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HomeMy WebLinkAboutStaff Report 123-08City of Palo Alto City Manager’s Report TO:HONORABLE CITY COUNCIL 8 FROM:CITY MANAGER DEPARTMENT: ADMINISTRATIVE SERVICES DATE: SUBJECT: FEBRUARY 4, 2008 CMR: 123:08 APPROVAL OF AMENDMENT #1 TO THE LEASE BETWEEN CITY OF PALO ALTO AND COMMUNITY SKATING, INC. FOR THE WINTER LODGE, 3009 MIDDLEFIELD ROAD, EXTENDING THE TERM FOR AN ADDITIONAL TEN YEARS RECOMMENDATION Staff recommends that Council authorize the City Manager to execute the attached Amendment #1 to the lease between the City of Palo Alto and Community Skating, Inc. for Winter Lodge, 3009 Middlefield Road, extending the term for an additional ten years. BACKGROUND In accordance with a voter-approved measure, on April 28, 1987, the City acquired the 3.73 acre parcel on Middlefield Road commonly ~known as the "Winter Lodge" site, for the purpose of continuing its use as a COlnmunity ice skating facility. On January 26, 1990, the City entered into a 20-year lease with Community Skating, Inc. (CSI) to operate a public ice skating facility on a 1.056-acre portion of the site. On April 20, 2001. the City entered into second lease with CSI to operate a public tennis facility on the remaining 1.634-acre portion of the site formerly used as a swim and tennis facility. Both leases also share 1.04 acres of common parking. Both leases are set to terminate on January 25, 2010 and provide for the option to extend the term for an additional ten years upon notice from CSI of its intent to do so and upon the City Manager’s assessment of CSI’s satisfactory performance of the terms of the lease. DISCUSSION On October 25, 2007, CSI sent the City written notice (Attachment B) of its intent to exercise its option to extend its lease for the ice skating facility for the additional ten years from 2010 to 2020. As noted in its letter, the Winter Lodge facility has been an asset to the City. The Winter Lodge acts as a recreational partner for the City by offering classes through the Cib,’s Recreation Division and booking family skate nights for elementary schools in Palo Alto and neighboring communities. Last year, the Winter 1.~:08 Page 1 of 3 Lodge was recognized by the Ice Skating Institute for having the largest skating school in the USA. The skating school operates consistently with 98 to 99% customer satisfaction and enrolls over 3,000 students per season every year. The facility has been ranked recently by Outside Magazine as one of the top 10 outdoor ice skating experiences in the country. In addition, CSI’s improvements to the site and building total over one million dollars. The terms of the lease require CSI to satisfy all conditions of the lease throughout the primary lease term, abide by all City laws, code and ordinance requirements, and to provide written notice of its desire to exercise the option to extend. All of these conditions have been met. Therefore, the attached Amendment #1 provides for the lease extension to January 1, 2020, with all other terms and conditions of the lease to remain the salne. RESOURCE IMPACT Extension of the lease will have no fiscal impact to the City. There is no monetary rent required by the lease. The non-monetary consideration required by the lease is that CSI operate the facility for the required use at no cost to the City. POLICY IMPLICATIONS Extending the term in accordance with the lease option-to-extend provisions does not represent an?, change to existing policy. ENVIRONMENTAL REVIEW Extension of a lease is categorically exempt from the requirements of the California Environmental Quality Act under Article 19, Section 15301, existing facilities. ATTACHMENTS Attachment A: Notice from CSI of Intent to Exercise Option Attachment B: Alnendment # 1 to Lease with CSI for the Winter Lodge 123:08 Page 2 of 3 CITY MANAGER APPROVAL:~’EY HARRI~S~ Assistant City Manager cc:Jan van der Laan, President, Community Skating Inc. Linda Stebbins Jensen, Executive Director, Winter Lodge 123:08 Page 3 of 3 _ I~TTNCHMENT AWinter .Lodge_. . OEITDOOR_ ICE SKATING SINCE 1956 ATTACHMENT A .Octob~r2,5, 2007 Mr. Frank:Ben6st, City Ma~ager City Of Pal0 Alto PO Box ’F0250 P#,IO AIt0;.CA 94303 " - Re: Wihter Lodge/Communi.ty..Skating Inc. 10-year .lease extension, Dear Mr. Bones{, +he initial 20-year perio.d.of the-lease, fo~ the operation of winter Lodge .by. cbhbmunity Sk,atiHg Inc. #2.47 ~villexpir.e on Janu. ary 26,/2010. A i0-~ear.0P.tion, to extend is included inthis:lease. " Theref0re, as-pet" the terms of our cu~ent.lease,.the Board"of Directors. 0f Cd~nmunity.Skating Inc. .would now like to.exercise our0ptionto extend the le~ise;for 1.0 years-from 2010to 2020. .-. :Wint~r Lodge has beenan ~sset.to the City"~P~,lo Alto f0i~bve~50: years.- OPeratlng:lik&a " -;. reci~eati_on~l partner-for:}he, city; Winte.r LOdge 0tfers ~lassegthrdugh.tt~e.City.of.PaloiAff0:~ ~eC.r..eation i~.Departmen,t and.o, th&r nejgh.bori.ng c0mmubity r~cf6atioffdePat~ttn6nts..: Al~dgt ever.y..dlei:n~ntary ’:"g~hoo! in (fie Pfilo Alto Unified-School DistrictbookS a:famil)skate"nigPit at...Wi’ntdr iLddge evew? year, and manyschools in neighboring communities do the-same. W~ plan:to co[itinueour:cur, rent ..practices 0f keeping ~he p.r.~p.erty; ma(~hineryarid buildingS- in top Condffioh. Our improvements tO ..... the.site and.building,, to dine; total OVer0ne million dO.Ila.~s ($1,.000,0d0).- . iWe a.lso.p.lan.to continue .to.p.roVide outstanding chs}omer.service", We:believe bur.track.Ee~ord of " 4~.i’0Viding a no.n:ffE0.fit recreati6nalfacili~ for the’:Cc}mmunity.:ib~S bee:H:eX~mpla¢y:., kaSt:y~a¢, Wiiiter. L0dge was reC0gnized, bythe ide.Skating lnsfit)ate fo.~ having th~ #l-:ia"rge.st:ska.idhg:.~chool"intlie .Ur~ifed ~tates; b~sed On number of Studentg prb.moted. This .is eslbecia!ly imP~eg.sDe, ag ,w.e ..ar:e a .facility with a smaller-than-a~zerage rink .and are on.lyopen.seven months of the year.... ©ur..sk~ting gchool hi’Orates consistently, with a 98 to :99% customer }atisfaction andenr011gove¢ per season every year. Our facility and. o~r program have gathered interest outside ofthe.ar.ea.. The City of.Boulderl, Colorado, is cu[~ently plannir~g a:¢ecreatibna:l ice skating facilit.v.m:6;deled after’our.operation, we are a soproud to note that Outside Magazine recently ranked Winter Lodge as one of the top t 0 outdoor ice gk-fiting experien~:es in the .United States. "Wethank you fqr your consideration and we 100k forward ~o hearing from .you.and workingwith you in the future. ~Re~aectfully, ., Van der Laan P~’esident, Community Skating Inc. Li~en Executive Director,-Wi.nter Lodge "WINTER. LODGE IS DEDICATED TO PFLOVIDING QISALITY R.ECREATIONAL ?KOGRAMS FOR. THE COMMLINITY." 3009 M]DDLEFIELD KOAD, PALO ALTO, CAlIFORNiA- 94306 650.493.4556 / FACSIM1L,IZ 650.493.3294 Attacl~ment B AMENDMENT NO. 1 TO LEASE WITH COMMUNITY SKATING, INC., FOR THE PROPERTY LOCATED AT 3009 MIDDLEFIELD ROAD, PALO ALTO THIS AMENDMENT NO. 1 to the January 26, 1990 lease ("Lease") with Community Skating, Inc., for the property at 3009 Middlefield Road, Palo Alto, is made and entered into this day of__, 2008, by and between the City of Palo Alto, a municipal corporation ("Lessor") and Cormnunity Skating, Inc., a California nonprofit corporation ("Tenant"). RECITALS In accordance with a voter-approved measure on April 28, 1987, the City acquired a 3.73 acre parcel on Middlefield Road, commonly known as the "Winter Lodge" site, for the purpose of continuing its use as a community ice skating facility,. On August 4, 1989, Lessor granted Tenant an exclusive option to obtain a lease for the purpose of upgrading, maintaining and operating of a public ice skating facility; and ancillary services including access by civic and community groups. On January 26, 1990, Lessor and Tenant entered into a 20-year lease with an option to extend for an additional 10 years. The parties now desire to amend the Lease to extend the existing lease term for an additional ten (10) ?,ears. Tenant has been a good steward of the property and provided community benefit through its operations and programs. E.The Tenant has satisfied the conditions required to extend the Lease. NOW, THEREFORE, in consideration of the following covenants, ten-ns and conditions, the parties hereto agree. Section !. Pursuant to the terms of Section VI of the Lease, Tenant is hereby permitted to extend the term of this Lease for an additional ten year period, commencing December 31, 2010 and terminating January 1, 2020. Section 2.All provisions of the Lease not amended herein, shall remain in full force and effect. IN WITNESS WHEREOF, the parties have executed this Amendment No. 1 to the Lease as of the date first written above. CITY OF PALO ALTO TENANT: Assistant City Manager ATTEST: COMMUNITY SKATING, INC. a California nonprofit corporation By: Name: City Clerk Title: APPROVED AS TO FORM: Sr. Asst. City Attorney APPROVED: Director, Administrative Services