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HomeMy WebLinkAboutStaff Report 281-08City of Palo Alto City Manager’s Report TO:HONORABLE CITY COUNCIL 10 FROM: DATE: SUBJECT: CITY MANAGER DEPARTMENT: COMMUNITY SERVICES JUNE 16, 2008 CMR:281:08 APPROVAL OF A LETTER OF INTENT WITH THE FRIENDS OF LYTTON PLAZA PARK, L.L.C., FOR THE DESIGN, CONSTRUCTION AND INSTALLATION OF TREES, FOUNTAIN, PARK AMENITIES AND OTHER IMPROVEMENTS AT LYTTON PLAZA -CAPITAL IMPROVEMENT PROGRAM PROJECT PE-08004 RECOMMENDATION Staff recommends that Council authorize the City Manager or designee to sign the attached Letter of Intent with the Friends of Lytton Plaza Park, L.L.C., for improvements located within Lytton Plaza Park, including the installation of trees, a fountain, site amenities and other improvements. . BACKGROUND On June 11, 2007, Council approved the allocation of $50,000 from the Infrastructure Reserve Fund to Capital Improvement Project PE-08004 for preliminary design for the renovation of Lytton Plaza Park (200 University Avenue at Emerson Street). On June 9, 2008, Council approved a supplemental allocation for construction expenses of $300,000 for the City’s share of a public/private partnership to renovate the Plaza. The Friends of Lytton Plaza Park, LLC, have legally incorporated in order to eventually enter into an agreement with the City to occupy the Plaza for a period of approximately three months so that the Plaza can be rebuilt. The Friends have worked with landscape architects to create a conceptual plan for the Plaza that will make the park inviting, family oriented, and a community gathering spot. Original round benches/planters would be replaced with movable tables and chairs under an expanded canopy of trees that will allow visitors to read, converse and enjoy their lunches in a relaxed setting. The concept of improving Lytton Plaza was reviewed by the Parks and Recreation Commission on October 23, 2007. The Commission supported the initial concept of the renovations. A publicly noticed meeting was held at City Hall on May 28, 2008 to receive comments and suggestions from the public on the project. CMR:281:08 Page 1 of 3 DISCUSSION Staff has worked cooperatively with the Friends to develop a Letter of Intent (Attachment A) that lays out the responsibilities and expectation of both parties. Similar to Letters of Intent with the Friends of Heritage Park and the Palo Alto Art Foundation, the letter describes the scope of the renovation project, the amount of money that will be contributed by each partner, and the responsibilities for the on-going maintenance of the park once it is improved. Once the Letter of Intent is executed by both parties, the Friends will work with design consultants to prepare detailed construction plans and specifications for the project. The Friends will return to the City with plans to be submitted for Planning Department, Architectural Review Board, and Planning & Transportation Commission review. The Friends will then develop a budget for the project, ensuring that there are adequate funds to successfully complete the project, a detailed construction timeline and evidence of insurance. Staff will then return to Council with a Park Improvement Ordinance, Budget Amendment Ordinance, and Agreement To Enter documents for review and approval.. The Agreement To Enter specifies policy and procedural guidelines for the Lytton Plaza Park, LLC to follow regarding construction, safety, liability, and payment details. The agreement follows similar public/private partnership agreements that provide for authorized non-profits to manage the improvement of City facilities. Other examples of such partnerships include the Friends of the Children’s Theatre for the construction of the Magic Castle, and an agreement with Perry-Arrillaga for the construction of a refreshment stand at the Baylands Athletic Center. Once the project is successfully constructed and accepted by the City, the City will complete the payment of project-related invoices, the Agreement To Enter will terminate, and the City will resume maintenance responsibilities for the Plaza. If the Friends or the City determine that it is not in their best interest to proceed with construction of the Project, then the City will share in one-half of the design costs of the project up to, but not exceeding, the amount of $50,000. RESOURCE IMPACT Funds for the City’s share of this project are included in Capital Improvement Program Project - PE-08004 (Lytton Plaza Renovation). Funds for this project will be matched by the Friends of Lytton Plaza Park, LLC. The LLC estimates the total cost of the renovations to be $700,000. The Letter of Intent caps the City’s financial participation for design and construction of improvements at $350,000. The current maintenance and utilities cost of the Plaza is approximately $4,235. The projected annual cost to the City for maintaining and operating the plaza is estimated at $8,600. This cost includes the maintenance and operational costs of a water feature which will be added to the Plaza. POLICY IMPLICATIONS This project is consistent with the recently approved (Policies & Services Committee) public/private partnership policy as a "joint partnership project." CMR:28 1:08 Page 2 of 3 The proposed project is consistent with existing City policy, including C-26: Maintain and enhance existing park facilities. A Park Improvement Ordinance will be required for park development. The Ordinance will be prepared and presented to the Council at the point when the actual project agreement is ready for Council approval. ENVIRONMENTAL REVIEW Environmental review will be performed at the time the project is presented to Council for approval. ATTACHMENTS Attachment A:Letter of Intent PREPARED BY: DEPARTMENT HEAD: CITY MANAGER APPROVAL: Open Space and Parks Division Manager - D~O~ of Community Services STEVE EMSLIE/KELLY MORARIU Deputy City Managers CMR:281:08 Page 3 of 3 City of Palo Alto Office of the City Manager May 29, 2008 Friends of Lytton Plaza Park LLC c/o Barbara Gross 721 Emerson Street Palo Alto, CA 94301 Attention: Barbara Gross/Sunny Dykwel/Leland Levy RE: Lytton Plaza Design and Remodel Project Dear Ms. Gross, Ms. Dykwel and Mr. Levy: The City of Palo Alto (the "City") and the Friends of Lytton Plaza Park LLC (the "Friends") (each a "Party" and, collectively, the "Parties") wish to collaborate in bringing to Lytton Plaza (the "Plaza") a new design and improvements to the Plaza’s open-air pedestrian walkway and planter and seating structures (the "Premises"). The City is interested in providing to the Friends for a limited period of time--a license or other permission for access to and the non- exclusive possession of the Premises (the "Agreement"), as may be mutually agreed to by the Parties, in order that the Friends may re-develop the Premises as a public square for pedestrians and shoppers, by constructing new seating, planter structures, and landscaping, as appropriate (the "Project"). The City understands that the Friends are interested in entering into the Agreement with the City in regard to the Friends’ commitment to undertake and complete the Project, on mutually acceptable terms and conditions, as follows: The Premises consists of real property located at 200 University Avenue, at the comer of University Avenue and Emerson Street in downtown Palo Alto, containing approximately 8,500 square feet in area. The term of any Agreement will be the design and construction period of the Project, estimated at approximately ten (10) months, commencing after th~ City has approved the Project and the Parties have executed and delivered the Agreement, or as otherwise may be agreed to by the Parties. 080529 jb 0072969 Subject to Paragraph 10 of this letter of intent, the Friends wi!l not pay rent to the City but, in lieu thereof, subject to the Friends’ preparation and approval of an estimated budget for the cost of the Project, which the Friends anticipate will be approximately $700,000.00, and the Parties’ approval of the amount the City will contribute to the Project, the Friends will contribute funds equ~il to one-half of the estimated budget of $700,000, plus any additional amount in construction costs incurred in excess of the estimated budget of $700,000, but excepting those ongoing maintenance costs for the Project to be contributed by the City, as described in paragraph 10 below, to be used to acquire the services of an architect, a general contractor, a project manager and/or other professional(s) with respect EO. Box 10250Palo Alto, CA 94303 650.329.2563 650.325.~25 fax Friends of Lytton Plaza Park LLC May 29, 2008 Page 2 ’ to the design and construction of the Project and to defray Project-related costs and expenses. The services of consultants and contractors will be procured in accordance with informal competitive selection processes (requiring the solicitation of at least three competitive bids and/or proposals) as determined by the Friends. Performance bonds and payments bonds in the amounts of one hundred percent of the selected bid will be required of the general contractor for the Project. The Friends 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 the subsequent review and approval of, as appropriate, the City’s boards and commissions, including, but not limited to, the Parks and Recreation Commission, and the City Council. The Friends will obtain and maintain all required City permits and other authorizations and furnish or caused to be furnished any financial and non- financial security, during the construction, as appropriate, and upon request, to the City, including, but not limited to, insurance, indemnity, lien waivers, performance and payment bonds (as noted in paragraph 3) and covenants. The Friends acknowledge that the City must develop findings of fact that the Project does not intrude in the public right-of-way. Any survey of the Premises to support such findings will be performed at the City’s cost and expense. The Friends will furnish a copy of its articles of organization and other information relating to its legal or entity status to the. Office of City Attorney for its review. The Friends will undertake a community outreach and fund-raising program to garner the Plaza and downtown Palo Alto community’s input and support for the Project. The Friends will coordinate construction efforts at the Plaza with interested community groups and organizations. The Friends will surrender possession of the Premises and transfer or otherwise quitclaim any and all rights, title and interests to the Project, upon completion of construction thereof, to the City. The date of completion of the construction of the Project, the surrender of possession of the Premises, the termination of the obligations of the Friends under the Agreement (including the termination of the obligations of the Friends during construction that apply during the construction of the Project referred to in Paragraph 10 hereof), the acceptance of the Project by the City, and the assumption by the City of the responsibility for the permanent. maintenance and repair of the Project thereafter will be confirmed, in writing, by the Parties. The City will provide staff support and other assistance, upon request, to the Friends in connection with the execution of the Project. 070529 jb 0072969 Friends of Lytton Plaza Park LLC May 29, 2008 Page 3 10.The City, subject to the approval of the City Council, will contribute funds in an amount not to exceed three hundred fifty thousand dollars ($350,000), to be applied to the construction-related costs and expenses referred to in paragraph 3 above. During the period from the commencement of construction of the Project through the completion of the Project and the termination of the obligations of the Friends under the Agreement, the City will not absorb any other costs and expenses relating to the design and construction of the Project, including utilities rates and charges, and maintenance costs associated with the Project, in excess of the sum stipulated above under the Agreement. The City will bear responsibility for the Project’s on-going maintenance and operating costs and expenses of the Project effective as of the satisfaction of the following: the construction and renovation are completed, the obligations of the Friends under the Agreement are terminated, and the Plaza is officially open to the public, all in accordance with the Agreement. If the Parties determine that it is not in their best interest to proceed to construction of the Project, then the City will share in one-half of the design costs of the Project up to but not exceeding the amount of fifty thousand dollars ($50,000.00). 11. 12. The City will waive the Friends’ obligation to pay Project-related fees and charges that are due and payable to the City’s General Fund. During the construction of the Project, the Friends will be obligated to pay all utilities fees and charges that are due and payable to the City’s Enterprise Fund in connection with the execution of the Project to the extent such costs and expenses are separately billed to the Friends. Such fees and charges will be listed in an exhibit to the Agreement to the extent practicable. The Agreement will be subject to the approval of the City Council and the approval as to form by the City Attorney. The Council will be required to adopt a Park Improvement Ordinance in connection with the Project. 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 any Agreement regarding the Project and the rights and obligations of the Parties. The City requests the Friends’ execution of this letter of intent below in order that the City.may proceed to develop a draft Agreement concerning the Project for the Friends’ consideration. Neither the City nor the Friends will have any obligation with respect to the Project, unless and until the Project is approved by the City and a mutually acceptable Agreement is executed and delivered by the Parties. 070529 jb 0072969 Friends of Lytton Plaza Park LLC May 29, 2008 Page 5 The Friends of Lytton Plaza Parl£ LLC hereby acknowledges the foregoing proposed general terms and conditions of any Agreement between the Parties pertaining to the Project. By: Title:Member Date: ~ - {)~’-~t9~ ,2008 070529 jb 0(172969 Friends of Lytton Plaza Park LLC May 29, 2008 Page 4 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 Copy: FRANK BENEST City Manager Richard James, Director, Community Services Greg Betts, Manager, Open Spaces & Sciences Grant Kolling, Senior Asst. City Attorney