HomeMy WebLinkAboutStaff Report 288-07TO:
FROM:
City of Palo Alto
Manager’s Rep r
7HONOIL4BLE CITY COUNCIL
~.T 7CITY MANAGER DEPARTMENT: COMMUNITk SERVICES
DATE:
SUB3ECT:
JULY 9, 2007 CMR: 288:07
APPROVAL OF A LETTER OF INTENT WITH THE PALO ALTO
ART CENTER FOUNDATION TO RENOVATE AND EXPAND
THE PALO ALTO ART CENTER AND UPGRADE ASSOCIATED
INFRASTRUCTURE (CAPITAL IMPROVEMENT PROGK&M
PROJECT PF-07000)
RECOMMENDATION
Staff recommends that Council:
1. Approve the attached Letter of Intent (A~actm~ent A) with thePalo Alto Art
Center Foundation, which sets guidelines for the formation of a public/private
partnership for the renovation and expansion of the Palo Alto A~ Center.
2.The City Manager or his designee be authorized to sign the Letter of Intent on
behalf of the City of Palo Alto.
BACKGROUND
The mission of the Palo Alto Art Center Foundation (formerly the Palo Alto Cultural
Center Guild), a private nonprofit 501 (c) (3) organization founded in 1973, is to support
the mission and goals of the of the Palo Alto Art Center, promote unique art experiences
and education for people of all ages, and serve as the Art Center’s advocates and
anabassadors in the community. Beginning with a January- 19, 1999 letter to the Council,
the Foundation Board confirmed the intent to open discussions on the subject of a
public!private partnership to renovate and expand the Palo Alto Art Center.
The 28,000 square foot Art Center building and its facility systems exist essentially as
they were built and installed in 1951. Since its conversion from a City Hall more than
thirty-seven years ago, the only significant repairs to the Art Center have been seismic
improvements made in !987. In 1999, the Palo Alto Art Center Foundation began to
work proactively toward the needed expansion and renovation of the Art Center facility
focusing on two identified issues: 1) upgrades to the exhibition spaces, and 2) the need
for additional children’s art classrooms mad activity space. In March 1999, the Palo Alto
City Council approved a proposal from the Palo Alto Art Center Foundation to explore
the development of a public/private partnership that would make possible a capital
project to expand and renovate the .&-t Center. The Foundation intended that part of its
role in this partnership would be to raise one-half of the funds required for the project.
CMR: 288:07 Page 1 of 4
In March 2000 the Foundation applied to the David and Lucile Packard Foundation and
the Non-profit Facilities Fund and received $50,000 to conduct a facility master plam~ing
process, matched by $50,000 from the City. The Palo ~41to Art Center Programming
Report was completed in 2001 (CMR 438:01) by architect David Robinson. The
progranmaing report detailed space use as defined by cm-rent program needs and laid out
an improvement plata that addressed the Center’s immediate critical needs.
In August 2001, a Joint Site Plamaing Committee was convened. The goal was to seek a
site design that would allow the Main Library and the Art Center to expand while
addressing the limitations and opportunities offered by the site, neighborhood concerns,
and the desires of the community and other stakeholders. In September 2001, the Art
Center Foundation received a second $50,000 grant request from the David and Lucile
Packard Foundation. The grant was matched by the City (CMR: 226:02). Mark
Cavagnero and Associates in association with SWA Group were contracted by the
Foundation to develop the joint site plan. The Site Plamaing Study for the Palo Alto Main
Library and Art Center was completed February 8, 2002. A Public Draft EIR of the site
was prepared for the Ciu; of Palo Alto by Thomas Reid Associates and completed by
April 17, 2002.
In 2002, Mark Cavagnero Associates continued work on the master plan mad conceptual
design for the Palo Alto Art Center and site. All plans, reports, and surveys were
reviewed and approved by City boards and commissions. The plan was completed on
June 14, 2002 and approved by Council. A Memorandmn of Understanding was
approved unanimously by the City Council at its July 15, 2002 meeting (CMR: 340.02),
describing the City’s commitment to contribute $5 million to a fund set up through a
public/private partnership over five years. The MOU was intended to go into effect upon
successful passage of a library bond measure in November 2002. The bond measure was
unsuccessful.
DISCUSSION
In the spring of 2003, the Foundation Board unanimously voted to commit to the
implementation of the master plan for the Art Cemer. Supported by a $10,000 grant from
the Non-profit Finance Fund it worked with fundraising and organizational development
consultants to prepare for the possibility of a future capital campaign.
In 2005, the Foundation contracted with Mark Cavagnero Associates to develop a phased
approach to complete the master plan. A first phase of building renovations with cost
estimates developed by Mack 5 included creation of a children’s wing, improYements to
existing gallery space, and replacement of mechanical and electrical systems. The
Foundation’s Building Committee met with Public Works staff. Based on the cost
estimates the Infrastruct~,kre Management Plan allocation for the Art Center Electrical &
Mechanical Upgrade (Capital Improvement Progran~ Project - PF-07000) was readjusted.
In January 2006, the Foundation Board gave final approval to move towards a capital
campaign. In June 2006, the Foundation contracted Netzel Associates to conduct a capital
development feasibility study. Netzel Associates is an organizational consulting firm
specializing in managing capital development programs for nonprofits. Clients include
CMR: 288:07 Page 2 of 4
the California Science Center, the Japanese American National Museum, Ronald
McDonald House at Stanford, YMCA of Santa Clara Valley, and Notre Dame High
School. Netzel presented its report to the Board on October 16, and the Board voted to
accept the Netze!’s recommendation to move forward with a $6.5 million capital
campaign. The Foundation Board hired Netzel as its campaign counsel. At its December
13, 2006 meeting, the Board voted to conduct a 26-month capital campaign to raise the
$6.5 million.
On April 10, 2006 a colleague’s memo was approved by the Ci~; Council directing City
staff to work with the Art Center Foundation in drafting a Memorandum of
Understanding to expand and renovate the Art Center as a Public/Private Partnership,
committing $1.74 million from the City’s Infrastructure Improvemem program.
The Letter of Intent (Attactvnent A) outlines mutually acceptable terms and conditions
for the collaboration between the City and the Palo Alto Art Center Foundation for Phase
I construction of improvements and alterations to the Palo Alto Art Center.
RESOURCE IMPACT
Funds of $1.74M for the electrical and mechanical upgrades for the project are included
in Capital Improvement Program Project - PF-07000 (Art Center Electrical &
Mechanical Upgrades) and come from the City’s Infrastructure Improvemem program.
To reach the funding goal of $6.5M, the Palo Alto Art Cemer Foundation will raise
approximately $4.8M through private comributions.
PROJECT REVIEW TIMELINE
Option agreement, lease, license or other contract between the City and the Palo
Alto Art Center Foundation to be presented for Com~cil approval in fall 2007.
Schematic design, landmark review, and design review, pla~ming, owner review,
and design development to be completed by June 2008.
Palo Alto Art Center Foundation campaign plamaing and fundraising completed by
December 2008
*Construction documentation, permit, and bidding to be completed by May 2009
*Construction to begin September 2009, with an eight month anticipated
construction period.
NEXT STEPS
Should this Letter of Intent be adopted, the next step will be to develop an option
agreement, lease, license or other contract to be put in place for the construction period,
or as otherwise agreed to by the parties. The document will speci~ all policies,
procedures and requirements as they relate to design, construction, safety, liability and
funding details necessary between the City and the Palo Alto Art Center Foundation to
successfully complete Phase I construction at the Palo Alto Art Center. Once the
document is signed and approved, and all requirements met, the Palo Alto Art Center
Foundation will begin construction activities.
CMR: 288:07 Page 3 of 4
POLICY IMPLICATIONS
The proposed projects are consistent with the recently updated Public/Private Partnership
Policy which defines this project as an alliance partnership.
ENVIRONMENTAL REVIEW
An Enviroim~ental Impact Report for the Newell/Embarcadero Civic Facilities Expansion
Program was adopted by a Council resolution (CMR: 305:02) on June 24, 2002. These
ptans are consistent with the original concepts evaluated in the EIR.
ATTACHMENTS
Attactm~ent A:
Exhibit 1:
Letter of Intent
Conceptual Plan of premise "Art Center Master Plan"
PREPARED BY:
DEPARTMENT HEAD:
LINDA CRAIGH~;AD
Director, Palo Alto Art Center
RICHARD JAMES
Director, Community Services
CITY MANAGER APPROVAL:
HARRISON
Assistant City Manager
CMR: 288:07 Page 4 of 4
City of Palo Alto
Office of the Cihj Manager
June 28, 2007
Jeannie Duisenberg, President
Pa!o Alto Art Center Foundation
cio Pa!o Alto Art Center
1313 Newell Road
Palo Alto, CA 94303
RE: Palo Alto Art Center Improvements
Dear Ms. Duisenberg:
The City of Pa!o Alto (the "City") and the Palo Alto
Art Center Foundation (the "Foundation") wish to collaborate in
the Phase I construction of new improvements and alterations to
the existing improvements (the ~Project") at the Palo Alto Art
Center (the "Art Center"). The City is interested in providing.
to the Foundation for a period, of time land and facilities which
comprise the Art Center (the ~Premises") to Permit the
alteration of the Art Center. The City understands that the
Foundation has an interest in signing a contract with the City
in regard to the City’s and the Foundation’s commitment to
complete the Project,on mutually acceptable terms and
conditions, as follows:
The term of any option agreement, lease, license
or other contract shall be the construction
period, or as otherwise may be agreed to by the
parties.
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o The Foundation Will contribute significant funds
(currently estimated at approximately $4.8
million) over and above the amount to be
contributed by the City, as described in paragraph
9 below, to be used to cover the Foundation’s
administrative expenses in relation to the Project
and acquire the services of an architect, a
general contractor, a project manager, capita!
campaign consultants and/.or other professional(s)
with respect to the fund~raising, design and
EO. ~x I0~0Pdo~ CA 94303650.329.2563
Printed wilh soy-based inks on 100% recycled paper processed without chlorine
Palo Alto Art Center Foundation
June 28, 2007
Page 2
construction of the Project and defray Project-
related costs and expenses. The services of
contractors shall be procured in accordance with
informa! competitive selection processes as
determined by the Foundation.
The Foundation will submit the final plans,
specifications and working drawings for the design
and construction of the Project to the City’s
Departments of Community Services, Planning and
Community Environment, and Public Works for review
and approva! of, as appropriate, the City’s boards
and commissions and the Council.
0 The Foundation will obtain and maintain all
required City permits and other authorizations and
furnish any financial and non-financial security,
during the construction, as appropriate and upon
request, to the City.
0 The Foundation will furnish a copy of its articles
of organization and other information relating to
its corporate status to the City for its review
and approval.
o The Foundation will continue and otherwise
undertake a community outreach and capital fund-
raising campaign to garner the community’s input
and support for the Project.
The Foundation will surrender possession of the
Premises and transfer title to the Project, upon
completion thereof, to the City.
o The City will provide staff support and other
assistance, upon request, to the Foundation in
connection with the execution of the Project.
The City has currently earmarked Capital
Improvement Program funds in the budget in the
amount of $1.75 million as part of its
Infrastructure Management Plan for the Art Center,
to be applied to the costs referred to in
paragraph 2 above.
!0.The City will waive the Foundation’s obligation to
pay Project-related fees and charges that are due
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Pa!o Alto Art Center Foundation
June 28, 2007
Page 3
and payable to the City’s General Fund. However,
the Foundation will be obligated to pay all
utility services rates, fees and charges that are
due and payable to the City’s Enterprise Fund in
connection with the Project.
ii. Any contract between the parties will be subject
to the approval of the Council and the approval as
to form by the City Attorney.
This letter is not intended to be a contract between
the parties with respect to the Project. It is intended to
facilitate discussion of the Project and is only an expression
of the basis on which the parties would enter into a contract
regarding the Project and the rights and obligations of the
parties. The City requests the Foundation’s acknowledgement of
this letter of intent below in order that the City. may proceed
to develop with the Foundation, a draft contract concerning the
Project.
The City does not undertake any obligation or other
commitment to a realtor or real estate professional in
connection.with any services rendered concerning this matter.
Sincerely,
CITY OF PALO ALTO
EMILY HARRISON
Assistant City Manager
The Palo Alto Art Center Foundation hereby
acknowledges receipt of the foregoing proposed general terms and
conditions of a contract between the parties pertaining to the
Project and agrees that a next step is the drafting of a
contract agreeable between the parties providing for the
deve!opment of the Project.
By
Tit President
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