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HomeMy WebLinkAbout2002-03-04 City Council (8)TO: FROM: DATE: SUBJECT: City of Palo Alto City Manager’s Report HONORABLE CITY COUNCIL CITY MANAGER DEPARTMENT: PUBLIC WORKS MARCH 4, 2002 CMR:161:02 RECOMMENDATIONS TO DEMOLISH THE BASEMENT OF THE ROTH BUILDING ASSOCIATED WITH THE NON-HISTORIC WINGS; TO RETAIN THE "SPINE" OF THE 1947 ADDITION TO THE BULDING; AND TO ISSUE A REQUEST FOR PROPOSALS FOR NON-PROFIT ORGANIZATIONS TO LEASE AND RENOVATE THE BUILDING RECOMMENDATION Staff recommends that Council: Approve the demolition .of the basement associated with the non-historic wings of the 1947 addition to the Roth Building. Approve the retention of the spine of the 1947 addition to the Roth Building. Review and comment on the summary of a Request for Proposals (RFP) for non- profit organizations to lease and renovate the Roth Building. BACKGROUND In April 2000, the City Council approved the purchase of the Roth Building for potential use as a public facility in the proposed SOFA park. In acquiring the Roth Building, the City entered into a Development Agreement with the Palo Alto Medical Foundation (PAMF). The Development Agreement stipulates that the City must complete demolition and removal of the non-historic wings by July 2003. The purpose of the demolition is to provide for additional park space and to 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 December 11, 2001, staff presented a City Manager’s Report (CMR:340:01, Attachment A) on the Roth Building’s potential reuse to the Policy and Services Committee of the City Council. That report prioritized three options. First, the City could renovate the Roth Building and then move the Development Center staff into it when its current lease expires in 2007. Second, the City could seek non-profit CMR:161:02 Page 1 of 6 organizations for development of the Roth Building. Third, the City could seek private developers for the development of the Roth; Building. Furthermore, in the CMR, staff had recommended that the spine of the 1947 addition to the Roth Building should be further studied for retention, but that the basements should be demolished along with the wings. At the December 11 meeting, Policy and Services Committee heard .from representatives of the Palo Alto Historical Association (PAHA). PAHA mentioned that it is potentially ¯ interested in leasing the Roth Building, including the spine and the basement, from the City for use as a history museum. The Policy and Services Committee directed staff to issue an RFP for non-profit organizations to lease the Roth Building. Specifically, Policy and Services Committee indicated that it would like the RFP set up in a manner such that a non-profit organization, or a partnership of non-profit organizations, could propose on using the: ¯10,000 sf original Roth Building ¯10,000 sf original Roth Building plus the 7,000 sf spine ¯10,000 sf original Roth Building plus the 7,000 sf spine plus an 11,000 sf basement DISCUSSION The challenge that the City is now facing is what to do with the spine, basement and courtyard of the 1947 addition. The Development Agreement specifies that the wings must be demolished, but it does not specifically address the basement, courtyard, or the spine. Attachment B is a site plan identifying these features. When the Roth Building wings (and potentially the basement) are removed, it will be necessary to install a temporary wall to brace and enclose the resulting openings in the original Roth Building. Staff needs approximately twelve months to select an architect to design the demolition of the wings (and potentially the basement) and the bracing and enclosUre structure, to put the project out to bid, and to complete the demolition and construction. The design cannot proceed until a decision is made to keep or demolish the basement and the spine so that the architectural design team can design the appropriate bracing and enclosure structure. Therefore, a decision on retaining the basement and the spine needs to be made by June 2002. If the Council approves the Policy and Services Committee’s recommendation to issue a RFP for non-profit organizations to renovate and use the Roth Building, it is anticipated that the RFP will be circulated for a one year period, to allow the organizations to assemble the multi-million dollar funding plan that would be required. The RFPs would be due in April 2003. Accordingly, staff is asking Council to make a decision on retaining the basement and/or the spine now so that the RFP can specifically state whether the spine and/or the basement will be available for lease. CMR:161:02 Page 2 of 6 Basement In November 2000, the City entered into an agreement with Stoecker and Northway Architects to analyze the basement under the wings of the Roth Building addition. Staff’s intent was to determine if the basement is reusable and, if so, what modifications would be necessary and how much would they cost. Stoecker and Northway completed the basement analysis and provided the City three options: Keep the slab, exterior walls and roof of the basement and incorporate the sunken courtyard space, resulting in an approximately 11,000 sf basement. Structural renovations of the basement would be necessary. The ceiling height is lower than is recommended for use as office space, but allowable by code. The roof of the existing basement extends above the adjacent grade by approximately two feet. Estimated construction cost: $1,243,000 (excludes the costs of escalation, tenant improvements, furnishings, design, etc.). Remove the ceiling/roof structure over the basement, incorporate the courtyard, add two feet of height to the perimeter walls and interior columns, and then install a new roof/ceiling. This would provide better headroom within the basement, but it would cause the basement roof to.be above the adjacent parkland by approximately four feet. Estimated construction cost: $1,297,000 (same exclusions as above). o Remove the existing basement altogether. Excavate down approximately four more feet and then construct an all new basement, incorporating the courtyard. This would provide proper headroom within the basement while keeping the roof of the structure level with the surrounding parkland. Estimated construction cost: $2,595,000 (same exclusions as above). All these alternatives would need to comply with the City Council’s directions for both open space for the park and separation from the Summerhill Homes development. A fourth alternative is to simply demolish the basement and not reconstruct it. This is, of course, the cheapest alternative at approximately $300,000 and the only one that will not impact the park space above the basement. Staff recommends moving ahead immediately with plans for demolishing the basement under the wings for two main reasons. First, it is highly unlikely that it will prove practical from an economic or operational perspective for either a non-profit organization or the City to ~undertake a build-out of the basement. The existing basement is in need of major renovation. There would be a substantial cost to renovate the basement under any of the three schemes Stoecker and Northway analyzed. There will also be a substantial cost to provide the interior improvements and furnishings. Basement space is not considered ideal building space, particularly for offices, as it is difficult and expensive to provide natural daylight and ventilation. Waterproofing an existing basement is also difficult and expensive. CMR:161:02 Page 3 of 6 Second, if the existing basement is kept at the Roth Building, there will be impacts to the parkland. The basement may rise above the adjacent grade 0fthe park by approximately. two to four feet, depending upon which basement scheme is selected. Furthermore, if the light wells that run the length of the basement along .both the east and west sides are retained, this will prevent park users from easily traversing the site. Some kind of steps, ramps or bridges will be required to cross over the light wells to access the roof of the basement. Railings will also be required around the entire perimeter of the basement to prevent park users from falling into the light wells. Exit stairs and plumbing vents would also protrude into the park. Additional issues to meet building and fire codes for existing and mechanical equipment would have to be addressed. Spine_ Staff recommends keeping the spine of the Roth Building addition. This space will provide additional opportunities to the City or non-profit organizations should they need more than 10,000 sf. If the City enters into a lease agreement with a non-profit organization which only proposes to use the 10,000 sf original Roth Building, the non- profit will be obligated to remove the spine at its cost. If there are no successful proposals, Council may decide that the Roth Building will become a City facility, like the Development Center. In this case, the .spine would allow additional opportunities for public spaces such as needed meeting rooms. Retention of the spine also provides for the retention of the existing stairway/elevator core, so that space would not need to be replicated in the original Roth Building. Keeping the spine of the Roth Building has significant structural, architectural and cost impacts. Staff has previously determined that the total project costs for renovating the original Roth Building are approximately $4,500,000. Renovating an additional 7,000 sf will add approximately $2,000,000 in project costs. The work that Stoecker and Northway conducted regarding the structural renovations .will have to be redone to include the spine. Finally, the architectural look of the Roth Building with the spine needs to be thoroughly analyzed and reviewed. Request for Proposals The City Manager’s Policy and Procedures, Section 1-11, deals with leased use of City land and facilities. A summary of the RFP for Council review is provided in Attachment C. Staff requests Council to review and comment on the summary, which will be incorporated into the RFP and issued in April 2002. RESOURCE IMPACT No money was budgeted for the Roth Building during Fiscal Year 2001-02 because the City acquired the building after that budget was established. Since demolition of the non- historic wings is dictated by the development agreement with PAMF, it is necessary to CMR: 161:02 Page 4 of 6 start demolition efforts soon. A new Capital Improvement Program project has been proposed in the FY 2002-03 Budget as follows: Abate hazardous materials: Design of demolition and temporary bracing structure: Demolish wings and basement and install bracing/enclosure structure: ’ TOTAL: $i30,000 100,000 700,000 $930,000 Since there are no funds allocated for this project, the source of funding would have to be either the Infrastructure Reserve or the Budget Stabilization Reserve (BSR). Given the current economic conditions, it would not be prudent to fund this project from the BSR since that would take it below the required minimum. Therefore, the only viable option at this time is to fund it from the Infrastructure Reserve, even though the project is a new infrastructure activity not included in the Infrastructure Maintenance Program. Thus, this project will have a financial impact, or cause delays to other projects included in the Infrastructure Maintenance Plan. POLICY IMPLICATIONS This reconamendation represents no change to existing City policy. TIMELINE If the FY 2002-03 proposed budget for the Roth Building is approved, staff will select an architect starting in July 2002 to prepare the plans and specifications for the demolition and bracing/enclosure structure. Plans and specifications would be completed and put out to bid around January 2003. Demolition and construction would occur in the Spring 2003, and be completed before July 2003, as required by the development agreement with PA1VIF. Proposals .for non-pr0fit o{ganizations to lease the RothBuilding will be due in April 2003. At that’ time, staff will evaluate the proposals to determine if any meet all the conditions established in the RFP. If the City receives complete and acceptable proposals, staff will present them to Council for further direction. ENVIRONMENTAL REVIEW The City approved a Final Environmental Impact Report for the Council adoption of the SOFA CAP Phase I and approval of the Development Agreement wkh PAMF. Both actions included the retention of the historic Roth Building, demolition of the 1947 wings, and development of a two-acre park. The final design, use and rehabilitation of the Roth Building, including the spine, would include a historic analysis for conformancewith the Secretary of the Interior’s Standards of Rehabilitation of Historic Properties. CMR:161:02 Page 5 of 6 ATTACHMENTS Attachment A:CMR:340:01 Attachment B:Site Plan Attachment C:Summary of RFP PREPARED BY: DEPARTMENT HEAD: BOB MORRIS Senior Project Manager GLENN S. ROBERTS Director of Public Works CITY MANAGER APPROVAL : "---~i"~) ~ .~~ HARRI~0N Assistant City Manager CMR: 161:02 Page 6 of 6 ATTACHMENT A City of Palo Alto City Manager’s Report TO:HONORABLE CITY COUNCIL Attention: Policy and Services Committee FROM:CITY MANAGER DEPARTMENT: PLANNLNG AND COMMUNITY ENVIRONMENT DATE:DECEMBER 11, 2001 CMR:340:01 SUBJECT:ROTH BUILDING: COST OF RENOVATION AND POTENTIAL REUSE REPORT IN BRIEF This report provides an analysis of alternatives for the adaptive reuse of the historic Roth Building in concert with the future neighborhood park for the South of Forest Area. The report discusses alternative uses for the building and concludes that the most viable. financially and programmaticaIly is to move the Development Center currently located in leased space adjacent to.City Hall to the Roth Building. The report addresses demolition and removal of the wing additions to the original building, and recommends removal of a portion of the wings and demolition of the basement. CMR:340:01 Page 1 of 11 RECOl~42%IENDATION " Staff recommends that the Council direct staff to: 1. Proceed with program and design development for ’the reuse of the Roth Building for the relocation of the Development Center. 2. Proceed with the asbestos abatement work as well as design of demolition of the iwings and installation of the braci.ng and enclosure structure for the original building. This should include considering the retention of the connecting dorridor of the wing addition with the existing elevator and stairway. 3. Remove the basement area under the wing additions and not replace it as part¯of the redevelopmentof the Roth Building. BACKGROUND In April 2000, the City Council approved the. 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 Coordinated Area Plan (SOFA CAP). The original portion of the Roth Building is a ’U’ shaped building, approximately 10,000 square feet in size. The two legs of the ’U’ are single st6ry, with the connecting corridor spine of the building having both a second story and partial basement. A 1.947 addition connects two new wings to .the historic building with a similar spine along the south wall of the original building, forming the total building’s ’H’ shape. The connecting spine contains a stairway and an elevator. The new wings were two stories tall, with basements and a below grade outdoor courtyard. The tallest element of the building is the elevator shaft located between the two new wings. The original Roth Building is considered one of the most important works of Palo Alto’s premier historic architect, Birge Clark. It was designed in Clark’s signature Spanish Colonial Revival style and constructed in 1932. Features of the building include the low- pitched red tile roof, the Monterey-style wood balcony at the back of the courtyard, hand- adzed beams, decorative copper downspouts, circular tiled attic vents, hand-pressed stucco walls and steel sash. Particularly notable are the fresco murals flanking the entry doors that depict medical procedures of the early twentieth century. Victor Amautoff, a disciple of the celebrated Mexican artist Diego Rivera, painted the murals. The siting of the Roth Building is also significant, as its courtyard was designed around one of the most majestic oaks in Palo Alto. The building is eligible for the California Register of Historic Places. With the acquisition of the Roth Building, the opportunity exists to add one of Birge Clark’s most significant buildings to the community’s other civic buildings designed by Mr. Clark, which include the Lucie Stern Center and the Downtown Post Office. In acquiring the Roth Building, the City entered into a Development Agreement with the Palo Alto Medical Foundation (PAMF). Through dedication and purchase, the Deve!opment Agreement provides for affordable housing, a child care center and a two- CMR:340:01 Page 2 of 11 acre park adjacent to the Roth Building. The Development Agreement provides that the City shall begin removal and demolition of the non-historic Roth Building wings withiI~ twelve months of the closing date (July 2000). All removal and demolition work for the new wings shall be completed on or before expiration of the thirty-sixth month folIowing the closing-date (July 2003). It is staff’s intent to enter into a new agreement with Stoecker and Northway that includes the demolition of the non-historic-wings of the Roth Building and the design of a bracing and enclosure structure for the south wall of the original Roth Building where the wings are attached. However, this recommendation is dependent on Council:’s decision regarding whether the basement or a portion of the 1947 addition will be demolished, so it can be included in the demolition of the wings project work. DISCUSSION Existin~ Conditions of Roth Buildin~ In November 2000, the City entered into an agreement with Stoecker and Northway to analyze the existing basement under the 1947 wings of the Roth Building to determine if it is suitable for reuse. Stoecker and Northway completed that study and submitted a report to the City in July 2001. The basement space in the 1947 addition consists of former medical offices and a below- grade courtyard located between the wings. The floor area of the enclosed basement and courtyard, consists of a total of approximately 11,258 square feet. The report analyzed whether the l l,000-square-foot basement could be retained if the 1947 wings were removed. Retention of the basement would increase the usable area of the Roth Building to approximately 20,000 square feet. The Stoecker and Northway report states that the existing basement could be reconstructed with structural strengthening and renovations of the architectural, electrical and HVAC systems. The report analyzed three possible retention scenarios with different basement ceiling heights. The three alternatives for reconstruction ranged in cost from $1,250,000 to $2,595,000. In adding in the costs for interior improvements, with fixtures and equipment, the cost estimates increased, to approximately $3,000,000 to $4,400,000. Based on the costs, staff is recommending that the basement structure under the 1947 wings be demolished and not rebuilt. The addition of an l l,000-square-foot basement space is not_ _efficient, gi’fen the costs to reconstruct it. Removal of the basement and wing areas of the 1947 addition would satisfy the necessary separation from the new condominium development as well as add park area. Although staff is not recommending retention of the basement area or 1947 wing, staff is recommending exploration of the retention of the 1947 central spine element. Retention of the 1947 spine would save the existing stairway, . elevator, and a central corridor, providing approximately 4,000 to 6,000 square feet of additional area for the Roth Building (Attachment B). It would also reduce the demolition "exposure" of the south ClVfR:340:01 Page 3 of 11 .I wall opening behind the wing’s openings after they are removed. The 1947 addition is not determined to be a significant historic resource and the demolition of all or a portion of the addition would not have a historic impact. However, when the 1947 wings were added, the original south wall and stairway of the historic building were completely removed. The reconstruction of this side of the building, after removal of the 1947 addition, would be subject to the Secretary of the Interior’s Standards for Rehabilitation of Historic Structures. The City retained Pro Tech Consulting and Engineering in January 2001 to prepare a hazardous material report for the Roth Building. Pro Tech submitted itS"i:eport in June 2001. The report identifies asbestos laden materials in the Roth Building and wings that need to be removed prior to building demolition and tenovation. The cost of the asbestos abatement is estimated at $150,000. The demolition of the existing basement is estimated to cost $156,000. Staff intend~ to seek approval in Fall of 2001 to fund the asbestos abatement work as well as the design of the demolition of the wings and the installation of the bracing and enclosure structure for the original building. Stoecker and Northway also evaluated the existing architectural and structural conditions, made recommendations as to how these systems should be upgraded to meet current codes and buildings practices, estimated the cost of the renovations, and summarized its findings in a report submitted to the City in April 2000, with final approval of the Development Agreement. Stoecker and NorthwaY recommended that the structural system of the Roth Building be upgraded by replacing most of the interior walls with posts and beams to create a more open floor plan. Structural shear walls would be added in a few locations to stabilize the building. The exterior shell of the building would be restored to its 1932 appearance as much as possible by removing the non-historic east wings of the.building and building a new east exterior wall along the same line as the original east elevation. Windows, roof tiles and copper gutters salvaged from the 1947 wings would be reused in the rehabilitation of the historic building. Stoecker and Northway estimated, the cost of doing the structural upgrades and exterior shell renovations at $1,163,000. This cost was derived at by estimating the construction cost in year 2000 dollars, and then escalating those costs to an estimated March 2003 start date. The cost also included a new heating, venting and air conditioning (I-1-VAC) system, new stairs, and a new elevator. The Roth Building needs renovations in addition to .those recommended by Stoecker and Northway. The electrical and telecommunications systems Would need to be replaced. The accessibility features (ADA) of the building need to be evaluated and brought up to CM:R:340:01 Page 4 of 11 the current code. Utility services to the building and streetscape elements such as sidewalks would also need to be evaluated and upgraded. The costs associated with demolition of the 1947 wings, hazardous materials abatement and renovation of the resulting historic building are shown below and detailed in Attachment A. Salvage & demolish 1947 wings, asbestos abatement Renovate historic building including seismic upgrade Interior/tenantYoasement improvements: Replace/upgrade utility service Contingency & soft costs Total $ 715,000 $1,163,000 $1,247,000 $ 200,000 $1,675,044 $5,400,000 Costs have been escalated to 2003 dollars. This does not include cost for retention and improvement of the portion of the 1947 addition. This does not include financing costs of approximately $500,000 (Resource Impact section, page I0). Alternative Uses The amount of usable square footage that may be programmed for each alternative must be considered in order to evaluate the viability of proposed uses and the options they present. The Stoeckerand Northway report states that the Roth Building is approximately 9,923 square feet, with 7,171 square feet on the ground floor and 2,752 square feet on the second floor. This assumes demolition of the 1947 wings and basement, retaining only the originai structure. Using the Birge Clark architectural drawings, staff has calculaed the-usable interior square feet of floor space for the different areas of the historic building to be approximately 9,187 square feet, with 6,646 on the first floor and 2,541 on the second floor. This is not different than the Stoecker and Northway numbers above, it simply reflects measurement from interior wails to more accurately reflect the interior space for programming uses. The Stoecker and Northway report also identified where load bearing wails would need to be placed to create the most flexible "open" areas for the purpose of programming uses. The remaining interior supports could be post and beam. To further define the space within the Roth Building for the alternative discussion, the interior space has been broken down as shown on Attachment B. The wings are approximately 35 feet.wide, and contain 1,598 square feet each when measured from the Homer Avenue entrance to the back of the courtyard, (Areas A and E). The entrance area from the courtyard for lobby, stairway, elevator and restrooms is approximately 1,008 square feet (Area B). The remaining first floor corner areas are 1,122 square feet (Area A, next to park) and .1,320 square feet (Area C, Bryant Street side)..The second floor usable, area is approximately 2,541 square feet (Area F). The courtyard, with its majestic oak tree and flowering jacaranda, is approximately 1,872 square feet. Attachment B also CMR:340:01 Page 5 of 11 shows the portion of the 1947 addition that could be retained to add approximately 4,000 to 6,000 squai:e feet to the facility, with removal of the basement under the wings, The final Roth Building development would be approximately 15,000 square feet. Staff has identified three alternative uses for the Roth Building and identified funding opportunities and constraints for each. The three alternatives for use of the Roth Building discussed in this report are: (1) relocation of the Development Center, along with the creation of community meeting rooms and additional City space, (2.) non-profit office space, and (3) private development. Alternative 1: Relocation of the Development Center. The Development Center is currently located in 6,361 square feet of leased space at Hamilton Avenue and Bryant Street. There are currently 34 employees assigned to the Development Center. The rent of approximately $374,000 a year is fully recovered through permit fees. The lease for this facility expires in 2007. There are no options in. the lease for extensions. Existing space constraints and the need for a consolidated multi- departmental operation would not allow for relocation of these services back to City Hall. The Development Center could be relocated to the P,,oth Building. The central area (Areas A, B, C and F) and the retention of a portion of the 1947 addition would provide 12,000 square feet for a full-service Development Center, as well as additional office and storage space in the basement portion of the addition. It would also be possible to relocate the existing City staff from Information Technology using the Downtown Library Community Room (approximately 700 square feet), and return that space for library use. There is an additional 3,000 square feet of space in the two historic wings of the building that front on Bryant Street. Coupled with the historic courtyard (1,800 square feet), these areas provide excellent opportunities for the creation Of community meeting rooms and a City board!commission meeting room (Attachment C). The addition of these areas could provide additional revenues for private events similar to the Lucie Stern Center. and Gamble Gardens. Because the Development Center is closed on evenings and weekends, the meeting room in the wings and the courtyard could provide a nice setting for civic functions, lectures, and receptions. There are some drawbacks to locating the Development Center in the Roth Building. The Roth Building is farther from City Hail than the current location. The convenience of staff, applicants and the public walking between the two would be affected. The ladk of on-site parking would also be a consideration. The Development Center averages over 70 walk-in customers per day, who often need to meet with more than one staff member. During peak seasons, the Development Center averages 90 walk-in customers a day. Also, customers often come in their own automobiles. CMR:340:01 Page 6 of 11 Another consideration is the relationship of the primary office use of the. building to the park. While the Development Center would add a weekday population to the park (especialIy during lunch) .the Center is closed on weeknights and evenings. However, this would be offset with the use of the wings for community meetings and other functions. As a part of analyzing this alternative, staff also considered .the option of relocating the Downtown Library to the Roth Building and moving the Development Center to the Downtown Library building. The library and park would be an excelient match, as compared to the office use of a Development Center. Programmatically, the>Downtown Librmy and Development Center have similar space needs. These consist of a public entrance, a public counter/information!reference area, and flexible areas for offices, storage (files and plans vs. books and periodicals) and lines of sight for operations. Public parking would also be an issue for the library at the Roth Building.. The New Library Plan priorities for upgrading the City’s libraries are the resource libraries: Children’s, Main, and Mitchell Park. Staff has consulted the Library Advisory Commission and agrees that these three library projects must be funded and launched before addressing the Downtown Library. Consequently, staff is not pursuing this option at this time. This option could be brought forward again at a later date. AIterJzative 2: Development of the Roth Btiilding for use by non-profit organizations. Thisalternative incorporates the staff recommendations that: (1) the 1947 wing addition be removed, (2) the basement structure be removed and not rebuilt, and (3) community meeting room space be included for civic use. In the last twenty years the City, through the Request for Proposals (RPF) process, has selected two non-profit organizations that have successfully refurbished the historic Gamble Gardens and Rhona Williams. estate. The selected non-profit organizations were required to refurbish and maintain these .properties at their expense. The City’s contribution was a nominal rent of $1.00 per year; however, .the City does contribute to materials, services and ongoing funding for both projects. Both estates were bequeathed to the City so initial costs were relatively low. However, staff believes that it is unlikely that the City would find a non-profit that would be ableto raise the funds necessary to developthe Roth Building in this way. First, very few non-profit organizations located in the City of Palo Alto can assume the cost of providing a facility that requires the seismic and interior improveme}~ts necessary to develop the Roth Building. Also, very few non-profit organizations in the City have a need for a 10,000-square-foot facility. The most viable use of the Roth Building for non- profit development would be through multiple tenant use. The design of the Roth Building provides the flexibility to divide the building in separate areas for different uses. Utilizing a creative design program for common lobby and meeting rooms could add to an efficient and maximum use. CIVI~:340:01 Page 7 of 11 With this alternative, the Roth Building could be developed into multiple n0n-profit offices ranging areas from 1,500 to 3,000 square feet, which fits the needs of most organizations. This option for several tenants would remove the burden of finding a single organization capable of developing the entire building. The use of the building by non-profit organizations could also be compatible with the adjoining park. The parking requirements would .be similar or more than the Development Center. Similar to other City-owned non-profit faciIities, this would also have an impact on City staff resources apart from hard costs to develop the building. Staff does-:~iot believe this option is viable given the high costs of lease revenue required to recoup the City’s initial investment in the building and to renovate. Alternative 3: Private Development of the Roth Building The Roth Building could be sold or leased long term for private use, and the City could recover some or all of the funds used to purchase the site. The City would be responsible for most site delivery costs such as demolition, asbestos abatement, and parcelization, which couldbe recovered through the sale price or lease costs. This alternative would consist of the historic Roth Building with approximately 10,000 square feet. The two options for private development of the Roth Building that were considered were for commercial and residential usesl Staff did not look at an option for mixed-use development. Staff did not consider the removal of park area for provision of on-site parking. Development for private office space would require considerations for additional employee and visitor parking; historic preservation issues; interface with the-park; hours of use; and increased traffic and other impacts on the neighborhood. Retail development for 10,000 square feet would have similar considerations. Additionally, current market conditions do not support the financial benefits for sale or lease of the building to allow private development. Commercial development could also involve uses such as a private school, private recreational facility, childcare center (one is currently in development in the area) and a small hotel. All would have similar parking mad neighborhood impacts that would need to be addressed. The costs associated with these developments could be similar or more than Alternative 2. Single family residential development is not viable given the size of the historic building. Multi-family development as apartments or market rate housing can be explored. With the requirement for adequate parking and historic preservation, these uses would place considerable financial constraints on the City to recover costs for acquisition and site delivery. Selling the land and building is an option, but not one staff would recommend at this time, given the economic climate. CM_R:340:01 Page 8 of 11 Parking Were the Roth Building occupied by principally an office use, such as the Development Center, the parking requirement would be 4 spaces per 1,000 square feet or approximately 40 spaces. At the time of acquisition of the building, the issue of whether to progide on-site parking was deferred until the eventual use of the building was determined. If on-site parking was required, staff had considered placing the parking under the parkiand. This option is not recommended because of the added costs to the park development as well as avoiding the removal of usable area for parkland, due to ramping, stairways and elevators. .., The Development Agreement with PAMF also provides for 60 off-site public parking spaces for the Roth Building at the proposed office building at Bryant and Homer (250/270 Homer). The off-site parking would be provided only on Saturdays and Sundays from8 a.m. until 9 p.m., and on weekday evenings between 6 p.m. and 10 p.m. Given the civic uses proposed for the Roth Building and availability of shared parking arrangements across the street, staff is not recommending that any on-site parking be required. This may affect parking in the immediate area during the workweek from 8 a.m. to 6.p.m. However, staff believes this can be offset by City staff continuing .to use the existing .City employee parking provided at the Civic Center, and by providing a sufficient number of time limit and handicap parking spaces on Homer Avenue and Bryant Street for customers and visitors. In the future, when a residential parking permit program for the neighborhood in and around the Roth Building is instituted, on-street parking by workers in the downtown would be reduced. The impact of this program will need to be taken into account as the plan for the Roth Building development goes forward. RESOURCE IMPACT Currently, there are no General Fund momes available to finance the renovations of the Roth Building. The City is facing numerous challenges to its revenue base and is preparing expense reductions to meet anticipated revenue shortfalls. The Infrastructure Reserve is dedicated to renovating older, functioning City facilities and the Rate Stabilization Reserve is at its minimum level of 18.5 .percent of annual budgeted operating expenses: A potential source of funding is using Development Center lease payments (around $374,000 annually) to debt finance improvements. The relocation of the Development Center to the Roth Building would provide this financing opportunity. The City has an option of subleasing the space, recapturing 50 percent of what it collects in sublease income. This option results in an ongoing net expense to the City of approximately $187,000 and would not, in itself, provide funding to completely renovate the Roth Bui~lding for the Development Center until 2007. After 2007, the $374,000 in avoided CMR:340:01 Page 9 of 11 expense could be used to offset the estimated $416,000 in annual debt service. Estimating a 30-year loan with a 5.75 percent interest rate could yield approximately $5.9 million in bonds, which includes $5.4 million for the project and $500,000 for financing costs. Should voters approve new revenues such as Business License Tax (an associated use of the DC) or. an increase in the Transient Occupancy Tax, additional funds could be identified for finance of the Roth Building. These costs would not be considered until 2003. Staff has identified the potential to secure additional funds with development of the Roth Building from the following: ¯The basement area of the Roth Building could provide approximately 2,000 square feet of storage area for records. The City currently spends approximately $9,600 a year for records storage. Over five years, this could provide cost savings of $48,000 and 30 years would result in $288,000 savings. ¯The development of the Roth Building would provide an excellent community meeting room for the City. The Planning Department alone pays approximately $3,000 a year in rental and extra staff costs for downtown facilities (Women’s Club) for community services. Over five years this could provide cost savings of $15,000 and 30 years would result in $90,000 savings. ¯The opportunity exists to develop a revenue source for rentals for private meetings and celebrations with the wings and courtyard. Gamble Gardens receive revenues of approximately $45,000 a year for meetings, weddings and other events. Over five years this could be $225,000 and 30 years could be $1,300.,000 for potential revenue. ¯The Lucie Stern Center provides meeting and event rooms and courtyards ranging from 650 square feet to 2,500 square feet.. These provide for private rentals for guests and dining events. Comparably, the Roth Building, in the downtown could generate revenues from $50 to $100 per hour. At $75 per hour for a thre~ hour event once a week, this could be $3,900 per year. Over five,years this could be $19,500 and 30 years could be $117,000. ¯Additional opportunities for revenues could be developed through summer school programs, art exhibitions with the park, and holiday events. An additional $10,000 a year for events in the downtown could be accrued Over five years this could be $50,000 and 30 years could be $300,000. ¯Historic Preservation funds from the state and federal level should also be explored. The review of cost savings and added revenues could provide approximately $50,000 to $70,000 a year to the City towards gap financing for development of the Roth Building. These revenues can not be used to secure bonding and financing. Additional C1VfR:340:01 Page 10 of 11 opportunities for City departments to add funds for City use should be explored to develop a final funding scenario for development of the Roth Building. T1MELINE The Development A~eement requires that the City complete the demolition of the non- historic wings., by July 2003. Staff’s current plan is to demolish the wings and design the bracing and enclosure structure in FY 2001-02. However, this could change and potentially be pushed back a year if the City does not make a decision on what to do with the basement. The work would then be bid as soon as budget becomes available. The subsequent renovation and remodeling work of the original Roth Building could be initiated as soon as the demolition project is completed and the City. has determined the reuse or the building and budgeted for its design and construction. ATTA.CHMENTS A.Roth Building Options - Cost Summary B.Roth Building Space Layout and retention for portion of the 1947 addition. C.Analysis of Community meeting and Board/Commission meeting space. PREPARED BY: ~~’Z~---~~;7~ C~~~en LUSARDI .( t Planning Manager DEPARTMENT HEAD REVIEW: ( ~"~. ~__~ [LL~ ~I--II-~E, Interim Dir;~-tor Planning and Community Environment CITY MANAGER APPROVALS@. EMILY HARRISON Assistant City Manager cc:University South Neighborhood Association Cl~GR:340:01 Page 11 of 1! ROTH BUILDING OPTIONS COST SUMMARY QTY I UNIT IUNIT COSTI ~RENOVATE ROTH BLDG. Hazardous materials abatement Salvage and demolition of wings and basement Brace & enclose original building Seismic and exterior upgrades Interior improvements Interior basement improvements l Replace/upgrade utility service Furniture, fixtures & equipment Subtotal Contingency @ 15% Soft costs @ 30% TOTAL (SAY} ADD NEW BASEMENT @ SOUTH SIDE Construct new basement Interior. improvements Furniture, fixtures & equipment Subtotal Contingency @15% Soft costs @ 30% TOTAL (SAY) RENOVATE DOWNTOWN LIBRARY Allowance for seismic upgrade Interio" improvements Furniture. fixtures & equipment Subtotal Contingency @ 15% Soft costs @ 30%1 TOTAL (SAY) 1 26,000 1 1 9,923 944 1 9,923 11,258 11,258 11,258 8,950 8,950 8,95O LS SF LS LS SF PARKING OPTIONS Surface parking south of Roth Building Contingency @ 15% Soft costs @ 20% TOTAL (SAY)I I Below-grade parking (on-site or across street)l Contingency @ 15%1 Soft costs @ 30%1 TOTALI $15 1$12o SF LS SF $6O SF SF SF $190 $I20 $40 SF I $20 SF $40 SF $40 I ’ $5,500 I spaces III I TOTAL COST $!25 000 $390,000 $200,000 $1,163,000 $1,190,760 $56,640 $200,000 ..$396,92C $3,722,32C $558,34~- ¯$1,116,69~ $5,400,00[ $2,139,02( $1,350,960 .$450,32~ $3,940,300 $591,045 ~1,182, O9O $5,700,000 $179,000 $358,000 $358,000. $895,000 $134,250 $268,500 ¯ $i ,300,000 $220,000 $33,000 I ~44,000 I $300,000 ! 40 spaces $50,000 $3oo,ooc $6oo,ooc $2,900,00( ~\F~÷h Rlrln\Cost Summary2, Last Updated 8/22/01 ROTH BUILDING ~OPTIONS COST SUMMARY INOTES: All cc~sts are based upon construction occurring in 2003. ’ ~--~r--~sscape and andscape costs have been excluded, assume part of park construction. ° 3 rl ATTACHMENT C COMMUNITY AND B OARD/COMMIS S ION MEETING ROOMS A pressing need for the City Hall civic area is contrnunity-meeting space, conference rooms, and an efficient board/commission meeting spaoe. The city currently has two facilities for community meetings in the downtown: the council conference room and the council chambers. The council conference room (576 sf) can only serve a small portion of community meetings and department-meetings, due to size and limited scheduIing time. The .Council Chambers (2,446 sf) presents setting,.physical and room arrangement challenges .for medium size con~nunity meetings and is also tightly scheduled. This often requires the staff to secure meeting space such as the Women’s Club or Williams House for comrnunity meetings.These facilities often charge the City for their use and require staff to set up and tear down for each meeting. A city community meeting room as large as 1,000 to 1,500 sfis needed for the civic area, in addition to pro~viding revenues from private rentals and programs. A second need is an efficient spac~ for boards and commissions to conduct public meetings and study sessions. The council chamber and conference room currently serves this purpose but often present challenges. The. chamber serves the Council and Planning Commission well. However, when the ARB andHRB conduct meetings during the workday, their effectiveness is diminished by the separation of the boards from the applicant, staff and the punic, and the poor configuration for architectural presentations. It is ¯ often comparable to conducting hearings in a bus depot. The remaining commissions meetings are held in the council conference room and face similar challenges. An efficiently designed Board/Commission room of 1,500 sf would allow more effective community participation in B oard/Commission meetings. As a point of reference for defining conceptual program space, staff has provided the for the following: ¯Existing Development Center 6,361 sf ¯Existing Downtown Library 7,842 sf (Note: this does not include the 774 sq.ft, used by other city departments which would bring the total to 8,616 sq. ft.) ¯Council Conference Room 576 sf ¯Council Chambers (w/o passage halls) ¯Women’s Club (large meeting room) ¯Lucie Stern Ballroom ¯Lucie Stern Cormrmnity Room ¯Lucie Stern Fireside Room ¯Lucie Stern Patio 2~446 sf 1,900 sf 2,800 sf 1,125 sf 650 sf 6,300 sf ATTACHMENT C SUMMARY OF ROTH BUILDING REQUEST FOR PROPOSALS Roth Building Request for Proposals The Request for Proposals (RFP) will consist of an Information Flyer (summarizing the offering) and a Proposal Package (including. Proposal Forms, Proposal Questionnaire, Option to Lease, and Lease). The intent of the RFP is to lease the property under a long- term lease to a non-profit group or organization which would improve, maintain and operate the property in a way that would provide public access (meeting Park Ordinance requirements), provide public benefit, and preserve and maintain the historic significance of the property. The requirements, conditions and features approved by the Council will be incorporated into the RFP. The RFP is outlined in Exhibit "A" attached. Major provisions of the RFP, Option to Lease and Lease are proposed as follows: Use of the property The RFP will describe requirements for use of the property which include Palo Alto Municipal Code requirements that use of city parkland be open to the public. (The Park Ordinance prohibits exclusive use by any private group; therefore private office use would be prohibited.) The RFP will also require that the us~ of the property be of benefit to the City and community as a whole, that it is consistent with City goals and objectives as set forth in the Comprehensive Plan and Zoning Ordinance, and that the impact of the proposed use will not be detrimental to the neighborhood, community and environment. Required improvements and Estimate costs The RFP will note that all significant improvements and their costs necessitated by a new use of the property are not possible to determine precisely without knowing the nature of thespecific use of the property; however, the RFP will identify the minimum improvements and related estimated costs required or recommended for any new use of the property. These include renovating the historic building including: seismic upgrade; exterior improvements; interior/tenant improvements; and replacing/upgrading utility service as necessary. Other possible improvements might include electrical and HVAC full replacement/upgrade, life safety equipment such as fir sprinklers/alarms, elevator upgrade, and ADA. Historic Preservation The RFP will explain the architectural and historic significance of the Roth Building and the requirement that the City desires to preserve as much of the historic significance and integrity as possible. A summary of the guidelines for historic preservation included in the Secretary of the Interior’s Standards of Rehabilitation for Historic Properties will be the Secretary of the Interior’s Standards of Rehabilitation for Historic Properties will be attached. It will be up to the proposer to show how its proposed improvements and possible modifications to the property are responsive to the standards and guidelines for historic preservation and rehabilitation. Evaluation of Proposals Proposers will be required to show how their proposed use, improvements and modifications meet the requirements for use and historic preservation of the property. Proposals will be reviewed and evaluated for recommendation to the City Council by a proposal evaluation committee comprised of representatives of staff from Planning, Real Estate, Public Works, Community Services, and a member of the Historic Resources Board. Review and Approval of Plans during Option Term Once a successful proposer has been selected by the City Council, and the Option-to- Lease has been executed, the optionee’s plans submitted for City review during the option period must included interior plans, structural plans, exterior elevations and landscaping plans, and must indicate specific plans and details of the historic preservation to be included in developing the property. These plans must be reviewed and approved by the Historic Resources Board (HRB) the Architectural Review Board (ARB), Planning Commission and the City Council. Also, during the option term, the optionee must submit and receive approval from the City Manager of a long-term maintenance plan for the building and landscaping. In addition, the optionee must.submit proof that the optionee has the financial security to complete the proposed project and provide for the maintenance of the building and the landscaping. Required improvements and Maintenance under the Lease Required improvements under the lease are those improvements identified and shown in the plans approved by the City during the option term. The lease also requires that all maintenance and repairs to the property be in accordance with the maintenance program approved by the City during the option period. Consistency with the City’s policy for the Leased Use of City Land/Facilities Proposers will be required to provide the following information which will be considered in evaluating proposals: 1) the extent to which the proposed leased use satisfies a public need or provides public benefit; 2) the consistency of the proposed use with existing City goals and objectives (as set forth in the Comprehensive Plan, Zoning Ordinance, Municipal Code, and general municipal services objectives); 3) the impact of the proposed use upon the neighborhood, community; and environment; 4) the degree of public access and fees to be charged to Palo Alto citizens; 5) the monetary and non- monetary consideration to be provided to the City; 6) the history and assessment of the proposer’s ability to carry out the construction and operation of the facility and services as proposed; and 7) a five-year pro-forma financial analysis of the proposed use, setting forth the project revenues and expenses for this period of time. Proposed Schedule for Solicitation In April 2002, staff will advertise the RFP in local newspapers, send the Information flyer to the City’s surplus property mailing list, local non-profit groups and to those persons and groups who have. expressed in interest in lease the property. Proposals will be accepted until April, 2003, when sealed proposals will be opened. Proposals and proposers will then be reviewed by the evaluation committee using the criteria summarized above, and the proposals and recommendations for a successful bidder.will be forwarded to the City Council. Exhibit A OUTLINE - ROTH BUILDING PROPERTY REQUEST FOR PROPSAL The Request for Proposal (RFP) will consist of I.) the Information Flyer and II.) the Proposal Package. I.Information Flyer The information Flyer summarizes the offering and will be sent to interested person or organizations. The Information Flyer will include the following information: A.Minimum bid ($5,000, which reflects the estimated cost to solicit proposals,) and the date the proposals are due (April 2003). B.General description of the property to be leased, including location map. C.Statement of intent of the RFP and requirements for use. D.Required improvements, maintenance and historic preservation. E.Summary of the terms of the Option to Lease and Lease. F.Instructions for obtaining the Proposal Package. II.Proposal Package The Proposal Package summarizes the proposal requirements and procedures and lists the evaluation criteria. It includes the Proposal Forms, Proposal Questionnaire and the Option to Lease and Lease. A.Option to Lease" The term of the Option is 2 years, and it may not be exercised until the Optionee has fulfilled the following conditions: 1.Paid the purchase price of the Option (minimum $5,000). 2.Submitted schematic plans for the project within six (6) months of the commencement of the option. 3.Received approval of its development plans for the entireproject from the Historic Resources Board (HRB), Architectural Review Board (ARB); Planning Commission and City Council. No Received approval from the City Engineer and Chief Building Official of construction drawings, including the construction contract form and proposed construction schedule. If property is phased, this requirement shall apply only to Phase I improvements. 5.Received approval from the City Council for a Park Improvement Ordinance for the proposed improvements. 6.Complied with all requirements of the California Environmental Quality Act (CEQA). Received approval from the City Manager of a long-term maintenance plan and schedule for the buildings and landscaping on the property during the lease term. 8.Received approval of any land use permits or approval required to implement the project and development plans. Provided evidence to the Real Property Manager that any and all permits from any agencies having pre-constructionjurisdiction over the proposed development have b~en authorized and are available. If property is phased, this requirement shall apply only to Phase I improvements. 10.Satisfied the Director of Administrative Services that the Optionee 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. 11.Submitted to the Real Property Manager a security deposit as required by the Lease. Lease - the key provisions in the lease are as follows: 1.Premises: the property and improvements known as the Roth Building located at on Homer Avenue in Palo Alto. 2.Required uses: specific use is to be determined, but any use shall meet the requirements of the Palo Alto Municipal Code for parkland. Term: 30 years Rent: a minimum rent will not be established. The amount of any monetary rent will depend on the value of improvements and the public benefit (non-monetary consideration) proposed. o Improvements to be made by tenant: Required improvements will be those improvem.ents which are identified and shown in the plans approved by the City during the option period. °Construction or additional alteration by tenant subsequent to the initial construction: Tenant may not make any changes to the property without prior City review and approval. 7. Security Deposit: $10,000 o Maimenance and Repairs: Tenant shall be responsible for all maintenance and repairs in accordance with the City-approved maintenance program approved during the option period. 9.Assignments and subletting: Any assignment, subletting or encumbrance of the lease is subject to City approval. 10.Taxes, Assessments and Utilities: Tenant shall be responsible for all costs for utilities, taxes and assessments for the premises. 11.Insurance: The tenant shall maintain insurance meeting the City’s standard requirements for insurance protection.