jb 0072742
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performance of such act shall be excused for the period of the delay and the period for the
performance of any such act shall be extended for a period equivalent to the period of such delay.
16. PARTIAL INVALIDITY
If any covenant, term, condition, or provision of this Lease is determined to be invalid, void,
or unenforceable, by a court of competent jurisdiction, the remainder of the provisions hereof shall
remain in full force and effect and shall in no way be affected, impaired, or invalidated thereby.
17. WAIVER OF RIGHTS
The failure of CITY or TENANT to insist upon strict performance of any of the covenants,
terms, or conditions of this Lease shall not be deemed a waiver of any right or remedy that CITY or
TENANT may have, and shall not be deemed a waiver of the right to require strict performance of
all the covenants, terms, and conditions of the Lease thereafter, nor a waiver of any remedy for the
subsequent breach or default of any term, covenant, or condition of the Lease.
18. COSTS OF SUSTAINING AN ACTION FOR BREACH OR DEFAULT
In the event either CITY or TENANT commences legal action against the other claiming a
breach or default of this Lease, the prevailing party in such litigation shall be entitled to recover from
the other cost of sustaining such action, including reasonable attorneys’ fees, as may be fixed by the
Court.
19. RESERVATIONS TO CITY
Except as otherwise provided in the Lease, the PROPERTY is accepted "as is" and "where
is" by TENANT subject to any and all existing easements, and encumbrances, subject to the
performance by CITY of its obligations under the Agreement to ~maintain the PROPERTY prior to
the Commencement Date and to make certain repairs, more particularly set forth in the Agreement.
CITY reserves the right to install, lay, construct, maintain, repair, and operate such sanitary sewers,
drains, storm water sewers, pipelines, manholes, and colmections; water, oil, and gas pipelines;
telephone and telegraph power lines; and the applications and appurtenances necessary or convenient
for connection therewith, in, over, upon, through, across and along the PROPERTY or any part
thereof, and to enter the PROPERTY for any and all such purposes. CITY also reserves the right to
grant franchises, easements, rights of way, and permits, in, over, upon, through, across, and along
any and all portions of the PROPERTY. No right reserved by CITY in this section shall be so
exercised as to interfere unreasonably with TENANT’s operation hereunder and CITY shall pay all
costs reasonably incurred by TENANT in connection with the exercise by CITY of the rights
granted to it by this section.
CITY agrees that rights granted to third parties by reason of this section shall contain
provisions that the surface of the land shall be restored as nearly as practicable to the original
condition upon the completion of any construction.
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20. HOLDING OVER
In the event TENANT shall continue in possession of the PROPERTY after the Lease Term
expires or is terminated, such possession shall not be considered a renewal of this Lease but a
tenancy from month to month and shall be governed by the conditions and covenants contained in
this Lease.
21. DISPOSITION OF ABANDONED PERSONAL PROPERTY
If TENANT abandons the PROPERTY or is dispossessed thereof by process of law or
otherwise, title to any personal property belonging to TENANT and remaining on the PROPERTY
forty-five (45) days after such abandonment or dispossession shall be deemed to have been
transferred to CITY. CITY shall have the right to remove and to dispose of such property without
liability therefor to TENANT or to any person claiming under TENANT, and shall have no need to
account therefor.
22. QUITCLAIM OF TENANT’S INTEREST UPON TERMINATION
Upon termination of this Lease for any reason, including but not limited to termination
because of default by TENANT, TENANT shall, at CITY’s request execute, acknowledge and
deliver to CITY within five (5) days after receipt of written demand thereof, a good and sufficient
deed whereby all rights, title, and interest of TENANT in the PROPERTY, is quitclaimed to CITY.
Should TENANT wrongfully fail or refuse to deliver the required deed to CITY, CITY may prepare
and record a notice reciting the failure of TENANT to execute, acknowledge and deliver such deed
and the notice shall be conclusive evidence of the termination of this Lease, and of all rights, title
and interest of TENANT or those claiming under TENANT in and to the PROPERTY.
23. CITY’s RIGHT TO RE-ENTER
TENANT agrees to yield and peaceably deliver possession of the PROPERTY to CITY on
the date of termination of this Lease, whatsoever the reason for such termination.
Upon giving written notice of termination to TENANT, CITY shall have the right to re-enter
and take possession of the PROPERTY on the date such termination becomes effective without
further notice of any kind and without institution of regular legal proceedings. Termination of the
Lease and re-entry of the PROPERTY by CITY shall in no way alter or diminish any obligation of
TENANT under the Lease terms and shall constitute an acceptance or surrender.
24. CONFLICT OF INTEREST
TENANT warrants and covenants that no official, officer or employee of CITY nor any
business entity in which any official, officer or employee of CITY is interested: (1) has been
employed or retained to solicit or aid in the procuring of this Lease; or (2) will be employed in the
performance of this Lease without the divulgence of such fact to CITY. In the event that CITY
determines that the employment of any such official, officer employee or business entity is not
compatible with such official’s, officer’s or employee’s duties as an official, officer or employee,
070501 jb 0072742
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respectively, of CITY, TENANT upon request of CITY shall immediately terminate such
employment.
25.EMINENT DOMAIN
In the event the whole or any part of the PROPERTY are condemned by a public entity in the
lawful exercise of its power of eminent domain, this Lease shall cease as to the part condemned.
The date of such termination shall be the effective date of possession of the whole or part of the
PROPERTY by the condemning public entity.
If only a part is condemned and the condemnation of that part does not substantially impair
the capacity of the remainder to be used for the purposes required by this Lease, TENANT shall
continue to be bound by the terms, covenants and conditions of this Lease. However, the then
current minimum annual rent shall be reduced in proportion to the relationship that the compensation
paid by the condemning public entity for the portion condemned bears to the value of the entire
PROPERTY as of the date of possession of the part condemned. If the condemnation of a part of the
PROPERTY substantially impairs the capacity of the remainder to be used for the purposes required
by this Lease, TENANT may:
A. Terminate this Lease and thereby be absolved of obligations under this Lease
which have not accrued as of the date of possession by the condemning public entity; or
B.Continue to occupy the .remaining PROPERTY and thereby continue to be
bound by the terms, covenants and conditions of this Lease. If TENANT elects to continue in
possession of the remainder of the PROPERTY, the then current annual minimum rental shall be
reduced in proportion to the relationship that the compensation paid by the condemning public entity
for the part condemned bears to the value of the entire leased PROPERTY as of the date of
possession by the condemning public entity.
TENANT shall provide CITY with written notice advising CITY of TENANT’s choice
within thirty (30) days of possession of the part condemned by the condemning public entity.
CITY shall be entitled to and shall receive all compensation related to the condemnation of
all or part of the PROPERTY by the exercise of eminent domain except that TENANT. shall be
entitled to that portion of the compensation which represents the value of the TENANT constructed
improvements for the remainder of the Lease Term, which portion shall be determined using the
formula for allocating insurance proceeds stated in Section XIII of the Lease.
26. CHANGES IN PRICE INDICES
Various provisions of this Lease may provide for adjustment based on the Consumer Price
Index, component indices, or other indices. Should these indices be changed, altered or cease to be
published, the following conditions shall apply:
A.If the subject index is changed so that the base year differs from that used as
of the month in which the Lease Term commences, the subject index shall be converted in
accordance with the conversion factor published by the publisher of that index;
-7-
070501 jb 0072742
B. If the subject index is discontinued or revised during the Lease Term, such
index shall be replaced by another government index or computation which will obtain substantially
the same result as would be obtained if the subject index had not been discontinued or revised.
27.POST-ACQUISITION TENANCY
TENANT hereby acknowledges that its occupancy of the PROPERTY is subsequent to
acquisition of the PROPERTY by CITY. TENANT further understands and agrees that as a post-
acquisition tenant, TENANT is not eligible, and furthermore waives all claims, for relocation
assistance and benefits under federal, state or local law.
28.HAZARDOUS SUBSTANCES
A.Definition. As used herein, the term "Hazardous Materials" means any
substance or material which has been determined by any state, federal or local governmental
authority to be capable of posing risk of injury to health, safety, and property, including petroleum
and petroleum products and all of those materials and substances designated as hazardous or toxic by
the U.S. Environmental Protection Agency, the California Water Quality Control Board, the U.S.
Department of Labor, the California Department of Industrial Relations, the California Department
of Health Services, the California Health and Welfare Agency in connection with the Safe Water and
Toxic Enforcement Act of 1986, the U.S. Department of Transportation, the U.S. Department of
Agriculture, the U.S. Consumer Product Safety Commission, the U.S. Department of Health and
Human Services, the U.S. Food and Drug Administration or any other governmental agency now or
hereafter authorized to regulate materials and substances in the environment. Without limiting the
generality of the foregoing, the term "Hazardous Materials" shall include all of those materials and
substances defined as "toxic materials" in Sections 66680 through 66685 of Title 22 of the California
Code of Regulations, Division 4, Chapter 20, as the same may be amended from time to time.
B. Tenant’s Use of PROPERTY. During theLease Term, TENANT shall abide
and be bound by all of the following requirements:
i. TENANT shall comply with all laws now or hereafter in effect during
the Lease Term relating to the use of Hazardous Materials on, under or about the PROPERTY, and
TENANT shall not contaminate the PROPERTY, or its subsurfaces, with any Hazardous Materials.
ii. TENANT shall restrict its use of Hazardous Materials at the
PROPERTY to those kinds of materials that are normally used in constructing the Project. Disposal
of any Hazardous Materials at the PROPERTY are strictly prohibited. Storage of such permissible
Hazardous Materials is allowed only in accordance with all applicable laws now or hereafter in
effect. All safety and monitoring features of any storage facilities shall be approved by CITY’s Fire
Chief in accordance with all laws.
iii. TENANT shall be solely and fully responsible for the reporting of all
Hazardous Materials releases that occur during the Lease Term, to the appropriate public agencies,
when such releases are caused by or result from TENANT’s activities on the PROPERTY.
070501jb 0072742
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TENANT shall immediately inform CITY of any release of Hazardous Materials, whether or not the
release is in quantities that would otherwise be reportable to a public agency.
iv. TENANT shall be solely and fully responsible and liable for such
releases at the PROPERTY, or into CITY’s sewage or storm drainage systems. TENANT shall take
all necessary precautions to prevent any of its Hazardous Materials from entering into any storm or
sewage drain system or from being released on the PROPERTY. TENANT shall remove releases of
its Hazardous Materials in accordance with all laws. In addition to all other rights and remedies of
CITY hereunder, if the release of Hazardous Materials caused by TENANT is not removed by
TENANT within ninety (90) days after discovery by TENANT, CITY or any other third party, CITY
may pay to have the same removed and TENANT shall reimburse CITY for such costs within five
(5) days of CITY’s demand for payment.
v. Notwithstanding Section 12 of this Exhibit A, TENANT shall protect,
defend, indemnify and hold harmless CITY from and against all loss, damage, or liability (including
all foreseeable and unforeseeable consequential damages) and expenses (including, without
limitation, the cost of any cleanup and remediation of Hazardous Materials) which CITY may
sustain as a result of the presence or cleanup of Hazardous Materials on the PROPERTY.
vi. TENANT’s obligations to CITY under this Section shall include
TENANT’s obligation and responsibility under Section X(C) hereof to abate or contain any asbestos
containing material or lead paint that may be present in the building on the PROPERTY.
vii. TENANT’s obligation under this Section shall survive the expiration
or earlier termination of this Lease.
viii. Notwithstanding anything contained herein, TENANT shall not be
responsible for the following, all of which shall be the sole responsibility of CITY: (a) releases of
Hazardous Materials caused by CITY or any of CITY’s AGENTS; (b) releases of Hazardous
Materials occurring prior to the commencement of the Lease Term, or any Hazardous Materials
existing on, in or under the PROPERTY as of the commencement of the Lease Term.
ix. This Section shall exclusively establish and govern the obligations of
CITY and TENANT with respect to Hazardous Materials located on the PROPERTY.
29.ALL COVENANTS ARE CONDITIONS
All provisions of the Lease are expressly made conditions.
30. PARTIES OF INTEREST
Nothing in this Lease, expressed or implied, is intended to, or shall be construed to, confer
upon or to give to any person or party other than CITY and TENANT the covenants, terms, or
condition hereof. All covenants, terms, and conditions in this Lease shall be for the sole and
exclusive benefit of CITY and TENANT.
070501 jb 0072742
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31. RECORDATION OF LEASE "
Neither CITY nor TENANT shall record this Lease; however, a short-form memorandum of
Lease may be recorded at CITY’s request.
070501 jb 0072742
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APN 120-17-093 Tuesday, March 16, 2004
PROPERTY DESCRIPTION
PARCEL B
ROTH BUILDING LEASE AREA
A portion of real property situated in the City of Palo Alto, County of Santa
Clara, State of California, being a portion of Lot 1, Block 24, as shown
upon that map entitled "University Park", which Map was filed for record in
the office of said county Recorder on February 27, 1889 in Book "D" of
Maps, page 69, more particularly described as follows:
Beginning at the intersection of the northeasterly line of Bryant Street, 60
feet wide, with the southeasterly line of Homer Avenue, 60 feet wide,
Thence along said Southeasterly line of Homer Avenue, North 39° 20’ 51"
East 140.00 feet;
Thence parallel with the Northeasterly line of Bryant Street, South 50° 40’
04" East 125.00 feet;
Thence parallel with the Southeasterly line of Homer Avenue, South 39 ° 20’
51" west 140 feet to the Northeasterly line of Bryant Street;
Thence along said Northeasterly line, North 50 °40’ 04"west 125.00 feet to
the Point of Beginning.
said Parcel B contains 17,500 square feet more or less
Said Parcel B is shown on attached map Exhibit "B" and mad,
hereof.
END OF PROPERTY DESCRIPTION
EXHIBIT "A"
JAMES DAVID KIEHL P.L.S. 7152
PREPARED BY / APPROVED
LEGAL:12017093B PLAT: 12017093B.DWG
REQUESTED BY: BILL FELLMAN
Expiration 6-30-
revision (2) 03-16-2004
12017093b.doc
park
EXHIBIT "B"
DRAWN BY: JAMES D. IdEHL
L,I’~GA L l: [.ENAM ’_
DRAWING FILENAME:RB103006.DWG
ROTH BUILDING
C, ITY OF PALO ALTO, CALIFORNIA
SCALE: NTS
REVISION: (1) 10-30-2006
EXHIBIT C
TENANT’S USE, HISTORIC PRESERVATION AND DEVELOPMENT OF PROPERTY
MUSEUM shall restore, preserve and improve the Roth Building as an historic asset and
make that asset available to the community in the following ways. Through displays, exhibits,
interactive demonstrations, workshops, classes and lectures, MUSEUM will provide a place to learn
about the people, .places and events that played a part in Palo Alto history. MUSEUM shall use the
Roth Building for museum purposes and associated activities all of which will be open to the public.
Use of the PROPERTY shall include restrooms made available to the public using the adjacent Park
and a community meeting room available for use by neighborhood groups.
The use of the PROPERTY shall meet CITY’s requirements for historic preservation,
financial viability, community or environmental compatibility and public benefit. MUSEUM shall
only change the PROPERTY’s structures as required by CITY ordinances and in accordance with
the development plan approved by CITY. MUSEUM shall maintain the landscaping in the historic
courtyard. As permitted by CITY ordinances, use of the PROPERTY may include a residential
caretaker’s unit and offices subleased to non- profit organizations.
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EXHIBIT D
DEVELOPMENT PLANS AND CONSTRUCTION DRAWINGS
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EXHIBIT E
LONG TERM MAINTENANCE PLAN AND SCHEDULE FOR PROPERTY
070501 jb 0072742
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Exhibit II
5.
o
10.
Secretary of the Interior’s Standards for Rehabilitation*
A property shall be used for its historic purpose or be placed in a new use that requires
minimal change to the defining characteristics of the building and its site and
environment.
The historic character of the property shall be retained and preserved. The removal of
historic material or alteration of features and spaces that characterize a property shall be
avoided.
Each property shall be recognized as a physical record of its time, place and use. Changes
that create a false sense of historic development, such as adding conjectural features or
¯ architectural elements from other buildings, shall not be undertaken.
Most properties change over time: Those changes that have acquired historic significance
in their, own right shall be retained and preserved.
Distinctive features, finishes, and construction techniques or examples of craftmanship
that characterize a historic property shall be preserved.
Deteriorated historic features shall be repaired rather than replaced. Where the severity of
deterioration requires replacement of a distinctive feature; the new feature shall match the
old in design, color, texture, and other visual qualities and, where possible, materials.
Replacement of missing features shall be substantiated by documentary, physical or
pictorial evidence.
Chemical or physical treatments, such as sandblasting, that cause damage to historic
materials shall not be used. The surface cleaning of structures., if appropriate, shall be
undertaken using the gentlest means possible.
Significant archeological resources affected by a project shall be protected andpreserved.
If such resources must be disturbed, mitigation measure shall be undertaken.
New additions, exterior alterations, or related new construction shall not destroy historic
materials that characterize the property. The new workshall be differentiated form the ’
old and shall be compatible with the massing, size, scale, and architectural features to
protect the historic integrity of the property and its environment.
New additions and adjacent or related new construction shall be undertaken in such a
manner that if removed in the future, the essential form and integrity Of the historic
property and its environment would be unimpaired.
*Guidelines for these Standards are available for public review in the Palo Alto Planning
Department.
ATTACHMENT D
ADDENDUM TO AN EIR
USE OF A FINAL PROGRAM EIR PREPARED FOR THE SOUTH OF FOREST
AREA COORDINATED AREA PLAN (SOFA CAP)
Pursuant to Section 15164 of the CEQA Guidelines, the City of Palo Alto has prepared an
Addendum to an Environmental Impact Report (EIR) for the South of Forest Area
Coordinated Area Plan (SOFA CAP) to support the original findings of that EIR. The
additional analysis does not raise important new issues about the significant impacts on
the environment resulting from implementation of the SOFA CAP. None of the
conditions described in Section 15162 of the CEQA Guidelines requiring preparation of a
subsequent EIR have occurred.
PROJECT DESCRIPTION
The proposed project is an agreement between the City of Palo Alto and the Palo Alto
Historical Museum for a lease option for operation of the Roth Building as a history
museum. The proposed reuse of the Roth Building conforms to the direction of the
SOFA 1 CAP which calls for the preservation of the historic Roth Building and retention
of the historic murals located in the interior of the building. The SOFA 1 CAP also
requires all restoration and rehabilitation of the building be completed in accordance with
the Secretary of Interior’ s Standards for Rehabilitation of Historic Buildings. The
proposal submitted by the Palo Alto Historical Association includes a conceptual historic
structures report that provides an initial analysis of compliance with the Secretary of the
Interior’s Standards for Rehabilitation for future use of the site as a museum.
If the lease option agreement is approved by the City of Palo Alto, the Palo Alto
Historical. Museum., as future tenant of the site, would be required to submit a .
subsequent application for a Conditional Use Permit (CUP) with the City since the
museum use is considered a conditional use in the PF (Public Facilities) zoning district on
the site. In addition to the issuance of the CUP, the project .would require design review
and recommendation by the Joint Architectural Review/Historic Resources Board in
compliance with SOFA 1 CAP requirements. At that time a final historic structures
report would be required for the proposed museum use.
ENVIRONMENTAL FINDINGS
A Final EIR entitled "South of Forest Avenue Coordinated Area Plan Final
Environmental Impact Report" addressed the environmental impacts of this project, and
City Council Resolution 7950 adopted findings on March 27, 2000. Specifically the
following impacts were reviewed and found to be adequately considered by the EIR:
Visual Quality and Design
Vegetation and Wildlife
Geology and Soils
Hydrology
Air Quality
Cultural Resources
Health Hazards
Land Use
Noise
Public Safety
Transportation, Circulation and Parking
Population, Housing, Employment
Open Space and Recreation
Public Services
The attached conceptual historic structures report (Appendix A) completed for this
project evaluates methods for ensuring preservation of the building in compliance with
the Secretary of the Interior’s Standards for Rehabilitation in conjunction with the future
use of the Roth building as a history museum. This information supplements the
documentation incorporated within the Final EIR for the SOFA 1 CAP.
ENVIRONMENTAL CHECKLIST FORM
City of Palo Alto
Department of Planning and Community Environment
Issues and Supporting Information Sources
Sources Potentially
Significant
Issues
Potentially
Significant
Unless
Mitigated
Less Than
Significant
Impact
No
Impact
I.AESTHETICS. Would the project:
a)
b)
c)
d)
Have a substantial adverse affect on a scenic vista?
Substantially damage scenic resources, including, but not
limited to, trees, rock outcroppings, and historic buildings
within a state scenic highway?
Substantially degrade the existing visual character or
quality of the site and its surroundings?
Create a new source of substantial light or glare which
would adversely affect day or nighttime views in the area?
1
1
1,7
1,7
X
X
X
X
II.AGRICULTURE RESOURCES. In determining whether impacts to agricultural resources are significant environmental
effects, lead agencies may refer to the California Agricultural Land Evaluation and Site Assessment Model (1997) prepared
by the California Dept. of Conservation as an optional model to use in assessing impacts on agriculture and farmland. Would
the project:
1)
2)
3)
Convert Prime Farmland, Unique Farmland, or Farmland
of Statewide Importance (Farmland), as shown on the
maps prepared pursuant to the Farmland Mapping and
Monitoring Program of the California Resources Agency,
to non-agricultural use?
Conflict with existing zoning for agricultural use, or a
Williamson Act contract?
Involve other changes in the existing environment which,
due to their location or nature, could result in conversion
of Farmland, to non-agricultural use?
1,2
1,2,3
X
X
X
lIl. AIR QUALITY. Where available, the significance criteria established by the applicable air quality management or air
pollution control district may be relied upon to make the following determinations. Would the project:
a)
b)
c)
Conflict with or obstruct implementation of the applicable
air quality plan?
Violate any air quality standard or contribute
substantially to an existing or projected air quality
violation?
Result in a cumulatively considerable net increase of any
criteria pollutant for which the project region is non-
attainment under an applicable federal or state ambient
air quality standard (including releasing emissions which
exceed quantitative thresholds for ozone precursors)?
1,2
1,2
1,2
X
X
X
Sources Potentially Potentially Less Than No
Issues and Supporting Information Sources Significant Significant Significant Impact
Issues Unless Impact
Mitigated
d)Expose sensitive receptors to substantial pollutant 1, 2 X
concentrations?
e)Create objectionable odors affecting a substantial number 1, 2 X
of people?
IV. BIOLOGICAL RESOURCES. Would the project:
a)1, 2 X
b)
c)
d)
e)
Have a substantial adverse effect, either directly or
through habitat modifications, on any species identified as
a candidate, sensitive, or special status species in local or
regional plans, policies, or regulations, or by the
California Department ofFish and Game or U.S. Fish and
Wildlife Service?
Have a substantial adverse effect on any riparian habitat
or other sensitive natural community identified in local or
regional plans, policies, regulations or by the California
Department of Fish and Game or US Fish and Wildlife
Service?
Have a substantial adverse effect on federally protected
wetlands as defined by Section 404 of the Clean Water Act
(including, but not limited to, marsh, vernal pool, coastal,
etc.) through direct removal, filling, hydrological
interruption, or other means?
Interfere substantially with the movement of any native
resident or migratory fish or wildlife species or with
established native resident or migratory wildlife corridors,
or impede the use of native wildlife nursery sites?
Conflict with any local policies or ordinances protecting
biological resources, such as a tree preservation policy or
ordinance?
Conflict with the provisions of an adopted Habitat
Conservation Plan, Natural Community Conservation
Plan, or other approved local, regional or state
conservation plan?
1,2
1,2
1,2
1,2
1,2
X
X
X
X
X
V. CULTURAL RESOURCES. Would the project:
a)Cause a substantial adverse change in the significance of 1, 2 X
an historical resource pursuant to 15064.5?7, 9
b)Cause a substantial adverse change in the significance of 1, 2 X
an archaeological resource pursuant to 15064.5?
c)Directly or indirectly destroy a unique paleontological 1, 2 X
resource or site or unique geologic feature?
Issues and Supporting Information Sources
Sources Potentially
Significant
issues
Potentially
Significant
Unless
Mitigated
Less Than No
Significant Impact
Impact
d)Disturb any human remains, including those interred 1, 2 "X
outside of formal cemeteries?
VI. GEOLOGY AND SOILS. Would the project:
a)Expose people or structures to potential substantial 2, 4 X
adverse effects, including the risk of loss, injury, or death
involving:
i)5 XRupture of a known earthquake fault, as delineated on the
most recent Alquist-Priolo Earthquake Fault Zoning Map
issued by the State Geologist for the area or based on other
substantial evidence of a known fault? Refer to Division of
Mines and Geology Special Publication 42.
ii)Strong seismic ground shaking?2, 4 X
iii)Seismic-related ground failure, including liquefaction?2, 4 X
iv)Landslides?2, 4 X
b)Result in substantial soil erosion or the loss of topsoil?1 X
c)2, 4 X
d)
e)
Be located on a geologic unit or soil that is unstable, or
that would become unstable as a result of the project, and
potentially result in on- or off- site landslide, lateral
spreading, subsidence, liquefaction or collapse?
Be located on expansive soil, as defined in Table 18-1-B of
the Uniform Building Code (1994), creating substantial
risks to life or property?
Have soils incapable of adequately supporting the use of
septic tanks or alternative waste water disposal systems
where sewers are not available for the disposal of waste
water?
2, 4, 6
VII. HAZARDS AND HAZARDOUS MATERIALS. Would the project?
a)Create a significant hazard to the public or the
environment through the routing transport, use, or
disposal of hazardous materials?
2, 7
X
X
X
3
Issues and Supporting Information Sources
b)
c)
~)
e)
g)
h)
Create a significant hazard to the public or the
environment through reasonably foreseeable upset and
accident conditions involving the release of hazardous
materials into the environment?
Emit hazardous emissions or handle hazardous or acutely
hazardous materials, substances, or waste within one-
quarter mile of an existing or proposed school?
Be located on a site which is included on a list of hazardous
materials sites compiled pursuant to Government Code
Section 65962.5 and, as a result, would it create a
significant hazard to the public or the environment?
For a project located within an airport land use plan or,
where such a plan has not been adopted, within two miles
of a public airport or public use airport, would the project
result in a safety hazard for people residing or working in
the project area?
For a project within the vicinity of a private airstrip,
would the project result in a safety hazard for people
residing or working the project area?
Impair implementation of or physically interfere with an
adopted emergency response plan or emergency
evacuation plan?
Expose people or structures to a significant risk of loss,
injury, or death involving wildland fires, including where
wildlands are adjacent to urbanized areas or where
residences are intermixed with wildlands?
Sources
2, 7
2, 7
n/a
n/a
1,2
1,2
Potentially
Significant
Issues
Potentially
Significant
Unless
Mitigated
Less Than
Significant
Impact
No
Impact
X
X
X
X
X
X
X
VIII. HYDROLOGY AND WATER QUALITY. Would the project:
a)Violate any water quality standards or waste discharge 1, 2 X
requirements?
b)1, 2 XSubstantially deplete groundwater supplies or interfere
substantially with groundwater recharge such that there
would be a net deficit in aquifer volume or a lowering of
the local groundwater table level (e.g., the production rate
of pre-existing nearby wells would drop to a level which
would not support existing land uses or planned uses for
which permits have been granted)?
Substantially alter the existing drainage pattern of the site
or area, including through the alteration of the course of a
stream or river, in a manner which would result in
substantial erosion or siltation on- or off-site?
1,2c)X
4
Issues and Supporting Information Sources
d)
e)
Substantially alter the existing drainage pattern of the site
or area, including through the alteration of the course of a
stream or river, or substantially increase the rate or
amount of surface runoff in a manner which would result
in flooding on- or off-site?
Create or contribute runoff water which would exceed the
capacity of existing or planned stormwater drainage
systems or provide substantial additional sources of
polluted runoff?.
1,2
1,2
Potentially
Significant
Issues
Potentially
Significant
Unless
Mitigated
Less Than
Significant
Impact
No
Impact
X
X
f) Otherwise substantially degrade water quality?1, 2 X
g)1 X
1,2
1,2
Place housing within a 100-year flood hazard area as
mapped on a federal Flood Hazard Boundary or Flood
Insurance Rate Map or other flood hazard delineation
map?
h)Place within a 100-year flood hazard area structures which
would impede or redirect flood flows?
i)Expose people or structures to a significant risk of loss,
injury or death involve flooding, including flooding as a
result of the failure of a levee or dam?
j) Inundation by seiche, tsunami, or mudflow?
X
X
X
IX. LAND USE AND PLANNING. Would the project:
a) Physically divide an established community?
b)Conflict with any applicable land use plan, policy, or
regulation of an agency with jurisdiction over the project
(including, but not limited to the general plan, specific
plan, local coastal program, or zoning ordinance) adopted
for the purpose of avoiding or mitigating an environmental
effect?
c) Conflict with any applicable habitat conservation plan or
natural community conservation plan?
1,2
1,2, 3,
8
1,2
X. MINERAL RESOURCES. Would the project:
a)Result in the loss of availability of a known mineral
resource that would be of value to the region and the
residents of the state?
X
X
X
X
5
Issues and Supporting Information Sources
B Result in the loss of availability of a locally-important
mineral resource recovery site delineated on a local
general plan, specific plan or other land use plan?
Sources Potentially
Significant
Issues
Potentially
Significant
Unless
Mitigated
Less Than
Significant
Impact
XI. NOISE. Would the project result in:
a)
b)
c)
d)
e)
Exposure of persons to or generation of noise levels in
excess of standards established in the local general plan or
noise ordinance, or applicable standards of other agencies?
Exposure of persons to or generation of excessive ground
borne vibration or ground borne noise levels?
A substantial permanent increase in ambient noise levels in
the project vicinity above levels existing without the
project?
A substantial temporary or periodic increase in ambient
noise levels in the project vicinity above levels existing
without the project?
For a project located within an airport land use plan or,
where such a plan has not been adopted, would the project
expose people residing or working in the project area to
excessive noise levels?
For a project within the vicinity of a private airstrip, would
the project expose people residing or working in the
project area to excessive noise levels?
2, 7
2, 7
2, 7
2, 7
n/a
n/a
XII. POPULATION AND HOUSING. Would the project:
a)Induce substantial population ~growth in an area, either
directly (for example, by proposing new homes and
businesses) or indirectly (for example, through extension of
roads or other infrastructure)?
b) Displace substantial numbers of existing housing,
necessitating the construction of replacement housing
elsewhere?
c)Displace substantial numbers of people, necessitating the
construction of replacement housing elsewhere?
1,2
n/a
n/a
No
Impact
X
X
X
X
X
X
X
X
6
Issues and Supporting Information Sources
SOUrCeS Potentially
Significant
Issues
Potentially
Significant
Unless
Mitigated
Less Than
Significant
Impact
XIII. PUBLIC SERVICES.
a)Would the project result in substantial adverse physical
impacts associated with the provision of new or physically
altered governmental facilities, need for new or physically
altered governmental facilities, the construction of which
could cause significant environmental impacts, in order to
maintain acceptable service ratios, response times or
other performance objectives for any of the public
services:
Fire Protection?
Police protection?
Schools?
Parks?
Other Public facilities?
2
1,7
2
2
2
No
Impact
X
X
x
X
x
XIV. RECREATION
a)Would the project increase the use of existing
neighborhood and regional parks or other recreational
facilities such that substantial physical deterioration of the
facility would occur or be accelerated?
b) Does the project include recreational facilities or require
the construction or expansion of recreational facilities
which might have an adverse physical effect on the
environment?
1,2
n/a
XV. TRANSPORTATION/TRAFFIC. Would the project:
a)Cause an increase in traffic which is substantial in relation
to the existing traffic load and capacity of the street system
(i.e., result in a substantial increase in either the number of
vehicle trips, the volume to capacity ratio on roads, or
congestion at intersections)?
b) Exceed, either individually or cumulatively, a level of
service standard established by the county congestion
management agency for designated roads or highways?
c)Result in change in air traffic patterns, including either an
increase in traffic levels or a change in location that results
in substantial safety risks?
1,2
X
X
X
X
X
Sources Potentially Potentially Less Than No
Issues and Supporting Information Sources Significant Significant Significant Impact
Issues Unless Impact
Mitigated
d) Substantially increase hazards due to a design feature (e.g.,3 X
sharp curves or dangerous intersections) or incompatible
uses (e.g., farm equipment)?
e) Result in inadequate emergency access?2 X
f) Result in inadequate parking capacity?1, 2, 3 X
g) Conflict with adopted policies, plans, or programs 2, 8 X
supporting alternative transportation (e.g., bus turnouts,
bicycle racks)?
XVI. UTILITIES AND SERVICE SYSTEMS. Would the project:
a)Exceed wastewater treatment requirements of the 1, 2 X
applicable Regional Water Quality Control Board?
b)1, 2 X
c)
d)
Require or result in the construction of new water or
wastewater treatment facilities or expansion of existing
facilities, the construction of which could cause significant
environmental effects?
Require or result in the construction of new storm water
drainage facilities or expansion of existing facilities, the
construction of which could cause significant
environmental effects?
Have sufficient water supplies available to serve the project
from existing entitlements and resources, or are new or
expanded entitlements needed?
Result in a determination by the wastewater treatment
provider which serves or may serve the project that it has
adequate capacity to serve the project’s projected demand
in addition to the provider’s existing commitments?
1,2
X
X
X
f) Be served by a landfill with sufficient permitted capacity to 2 X
accommodate the project’s solid waste disposal needs?
g) Comply with federal, state, and local statutes and 2 X
regulations related to solid waste?
SOURCE REFERENCES:
2.
3.
4.
5.
6.
7.
8.
9.
Site visit/knowledge of the site and project
Palo Alto Comprehensive Plan 1998-2010 & Maps L-7, L-8, L-9, N-I, N-2, N-3, N-5, N-6, N-8, N-10, T-7, T-8
Palo Alto Municipal Code, Title 18- Zoning Ordinance
Required compliance with the Uniform Building Code (UBC) Standards for Seismic Safety and Windload
Alquist-Priolo Earthquake Fault Zoning Map
Uniform Building Code
Information submitted by applicant
South of Forest Avenue Coordinated Area Plan
Conceptual Historic Structures Report for the Roth Building
EXPLANATION FOR APPLICABLE CHECKLIST RESPONSES:
A Final Program EIR entitled "South of Forest Avenue Coordinated Area Plan Final Environmental Impact Report" was certified by
the City Council on March 27, 2000 (Resolution number 7950). Pursuant to section 15186(c)(4) of the CEQA Guidelines, the
proposed project has been evaluated in this checklist form in order to determine whether the environmental effects of the proposed
project were covered in the Program EIR..
V. Cultural Resources
The project site is listed as a Category 2:Major Building on the City’s inventory of Historic Structures. The applicant proposes
to restore and rehabilitate the historic Roth building consistent with the Secretary of Interior’s Standards for Rehabilitation of
Historic Buildings. The project applicant has provided an initial analysis that documents how the restoration would be achieved.
That report is attached as part of this checklist form. A final historic structures report will be required after the interior design has
been completed prior to design review approval. The lease will ensure that the restoration and rehabilitation will be completed to
these standards.
IX. Land Use and Planning
The site is designated Public Facilities on the Comprehensive Plan Land Use map; the proposed use is consistent with this
designation. The proposed project is consistent with policies L-7 L-51, L-52, 1-58, L-59, L-64, and L-65, L-70, T-19, N-51, C-29
and G- 10 of the Comprehensive Plan. The proposed project is also consistent with the SOFA 1 Coordinated Area Plan policies T-
1, CF-3, DC-9, DC-2 Dc- 10, DC- 12, and DC- 14. The applicant’s proposal lists all of these policies in detail and identifies how the
project complies with individual policies.
XV. Transportation/Traffic
The proposed project will not increase traffic in the general vicinity of the project site. Based on information provided by the
potential lessee, the museum use is anticipated to generate approximately ten trips per day, which would not result in any
significant increase in localized traffic. The museum would have minimal impact on peak hour trips since it would be open from
11 to 5 on weekends and Fridays.
Parking2:
The applicant has proposed a plan for managing the parking need generated by the museum use by encouraging alternative forms
of transportation to and from the museum. Although there is no on-site parking availability, there is sufficient existing and planned
public parking available in the near vicinity of the museum. Given the weekend and Friday hours of operation, the museum will
require parking when parking demands in the area are less.